ANNUAL
REPORT
2021
CORPORATE DIRECTORY
DIRECTORS
Paul Burton
John Elkington Non-Executive Director and Chairman
Simon Morten Non-Executive Director
Managing Director and CEO
COMPANY SECRETARY
Paula Raffo
REGISTERED OFFICE
Suite 20, 22 Railway Road
Subiaco Western Australia 6008
PO Box 1126
Subiaco Western Australia 6904
Telephone:
(08) 9327 0900
Facsimile:
(08) 9327 0901
Website:
www.tngltd.com.au
Email:
corporate@tngltd.com.au
SHARE REGISTRY
Computershare Investor Services Pty Limited
Level 11
172 St Georges Terrace
Perth Western Australia 6000
Telephone:
(08) 9323 2000
Facsimile:
(08) 9323 2033
AUDITORS
KPMG
235 St Georges Terrace
Perth WA 6000
DOMESTIC STOCK EXCHANGE
Australian Securities Exchange (ASX)
Code: TNG
INTERNATIONAL STOCK EXCHANGE
German Stock Exchanges
Code: HJI
Annual Report 30 June 2021
CONTENTS
Chairman and Managing Director’s Letter
Review of Operations
Directors’ Report
Lead Auditor’s Independence Declaration
Financial Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Cash Flows
Consolidated Statement of Changes in Equity
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Additional Information
Corporate Governance Statement
2
3
12
28
29
29
30
31
32
33
62
63
67
69
A N N U A L R E P O R T 2 0 2 1
1
Dear Shareholders,
We are pleased to present TNG’s 2021
Annual Report and outline the progress
achieved at the Company’s world-class
Mount Peake Vanadium-Titanium-Iron
Project (“Project”) in the Northern Territory
despite what proved to be another
challenging year worldwide due to the
ongoing COVID-19 pandemic.
The health and safety of all members of the TNG
team both at home and abroad, as well as the broader
community in which we operate, has always been our
priority. Since the onset of the pandemic in March 2020,
we have been able to implement all necessary measures
to ensure everyone’s safety throughout this period of
uncertainty – including working-from-home arrangements
and virtual meetings, with TNG holding its first ever virtual
online Annual General Meeting in November 2020.
Despite the COVID-19 restrictions imposed in Australia
and worldwide, pre-development activities for the
Mount Peake Project advanced during the year with
a focus on completing the Front-End Engineering and
Design (“FEED”) Study, permitting and approvals.
The leading German engineering firm SMS group,
was able to progress the detailed FEED Study during
the year, culminating in the delivery of the technical
Front-End Loading (“FEL”)-3 report after the end of the
2021 financial year. This is another significant milestone
in the development of this major Project and represents
the conclusion of a vast amount of work by a significant
number of people in Australia and Germany.
The outcomes of the FEL-3 report and the FEED Study are
now being reviewed by our in-house Project Engineering
Team and will be dovetailed into the most appropriate
project delivery strategy as we move to finalise permitting
and project finance.
In terms of permitting and approvals, we submitted a
revised Mining Management Plan for the Mount Peake
mine site and a Supplement to the Draft Environmental
Impact Statement (“EIS”) for the Darwin TIVAN®
Processing Facility (“DPF”) during the year.
The Australian Federal Government has awarded
Major Project Status to the Project in recognition of the
strategic significance of the Project to Australia in growing
and diversifying the nation’s critical mineral resources
and contributing to the economic development of the
Northern Territory – adding to the Major Project Status
already awarded by the Northern Territory Government.
In terms of our sales and marketing strategy, during the
year we were able to secure binding life-of-mine off-take
agreements with Vimson Group for 100% of high-purity
iron ore and with GUNVOR for the remaining 40% of
vanadium pentoxide production, completing all of our
off-take agreements. This is a major achievement
considering the current challenging global market
environment and creates a robust commercial foundation
to advance the financing and development strategy for
the Mount Peake Project.
On the Project funding front, we have appointed the
KPMG Corporate Finance project finance team as TNG’s
global financial advisor. The KPMG team’s expertise
in global mining projects, strong track record of major
transaction achievements in Australia and globally, and
existing relationships with anticipated lenders KfW
IPEX-Bank and NAIF, adds credibility and is a positive
step towards achieving the optimal financing outcome
for the Company and its shareholders.
Additionally, as part of the vertical integration strategy
for the Project, we have established a green energy
subsidiary, TNG Energy, with the dual objective of
offsetting carbon emissions from TNG’s planned future
operations and generating new business opportunities
in the alternative energy market to create additional
shareholder value.
We have already entered into partnerships with
international technology groups with expertise in
the development and application of green hydrogen
technology and Vanadium Redox Flow Batteries.
The focus on green energy corroborates our vision
of establishing TNG as a sustainable resources
company capable of delivering maximum benefit to our
shareholders as we move forward with the development
of the multi-faceted and world-class Mount Peake Project.
In conclusion, the progress we achieved during the year,
despite the challenges associated with the COVID-19
pandemic, is due to the hard work and commitment of
our senior management group and dedicated team of
staff and consultants. We would like to thank them all
sincerely for their efforts on behalf of the Company.
We would also like to thank you, our valued and loyal
shareholders, for your ongoing support and faith in TNG
and in our flagship strategic metals asset.
Yours faithfully,
John Elkington
Non-Executive Chairman
Paul Burton
Managing Director & CEO
2
TNG LIMITEDCHAIRMAN AND MANAGING DIRECTOR’S LETTER OVERVIEW
TNG is an Australian resource and mineral processing
technology company focussing on building a world-scale
strategic metals business based on its flagship
100%-owned Mount Peake Vanadium-Titanium-Iron
Project (“Mount Peake Project” or “Project”) in the
Northern Territory.
Located 235km north-west of Alice Springs, the Mount
Peake Project is proposed to be a long-life project
producing a suite of high-quality, high-purity strategic
products for global markets including vanadium pentoxide,
2021 HIGHLIGHTS
titanium dioxide pigment and iron ore fines. The Project
has received Major Project Status from the Northern
Territory and Australian Federal Governments.
TNG is also advancing a green energy strategy with the
dual objective of offsetting carbon emissions from its
planned future operations and generating new business
opportunities in the alternative energy market to create
additional shareholder value, with a focus on green
hydrogen and vanadium redox flow batteries.
Key milestones achieved during the financial year relating
to the advancement of the Mount Peake Project included:
Other key milestones achieved during the financial year
included:
• Submission of the Supplement to the Draft
• Establishment of a Vanadium Redox Flow Battery
business unit.
• Heads of Agreement with V-Flow Tech for a joint
venture to commercialise Vanadium Redox Flow
Battery systems.
• Heads of Agreement with AGV Energy & Technology
to collaborate on commercial opportunities for
Vanadium Redox Flow Batteries and Green Hydrogen
Technology in Malaysia and Australia.
• Completion of a pro rata non-renounceable
entitlement issue and shortfall raising approximately
$12.5 million.
• Receipt of $5.14 million in research and development
rebate related to activities undertaken in FY20.
• Appointment of Jonathan Fisher as
Chief Financial Officer.
Environmental Impact Statement for the Darwin
TIVAN® Processing Facility.
• Progression of the Front-End Engineering and Design
(“FEED”) study for the Mount Peake Project by
SMS group despite delays experienced due to the
COVID-19 crisis, and, subsequent completion of the
FEED study following the end of the financial year.
•
•
Life-of-Mine Off-take Agreement executed with
Vimson Group for 100% of planned hematite
production for the Mount Peake Project.
Life-of-Mine Off-take and Marketing Agreement
executed with Gunvor (Singapore) for 40% of the
planned vanadium pentoxide production for the
Mount Peake Project.
• Completion of pre-qualification tender of the majority
of non-process infrastructure work streams.
•
Issue of an Authority Certificate for mining by the
Aboriginal Areas Protection Authority.
• Submission of a Revised Mining Management Plan
for the Mount Peake mine site.
• Major Project Status awarded to the Mount Peake
Project by the Australian Federal Government.
• Strategic partner development agreement with
SMS for development of carbon-neutral hydrogen
technology to be applied to the TIVAN® Process.
• Appointment of KPMG Corporate Finance project
finance team as global financial advisor for
the Project.
•
Further extension of the term of the debt financing
mandate for the Project with KfW IPEX-Bank to
11 December 2021.
3
ANNUAL REPORT 2021REVIEW OF OPERATIONS MOUNT PEAKE VANADIUM-TITANIUM-IRON PROJECT
PROJECT SUMMARY AND
BUSINESS MODEL
The Mount Peake Project is a world-scale strategic metals
project located 235km north-west of Alice Springs, which
was discovered by and is 100%-owned by the Company.
The Project is well located close to existing key power and
transport infrastructure including the Alice Springs-Darwin
Railway and the Stuart Highway. Mount Peake is a shallow
and flat-lying ore body with a JORC Measured, Indicated
and Inferred Resource totalling 160 million tonnes
(118 million tonnes Measured, 20 million tonnes Indicated
and 22 million tonnes Inferred), grading 0.28% V2O5,
5.3% TiO2 and 23% Fe. Mount Peake is one of the largest
undeveloped vanadium-titanium-iron projects in the world.
The Mount Peake Project has been awarded Major Project
Status from both the Australian Federal Government and
the Northern Territory Government.
The Company’s strategy for the Mount Peake Project is to
develop dedicated mining and processing operations to
produce three high-value, high-purity products for export
– vanadium pentoxide (V2O5), titanium dioxide pigment
(TiO2) and iron oxide (Fe2O3) - through the application of an
innovative processing technology, known as the TIVAN®
Process, which is owned exclusively by TNG.
TNG has in place life-of-mine binding off-take agreements
for 100% of all products proposed to be produced at the
Mount Peake Project with strong offtake counterparties
with a multinational presence.
PROJECT PERMITTING
Environmental Impact Statement – Darwin
TIVAN® Processing Facility
TNG continues to diligently progress the environmental
approval process for its proposed Darwin TIVAN®
Processing Facility (“DPF”), having submitted a Draft
Environmental Impact Statement (“Draft EIS”) for the
DPF to the Northern Territory Environment Protection
Authority (“NT EPA”) in October 2019. Following a
detailed review of the Draft EIS by the NT EPA and
receipt of submissions from the public and government
agencies, the Company received a “Direction to
Prepare a Supplement to the Draft EIS” from the
NT EPA in April 2020.
During the reporting period, in February 2021 the
Company submitted its Supplement to the Draft
Environmental Impact Statement (“EIS Supplement”)
for the DPF to the NT EPA. Then in May 2021, TNG
received a further “Direction to provide additional
information”(“Direction”) on the EIS Supplement from
the NT EPA. The Direction requires the Company to
provide additional information on 23 matters based on
submissions from NT Government agencies and the
Environment Centre NT.
TNG and its environmental consultant, Animal Plant
Mineral (“APM”), completed an assessment of specific
scopes of work required to address the matters raised in
the Direction following meetings held with the NT EPA
and NT Government Departments, in which detailed
clarification in relation to requested additional information
on the matters raised was provided to the Company
and APM.
Figure 1: Proposed locations of Mount Peake Mine Site and TIVAN® Processing Facility.
4
TNG LIMITEDREVIEW OF OPERATIONS As part of the Direction, TNG has been requested to
demonstrate that reasonable alternative site locations
for the TIVAN® Processing Facility have been properly
considered and evaluated using the site selection criteria
provided by the NT EPA. The Company’s management
has prioritised the alternative site assessment and the
Company’s Project Engineering Team, with assistance
from local engineering groups, has prepared a detailed
study and cost/benefit assessment, which includes
consideration of locating the TIVAN® Processing Facility
at the Mount Peake mine site.
A number of additional/updated technical reports are still
required to be prepared to satisfy the requirements of
the Direction, including: revised air quality assessment,
updated noise modelling, visual impact assessment,
updated traffic impact assessment, greenhouse gas
management plan, biodiversity offset plan, and waste
management plan.
TNG expects that the completion timeframe for
submission of the requested additional information will be
within the 12-month “Submission Period” provided by the
NT EPA in the Direction.
Mining Management Plan (“MMP”)
During the reporting period, in November 2020 the
Company submitted a Revised MMP for the Mount Peake
Mine Site to the Department of Industry, Tourism and
Trade (“DITT”) of the NT Government. Since then, the
Company has been liaising with DITT on the Revised
MMP mainly regarding compiling information on the
integrated waste landform and ground and surface water
management plans for the proposed mine site.
FRONT-END ENGINEERING AND
DESIGN STUDY
During the reporting period, the Company progressed
finalisation of the FEED Study for the Mount Peake
Project with German-based engineering firm SMS group
(“SMS”) for the Beneficiation Plant and the DPF.
The scope of work for the FEED Study was divided into
four front-end loading (“FEL”) phases – namely, FEL-0,
FEL-1, FEL-2 and FEL-3. The scope of work covers the
process plant equipment required for the mine site
Beneficiation Plant and the DPF, including all associated
plant and equipment.
The FEED study was completed and the final technical
FEL-3 report was submitted by SMS subsequent to the
end of the FY21. TNG’s in-house Project Engineering Team
is undertaking a detailed review of the FEL-3 report, which
includes the following deliverables focused on the DPF
and its associated plants:
• Plant Design Basis
•
Ti-Cons FEL-3 Report (Ti-Cons GmbH is providing
the design for the Company’s Titanium Pigment
Plant operation)
• Como FEL-3 Report (Como Engineers focused on the
Mine-site Beneficiation Plant)
•
Testwork program, including confirmatory testwork
for all process stages
• Process Description
• Process Flow Diagrams (PFD) and Block Flow
Diagrams
• Preliminary Piping & Instrumentation Diagrams (PID)
• Major Equipment Lists
• Major Equipment Specifications
• Detailed Scopes
• Plant Layout
• Plots and Arrangement Drawings
• Utility Requirements
•
Logistics Concept
• Critical Flaw Analysis
• Mechanical & Electrical Plumbing
•
Local Content Providers
• Potential Package Units
The FEL-3 report provided by SMS excluded the outcome
of some remaining validation testwork that is currently
being finalised, which has taken longer than anticipated
due the global COVID-19 restrictions affecting SMS.
PROJECT EXECUTION MODEL
TNG and SMS are advancing discussions on details of a
revised Project Execution Model designed to address the
ongoing commercial and logistical challenges associated
with the global COVID-19 pandemic.
Under the current agreement, SMS was intending to
prepare and provide TNG with a fixed-price engineering,
procurement and construction (“EPC”) proposal for the
delivery of the Mount Peake Beneficiation Plant and the
DPF following completion and delivery of the FEED. As
part of this delivery strategy, SMS had initially proposed to
engage Australian-based engineering, manufacturing and
construction companies as sub-contractors.
However, ongoing commercial and logistical challenges
caused by the global COVID-19 pandemic – including
severe restrictions on travel between Europe and
Australia, the escalation of construction and engineering
costs, global workforce shortages and disruptions
to supply chain logistics – are all posing significant
challenges to major projects, especially when those are
supposed to be undertaken by overseas contractors.
Under the prevailing circumstances, TNG considers any
“fixed-price EPC proposal” could include substantial extra
contingencies for project delivery which may not be in the
best interests of the Company.
5
ANNUAL REPORT 2021REVIEW OF OPERATIONS In light of this and with the goal of maintaining capital
expenditure at an attractive level, TNG and SMS are
revising and optimising the model for the delivery of the
Mount Peake Project, whereby SMS will continue to
provide all downstream processing plant, production and
product quality guarantees for the Project and accept local
Australian engineering and construction companies to be
engaged for the Beneficiation Plant, and any Build Own
Operate and Build Own Operate Transfer opportunities.
The Company expects SMS to continue in a major
contracting role during the Project’s further construction
development and implementation phase.
NON-PROCESS INFRASTRUCTURE (“NPI”)
In parallel with the FEED Study, the Company completed
pre-qualification tendering and short-listing of proponents
for the NPI required at both sites during the reporting
period, including mine site accommodation camp,
haul road, camp catering, communications, gas supply
and power supply. Final commercial phases for the NPI
works will progress once the review of the FEED study
is finalised.
MINING
TNG completed an owner-operator study for mine,
load and haul of ore and waste, ROM crusher feed and
process plant waste removal, during the reporting period,
while the tender process for the provision of mining
services was undertaken in the previous year. Final
commercial phases for the mining contract will progress
once the review of the FEED study is finalised.
OFF-TAKE AGREEMENTS
Vanadium Pentoxide
During the reporting period, in October 2020, the
Company executed a binding life-of-mine (“LOM”)
off-take and marketing agreement with global commodity
trader Gunvor (Singapore) for 40% of the planned
production of 6,000 tonnes per annum of high-purity
vanadium pentoxide for the Mount Peake Project.
The agreement with Gunvor complements the existing
LOM agreement with Woojin (Korea) for 60% of TNG’s
planned vanadium pentoxide production.
Titanium Dioxide Pigment
The Company has a binding life-of-mine (“LOM”) off-take
and marketing agreement with market expansion provider
DKSH (Switzerland) for a minimum of 75,000 tpa and up
to 100% of TNG’s planned titanium dioxide production.
Iron Ore
During the reporting period, in July 2020, the Company
signed a binding LOM off-take agreement with the
Vimson Group for 100% of the planned production of
6
500,000 tonnes per annum of high-grade iron ore fines
(+64% Fe) for the Mount Peake Project.
PROJECT FINANCE
During the reporting period, TNG appointed KPMG
Corporate Finance as its global financial advisor for the
Mount Peake Project to assist the Company to optimise
and execute the debt and equity components for the
total project financing requirements for development.
KPMG Corporate Finance’s scope of work will be limited
to the provision of advice whilst the responsibility for
management decisions rests with the management
of TNG.
KPMG Corporate Finance has a dedicated mining
corporate finance team that assists with global-scale
projects like the Mount Peake Project and has recent
experience working on other large project financing
deals with KfW IPEX-Bank GmbH (“KfW”), the
Northern Australia Infrastructure Facility (“NAIF”) and
export credit agencies.
Debt Funding
KfW IPEX-Bank has been appointed as the Company’s
exclusive senior debt advisor and arranger to lead up to
a US$600 million debt raise for the development of the
Mount Peake Project.
TNG has been progressing discussions with KfW and
KPMG Corporate Finance regarding the proposed
financing structure and supporting due diligence
requirements, with the final capital requirements and
funding structure expected to be determined following
finalisation of the review of the FEED study and the
revised Project Execution Model.
As part of the debt funding process, the Company
is also in discussions with a number of leading
investment groups with the potential for an offer of
mezzanine finance.
Northern Australia Infrastructure Facility
TNG has formally submitted an application to NAIF
regarding debt funding for the Project. As part of NAIF’s
funding assessment process, the Company held meetings
with NAIF representatives during the reporting period to
provide updates on the Mount Peake Project as well as to
discuss NAIF’s Indigenous Engagement Strategy.
Equity Funding
TNG continues to evaluate different options for equity
financing for development of the Mount Peake Project.
The final equity requirement will only be determined upon
confirmation of the level of debt funding available.
TNG LIMITEDREVIEW OF OPERATIONS GREEN ENERGY STRATEGY
In line with worldwide efforts to reach net-zero
greenhouse gas emissions targets, TNG is committed to
develop its operations in a carbon-efficient way in order
to adequately mitigate climate related risks.
The Company has strategies in place to both enter the
alternative energy market and to offset any potential
carbon emissions from its future operations through
the establishment of partnerships with international
technology groups with expertise in the development and
application of green hydrogen technology and Vanadium
Redox Flow Batteries.
VANADIUM REDOX FLOW BATTERY
BUSINESS
During the reporting period, TNG established a Vanadium
Redox Flow Battery (“VRFB”) business unit to capitalise
on growing demand for green energy generation
and storage solutions for the decarbonisation of the
global economy, and to support the Company’s vertical
integration strategy for the Mount Peake Project.
VRFBs use vanadium electrolyte (“VE”) to store energy
from renewable power generation and are highly
scalable for use in a variety of settings. Reliable supply
of high-purity VE is critical to the continued growth of
the global VRFB market.
VRFBs offer a number of distinct advantages for
sustainable large-scale energy storage, having long
lifespans of potentially 20-plus years without performance
degradation, the ability to discharge without battery
damage, the non-flammability of the VE and the ability to
recover and re-use the VE at the end of the battery life.
TNG has previously produced at a lab-scale its own high
specification VE, and intends to patent and produce
VE in commercial quantities to become an Australian
supplier of VRFBs.
During the reporting period, the Company signed a
Heads of Agreement for an incorporated joint venture
with leading Singaporean-based battery technology
development company, V-Flow Tech Pte Ltd, to jointly
develop and roll-out a VRFB business targeting initial
applications at remote regional sites in Australia with
a fully integrated renewable energy supply and VRFB
storage solution.
Subsequent to the end of the reporting period,
TNG engaged Perth-based mineral process engineering
group METS Engineering to undertake a technology and
process design study for a VE production facility.
GREEN HYDROGEN PRODUCTION
TECHNOLOGY
During the reporting period, the Company signed
a Heads of Agreement with Malaysian-based AGV
Energy & Technology (“AGV Energy”) to progress formal
arrangements for collaboration on commercialisation
opportunities for VRFB and technologies to produce
green hydrogen.
AGV Energy and its partners have developed a technology
to produce green hydrogen using the electrolysis of
demineralised water and renewable energy (“HySustain”),
with the first commercial application planned at a project
in Malaysia.
Green hydrogen production is reliant on green electricity
production from 100% renewable energy sources. AGV
intends to utilise VRFBs as the preferred energy storage
system for integration with HySustain.
SMS JOINT VENTURE
During the reporting period, the Company entered into a
strategic partner agreement with SMS group to develop
a CO2-neutral technology for the production of green
hydrogen from various renewable, secondary or fossil
hydrocarbon sources by means of plasma pyrolysis,
utilising green electrical energy.
This technology, which consumes roughly one-third of
the electricity required to produce the same amount of
hydrogen by electrolysis of water, could be the preferred
reduction agent for TNG’s TIVAN® Process, marking
an important step in the Company’s roadmap towards
achieving a net zero carbon footprint for TIVAN®.
The partnership is in progress; however, it has been
delayed due to COVID-19 related travel restrictions for the
SMS group.
ENVIRONMENT, SOCIAL AND
GOVERNANCE (“ESG”)
TNG believes that strong community relations,
environmental sensitivity and effective corporate
governance are all fundamental factors in sustainable
development and the Company’s ability to deliver
long-term stakeholder value.
The Company recognises, considers and respects that
environmental issues may arise from its activities and
climate change risk has the potential to impact TNG’s
business and communities.
With the launch of TNG’s green energy strategy in
late 2020, the Company is focussed on developing its
operations in a carbon-efficient way in order to adequately
mitigate climate related risks through the development
of partnerships for application of green hydrogen and use
of Vanadium Redox Flow Batteries.
7
ANNUAL REPORT 2021REVIEW OF OPERATIONS TNG also decided to incorporate a waste water recycling
plant at its proposed TIVAN® Processing Facility in Darwin
as part of optimisation work on the Mount Peake Project
to reduce water demand and processing water discharge.
This initiative is expected to reduce the DPF’s water
consumption by 65%, significantly reducing the impact
on the environment.
The Company’s recognition of the traditional attachment
and customary requirements and preservation of culture
and customs by Indigenous people in relation to land
is reflected in TNG’s supportive relationship with Land
Councils, native titleholders and the community at large.
TNG has adopted systems of control and accountability as
the basis for the administration of corporate governance.
It influences how the objectives of the Company are
achieved, how risk is monitored and assessed and how
performance is optimised.
The Company, through its Board and management, is
committed to corporate governance and have adopted the
Corporate Governance Principles and Recommendations
as published by ASX Corporate Governance Council
where practical relative to a company with the size and
operations of TNG.
OTHER PROJECTS
KULGERA PROJECT (EL32369 AND EL32370
– 100% TNG)
TNG was granted Exploration Licences (“EL”) for the
Kulgera Project during the reporting period. Kulgera is
a 1,231km2 vanadium and titanium exploration project
located along the South Australian border in the
Northern Territory.
CORPORATE
BOARD AND SENIOR MANAGEMENT
UPDATE
On 4 February 2021, non-executive director Greg Durack
stepped down from the TNG Board to take up the position
of Managing Director and Chief Executive Officer of Juno
Minerals Limited, which subsequently listed on the ASX
following an IPO.
On 15 February 2021, the Company appointed
highly-regarded and experienced senior mining and
corporate finance executive Jonathan Fisher as its
Chief Financial Officer.
On 16 March 2021, Ms Paula Raffo was appointed as
sole Company Secretary while Mr Jason Giltay, who
was previously joint Company Secretary with Ms Raffo,
focuses on an expanded role as the Company’s General
Manager Commercial & Corporate Development due to
an increase in corporate activities.
MEASURES TAKEN IN RESPONSE TO
THE COVID-19 PANDEMIC
Since the World Health Organisation declared the
COVID-19 outbreak a pandemic in March 2020, TNG
has put in place a range of measures in order to ensure
the safety of its employees, directors, consultants,
contractors, advisors and the broader community in
which it operates.
The Company swiftly implemented working from home
arrangements, suspension of face-to-face business
meetings and all business travel in Australia and
internationally.
A sampling program was completed with a set of 10 bulk
samples submitted for a series of analyses at Nagrom to
define sources of concentrate that could be treated using
TNG’s TIVAN® Process.
In July 2020, the Company returned to normalised
working hours and arrangements for its Perth-based
project management team and other staff with the
provision of flexible working arrangements when required.
The Company is closely monitoring the COVID-19
situation in Australia and internationally, including new
restrictions implemented by governments around the
world, mainly in Germany and Austria, and for any
potential impacts on the Mount Peake Project.
All necessary health and safety precautions continue
to be adhered to, including Government enforced
travel restrictions.
MOONLIGHT PROJECT (EL32433 AND
EL32434 – 100% TNG)
The Company was also granted Exploration Licences for
a 1,594km2 vanadium exploration project at Moonlight,
located 80km west of Daly Waters in the central Northern
Territory during FY2021. Planned field work is to be
completed by the end of 2021 subject to COVID related
travel restrictions.
CAWSE EXTENDED MINE PROJECT: NICKEL-
COBALT (80%: MESMERIC/20%: TNG)
The Company has a 20% free-carried interest in
the Cawse Extended Mining Lease. Joint venture
partners, Mesmeric Enterprises, completed necessary
rehabilitation works during the period and continued
work within Cawse Extended licences.
8
TNG LIMITEDREVIEW OF OPERATIONS As at 30 June 2021, the Company reviewed its Mineral Resources and Ore Reserves which are as follows:
MOUNT PEAKE MINERAL RESOURCES AND ORE RESERVES
MINERAL RESOURCE
The Mount Peake Mineral Resource estimate set out below (Table 1) was released in an ASX Announcement entitled
“Additional Information on the Mount Peake Resource” on 26 March 2013 in accordance with the JORC Code (2012).
Table 1 – Mount Peake Mineral Resource estimate
Category
Tonnes (Mt)
V2O5%
TiO2%
Measured
Indicated
Inferred
TOTAL
118
20
22
160
0.29
0.28
0.22
0.28
5.5
5.3
4.4
5.3
Fe%
24
22
19
23
Al2O3%
SiO2%
8.2
9.1
10.0
8.6
33
34
38
34
Note: Mineral Resource is inclusive of Ore Reserves. Tonnage and grade figures in tables have been rounded and small discrepancies
in totals may occur. The Mineral Resource is reported using a 0.1% V2O5 cut-off. TNG is not aware of any new information or data that
materially affects the Mineral Resource estimate included in the ASX Announcement dated 26 March 2013 and all material assumptions
and technical parameters underpinning the estimate provided in that announcement continue to apply.
ORE RESERVE
The Mount Peake Ore Reserve estimate (Table 2) was reported in an ASX Announcement entitled “Mount Peake Feasibility
Results” on 31 July 2015 in accordance with the JORC Code (2012).
Table 2 – Mount Peake Ore Reserve estimate
Category
Proven
Probable
TOTAL
Tonnes (Mt)
0
41.1
41.1
V2O5%
-
0.42
0.42
TiO2%
-
7.99
7.99
Fe%
-
28.0
28.0
Note: Tonnage and grade figures in tables have been rounded to 2 or 3 significant figures and as a result, small discrepancies may occur
due to the effect of rounding. Ore Reserve is reported using a 15% Fe cut-off. TNG is not aware of any new information or data that
materially affects the Ore Reserve estimate reported in the ASX Announcement dated 31 July 2015 and all material assumptions and
technical parameters underpinning the assessment provided in that announcement continue to apply.
The Company engaged independent consultants to prepare Mineral Resources and Ore Reserves estimates, in the course
of doing so the consultants have:
• Reviewed TNG’s assay and QAQC data;
•
•
•
•
•
Generated electronic models that represent the interpreted geology, mineralisation and oxidation profiles, based on
drilling and geological information supplied by TNG;
Completed statistical analysis and variography for economic elements;
Estimated grades of economic elements using ordinary kriging and completed model validity checks;
Classified the Mineral Resource and Ore Reserve estimates in accordance with the JORC Code; and
Reported the estimates and compiled supporting documentation in accordance with JORC Code guidelines.
9
ANNUAL REPORT 2021REVIEW OF OPERATIONS TENEMENT LIST
As at 8 September 2021, the Group held interests in the following tenements:
Project
Mineral and ancillary Titles
Holder and TNG Equity
Mount Peake
EL27069, EL27070, EL27941, EL29578,
EL30483, EL31389, EL31850, ML28341,
ML29855, ML29856, ML30686, AA31105,
AA32037
Cawse Extended
M24/547, M24/548, M24/549, M24/550
Enigma Mining Limited - 100% (Enigma is a
wholly owned subsidiary of TNG Limited)
TNG 20% free carried to production, or can be
converted to a 2% net smelter return on ore
mined. Unicorn Pit is now excised and a wet
tonne royalty applies.
Enigma Mining Limited - 100% (Enigma is a
wholly owned subsidiary of TNG Limited)
Enigma Mining Limited - 100% (Enigma is a
wholly owned subsidiary of TNG Limited)
Evolution Mining (Mungarri) Pty Ltd
TNG 2% gold return interest on production
announcement continue to apply and have not materially
changed. The Company confirms that the form and
context in which the Competent Person’s findings are
represented have not been materially modified from the
original market announcement.
The information in this report related to the Kulgera
Project Mineral Resource estimates is extracted from
an ASX Announcement entitled “TNG expands tenure
with existing JORC resource” dated on 8 July 2020 in
accordance with the JORC Code (2012) and is available to
view on www.tngltd.com.au and www.asx.com.au.
The Company confirms that it is not aware of any new
information or data that materially affects the information
included in the original market announcement and
that all material assumptions and technical parameters
underpinning the Mineral Resource estimates in the
relevant market announcement continue to apply and
have not materially changed. The Company confirms that
the form and context in which the Competent Person’s
findings are represented have not been materially
modified from the original market announcement.
Kulgera
EL32369, EL32370
Moonlight
EL32433, EL32434
Kintore East
M16/545
AA: Access Authority (NT)
EL: Exploration Licence (NT)
M: Mining Lease (WA)
ML: Mining Lease (NT)
REGULATORY DISCLOSURES
COMPETENT PERSON’S STATEMENT
The information in this report related to the Mount
Peake Mineral Resource estimates is extracted from an
ASX Announcement entitled “Additional Information on
the Mount Peake Resource” dated 26 March 2013 in
accordance with the JORC Code (2012) and is available
to view on www.tngltd.com.au and www.asx.com.au.
The Company confirms that it is not aware of any new
information or data that materially affects the information
included in the original market announcement and
that all material assumptions and technical parameters
underpinning the Mineral Resource estimates in the
relevant market announcement continue to apply and
have not materially changed. The Company confirms that
the form and context in which the Competent Person’s
findings are represented have not been materially
modified from the original market announcement.
The information in this report related to the Mount
Peake Ore Reserve estimates is extracted from an
ASX Announcement entitled “Mount Peake Feasibility
Results” dated 31 July 2015 in accordance with the
JORC Code (2012) and is available to view on
www.tngltd.com.au and www.asx.com.au. The Company
confirms that it is not aware of any new information or
data that materially affects the information included in
the original market announcement and that all material
assumptions and technical parameters underpinning
the Ore Reserve estimates in the relevant market
10
TNG LIMITEDREVIEW OF OPERATIONS To the fullest extent permitted by law, TNG Limited, its
officers, employees, agents and advisers do not make
any representation or warranty, express or implied, as to
the currency, accuracy, reliability or completeness of any
information, statements, opinions, estimates, forecasts
or other representations contained in this report.
No responsibility for any errors or omissions from this
arising out of negligence or otherwise is accepted.
This report may include forward looking statements.
Forward looking statements are only predictions and are
subject to risks, uncertainties and assumptions which are
outside the control of TNG Limited. Actual values, results
or events may be materially different to those expressed
or implied.
PRODUCTION TARGETS AND FINANCIAL
INFORMATION
Information in relation to Mount Peake production
targets and financial information included in this
report is extracted from an ASX Announcement dated
11 September 2019 called “Optimised Delivery Strategy
for Mount Peake” available on the Company’s website
on www.tngltd.com.au. The Company confirms that all
material assumptions underpinning the production target
and financial information set out in the announcement
released on 11 September 2019 continue to apply and
have not materially changed.
FORWARD-LOOKING STATEMENTS
This report has been prepared by TNG Limited.
This report is in summary form and does not purport to
be all inclusive or complete. Recipients should conduct
their own investigations and perform their own analysis
in order to satisfy themselves as to the accuracy and
completeness of the information, statements and
opinions contained.
This report is for information purposes only. Neither this
nor the information contained in it constitutes an offer,
invitation, solicitation or recommendation in relation to the
purchase or sale of TNG Limited shares in any jurisdiction.
This report does not constitute investment advice and has
been prepared without taking into account the recipient’s
investment objectives, financial circumstances or
particular needs and the opinions and recommendations
in this announcement are not intended to represent
recommendations of particular investments to particular
persons. Recipients should seek professional advice
when deciding if an investment is appropriate.
All securities transactions involve risks, which include
(among others) the risk of adverse or unanticipated
market, financial or political developments.
11
ANNUAL REPORT 2021REVIEW OF OPERATIONS SHARE OPTIONS AND RIGHTS
Unissued shares under options
At the date of this report unissued shares of the Company
under options are:
Number of
options
Exercise price
per option $
Expiry Date
124,951,916*
2,500,000
2,500,000
5,000,000
5,000,000
$0.18
$0.15
$0.20
$0.25
$0.30
30-Nov-21
26-Feb-24
26-Feb-24
26-Feb-24
26-Feb-24
* Listed options related to a pro rata non-renounceable
entitlement issue undertaken by the Company during the
reporting period, whereby eligible shareholders could subscribe
for one new share at an issue price of $0.10 together with one
free new option.
No options were exercised during or since the end of the
reporting period.
Unissued shares under non-executive director
(“NED”) rights and performance rights
(together the “Rights”)
At the date of this report unissued shares of the Company
under Rights are:
Number of
Rights
Vesting period
end date
NED Rights
32,500,000
17-Dec-23
Performance
Rights
4,200,000
17-Dec-23
Further details about share-based payments to directors
and key management personnel are included in the
Remuneration Report.
No Rights were exercised during or since the end of the
reporting period.
The Directors of TNG Limited (“TNG” or “the Company”)
present their report on the consolidated entity consisting
of the Company and the entities it controlled at the end
of, or during, the financial year ended 30 June 2021
(hereafter referred to as the “Group”).
DIRECTORS
The names of each person who has been a Director of
the Company at any time during or since the end of the
financial year, unless noted otherwise, are as follows:
• Mr Paul Burton
• Mr John Elkington
• Mr Simon Morten
• Mr Greg Durack (resigned 4 February 2021)
PRINCIPAL ACTIVITIES
The principal activities of the Group during the course
of the financial year were the continued evaluation and
development planning for the Group’s Mount Peake
Project. There were no significant changes in the nature of
those activities of the Group during the year.
REVIEW & RESULTS OF OPERATIONS
A review of the operations during the financial year is set
out on pages 3 to 11.
The operating loss of the Group after income tax for the
year was $2.905 million (2020: loss $2.885 million). The
Group capitalised $11.999 million (2020: $16.397 million)
on Exploration and Evaluation for the year.
As at 30 June 2021, the Group held $11.434 million
(2019: $8.616 million) in cash.
SIGNIFICANT CHANGES IN THE STATE
OF AFFAIRS
Significant changes in the state of affairs of the Group
during the financial year are detailed in the Review
of Operations on pages 3 to 11. In the opinion of the
Directors, there were no other significant changes in
the state of affairs of the Group that occurred during the
financial year under review not otherwise disclosed in
this Annual Report.
DIVIDENDS
No dividends were paid during the year and the Directors
have not declared a dividend and do not recommend
payment of a dividend.
1 2
TNG LIMITEDDIRECTORS’ REPORT EVENTS SUBSEQUENT TO
REPORTING DATE
The material business risks faced by the Group that are
likely to have an effect on its financial prospects, and how
the Group manages these risks, are:
Subsequent to the end of the financial year, the Company
has continued to progress engineering, permitting and
approvals, and planning works related to the proposed
development of the Mount Peake Project as well as
implementation of TNG’s green energy strategy.
•
As announced on 26 July 2021, the FEED study was
completed and the technical FEL-3 report was delivered by
SMS group, which is currently being reviewed by TNG’s
in-house Project Engineering Team.
On 10 August 2021, the Company announced that it has
engaged Perth-based mineral process engineering group
METS Engineering to undertake a technology and process
design study for a vanadium electrolyte production facility
for TNG’s vanadium redox flow battery business unit.
On 31 August 2021, the Company advised that it has
completed a comprehensive assessment of alternative
for the TIVAN® Processing Facility proposed for Darwin
as part of the environmental approvals process for the
Mount Peake Project.
On 3 September 2021, TNG announced the execution
of a Project Development Agreement with Malaysian-
based AGV Energy & Technology Sdn Bhd to jointly and
exclusively develop green hydrogen projects in Australia
using the HySustain production technology.
In the opinion of the Directors, there are no other matters
that have arisen since the end of the financial year that
may significantly affect:
•
•
•
the results of those operations in future financial
years; or
the Group’s state of affairs in future financial years.
LIKELY DEVELOPMENTS
The Group will continue to focus on the pre-development
activities of the Mount Peake Project, prioritising the
following milestones for the 2022 financial year:
•
•
•
•
completion of engineering and design activities;
securing all required regulatory permits for
development;
progressing the project financing package for
development; and,
progressing towards a Final Investment Decision.
Future capital needs – the Group does not currently
generate cash from its operations. The Group will
require further funding in order to meet its corporate
expenses, to continue its pre-development activities
for the Mount Peake Project and to finance the
development and construction of the Mount Peake
Project. There is no assurance that the Group will be
successful in raising additional capital on acceptable
terms in the future, including to fully finance and
develop TNG’s projects.
• Exploration and development risks – whilst the
Group has already discovered Vanadium-Titanium-
Iron resources at the Mount Peake Project, there
is a risk that its mineral deposits may not be
commercially viable subject to factors outside of
the Group’s control including development costs,
changes in mineralisation, consistency and reliability
of ore grades and commodity prices. The Group
employs geologists, technical specialists and external
consultants where appropriate to address these risks.
• Commodity price and exchange rate risks – as a
Group which is focused on the development of its
Vanadium-Titanium-Iron project, the Group is exposed
to movements in these commodity prices, which
are quoted in foreign currency. The Group monitors
historical and forecast pricing for these commodities
from a range of sources in order to inform its planning
and decision making.
pandemic is impacting global economic markets and
it may result in delays in development, financing and
to the government approval processes relating to
the Mount Peake Project. The Group is monitoring
the situation closely and has considered the impact
of COVID-19 on the Group’s business and financial
performance. However, the situation is continually
evolving, and the consequences are therefore
inevitably uncertain.
• Climate change regulation – mining of mineral
resources is relatively energy intensive and is
dependent on the consumption of fossil fuels.
Increased regulation and government policy designed
to mitigate climate change may adversely affect the
Group’s cost of operations and adversely impact the
financial performance of the Group.
1 3
the operations of the Group in future financial years;
• Coronavirus (COVID-19) – the ongoing COVID-19
ANNUAL REPORT 2021DIRECTORS’ REPORT INFORMATION ON DIRECTORS
MR PAUL BURTON - MANAGING DIRECTOR
AND CEO
MR JOHN ELKINGTON - CHAIR AND
NON-EXECUTIVE DIRECTOR
Experience, Qualifications & Special
Responsibilities
Experience, Qualifications & Special
Responsibilities
Mr Elkington is a highly experienced Australian mining
executive and company director. His other roles include
operating as an independent mining consultant providing
company management, strategic cash-flow modelling and
financial analysis, as well as project and risk management
advice for consulting, mining and development companies
in the mining industry.
Mr Elkington holds a Master of Science degree (Mineral
Economics) from the Western Australian School of
Mines, Curtin University. He is a Fellow of the Australian
Institute of Company Directors (FAICD) and a Fellow
of the Australasian Institute of Mining and Metallurgy
(FAusIMM).
Mr Elkington was appointed as a Director of the Company
on 1 February 2019.
Other Listed Company Directorships
Mr Elkington has been a non-executive Director and Chair
of Koonenberry Gold Limited since 30 June 2021.
It is noted that Mr Elkington was a Director and Chair of
the Mid West Ports Authority, a Government enterprise,
from February 2017 to February 2020.
Director’s Interest in Securities (as at the date of
this report)
33,334 ordinary shares
3,334 listed options at $0.18 each and expiring on
30 November 2021
2,800,000 non-executive director (“NED”) rights expiring
on 17 December 2023
Mr Burton is an experienced mining executive, having
worked in the resources sector throughout Australia and
overseas for the last 30 years.
Mr Burton joined TNG Limited in 2007 and was appointed
Managing Director in 2009. He has been involved in the
discovery and development of TNG’s flagship Mount
Peake Project. He is also the driving force behind the
Company’s patented TIVAN® metallurgical process and
was instrumental in the creation and listing of Todd River
Resources Ltd (ASX:TRT) which was spun out of TNG.
Previous career appointments include senior and
executive roles at Anglo American, De Beers, Normandy
Mining Ltd and Minotaur Exploration Ltd.
Mr Burton holds a Bachelor of Science Honours degree
(BSc Hons) in Geology, and a Master of Science
(MSc) degree in Mineral Exploration and Mining from
McGill University in Canada. He is a Graduate of the
Australian Institute of Company Directors, a Fellow of
the Association of Applied Exploration Geochemists, a
member of both the Australian and Canadian Institutes
of Mining and Metallurgy, and a Member of the British
Institute of Directors.
Mr Burton was appointed as a Director of the Company
on 11 August 2008.
Other Listed Company Directorships
Mr Burton has been a non-executive director of Western
Mines Group since 28 October 2020.
Mr Burton was a director of Todd River Resources Limited
from June 2014 to January 2019.
Director’s Interest in Securities (as at the date of
this report)
7,688,889 ordinary shares
406,792 listed options at $0.18 each and expiring on
30 November 2021
11,800,000 performance rights expiring on
17 December 2023
1 4
TNG LIMITEDDIRECTORS’ REPORT MR SIMON MORTEN - INDEPENDENT
NON-EXECUTIVE DIRECTOR
Mr Durack was appointed as a Director of the Company
on 31 May 2018 and retired on 4 February 2021.
Experience, Qualifications & Special
Responsibilities
Mr Morten has 30 years of experience in the titanium
pigment industry including extensive expertise in pigment
manufacture and processing. He spent most of his career
with Cristal, which was recently acquired by Tronox, one
of the world’s leading vertically integrated producers of
high-quality titanium products and zircon, with a diverse
global footprint.
Mr Morten holds a Bachelor Degree in Applied Science
(Chemistry) from the University of Central Queensland,
is a graduate of the Australian Institute of Company
Directors, and has served on various Boards that
controlled Cristal’s interests in Australia, the UK
and China.
Mr Morten was appointed as a Director of the Company
on 17 February 2020.
Other Listed Company Directorships
Mr Morten has held no other directorships of publicly
listed companies during the last three years.
Director’s Interest in Securities (as at the date of
this report)
164,609 ordinary shares
16,461 listed options at $0.18 each and expiring on
30 November 2021
Other Listed Company Directorships
Mr Durack was appointed Managing Director of Juno
Minerals Limited on 20 November 2020.
COMPANY SECRETARY
MS PAULA RAFFO
Experience, Qualifications & Special
Responsibilities
Ms Raffo is a Chartered Secretary with a thorough
knowledge and understanding of the corporate
governance and investor relations fields, having worked
in these areas for the past 15 years. She has previous
Board experience having worked with Directors and
senior management of both ASX and B3 (Sao Paulo Stock
Exchange) companies in industries including metals
& mining and insurance. She is an Associate of the
Governance Institute of Australia and holds a Bachelor of
Business and a Graduate Diploma in Applied Corporate
Governance.
Ms Raffo joined the Company in April 2019 as Investor
and Public Relations Executive. She was appointed joint
Company Secretary on 1 September 2020 and then sole
Company Secretary on 16 March 2021, while remaining in
her role as TNG’s Investor and Public Relations Executive.
1,400,000 NED rights expiring on 17 December 2023
MR JASON GILTAY - RETIRED
MR GREG DURACK - INDEPENDENT
NON-EXECUTIVE DIRECTOR (RETIRED)
Experience, Qualifications & Special
Responsibilities
Experience, Qualifications & Special
Responsibilities
Mr Durack is a highly experienced metallurgist and
mining executive with more than 30 years’ global mining
experience. He has a distinguished career spanning
multiple commodities and projects. His consulting
company was the Study Manager for the Definitive
Feasibility Study for Pilbara Minerals Limited (ASX:PLS)
Pilgangoora Lithium-Tantalum Project in Western
Australia’s Pilbara region, and was also responsible
for the metallurgical test work program and process
design for Stages 1 and 2, and part of the process plant
commissioning team providing technical input.
Mr Durack is a qualified Chemist (B. App. Sc. in App.
Chem. from WAIT, now Curtin University), but in a
practical sense worked as a Metallurgist in operations.
He is a member of the Australian Institute of Mining
and Metallurgy.
Mr Giltay is a senior finance executive with more than
20 years’ experience in the areas of corporate finance,
commercial management and business strategy.
He has extensive experience in the resources industry,
having consulted to and worked for a range of resources
companies engaged in exploration, project development,
operations and mining services. He holds a Bachelor of
Commerce and Postgraduate Diploma in HRM from the
University of Western Australia.
Mr Giltay joined the Company in July 2018 as General
Manager – Commercial. He was appointed Company
Secretary on 21 December 2018 and then retired
from that position on 16 March 2021 to focus on an
expanded role as TNG’s General Manager Commercial
& Corporate Development.
1 5
ANNUAL REPORT 2021DIRECTORS’ REPORT BOARD MEETINGS
Non-Executive Directors
The number of Board meetings held during the financial
year, and the attendance of the Directors at each meeting,
were as follows:
• Mr John Elkington (appointed 1 February 2019)
• Mr Simon Morten (appointed 17 February 2020)
• Mr Greg Durack (appointed 31 May 2018,
Board Meetings
retired 4 February 2021)
Director
Paul Burton
John Elkington
Simon Morten
Greg Durack1
A
15
15
15
9
A - Number of meetings attended
B
15
15
15
9
2. REMUNERATION GOVERNANCE
The Board is directly responsible for the review of
remuneration packages and policies applicable to
Senior Executives and Directors as well as oversight of
incentive structures, superannuation entitlements and
performance evaluation for all Directors.
B - Number of meetings held during the time the director held
office during the year
3. EXECUTIVE REMUNERATION
ARRANGEMENTS AND PRINCIPLES
3.1 Remuneration principles and strategy
The Company’s remuneration policy is designed to
align the interests of the KMP with the interests of
shareholders, cognisant that the Company’s success
is driven by its ability to recruit, retain and motivate
high-quality personnel and Directors. The Company’s
remuneration policy is designed as follows:
• Structure remuneration practices to align with the
Company’s wider objectives and strategies.
• Provide a fixed remuneration component and, where
appropriate, offer specific short-term (cash bonuses)
and long-term (equity schemes) incentives that align
with the Company’s performance.
• Establish specific remuneration by taking into
account the stage of the Company’s development,
market conditions and comparable salary levels
for companies of a similar size and stage of
development, and operating in a similar sector.
• Align remuneration with role, responsibilities and
commitment.
• Utilise external independent advice on remuneration
on an as required basis.
The Board believes that this remuneration policy is
appropriate given the stage of development of the
Company and is appropriate in aligning personnel
performance with shareholder and business objectives.
The Board believes this policy has been effective in
attracting and retaining appropriately qualified and
experienced personnel to effectively manage the
Company’s activities and progress the Company’s
strategies.
1 - Retired as a Director on 4 February 2021
Due to the Company’s size and level of operations, on
30 May 2019 the Board resolved to suspend the Audit
Committee and the Remuneration Committee and have
the Board assume these functions.
REMUNERATION REPORT (AUDITED)
This Remuneration Report, for the year ended
30 June 2021, which has been audited, details the
remuneration arrangements for the Key Management
Personnel (“KMP”) of the Company in accordance
with the requirements of the Corporations Act 2001 and
its regulations.
1. INTRODUCTION
The Remuneration Report details the remuneration
arrangements for KMP who are defined as having the
authority and responsibility for planning, directing and
controlling the major activities of the Group, and include
both Executives and Non-Executive Directors (“NED”)
for the purpose of this report. The KMP covered in this
Remuneration Report are:
Executives
• Mr Paul Burton - Managing Director & CEO
(appointed a Director on 11 August 2008)
• Mr Jonathan Fisher – Chief Financial Officer
(appointed 15 February 2021)
• Mr Jason Giltay - General Manager Commercial &
Corporate Development (appointed 8 July 2018) &
Company Secretary (appointed 21 December 2018
and retired 16 March 2021)
• Ms Paula Raffo – Investor and Public Relations
Executive (appointed 15 April 2019) & Company
Secretary (appointed 1 September 2020)
1 6
TNG LIMITEDDIRECTORS’ REPORT • Option Plan (Approved by shareholders at 2020 AGM)
The Company previously had in place the TNG Limited
Employee Option Plan (applicable to employees and
executive Directors) and TNG Limited Non-Executive
Director and Consultant Option Plan (applicable to
NEDs, contractors and consultants). The Company
replaced these plans in 2020 with a single Option
Plan (“TNG Option Plan”) that is compliant with
ASIC Class Order [CO 14/1000].
The Board believes that having the Option Plan in
place and the ability to issue Options to employees,
Directors and contractors pursuant to the Option Plan
provides a suitable mechanism to attract and retain
talented and high calibre key management personnel
who are able to deliver the Company’s business
objectives; to attract and retain Directors and
contractors to the Company; to ensure remuneration
is competitive in relation to the broader market
and is linked to role, experience and performance;
and, to ensure remuneration is compatible with the
Company’s phase of development and cash
flow position.
Under the TNG Option Plan, Eligible Employees (being
a full or part time employee (including an Executive
Director, a Non-Executive Director, a contractor, a
causal employee or a prospective participant of the
Company or its subsidiaries)) may be granted options
as part of their remuneration or fees. Each option
entitles the holder to subscribe for and be allotted
one TNG share at an exercise price per option to be
determined by the Board at the time it resolves to
make offers of options, having regard to such matters
as the Board considers appropriate (but which
exercise price will not be less than the market value
of a share at that time).
Options are granted for no consideration, may
be subject to vesting conditions or vest on grant
date and do not carry voting rights or dividend
entitlements.
REMUNERATION REPORT (AUDITED)
(continued)
3.2 Approach to setting remuneration
In FY21, the executive remuneration framework consisted
of fixed and variable remuneration as described below.
3.2.1 Fixed remuneration
Fixed remuneration consists of base salary, as well
as employer contributions to superannuation funds.
Remuneration levels are reviewed annually by the Board
through a process that considers individual performance,
the market and overall performance of the Company.
A senior executive’s remuneration is also reviewed
on promotion.
3.2.2 Variable remuneration
Variable remuneration consists of performance linked
remuneration including short and long-term incentives
designed to incentivise and reward Executives for
meeting or exceeding specific objectives or as recognition
for strong individual performance.
Short-term incentives
Short-term incentives are provided in the form of cash
bonuses and/or salary increases, as set out in individual
employment agreements or as determined by the Board.
They are used to encourage and reward exceptional
performance in the realisation of strategic outcomes and
growth in shareholders’ wealth.
The Company (through the Board) has the discretion to
grant to the Executives additional incentives from time
to time in connection with the achievement of significant
milestones for the Company or otherwise in recognition
of services to the Company.
No short-term incentives were awarded during the
reporting period.
Long-term incentives
Long term incentives comprise of shares, share options
and performance rights which are granted from time
to time to attract and retain talented and high calibre
personnel who are able to deliver the Company’s
business objectives. Incentive securities are also used
to ensure remuneration is competitive in relation to the
broader market and is linked to role, experience and
performance, and to ensure remuneration is compatible
with the Company’s phase of development and
cash position.
There is no policy currently in place for the KMP to limit
their exposure to risk in relation to the shares held and
share options granted as part of their remuneration.
1 7
ANNUAL REPORT 2021DIRECTORS’ REPORT NED Rights vesting linked to performance conditions
will not compromise the Board’s objectivity and
independence and all decisions will continue to
be made solely in the interests of TNG and all
shareholders.
The key terms of the NED Rights Plan are the same
as the key terms of the Performance Rights Plan,
except that NED Rights may only be issued to
Non-Executive Directors.
• Company Share Plans
The TNG Employee Share Plan and TNG Non-
Executive Director and Consultant Share Plan
(together referred to as the “Company Share Plans”)
allow certain Group employees to acquire shares of
the Company (“Plan Shares”). Employees have been
given a limited recourse 5-year interest free loan in
which to acquire the Plan Shares.
Loans are not recognised in the statement of financial
position, as the Company only has recourse to the
value of the shares. The arrangement is accounted
for as an in-substance option over ordinary shares.
The grant date fair value of the shares granted to
employees is recognised as an employee expense
with a corresponding increase in equity on grant date
on which the employees become unconditionally
entitled to the shares.
The fair value of the shares issued pursuant to the
Company Share Plans are measured using the Black
Scholes pricing model, taking into account the terms
and conditions upon which the in-substance options
were granted. The amount recognised as an expense
is adjusted to reflect the actual number of shares
that vest.
REMUNERATION REPORT (AUDITED)
(continued)
• Performance Rights Plan (Approved by shareholders
at 2018 AGM)
TNG established the Performance Rights Plan to
attract and retain talented key personnel required for
the successful delivery of the Mount Peake Project,
and to appropriately incentivise its senior leadership
team to drive company performance for the benefit of
TNG and all shareholders.
The TNG Performance Rights Plan contemplates
the issue to Eligible Executives (being actual and
prospective full-time, part-time or casual employees,
executive Directors (excluding Non-Executive
Directors) and consultants) of rights which carry the
entitlement to be issued shares on satisfaction of
performance conditions determined by the Board
(“Performance Rights”).
The Performance Rights will vest only upon
satisfaction of certain key performance/vesting
conditions as set by the Board of Directors and will
entitle the holder to one fully-paid ordinary share for
each vested right.
Each Right will, upon vesting and exercise, result in
the issue of one ordinary share in the Company.
No issue price or exercise price is payable for
the Rights. The Board will determine (in its sole
discretion) the extent to which the relevant vesting
conditions have been satisfied. Rights may vest (and
be exercised into shares) progressively as vesting
conditions are satisfied.
• Non-Executive Director (NED) Rights Plan (Approved
by the Board in May 2020)
The NED Rights Plan was established to attract and
retain talented Non-Executive Directors and to align
the interests of NEDs with those of shareholders
in order to increase shareholder value by enabling
Eligible NEDs to share in the future growth and
profitability of the Company.
The NED Rights Plan contemplates the issue to
Eligible NEDs of rights which carry the entitlement
to be issued fully-paid ordinary shares on satisfaction
of vesting conditions determined by the Board
(“NED Rights”).
While some corporate governance bodies suggest
that NED remuneration should not be linked to
performance, in the circumstances of TNG and its
current stage of development, the Board considers
that it is appropriate to adequately incentivise and
reward NEDs (including as an attraction and retention
tool) based on performance and achievement of key
milestones. The Board is of the view that having
1 8
TNG LIMITEDDIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (continued)
3.3 Long-term incentives granted in FY21
3.3.1 Options
During the reporting period, the Company granted the following Options to Mr Jonathan Fisher, TNG’s Chief Financial
Officer, as part of his remuneration package. Details of the Options granted are as follow:
Number of Options Granted
Exercise Price
Vesting Condition
2,500,000
2,500,000
5,000,000
5,000,000
$0.15
$0.20
$0.25
$0.30
On signing Employment contract
After 12 months employment
Completion of project finance
On first drawdown of project finance
The options have a 12-month vesting period with exercise subject to achieving the applicable milestone, and an expiry date
of 26 February 2024.
3.3.2 NED Rights and Performance Rights
During the reporting period, the Company granted NED Rights for the Non-Executive Directors and Performance Rights
for key management personnel (together, the “Rights”) under the TNG Limited NED Rights and Performance Rights Plans,
respectively.
The grant of Rights to the Directors, including the Managing Director, was approved by shareholders at the Company’s
2020 AGM held on 30 November 2020.
The Rights will vest only upon satisfaction of the specific vesting condition for each class. Each Right will, upon subsequent
exercise, entitle the holder to be issued one ordinary share in TNG.
No issue price or exercise price is payable for the Rights. The Board will determine (in its sole discretion) the extent to
which the relevant vesting conditions have been satisfied. Rights may vest (and be exercised into shares) progressively as
vesting conditions are satisfied.
The Rights are structured in different classes as detailed below, with each class of Rights subject to different vesting
conditions. The classes are the same for both the Performance Rights and NED Rights, with the same vesting conditions
to apply.
Class
Vesting condition to be met
A
B
C
D
E
F
Completion of the Mount Peake Project Front-End Engineering and Design Study by SMS
group, and receipt of turnkey EPC proposal from SMS group
Entry into binding documentation for the acquisition of land for the Darwin Processing
Facility with the NT Government
Commencement of ground-breaking activities at the Mount Peake Project
Entry into binding documentation to raise an amount of equity finance which is sufficient to
support the project financing of the Mount Peake Project
Entry into binding documentation to raise an amount of debt finance which is sufficient to
support the project financing of the Mount Peake Project
TNG market capitalisation reaching A$500 million based on a volume weighted average
price of TNG shares over 20 consecutive trading days on which TNG shares have traded
multiplied by the number of issued shares on the day of the grant of the Performance
Rights, which will exclude any new shares issued after the grant date
Weighting
NED
KMP
5%
15%
5%
5%
20%
20%
20%
20%
20%
20%
30%
20%
During the reporting period, the Company granted 4,200,000 NED Rights to non-executive directors and 20,300,000
Performance Rights to key management personnel (excluding NEDs).
1 9
ANNUAL REPORT 2021DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED)
(continued)
3.4 Executive contracts
Paul Burton - Managing Director & CEO
Paula Raffo – Investor & Public Relations Executive
and Company Secretary
•
Term of Agreement – April 2019 until terminated
by either party (Ms Raffo was appointed Investor &
Public Relations Executive in April 2019 and appointed
Company Secretary on 1 September 2020).
•
Term of Agreement: October 2014 until terminated by
either party.
• Salary - $160,000 per annum excluding super plus any
reasonable expense incurred
• Salary: $476,100 per annum excluding super plus any
• Early Termination – one month’s written notice by
reasonable expense incurred.
either party.
•
•
Incentive Bonus: An incentive bonus based on market
capitalisation (“MCIB”) equivalent to 20% of base
salary, payable when the market capitalisation of TNG
reaches trigger points set by the Board: $200 million;
$300 million; $400 million; $500 million; and any
additional trigger points as agreed in writing between
TNG and Mr Burton from time to time or at the
Board’s discretion.
The incentive will be payable in cash or (subject to
shareholder approval) an equivalent amount in TNG
shares. If the market capitalisation of TNG remains
above a trigger point for a continuous period of at
least three months, then base salary will increase
(with effect from the end of the three-month period)
by the amount of the relevant MCIB payment.
• Early termination: The Company to give six months’
written notice or make a payment of six months’
salary in lieu. The employee to provide six months’
written notice. This applies to any reason other than
gross misconduct.
Jonathan Fisher – Chief Financial Officer
•
Term of Agreement: February 2021 until terminated
by either party.
3.5 Non-Executive Director remuneration
With respect to the remuneration of Non-Executive
Directors:
•
The full Board determines the remuneration of the
Non-Executive Directors.
• Non-Executive Director remuneration is reviewed
annually, based on market practice, duties and
accountability.
•
•
The maximum aggregate amount of Directors fees is
subject to shareholder approval at a General Meeting.
To align Directors’ interests with shareholder
interests, the Directors are encouraged to hold shares
in the Company and may receive Company Options or
Rights if approved by shareholders.
Total remuneration for all Non-Executive Directors,
approved by shareholders at the 2015 General Meeting,
is not to exceed $500,000 per annum. The current fee
structure is as follows:
• Base fee for the Chairperson is $120,000 per annum
plus superannuation.
• Base fee for the other Non-Executive Directors is
• Salary: $350,000 per annum excluding super plus any
$60,000 per annum plus superannuation.
Non-Executive Directors are not provided with retirement
benefits apart from statutory superannuation.
reasonable expense incurred.
• Early Termination: three months’ written notice by
either party.
Jason Giltay – General Manager Commercial &
Corporate Development
•
Term of Agreement – July 2018 until terminated
by either party (Mr Giltay was appointed General
Manager Commercial in July 2018, appointed
Company Secretary on 21 December 2018 and retired
as Company Secretary on 16 March 2021).
• Salary - $245,000 per annum excluding super plus
any reasonable expense incurred
• Early Termination - three months’ written notice by
either party.
2 0
TNG LIMITEDDIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (continued)
4. CONSEQUENCES OF PERFORMANCE ON SHAREHOLDER WEALTH
In considering the consolidated entity’s performance on shareholder wealth, the Board notes that at this stage of
development, as a company pre-planning for development of its primary asset the Mount Peake Project and with no
operational assets, there is no relevant direct link between the Company’s financial performance and earnings, and the
advancement of shareholder wealth.
Profit/(loss) attributable to
owners of the Company
Dividends paid
Share price at 30 June
Change in share price
Return on capital employed
2021
2020
2019
2018
2017
(2,904,883)
(2,885,329)
(3,089,785)
(3,329,120)
(4,436,184)
-
$0.060
(2%)
(4%)
-
$0.061
(41%)
(4%)
-
$0.104
(16%)
(3%)
-
$0.124
(14%)
(3%)
-
$0.144
8%
(4%)
5. DIRECTORS’ AND EXECUTIVE OFFICERS’ REMUNERATION
Details of the nature and amount of each major element of remuneration of each director of the Company, and other key
management personnel of the Group are detailed below.
5.1 Details of Remuneration
5.1.1 Details of Base Remuneration for the years ended 30 June 2021 and 30 June 2020
FY2021
FY2020
Salary &
Fees
Superannuation
Total
Salary &
Fees
Superannuation
Total
$
$
$
$
$
$
476,100
127,885
245,000
154,693
120,900
35,692
80,750
-
46,621
12,149
23,275
14,696
522,721
140,034
268,275
169,389
461,451 1
-
245,000
-
43,838
505,289
-
-
23,275
268,275
-
-
11,970
132,870
163,337 1
10,830
3,676
5,985
-
39,368
86,735
53,897 1
31,506 1
-
33,012
5,120
1,817
3,136
174,167
59,017
33,323
36,148
1,241,020
118,372
1,359,392
988,203
88,016
1,076,219
Executives
Paul Burton
Jonathan Fisher 2
Jason Giltay 3
Paula Raffo 4
Directors
John Elkington 5
Greg Durack 5, 6
Simon Morten 5, 7
John Davidson 8
Total
1 Reduction of up to 20% of Directors’ salary and fees due
to the COVID-19 pandemic, which was capped at a duration
of three months from commencement.
2 Appointed CFO on 15 February 2021
3 Appointed General Manager Commercial in July 2018, and
appointed as Company Secretary on 21 December 2018.
Resigned as Company Secretary on 16 March 2021 to take
on expanded role of General Manager Commercial &
Corporate Development
4 Appointed Company Secretary on 1 September 2020
5 Includes consulting fees, refer to Note 26 (b)
6 Retired as a Director on 4 February 2021
7 Appointed as a Director on 17 February 2020
8 Retired as a Director on 7 February 2020
2 1
ANNUAL REPORT 2021DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (continued)
5.1.2 Details of Total Remuneration for the year ended 30 June 2021
Base Remuneration
Short-Term
Long-Term
Salary, Fees
& Super
$
Bonus
$
Other 1
Share-based
payments 2
Executives
Paul Burton
Jonathan Fisher 4
Jason Giltay 5
Paula Raffo 6
Directors
John Elkington 7
Greg Durack 7, 8
Simon Morten 7, 9
Total
522,721
140,034
268,275
169,389
132,870
39,368
86,735
1,359,392
-
-
-
-
-
-
-
14,649
-
-
-
6,000
3,000
3,000
26,649
171,723
98,789
29,106
21,829
37,866
-
18,933
378,246
Proportion of
remuneration
performance
related
%
24%
41%
10%
11%
21%
-
17%
Total 3
$
709,093
238,823
297,381
191,218
176,736
42,368
108,668
1,764,287
1 Related to refund of directors’ fee reduction due to the COVID-19
5 Appointed General Manager Commercial in July 2018, and
pandemic, which was then used by the Directors to buy an
equivalent value of after-tax amount of TNG shares on-market
2 Equity-settled remuneration based on the value of the performance
appointed as Company Secretary on 21 December 2018. Resigned
as Company Secretary on 16 March 2021 to take on expanded role
of General Manager Commercial & Corporate Development
rights, NED rights and options granted during the period
6 Appointed Company Secretary on 1 September 2020
3 Accrued annual leave and long service leave as noted in table
7 Includes consulting fees, refer to Note 26 (b)
5.1.4 are not included in the total above but forms part of the total
remuneration for the year
8 Retired as a Director on 4 February 2021
9 Appointed as a Director on 17 February 2020
4 Appointed CFO on 15 February 2021
5.1.3 Details of Total Remuneration for the year ended 30 June 2020
Base Remuneration
Short-Term
Long-Term
Salary, Fees
& Super
$
Bonus
$
Other
Share-based
payments
Executives
Paul Burton
Jason Giltay
Directors
John Elkington 3
Greg Durack 3, 4
Simon Morten 3, 5
John Davidson 3, 6
505,289 2
268,275
174,167 2
59,017 2
33,323 2
36,148
95,220
25,000
-
-
-
-
Total
1,076,219
120,220
-
-
-
-
-
-
-
Proportion of
remuneration
performance
related
%
16%
9%
-
-
-
-
Total 1
$
600,509
293,275
174,167
59,017
33,323
36,148
1,196,439
-
-
-
-
-
-
-
1 Accrued annual leave and long service leave as noted in table
3 Includes consulting fees, refer to Note 26 (b)
5.1.4 are not included in the total above but forms part of the total
remuneration for the year
2 Reduction of up to 20% of Directors’ salary and fees due
to the COVID-19 pandemic, which was capped at a duration
of three months from commencement.
4 Retired as a Director on 4 February 2021
5 Appointed as a Director on 17 February 2020
6 Retired as a Director on 7 February 2020
2 2
TNG LIMITEDDIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (continued)
5.1.4 Details of Accrued Leave for the year ended 30 June 2021 and 30 June 2020
FY2021
Long Service
Leave2
Annual Leave1
$
$
23,927
79,350
8,491
4,712
7,873
-
-
-
Total
$
103,277
8,491
4,712
7,873
45,003
79,350
124,353
Executives
Paul Burton 1,2
Jonathan Fisher 1
Jason Giltay 1
Paula Raffo 1
Total
FY2020
Long Service
Leave2
Annual Leave1
$
$
Total
$
33,108
79,350
112,458
-
4,711
-
37,819
-
-
-
-
4,711
-
79,350
117,169
1 Includes accrued annual leave not taken over and above base salary detailed within the service contracts item 3.3
2 Includes accrued long service leave not taken over and above base salary detailed within the service contracts item 3.3
5.1.5 Analysis of bonuses included in the remuneration
There was no bonus awarded to any director or Key Management personnel during FY21.
Details of the vesting profile of the short-term incentive cash bonuses awarded as remuneration to each director of the
Company, and other key management personnel in FY20 are detailed below.
Short-term incentive bonus – FY2020
Included in remuneration
$ (A)
% vested in year
% forfeited in year
Paul Burton 1
Jason Giltay
95,220
25,000
100%
100%
-
-
(A) Amounts included in remuneration for the financial year were approved by the Board of Directors and represent the amount related to
the financial year based on achievement of personal goals and satisfaction of specified criteria.
1 Mr Paul Burton agreed to use the proceeds from his bonus to cover the costs of the purchase of 2,000,000 Plan Shares as a way to
return the investment to the Company.
5.2 Equity instruments
All Rights and Options refer to NED rights and performance rights and options over ordinary shares of TNG Limited, which
are exercisable on a one-for-one basis under the respective long-term incentive plans.
5.2.1 Rights and options over equity instruments granted as compensation
Details on Rights and Options over ordinary shares in the Company that were granted as compensation to each key
management person during the reporting period are as follows:
Number
of options
granted during
FY2021
Options
Fair value per
option at grant
date $
Exercise price
per option $
Grant date
Jonathan Fisher
2,500,000
26-Feb-21
2,500,000
26-Feb-21
5,000,000
26-Feb-21
5,000,000
26-Feb-21
$0.037
$0.031
$0.026
$0.023
$0.15
$0.20
$0.25
$0.30
Expiry Date
26-Feb-24
26-Feb-24
26-Feb-24
26-Feb-24
Number of vested
options vested
during FY2021
-
-
-
-
2 3
ANNUAL REPORT 2021DIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
Number
of rights
granted
during
FY2021
Vesting Condition
Grant
date
Expiry
Date
Class A
Class B
Class C
Class D
Class E
Class F
11,800,000 1,770,000
590,000 2,360,000 2,360,000 2,360,000 2,360,000 17-Dec-20 17-Dec-23
5,000,000
750,000
250,000 1,000,000 1,000,000 1,000,000 1,000,000 26-Feb-21 17-Dec-23
2,000,000
300,000
100,000
400,000
400,000
400,000
400,000 17-Dec-20 17-Dec-23
1,500,000
225,000
75,000
300,000
300,000
300,000
300,000 17-Dec-20 17-Dec-23
2,800,000
140,000
140,000
560,000
560,000
560,000
840,000 17-Dec-20 17-Dec-23
1,400,000
70,000
70,000
280,000
280,000
280,000
420,000 17-Dec-20 17-Dec-23
1,400,000
70,000
70,000
280,000
280,000
280,000
420,000 17-Dec-20
N/A
Rights
Executives
Paul
Burton
Jonathan
Fisher
Jason
Giltay
Paula
Raffo
Directors
John
Elkington
Simon
Morten
Greg
Durack1
1 Retired as a Director on 4 February 2021, therefore his NED rights lapsed under the terms of the NED Rights Plan.
All Rights and Options expire on the earlier of their expiry date or termination of the individual’s employment. The options
have a 12-month vesting period with exercise subject to achieving applicable milestone and an expiry date of 26 February
2024. The total number of Rights to vest will depend on the satisfaction of the vesting conditions/milestones in each class.
The vesting period of the Rights will end on 17 December 2023. Details of the vesting conditions/milestones are included in
the long-term incentives’ discussions on section 3.3 of the Remuneration Report.
5.2.2 Exercise of options granted as compensation
During the period no options were exercised by the KMP.
5.2.3 Details of equity incentives affecting current and future remuneration
Details of vesting profiles of the Rights and Options held by each key management person of the Company, are detailed
below.
Instrument
Grant date
% vested
in year
% forfeited
in year
Financial
years which
grant vest
Executives
Paul Burton
Jonathan Fisher
Jason Giltay
Paula Raffo
Non-Executive
Directors
John Elkington
Simon Morten
Greg Durack1
Rights
Rights
11,800,000
17-Dec-20
5,000,000
26-Feb-21
Options
15,000,000
26-Feb-21
Rights
Rights
2,000,000
17-Dec-20
1,500,000
17-Dec-20
Rights
Rights
Rights
2,800,000
17-Dec-20
1,400,000
17-Dec-20
1,400,000
17-Dec-20
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
1-Jul-23
1-Jul-23
1-Jul-23
1-Jul-23
1-Jul-23
Expiry date
17-Dec-23
17-Dec-23
26-Feb-24
17-Dec-23
17-Dec-23
0%
0%
100%
1-Jul-23
1-Jul-23
1-Jul-23
17-Dec-23
17-Dec-23
17-Dec-23
1 Retired as a Director on 4 February 2021, therefore his NED rights lapsed under the terms of the NED Rights Plan
2 4
TNG LIMITEDDIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
5.2.4 Options and rights over equity instruments
The movement during the reporting period, by number of Rights and Options over ordinary shares in TNG Limited held,
directly, indirectly or beneficially, by each key management person, including their related parties, is as follows:
Held at
1 July
2020
Granted as
remuneration
Exercised
Lapsed
Forfeited
Held at
30 June
2021
Vested
during the
year
Vested and
exercisable
at 30 June
2021
Options
Executive
Jonathan Fisher
Rights
Executives
Paul Burton
Jonathan Fisher
Jason Giltay
Paula Raffo
Directors
John Elkington
Simon Morten
Greg Durack1
-
-
-
-
-
-
-
-
15,000,000
11,800,000
5,000,000
2,000,000
1,500,000
2,800,000
1,400,000
1,400,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,400,000
-
-
-
-
-
-
-
-
15,000,000
11,800,000
5,000,000
2,000,000
1,500,000
2,800,000
1,400,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 Retired as a Director on 4 February 2021, therefore his NED rights lapsed under the terms of the NED Rights Plan
5.2.5 Modification of terms of equity-settled share-based payment transactions
No terms of equity-settled share-based payment transactions (including shares or options granted as remuneration to a key
management person) have been altered or modified by the issuing entity during the reporting period.
In the prior reporting period, at the 2019 Annual General Meeting held on 18 November 2019, shareholder approval under
section 208(1) of the Corporations Act 2001 was sought and received to extend the Repayment Date of 4,000,000 Plan
Shares granted to Mr Paul Burton on 26 November 2014 by four years to 27 November 2023.
6. KEY MANAGEMENT PERSONNEL TRANSACTIONS
6.1 Other transactions with key management personnel and their related parties
Key management personnel, or their related parties, may hold positions in other entities that result in them having control
or joint control over the financial or operating policies of those entities.
Some of these entities transacted with the Company during the year. The terms and conditions of the transactions with
Key Management Personnel and their related parties were no more favourable than those available, or which might
reasonably be expected to be available, on similar transactions to non-Key Management Personnel related entities on an
arm’s length basis.
2 5
ANNUAL REPORT 2021DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (continued)
6.2 Movements in shares
The movement during the reporting period in the number of ordinary shares in TNG Limited held, directly, indirectly or
beneficially, by each KMP, including their related parties, is as follows:
Executives
Paul Burton
Jonathan Fisher
Jason Giltay
Paula Raffo
Directors
John Elkington
Simon Morten
Greg Durack 2
Held at
1 July 2020
Purchases
Received on
exercise of
options
Sales
Held at
30 June 2021
7,661,110
406,792
-
-
-
-
148,148
459,496
-
-
-
33,334
16,461
51,056
-
-
-
-
-
-
-
379,013 1
7,688,889
-
-
-
-
-
-
-
-
-
33,334
164,609
510,552
1 Sale of a small portion of Mr Burton’s holding of TNG shares to allow him to participate in the Company’s Entitlement Issue Offer
undertaken in November 2020.
2 Holding at date of retirement
The audited remuneration report ends here.
2 6
TNG LIMITEDDIRECTORS’ REPORT ENVIRONMENTAL REGULATION
NON-AUDIT SERVICES
During the year, KPMG provided non-audit services.
The directors are satisfied that the provision of non-audit
services is compatible with the general standard of
independence for auditors imposed by the Corporations
Act 2001. The nature and scope of each type of non-audit
service provided means that auditor independence was
not compromised. Refer to Note 7 in the Financial Report.
LEAD AUDITOR’S INDEPENDENCE
DECLARATION
The Lead Auditor’s Independence Declaration as required
under section 307C of the Corporations Act 2001
immediately follows this Directors’ Report and forms part
of the Directors’ Report for the financial year ended
30 June 2021.
ROUNDING
The Group is of a kind referred to in ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument
2016/191 and in accordance with that instrument,
amounts in the Consolidated Statements and Directors’
Report have been rounded off to the nearest thousand
dollars, unless otherwise stated.
This Directors’ Report is made in accordance with a
resolution of the Directors:
Paul Burton
Managing Director & CEO
17 September 2021
The Group holds various mineral licences to regulate its
activities in Australia. These licences include conditions
and regulation with respect to the management and
rehabilitation of areas disturbed during the course of its
activities. However, the Board believes that the Group
has adequate systems in place for the management of
its environmental requirements and is not aware of any
breach of those environmental requirements as they apply
to the Group.
INDEMNIFICATION OF DIRECTORS
AND OFFICERS
The Company has agreed to indemnify current and
former Directors and officers against all liabilities to
another person (other than the Company or a related body
corporate), including legal expenses that may arise from
their position as Directors and Officers of the Company
and its controlled entities, except where the liability
arises out of conduct involving a lack of good faith or for a
pecuniary penalty under section 1317G or a compensation
order under section 1317H of the Corporations Act 2001.
INSURANCE PREMIUMS FOR
DIRECTORS AND OFFICERS
During and since the end of the financial year, the
Company has paid premiums to insure each of the
Directors and Officers against liabilities for costs and
expenses incurred by them in defending any legal
proceedings arising out of their conduct while acting
in the capacity of director of the Company, other than
conduct involving a wilful breach of duty in relation to
the Company. The amount of the premium was $29,318
(2020: $26,663) exclusive of GST.
PROCEEDINGS ON BEHALF OF
THE GROUP
No person has applied for leave under section 237 of
the Corporations Act 2001 of Court to bring proceedings
on behalf of the Group or intervened in any proceeding
to which the Group is a party for the purpose of taking
responsibility on behalf of the Group for all or any part of
those proceedings. The Group was not a party to any such
proceedings under section 237 of the Corporations Act
2001 during the financial year.
2 7
ANNUAL REPORT 2021DIRECTORS’ REPORT Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of TNG Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of TNG Limited for the
financial year ended 30 June 2021 there have been:
i.
no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit; and
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Jane Bailey
Partner
Perth
17 September 2021
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
2 8
TNG LIMITEDLEAD AUDITOR’S INDEPENDENCE DECLARATION
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2021
Other Income
Total Income
Corporate and administration expenses
Employment expenses
Depreciation and amortisation expenses
Loss from continuing operations
Finance income
Finance costs
Net finance income
Loss before tax
Income tax expense
Note
6(a)
6(b)
6(c)
6(a)
6(a)
2021
$’000
2020
$’000
184
184
(918)
(2,012)
(179)
(2,925)
33
(13)
20
149
149
(1,574)
(1,490)
(188)
(3,103)
236
(18)
218
(2, 905)
(2,885)
8
-
-
Loss for the year attributable to the owners of the Company
(2,905)
(2,885)
Other comprehensive income
Items that will not be reclassified to profit or loss
Equity Investments at FVOCI-net change in fair value
13
Tax effect on other comprehensive income (loss)
Other comprehensive loss for the year
Total comprehensive loss for the year attributable to the owners of
the company
408
-
408
(127)
-
(127)
(2,497)
(3,012)
Loss per share (cents per share)
Basic (loss) per share (cents)
Diluted (loss) per share (cents)
9
9
(0.24)
(0.24)
(0.26)
(0.26)
The Consolidated Statement of Profit or Loss and other Comprehensive Income is to be read in conjunction with the notes
to the financial statements.
2 9
ANNUAL REPORT 2021FINANCIAL REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2021
Note
2021
$’000
2020
$’000
Assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Other Investments
Current assets
Other receivables
Plant and equipment
Right-of-use-asset
Exploration and evaluation expenditure
Non-current assets
Total assets
Liabilities
Trade and other payables
Provisions
Lease Liability
Current liabilities
Lease liability
Provisions
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
11
12
13
14
15
16
17
18
18
17
19
19
11,434
231
362
600
12,627
67
42
238
53,149
53,496
8,616
258
358
192
9,424
67
60
350
46,288
46,765
66,123
56,189
2,087
496
158
2,741
95
6
101
2,282
464
146
2,892
215
-
215
2,842
3,107
63,281
53,082
114,735
(2,948)
(48,506)
63,281
102,595
(3,356)
(46,157)
53,082
The Consolidated Statement of Financial Position is to be read in conjunction with the notes to the financial statements.
3 0
TNG LIMITEDFINANCIAL REPORT CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2021
Cash flows from operating activities
Cash receipts from customers
Cash payments in the course of operations
Interest received
Interest paid
Note
2021
$’000
2020
$’000
184
116
(2,357)
(3,269)
41
(13)
248
(18)
Net cash used in operating activities
24
(2,145)
(2,923)
Cash flows from investing activities
Payments for plant and equipment
Payments for exploration and evaluation expenditure
Research and development rebate
Security deposits refunded/(paid)
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
Repayments of lease liability
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash at the beginning of the financial year
(10)
(12,149)
5,139
-
(23)
(15,298)
2,185
(3)
(7,020)
(13,139)
12,535
(391)
(161)
11,983
2,818
8,616
4,980
(259)
(157)
4,564
(11,498)
20,114
8,616
Cash and cash equivalents at the end of the financial year
11
11,434
The Consolidated Statement of Cash Flows is to be read in conjunction with the notes to the financial statements
3 1
ANNUAL REPORT 2021FINANCIAL REPORT CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2021
Issued
Capital
$’000
Accumulated
losses
$’000
Reserves
$’000
Total Equity
$’000
Balance at 1 July 2019
97,874
(43,272)
(3,229)
51,373
Other comprehensive income (loss)
Net loss for the year
Equity Investments at FVOCI-net change
in fair value
Total comprehensive loss
Transactions with owners recorded directly
in equity
-
-
-
-
-
(2,885)
-
-
-
(127)
(2,885)
(127)
Share placement
Share issue costs
4,980
(259)
-
-
-
-
Balance at 30 June 2020
102,595
(46,157)
(3,356)
-
(2,885)
(127)
(3,012)
4,980
(259)
53,082
Balance at 1 July 2020
102,595
(46,157)
(3,356)
53,082
Other comprehensive income (loss)
Net loss for the year
Equity Investments at FVOCI-net change
in fair value
Total comprehensive loss
Transactions with owners recorded directly
in equity
Share placement
Share issue costs
Share based payments
Loan funded share plan – loan repaid
-
-
-
-
12,495
(395)
-
40
-
(2,905)
-
(2,905)
-
-
556
-
-
-
408
408
-
-
-
-
-
(2,905)
408
(2,497)
12,495
(395)
556
40
Balance at 30 June 2021
114,735
(48,506)
(2,948)
63,281
The amounts recognised directly in equity are disclosed net of tax.
The Consolidated Statement of Changes in Equity is to be read in conjunction with the notes to the financial statements.
3 2
TNG LIMITEDFINANCIAL REPORT 1
REPORTING ENTITY
TNG Limited (“TNG” or “the Company”) is a company domiciled in Australia. The address of the Company’s registered
office is Suite 20, 22 Railway Road Subiaco, Western Australia 6008.
The consolidated financial report of the Company as at and for the year ended 30 June 2021 comprises the Company
and its subsidiaries (together referred to as the “Group”). The Group is a for profit entity and primarily is involved in the
exploration of minerals within Australia.
2 BASIS OF PREPARATION
(a) Statement of compliance
The consolidated financial statements are general purpose financial statements which have been prepared in accordance
with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the
Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards
(IFRS) and Interpretations adopted by the International Accounting Standards Board (IASB).
(b) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following:
•
•
•
investments in equity instruments (FVOCI);
share based payments are measured at fair value; and
lease liability
The methods used to measure fair values are discussed further in Note 4.
(c) Functional and presentation currency
These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency
and the functional currency of all entities in the Group. The Group is of a kind referred to in ASIC Corporations (Rounding
in Financial/ Directors’ Reports) Instrument 2016/191 and in accordance with that instrument, amounts in the Consolidated
Financial Statements and Directors’ Report have been rounded off to the nearest thousand dollars ($000), unless
otherwise stated.
(d) Use of estimates and judgements
In preparing these consolidated financial statements, management has made judgements and estimates that affect the
application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
Critical Judgements
Assumptions and estimation uncertainties
Exploration and evaluation assets
The ultimate recovery of the value of exploration and evaluation assets is dependent on successful development and
commercial exploitation, or alternatively, sale, of the underlying mineral exploration properties.
The Group undertakes at each reporting date, a review for indicators of impairment of these assets. Should an indicator
of impairment exist, there is significant estimation and judgments in determining the inputs and assumptions used in
determining the recoverable amounts.
3 3
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS 2 BASIS OF PREPARATION (continued)
The key areas of estimation and judgement that are considered in this review included:
• Recent drilling results and reserves/resource estimates;
• Environmental issues that may impact the underlying tenements;
•
•
•
•
The estimated market value of assets at the review date;
Independent valuations of underlying assets that may be available;
Fundamental economic factors such as mineral prices, exchange rates
and current and anticipated operating cost in the industry; and
The Group’s market capitalisation compared to its net assets.
Information used in the review process is agreed to externally available information where appropriate.
Changes in these estimates and assumptions as new information about the presence or recoverability of an ore reserve
becomes available, may impact the assessment of the recoverable amount of exploration and evaluation assets. If, after
having capitalised the expenditure a judgement is made that recovery of the expenditure is unlikely, an impairment loss is
recorded in the profit or loss in accordance with accounting policy 3(h). The carrying amounts of exploration and evaluation
assets are set out in ”Note” 15.
Coronavirus (COVID-19) – the outbreak of the coronavirus disease (COVID-19) is impacting global economic markets
and it may result in delays in development, financing and to the government approval processes relating to the Mount
Peake Project. The Group is monitoring the situation closely and has considered the impact of COVID-19 on the Group’s
business and financial performance. However, the situation is continually evolving, and the consequences are therefore
inevitably uncertain.
(e) Going Concern
The financial report has been prepared on a going concern basis, which contemplates the continuity of normal business
activity and the realisation of assets and settlement of liabilities in the normal course of business.
During the year, the Group incurred a loss after tax of $2,905,000 and net cash outflows from operating and investing
activities of $9,165,000. As at 30 June 2021, the Group has cash in hand of $11,434,000 and a working capital surplus
of $9,886,000.
The Group’s principal activities are the continued evaluation and development planning of the Group’s Mount Peake Project.
The Group will require further funding to meet its ongoing obligations and, subject to the results of its ongoing exploration
and engineering activities, expand or accelerate its work programs. The Directors believe that the Group will be able to
secure further funding as it has demonstrated, in the past, its ability to successfully raise additional funds, which is in part
attributed to the opportunity presented by the Group’s Mount Peake Project – a large global scale project in a stable and
pro-development jurisdiction, underpinned by a new processing technology that is targeted to produce three high-quality
product streams, and which has attracted a number of development partners.
The Group has a number of potential additional funding options available to it, including potential farm-in arrangements or
strategic project investment or other similar arrangements. If necessary, the Group can delay exploration and engineering
expenditures, and can also institute cost saving measures to further reduce corporate and administrative costs.
The Directors have approved the cashflow forecast which shows that the Group has sufficient cash to meet its obligations,
as and when they become due, for at least 12 months from the date of signing of the financial statements. On this basis,
the Directors believe the use of the going concern basis of preparation in the financial statements is appropriate.
3 4
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 3 SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these consolidated
financial statements, and have been applied consistently by Group’s entities.
(a) Basis of preparation
(i) Subsidiaries
Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or
indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In
assessing control, potential voting rights that presently are exercisable or convertible are taken into account. The
financial statements of subsidiaries are included in the consolidated financial report from the date that control
commences until the date that control ceases.
(ii) Loss of control of a subsidiary
When the Group loses control over a subsidiary it derecognises the assets and liabilities of the subsidiary, and
any related and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest
retained in the former subsidiary is measured at fair value when control is lost.
(iii) Transactions eliminated on consolidation
Intragroup balances, and any unrealised gains and losses or income and expenses arising from intragroup
transactions, are eliminated in preparing the consolidated financial statements.
(b) Income tax
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates
to items recognised directly in equity or in other comprehensive income.
Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the period and any
adjustment to tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively
enacted at the reporting date. Current tax payable also includes any tax liability arising from the declaration of dividends.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
•
•
•
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination
and that affects neither accounting or taxable profit or loss
temporary differences related to investments in subsidiaries, associates or jointly controlled entities to the extent that
the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will
not reverse in the foreseeable future
taxable temporary differences arising on the initial recognition of goodwill
Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the
extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will
be realised.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
using tax rates enacted or substantively enacted at the reporting date. The measurement of deferred tax reflects the tax
consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle
the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset only if certain criteria are met.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it
has become probable that future taxable profit will allow the deferred tax asset to be recovered.
3 5
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS 3
SIGNIFICANT ACCOUNTING POLICIES (continued)
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted
at the statement of financial position date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.
Tax consolidation
•
The Company and its wholly-owned Australian resident entities are part of a tax-consolidated group. As a consequence,
all members of the tax-consolidated group are taxed as a single entity. The head entity within the tax-consolidated
group is TNG Limited. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and
relevant tax credits of the members of the tax consolidated group are recognised by TNG Limited (as the head
company of the tax-consolidated group).
• Entities within the tax-consolidated group have not entered into a tax sharing or tax funding agreement with TNG
Limited. The effect of not having entered into a tax sharing or tax funding agreement is that whilst TNG Limited
(as the head company of the tax-consolidated group) will be liable for the income tax debts of the tax-consolidated
group that are applicable to the period of consolidation, income tax debts may be recovered from subsidiary
members in certain circumstances.
(c) Goods and services tax
(i)
Revenues, expenses and assets are recognised net of the amount of GST except where the GST incurred
on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST
is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable;
(ii)
Receivables and payables are stated with the amount of GST included;
(iii) The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the balance sheet;
(iv) Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority,
are classified as operating cash flows; and
(v) Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(d) Plant and equipment
(i) Recognition and measurement
Items of plant and equipment are stated at cost or deemed cost less accumulated depreciation and
impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset.
Where parts of an item of plant and equipment have different useful lives, they are accounted for as
separate items of plant and equipment.
(ii) Subsequent costs
The Group recognises in the carrying amount of an item of plant and equipment the cost of replacing part of
such an item when that cost is incurred if it is probable that the future economic benefits embodied within the
item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised
in the Statement of Comprehensive Income as an expense as incurred.
3 6
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 3
SIGNIFICANT ACCOUNTING POLICIES (continued)
(iii) Depreciation
Depreciation is charged to the profit and loss on a straight-line basis over the estimated useful lives of each part of
an item of plant and equipment. The estimated useful lives in the current and comparative periods are as follows:
Leasehold improvements 4 years
Plant and equipment
Fixtures and fittings
Right-of-use-asset
3 to 8 years
3 to 8 years
Depreciation is over the shorter of the useful life of the asset and the lease
term, unless the title to the asset transfers at the end of the lease term, in
which case depreciation is over the useful life.
The residual value, the useful life and the depreciation method applied to an asset are reassessed annually.
(e) Foreign currency translation
Transactions in foreign currencies are translated to the functional currency of the Group at the foreign exchange rate
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the statement of
financial position date are translated to Australian dollars at the foreign exchange rate ruling at that date.
Foreign exchange differences arising on translation are recognised in the profit and loss. Non-monetary assets and liabilities
that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the
transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated
to Australian dollars at foreign exchange rates ruling at the dates the fair value was determined.
(f) AASB 16 Leases
Lessees recognise a right-of-use asset representing its right to use the underlying asset and a lease liability representing its
obligation to make lease payments. There are recognition exemptions for short-term leases (12 months or less) and leases
of low-value items. Lessors classify leases as finance or operating leases.
Accounting policy
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available
for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to
profit or loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability
for each period. The right-of-use asset is depreciated over the shorter of the asset’s useful life and the lease term on a
straight–line basis.
Assets and liabilities arising from the lease are initially measured on a present value basis. Lease liabilities include the net
present value of the following lease payments:
•
•
•
fixed payments
variable lease payment that are based on an index or a rate
the option to renew the lease
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined, the
lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the fund necessary
to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
Right-of-use assets are measured at cost comprising the following:
•
•
the amount of the initial measurement of lease liability
any lease payments made at or before the commencement date
Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets are assets
with a replacement value of less than US$5,000.
3 7
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS
3
SIGNIFICANT ACCOUNTING POLICIES (continued)
(g) Share capital
Ordinary shares
Incremental costs directly attributable to issue of ordinary shares and share options are recognised as a deduction
from equity, net of any related income tax benefit.
(h) Intangible assets
Exploration and evaluation assets
Exploration for and evaluation of Mineral Resources is the search for Mineral Resources after the entity has obtained
legal rights to explore in a specific area, as well as the determination of the technical feasibility and commercial viability
of extracting the Mineral Resource. Accordingly, exploration and evaluation expenditure are those expenditures by the
Group in connection with the exploration for and evaluation of Mineral Resources before the technical feasibility and
commercial viability of extracting a Mineral Resource are demonstrable.
Accounting for exploration and evaluation expenditures is assessed separately for each ‘area of interest’. An ‘area of
interest’ is an individual geological area which is considered to constitute a favourable environment for the presence
of a mineral deposit or has been proved to contain such a deposit.
Expenditure incurred on activities that precede exploration and evaluation of mineral resources, including all expenditure
incurred prior to securing legal rights to explore an area, is expensed as incurred. For each area of interest, the expenditure
is recognised as an exploration and evaluation asset where the following conditions are satisfied:
a)
The rights to tenure of the area of interest are current; and
b) At least one of the following conditions is also met:
(i) The expenditure is expected to be recouped through successful development and commercial exploitation
of an area of interest, or alternatively by its sale; or
(ii) Exploration and evaluation activities in the area of interest have not, at reporting date, reached a stage
which permits a reasonable assessment of the existence or otherwise of ‘economically recoverable
reserves’ and active and significant operations in, or in relation to, the areas of interest are continuing.
Economically recoverable reserves are the estimated quantity of product in an area of interest that can
be expected to be profitably extracted, processed and sold under current and foreseeable conditions.
Exploration and evaluation assets include:
• Acquisition of rights to explore;
•
Topographical, geological, geochemical and geophysical studies;
• Exploratory drilling, trenching, and sampling; and
• Activities in relation to evaluating the technical feasibility and commercial viability of extracting the Mineral Resource.
General and administrative costs are allocated to, and included in, the cost of exploration and evaluation assets only to the
extent that those costs can be related directly to the operational activities in the area of interest to which the exploration
and evaluation assets relate. In all other instances, costs are expensed as incurred.
Exploration and evaluation assets are transferred to Development Assets once technical feasibility and commercial viability
of an area of interest is demonstrable. Exploration and evaluation assets are assessed for impairment, and any impairment
loss is recognised, prior to being reclassified.
The carrying amount of the exploration and evaluation assets is dependent on successful development and commercial
exploitation, or alternatively, sale of the respective area of interest.
3 8
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 3
SIGNIFICANT ACCOUNTING POLICIES (continued)
Impairment testing of exploration and evaluation assets
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility
and commercial viability or facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances exist:
•
The term of exploration licence in the specific area of interest has expired during the reporting period or will expire
in the near future, and is not expected to be renewed;
• Substantive expenditure on further exploration for and evaluation of mineral resources in the specific area are not
budgeted nor planned;
• Exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially
viable quantities on Mineral Resources and the decision was made to discontinue such activities in the specified area;
or
• Sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying
amount of the exploration asset is unlikely to be recovered in full from successful development or by sale.
Where a potential impairment is indicated, an assessment is performed for each Cash Generating Unit [CGU] (consisting
of Mount Peake, Cawse Extended and Kintore East) which is no larger than the area of interest. The Group performs
impairment testing in accordance with accounting policy 3(i)(ii).
(i) Impairment
(i) Financial assets
A financial asset is considered to be impaired if objective evidence indicates that one or more events have had
a negative effect on the estimated future cash flows of that asset.
On initial recognition, a financial asset is classified as measured at: amortised cost; fair value through other
comprehensive income (“FVOCI”) – debt investment; FVOCI equity instrument; or FVTPL. The classification of
financial assets under AASB 9 is generally based on the business model in which a financial asset is managed
and its contractual cash flow characteristics.
Cash and cash equivalents and other receivables classified as amortised cost are subject to impairment testing
and are assessed collectively in groups that share similar credit risk characteristics.
All impairment losses are recognised in profit or loss. Any cumulative loss in respect of investment in equity
instrument financial asset is recognised in equity Fair Value through Other Comprehensive Income (FVOCI).
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the
impairment loss was recognised.
(ii) Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists, then the
asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are
not yet available for use, recoverable amount is estimated at each reporting date.
An impairment loss is recognised in profit and loss if the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that generates
cash flows that largely are independent from other assets and groups. Impairment losses are recognised in profit
or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying
amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the
unit (group of units) on a pro rata basis.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less
costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset.
3 9
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS 3
SIGNIFICANT ACCOUNTING POLICIES (continued)
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses
recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or
no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does
not exceed the carrying amount that would have been determined, net of depreciation of amortisation, if no
impairment loss had been recognised.
(j) Employee benefits
(i) Share based payments
The grant date fair value of share-based payment awards granted to employees is recognised as an employee
expense, with a corresponding increase in equity, over the period that the employees unconditionally become
entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for
which the related service and non-market vesting conditions are expected to be met, such that the amount
ultimately recognised as an expense is based on the number of awards that do meet the related service and
non-market performance conditions at the vesting date. For share-based payment awards with non-vesting
conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and
there is no true-up for differences between expected and actual outcomes.
The TNG Employee Share Plan and TNG Non-Executive Director and Consultant Share Plan (together referred to
as the “Company Share Plans”) allow certain Group employees to acquire shares of the Company. Employees
have been given a limited recourse 5-year interest free loan in which to acquire the shares. Such loans have not
been recognised in the statement of financial position, as the Company only has recourse to the value of the
shares. The arrangement is accounted for as an in-substance option over ordinary shares. The grant date fair
value of the shares granted to employees is recognised as an employee expense with a corresponding increase
in equity on grant date on which the employees become unconditionally entitled to the shares.
The fair value of the shares issued pursuant to the Company Share Plans are measured using the Black Scholes
pricing model, taking into account the terms and conditions upon which the in-substance options granted. The
amount recognised as an expense is adjusted to reflect the actual number of shares that vest.
The fair value of the Options and the Classes A to E of the NED Rights and Performance Rights (together the
“Rights”) has been measured using the Black Scholes option pricing model. The fair value of Class F of the Rights
has been measured using a barrier up-and-in trinomial option pricing model with a Parisian barrier adjustment,
to reflect that the market capitalisation condition is assessed using a volume weighted price over 20-day period.
Employee benefits received are accounted as Options and Rights under AASB2: Share-based Payment. Information
in relation to Options and Rights is set out in Note 25.
(ii) Short term benefit
Liabilities for employee benefits for wages, salaries, annual leave and sick leave represent present obligations
resulting from employees’ services provided to reporting date, calculated at undiscounted amounts based on
remuneration wage and salary rates that the Group expects to pay as at reporting date including related on-costs,
such as workers’ compensation insurance and payroll tax.
(iii) Defined contribution funds
Obligations for contributions to defined contribution superannuation funds are recognised as an expense in
the profit or loss as incurred.
(k) Earnings per share
The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by
dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary
shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary
shareholders and the weighted average number of ordinary shares outstanding for the effects of all diluted potential
ordinary shares, which comprise convertible notes, Rights and share options granted to employees as per AASB 133.
4 0
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 3
SIGNIFICANT ACCOUNTING POLICIES (continued)
(l) Provisions
A provision is recognised in the statement of financial position when the Group has a present legal or constructive
obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the
obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax
rate that reflects current market assessments of the time value of money and, when appropriate, the risks specific to the
liability.
(m) Income and Expenses
a. Leases (AASB 16)
Lease payments under leases (AASB 16) are apportioned between the finance charge and the reduction of the
liability. The finance charge is allocated to each period during the lease term so as to produce a constant period
rate of interest on the remaining balance of the liability.
b. Finance income and expenses
Finance income comprises interest income on funds invested. Interest income is recognised as it accrues,
using the effective interest method.
Finance expenses comprise of interest expense on borrowings, loss on held for trading investments and lease
liability on right-of-use assets. All borrowing costs are recognised in profit or loss using the effective interest
method or incremental borrowing rate.
c. Government grants
The Group recognises the refundable research and development tax incentive (received under the tax legislation
passed in 2011) as a government grant. This incentive is refundable to the Group regardless of whether the Group
is in a tax payable position and is deducted against capitalised exploration and evaluation expenditure. Government
grants are recognised when there is reasonable assurance that (a) the Group will comply with the conditions
attaching to them; and (b) the grants will be received.
(n) Segment reporting
Segment results that are reported to the Board include items directly attributable to a segment as well as those that can
be allocated on a reasonable basis.
The Group operated predominately in one business segment and in one geographical location in both current and previous
years.
4 DETERMINATION OF FAIR VALUES
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial
and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes
based on the following methods. Where applicable, further information about the assumptions made in determining fair
values is disclosed in the notes specific to that asset or liability.
(i) Equity investments
The fair value of investment in equity instruments (FVOCI) is determined by reference to their quoted bid price
at the reporting date and is considered to be a level 1 in the fair value hierarchy.
4 1
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS 4 DETERMINATION OF FAIR VALUES (continued)
(ii) Share-based payment transactions
The fair value of employee options and classes A-E of the Rights are measured using the Black-Scholes formula.
Measurement inputs include share price on measurement date, exercise price of the instrument, expected
volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available
information), weighted average expected life of the instruments (based on historical experience and general
option holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds).
Service and non-market performance conditions attached to the transactions are not taken into account in
determining fair value.
The fair value of Class F of the Rights is measured using a barrier up-and-in trinomial option pricing model
with a Parisian barrier adjustment, to reflect that the market capitalisation condition is assessed using a volume
weighted price over a 20-day period.
Information in relation to share based payments for Options and Rights is set out in Note 25.
(iii) Right-of-use-assets & Lease Liability
The right-of-use-asset is measured at cost at the commencement date less any depreciation. Additionally, the
cost is subsequently adjusted for any remeasurement of the lease liability resulting from reassessment or lease
modifications.
However, the initial measurement of the lease liability is the present value of lease payments over the lease
term, discounted using the interest rate implicit in the lease if it can be determined, otherwise at the lessee’s
incremental borrowing rate.
5 FINANCIAL RISK MANAGEMENT
Overview
This note presents information about the Group’s exposure to credit, liquidity and market risks, their objectives, policies
and processes for measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
Management monitors and manages the financial risks relating to the operations of the Group through regular reviews of
the risks.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s trade and other receivables and cash and cash equivalents.
For the Company it also arises from receivables due from subsidiaries.
Presently, the Group undertakes exploration and evaluation activities exclusively in Australia. At the statement of financial
position date there were no significant concentrations of credit risk for the Group.
Cash and cash equivalents
The Group limits its exposure to credit risk by only investing in liquid securities and only with counterparties that have
an acceptable credit rating. Cash and cash equivalents are held with Australian banks rated AA- by Standard & Poor’s.
Trade and other receivables
As the Group operates primarily in exploration activities it does not carry a material balance of trade receivables and
therefore is not exposed to credit risk in relation to trade receivables
4 2
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 5 FINANCIAL RISK MANAGEMENT (continued)
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum
exposure to credit risk at the reporting date was:
Consolidated
Carrying amount
2021
$’000
2020
$’000
231
11,434
11,665
258
8,616
8,874
Note
12
11
Trade and other receivables
Cash and cash equivalents
None of the Group’s trade and other receivables are past due.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Group’s reputation.
The Group manages liquidity risk by maintaining adequate cash reserves from funds raised in the market and by monitoring
forecast and actual cash flows.
The following are the contractual maturities of financial liabilities, including estimated interest payments:
Consolidated
30 June 2021
Trade and other payables
Lease liabilities
30 June 2020
Trade and other payables
Lease liabilities
Market risk
Note
16
18
Note
16
18
Carrying
amount
$’000
Contractual
cash flows
$’000
<3 months
$’000
>12 months
$’000
2,087
253
2,340
2,087
253
2,340
2,087
40
2,127
-
95
95
Carrying
amount
$’000
Contractual
cash flows
$’000
2,282
361
2,643
2,282
361
2,643
<3 months
$’000
>12 months
$’000
2,282
36
2,318
-
325
325
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Group’s income or the value of its holdings of financial instruments.
The objective of market risk management is to manage and control market risk exposures within acceptable parameters,
while optimising the return.
4 3
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS 5 FINANCIAL RISK MANAGEMENT (continued)
Interest rate risk
The Group is exposed to interest rate risk (primarily on its cash and cash equivalents and loans and borrowings),
which is the risk that a financial instrument’s value will fluctuate as a result of changes in the market interest rates
on interest-bearing financial instruments. The Group does not use derivatives to mitigate these exposures.
The Group adopts a policy of ensuring that as far as possible it maintains excess cash and cash equivalents in high
interest-bearing accounts.
Profile
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
Variable rate instruments
Cash and cash equivalents
Fixed rate instruments
Cash and cash equivalents
Security deposits
Lease Liability
Consolidated carrying amount
Note
2021
$’000
2020
$’000
11
11
12
18
2,934
1,616
8,500
214
(253)
11,395
7,000
214
(361)
8,469
Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore,
a change in interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased or decreased the Group’s equity
and profit or loss by $29,340 (2020: $16,160).
Sensitivity analysis
The Group operates primarily in the exploration and evaluation phase and accordingly the Group’s financial assets and
liabilities are subject to minimal commodity price risk.
Investments in equity instrument (FVOCI)
All of the Group’s equity investments are listed on the ASX. For such investments classified as investment in equity
instrument, a 1% increase in the share price at the reporting date, would have increased equity by $6,003 (2020: $19,256).
An equal change in the opposite direction would have decreased equity by the same amount.
Capital Management
The Group has defined its capital as paid up share capital net of accumulated losses. The Group’s objectives when
managing capital are to safeguard the Group’s ability to continue as a going concern, so as to maintain a strong capital base
sufficient to maintain future exploration and development of its projects. In order to maintain or adjust the capital structure,
the Group may return capital to shareholders, issue new shares or sell assets or reduce debt. The Group’s focus has been
to raise sufficient funds through equity to fund engineering, exploration and evaluation activities.
There were no changes in the Group’s approach to capital management during the year. Risk management policies and
procedures are established with regular monitoring and reporting. Neither the Company nor any of its subsidiaries are
subject to externally imposed capital requirements.
4 4
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 6
INCOME AND EXPENSES
(a)
Income
Other income
Total income
Interest income
Finance income
Interest expense
Finance expense
Net finance income
Consolidated
Note
2021
$’000
2020
$’000
184
184
33
33
(13)
(13)
20
149
149
236
236
(18)
(18)
218
Other income consists of temporary boosting cash flow for Employers under the Government Stimulus Package due to
the impact of Covid-19 pandemic. The payment is equal to the lesser of 100 percent of PAYG withheld on employees’ salary
and wages (up from 50 percent) or $50,000 for both the year ended 30 June 2020 and 30 June 2021.
The Group received the first half amounting to $50,000 as at 30 June 2020, and the remaining $50,000 was received in
three instalments from July 2020 to October 2020.
Additionally, an incentive from the Federal Government on the Job-keeper program was received which broadly comprised
a wage subsidy to help businesses keep staff employed. From 30 March 2020 to 27 September 2020, the subsidy of
$1,500 per fortnight, per eligible employee was received. TNG had participated in the program and lodged the monthly
declaration on the job-keeper payments until September 2020. The Group received $115,500 for the job keeper payments
as at 30 June 2021 (2020: $99,000).
On 16 March 2020, the Government of Western Australia announced that a one-off grant of $17,500 would be given to
employers, whose annual Australian taxable wages were between $1 million and $4 million to assist in managing the
impacts of Covid-19.
TNG was approved for the one-off grant of $17,500 as part of the Covid-19 Payroll Tax relief measures. The amount was
received in August 2020.
(b) Corporate and administration expenses
Travel and accommodation
Legal fees
Promotional
Contractors and consultancy
Occupancy
Taxation Fees
Insurance
Share registry, ASIC & ASX
General Office Maintenance
Accounting costs
Other
Total Corporate and Administration
Consolidated
2021
$’000
2020
$’000
8
95
137
72
76
77
69
106
90
26
162
918
161
280
244
229
64
74
53
109
152
77
131
1,574
4 5
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS 6
INCOME AND EXPENSES (continued)
(c) Employment expenses
Wages and salaries1
Other associated personnel expenses
Increase (Decrease) in liability for long service leave
Contributions to defined contribution plans
Share based payments expense
Total Employment expenses
Consolidated
2021
$’000
2020
$’000
1,309
1,339
9
18
120
556
17
33
101
-
2,012
1,490
1 Total Wages and Salaries incurred during the year including amounts capitalised to exploration and evaluation was $2,419,207
(2020: $2,449,502).
7 AUDITORS’ REMUNERATION
Auditors of the Group -
KPMG Australia:
Audit and review of financial reports
Tax Advice
Monthly Retainer Service for Debt Finance
Northern Territory Benefit Plan Work
Total Auditor’s remuneration
Consolidated
2021
$
2020
$
41,753
-
150,700
15,164
207,617
41,100
15,525
-
-
56,625
4 6
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 8
INCOME TAX
A reconciliation between tax expense and pre-tax loss:
Accounting (loss) before income tax
At the domestic tax rate of 26% (2020: 27.5%)
Reconciling items
Other non-deductible expenses
Tax losses and temporary differences not brought to account
Income tax expense reported in the income statement
Consolidated
2021
$’000
2020
$’000
(2,905)
(755)
(2,885)
(793)
156
599
-
130
663
-
Unused tax losses carried forward
68,371
65,844
Potential tax benefit @ 26% (2020: 27.5%)
Tax losses offset against deferred tax liabilities
Unrecognised tax benefit
All unused tax losses were incurred by Australian entities.
17,776
(13,308)
4,468
18,107
(12,115)
5,992
Potential future income tax benefits net of deferred tax liabilities attributable to income tax losses (both consolidated and
Parent Entity) have not been brought to account because the Directors do not believe it is appropriate to regard realisation
of the future income tax benefits as probable.
The benefits of these tax losses will only be obtained if:
(i)
future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be realised;
(ii)
the conditions for deductibility imposed by tax legislation continue to be complied with; and
(iii) no changes in tax legislation adversely affect the Group in realising the benefit.
Deferred income tax
Statement of financial position
Deferred income tax relates to the following:
Deferred Tax Liabilities
Exploration and evaluation assets
Deferred Tax Assets
Other
Brought forward tax losses offset against deferred tax liabilities
Consolidated
2021
$’000
2020
$’000
13,657
12,587
(349)
(13,308)
-
(472)
(12,115)
-
4 7
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS 9 EARNINGS PER SHARE
The calculation of basic earnings per share for the year ended 30 June 2021 was based on the loss attributable to ordinary
shareholders of $2,904,883 (2020: loss $2,885,329) and a weighted average number of ordinary shares on issue during the
year ended 30 June 2021 of 1,193,876,045 (2020: 1,120,009,401).
Loss attributable to ordinary shareholders
(Loss) for the period
(Loss) attributable to ordinary shareholders
Weighted average number of ordinary shares
Number of ordinary shares at 1 July
Effect of shares issued
Weighted average number of ordinary shares at 30 June
Basic (loss) per share (cents)
Diluted (loss) per share (cents)
Effect of dilutive securities
2021
$’000
2020
$’000
(2,905)
(2,905)
(2,885)
(2,885)
2021
Numbers
2020
Numbers
1,124,545,124
1,070,994,327
69,330,921
53,550,797
1,193,876,045
1,120,009,401
(0.24)
(0.24)
(0.26)
(0.26)
TNG’s potential ordinary shares at 30 June 2021 are 15,000,000 Options and 36,700,000 Rights granted to the Eligible
Employees and Non-Executive directors during the year. There are 124,951,916 listed options issued during the period.
The listed options have not been included in the calculation of diluted earnings per share as the market price exceeds the
exercise price (AASB paragraph 47).
The Rights are treated as Contingency Issuable shares as per AASB 133 paragraph 56. At the reporting date, the vesting
conditions were not met and therefore the Rights have not been included in the calculation of diluted earnings per share.
The options granted to the employee have been treated as per AASB 133 paragraph 47A-48 and diluted earnings per share
have been calculated taking them into consideration. However, rounding creates the same amount for basic and diluted
earnings per share.
10 SEGMENT INFORMATION
The Board has determined that the Group has one reportable segment, being mineral exploration in Australia. As the Group
is focused on mineral exploration, the Board monitors the Group based on actual versus budgeted consolidated results.
This internal reporting framework is the most relevant to assist the Board in making decisions regarding the Group and its
ongoing exploration activities, while also taking into consideration the results of exploration work that has been performed
to date. The financial results from this segment are equivalent to the financial statements of the Group as a whole.
All of the Group’s assets are located in one geographical segment being Australia.
4 8
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 11 CASH AND CASH EQUIVALENTS
Cash at bank
Short term deposits
12 TRADE AND OTHER RECEIVABLES
Current
Other receivables
Short term security deposits1
GST receivables
Consolidated
2021
$’000
2020
$’000
2,934
8,500
11,434
1,616
7,000
8,616
Consolidated
2021
$’000
2020
$’000
6
147
78
231
46
147
65
258
1 Bank short term deposits of $46,000 maturing 11 months 29 days and $100,000 maturing in 6 months are paying interest at a weighted
average interest rate of 0.50% and 0.23% respectively (2020: 0.55%)
13 OTHER INVESTMENTS
Investments in equity instruments
Number
$’000
Number
$’000
2021
2020
Peninsula Energy Ltd
Spirit Telecom Energy Ltd
Todd River Resources Ltd
Balance at end of year
90,000
17,392
7,000,000
7,107,392
15
4
581
600
90,000
17,392
7,000,000
7,107,392
6
4
182
192
The Group’s investments in equity securities are classified as Investment in equity instruments (FVOCI). Subsequent
to initial recognition, they are measured at fair value. Gains or losses on revaluation of asset are recognised in other
comprehensive income (FVOCI). At 30 June 2021, management recognised fair value adjustment of positive $407,808
through other comprehensive income. The increase in fair value is largely due to the significant increase in the share price
of Todd River Resources.
4 9
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS 14 RIGHT-OF-USE ASSET
Cost
Initial recognition 1 July 2020
Additions
Accumulated depreciation
Balance at 30 June
15 EXPLORATION AND EVALUATION EXPENDITURES
Cost
Balance at 1 July
Exploration and evaluation expenditure
Research and development rebate
Balance at 30 June
Exploration expenditure capitalised during the year
Drilling and exploration
Feasibility and evaluation
Total exploration expenditure
Consolidated
2021
$’000
2020
$’000
350
40
(152)
238
488
12
(150)
350
Consolidated
2021
$’000
2020
$’000
46,288
12,000
(5,139)
53,149
1,267
10,733
12,000
32,076
16,397
(2,185)
46,288
1,628
14,769
16,397
The ultimate recoupment of costs carried forward for exploration and evaluation phases is dependent on the successful
development and commercial exploitation or sale of the respective areas. At balance date the carrying amount of
engineering, exploration and evaluation expenditure was $53,148,729 of which $52,946,635 was attributable to the
Mount Peake project and the balance relating to other current exploration programs.
16 TRADE AND OTHER PAYABLES
Consolidated
2021
$’000
2020
$’000
343
1,421
323
2,087
462
1,514
306
2,282
Current
Trade payables
Accruals
Other payables
Trade payables are normally settled on a 30-day basis.
5 0
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 17 PROVISIONS
Employee provisions
Current
Annual leave
Long-service leave
Employee provisions
Non- Current
Long-service leave
Balance at 1 July
Net provisions recognised/(used) during the year
Balance at 30 June
18 LEASE LIABILITY
Lease liability at transition
Additions
Interest expense
Lease repayments
Balance at 30 June
Current liability
Non-current liability
Consolidated
2021
$’000
2020
$’000
317
179
496
6
6
464
38
502
297
167
464
-
329
135
464
Consolidated
2021
$’000
2020
$’000
361
40
13
(161)
253
158
95
253
488
12
18
(157)
361
146
215
361
5 1
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS 19 ISSUED CAPITAL AND RESERVES
Issued and paid-up share capital
(a) Movements in shares on issue
Consolidated
2021
$’000
2020
$’000
114,735
102,595
2021
2020
Number
$’000
Number
$’000
Balance at the beginning of year
1,124,545,124
102,595
1,070,994,327
Share placement
124,951,916
12,495
53,550,797
Share issue costs
Loan Funded Share Plan – loan repaid
-
-
(395)
40
-
-
97,874
4,980
-
-
Balance at the end of year
1,249,497,040
114,735
1,124,545,124
102,595
Terms and conditions of contributed equity
Holders of ordinary shares are entitled to receive dividends that may be declared from time to time and are entitled to one
vote per share at shareholders’ meetings. In the event of winding up of the Company, ordinary shareholders rank after all
other shareholders and creditors and are fully entitled to any proceeds from liquidation.
Reserves
Fair Value through other comprehensive income reserve1
Transaction Reserve2
Total Reserves
Consolidated
2021
$’000
2020
$’000
802
2,146
2,948
1,210
2,146
3,356
Transaction Reserve is used to record the fair value of shares accounted for during the in-specie distribution.
1 Reflects the movement in fair value of investments in equity instrument (FVOCI).
2 In 2017, TNG demerged its assets via its subsidiary Todd River Resources to create a base metal focused exploration company.
TNG transferred $7,000,000 of the NT base Metal Assets to Todd River Resources in consideration of 35,000,000 shares at a deemed
issue price of $0.20 per share. 28,000,000 of these shares were distributed and transferred via an in specie distribution to TNG’s
shareholders on a pro-rata basis. The in specie distribution was accounted for at the fair value of the assets distributed and the remainder
was accounted for in the Share capital account.
5 2
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS
20 COMMITMENTS
Tenement expenditure commitments
In order to maintain current rights of tenure to exploration tenements, the Group is required to perform minimum
exploration work to meet the minimum expenditure requirements specified by various State and Territory governments.
These requirements are subject to renegotiation when application for a mining lease is made and at other times.
These obligations are not provided for in the financial report.
Consolidated
2021
$’000
2020
$’000
Exploration commitments payable not provided for in the financial report:
Within one year
848
823
21 CONTINGENT LIABILITIES
The details and estimated maximum amounts of contingent liabilities that may become payable are set out below.
The Directors are not aware of any circumstance or information which could lead them to believe that these liabilities
will crystallise and consequently no provisions are included in the financial statements in respect of these matters.
(a) Guarantees - Parent
A guarantee has been provided to support unconditional office lease
performance bonds
(b) Guarantees - Subsidiary
A guarantee has been provided to support unconditional environmental
performance bonds
Consolidated
2021
$’000
2020
$’000
47
47
167
167
47
47
167
167
The Group has various security deposits totalling $213,979 representing bank guarantees of $45,946 for the office lease
in Perth, $1,083 for site office in Alice Springs (NT) and $100,000 for Central Land Council (NT). Another $66,950 was also
paid directly to the Department of Primary Industry and Resources for various tenements for the Mount Peake Project for
rehabilitation guarantee which is accounted for as non-current assets.
Indemnities have been provided to Directors and certain executive officers of the Company in respect of liabilities to
third parties arising from their positions, except where the liability arises out of conduct involving a lack of good faith.
No monetary limit applies to these agreements and there are no known obligations outstanding at 30 June 2021.
5 3
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS 22 DEED OF CROSS GUARANTEE
Pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785 the whollyowned subsidiaries listed below
are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports, and
Directors’ reports.
It is a condition of the Instrument that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee.
The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding
up of any of the subsidiaries under certain provisions of the Corporations Act 2001. If a winding up occurs under other
provisions of the Act, the Company will only be liable in the event that after six months any creditor has not been paid in
full. The subsidiaries have also given similar guarantees in the event that the Company is wound up.
The subsidiaries subject to the Deed are Connaught Mining NL and Enigma Mining Limited. A consolidated statement of
comprehensive income and consolidated statement of financial position, comprising the Company and controlled entities
which are a party to the Deed, after eliminating all transactions between parties to the Deed of Cross Guarantee, for the
year ended 30 June 2021 is set out as follows:
Consolidated
2021
$’000
2020
$’000
184
184
(917)
(2,012)
(179)
(2,924)
33
(13)
20
149
149
(1,572)
(1,490)
(188)
(3,101)
236
(18)
218
(2,904)
(2,883)
-
-
(2,904)
(2,883)
408
-
408
(2,496)
(2,904)
556
(2,348)
(47,251)
(49,599)
(127)
-
(127)
(3,011)
(2,883)
-
(2,883)
(44,368)
(47,251)
Other Income
Total Income
Corporate and administration expenses
Employment expenses
Depreciation and amortisation expenses
Loss from continuing operations
Finance income
Finance costs
Net finance income
Loss before tax
Income tax expense
Loss for the year
Items that will not be reclassified to profit or loss
Equity investments at FVOCI-net change in fair value
Tax effect on other comprehensive income
Other comprehensive loss for the income (loss) for the year
Total comprehensive loss for the year
Statement of Comprehensive income and retained earnings
Profit (loss) before income tax
Share-based payments
Movements in retained earnings
Retained earnings at beginning of the year
Retained earnings at end of year
5 4
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 22 DEED OF CROSS GUARANTEE (continued)
Statement of Financial Position
Cash assets
Trade and other receivables
Prepayments
Other investments
Total current assets
Other investments
Other receivables
Plant and equipment
Loan and borrowings from related parties
Right-of-use-asset
Exploration and evaluation expenditure
Total non-current assets
Total assets
Trade and other payables
Provision
Lease liability
Total current liabilities
Lease liability
Provision
Total non-current liabilities
Total liabilities
Net assets
Issued capital
Reserves
Retained earnings
Total equity
Consolidated
2021
$’000
2020
$’000
11,433
230
362
600
12,625
-
67
42
(1,091)
238
53,149
52,405
65,030
2,087
496
158
2,741
95
6
101
8,615
258
358
10
9,241
182
67
60
(1,093)
350
46,288
45,854
55,095
2,282
464
146
2,892
215
-
215
2,842
3,107
62,188
51,988
114,735
(2,948)
(49,599)
62,188
102,595
(3,356)
(47,251)
51,988
5 5
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS 23 CONSOLIDATED ENTITIES
Subsidiaries
Connaught Mining NL
Enigma Mining Limited
Tennant Creek Gold (NT) Pty Ltd
Manbarrum Mining Pty Ltd
TNG Energy Pty Ltd¹
TNG Gold Pty Ltd
TIVAN Technology Pty Ltd
¹ Direct subsidiary of Enigma Limited
Country of Incorporation
2021
% of Ownership
2020
% of Ownership
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
24 NOTES TO THE STATEMENTS OF CASH FLOWS
Reconciliation of cash flows from operating activities
Net profit/(loss) for the period
Add/(less) non-cash items:
Depreciation and amortisation
Interest expense
Share based expense
Change in assets and liabilities:
Change in current payables and provisions
Change in current receivables and prepayments
Net cash used in operating activities
Reconciliation of lease liabilities arising from financing activities
Lease liability at transition 1 July
Additions
Interest expense
Lease liability at 30 June
Net cash used in financing activities
Consolidated
2021
$’000
2020
$’000
(2,905)
(2,885)
179
13
556
188
18
-
(2,157)
(2,679)
(16)
28
(2,145)
(296)
52
(2,923)
Consolidated
2021
$’000
2020
$’000
(361)
(40)
(13)
253
(161)
(488)
(12)
(18)
361
(157)
5 6
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS
25 EMPLOYEE BENEFITS
Defined contribution superannuation funds
The Group made contributions to employee’s nominated superannuation funds. The amount recognised as an expense was
$119,758 for the financial year ended 30 June 2021 (2020: $100,559).
Share-based payments
During the financial year 32,500,000 performance rights, 4,200,000 NED rights and 15,000,000 options were granted to
employees and Non-Executive Directors with vesting conditions as an employee benefit.
Share based payments for the Directors and Key Management Personnel have been included in the remuneration report.
Total share-based expenses for FY21 were $555,790 (2020: 0).
(a) Types of share-based payments
The Group has the following incentive securities plans in place.
Option Plan
The Group previously had in place the TNG Limited Employee Option Plan (applicable to employees and executive Directors)
and TNG Limited Non-Executive Director and Consultant Option Plan (applicable to NEDs, contractors and consultants).
The Company replaced these plans with a single Option Plan that is in compliance with ASIC Class Order [CO 14/1000]
at the Annual General Meeting on 30 November 2020. Under the TNG Option Plan, Eligible Employees may be granted
options over unissued ordinary shares of TNG Limited as part of their remuneration and as specified in the plan rules.
Performance Rights Plan
The TNG Performance Rights Plan was established and approved at the Annual General Meeting on 29 November 2018.
Under the Performance Rights Plan, Eligible Executives may be granted performance rights as part of their remuneration.
The performance rights carry the entitlement to issue shares on satisfaction of performance conditions determined by
the Board.
Non-Executive Director (NED) Rights Plan
The NED Rights Plan was established and approved by the Board of Directors in May 2020. The NED Rights Plan
contemplates the issue to Eligible NEDs of rights which carry the entitlement to be issued shares on satisfaction of vesting
conditions determined by the Board.
(b) Summary and movement of incentive securities on issue
Options
2021
2020
Outstanding balance at the beginning of the year
Granted
Vested
Lapsed
Forfeited
Outstanding balance at the end of the year
Vested and exercisable at the end of the year
The Options have the following exercise prices and vesting conditions:
Number of Options Granted
Exercise Price
Vesting Condition
-
15,000,000
-
-
-
15,000,000
-
-
-
-
-
-
-
-
2,500,000
2,500,000
5,000,000
5,000,000
$0.15
$0.20
$0.25
$0.30
On signing Employment contract
After 12 months employment
Completion of project finance
On first drawdown of project finance
5 7
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS 25 EMPLOYEE BENEFITS (continued)
Performance Rights
2021
2020
-
32,700,000
-
200,000
-
32,500,000
2021
-
-
5,600,000
-
1,400,000
-
4,200,000
-
2020
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Weighting
NED Rights
Performance
Rights
210,000
4,875,000
210,000
1,625,000
840,000
6,500,000
840,000
6,500,000
840,000
6,500,000
1,260,000
6,500,000
Outstanding balance at the beginning of the year
Granted
Vested
Lapsed
Forfeited
Outstanding balance at the end of the year
Vested and exercisable at the end of the year
NED Rights
Outstanding balance at the beginning of the year
Granted
Vested
Lapsed
Forfeited
Outstanding balance at the end of the year
Vested and exercisable at the end of the year
The Rights have the following vesting conditions:
Class
Vesting condition to be met
Completion of the Mount Peake Project Front-End Engineering and
Design Study by SMS group, and receipt of turnkey EPC proposal
from SMS group
Entry into binding documentation for the acquisition of land for the
Darwin Processing Facility with the NT Government
Commencement of ground-breaking activities at the
Mount Peake Project
Entry into binding documentation to raise an amount of equity
finance which is sufficient to support the project financing of the
Mount Peake Project
Entry into binding documentation to raise an amount of debt
finance which is sufficient to support the project financing of the
Mount Peake Project
TNG market capitalisation reaching A$500 million based on a
volume weighted average price of TNG shares over 20 consecutive
trading days on which TNG shares have traded multiplied by the
number of issued shares on the day of the grant of the
Performance Rights, which will exclude any new shares issued
after the grant date
A
B
C
D
E
F
5 8
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 25 EMPLOYEE BENEFITS (continued)
(c) Fair value determination
The fair value of the Options and the Classes A to E of the Rights has been measured using the Black Scholes option
pricing model. The fair value of Class F of the Rights has been measured using a barrier up-and-in trinomial option pricing
model with a Parisian barrier adjustment, to reflect that the market capitalisation condition is assessed using a volume
weighted price over a 20-day period.
The inputs used in the measurement of the fair values at grant date of the equity-settled share-based payments plans were
as follows:
Options
Fair value at grant date
Share price at grant date
Exercise price
Expected volatility
Expected life
Expected dividends
Tranche A
Tranche B
Tranche C
Tranche D
$ 0.037
$ 0.094
$ 0.150
80%
3
-
$ 0.031
$ 0.094
$ 0.200
80%
3
-
$ 0.026
$ 0.094
$ 0.250
80%
3
-
$ 0.023
$ 0.094
$ 0.300
80%
3
-
Risk-free interest rate (based on government bonds)
0.115%
0.115%
0.115%
0.115%
Rights
Fair value at grant date
Share price at grant date
Exercise price
Expected volatility
Expected life
Expected dividends
Class A-E
Class F
$ 0.094
$ 0.094
$ 0.039
$ 0.094
-
80%
2.81
-
-
80%
2.81
-
Risk-free interest rate (based on government bonds)
0.115%
0.115%
26 RELATED PARTIES
(a) Compensation of key management personnel
Key management personnel compensation comprised the following:
Compensation by category
Key Management Personnel
Short-term
Post-employment
Consolidated
2021
$’000
2020
$’000
1,764
45
1,809
1,196
38
1,234
Information regarding individual Directors and executives’ compensation and equity disclosures as permitted by
Corporations Regulation 2M.3.03 and 2M.6.04 is provided in the Remuneration Report section of the Directors’ Report.
5 9
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS 26 RELATED PARTIES (continued)
(b) Other transactions with key management personnel
The terms and conditions of the transactions with key management personnel and their related parties were no more
favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-key
management personnel related entities on an arm’s length basis.
The following payments were also paid for consulting fees to Southern Mining Consultants $0 (2020: $49,337) and
Miceva Family Trusts $20,750 (2020: $12,375) of which John Elkington and Simon Morten are related parties respectively.
John Elkington was paid $900 during the year for Consulting Services (2020: 0).These have been included in the
directors’ remuneration.
None were outstanding at 30 June 2021 (2020: $0).
27 PARENT ENTITY INFORMATION
As at, and throughout, the financial year ending 30 June 2021 the parent entity of the Group was TNG Limited.
2021
$’000
2020
$’000
11,844
51,665
63,509
916
259
1,175
114,735
11,803
(64,204)
9,073
44,298
53,371
922
361
1,283
102,595
10,839
(61,346)
62,334
52,088
(2,857)
(2,449)
(2,844)
(2,971)
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Issued capital
Reserves
Accumulated losses
Total shareholders’ equity
Loss for the year
Total comprehensive loss for the year
6 0
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 27 PARENT ENTITY INFORMATION (continued)
Tax consolidation
TNG and its 100% owned Australian subsidiaries formed a tax consolidated group with effect from 1 July 2003. TNG is the
head entity of the tax consolidated group. Members of the group have not entered into a tax sharing agreement.
The parent entity has entered into a Deed of Cross Guarantee with the effect that the Company guarantees debts in
respect of certain subsidiaries. Further details of the Deed of Cross Guarantee and the subsidiaries subject to the deed are
disclosed in Note 22.
Operating lease commitments
Operating lease commitments are payable as follows:
Within one year
Between one year and 5 years
Contingent Liabilities
Guarantees
A guarantee has been provided to support unconditional
Office lease performance bonds
Total estimated contingent liabilities
28 EVENTS SUBSEQUENT TO BALANCE DATE
2021
$’000
2020
$’000
-
-
-
-
-
-
2021
$’000
2020
$’000
47
47
47
47
Subsequent to the end of the financial year, the Company has continued to progress engineering, permitting and approvals,
and planning works related to the proposed development of the Mount Peake Project as well as implementation of TNG’s
green energy strategy.
As announced on 26 July 2021, the FEED study was completed and the technical FEL-3 report was delivered by
SMS group, which is currently being reviewed by TNG’s in-house Project Engineering Team.
On 10 August 2021, the Company announced that it has engaged Perth-based mineral process engineering group
METS Engineering to undertake a technology and process design study for a vanadium electrolyte production facility
for TNG’s vanadium redox flow battery business unit.
On 31 August 2021, the Company advised that it has completed a comprehensive assessment of alternative sites
for the TIVAN® Processing Facility proposed for Darwin as part of the environmental approvals process for the
Mount Peake Project.
On 3 September 2021, TNG announced the execution of a Project Development Agreement with Malaysian-based AGV
Energy & Technology to jointly and exclusively develop green hydrogen projects in Australia using the HySustain production
technology.
Other than as mentioned above, or elsewhere in this report, financial statements or notes thereto, at the date of this report
there are no other matters or circumstances which have arisen since 30 June 2021 that have significantly affected or may
significantly affect:
a)
the Consolidated Entity’s operations in future years, or
b)
the results of those operations in future financial years, or
c)
the Consolidated Entity’s state of affairs in future financial years.
6 1
ANNUAL REPORT 2021NOTES TO THE FINANCIAL STATEMENTS In the opinion of the Directors of TNG Limited (the “Company”):
In the opinion of the Directors of TNG Limited (the “Company”):
1.
1.
The consolidated financial statements and notes, that are set out on pages 29 to 61, and the Remuneration Report in
The consolidated financial statements and notes, that are set out on pages 29 to 61, and the Remuneration Report in
pages 16 to 26 in the Directors’ Report, are in accordance with the Corporations Act 2001, including:
pages 16 to 26 in the Directors’ Report, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance, for the
(i) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its performance, for the
financial year ended on that date; and
financial year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporation Regulations 2001, and
(ii) complying with Australian Accounting Standards and the Corporation Regulations 2001, and
2.
2.
3.
3.
There are reasonable grounds to believe that the Company “and Group” will be able to pay its debts as and when they
There are reasonable grounds to believe that the Company “and Group” will be able to pay its debts as and when they
become due and payable.
become due and payable.
There are reasonable grounds to believe that the Company and the group entities identified in note 23 will be able to
There are reasonable grounds to believe that the Company and the group entities identified in note 23 will be able to
meet any obligation or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee
meet any obligation or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee
between the Company and those group entities pursuant to ASIC Corporations (Wholly owned Companies) Instrument
between the Company and those group entities pursuant to ASIC Corporations (Wholly owned Companies) Instrument
2016/785.
2016/785.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
Chief Executive Officer (or equivalent)”and Chief Financial Officer” for the financial year ended 30 June 2021.
Chief Executive Officer (or equivalent)”and Chief Financial Officer” for the financial year ended 30 June 2021.
The Directors draw attention to note 2(a) of the consolidated financial statements which includes a statement of
The Directors draw attention to note 2(a) of the consolidated financial statements which includes a statement of
compliance with International Financial Reporting Standards.
compliance with International Financial Reporting Standards.
Signed in accordance with the resolution of the Directors:
Signed in accordance with the resolution of the Directors:
Paul Burton
Paul Burton
Managing Director & CEO
Managing Director & CEO
Dated 17 September 2021
Dated 17 September 2021
6 2
TNG LIMITEDDIRECTORS’ DECLARATION
Independent Auditor’s Report
To the shareholders of TNG Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of TNG
Limited (the Company).
In our opinion, the accompanying Financial Report
of the Company is in accordance with the
Corporations Act 2001, including:
• giving a true and fair view of the Group’s
financial position as at 30 June 2021 and of its
financial performance for the year ended on
that date; and
The Financial Report comprises:
• Consolidated statement of financial position as
at 30 June 2021.
• Consolidated statement of profit or loss and
other comprehensive income, consolidated
statement of changes in equity, and
consolidated statement of cash flows for the
year then ended.
• Notes including a summary of significant
•
complying with Australian Accounting
Standards and the Corporations Regulations
2001.
accounting policies.
• Directors’ Declaration.
The Group consists of the Company and the
entities it controlled at the year-end or from time to
time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
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 Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
have fulfilled our other ethical responsibilities in accordance with the Code.
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.
This matter was 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 this matter.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
6 3
ANNUAL REPORT 2021INDEPENDENT AUDITOR’S REPORT
Carrying value of exploration and evaluation expenditure ($53,149,000)
Refer to Note 15 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Our procedures included:
• We evaluated the Group’s accounting policy to
recognise exploration and evaluation assets
using the criteria in the accounting standard.
• For Mount Peake, we assessed the Group’s
current rights to tenure by checking the
ownership of the relevant licences to
government registries and evaluating
agreements in place with other parties. We also
tested for compliance with conditions, such as
minimum expenditure requirements, on a
sample of licences.
• We tested the Group’s additions to E&E for the
year by evaluating a statistical sample of
recorded expenditure for consistency to
underlying records, the capitalisation
requirements of the Group’s accounting policy
and the requirements of the accounting
standard.
• We evaluated documents, such as minutes of
Board meetings and ASX announcements for
consistency with the Group’s stated intentions
for continuing E&E in Mount Peake. We
corroborated this through interviews with key
operational and finance personnel.
• We analysed the Group’s determination of
recoupment through successful development
and exploitation of the area by evaluating the
Group’s documentation of planned
future/continuing activities including work
programmes and project and corporate budgets
for a sample of areas.
• We obtained the budget to identify planned
expenditure and funding requirements for
Mount Peake, for evidence of the ability to fund
continued activities.
• We compared the results from the external
expert engaged by the Group regarding the
existence of economically recoverable reserves
for consistency with the treatment of E&E.
The carrying value of exploration and evaluation
expenditure (E&E) is a key audit matter due to the:
• significance of the activity to the Group’s
business; and
• greater level of audit effort to evaluate the
Group’s application of the requirements of the
industry specific accounting standard AASB 6
Exploration for and Evaluation of Mineral
Resources, in particular the conditions allowing
capitalisation of relevant expenditure and
assessment of impairment indicators for the
area of interest with the most significant
capitalised E&E, being Mount Peake. The
presence of impairment indicators would
necessitate a detailed analysis by the Group of
the value of E&E, therefore given the criticality
of this to the scope and depth of our work, we
involved senior team members to challenge the
Group’s determination that no such indicators
existed.
In assessing the conditions allowing capitalisation
of relevant expenditure, we focused on:
• Documentation available regarding rights to
tenure, via licensing, and compliance with
relevant conditions, to maintain current rights to
an area of interest and the Group’s intention
and capacity to continue the relevant E&E
activities; and
• The Group’s determination of whether the E&E
are expected to be recouped through
successful development and exploitation of the
area of interest, or alternatively, by its sale.
In assessing the presence of impairment indicators,
we focused on those that may draw into question
the commercial continuation of E&E activities for
Mount Peake. In addition to the assessments above
and given the financial position of the Group, we
paid particular attention to:
• The Group’s determination of whether the E&E
are expected to be recouped through
successful development and exploitation of the
area of interest, or alternatively, by its sale;
• The ability of the Group to fund the continuation
of activities; and
• Results from latest activities regarding the
existence or otherwise of economically
recoverable reserves at Mount Peake provided
by an external expert.
6 4
TNG LIMITEDINDEPENDENT AUDITOR’S REPORT
Other Information
Other Information is financial and non-financial information in TNG Limited’s annual reporting which is
provided in addition to the Financial Report and the Auditor's Report. The Directors are responsible for
the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we 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.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date
of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001.
•
implementing necessary internal control to enable the preparation of a Financial Report that gives
a true and fair view and is free from material misstatement, whether due to fraud or error.
• assessing the Group and Company’s ability to continue as a going concern and whether the use
of the going concern basis of accounting is appropriate. This includes disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless they
either intend to liquidate the Group and Company or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They 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 the Financial Report.
A further description of our responsibilities for the audit of the Financial Report 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 Auditor’s Report.
6 5
ANNUAL REPORT 2021INDEPENDENT AUDITOR’S REPORT
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of TNG
Limited for the year ended 30 June 2021 complies
with Section 300A of the Corporations Act 2001.
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 responsibilities
We have audited the Remuneration Report
included in pages 16 to 26 of the Directors’
report for the year ended 30 June 2021.
Our responsibility is to express an opinion on
the Remuneration Report, based on our audit
conducted in accordance with Australian
Auditing Standards.
KPM_INI_01
KPMG
Jane Bailey
Partner
Perth
17 September 2021
6 6
TNG LIMITEDINDEPENDENT AUDITOR’S REPORT
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed elsewhere in
this report is set out below.
The Company has 1,249,497,040 fully paid ordinary shares on issue. There are 5,634 holders of these ordinary shares as at
8 September 2021. Shares are quoted on the Australian Securities Exchange under the code TNG and on European Stock
Exchanges, including the Frankfurt Stock Exchange under the code HJI.
The Company also has 124,951,916 listed options on issue with an exercise price of $0.18 each.
Substantial shareholders as at 8 September 2021
Substantial holders in the Company are set out below:
Shareholder
Deutsche Balaton and Associates
V. M. Salgaocar & Bro. (Singapore) Pte. Ltd
W W B Investments and Associates
Twenty largest shareholders as at 8 September 2021
Units
% Units
153,463,093
110,692,082
93,333,333
12.28%
8.86%
7.47%
Rank
Name
Units
% Units
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
V M Salgaocar & Bro (Singapore) Pte Ltd
Mr Warren William Brown + Mrs Marilyn Helena Brown
Sparta AG
Aosu Investment and Development Co Pty Ltd
Delphi Unternehmensberatung Aktiengesellschaft
Deutsche Balaton Aktiengesellschaft
SMS Investments S A
Mr Adam Furst
BNP Paribas Nominees Pty Ltd ACF Clearstream
Leigh Martin Marine Pty Ltd
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Mr Todd Brouwer
W W B Investments Pty Ltd
Mr Jeffrey Jay Johns
Mr Ernie Roosendaal + Mrs Sylvia Roosendaal
Mr Leigh Charles Martin
Mr Bruno Dimasi + Mrs Jennifer Louise Dimasi
BNP Paribas Nominees Pty Ltd Six Sis Ltd
Mr Zhigang Wang
110,692,082
85,575,000
72,222,223
56,208,643
48,418,758
32,822,112
14,700,000
13,754,947
10,875,454
10,000,000
9,615,680
7,823,614
7,041,111
6,475,000
5,660,041
5,000,010
5,000,000
4,944,445
4,509,789
4,300,000
8.86
6.85
5.78
4.50
3.88
2.63
1.18
1.10
0.87
0.80
0.77
0.63
0.56
0.52
0.45
0.40
0.40
0.40
0.36
0.34
Totals: Top 20 holders of Ordinary Fully Paid Shares (Total)
Total Remaining Holders Balance
515,638,909
733,858,131
41.27
58.73
6 7
ANNUAL REPORT 2021ASX ADDITIONAL INFORMATION Distribution of listed equity securities as at 8 September 2021
Category
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of
Holders
% Units
263
566
861
2,615
1,329
5,634
0.00
0.16
0.54
8.35
90.94
100.00
The number of shareholders holding less than a marketable parcel is 961.
Unquoted securities
The Company has the following unquoted securities issued under employee incentive schemes:
Category
NED Rights
Performance Rights
Options
Voting rights
Fully Paid Ordinary Shares
Number of Unquoted Securities
4,200,000
32,500,000
15,000,000
The voting rights attaching to the Company’s fully paid ordinary shares, as set out in the Company’s constitution,
are as follows:
(a) at meetings of members or classes of members each member entitled to vote may vote in person or by proxy
or attorney; and
(b) on a show of hands every person present who is a member has one vote, and on a poll every person present in
person or by proxy or attorney has one vote for each fully paid ordinary share held.
Listed Options
There are no voting rights attached to the listed options.
Unquoted Securities
There are no voting rights attached to either NED Rights, Performance Rights or Options.
On-market buy-back
There currently no on-market buy-back being undertaken by the Company.
Item 7 of Section 611 of the Corporations Act
No issues of securities approved under Item 7 of section of 611 of the Corporations Act are yet to be completed.
Restricted securities as at 8 September 2021
8,000,000 shares which were issued in previous years pursuant to the Company’s share plans remain on issue.
A “Holding lock” in relation to these shares was put in place in accordance with the terms and conditions of the original
offer. This holding lock will remain in place until certain restrictions are satisfied unless waived by the Board.
There were no securities on issue subject to voluntary escrow as at 8 September 2021.
6 8
TNG LIMITEDASX ADDITIONAL INFORMATION
The Board of Directors is responsible for the corporate governance of the Company. The Board guides and monitors
the business and affairs of the Company on behalf of the shareholders by whom they are elected and to whom they
are accountable.
TNG’s Corporate Governance Statement (“Statement”), as approved by the Board of Directors, sets out the main corporate
governance practices in place throughout the financial year ended 30 June 2021 and remains current at the date of this
report, with reference to the Corporate Governance Principles and Recommendations 4th Edition of the ASX Corporate
Governance Council.
The Company’s Statement and copies or summaries of the TNG policies referred to in it are published on TNG’s website at:
https://www.tngltd.com.au/corporate/corporate-governance/
6 9
ANNUAL REPORT 2021CORPORATE GOVERNANCE STATEMENT This page has been intentionally left blank
7 0
TNG LIMITED u
a
.
m
o
c
.
n
g
s
e
d
n
r
o
c
a
i
0
1
5
0
8