ANNUAL
REPORT
2022
CORPORATE DIRECTORY
DIRECTORS
Paul Burton
Neil Biddle
Simon Morten
Dr Anthony Robinson
Managing Director and CEO
Non-Executive Director and Chairman
Non-Executive Director
Non-Executive Director
JOINT COMPANY SECRETARIES
Paula Raffo
Tony Bevan
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 2022
CONTENTS
Chairman and Managing Director’s Letter
Review of Operations
Directors’ Report
Lead Auditor’s Independence Declaration
Financial Report
Consolidated Statement of Profit or Loss
and Other 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
4
13
28
29
29
30
31
32
33
64
65
69
71
A N N U A L R E P O R T 2 0 2 2
1
Dear Shareholders,
We are pleased to present TNG’s 2022
Annual Report and to review what has
been an extraordinarily busy, positive and
productive – albeit at times challenging –
year for the Company.
As the world emerged from the global COVID-19
pandemic, we have been able to move swiftly to
advance our flagship asset, the Mount Peake
Vanadium-Titanium-Iron Project (“Mount Peake Project”
or “Project”) in the Northern Territory, with substantial
progress achieved during the year in respect of the
project delivery strategy, permitting, project engineering
and execution and, importantly, financing.
The rapid and effective implementation of a new
development configuration followed the decision to
relocate the downstream TIVAN® Processing Facility
(“TPF”) from Darwin to the Mount Peake mine site
last year.
In parallel, we reached agreement with our long-standing
strategic engineering partner SMS group (“SMS”),
for a revised Project Execution Strategy which has been
pragmatically adapted to take into account the seismic
changes we have seen in global markets, supply chain
management and logistics in the post-COVID world
– in particular the impacts of cost inflation.
This agreement cleared the way for us to engage with
Clough Projects Australia Pty Ltd (“Clough”) our main
engineering and construction partner here in Australia.
With the continued support of SMS, Clough was
engaged to develop the Integrated Plant Layout for the
Mount Peake mine site and to undertake critical value
engineering and optimisation work.
In June 2022, we cemented this relationship with the
appointment of Clough as TNG’s Lead Engineer and
preferred Engineering, Procurement and Construction
(“EPC”) Contractor for the delivery of the Mount Peake
Project – a very significant milestone for everyone
involved with the Project.
Under the Agreement, Clough will prepare a binding
fixed-price, lump sum EPC proposal for the Project,
subject to completion of any works required and the
procurement contracting model.
To support the revised development and execution
strategy, our project development team – working with
our consultants – has made excellent progress with the
revised permitting framework for the integrated mining
and processing operation. This included the completion
of a successful water bore drilling program designed to
support the new water requirements for the integrated
operation and preparation of the updated Environmental
Impact Assessment.
After many years of patiently advancing our multi-pronged
funding strategy for Mount Peake, we have made several
key funding breakthroughs in recent months, securing
up to A$800 million in conditional non-binding project
financing support from Government-backed funding
sources in Australia, Germany and Korea.
This is a direct reflection of the significant progress we
have made in advancing the Project as well as the strong
relationships we have established with the Northern
Territory and Australian Government, the Northern
Territory Environmental Protection Authority, and a wide
range of other strategic partners, customers and advisors.
Pleasingly, the markets for all our key products have
continued to strengthen during the year and the outlook
remains robust for the foreseeable future – providing a
strong strategic backdrop to our plans to advance the
Mount Peake Project towards a Final Investment Decision
in the near future.
In terms of our longer-term growth horizons, TNG
continued to progress its green energy strategy during
the year, with tangible progress achieved with the
commercial and technical aspects of our “HySustain™”
joint venture with AGV Energy & Technology.
Following a formal request by TNG, the NT Government
has reserved a site in Darwin Port’s Middle Arm precinct,
originally earmarked for the TPF, for this exciting project.
We also progressed our commercialisation strategy for
the development of a high-purity Vanadium Electrolyte
Production Facility to support the future production of
Vanadium Redox Flow batteries in Australia – a venture
that will help us to enhance the value of the Mount Peake
product suite.
2
TNG LIMITEDCHAIRMAN AND MANAGING DIRECTOR’S LETTER Thanks to the completion of an oversubscribed
A$12.5 million institutional placement in November last
year and the receipt of $3.7 million as a refundable tax
offset under the Federal Government’s Research
& Development tax incentive for eligible R&D activities,
the Company finished the 2022 financial year in a strong
financial position with cash reserves of $14.4 million.
This puts us in a strong position to execute the next
steps in our funding and project development strategy
at Mount Peake.
On 20 September 2022, John Elkington and
Elizabeth Henson resigned from the TNG Board.
On behalf of the Board, we would like to sincerely thank
John for his exceptional service to the Company,
and also thank Elizabeth for her contribution to TNG.
In conclusion, we would like to extend our sincerest
thanks to our loyal and hard-working employees and
contractors for their tireless efforts during the year to
advance the Mount Peake Project towards development.
Our thanks also to our shareholders for your continued
support.
We look forward to sharing in that future with you.
Yours faithfully,
Neil Biddle
Non-Executive Chairman
Paul Burton
Managing Director & CEO
3
ANNUAL REPORT 2022CHAIRMAN AND MANAGING DIRECTOR’S LETTER TNG ALTERNATIVE ENERGY
• Commercial and technical parameters for the
development of the “HySustain™” project in
Darwin progressed by TNG and its green hydrogen
technology partner, Malaysian-based energy group
AGV Energy & Technology.
• Site in Darwin Port’s Middle Arm precinct reserved
by the Northern Territory Government for the
HySustain™ Darwin Project ahead of formal
application and lease negotiations.
•
Technology & Process Design Study completed
by METS Engineering for the development of a
high-purity Vanadium Electrolyte Production Facility
to support the commercialisation of Vanadium Redox
Flow Battery (“VRFB”) technology in Australia and
enhance value from the Mount Peake product suite.
• Subsequent to the year-end, TNG executed an
agreement with Perth-based Australian energy
company Ultra Power Systems to jointly explore
opportunities for vanadium electrolyte production
and VRFBs in Australia.
CORPORATE
• A$12.5 million raised via an oversubscribed
institutional share placement .
•
$3.7 million received as a refundable tax offset under
the Federal Government’s Research & Development
(“R&D”) tax incentive for eligible R&D activities
undertaken during the 2020/2021 financial year.
• Small shareholding sale facility established for certain
shareholders with holdings valued at less than A$500.
This facility closed on 4 April 2022 with proceeds paid
to Eligible Shareholders on 27 April 2022.
2022 HIGHLIGHTS
MOUNT PEAKE VANADIUM-TITANIUM-
IRON PROJECT
Project Development
• Strategic decision to progress development of the
Mount Peake Project as a fully-integrated mining and
processing operation within TNG’s existing Mining
Leases at the Mount Peake mine site (“Mine Site”).
• Completion of a consolidated plant layout at the mine
site for the integrated Mount Peake Project by Clough
Projects Australia Pty Ltd (“Clough”), comprising
the Beneficiation Plant, the TIVAN® Process Plant
and Titanium Pigment Plant (together the “TIVAN®
Processing Facility” or the “TPF”), and plant
utilities located.
• Engagement of Clough to progress further design
and value engineering works for the integrated
Project together with TNG Project Team and
SMS group (“SMS”).
• Agreement reached with SMS for a revised
Project Execution Strategy that allows enhanced
delivery of key processing infrastructure for the
Mount Peake Project.
• Appointment of Clough as TNG’s Lead Engineer
and preferred Engineering, Procurement and
Construction (“EPC”) Contractor for the delivery
of the Mount Peake Project.
Project Finance
• Subsequent to the end of the reporting period,
TNG received up to A$800 million in conditional
Letters of Support/Interest for the Mount Peake
Project from Australian, German and Korean
Government backed funding sources.
• Australian and International Commercial and
Investment Banks also issued Letters of Interest
to TNG for financing of the Mount Peake Project.
Permitting and Approvals
• Successful completion of water bore drilling and
evaluation program to provide information for
groundwater modelling for additional process water
required for the TPF at the Mine Site.
• Completion of all ground-based activities for
the Environmental Impact Assessment (“EIA”),
with technical report now underway.
• Continuous engagement with the Central Land
Council (“CLC”) regarding updates to the current
Indigenous Land Use Agreement.
4
TNG LIMITEDREVIEW OF OPERATIONS MOUNT PEAKE VANADIUM-TITANIUM-IRON PROJECT (TNG: 100%)
PROJECT SUMMARY
The Mount Peake Project is the Company’s flagship
project, comprising a world-scale critical and
battery minerals deposit located 235km north-west
of Alice Springs in the Northern Territory (NT).
The Project is well located close to existing key power
and transport infrastructure corridors including the
Alice Springs-Darwin Railway and the Stuart Highway.
The Company’s strategy for the Mount Peake Project
is to develop a fully-integrated mining and processing
operation 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 a world-first processing
technology, known as the TIVAN® Process, which is
owned exclusively by TNG.
Mount Peake is a shallow, flat-lying orebody with a
JORC Measured, Indicated and Inferred Resource
totalling 160 million tonnes grading 0.28% V2O5,
5.3% TiO2 and 23% Fe. The Mount Peake Project is
one of the largest undeveloped vanadium-titanium-iron
projects in the world.
Figure 1. Mount Peake Project location
PROJECT HIGHLIGHTS
Major Project Status awarded by the Australian Federal Government
and the Northern Territory Government
Key facts
Vertically integrated mining and processing operation
TIVAN® technology enabling production of three high-purity
products at commercial grade
Life of operations of 37 years bringing significant long-term
socio-economic benefits to Northern Australia
Large flat-lying, shallow vanadium-titanium deposit in a
tier-1 jurisdiction
Mining licences and most regulatory permits approvals in place
Partnerships with Tier 1 development companies and long-term
off-take agreements in place for all products with global groups
VANADIUM AND TITANIUM HAVE BEEN IDENTIFIED BY THE
AUSTRALIAN GOVERNMENT AS CRITICAL MINERALS REQUIRED
TO UNDERPIN THE ADVANCED TECHNOLOGIES THAT WILL SUPPORT
THE GLOBAL PUSH FOR DECARBONISATION.
$17.5 billion*
contribution to Gross
Territory Product
A mine life of
37 years
$710 million
of minerals royalties
Exports of
$774 million
per annum
1,600-1,800 jobs
during construction
1,100-1,200 jobs
per annum during
operation
* Economic impact results have been developed by ACIL Allen using the Tasman Global computable general equilibrium model.
The ACIL Allen reliance and disclaimer found at www.acilallen.com.au applies to all results and information presented in this brochure.
Information based on Mount Peake production targets and forecast financial information extracted from ASX Announcement dated
September 20 called “Optimised Delivery Strategy for Mount Peake” available on the Company’s website on www.tngltd.com.au.
5
ANNUAL REPORT 2022REVIEW OF OPERATIONS
PROJECT DEVELOPMENT
Design and Commercial Work
Following the completion of the preliminary integrated
layout, Clough has progressed engineering and design
works for the Mount Peake Project and is progressing a
revised cost estimate for the integrated operation.
The preparation of a revised cost estimate was ongoing
due to delays in sourcing market-based quotes caused
by global disruption of supply chains due to the COVID-19
pandemic, higher energy costs (including from the impact
of the Ukraine-Russia conflict), long lead times, logistical
delays, higher labour costs due to workforce shortages
and escalated costs of steel and concrete, which directly
affect both equipment and construction costs. TNG is
continuing to work closely with Clough to assess the
potential impact of these factors on the cost estimate.
Non-Process Infrastructure (“NPI”)
The integrated mining and processing operation at the
Mine Site has provided the opportunity to consolidate
a number of infrastructure items including power
generation, gas supply and communications installations.
The Company has advanced NPI items for tendering
processes, which will include BOO (build, own,
operate) and BOOT (build, own, operate, transfer)
equipment opportunities, and haul road, borefield,
and accommodation camp.
Fully integrated operation at the Mine Site
During the year, the Company made the strategic decision
to progress a fully-integrated mining and processing
operation within its existing Mining Leases at the Mount
Peake mine site as a result of the completion of a detailed
review of the Middle Arm site in Darwin and alternative
sites for the location of the TPF.
The key benefits of a fully integrated operation include:
consolidation of common non-process infrastructure;
reduction in construction requirements, with the
Mine Site being located in a non-cyclonic zone; reduction
in solid waste and tailings disposal handling costs; ability
to optimise processing layout and simplify commissioning
at one location; and an expected lower-risk final
permitting process.
In support of the consolidation decision, and in light
of the severe restrictions on travel between Europe
and Australia due to the COVID-19 pandemic which
have impacted SMS’ ability to travel and fully assign a
team in Australia, the Company appointed Perth-based
engineering and construction contractor Clough to
work with TNG’s Project Team and SMS to develop an
updated integrated layout for the Project.
The preliminary integrated layout was developed and
delivered by Clough together with TNG’s Project Team
in November 2021, based on the deliverables prepared
under the Front-End Engineering and Design (“FEED”)
study completed by SMS in July 2021. The integrated
layout comprises the beneficiation plant, the TPF and
plant utilities located within the Mining Lease footprint
of the Mine Site.
Figure 2: Mount Peake Project integrated operation layout (south-east view)
6
TNG LIMITEDREVIEW OF OPERATIONS PROJECT EXECUTION MODEL
During the reporting period, TNG executed a Heads of
Agreement (“Agreement”) with Clough for the delivery
of the Mount Peake Project. Under the Agreement,
Clough has been appointed as TNG’s Lead Engineer and
preferred EPC Contractor for the delivery of the Project
and will prepare a binding fixed-price, lump sum EPC
proposal (“EPC Proposal”) for the Project, subject to
completion of any works required and the procurement
contracting model.
TNG and Clough are currently advancing discussions on
any additional work that may be required to be undertaken
by Clough to facilitate development of the EPC Proposal,
with any such work to be confirmed under a separate
services agreement including detailed scope, costs
and scheduling.
The Company’s long-standing strategic engineering
partner and metallurgical consultants SMS group was
previously contracted to deliver an EPC proposal but,
due to disruptions caused by the COVID-19 pandemic,
TNG reached agreement with SMS to engage with
Australian-based engineering and construction companies
for the delivery of the Mount Peake Project. SMS remains
involved with confirmatory test and design work and
Clough will continue to be supported by SMS.
PROJECT PERMITTING
Environmental Approvals
The Company received an environmental approval for
the Mine Site in 2018 for the mining and beneficiation
operations. As a result of the consolidation of the Project
at the Mine Site, TNG has engaged with the Northern
Territory Environment Protection Authority (“NT EPA”)
and has received a clear roadmap from the NT EPA for
the updated environmental approval process for further
processing for the Mine Site.
TNG’s environmental consultant, Animal Plant
Mineral (“APM”), has been mandated to progress the
environmental assessment for the integrated operation.
All ground-based activities for the updated environmental
approval for the integrated Mount Peake Project were
completed during the reporting period, with results
now being reviewed for inclusion in the final report
for submission.
Native Title Agreement
TNG representatives are progressing discussions with the
CLC representatives regarding the consolidation of the
Mount Peake Project at the Mine Site and updates to the
current Indigenous Land Use Agreement (“ILUA”).
An Indigenous Land Use Agreement is in place between
TNG, the CLC and the Eynewantheyne Aboriginal
Corporation RNTBC ICN 7947 (Native Title Party).
This agreement was supplemented by an Authority
Certificate issued under the NT’s sacred sites legislation.
PROJECT FINANCE
Debt Finance
Subsequent to the end of the reporting period, TNG
received a total of up to A$800 million in conditional and
non-binding Letters of Support/Interest from Australian,
German and Korean Government backed funding sources.
The Australian Government’s Export Credit Agency
(“ECA”), Export Finance Australia (“EFA”), issued a
conditional and non-binding Letter of Support for up
to A$300 million of debt funding for the Mount Peake
Project.
Federal Republic of Germany Export Credit Agency, Euler
Hermes, issued a Letter of Interest including indicative
key terms for German ECA financing of up to A$300
million.
The Korean official Export Credit Agency Korea Trade
Insurance Corporation (“K-SURE”) issued a conditional
Letter of Support for the provision of up to A$200 million
in debt funding for Mount Peake.
In addition, TNG has received expressions of interest
from seven Australian and International Commercial
and Investment Banks for financing the commercial
component of the debt for the Project.
The KPMG Corporate Finance and Germany’s KfW IPEX-
Bank GmbH (“KfW”) have provided advice in assisting
TNG to achieve these landmark financing milestones.
KPMG Corporate Finance’s scope of work is 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, the Northern Australia Infrastructure Facility
(“NAIF”) and export credit agencies.
Equity
The Company, with the assistance of KPMG Corporate
Finance, continued to progress its strategy for equity
financing for the Mount Peake Project, including both
institutional investor and strategic equity streams. TNG
continues to target increasing institutional presence on its
share register to support future project financing equity
raising.
As above, KPMG Corporate Finance’s scope of work
continues to be limited to the provision of advice whilst
the responsibility for management decisions rests with
the management of TNG.
7
ANNUAL REPORT 2022REVIEW OF OPERATIONS TNG ALTERNATIVE ENERGY
GREEN HYDROGEN PRODUCTION
TECHNOLOGY
The Company executed a Project Development
Agreement with Malaysian-based AGV Energy &
Technology Sdn Bhd (“AGV”) to jointly and exclusively
develop green hydrogen production projects in Australia
using the “HySustain” integrated technology and logistics
solution developed by AGV and its partners.
TNG and AGV are jointly scoping and evaluating an initial
HySustain Project in Darwin in the Northern Territory,
and are engaged with the Northern Territory Government
and potential development partners, including renewable
energy providers, on project development planning.
Following a formal request by TNG, the Northern Territory
Government reserved a site in Darwin Port’s Middle
Arm for the HySustain Darwin Project ahead of formal
application and lease negotiations.
The reserved site is the previous site proposed to be used
for the Mount Peake Project downstream processing
facility. TNG previously completed an extensive body of
work for this site for Mount Peake, which will significantly
benefit planning for HySustain Darwin.
The joint venture has also initiated early engagement with
potential off-takers in Asia and prospective financiers on
the main future project financing requirements.
VANADIUM ENERGY PROJECT –
VANADIUM ELECTROLYTE & BATTERIES
Technology and Process Design Study
TNG completed a review of a technology and process
design study prepared by METS Engineering for the
development of a production facility to produce high-
purity vanadium electrolyte (“VE”) for the Vanadium
Redox Flow Battery (“VRFB”) market (“VE Study”). The
key outcomes and findings of the VE Study identified:
•
The preferred form of vanadium pentoxide as the
preferred feedstock for the process, this is planned
to be derived from vanadium pentoxide flake (the
vanadium product planned to be produced at Mount
Peake);
• Preferred process options, with process flowsheets,
descriptions and design criteria, and a mass balance,
developed for each option; and
• Darwin as the indicative location of the facility with
existing ready access to all necessary infrastructure;
the next phase of work will also consider the option
of a Mount Peake based VE production facility as part
of the consolidated mining and processing operation.
Following the successful completion of the VE Study, the
Company is also now evaluating the use of VRFBs at its
Mount Peake operation and incorporating these into the
current non-process infrastructure design and energy
supply mix to help further reduce the Project’s carbon
footprint.
Collaboration Agreement with Ultra
Power Systems
TNG further progressed its vanadium energy strategy
after executing a memorandum of understanding for
collaboration with Perth-based energy technology
company, Ultra Power Systems Pty Ltd (“Ultra”),
in July 2022.
Under the Agreement, TNG and Ultra will collaborate on
opportunities for the identification, development, and
deployment of a combined renewable power generation
and VRFB storage system for the Australian market.
This includes the production of Ultra’s high performing
mixed-acid vanadium electrolyte.
The collaboration with Ultra will support TNG’s plans
to establish a vertically integrated vanadium energy
business including the supply of vanadium electrolyte and
installation of batteries across a range of industries and
remote locations. The parties will consider further formal
agreements for collaboration initiatives.
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.
The decision to develop the Mount Peake Project as
a fully integrated mining and processing operations is
expected to deliver a number of important ESG benefits.
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.
8
TNG LIMITEDREVIEW OF OPERATIONS CORPORATE
CAPITAL RAISING
TNG completed a Share Placement at $0.09 per share to
raise A$12.5 million (before costs) in November 2021 to
fund consolidation planning, engineering and approvals,
and project financing work streams for the Mount Peake
Project, as well as to progress the Company’s green
energy initiatives.
The Share Placement was strongly supported by a
number of new institutional and high net worth investors,
as well as by the Company’s German-based major
shareholder, Deutsche Balaton and associates. Leading
investment bank Canaccord Genuity (Australia) Limited
was appointed as Lead Manager to the Share Placement.
RESEARCH & DEVELOPMENT (“R&D”)
REBATE
On 4 May 2022, the Company received an amount of
$3.7 million as a refundable tax offset under the Federal
Government’s R&D tax incentive scheme for eligible
R&D activities related to the Mount Peake Project and
the TIVAN® processing technology undertaken during the
2020/2021 financial year.
SMALL SHAREHOLDING SALE FACILITY
(“FACILITY”)
The Facility was established to reduce the administrative
costs of managing small shareholdings valued at less than
A$500 (“Eligible Shareholders”) on 14 February 2022 and
closed on 4 April 2022.
The proceeds of the Facility were remitted to 551
participating Eligible Shareholders on 27 April 2022,
with brokerage and other costs paid by the Company.
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 (EL – 100% TNG)
The Company has two granted Exploration Licences
(“EL”) for the Kulgera Project, a 1,231km2 vanadium
and titanium exploration project located along the South
Australian border in the Northern Territory.
A range of chemical and mineralogical analyses are being
undertaken on the 2021 sampling. Assessment is ongoing
with further test work planned.
MOONLIGHT PROJECT (EL32433 AND
EL32434 – 100% TNG)
The Company has Exploration Licences at Moonlight,
located 80km west of Daly Waters in the central Northern
Territory where vanadium occurrences have been
recorded. No field activity was undertaken during FY2022,
but the Company aims to establish if these will provide
additional vanadium resources.
SPRING CREEK (EL – 100% TNG)
The Company disposed of the Spring Creek Project
Exploration Licence in South Australia, for $75,000
following the end of the reporting period.
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
partner, Mesmeric Enterprises, completed necessary
rehabilitation works in FY2021. The Company awaits
further work programme results from Mesmeric.
9
ANNUAL REPORT 2022REVIEW OF OPERATIONS As at 30 June 2022, 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
120
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 quality assurance and quality control (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.
10
TNG LIMITEDREVIEW OF OPERATIONS TENEMENT LIST
As at 30 August 2022, the Group held interests in the following tenements:
Project
Mineral and ancillary Titles
Holder and TNG Equity
Mount Peake
EL27069, EL27941, EL29578, EL30483,
EL31389, EL31850, ML28341, ML29855,
ML29856, ML30686, AA31105, AA32037
Mount Peake Calcrete EL31896
Kulgera
EL32369, EL32370
Moonlight
EL32433, EL32434
Sandover
ELA33090, ELA33094, ELA33095, ELA33096,
ELA33097, ELA33098, ELA33099, ELA33100,
ELA33102, ELA33103, ELA33104, ELA33105,
ELA33106
Cawse Extended
M24/547, M24/548, M24/549, M24/550
Kintore East
M16/545
AA: Access Authority (NT)
EL: Exploration Licence (NT)
ELA: Exploration Licence Application (NT)
M: Mining Lease (WA)
ML: Mining Lease (NT)
REGULATORY DISCLOSURES
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)
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)
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.
Evolution Mining (Mungarri) Pty Ltd
TNG 2% gold return interest on production
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
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 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.
11
ANNUAL REPORT 2022REVIEW 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.
1 2
TNG LIMITEDREVIEW OF OPERATIONS 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 2022 (hereafter referred to
as the “Group”).
DIRECTORS
The directors of the Company at any time during or since
the end of the financial year, unless noted otherwise,
are as follows:
Mr John Elkington (appointed Chair and
Non-Executive Director on 1 February 2019;
resigned as Chair on 2 September 2022; resigned as
a Non-Executive Director on 20 September 2022)
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).
Other Listed Company Directorships (last three years)
Mr Elkington was a non-executive Director and Chair
of Koonenberry Gold Limited from 30 June 2021 to
27 November 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
resignation)
33,334 ordinary shares
2,800,000 non-executive director (“NED”) rights expiring
on 17 December 2023, subject to achievement of
vesting conditions
Mr Neil Biddle – Chair and Non-Executive
Director (appointed on 2 September 2022)
Experience, Qualifications & Special Responsibilities
Mr Biddle is a highly experienced geologist and mining
executive with a successful career spanning more than
30 years in the exploration and mining industry. Mr Biddle
co-founded TNG and was Managing Director between
1998 and 2011 and a Non-Executive Director up until
2013, a period which saw it establish a dominant multi-
commodity exploration portfolio in Northern Australia.
He was also the co-founder and a former Executive
Director of the successful lithium producer Pilbara
Minerals (ASX: PLS) and devised and implemented the
strategy which saw that company grow from a junior
micro-cap into a leading global battery materials producer,
with a market capitalisation today of almost $11 billion.
Mr Biddle is a geologist and Corporate Member of the
Australasian Institute of Mining and Metallurgy.
Other Listed Company Directorships (last three years)
Mr Biddle was previously Managing Director of Greenvale
Mining (ASX: GRV) from 7 September 2020 to 31 August
2022 and since then is a non-executive Director of GRV.
He is also a non-executive Director of battery materials
explorer Trek Metals (ASX: TKM) since 4 September 2020.
Mr Biddle was a Director of gold explorer Bardoc Gold
(ASX: BDC) from 29 June 2017 to 13 April 2022.
Director’s Interest in Securities (as at the date of
this report)
Nil
Mr Paul Burton - Managing Director and CEO
(appointed a Director on 11 August 2008)
Experience, Qualifications & Special Responsibilities
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.
Other Listed Company Directorships (last three years)
Mr Burton has been a non-executive director of
Western Mines Group since 28 October 2020.
Director’s Interest in Securities (as at the date of
this report)
7,688,889 ordinary shares
11,800,000 performance rights expiring on 17 December
2023, subject to achievement of performance conditions
1 3
ANNUAL REPORT 2022DIRECTORS’ REPORT Mr Simon Morten - Independent Non-Executive
Director (appointed on 17 February 2020)
Dr Anthony Robinson - Non-Executive Director
(appointed on 20 September 2022)
Experience, Qualifications & Special Responsibilities
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.
Other Listed Company Directorships (last three years)
Mr Morten has held no other directorships of publicly
listed companies during the last three years.
Dr Robinson is an investor, mining consultant and private
company director. He has advised on local and global
mining and processing operations as well as development
projects and programmes in Australia, the Americas,
Europe and Africa.
His 25-year career started with a boutique consulting firm
based in Perth and Sydney; later he co-owned mining
consulting business Momentum Partners, then joined
Deloitte as a partner in 2010. His work has assisted
multiple small and major resources companies to deliver
greenfield and brownfield projects, including capital
efficiency, operations readiness, ramp-up, transition,
steady state efficiency, and end-of-life shutdown strategy.
Dr Robinson holds a BComm, BEng and PhD
(Engineering) from the University of Melbourne.
Other Listed Company Directorships (last three years)
Director’s Interest in Securities (as at the date of
this report)
Dr Robinson has held no other directorships of publicly
listed companies during the last three years.
164,609 ordinary shares
1,400,000 NED rights expiring on 17 December 2023,
subject to achievement of vesting conditions
Director’s Interest in Securities (as at the date of
this report)
Nil
Ms Elizabeth Henson (appointed Non-Executive
Director on 1 August 2022; resigned as a
Non-Executive Director on 20 September 2022)
Experience, Qualifications & Special Responsibilities
Ms Henson has more than 35 years of international
experience in corporate governance, business and tax
related matters to the TNG Board.
She was a Senior Tax Partner at PricewaterhouseCoopers
(“PwC”) based in London between 2007 and 2019, and
before that a Director specialising in international tax law.
Ms Henson has a Master of Laws (LLM), Tax, from
Queen Mary, University of London; a Bachelor of Laws
(LLB) from Rhodes University, South Africa; and a
Bachelor of Arts (BA), also from Rhodes University,
South Africa.
Other Listed Company Directorships (last three years)
Ms Henson has been a non-executive Director of
ASX- and AIM-listed company Future Metals Plc since
21 October 2021 and of AIM-listed Alba Mineral
Resources Plc since 8 December 2020.
Director’s Interest in Securities (as at the date of
resignation)
JOINT COMPANY SECRETARIES
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.
Ms Raffo became Joint Company Secretary on
15 September 2022 with the appointment of
Mr Tony Bevan.
Nil
1 4
TNG LIMITEDDIRECTORS’ REPORT Mr Tony Bevan
Experience, Qualifications & Special Responsibilities
Mr Bevan is a Chartered Accountant with a diverse
background in listed companies, not for profits and public
practice. He is currently the Company Secretary of an
ASX listed African mining company and Interim CFO of a
large Australian gold producer. Mr Bevan has significant
commercial and governance experience including
Director/COO of a large Aboriginal Corporation in the
Pilbara and Chief Executive Officer, CFO and Company
Secretary of an ASX listed civil and mining contractor.
Before that, he was an audit and corporate finance partner
in major accounting firms.
Mr Bevan was appointed Joint Company Secretary on
15 September 2022.
BOARD MEETINGS
The number of Board meetings held during the financial
year, and the attendance of the Directors at each meeting,
were as follows:
Board Meetings
Director
Paul Burton
John Elkington
Simon Morten
A
15
15
15
B
15
15
15
A - Number of meetings attended
B - Number of meetings held during the time the director
held office during the year
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.
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 4 to 12.
The operating loss of the Group after income tax for the
year was $4.895 million (2021: loss $2.905 million).
The Group capitalised $8.29 million (2021: $12.0 million)
on Exploration and Evaluation for the year.
As at 30 June 2022, the Group held $14.442 million
(2021: $11.434 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 4 to 12. 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.
EVENTS SUBSEQUENT TO
REPORTING DATE
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 8 July 2022, the Company received a
conditional Letter of Support from EFA that considers the
provision of up to A$300 million of debt funding for the
construction of the Mount Peake Project.
On 19 July 2022, the Company announced that the
Republic of Germany Export Credit Agency, Euler Hermes,
issued Letter of Interest including indicative key terms
for German ECA financing of A$300 million.
TNG also announced the receipt of Expressions of
Interest from seven lenders active in Mining & Metals
and ECA Finance.
On 29 July 2022, the Company announced the
appointment of highly-regarded and experienced
international company director, Elizabeth Henson,
as a non-executive director of the Company, effective
from 1 August 2022.
On 1 August 2022, TNG announced that it had received
further financial backing with Korean Export Credit Agency
K-SURE issuing a letter of support for up to A$200 million
in debt funding for the Mount Peake Project.
On 8 August 2022, the Company gave notice that a
General Meeting of Shareholders of the Company will
be held at Vibe Hotel, 9 Alvan Street, Subiaco, 6008,
Western Australia on 20 September 2022 at 4:00pm
(WST), following the receipt of a request from
shareholders who together hold at least 5% of the
shares in the Company, to call a meeting of shareholders
pursuant to s249D of the Corporations Act 2001 (Cth)
to consider resolutions to reconstitute the TNG Board
of Directors.
1 5
ANNUAL REPORT 2022DIRECTORS’ REPORT On 16 August 2022, the Company announced that it had
further strengthened its growth pipeline in battery-related
and future-facing strategic minerals after securing an
extensive new lithium exploration package, the Sandover
Lithium Project, located near the Mount Peake Project.
On 2 September 2022, TNG announced the appointment
of highly regarded Australian mining executive Mr Neil
Biddle as non-executive Chairman, effective immediately.
Following the appointment, Non-Executive Chairman
Mr John Elkington transitioned to Non-Executive Director
as part of TNG’s ongoing board renewal process.
On 16 September 2022, TNG announced that
Mr John Elkington and Ms Elizabeth Henson would step
down from the TNG Board, and that the Company is
undertaking a global search for an experienced mining
and operations executive to take the Company forward.
On 20 September 2022, Mr Elkington and Ms Henson
formally resigned from the Board.
On 20 September 2022, a General Meeting of
Shareholders of the Company was held to consider
resolutions to reconstitute the TNG Board of Directors.
As a result of the General Meeting, Dr Anthony Robinson
was appointed as a Non-Executive Director of the
Company. No other changes to the Board resulted from
the General Meeting.
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 operations of the Group in future financial years;
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 2023 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.
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:
•
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.
• Coronavirus (COVID-19) – the COVID-19 pandemic
has impacted global economic markets which has
resulted in delays in development, financing and to
the government approval processes relating to the
Mount Peake Project. The Group continues to monitor
the situation closely and has considered the impact
of COVID-19 on the Group’s business and financial
performance. However, post-COVID-19 impacts
are still affecting major projects worldwide 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.
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 $
2,500,000
2,500,000
5,000,000
5,000,000
17,354,824*
$0.15
$0.20
$0.25
$0.30
$0.18
Expiry Date
26-Feb-24
26-Feb-24
26-Feb-24
26-Feb-24
20-Dec-24
* Options issued to Canaccord Genuity on 21 December 2021
as payment for corporate advisory services.
1 6
TNG LIMITEDDIRECTORS’ REPORT All unissued shares are ordinary shares of the Company.
All options expire on the earlier of their expiry date or
(excluding the options issued to Canaccord) termination of
the employee’s employment.
These options do not entitle the holder to participate
in any share issue of the Company or any other body
corporate.
No shares were issued on exercise of options during or
since the end of the reporting period.
Unissued shares under non-executive director
(“NED”) rights and performance rights
(together the “Rights”)
All Rights were granted in previous financial years.
No Rights have been granted since the end of the
previous financial year. During the reporting period,
2,150,000 Rights lapsed in accordance with their
terms and conditions.
At the date of this report unissued shares of the
Company under Rights are:
Number of
Rights
Vesting period
end date
NED Rights
30,350,000
17-Dec-23
Performance
Rights
4,200,000
17-Dec-23
No Rights were exercised during or since the end of the
reporting period.
Further details about share-based payments to directors
and key management personnel are included in the
Remuneration Report.
ENVIRONMENTAL REGULATION
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 $33,589
(2021: $29,318) 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.
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 (Cth). 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 (Cth)
immediately follows this Directors’ Report and forms part
of the Directors’ Report for the financial year ended
30 June 2022.
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.
1 7
ANNUAL REPORT 2022DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED)
This Remuneration Report, for the year ended
30 June 2022, 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)
• Ms Paula Raffo – Investor and Public Relations
Executive (appointed 15 April 2019) & Company
Secretary (appointed 1 September 2020)
Non-Executive Directors
Mr John Elkington (appointed 1 February 2019)
Mr Simon Morten (appointed 17 February 2020)
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.
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.
3.2 Approach to setting remuneration
In FY22, 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.
1 8
TNG LIMITEDDIRECTORS’ REPORT REMUNERATION REPORT (AUDITED)
(continued)
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, 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.
• 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 (“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 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.
During the reporting period, the Company did not
grant any Options to KMP.
During the reporting period, 2,500,000 Options
exercisable at $0.15 (expiring on 2 Feb 2024) and
2,500,000 Options exercisable at $0.20 (expiring on
26 Feb 2024) granted to Mr Jonathan Fisher vested
in accordance with their terms and conditions.
No Options have been converted into Shares.
• Performance Rights Plan (approved by shareholders
at 2018 AGM with approval refreshed at 2021 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 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.
1 9
ANNUAL REPORT 2022DIRECTORS’ REPORT 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.
During the reporting period, the Company did not
grant any NED Rights for the Non-Executive Directors
under the NED Rights Plan and no NED Rights vested
in accordance with their terms and conditions.
• 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)
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.
During the reporting period, the Company did not
grant any Performance Rights for any KMP under the
Performance Rights Plan and no Performance Rights
vested in accordance with their terms and conditions.
• 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 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.
2 0
TNG LIMITEDDIRECTORS’ REPORT REMUNERATION REPORT (AUDITED)
(continued)
3.3 Executive contracts
Paul Burton - Managing Director & CEO (refer to ASX
announcement of 17 October 2014)
•
Term of Agreement: October 2014 until terminated by
either party.
• Salary: $476,100 per annum excluding super plus any
reasonable expense incurred.
•
•
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 12 months’
written notice or make a payment for any notice
period actually worked plus an amount equivalent
to the lesser of 12 months’ salary and the amount
calculated in accordance with section 200F(2)(b) of
the Corporations Act 2001 (Cth). Mr Burton 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.
• Salary: $350,000 per annum excluding super plus
any reasonable expense incurred, subject to annual
review.
• 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 - $270,000 per annum excluding super plus
any reasonable expense incurred, subject to
annual review).
• Early Termination - three months’ written notice by
either party.
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).
• Salary - $190,000 per annum excluding super plus
any reasonable expense incurred, subject to
annual review)
• Early Termination – three months written notice by
either party.
3.4 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
$60,000 per annum plus superannuation.
Non-Executive Directors are not provided with retirement
benefits apart from statutory superannuation.
2 1
ANNUAL REPORT 2022DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (continued)
4. CONSEQUENCES OF PERFORMANCE ON SHAREHOLDER WEALTH
In considering the consolidated entity’s performance on shareholder wealth, the Directors note 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
2022
2021
2020
2019
2018
(4,894,658)
(2,904,883)
(2,885,329)
(3,089,785)
(3,329,120)
-
$0.050
(17%)
(7%)
-
$0.060
(2%)
(4%)
-
$0.061
(41%)
(4%)
-
$0.104
(16%)
(3%)
-
$0.124
(14%)
(3%)
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 2022 and 30 June 2021
FY2022
FY2021
Salary &
Fees
Superannuation
Total
Salary &
Fees
Superannuation
Total
$
$
$
$
$
$
476,100
350,000
266,827
189,654
47,610
35,000
26,683
18,965
523,710
385,000
293,510
208,619
476,100
127,885
245,000
154,693
46,621
12,149
23,275
14,696
522,721
140,034
268,275
169,389
155,300
12,000
167,300
120,900
11,970
132,870
-
-
-
60,000
6,000
66,000
35,692
80,750
3,676
5,985
39,368
86,735
1,497,881
146,258
1,644,139
1,241,020
118,372
1,359,392
Executives
Paul Burton
Jonathan Fisher 3
Jason Giltay 4
Paula Raffo 5
Directors
John Elkington 1
Greg Durack 1,2
Simon Morten 1
Total
1 Includes consulting fees, refer to Note 26 (b)
2 Retired as a Director on 4 February 2021
3 Appointed CFO on 15 February 2021
4 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
5 Appointed Company Secretary on 1 September 2020
2 2
TNG LIMITEDDIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (continued)
5.1.2 Details of Total Remuneration for the year ended 30 June 2022
Base
Remuneration
Salary, Fees
& Super
$
Short-Term
Bonus
$
Other
Long-Term
Share-based
payments 1
Proportion of
remuneration
performance
related
%
Total 2
$
Executives
Paul Burton
Jonathan Fisher
Jason Giltay
Paula Raffo
Directors
John Elkington 3
Simon Morten 3
Total
523,710
385,000
293,510
208,619
167,300
66,000
1,644,139
-
-
-
-
-
-
-
-
-
-
-
-
-
-
317,027
286,147
53,733
40,300
69,907
34,953
840,737
671,147
347,243
248,919
237,207
100,953
802,067
2,446,206
38%
43%
15%
16%
29%
35%
1 Equity-settled remuneration (Non-Cash) based on the value of the performance rights, NED rights and options during the period ended
30 June 2022
2 Movements in the accrued annual leave and long service leave balances as set out in table 5.1.4 are not included in the total above but
form part of the total remuneration for the year
3 Includes consulting fees, refer to Note 26 (b)
5.13 Details of Total Remuneration for the year ended 30 June 2021
Base
Remuneration
Salary, Fees
& Super
$
522,721
140,034
268,275
169,389
132,870
39,368
86,735
1,359,392
Executives
Paul Burton
Jonathan Fisher 4
Jason Giltay 5
Paula Raffo 6
Directors
John Elkington 7
Greg Durack 7,8
Simon Morten 7
Total
Short-Term
Bonus
Other 1
Long-Term
Share-based
payments 2
$
-
-
-
-
-
-
-
-
14,649
171,723
-
-
-
6,000
3,000
3,000
26,649
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 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 (Non-Cash) based on the value of the performance rights, NED rights and options during the period ended
30 June 2021.
3 Movements in the accrued annual leave and long service leave balances as set out in table 4.1.4 are not included in the total above but
form part of the total remuneration for the year
4 Appointed CFO on 15 February 2021
5 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
6 Appointed Company Secretary on 1 September 2020
7 Includes consulting fees, refer to Note 26 (b)
8 Retired as a Director on 4 February 2021
2 3
ANNUAL REPORT 2022DIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (continued)
5.1.4 Details of Accrued Leave for the year ended 30 June 2022 and 30 June 2021
FY2022
Long Service
Leave2
Annual Leave1
$
$
Executives
Paul Burton 1,2
Jonathan Fisher 1
Jason Giltay 1
Paula Raffo 1
Total
27,528
11,398
3,309
12,240
54,474
119,027
-
-
-
119,027
Total
$
146,555
11,398
3,309
12,240
173,501
FY2021
Long Service
Leave2
Annual Leave1
$
$
Total
$
23,927
79,350
103,277
8,491
4,712
7,873
-
-
-
8,491
4,712
7,873
45,003
79,350
124,353
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 KMP during the reporting period.
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
No Rights or Options over ordinary shares in the Company were granted as compensation to any Director or key
management person during the reporting period. Details on Options that vested during the reporting period are as follow:
Options
Jonathan Fisher
Grant date
26-Feb-21
26-Feb-21
Fair value
per option at
grant date $
$0.037
$0.031
Exercise price
per option $
$0.15
$0.20
Expiry Date
26-Feb-24
26-Feb-24
Number of vested
options vested
during FY2022
2,500,000
2,500,000
5.2.2 Exercise of options granted as compensation
During the period no options were exercised by any KMP.
2 4
TNG LIMITEDDIRECTORS’ REPORT
REMUNERATION REPORT (AUDITED) (continued)
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 as follow:
Instrument
Grant date
% vested in
year
% forfeited in
year
Financial
years which
grant vest
Expiry date
Executives
Paul Burton
Jonathan Fisher
Jason Giltay
Paula Raffo
Non-Executive
Directors
John Elkington
Simon Morten
Rights
Rights
11,800,000
17-Dec-20
5,000,000
26-Feb-21
0%
0%
Options
5,000,000
26-Feb-21
100%
Options
10,000,000
26-Feb-21
Rights
Rights
2,000,000
17-Dec-20
1,500,000
17-Dec-20
Rights
Rights
2,800,000
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-22
1-Jul-23
1-Jul-23
1-Jul-23
17-Dec-23
17-Dec-23
26-Feb-24
26-Feb-24
17-Dec-23
17-Dec-23
1-Jul-23
1-Jul-23
17-Dec-23
17-Dec-23
Rights were granted to the Directors, including the Managing Director, in the previous financial year and were approved by
shareholders at the Company’s 2020 AGM.
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
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
Weighting
NED
KMP
5%
15%
5%
5%
Commencement of ground-breaking activities at the Mount Peake Project
20%
20%
Entry into binding documentation to raise an amount of equity finance which is sufficient
to support the project financing of the Mount Peake Project
20%
20%
Entry into binding documentation to raise an amount of debt finance which is sufficient to
support the project financing of the Mount Peake Project
20%
20%
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
30%
20%
2 5
A
B
C
D
E
F
ANNUAL REPORT 2022DIRECTORS’ 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 2021
Granted as
remuneration
Exercised
Lapsed
Forfeited
Held at
30 June
2022
Vested
during the
year
Vested and
exercisable
at 30 June
2022
Options
Executive
Jonathan Fisher
15,000,000
Rights
Executives
Paul Burton
11,800,000
Jonathan Fisher
5,000,000
Jason Giltay
Paula Raffo
Directors
2,000,000
1,500,000
John Elkington
2,800,000
Simon Morten
1,400,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15,000,000
5,000,000
5,000,000
11,800,000
5,000,000
2,000,000
1,500,000
2,800,000
1,400,000
-
-
-
-
-
-
-
-
-
-
-
-
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.
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.
The following payments were done for consulting fees to Miceva Family Trusts $0 (2021: $20,750) of which Simon Morten
is a related party. John Elkington was paid $35,300 during the year for Consulting Services (2021: $900).
2 6
TNG LIMITEDDIRECTORS’ REPORT REMUNERATION REPORT (AUDITED) (continued)
6.2 Movements in shares
There was no 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, as per below:
Executives
Paul Burton
Jonathan Fisher
Jason Giltay
Paula Raffo
Directors
John Elkington
Simon Morten
Held at
1 July 2021
Purchases
Received on
exercise of
options
Sales
Held at
30 June 2022
7,688,889
-
-
-
33,334
164,609
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,688,889
-
-
-
33,334
164,609
The audited remuneration report ends here.
This Directors’ Report is made in accordance with a resolution of the Directors:
Paul Burton
Managing Director & CEO
28 September 2022
2 7
ANNUAL REPORT 2022DIRECTORS’ 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 2022 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Glenn Brooks
Partner
Perth
28 September 2022
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 2022
Other Income
Total Income
Corporate and administration expenses
Employment expenses
Exploration 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(d)
6(a)
6(a)
2022
$’000
2021
$’000
-
-
(1,419)
(2,773)
(564)
(184)
(4,940)
53
(8)
45
184
184
(918)
(2,012)
-
(179)
(2,925)
33
(13)
20
(4,895)
(2,905)
8
-
-
Loss for the year attributable to the owners of the Company
(4,895)
(2,905)
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
(403)
-
(403)
408
-
408
(5,298)
(2,497)
Loss per share (cents per share)
Basic (loss) per share (cents)
Diluted (loss) per share (cents)
9
9
(0.37)
(0.37)
(0.24)
(0.24)
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 2022FINANCIAL REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2022
Note
2022
$’000
2021
$’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
14,442
11,434
409
371
197
231
362
600
15,419
12,627
95
32
102
57,753
57,982
67
42
238
53,149
53,496
73,401
66,123
1,960
461
103
2,524
8
22
30
2,087
496
158
2,741
95
6
101
2,554
2,842
70,847
63,281
126,176
(3,351)
(51,978)
70,847
114,735
(2,948)
(48,506)
63,281
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 2022
Cash flows from operating activities
Cash receipts from customers
Cash payments in the course of operations
Interest received
Interest paid
Note
2022
$’000
2021
$’000
-
(3,293)
39
(8)
184
(2,357)
41
(13)
Net cash used in operating activities
24
(3,262)
(2,145)
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 in cash and cash equivalents
Cash at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
(16)
(9,022)
3,687
(30)
(5,381)
12,506
(683)
(172)
11,651
3,008
11,434
14,442
(10)
(12,149)
5,139
-
(7,020)
12,535
(391)
(161)
11,983
2,818
8,616
11,434
19
19
24
11
The Consolidated Statement of Cash Flows is to be read in conjunction with the notes to the financial statements
3 1
ANNUAL REPORT 2022FINANCIAL REPORT CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2022
Issued
Capital
$’000
Accumulated
losses
$’000
Reserves
$’000
Total Equity
$’000
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
Balance at 1 July 2021
114,735
(48,506)
(2,948)
63,281
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
Exercise of Options
Share issue costs
Share issue costs (Share based Payment)
Share based payments
-
-
-
-
12,500
6
(683)
(382)
-
-
(4,895)
-
(4,895)
-
-
-
382
1,041
-
-
(403)
(403)
-
-
-
-
-
-
(4,895)
(403)
(5,298)
12,500
6
(683)
-
1,041
Balance at 30 June 2022
126,176
(51,978)
(3,351)
70,847
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 2022 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
Share-based Payments
The Group is required to use assumptions in respect of its fair value models, and the variable elements in these models,
used in attributing a value to share based payments as well as the number of awards that will ultimately vest. The Directors
have used a model to value options and rights, which requires estimates and judgements to quantify the inputs used by the
model. Further information on the assumptions used in determining the fair value of rights and options granted during the
period can be found in “Note” 25.
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.
3 3
ANNUAL REPORT 2022NOTES TO THE FINANCIAL STATEMENTS 2 BASIS OF PREPARATION (continued)
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.
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 $4,895,000 and net cash outflows from operating and investing
activities of $8,643,000. As at 30 June 2022, the Group has cash in hand of $14,442,000 and a working capital surplus
of $12,895,000.
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 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 accelerate work programs or commence development of the Mount Peake
Project. 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 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.
(f) Adoption of new standards
A number of new or amended standards became applicable for the current reporting period. The Group did not have to
change its accounting policies or make retrospective adjustments as a result of adopting these standards.
3 4
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 2 BASIS OF PREPARATION (continued)
Standards not yet adopted
The Group has reviewed the new and revised Standards and Interpretations on issue not yet adopted for the year ended
30 June 2022. As a result of this review the Group has determined that there is no material impact of the Standards and
Interpretations in issue not yet adopted on the Company and, therefore, no change is necessary to Group Accounting
Policies.
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.
3 5
ANNUAL REPORT 2022NOTES TO THE FINANCIAL STATEMENTS 3 SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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 2022NOTES 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) 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, Kulgera, Moonlight, Spring Creek, 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(j) (ii).
(i) Financial Instruments
(i) Classification of financial instruments
The Group classifies its financial assets into the following measurement categories:
Those to be measured at fair value (either through other comprehensive income, or through profit or loss); and
Those to be measured at amortised cost
The classification depends on the Group’s business model for managing financial assets and the contractual terms
of the financial assets’ cash flows.
The Group classifies its financial liabilities at amortised cost unless it has designated liabilities at fair value through
profit or loss or is required to measure liabilities at fair value through profit or loss such as derivative liabilities.
(ii) Items at fair value through profit and loss
Items at fair value through profit and loss comprise
•
•
•
Items for trading
Items specifically designated as fair value through profit or loss on initial recognition; and
Debt instruments with contractual terms that do not represent solely payments of principal and interest
Financial instruments held at fair value through profit or loss are initially recognised at fair value, with transaction
costs recognised in the income statement as incurred. Subsequently, they are measured at fair value and any
gains or losses are recognised in the income statement as they arise.
Where a financial asset is measured at fair value, a credit valuation adjustment is included to reflect the credit
worthiness of the counterparty, representing the movement in fair value attributable to changes in credit risk.
A financial instrument is classified as held for trading if it is acquired or incurred principally for the purpose of
selling or repurchasing in the near term, or forms part of a portfolio of financial instruments that are managed
together and for which there is evidence of a short-term profit taking, or it is a derivative not in a qualifying hedge
relationship.
Upon initial recognition, financial instruments may be designated as measured at fair value through profit or loss.
A financial asset may only be designated at fair value through profit or loss if doing so eliminates or significantly
reduces the measurement or recognition inconsistencies (i.e. eliminates an accounting mismatch) that would
otherwise arise from measuring financial assets or liabilities on a different basis.
A financial liability may be designated at fair value through profit or loss if it eliminates or significantly reduces an
accounting mismatch or:
3 9
ANNUAL REPORT 2022NOTES TO THE FINANCIAL STATEMENTS 3 SIGNIFICANT ACCOUNTING POLICIES (continued)
•
•
If a host contract contains one or more embedded derivatives
If financial assets and liabilities are both managed and their performance evaluated on a fair value basis in
accordance with a documented risk management or investment strategy
Where a financial liability is designated at fair value through profit or loss, the movement in fair value attributable
to changes in the Group’s own credit quality is calculated by determining the changes in credit spreads above
observable market interest rates and is presented separately in other comprehensive income.
(iii) Recognition and derecognition of financial instruments
A financial asset or financial liability is recognised in the balance sheet when the Group becomes a party to the
contractual provisions of the instrument, which is generally on trade date. Loans and receivables are recognised
when cash is advanced (or settled) to the borrowers.
Financial assets at fair value through profit or loss are recognised initially at fair value. All other financial assets are
recognised initially at fair value plus directly attributable transaction costs.
The Group derecognises a financial asset when the contractual cash flows from the asset expire or it transfers its
rights to receive contractual cash flows from the financial asset in a transaction in which substantially all the risks
and rewards of ownership are transferred. Any interest in transferred financial assets that is created or retained by
the Group is recognised as a separate asset or liability.
A financial liability is derecognised from the balance sheet when the Group has discharged its obligations or the
contract is cancelled or expires.
(iv) Offsetting
Financial assets and liabilities are offset and the net amount is presented in the balance sheet when the Group
has a legal right to offset the amounts and intends to settle on a net basis or to realise the asset and settle the
liability simultaneously.
(j) 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.
4 0
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 3 SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
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.
(k) 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.
4 1
ANNUAL REPORT 2022NOTES TO THE FINANCIAL STATEMENTS 3 SIGNIFICANT ACCOUNTING POLICIES (continued)
(l) 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 Rights and share options granted to employees as per AASB 133.
(m) 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.
(n) 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.
(o) 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 2
TNG LIMITEDNOTES 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 3
ANNUAL REPORT 2022NOTES 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:
Trade and other receivables
Cash and cash equivalents
None of the Group’s trade and other receivables are past due.
Liquidity risk
Note
12
11
Consolidated Carrying amount
2022
$’000
2021
$’000
409
14,442
14,851
231
11,434
11,665
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 2022
Trade and other payables
Lease liabilities
30 June 2021
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
1,960
111
2,071
1,960
111
2,071
1,960
103
2,063
-
8
8
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
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 4
TNG LIMITEDNOTES 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.
Currency Risk
The Group has no material exposure to currency risk.
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
Security Deposits to Department of Primary Industry & Resources
Lease Liability
Consolidated carrying amount
Note
2022
$’000
2021
$’000
11
11
12
18
4,442
2,934
10,000
149
95
(111)
14,575
8,500
214
-
(253)
11,395
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 $44,420 (2021: $29,340).
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 $1,973 (2021: $6,003).
An equal change in the opposite direction would have decreased equity by the same amount.
4 5
ANNUAL REPORT 2022NOTES TO THE FINANCIAL STATEMENTS 5 FINANCIAL RISK MANAGEMENT (continued)
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.
6
INCOME AND EXPENSES
Consolidated
Note
2022
$’000
2021
$’000
-
-
53
53
(8)
(8)
45
150
35
320
180
62
100
68
140
34
11
319
1,419
184
184
33
33
(13)
(13)
20
8
95
137
72
76
77
69
106
90
26
162
918
(a)
Income
Other income
Total income
Interest income
Finance income
Interest expense
Finance expense
Net finance income
(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
4 6
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 1 Total Wages and Salaries incurred during the year including amounts capitalised to exploration and evaluation was $2,912,866
(2021: $2,455,339).
6
INCOME AND EXPENSES (continued)
(c) Employment expenses
Wages and salaries1
Other associated personnel expenses
Increase in liability for long service leave
Contributions to defined contribution plans
Share based payments expense
Total Employment expenses
(d)
Impairment on exploration tenement
Impairment of exploration tenement
Total Expense
7 AUDITORS’ REMUNERATION
Auditors of the Group -
KPMG Australia:
Audit and review of financial reports
Non-Audit fees (Primarily relates to project financing services)
Total Auditor’s remuneration
Consolidated
Note
2022
$’000
2021
$’000
1,557
1,309
9
22
144
1,041
2,773
564
564
9
18
120
556
2,012
-
-
Consolidated
2022
$’000
2021
$’000
45,080
217,868
262,948
41,753
165,864
207,617
4 7
ANNUAL REPORT 2022NOTES 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 30% (2021: 26%)
Reconciling items
Other non-deductible expenses
Tax losses and temporary differences not brought to account
Income tax expense reported in the income statement
Consolidated
2022
$’000
2021
$’000
(4,895)
(1,468)
(2,905)
(755)
342
1,126
-
156
599
-
Unused tax losses carried forward
71,777
68,371
Potential tax benefit @ 25% (2021: 26%)
Tax losses offset against deferred tax liabilities
Unrecognised tax benefit
17,944
(13,137)
4,807
17,776
(13,308)
4,468
All unused tax losses were incurred by Australian entities.
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
Non-current assets
Tax only assets
Trade and Other payables/ Accruals
Brought forward tax losses offset against deferred tax liabilities
Consolidated
2022
$’000
2021
$’000
14,173
13,657
(401)
(507)
(128)
(211)
-
(138)
(13,137)
(13,308)
-
-
4 8
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS
9 EARNINGS PER SHARE
The calculation of basic earnings per share for the year ended 30 June 2022 was based on the loss attributable to ordinary
shareholders of $4,894,658 (2021: loss $2,904,883) and a weighted average number of ordinary shares on issue during the
year ended 30 June 2022 of 1,335,133,223 (2021: 1,193,876,045).
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
Effect of options exercised
Weighted average number of ordinary shares at 30 June
Basic (loss) per share (cents)
Diluted (loss) per share (cents)
Effect of dilutive securities
2022
$’000
2021
$’000
(4,895)
(4,895)
(2,905)
(2,905)
2022
Numbers
2021
Numbers
1,249,497,040
1,124,545,124
85,616,438
69,330,921
19,745
-
1,335,133,223
1,193,876,045
(0.37)
(0.37)
(0.24)
(0.24)
TNG’s potential ordinary shares as at 30 June 2022 include 15,000,000 Options and 34,550,000 Rights granted to
the Eligible Employees and Non-Executive directors at the year ending 2022, and 17,354,824 options issued to
Canaccord Genuity. 138,888,889 ordinary shares were issued and 32,923 options were converted into ordinary
shares during the period.
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. Diluted earnings per share
have been calculated taking consideration of the options with the fixed term. Performance-based employee options are
treated as contingently issuable shares because their issue is contingent upon satisfying specified conditions in addition
to the passage of time. 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 9
ANNUAL REPORT 2022NOTES 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
2022
$’000
2021
$’000
4,442
10,000
14,442
2,934
8,500
11,434
Consolidated
2022
$’000
2021
$’000
19
149
241
409
6
147
78
231
1 Bank short term deposits of $46,000 maturing in 11 months 29 days and $100,000 maturing in 6 months 2 days are paying interest at a
weighted average interest rate of 0.70% and 0.80% respectively (2021: 0.50% and 0.23%)
13 OTHER INVESTMENTS
Investments in equity instruments
Number
$’000
Number
$’000
2022
2021
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
14
1
182
197
90,000
17,392
7,000,000
7,107,392
15
4
581
600
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 2022, management recognised fair value adjustment of negative $403,050
through other comprehensive income. The decrease in fair value is largely due to the significant decrease in the share price
of Todd River Resources.
5 0
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS
14 RIGHT-OF-USE ASSET
Cost
Balance at 1 July
Additions
Accumulated depreciation
Balance at 30 June
15 EXPLORATION AND EVALUATION EXPENDITURES
Cost
Balance at 1 July
Exploration and evaluation expenditure
Impairment of Tenement 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
2022
$’000
2021
$’000
238
22
(158)
102
350
40
(152)
238
Consolidated
2022
$’000
2021
$’000
53,149
8,855
(564)
(3,687)
57,753
1,833
6,458
8,291
46,288
12,000
-
(5,139)
53,149
1,267
10,733
12,000
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
exploration and evaluation expenditure was $57,753,068 of which $57,257,767 was attributable to the Mount Peake project
and the remaining balance relating to other current exploration programs.
An impairment of $564,398 has been recognised as a result of the Group surrendering a tenement (EL27070) forming part
of the Mount Peake Project. The tenement was surrendered on 29 July 2021 as non-core to the project, as exploration for
and evaluation of mineral resources in the tenement area has not led to the discovery of commercially viable quantities
of mineral resources. The amount was previously allocated to exploration and evaluation asset and was expensed in the
Statement of Profit and Loss, as exploration expense during the financial year ending 30 June 2022.
16 TRADE AND OTHER PAYABLES
Current
Trade payables
Accruals
Other payables
Trade payables are normally settled on a 30-day basis.
Consolidated
2022
$’000
2021
$’000
1,183
455
322
1,960
343
1,421
323
2,087
5 1
ANNUAL REPORT 2022NOTES TO THE FINANCIAL STATEMENTS
Consolidated
2022
$’000
2021
$’000
323
138
461
22
22
502
(19)
483
317
179
496
6
6
464
38
502
Consolidated
2022
$’000
2021
$’000
253
22
8
(172)
111
103
8
111
361
40
13
(161)
253
158
95
253
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
Balance as at 1 July
Additions
Interest expense
Lease repayments
Balance at 30 June
Current liability
Non-current liability
5 2
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 19 ISSUED CAPITAL AND RESERVES
Issued and paid-up share capital
(a) Movements in shares on issue
Consolidated
2022
$’000
2021
$’000
126,176
114,735
2022
2021
Number
$’000
Number
$’000
Balance at the beginning of year
1,249,497,040
114,735
1,124,545,124
Share placement
138,888,889
12,500
124,951,916
Share issue costs
Share issue costs (Share Based Payments)
Options Exercised
Loan Funded Share Plan – loan repaid
-
-
32,293
-
(683)
(382)
6
-
-
-
-
-
102,595
12,495
(395)
-
-
40
Balance at the end of year
1,388,418,222
126,176
1,249,497,040
114,735
During the reporting period, the Company completed a Share Placement at $0.09 per share to raise A$12.5 million (before
costs). A total of 138,888,889 new shares were issued.
Additionally, an amount of $5,813 was received from the exercise of 32,293 quoted options (ASX: TNGOB) at
$0.18 per option, and the remaining 124,919,623 quoted options expired on 30 November 2021.
Ordinary shares are classified as equity. Incremental costs directly attributed to the issue of new shares are shown in
equity as a deduction from the proceeds.
Refer to Note 25 for details of employee share-based payments.
On 21 December 2021, the Company issued 17,354,824 unquoted options exercisable at $0.18 with a 3-year expiry
to Canaccord Genuity as payment for corporate advisory services. The fair value of these unquoted options has been
measured using the Black Scholes option pricing model and has been shown as a reduction in equity. The inputs used in
the measurement of the fair values at grant date of the options were as follows:
Item
Underlying security spot price
Exercise price
Valuation date
Expiry date
Life of the Options (years)
Share price volatility
Risk - free rate
Dividend yield
Number of Options
Valuation per Option
Valuation per Tranche
Options
$0.077
$0.180
21-Dec 21
20-Dec 24
3.00
75%
0.960%
Nil
17,354,824
$0.022
$381,806
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.
5 3
ANNUAL REPORT 2022NOTES TO THE FINANCIAL STATEMENTS 19 ISSUED CAPITAL AND RESERVES (continued)
Reserves
Fair Value through other comprehensive income reserve1
Transaction Reserve2
Total Reserves
Consolidated
2022
$’000
2021
$’000
1,205
2,146
3,351
802
2,146
2,948
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.
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
2022
$’000
2021
$’000
Exploration commitments payable not provided for in the financial report:
Within one year
1,391
848
5 4
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 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
2022
$’000
2021
$’000
47
47
197
197
47
47
167
167
The Group has various security deposits totalling $244,146 representing bank guarantees of $45,946 for the office lease in
Perth, $1,083 for site office in Alice Springs (NT), $100,000 for Central Land Council (NT), and $2,085 related to tenement
management. $95,032 was 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 2022.
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.
5 5
ANNUAL REPORT 2022NOTES TO THE FINANCIAL STATEMENTS 22 DEED OF CROSS GUARANTEE (continued)
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 2022 is set out as follows:
Consolidated
2022
$’000
2021
$’000
-
-
(1,418)
(2,773)
(183)
(564)
(4,938)
53
(8)
45
184
184
(917)
(2,012)
(179)
-
(2,924)
33
(13)
20
(4,893)
(2,904)
-
-
(4,893)
(2,904)
(403)
-
(403)
(5,296)
408
-
408
(2,496)
(4,893)
(2,904)
1,041
382
(3,470)
556
-
(2,348)
(49,599)
(53,069)
(47,251)
(49,599)
Other Income
Total Income
Corporate and administration expenses
Employment expenses
Depreciation and amortisation expenses
Exploration 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
Share Issue costs (Share Based Payments)
Movements in retained earnings
Retained earnings at beginning of the year
Retained earnings at end of year
5 6
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
2022
$’000
2021
$’000
14,442
11,433
408
371
197
230
362
600
15,418
12,625
-
95
32
(1,086)
102
57,750
56,893
72,311
1,961
461
103
2,525
8
22
30
-
67
42
(1,091)
238
53,149
52,405
65,030
2,087
496
158
2,741
95
6
101
2,555
2,842
69,755
62,188
126,176
(3,351)
(53,069)
69,756
114,735
(2,948)
(49,599)
62,188
5 7
ANNUAL REPORT 2022NOTES 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 Mining Limited
Country of Incorporation
2022
% of Ownership
2021
% 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
Consolidated
2022
$’000
2021
$’000
(4,895)
(2,905)
184
8
1,041
382
564
179
13
556
-
-
(2,716)
(2,157)
(176)
(370)
(3,262)
(16)
28
(2,145)
Consolidated
2022
$’000
2021
$’000
(253)
(22)
(8)
111
(172)
(361)
(40)
(13)
253
(161)
Net profit/(loss) for the period
Add/(less) non-cash items:
Depreciation and amortisation
Interest expense
Share based expense
Share issue costs (Share Based Payments)
Impairment 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 1 July
Additions
Interest expense
Lease liability at 30 June
Net cash used in financing activities
5 8
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 $144,115 for the financial year ended 30 June 2022 (2022: $119,758).
Share-based payments
Details of the types of share-based payments for the Key Management Personnel have been included in the
remuneration report.
This is a non-cash expense recognised, based on the value of the Performance Rights/Options
Total share-based expenses for FY22 were $1,040,788 (2021: 555,790).
(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
with approval refreshed at the Annual General Meeting on 30 November 2021. 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
Outstanding balance at the beginning of the year
Granted
Vested
Lapsed
Forfeited
2022
2021
15,000,000
-
-
15,000,000
5,000,000
-
-
-
-
-
Outstanding balance at the end of the year
15,000,000
15,000,000
Vested and exercisable at the end of the year
5,000,000
-
5 9
ANNUAL REPORT 2022NOTES TO THE FINANCIAL STATEMENTS 25 EMPLOYEE BENEFITS (continued)
The Options have the following exercise prices and vesting conditions:
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
Performance Rights
Outstanding balance at the beginning of the year
Granted
Vested
Lapsed
Forfeited
Outstanding balance at the end of the year
2022
2021
32,500,000
-
-
-
32,700,000
-
2,150,000
200,000
-
-
30,350,000
32,500,000
Vested and exercisable at the end of the year
-
NED Rights
Outstanding balance at the beginning of the year
2022
2021
4,200,000
-
-
Granted
Vested
Lapsed
Forfeited
-
-
-
-
5,600,000
-
1,400,000
-
Outstanding balance at the end of the year
4,200,000
4,200,000
Vested and exercisable at the end of the year
-
-
The Rights have the following vesting conditions:
Class
Vesting condition to be met
Weighting
NED Rights
Performance
Rights
210,000
4,552,500
210,000
1,517,500
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
840,000
6,070,000
Entry into binding documentation to raise an amount of equity
finance which is sufficient to support the project financing of the
Mount Peake Project
840,000
6,070,000
Entry into binding documentation to raise an amount of debt finance which
is sufficient to support the project financing of the Mount Peake Project
840,000
6,070,000
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
1,260,000
6,070,000
A
B
C
D
E
F
6 0
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
-
80%
2.81
-
$ 0.039
$ 0.094
-
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
Share Based Expense (Non-Cash)
Consolidated
2022
$’000
2021
$’000
2,446
54
697
3,197
1,764
45
321
2,130
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.
6 1
ANNUAL REPORT 2022NOTES 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 Miceva Family Trusts $0 (2021: $20,750) of which
Simon Morten is a related party. John Elkington was paid $35,300 during the year for Consulting Services (2021: $900).
These have been included in the directors’ remuneration.
$10,100 was outstanding at 30 June 2022 (2021: $0).
27 PARENT ENTITY INFORMATION
As at, and throughout, the financial year ending 30 June 2022 the parent entity of the Group was TNG Limited.
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
Tax consolidation
2022
$’000
2021
$’000
14,814
56,680
71,494
840
133
973
126,176
12,822
(68,477)
11,844
51,665
63,509
916
259
1,175
114,735
11,803
(64,204)
70,521
62,334
(4,274)
(4,677)
(2,857)
(2,449)
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
2022
$’000
2021
$’000
-
-
-
-
-
-
6 2
TNG LIMITEDNOTES TO THE FINANCIAL STATEMENTS 27 PARENT ENTITY INFORMATION (continued)
Contingent Liabilities
Guarantees
A guarantee has been provided to support unconditional
Office lease performance bonds
Total estimated contingent liabilities
2022
$’000
2021
$’000
47
47
47
47
28 EVENTS SUBSEQUENT TO BALANCE DATE
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 8 July 2022, the Company received a conditional Letter of Support from EFA that considers the provision
of up to A$300 million of debt funding for the construction of the Mount Peake Project.
On 19 July 2022, the Company announced that the Republic of Germany Export Credit Agency, Euler Hermes, issued Letter
of Interest including indicative key terms for German ECA financing of A$300 million. TNG also announced the receipt of
Expressions of Interest from seven lenders active in Mining & Metals and ECA Finance.
On 29 July 2022, the Company announced the appointment of highly-regarded and experienced international company
director, Elizabeth Henson, as a non-executive director of the Company, effective from 1 August 2022.
On 1 August 2022, TNG announced that it had received further financial backing with Korean Export Credit Agency K-SURE
issuing a letter of support for up to A$200 million in debt funding for the Mount Peake Project.
On 8 August 2022, the Company gave notice that a General Meeting of Shareholders of the Company will be held at Vibe
Hotel, 9 Alvan Street, Subiaco, 6008, Western Australia on 20 September 2022 at 4:00pm (WST), following the receipt of a
request from shareholders who together hold at least 5% of the shares in the Company, to call a meeting of shareholders
pursuant to s249D of the Corporations Act 2001 (Cth) to consider resolutions to reconstitute the TNG Board of Directors.
On 16 August 2022, the Company announced that it had further strengthened its growth pipeline in battery-related and
future-facing strategic minerals after securing an extensive new lithium exploration package, the Sandover Lithium Project,
located near the Mount Peake Project.
On 2 September 2022, TNG announced the appointment of highly regarded Australian mining executive Mr Neil Biddle as
non-executive Chairman, effective immediately. Following the appointment, Non-Executive Chairman Mr John Elkington
transitioned to Non-Executive Director as part of TNG’s ongoing board renewal process.
On 16 September 2022, TNG announced that Mr John Elkington and Ms Elizabeth Henson would step down from the
TNG Board, and that the Company is undertaking a global search for an experienced mining and operations executive to
take the Company forward. On 20 September 2022, Mr Elkington and Ms Henson formally resigned from the Board.
On 20 September 2022, a General Meeting of Shareholders of the Company was held to consider resolutions to
reconstitute the TNG Board of Directors. As a result of the General Meeting, Dr Anthony Robinson was appointed as
a Non-Executive Director of the Company. No other changes to the Board resulted from the General Meeting.
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 2022 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 3
ANNUAL REPORT 2022NOTES TO THE FINANCIAL STATEMENTS In the opinion of the Directors of TNG Limited (the “Company”):
1.
The consolidated financial statements and notes, that are set out on pages 29 to 63, and the Remuneration Report in
pages 18 to 27 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 2022 and of its performance, for the
financial year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporation Regulations 2001, and
2.
3.
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.
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
between the Company and those group entities pursuant to ASIC Corporations (Wholly owned Companies) Instrument
2016/785.
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 2022.
The Directors draw attention to note 2(a) of the consolidated financial statements which includes a statement of
compliance with International Financial Reporting Standards.
Signed in accordance with the resolution of the Directors:
Paul Burton
Managing Director & CEO
Dated 28 September 2022
6 4
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 2022 and of
its financial performance for the year ended
on that date; and
• Complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
The Financial Report comprises:
• Consolidated statement of financial position as
at 30 June 2022;
• 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
accounting policies; and
• 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 (including Independence Standards) (the Code) that are relevant to our
audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
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 5
ANNUAL REPORT 2022INDEPENDENT AUDITOR’S REPORT
Exploration and evaluation expenditure capitalised ($57,753,000)
Refer to Note 15 to the Financial Report
The key audit matter
How the matter was addressed in our audit
Exploration and evaluation expenditure capitalised
(E&E) is a key audit matter due to the:
• Significance of the activity to the Group’s
business and balance sheet (being 79% of
total assets); 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 Mt Peake area of interest. 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.
In assessing the presence of impairment
indicators, we focused on those that may draw
into question the commercial continuation of E&E
activities for the Mount Peake project. 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; and
• The ability of the Group to fund the
continuation of activities.
Our audit procedures included:
• Evaluating the Group’s accounting policy to
recognise E&E using the criteria in the
accounting standard;
• Assessing the Group’s current rights to
tenure, particularly for the Mt Peake project,
by checking the ownership of the relevant
licenses to government registries. We also
tested for compliance with conditions, such
as minimum expenditure requirements, on a
sample of licenses;
• Testing 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;
• Evaluating documents, such as minutes of
Board meetings and ASX announcements for
consistency with the Group’s stated
intentions for continuing E&E activities. 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 of interest; and
• Assessing the Group’s cash flow budget to
identify planned expenditure for Mount
Peake, for evidence of the ability to fund
continued activities.
6 6
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; and
• 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 7
ANNUAL REPORT 2022INDEPENDENT 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 2022
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 18 to 27 of the Directors’ report
for the year ended 30 June 2022.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit
conducted in accordance with Australian Auditing
Standards.
KPMG
Glenn Brooks
Partner
Perth
28 September 2022
6 8
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 1,388,418,222 fully paid ordinary shares on issue. There are 5,862 holders of these ordinary shares as
at 24 August 2022. 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.
Substantial shareholders as at 24 August 2022
Substantial holders in the Company are set out below:
Shareholder
Deutsche Balaton and Associates
Grant Francis Wilson
V. M. Salgaocar & Bro. (Singapore) Pte. Ltd
Twenty largest shareholders as at 24 August 2022
Units
% Units
170,463,093
122,494,092
110,692,082
12.28%
8.82%
7.97%
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
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