Torque Metals Limited Annual Report 2020

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FY2020 Annual Report · Torque Metals Limited

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Director’s Report 30 June 2020

Torque Metals Limited

TORQUE METALS LIMITED

ACN 621 122 905

Financial statements for the year ended

30 June 2020

Financial statements for the period from

16 August 2017 (date of incorporation) through to

30 June 2018

Financial Statements 30 June 2020

Torque Metals Limited

Corporate Directory

Board of Directors
Ian D. Finch
Neil W. McKay
Antony L. Lofthouse Non-Executive Director (appointed 30 January 2020)

Managing Director
Executive Director

Company Secretary
Neil W. McKay

Principal Place of Business
4 Glencoe Road
Ardross
West Perth WA 6153

Postal Address
PO Box 27
West Perth, Western Australia 6872

Auditors
Bentleys Audit & Corporate (WA) Pty Ltd
P.O. Box 7775
Cloister Square WA 6850

Share Register
Advanced Share Registry Services
110 Stirling Highway,
Nedlands, WA 6010

Stock Exchange Listing
Sydney Stock Exchange
L41/259 George St, Sydney NSW 2000
Code : 8TM

Banker
Westpac Banking Corporation
1257 Hay Street
West Perth, Western Australia 6005

Financial Statements 30 June 2020

Torque Metals Limited

Contents

Corporate Directory .............................................................................................................................. 1

Contents ............................................................................................................................................... 2

Director’s Report .................................................................................................................................. 3

Independent Declaration .................................................................................................................... 15

Independent auditor’s report ............................................................................................................. 16

Director’s Declaration ......................................................................................................................... 21

Statement of profit or loss and other comprehensive income for the year ended 30 June 2020 ....... 22

Statement of financial position as at 30 June 2020 ............................................................................ 23

Statement of changes in equity for the year ended 30 June 2020 ...................................................... 24

Statement of cash flow for the year ended 30 June 2020 .................................................................. 25

Notes to the financial statements for the Year 30 June 2020 ............................................................. 26

Additional Shareholders Information.................................................................................................. 47

Tenements ......................................................................................................................................... 50

Director’s Report 30 June 2020

Torque Metals Limited

Director’s Report
The directors of Torque Metals Limited (“Torque” or “the Company”) present their report on Torque for
the year ended 30 June 2020 (“the Year”).

Directors
The names of the directors of the Company during the year are:
Ian D. Finch
Neil W. McKay
Anthon (Tony) L. Lofthouse Appointed 30 January 2020
Tshung H. Chang Removed 30 January 2020

Directors have been in office since the start of the Year to the date of this report unless otherwise stated.

Ian D. Finch

Managing Director (appointed 16 August 2017)

Qualifications

Experience

BSc (Hons) in Geology from the University of Birmingham (England), Member of
the Australasian Institute of Mining and Metallurgy.

Mr. Finch’s career spans 50 years of mining and exploration. He worked
extensively throughout Southern Africa between 1970 and 1981—from the
Zambian Copper Belt and Zimbabwean Nickel and Chrome fields to the
Witwatersrand Gold Mines in South Africa.
In 1982 he joined CRA Exploration as a Principal Geologist, before joining Bond
Gold as its Chief Geologist in 1987.
In 1993 Mr. Finch established Taipan Resources Ltd, a company which
successfully pioneered the exploration for large gold deposits in the Ashburton
District of Western Australia—when it discovered a resource of approximately
1.0 million ounces at the Paulsen’s Project.
In 1999 Mr. Finch founded Templar Resources Limited, which became a 100%
owned subsidiary of Canadian listed company Goldminco Corporation. As
President/CEO for Goldminco until May 2005, Mr. Finch established an extensive
exploration portfolio in New South Wales where the Company actively explored
for large porphyry copper / gold deposits. During his presidency, Mr. Finch
forged strong strategic ties with the major mining houses and financial
institutions in Vancouver, Toronto and London.

Interest in Shares

10,000,000 fully paid ordinary shares. 50% beneficial interest in Turf Moor Pty.
Ltd. a company in which he is a shareholder.

Interest in Performance
Rights

4,000,000

Directorships held in None.
other listed entities

Director’s Report 30 June 2020

Torque Metals Limited

Neil W. McKay

Executive Director (appointed 16 August 2017)
Company Secretary (appointed 16 August 2017)

Qualifications

Bachelor of Business (Sec Admin)

Experience

Mr. McKay is a former Chartered Accountant and has been involved in the
resources industry for more than 30 years. He has been Company Secretary for
several listed resource public companies and held senior administrative and
accounting positions for a number of other resource companies.
Since 1995, he has operated as an independent consultant specializing in the
incorporation and administration of resource companies with special focus in
South East Asia.

Interest in Shares

10,000,000 fully paid ordinary shares. 50% beneficial interest in Turf Moor Pty.
Ltd., a company in which he is a shareholder

Interest in Performance
Rights

4,000,000

Directorships held in None.
other listed entities

Antony L Lofthouse Non-Executive Director (appointed 30 January 2020)

Qualifications

Bachelor of Science (Hons) Geology from the University of London and a
Master of Business Administration from the University of Western Australia

Experience

With more than 43 years of working in the resources sector in Australia, Saudi
Arabia and the United Kingdom, Mr. Lofthouse has developed expertise in an
extensive range of relevant disciplines that together deliver a skillset ideally
suited to the particular challenges of an emerging mineral exploration company.
Mr. Lofthouse has worked as a field geologist, a resources equity analyst in
stockbroking, a corporate banker managing a portfolio of resource and
infrastructure customers (providing services that included project finance,
mezzanine debt, corporate advisory, transactional banking facilities, credit
analysis and legal documentation). Mr. Lofthouse has also worked as a provider
of internet-based geotechnical information services, and most recently as the
CEO of Ora Gold (formerly Thundelarra) an ASX-listed Australian exploration
company. He also has previous ASX-listed company non-executive director
experience.

Interest in Shares

Nil

Interest in Performance
Rights

2,000,000

Directorships held in None.
other listed entities

Director’s Report 30 June 2020

Torque Metals Limited

Directors Remuneration Report- Audited

This report details the nature and amount of remuneration for each director of the Company.

No director since the date of formation of the Company has received any cash remuneration either before
or after the Company listed.

Remuneration Policy.

The remuneration policy of Torque has been designed to align Director and executive objectives with
shareholder and business objectives by providing a fixed remuneration component which is assessed on
an annual basis in line with market rates. The further tailoring of goals between shareholders and the
Directors and executives is achieved through the issue of equity to the directors and executives to
encourage the alignment of personal and shareholder interest.

The Board of the Company believes the remuneration policy is below accepted industry standards but
appropriate and effective while the Company is in the initial phase of being listed on a Stock Exchange.

The remuneration policy, setting the terms and conditions for the Directors and executives was
developed by the Directors and approved by the Board.

The Board recognises that the remuneration rates are below competitive remuneration rates of local and
international trends among comparative companies and industry generally.

The Group is exploration and development focussed, and therefore speculative in terms of performance.
The Directors and executives are paid below market rates associated with individuals in similar positions,
within the same industry.

Options and performance incentives will be issued in the event that the entity moves from an exploration
entity to a producing entity, and key performance indicators such as profits and market value can be used
as measurements for assessing Board and executive performance.

All remuneration paid to Directors and executives is valued at the cost to the Company and expensed or
carried forward on the balance sheet for time that is attributable to exploration and evaluation.

The Board policy is to remunerate, where possible, non-executive directors at market rates for
comparable companies for time, commitment and responsibilities. The Managing Directors, in
consultation with independent advisors as necessary, determine payments to the non-executive Directors
and review their remuneration annually, based on market practice, duties and accountability. The
maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by
shareholders at the Annual General Meeting. Fees for non-executive Directors are not linked to the
performance of the Company. However, remuneration of non-executive directors at this present time are
below comparable market expectations.

Employment Contracts of Directors and Senior Executives.

The employment conditions of the Managing Director is formalised in a contract of employment. The
contract commenced on 21 August 2018 and may be terminated at any time by the Company giving the
Managing Director 6 months’ notice. The contract provided Mr. Finch with a commencement annual
salary of $240,000 with an annual review on 1 October upon the Company being admitted to the ASX. The
contract has standard termination clauses. In the event of termination, the fixed proportion of
remuneration is payable up until the date of the termination. On 11 May 2020 the employment contract
was varied by reducing the annual salary to $150,000. After year end, by mutual consent the $150,000
remuneration was deferred and temporarily replaced with a a range between $50,000 to $75,000 a
year. Until such time that the Company raises additional capital at which time the difference will be paid

The employment conditions of Mr. McKay is formalised in a contract of employment. The contract
commenced on 21 August 2018 and may be terminated at any time by the Company giving Mr. McKay 6

Director’s Report 30 June 2020

Torque Metals Limited

months’ notice. The contract provided Mr. McKay with a commencement annual salary of $200,000 with
an annual review on 1 October upon the Company being admitted to the ASX. The contract has standard

Directors Remuneration Report (Cont’d)

termination clauses. In the event of termination, the fixed proportion of remuneration is payable up until
the date of the termination. On 11 May 2020 the employment contract was varied by reducing the annual
salary to $125,000. After year end, by mutual consent the $125,000 remuneration was deferred and
temporarily replaced with a range between $40,000 to $62,500 a year until such time as the Company
raised additional capital at which time the difference will be paid.

An employment contract has been in place for the Non-Executive Director, Antony Lofthouse since his
appointment 30 January 2020. . Mr Lofthouse’s annual fee was $30,000 per annum. After year end, by
mutual consent the remuneration was deferred and temporarily replaced with to a range between
$10,000 to $15,000 a year until such time as the Company raised additional capital at which time the
difference will be paid.

The employment contracts stipulate a six-month resignation period. The Company may terminate an
employment contract without cause by providing six months written notice or making payment in lieu of
notice, based on the individual’s annuals alary component. Termination payments are not payable on
resignation or under the circumstances of unsatisfactory performance

Details of remuneration for the years ended 30 June 2020 and 30 June 2019
The remuneration for each key management personnel of the Company during the year was as follows

Post-
employment
Benefits

Other
Long-
term
Benefits

Share based Payment

Superannuation

Other

Equity

Performance
Rights

Total

Value of
Performance
Rights
Remuneration

Performance
Related

Short-term
Benefits

Cash, salary &
commissions

Ian D. Finch Managing Director

2020

2019

Neil W. McKay – Executive Director

2020

2019

Antony L. Lofthouse – Non Executive Director appointed 30 January 2020)

2020

2019

Tshung H. Chang – Non Executive Director (removed 30 January 2020)

2020

2019

Total Remuneration

2020

42,374

45,881

42,374

45,882

6,549

(45,881)

45,881

45,416

137,644

100%

2019
Key Management Personnel (KMP) Share and Performance Rights

30 June 2020

Balance
1/07/19

Granted as
Remuneration

Options
Exercised

Balance
30/06/20

Turf Moor Pty. Ltd1. 1 10,000,000

Antony L Lofthouse
Tshung H. Chang

-
7,150,000
17,150,000

-
-
-

10,000,000

-
7,150,000
17,150,000

Director’s Report 30 June 2020

Torque Metals Limited

Directors Remuneration Report (Cont’d)

30 June 2019

Balance
1/07/18

Granted as
Remuneration

Options
Exercised

Balance
30/06/19

Turf Moor Pty. Ltd1. 1 10,000,000

Tshung H. Chang

7,150,000
17,150,000

-
-

10,000,000

7,150,000
17,150,000

1 Mr. Finch and Mr. McKay are equal 50% shareholders in Turf Moor Pty. Ltd. which holds 10,000,000
Shares

Performance Rights
2 million Performance Rights were issued to a Director during the current financial year and represents
the only share based payments issued by the Company. No Performance Rights have vested during the
financial year ended 30 June 2020. When the performance or price criteria are met, all share rights can
then be converted into ordinary shares only on a 1 : 1 basis.
In accordance with the Performance Rights Agreement, Mr. Chang’s Performance Rights were cancelled
on 30 January 2020

Performance
Rights

Ian D. Finch

Total
Neil W. McKay

Total
Antony L.
Lofthouse2

Total

Granted Number

Grant Date

1,000,000
1,333,333
1,666,667
4,000,000
1,000,000
1,333,334
1,666,666
4,000,000
500,000
666,667
833,333
2,000,000
10,000,000

4 Sept. 2018
4 Sept. 2018
4 Sept. 2018

11 May 2020
11 May 2020
11 May 2020

Expiry Date

Vested
Number

Fair Value
Performance
Rights
$0.05918
$0.0646
$0.10025¹

12 mths from listing
24 mths from listing
36 mths from listing

$0.05918
$0.0646
$0.10025¹

12 mths from listing
24 mths from listing
36 mths from listing

-
-
-

¹Tranche 3 being a non-market condition has a 0% probability of being met. Nil Value recorded.

2Performance Rights issued to Mr. Lofthouse are subject to shareholder approval but have been accrued
based upon the 11 May 2020 issue date. Once approval is obtained the expense will be recognised
(shareholder approval date).

Other transaction with Directors of the Company
On 21 August 2018, the Company entered into a $75,000 unsecured loan agreement at an interest rate of
5% p.a. with Mr. T. Chang. The loan agreement was approved by shareholders at the Annual General
Meeting held 30 November 2018. The unsecured loan with outstanding accrued interest was repaid after
year end by way of the Company obtaining Unsecured Convertible Notes from the families of two
directors (Finch and McKay) on the following terms and conditions and from an unrelated 3rd party.
These are subject to shareholder approval.

Director’s Report 30 June 2020

Torque Metals Limited

Directors Remuneration Report (Cont’d)

The Convertibles Notes were re-issued after the 6 month term for a further 6 months commencing 3
March 2020 on the same terms and conditions.

Terms
Date of Issue
Sum
Term
Security
Interest Rate
Exercise

Catherine A. Finch
3 September 2019
$33,000
6 months from date of issue
None
7.5 % p.a.
Convertible at any time

Giovanna C. McKay
3 September 2019
$15,200
6 months from date of issue
None
7.5% p.a.
Convertible at any time

Review of Operations
The loss of the Company for the Year after providing for income tax, amounted to $221,734 (period ended
30 June 2019: $387,787). The expenditure incurred during the Year related to corporate and
administration expenditure, Initial Public Offering expenses and non-capitalized expenses relating to
tenement acquisition.

End of Remuneration Report (Audited)

Significant changes in state of affairs
There were no significant changes in state of affairs of the Company during the Year.

Principal Activities
Torque Metals Limited was incorporated on 16 August 2017 as an Australian private company for the
purpose of being listed on the Australian Securities Exchange (“ASX”). On 5 January 2018, it was
converted to a public unlisted company. The Company lodged a Prospectus with A.S.I.C. on 18 October
2018 but prevailing market circumstances, at that time, resulted in the Prospectus being formally
withdrawn 11 December 2018. Since that date the Company has continued its mineral exploration
programme awaiting a favourable upturn in the market. On 3 June 2020 Torque lodged a Prospectus
with the intention of listing on the Sydney Stock Exchange.

Review of Operations
Projects.

The Paris Gold Project.

During the year Torque negotiated an exclusive option to purchase the Paris / HHH gold mining centre
from Austral Pacific Py. Ltd. .(Austral). The project, which comprises 9 mining leases and two prospecting
leases aggregating ~68km2, is located approximately 100Km South Southeast of Kalgooorlie in Western
Australia. (“The Paris Project”), The project lies within the highly prospective Parker and Kambalda
geological domains which are noted for high grade gold occurrences. The Kambalda Domain is also a
world class Nickel Province.

Option Conditions

The exercise of the Option and the ensuing Tenement Sales Agreement is conditional upon Torque being
granted listing on an accredited Stock Exchange.

Consideration
The consideration for the sale and purchase of the Tenements is the:

a. Payment by Torque to Austral of the Option Fee of $100,000.

Director’s Report 30 June 2020

Torque Metals Limited

b. Payment of $650,000, less the Option Fee, within 5 business days of Torque listing on an

accredited stock exchange;

c. The issue of $1,200,000 in ordinary fully paid shares in Torque within 5 business days of

Torque listing on an accredited stock exchange;

Milestone / Performance Payments

Torque will pay Austral the following amounts upon successfully reporting an additional resource, in any
JORC category:

a. The first 50,000 ozs - $100,000 :- 50% in cash and 50% in shares, calculated at the previous 7

day VWAP:

b. Total 100,000 ozs - $200,000 :- 50% in cash and 50% in shares, calculated at the previous 7 day

VWAP;

c. Total 200,000 ozs - $400,000 :- 50% in cash and 50% in shares, calculated at the previous 7 day

VWAP;

d. Total 500,000 ozs - $1,000,000 :- 50% in cash and 50% in shares, calculated at the previous 7

day VWAP;

Royalty

Torque and Austral to agree the terms of, and enter into, a separate Royalty Deed that sets out the terms
on which the Royalty is to be paid.

a. The Royalty commences after the first 2,500 ozs of gold produced;
b. A 1.75% Net Smelter Royalty on gold and an agreed industry recognized royalty on all valuable

minerals if the Net Smelter Royalty is not applicable. In total up to $2.0 million;

c. Torque shall have the right at any time to purchase the royalty from Austral.

Pro Rata reimbursement of rentals and rates
Torque and Austral will agree upon any final adjustment to rentals and rates, if for any reason, the
Tenement Sales Agreement is extended beyond its anticipated period.

A February 2019 scoping study (BMGS & Minecomp) confirms potential for ongoing profitable
operations. The study used a base case gold price of AUD$1,650. There is a clear opportunity to increase
gold inventory via brownfields exploration, around and below the existing Paris and HHH pits as well as
from walk up drill targets elsewhere on the leases.

As part of Torque’s due diligence programme, the Company interrogated the large, tier 1 historical
database from previous work carried out by Western Mining, Goldfields Ltd. and Austral.

The Bullfinch Project

Torque controls approximately 600 Km2 of highly prospective, contiguous title within the Bullfinch
Goldfield, centered 34kms north of the mining town of Southern Cross in Western Australia.

During the year the Company carried out interrogation of its detailed data base with a view to identifying
suitable gold targets for a scout drilling programme and a bulk sampling exercise.

An early programme of bulk sampling is planned, in order to better define the grade, attitude and
distribution of the wide spread gold mineralization. A possible benefit of such sampling is to create an
ongoing income stream from gold sales. Under certain circumstances, a total of up to 50,000 tonnes of
material can be extracted for bulk sampling purposes without the necessity for a granted mining lease.
There are two, under capacity, processing plants within 80Km of the Bullfinch Project area. A desk top
study was undertaken which indicated that significant cash income may be generated as a result of
implementing such a programme.

Director’s Report 30 June 2020

Torque Metals Limited

A study of applicable, detailed, geophysical techniques, including sub audio magnetics (SAM) was undertaken to
ascertain the optimum technique to assist in identifying the location of gold lodes beneath shallow cover.
The Company also acquired additional, detailed aeromagnetic / radiometric data which was analysed for
the purpose of identifying additional scout drilling targets.

Disucssions with third parties, including drilling and metalurgical contractors, commenced as planning
for upcoming field work.

Tribal Mining Tenement Acquisition (Bullfinch)

The Company entered into an Acquisition Agreement with Tribal to wholly acquire the Tribal Tenement
(EL77/2607) in consideration for $50,000 cash and 10% of any gold recovered from the Tribal Tenement
during an approved bulk sampling programme.

Jindalee Joint Venture

Torque entered into a Farm-in and Joint Venture Agreement on 4 May 2020 with Jindalee Resources
Limited.

Key Terms

a) Torque to pay Jindalee $10,000 for past expenditure on the Tenements.

b) Jindalee grants the Company a sole and exclusive right to enter upon the Jindalee Tenements
during the farmin period (being 3 years after the date the Company obtains consent from the
Minister with respect to the transfer of the Jindalee Tenements from Jindalee) in order to carry
out exploration.

c) The Company to earn an 80% interest in the Jindalee Tenements by spending $200,000 on the
Jindalee Tenements within three years of execution of the Jindalee JV Agreement, with a
minimum of $50,000 to be spent within 12 months of execution of the Jindalee JV Agreement

d) Once the Company has earned an 80% interest in the Jindalee Tenements, Jindalee’s 20% interest

is free carried to completion of a pre-feasibility study.

Jindalee Royalty Agreement
Torque agrees to pay Jindalee a 1.5% Net Smelter Royalty.

Risks

There are specific risks associated with the activities of the Company and general risks which are largely
beyond the control of the Company and the Directors. The risks identified below, or other risk factors,
may have a material impact on the future financial performance of the Company and the market price of
the Company’s shares.

Exploration and Development

Mineral exploration and development is a speculative and high-risk undertaking that may be impeded by
circumstances and factors beyond the control of the Company. Success in this process involves, among
other things:

•

discovery and proving-up, or acquiring, an economically recoverable resource or reserve;

access to adequate capital throughout the acquisition/discovery and project development
phases;

securing and maintaining title to mineral exploration projects;

obtaining required development consents and approvals necessary for the acquisition, mineral
exploration, development and production phases; and

Director’s Report 30 June 2020

Torque Metals Limited

•
recruiting skilled contractors, consultants and employees.

accessing the necessary experienced operational staff, the applicable financial management and

There can be no assurance that exploration on the Projects, or any other exploration properties that may
be acquired in the future, will result in the discovery of an economic mineral resource. Even if an
apparently viable mineral resource is identified, there is no guarantee that it can be economically
exploited.

The future exploration activities of the Company may be affected by a range of factors including
geological conditions, limitations on activities due to seasonal weather patterns, unanticipated
operational and technical difficulties, industrial and environmental accidents, changing government
regulations and many other factors beyond the control of the Company.

Grant of Future Authorisation to Explore and Mine
If the Company discovers an economically viable mineral deposit that it then intends to develop, it will,
among other things, require various approvals, licences and permits before it will be able to mine the
deposit. There is no guarantee that the Company will be able to obtain all required approvals, licences and
permits. To the extent that required authorisations are not obtained or are delayed, the Company’s
operational and financial performance may be materially adversely affected.

Land Access
There is a substantial level of regulation and restriction on the ability of exploration and mining
companies to have access to land in Australia. Negotiations with both Native Title and land
owners/occupiers are generally required before the Company can access land for exploration or mining
activities. Inability to access, or delays experienced in accessing, the land may impact on the Company’s
activities.

The effect of present laws in respect of Native Title that apply in Australia is that the Tenements and
Tenement applications may be affected by Native Title claims or procedures. This may prevent or delay
the granting of exploration and mining tenements, or affect the ability of the Company to explore, develop
and commercialise the resources on the Tenements. The Company may incur significant expenses to
negotiate and resolve any Native Title issues, including compensation arrangements reached in settling
Native Title claims lodged over any of the Tenements held or acquired by the Company.

The Tenements are subject to the provisions of the Aboriginal and Torres Strait Islander Heritage
Protection Act 1984 (Cth) and the Aboriginal Heritage Act 1972 (WA). Accordingly, any destruction or
harming of such sites and artefacts may result in the Company incurring significant fines and court
injunctions, which may adversely impact on exploration and mining activities.

Environment
The Company’s proposed operations will be subject to State and Commonwealth laws and regulations
relating to the environment. As with most exploration projects and mining operations, the Company’s
proposed operations are expected to have an impact on the environment, particularly if advanced
exploration or mine development proceeds. Such impact may give rise to substantial costs for
environmental rehabilitation, damage and losses.

The potential environmental impacts of the Company’s proposed operations and any future projects
could be expected to require statutory approvals to be obtained by the Company. There is no guarantee
that such approvals would be granted and failure to obtain any environmental approvals that may be
required from relevant government or regulatory authorities may impede or prevent the Company from
undertaking its future operations.

Although it is the Company’s intention to conduct its activities to the highest standard of environmental
obligation, including in compliance in all material respects with relevant environmental laws, if such laws
are breached, the Company could be required to cease its operations and/or incur significant liabilities.

Director’s Report 30 June 2020

Torque Metals Limited

Resource and Reserve Estimates
Whilst the Company intends to undertake exploration activities with the aim of upgrading existing
resources or defining new resources, no assurances can be given that the exploration will result in the
determination of a resource. Even if a resource is identified, no assurance can be provided that this can be
economically extracted.

Resource and reserve estimates are expressions of judgement based on knowledge, experience and
industry practice. Estimates which were valid when initially calculated may alter significantly when new
information or techniques become available. In addition, by their very nature, resource and reserve
estimates are imprecise and depend, to some extent, on interpretation which may prove to be inaccurate.

Corporate

The Company raised a total of $462,850 via a placement to professional and sophisticated investors of
6,908,209 shares at an issue price of $0.067 per share.

Meeting of Directors

The number of directors' meetings held and conducted during the financial year that each director held
office during the financial year and the number of meetings attended by each director is:

Director

Number Eligible

Number Attended

Directors Meetings

I. D. Finch
N.W. McKay
A.L. Lofthouse
T.H. Chang

10
10
1
9

The Company does not have a formally constituted audit and risk committee or remuneration and
nomination committee as the Board considers that the Company’s size and type of operation do not
warrant the formation of such committees

Likely developments and expected results

Likely developments in the operations of the Company and the expected results of those operations in

future financial periods have not been included in this report as the inclusion of such information is likely

to result in unreasonable prejudice to the Company.

Environmental Issues

The Company’s operations are subject to environmental regulations under a law of the Commonwealth or
state or territory of Australia.

Dividends

No amounts have been paid or declared by way of dividend shares since the date of incorporation

Options

No options over issued shares or interests in the Company were granted during the Year.

Indemnification and insurance of directors and officers

The Company has entered into Deeds of Indemnification with the directors and officers of the Company. .

The Company has insurance policies in place for Directors and Officers insurance.

Director’s Report 30 June 2020

Torque Metals Limited

Proceedings on behalf of the Company

No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in

any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the

Company for all or any part of those proceedings. The Company was not a party to any such proceedings

during the Period.

Events arising since the end of the Year
3 July 2020

• 3 June 2020 Prospectus withdrawn

24July 2020

• The Company entered into an Underwriting Agreement with Martin Place Securities Pty. Ltd. to
raise a proposed capital raising of $600,000 (minimum subscription) and $900,000 (maximum
subscription) no later than 30 September 2020. The Underwriter will receive a fee of 6% and a
management fee of 1% on terms considered normal for such an agreement

28 July 2020

• 16,346,507 ordinary shares were allotted at 6.7 cents to raise $1,095,216 before costs of $64,838.
• The company entered into a Promissory Note with Martin Place Securities for an amount of
$290,000 of which $215,070 has been received, leaving an outstanding balance of $74,930 that is
payable no later than 19 November 2020.

• The Company was admitted to the Sydney Stock Exchange
• 2,000,000 unlisted options exercisable at 15 cents on or before three years from the date of issue,

issued to Martin Place Securities Pty. Ltd.

29 July 2020

• The Company acquired 100% ownership of the Paris Gold Project by:

a)
Exercising the Austral Pacific Option Agreement with a payment of $550,000 +GST
b) Issuing 12,000,000 ordinary shares at a deemed value of 10 cents to Austral Pacific Pty.
c) Reimbursement of tenement expenses $223,867

• Upon completion the Company’s issued capital increased to 60,171,382 ordinary shares

19 August 2020

• The Company issued a Prospectus for an offer of up to 9,000,000 Shares at an issue price of $0.10
each to raise up to $900,000 before costs, with a minimum subscription requirement to raise at
least $600,000 before costs. The Minimum Subscription amount of the Public Offer being
underwritten by Martin Place Securities Pty Ltd.

10 September 2020

• The Company issued a Replacement Prospectus to that dated 19 August 2020.

17 September 2020

The Company issued a Supplementary Prospectus to that dated 10 September 2020.

30 September 2020

• The Company issued a Second Supplementary Prospectus to that dated 10 September 2020.

Non-Audit Services

During the period ending 30 June 2020, the Company’s Auditor, Bentleys Audit & Corporate (WA) Pty Ltd

did not perform any non-audit services, except for taxation services ($2,000)

Director’s Report 30 June 2020

Torque Metals Limited

Auditor’s Independence Declaration

The auditor’s independence declaration for the Period ended 30 June 2020 forms part of the Director’s

Report and can be found on page 15.

Signed in accordance with a resolution of directors.

On behalf of the directors

Ian D Finch

Managing Director

Financial Statements 30 June 2020

Torque Metals Limited

Independent Declaration

Financial Statements 30 June 2020

Torque Metals Limited

Independent auditor’s report

Financial Statements 30 June 2020

Torque Metals Limited

Financial Statements 30 June 2020

Torque Metals Limited

Independent audit report continued

Financial Statements 30 June 2020

Torque Metals Limited

Financial Statements 30 June 2020

Torque Metals Limited

Independent audit report cont.

Financial Statements 30 June 2020

Torque Metals Limited

Director’s Declaration

In accordance with a resolution of the directors of Torque Metals Limited, the directors of the Company
declare that:

1. the financial statements and notes, as set out, are in accordance with the Corporations Act 2001 and: a.
comply with Australian Accounting Standards, which, as stated in accounting policy Note 1 to the financial
statements, constitutes compliance with International Financial Reporting Standards (IFRS); and b. give a
true and fair view of the financial position as at 30 June 2020 and of the performance for the year ended
on that date of the consolidated group;

2. in the directors’ opinion there are reasonable grounds to believe that the company will be able to pay
its debts as and when they become due and payable; and

3. the directors have been given the declarations required by s 295A of the Corporations Act 2001 from
the Chief Executive Officer and Chief Financial Officer

On behalf of the Directors

Ian D. Finch
Managing Director
Perth
30 September 2020

Financial Statements 30 June 2020

Torque Metals Limited

Statement of profit or loss and other comprehensive income for
the year ended 30 June 2020

Year Ended
30 June 2020
$

Year Ended
30 June 2019
$

Note

2
2
13
2
2

Revenue from continuing operations
Other income
Total revenue and other income
Corporate administrative expenses
Financial expense interest
Share Based Payments
Exploration expense written off
Prospectus expense written off
Loss before income tax
Income tax expense
Loss for the period
Other comprehensive income, net of income tax
Total comprehensive loss for the period
Loss attributable to:
Owners of Torque Metals Limited
Total comprehensive loss attributable to:
Owners of Torque Metals Limited

Earnings/(loss) per share from continuing and

discontinuing operations

-
-

(74,125)
(16,191)
(45,416)
(43,567)
(42,435)
(221,734)
-
(221,734)
-
(221,734)

-
-

(110,148)
(3,750)
(137,644)
(40,236)
(96,009)
(387,787)
-
(387,787)
-
(387,787)

(221,734)

(387,787)

(221,734)

(387,787)

Basic weighted average earnings/(loss) per share

Diluted weighted average earnings/(loss) per share

Cents

(0.008)

(0.016)

The above statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes

Financial Statements 30 June 2020

Torque Metals Limited

Statement of financial position as at 30 June 2020

Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non current assets
Exploration and evaluation expenditure
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Convertible Notes
Unsecured loans
Total current liabilities
Total liabilities
Net assets

Equity
Issued capital
Performance Reserve
Equity Reserve
Accumulated losses
Total equity

30 June
2020
$

Note

30 June
2019
$

6
7

9
10
11

12
13

2,056
69,649
71,705

921,299
921,299
993,004

165,679
74,615
43,476
283,770
283,770
709,234

1,161,404
183,060
13,592
(648,822)
709,234

24,109
837
24,946

668,608
668,608
693,554

146,078
-
116,620
262,698
262,698
430,856

720,300
137,644
-
(427,088)
430,856

The above statement of financial position should be read in conjunction with the accompanying notes

Financial Statements 30 June 2020

Torque Metals Limited

Statement of changes in equity for the year ended 30 June 2020

Accumulated Performance

Equity
Rights Reserve Reserve

Issued
Capital
$
540,600

Balance as at 1 July 2018
Total comprehensive Income/loss
for the Period
Issue of ordinary shares
Performance Rights issued
Transaction costs
Balance as at 30 June2019

-
195,000
-
(15,300)
720,300

720,300

Balance as at 1 July 2019
Total comprehensive Income/loss
-
for the Period
462,850
Issue of ordinary shares
-
Performance Rights issued
-
Equity Reserve
Transaction costs
(21,746)
Balance as at 30 June2020 1,161,404

Losses
$
(39,301)

(387,787)
-
-
-
(427,088)

(427,088)

(221,734)
-
-
-
-
(648,822)

Total

$
501,299

(387,787)
195,000
137,644
(15,300)
430,856

430,856

(221,734)
462,850
45,416
13,592
(21,746)
709,234

-
-
-
-
-

-
-
-
13,592
-
13,592

-
-
137,644
-
137,644

137,644

-
-
45,416
-
-
183,060

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes

Financial Statements 30 June 2020

Torque Metals Limited

Statement of cash flow for the year ended 30 June 2020

Cash flow used in operating activities
Payments to suppliers and employees
Net cash (used) in operating activities
Cash flow used from investing activities
Tenement acquisition
Exploration and evaluation
Net cash (used) in investing activities
Cash flow from financing activities
Proceeds from share issue
Directors’ loans
Repayment with Interest
Unsecured Advance
Convertible Notes
Associates
Other
Interest Paid to Other than a Director
Net cash from financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents 30 June 2020

Notes

30 June 2020
$

30 June 2019
$

(150,231)
(150,231)

(125,592)
(125,592)

(219,799)
(88,959)
(308,758)

441,104
-
(80,600)
1,856

48,200
30,000
(3,624)
436,936
(22,053)
24,109
2,056

(262,500)
(83,497)
(345,997)

179,700
16,210
-
-

-
-
-
195,910
(275,681)
299,790
24,109

The above statement of cash flow should be read in conjunction with the accompanying notes

Financial Statements 30 June 2020

Torque Metals Limited

Notes to the financial statements for the Year 30 June 2020
1.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements and notes represent those of Torque Metals Limited (the
Company or Torque). Torque Metals Limited is a listed public company, incorporated and domiciled in
Australia.

The financial statements were authorised for issue on 29 September 2020 by the Directors of the
Company.

Basis of preparation

The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards, Australian Accounting Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. The
Company is a for-profit entity for financial reporting purposes under Australian Accounting Standards.

Australian Accounting Standards set out in accounting policies that the AASB has concluded would result
in financial statements containing relevant and reliable information about transactions, events and
conditions. Compliance with Australian Accounting Standards ensures that the financial statements and
notes also comply with International Financial Reporting Standards as issued by the IASB. Material
accounting policies adopted in the preparation of these financial statements are presented below and
have been consistently applied unless otherwise stated.

These financial statements have been prepared on an accruals basis and are based on historical costs,
modified, where applicable, by the measurement at fair value of selected non-current assets, financial
assets and financial liabilities

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.

The Company incurred a net loss of $221,734 (2019: $387,787) and experienced net cash outflows from
operations of $150,231 (2019: $125,592). The Company has liabilities of $283,770 (2019: $262,698) and
cash on hand of $2,056(2019: $24,109).

The ability of the Company to continue as a going concern is dependent upon the success of the
fundraising under a prospectus yet to be issued. This requirement gives rise to a material uncertainty
that may cast a significant doubt over the Company’s ability to continue as a going concern and therefore
that it will be able to realise its assets and discharge its liabilities in the normal course of business, and at
the amount stated in the financial report.

The directors believe that the Company will continue as a going concern for the following reasons:

•
•
•
•

Refer to Note 20. Events After the Reporting Period and Directors Report Page 13
The Company will finalise its current capital raising of up to $900,000 (before costs);
The Company plans to undertake a further capital raising of up to $2.2 M (before costs);
The significant borrowings that the Company has are unsecured loans with the Directors of the
Company and Unsecured Convertible Notes with their associates.

Should the Company not be able to continue as a going concern, it may be required to realise its assets
and discharge its liabilities other than in ordinary course of business, and at amounts that differ from
those stated in the financial statements. The financial report does not include any adjustments relating to
the recoverability and classification of recorded asset amounts or liabilities that might be necessary
should the entity not continue as a going concern.

Financial Statements 30 June 2020

Torque Metals Limited

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

(a)

Exploration, Evaluation and Development Expenditure

Costs incurred during exploration and evaluations relating to an area of interest are accumulated. Costs
are carried forward to the extent they are expected to be recouped through successful development, or by
sale, or where exploration and evaluation activities have not yet reached a stage to allow a reasonable
assessment regarding the existence of economically recoverable reserves. In these instances the entity
must have rights of tenure to the area of interest and must be continuing to undertake exploration
operations in the area.

Accumulated costs carried forward in respect of an area of interest that is abandoned are written off in
full against profit in the year in which the decision to abandon the area is made. When production
commences, the accumulated costs for the relevant area of interest will be amortised over the life of the
area according to the rate of depletion of the economically recoverable reserves.

A regular review is undertaken of each area of interest to determine the appropriateness of continuing to
capitalise costs in relation to that area of interest.

Costs of site restoration are provided over the life of the project from when exploration commences and
are included in the costs of that stage. Site restoration costs include the dismantling and removal of
mining plant, equipment and building structures, waste removal, and rehabilitation of the site in
accordance with clauses of the mining permits. Such costs have been estimated of future costs, current
legal requirements and technology on an undiscounted basis.

(b)

Financial Instruments Financial Assets

Initial Recognition and Measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair
value through other comprehensive income (OCI), and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash
flow characteristics and the Company’s business model for managing them. With the exception of trade
receivables that do not contain a significant financing component or for which the Company has applied
the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case
of a financial asset not at fair value through profit or loss, transaction costs.

In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it
needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal
amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument
level.

The Company’s business model for managing financial assets refers to how it manages its financial assets
in order to generate cash flows. The business model determines whether cash flows will result from
collecting contractual cash flows, selling the financial assets, or both.

Purchases or sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e.,
the date that the Company commits to purchase or sell the asset.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading, financial
assets designated upon initial recognition at fair value through profit or loss, or financial assets
mandatorily required to be measured at fair value. Financial assets are classified as held for trading if
they are acquired for the purpose of selling or repurchasing in the near term.

Financial Statements 30 June 2020

Torque Metals Limited

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Financial assets at fair value through profit or loss are carried in the statement of financial position at fair
value with net changes in fair value recognised in the statement of profit or loss.

This category includes listed equity investments which the Group had not irrevocably elected to classify
at fair value through OCI. Dividends on listed equity investments are also recognised as other income in
the statement of profit or loss when the right of payment has been established.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is primarily derecognised (i.e., removed from the Group’s consolidated statement of financial
position) when:

•
•

The rights to receive cash flows from the asset have expired; or
The Group has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a
‘pass-through’ arrangement; and

either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the
Company has neither transferred nor retained substantially all the risks and rewards of the asset, but
has transferred control of the asset.

The Company considers a financial asset in default when contractual payments are 90 days past due.
However, in certain cases, the Company may also consider a financial asset to be in default when
internal or external information indicates that the Company is unlikely to receive outstanding
contractual amounts in full before taking into account any credit enhancements held by the Company.
A financial asset is written off when there is no reasonable expectation of recovering the contractual
cash flows

Financial Liabilities

Initial Recognition and Measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through
profit or loss, loans and borrowings, payables as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings
and payables, net of directly attributable transaction costs.

The Company’s financial liabilities include trade and other payable and convertible notes. The
accounting policy on convertible notes are at (q).

(c)

Cash and cash equivalents

For the purpose of the statement of cash flow, cash and cash equivalents includes cash on hand, deposits
held at call with financial institutions, other short term, high liquid investments with original maturities
of three (3) months or less that are readily convertible to known amounts of cash and which are subject
to an insignificant risk of changes in value and bank overdrafts

Trade and Other Receivables

(d)
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost
using the effective interest method, less allowances for impairment. Trade receivables are generally due
for settlement within 30 days.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectible are written off by reducing the carrying amount directly. An allowance account (provision
for impairment of trade receivables) is sued when there is objective evidence that the Company will not

Financial Statements 30 June 2020

Torque Metals Limited

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

be able to collect all amounts due according to the original terms of the receivables. Significant financial
difficulties of the debtor, probability that the debtor will enter into bankruptcy or financial reorganisation
and default or delinquency in payments (more than 30 days overdue) are considered indicators that the
trade receivables is impaired. The amount of the impairment allowance is the difference between the
asset’s carrying amount and the present value of estimated future cash flows, discounted at the original
effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of
discounting is immaterial.

The amount of impairment loss is recognised in the statement of comprehensive income within
impairment losses – financial assets. When a trade receivable for which an impairment allowance has
been recognised becomes uncollectible in a subsequent period, it is written off against the allowance
account. Subsequent recoveries of amounts previously written off are credited against impairment losses
– financial assets in the statement of comprehensive income.

(e)

Revenue and Other Income

Revenue from the sale of goods is recognised upon the delivery of goods to customers. Interest revenue is
recognised on a proportional basis taking into account the interest rates applicable to the financial assets.
Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.

All revenue is stated net of the amount of goods and services tax (GST).

(f)

Impairment of Assets

At the end of each reporting period, the Company assesses whether there is any indication that an asset
may be impaired. The assessment will include the consideration of external and internal sources of
information including dividends received from subsidiaries, associates or jointly controlled entities
deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out
on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value
less costs to sell and value in use, to the asset’s carrying value. Any excess of the asset’s carrying value
over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a
revalued amount in accordance with another standard (e.g. in accordance with the revaluation model in
AASB 116). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance
with that other standard.

Where it is not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash-generating unit to which the asset belongs. Impairment
testing is performed annually for goodwill and intangible assets with indefinite lives

(g)

Trade and other payables

Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the
consideration to be paid in the future for goods and services received, whether or not billed to the
Company. Interest, when charged by the lender, is recognised as an expense on an accrued basis.

(h)

Provisions

Provisions are recognised when the Company has a legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of economic benefits will result and that outflow can be
reliably measured.

The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at reporting date, taking into account the risks and uncertainties surrounding the
obligation. Where a provision is measured using the cash flows estimated to settle the present obligation,
its carrying amount is the present value of those cash flows.

Financial Statements 30 June 2020

Torque Metals Limited

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

(i)

Goods and service tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Taxation Office. In these circumstances, the GST is
recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and
payables in the statement of financial position are shown inclusive of GST. Cash flows are presented in
the statement of cash flows on a gross basis, except for the GST component of investing and financing
activities, which are disclosed as operating cash flows.

(j)

Income tax

The income tax expense/ (benefit) for the year comprises current income tax expense/ (benefit) and
deferred tax expenses/ (benefit). Current and deferred income tax expenses/(benefit) is charge or
credited directly to other comprehensive income instead of the profit or loss when the tax relates to items
that are credited or charged directly to other comprehensive income.

Current tax
Current income tax expense charge to profit or loss is the tax payable on taxable income using applicable
income tax rates enacted, or substantially enacted, as at reporting date.

Current tax liabilities/ (assets) are therefore at the amounts expected to be paid to/ (recovered from) the
relevant taxation authority.

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability will occur.

Deferred tax
Deferred income tax expense reflects movements in deferred tax assets and deferred tax liability during
the Period as well as unused tax losses.

Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax
bases of asset and liabilities and their carrying amounts in the financial statements. Deferred tax assets
also result where amounts have been fully expensed but future tax deductions are available. No deferred
income tax will be recognised from the initial recognition of an asset or liability, excluding a business
combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on tax rates enacted or substantially enacted at
reporting date. Their measurement also reflects the manner in which management expects to recover or
settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the
extent that it is possible that future taxable profit will be available against which the benefits of the
deferred tax asset can be utilised.

Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred
tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability will occur in future periods in which
significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

Financial Statements 30 June 2020

Torque Metals Limited

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

(k)

Share Based Payments

The Company operates equity-settled share-based payment employee share and option schemes. The fair
value of the equity to which employees become entitled is measured at grant date and recognised as an
expense over the vesting period, with a corresponding increase to an equity account. Share-based
payments to non-employees are measured at the fair value of goods or services received or the fair value
of the equity instruments issued, if it is determined the fair value of the good or services cannot be
reliably measured, and are recorded at the date the goods or services are received. The corresponding
amount is shown in the option reserve.

The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained
using a Black–Scholes pricing model which incorporates all market vesting conditions. The number of
shares and options expected to vest is reviewed and adjusted at the end of each reporting period such
that the amount recognised for services received as consideration for the equity instruments granted
shall be based on the number of equity instruments that eventually vest.

(l)

Contributed equity

Ordinary issued share capital is recognised at fair value of the consideration received by the Company.
Any transaction costs arising on the issue of the ordinary shares are recognised directly in equity as a
reduction in share proceeds received.

(m)

Earnings Per Share

Basic earnings per share is calculated as net earnings attributable to members, adjusted to exclude costs
of servicing equity (other than dividends) and preference share dividends, divided by the weighted
average number of ordinary shares, adjusted for an bonus element. Diluted earnings per share is
calculated as net earnings attributable to members, adjusted for costs of servicing equity (other than
dividends) and preference share dividends; the after tax effect of dividends and interest associated with
dilutive potential ordinary shares that would have been recognised as expenses; and other non-
discretionary changes in revenues or expenses during the period that would result from the dilution of
potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive
potential ordinary shares, adjusted for any bonus element.

(n) Interest in Joint Operations

A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the assets, and obligations for the liabilities, relating to the arrangement. Joint control is the
contractually agreed sharing of control of an arrangement, which exists only when decisions about the
relevant activities require unanimous consent of the parties sharing control

When the Company undertakes its activities under joint operations, the Company as a joint operator
recognises in relation to its interest in a joint operation:
•
•
•
•
•

its assets, including its share of any assets held jointly;
its liabilities, including its share of any liabilities incurred jointly;
its revenue from the sale of its share of the output arising from the joint operation;
its share of the revenue from the sale of the output by the joint operation; and
its expenses, including its share of any expenses incurred jointly.

The Company accounts for the assets, liabilities, revenues and expenses relating to its interest in a joint
operation in accordance with the AASBs applicable to the particular assets, liabilities, revenues and
expenses.

Financial Statements 30 June 2020

Torque Metals Limited

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

When the Company transacts with a joint operation in which the Company is a joint operator (such as a
sale or contribution of assets), the Company is considered to be conducting the transaction with the other
parties to the joint operation, and gains and losses resulting from the transactions are recognised in the
Group's consolidated financial statements only to the extent of other parties' interests in the joint
operation.

When the Company transacts with a joint operation in which the Company is a joint operator (such as a
purchase of assets), the Company does not recognise its share of the gains and losses until it resells those
assets to a third party

(o)

Critical Accounting Estimates and Judgements

The preparation of financial statements requires management to make judgements, estimates and
assumptions that affect the application of 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 accounting estimates are recognised in the
period in which the estimate is revised and in any future periods affected.

The directors evaluate estimates and judgments incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future
events and are based on current trends and economic data, obtained both externally and within the
group.

Key Judgements –Exploration and evaluation expenditure
Exploration and evaluation costs are carried forward where right of tenure of the area of interest is
current. These costs are carried forward in respect of an area that has not at balance sheet date reached a
stage that permits reasonable assessment of the existence of economically recoverable reserves, refer to
the accounting policy stated in note 1(a).

Key Judgements -Share based payment transactions
The Company measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined by an
internal valuation using a Black-Scholes option pricing model.

Key Judgments–Environmental issues

Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or
enacted environmental legislation, and the directors understanding thereof. At the current stage of the
company’s development and its current environmental impact the directors believe such treatment is
reasonable and appropriate

Key Estimate –Taxation
Balances disclosed in the financial statements and the notes thereto, related to taxation, are based on the
best estimates of directors. These estimates take into account both the financial performance and position
of the company as they pertain to current income taxation legislation, and the directors understanding
thereof. No adjustment has been made for pending or future taxation legislation. The current income tax
position represents that directors’ best estimate, pending an assessment by the Australian Taxation
Office.

(p)

Fair value measurements

The Group measures and recognises the asset, ‘Financial assets held for trading’ at fair value on a

Financial Statements 30 June 2020

Torque Metals Limited

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

Fair Value Hierarchy

recurring basis after initial recognition.
The Group does not subsequently measure any liabilities at fair value on a non-recurring basis.
(i)
AASB 13: Fair Value Measurement requires the disclosure of fair value information by level of the fair
value hierarchy, which categorises fair value measurements into one of three possible levels based on the
lowest level that an input that is significant to the measurement can be categorised into as follows

Level 1

Level 2

Level 3

Measurements based on quoted
prices (unadjusted) in active
markets for identical assets or
liabilities that the entity can
access at the measurement date

Measurements based on inputs
other than quoted prices
included in Level 1 that are
observable for the asset or
liability, either directly or
indirectly.

on
Measurements
unobservable inputs for the asset
or liability.

based

The fair values of assets and liabilities that are not traded in an active market are determined using one or
more valuation techniques. These valuation techniques maximise, to the extent possible, the use of
observable market data. If all significant inputs required to measure fair value are observable, the asset or
liability is included in Level 2. If one or more significant inputs are not based on observable market data,
the asset or liability is included in Level 3.

Valuation techniques

(ii)
The Company selects a valuation technique that is appropriate in the circumstances and for which
sufficient data is available to measure fair value. The availability of sufficient and relevant data primarily
depends on the specific characteristics of the asset or liability being measured. The valuation technique
selected by the Company is the Market approach whereby valuation techniques use prices and other
relevant information generated by market transactions for identical or similar assets or liabilities. When
selecting a valuation technique, the Company gives priority to those techniques that maximise the use of
observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market
data (such as publicly available information on actual transactions) and reflect the assumptions that
buyers and sellers would generally use when pricing the asset or liability are considered observable,
whereas inputs for which market data is not available and therefore are developed using the best
information available about such assumptions are considered unobservable. The following table provides
the fair values of the Company’s assets and liabilities measured and recognised on a recurring basis after
initial recognition and their categorisation within the fair value hierarchy:

(q) Convertible Notes

The component parts of convertible loan notes issued by the Company are classified separately as
financial liabilities and equity in accordance with the substance of the contractual arrangements and
the definitions of a financial liability and an equity instrument. A conversion option that will be
settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of the
Consolidated Entity’s own equity instruments is an equity instrument. Transaction costs that relate
to the issue of the convertible loan notes are allocated to the liability and equity components in
proportion to the allocation of the gross proceeds. Transaction costs relating to the equity
component are recognised directly in equity. Transaction costs relating to the equity component are
included in the carrying amount of the liability component and are amortised over the lives of the
convertible loan notes using the effective interest method. If the embedded derivative is separated
from its host contract (because it is not closely related to the host), then it must be accounted for as if
it were a standalone derivative. The embedded derivative should be recognised in the statement of

Financial Statements 30 June 2020

Torque Metals Limited

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

financial position at fair value, with changes in fair value recognised in profit or loss as they arise,
unless it is designated as an effective hedging instrument in a cash flow or a net investment hedge.

New, revised or amending accounting standards and interpretations adopted

(r)
.The Company has considered the implications of new or amended Accounting Standards which have
become applicable for the current financial reporting period. The Group had to change its accounting
policies and make adjustments as a result of adopting the following Standard:

AASB 16: Leases

Changes in Accounting Policies

This note describes the nature and effect of the adoption of AASB 16: Leases on the Group’s financial
statements and discloses the new accounting policies that have been applied from 1 July 2019, where
they are different to those applied in prior periods.

a.
Leases
The Company as lessee

At inception of a contract, the Company assesses if the contract contains or is a lease. If there is a lease
present, a right-of-use asset and a corresponding lease liability are recognised by the Company where the
Company is a lessee. However, all contracts that are classified as short-term leases (i.e., a lease with a
remaining lease term of 12 months or less) and leases of low-value assets are recognised as an operating
expense on a straight-line basis over the term of the lease.

Initially the lease liability is measured at the present value of the lease payments still to be paid at the
commencement date. The lease payments are discounted at the interest rate implicit in the lease. If this
rate cannot be readily determined, the Group uses the incremental borrowing rate.

Lease payments included in the measurement of the lease liability are as follows:

•
•

•
•
•

•

fixed lease payments less any lease incentives;
variable lease payments that depend on an index or rate, initially measured using the index or rate
at the commencement date;
the amount expected to be payable by the lessee under residual value guarantees;
the exercise price of purchase options, if the lessee is reasonably certain to exercise the options;
lease payments under extension options, if the lessee is reasonably certain to exercise the options;
and
payments of penalties for terminating the lease, if the lease term reflects the exercise of an option
to terminate the lease.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, any lease
payments made at or before the commencement date and any initial direct costs. The subsequent
measurement of the right-of-use assets is at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated over the lease term or useful life of the underlying asset, whichever is
the shortest.

Where a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects
that the Group anticipates to exercise a purchase option, the specific asset is depreciated over the useful
life of the underlying asset.

The Company as lessor

Upon entering into each contract as a lessor, the Company assesses if the lease is finance or operating
lease.

Financial Statements 30 June 2020

Torque Metals Limited

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

A contract is classified as a finance lease when the terms of the lease transfer substantially all the risks
and rewards of ownership to the lessee. All other leases not within this definition are classified as
operating leases.

Rental income received from operating leases is recognised on a straight-line basis over the term of the
specific lease.

Initial direct costs incurred in entering into an operating lease (for example, legal cost, costs to set up
equipment) are included in the carrying amount of the leased asset and recognised as an expense on a
straight-line basis over the lease term.

Rental income due under finance leases are recognised as receivables at the amount of the Group’s net
investment in the leases.

When a contract is determined to include lease and non-lease components, the Group applies AASB 15 to
allocate the consideration under the contract to each component.

Initial Application of AASB 16: Leases

The Company has adopted AASB 16: Leases retrospectively with the cumulative effect of initially applying
AASB 16 recognised at 1 July 2019. In accordance with AASB 16 the comparatives for the 2018 reporting
period have not been restated.

Based on the assessment by the Group, it was determined there was no impact on the Company. As such,
the Company has not recognised a lease liability and right-of-use asset for all leases (with the exception of
short-term and low-value leases) recognised as operating leases under AASB 117: Leases where the
Group is the lessee.

There has been no significant change from prior year treatment for leases where the Company is a lessor.

Lease liabilities are measured at the present value of the remaining lease payments, where applicable.
The Company's incremental borrowing rate as at 1 July 2019 was used to discount the lease payments.

The right-of-use assets, where applicable for the remaining leases have been measured and recognised in
the statement of financial position as at 1 July 2019 by taking into consideration the lease liability and the
prepaid and accrued lease payments previously recognised as at 1 July 2019 (that are related to the
lease).

2. Expenses
Administrative expenses
Exploration written off
Exploration expenses
Initial Public Offering expenses
Interest Paid
Share Based Payments

30 June
2020

30 June
2019

74,125
43,567
-
42,435
16,191
45,416
221,734

110,148

39,936

300
96,009

3,750

137,644

387,787

Financial Statements 30 June 2020

Torque Metals Limited

3. Key Management Personnel
Interests of Key Management Personnel
Refer to the remuneration report contained in the directors’ report for details of remuneration
paid or payable to each member of the Company’s key management personnel for the year
ended 30 June 2020.The totals of remuneration paid to key management personnel of the
Company during the year are as follows

Short term employee benefits
Post-employment benefits
Other long term benefits
Share based payments

30 June
2020
$

30 June
2019
$

-
-
-
45,416
45,416

-
-
-
137,644
137,644

No compensation was paid in respect to Key Management Personnel in termination benefits

Related Party Information
Family associates of Mr. I.D. Finch and Mr. N.W. McKay entered into Convertible Notes of $33,000
and $15,200 and received interest of $2,048 and $943 respectively.

Mr. T. H. Chang was repaid an unsecured loan of $75,000 and interest of $5,559

4. Income tax benefit/(expense)
(a) Income tax (benefit)/expense

Current tax
Deferred tax

Year Ended
30 June 2020
$

Year Ended
30 June 2019
$

-
-
-

(b) Reconciliation of income tax expense to prima facie tax payable

Profit/(Loss) from ordinary activities before income tax

(221,734)

(387,787)

The prima facie tax payable on profit from ordinary activities before income tax is reconciled to
the income tax expense as follows:

Prima facie tax on operating profit at 27.5% (2019: 30%)

(60,977)

(116,336)

Add tax effect of:

Non-deductible expenses

Capital Raising Costs

Capitalised exploration

Deferred tax assets not brought to account

Income tax reported in the statement of comprehensive
Income

Income tax benefit/(expense) (Cont’d)

13,625

(12,263)

(12,483)

72,098

53,401

(8,667)

(13,068)

84,670

Financial Statements 30 June 2020

Torque Metals Limited

Tax losses
Provisions and Accruals

Capital Raising Costs

Other

Total deferred assets

Set-off deferred tax liabilities pursuant to set-off provisions

Net deferred tax assets

Less: Deferred tax assets not recognised

Net tax assets

(d) Deferred tax liabilities

Exploration Expenditure

Other

Non-recognition of deferred tax assets

(e) Tax Losses

193,239

3,001

39,285

-
235,525

(88,413)
147,112

(147,112)
-

135,688
2,100

32,681

170,469

(90,317)

80,152

(80,152)
-

88,413

90,316

(88,413)
-

(90,316)

Unused tax losses for which no deferred tax asset has been

recognised

Potential tax benefit @ 27.5% (2019: 30.0%)

702,686

193,239

452,292

135,688

5. Reconciliation of loss for the Period to net cash flows from Operating Activities

Net (loss) Loss for the period

Interest expense

Exploration expense written off

Performance Rights Net Movement

30 June

2020

30 June

2019

(221,734)

(387,787)

16,191

43,567

45,416

3,750

39,936

137,644

Operating loss before changes in working capital

(116,560)

(206,457)

Decrease / (Increase) in receivables

Increase / (Decrease )in payables

Net cash used in operating activities

(68,812)

35,141

555

80,310

(150,231)

(125,592)

Non-cash financing and investing activities

No non-cash financing and investing activities occurred during the Period.

Financing facilities available
As at 30 June 2020, the Company has three financing facility available. For the purposes of the
statement of cash flow, cash includes cash on hand and in bank.

6. Cash on Hand and Equivalents

30 June
2020

30 June
2019

Financial Statements 30 June 2020

Torque Metals Limited

7. Trade Receivables

G.S.T. receivables

Other

8. Tenements

Tenement Acquisition

Represented by:

Acquisition of Bullfinch Project From Talga Resources Ltd.

Acquisition of Paris Gold Project from Austral Pacific Pty. Ltd.1

Joint Venture with Jindalee Resources Ltd.2

1 Non Refundable Deposit and stamp duty

Exploration and evaluation expenditure

Opening Balance

Expenditure for the period4

Expenditure written off3

Closing Balance

Total Exploration and Expenditure

1 Paris Gold Project

2,056

24,109

26,535

43,114

69,649

837

-
837

599,799

392,500

397,493

192,116

10,190

599,799

392,500

-
392,500

276,108

88,959

(43,567)

321,500

921,299

232,548

83,796

(40,236)

276,108

668,608

The Company entered into an Option Agreement on 1 November 2019, to acquire The Paris Gold Project,
100km south of Kalgoorlie by way of a $20,000 non-refundable deposit to be followed by a further
$80,000 within 14 days of signing the Option Agreement, as amended 9 April 2020. Where upon the
Company has 9 months exclusivity to list the Company and the acquired assets on an Australian Stock
Exchange or via a Reverse Takeover. At which time the Company will pay the vendor, cash of $550,000
and shares to the value of $1.2 million in the listed entity. Upon commencing production Austral Pacific is
entitled to receive a Net Smelter Royalty based on the number of ounces produced. The Royalty may be
purchased by the Company by way of a lump sum, or at any time after the payment of $2.9 million for
$1,000. The Option was exercised 29 July 2020.

2 Jindalee Joint Venture

The Company entered into a Farm-in and Joint Venture Agreement on 4 May 2020 with Jindalee

Resources Limited.Torque to pay Jindalee $10,000 for past expenditure on the Tenements.

The Company can earn an 80% interest in the Jindalee Tenements by spending $200,000 on the Jindalee
Tenements within three years of execution of the Jindalee JV Agreement, with a minimum of $50,000 to
be spent within 12 months of execution of the Jindalee JV Agreement Once the Company has earned an
80% interest in the Jindalee Tenements, Jindalee’s 20% interest is free carried to completion of a pre-
feasibility study.

Torque agrees to pay Jindalee a 1.5% Net Smelter Royalty

Tenements (Cont’d)

Financial Statements 30 June 2020

Torque Metals Limited

3 Expenditure Written Off during the year

• PL77/04106 was relinquished and associated capitalised costs of $3,514 were written off and

expensed

• EL77/02221 was surrounded during the year and associated capitalised costs of $40,018 were

written off and expensed.

4 $53,750 relates to exploration license E77/2251 subject to renewal and as of date of report, still to be
processed.

9. Trade and other payables

Trade Creditors

Other creditors and accrued expenses

30 June

2020

154,767

10,912

165,679

30 June

2019

121,636

24,442

146,078

Trade and other payables are non-interest bearing liabilities stated at cost.

10. Convertible Notes

(a) Associates of Directors

(b) Other
Less Equity Component

Present Value of Convertible Notes Issued

48,200

30,000
(13,592)
64,608

Unsecured, interest at 7.5% p.a. repayable in cash or conversion to shares at 6.7 cents by

3 September 2020 at the election of the Note Holder
Opening Balance

Present Value of Convertible Notes issued

Unwinding of equity component

Closing Balance

11 .Unsecured Loans

(i) Loan from Director

(ii) Advances from Directors

64,608

10,007

74,615

43,476

75,000

41,620

116,620

(i) Unsecured, repaid during the year at an interest rate of 5% p.a.
(ii) Working capital advances, with no fixed term of repayment and without interest
Reconciliation of liabilities arising from financing activities

Borrowings

1 July

2019

Cash flows

Non-cash changes

Inflow

Outflow

Adjustments

30 June

Movement

2020

Unsecured Loans

116,620

1,856

(75,000)

Convertible Notes

Liabilities from

78,200

(3,585)

financing activities

116,620

80,056

(75,000)

(3,585)

12. Issued Capital

Year ended 30 June 2020

Year ended 30 June 2019

43,476

74,615

118,091

Financial Statements 30 June 2020

Torque Metals Limited

a. Ordinary
Shares
Opening balance for

the period

Placement at $0.067
Placement at $0.10

Placement to Adviser

Cost relating to share issue

No.

24,916,667

6,908,209
-

720,300

462,850
-

(21,746)

22,933,333

-
1,950,000

33,334

540,600

-
195,000

3,333

(18,633)

31,824,876

1,161,404

24,916,667

720,300

Year ended 30 June 2020

Year ended 30 June 2019

b. Performance Rights

No.

Balance at beginning of reporting period

12,000,000

137,644

Adjustment for year ended 30 June 2020

84,748

Performance rights cancelled

(4,000,000)

(45,881)

Performance rights issued to directors

2,000,000

6,549

12,000,000

137,644

12,000,000

183,060

12,000,000

137,644

Capital risk management

The Board controls the capital of the Company in order to provide the shareholders with adequate
returns and ensure that the Company can fund its operations and continue as a going concern. The
Company’s capital includes ordinary share capital. There are no externally imposed capital requirements.

The Working Capital position of the Company for year endings 30 June 2020 and 2019 are as follows:

Working Capital

Cash and Cash Equivalents

Trade and Other Receivables

Current Liabilities

Working Capital Deficit Position

13 Performance Rights

30 June

2020

2,056

69,649

30 June

2019

24,109

837

(283,770)

(262,698)

(212,065)

(237,752)

The Company issued 12,000,000 performance rights to the Directors on 4 September 2018.The
share rights are divided into three classes of 3,000,000, 4,000,000 and 5,000,000 respectively ,
where each class will convert into ordinary shares upon satisfaction of the relevant milestone as
set out below and in accordance with the terms and conditions.

4,000,000 performance rights were cancelled upon the termination of Mr. T. Chang.
2,000,000 performance rights were issued to Mr. A. Lofthouse on 11 May 2020.

These rights have not met the vesting criteria and have not been converted to ordinary shares
during the period.

Performance Rights (Cont’d)

Financial Statements 30 June 2020

Torque Metals Limited

Tranche Number of

Performance Condition Expiry Date

Performance Rights
2,500,000

3,333,334

4,166,666

20 Day VWAP equals
25% or above admission
price.
20 Day VWAP equals
50% or above admission
price.
Announcement by the
Company of the
completion of
commercial gold pours
of at least 5,000 oz.

12 months from the
Admission Date

24 months from the
Admission Date

36 months from the
Admission Date

Tranche Grant Date

Milestone

Expiry Date

Share based
payment

8,000,000 Performance

Rights
4 September 2018

4 September 2018

20 Day VWAP equal 25%
or above admission price.
20 Day VWAP equals 50%
or above admission price
Announcement by the
Company of the
completion of commercial
gold pours of at least
5,000 oz.

12 months from the
Admission Date
24 months from the
Admission Date
36 months from the
Admission Date

41,458

43,290

84,748
Performance rights granted to a former director were forfeited and previous amount of $45,881 was
reversed to the profit and loss.

Tranche Grant Date

Milestone

Expiry Date

Share based
payment

2,000,000 Performance

Rights
11 May 2020

11 May 2020

20 Day VWAP equal 25%
or above admission price
20 Day VWAP equals 50%
or above admission price
Announcement by the
Company of the
completion of commercial
gold pours of at least
5,000 oz.

12 months from the
Admission Date
24 months from the
Admission Date
36 months from the
Admission Date

4,728

1,821

6,549

The fair value of performance rights granted were independently valued using standard valuation
techniques (including Monte Carlo simulation and probability distribution) taking into account the
terms and conditions upon which the rights were granted as detailed below:

Performance Rights (Cont’d)

Financial Statements 30 June 2020

Torque Metals Limited

Tranche

Grant
Date

Period Valuation
(years) Per right

8,000,000 Performance Rights

Expected
Volatility

Risk
Free
Interest Rate

Dividend Yield

1
2

3¹

4-Sep-18
4-Sep-18

4-Sep-18

2.5
3.5

4.5

2,000,000 Performance Rights

11-May-20

3¹

11-May-20

2.5

3.5

4.5

$0.06
$0.06

$0.10

$0.06

$0.10

100%
100%

100%

1.97%
2.02%

2.11%

1.97%

2.02%

2.11%

¹Tranche 3 being a non-market condition has a 0% probability of being met.

-
-

(i)

The Company issued current Directors with 10,000,000 Performance Rights. These
Performance Rights were independently valued in accordance to the probability of
achieving the required performance milestones at grant date.

14. Accumulated Losses

Opening Balance

Net Loss attributable to members

Closing Balance

15 Financial Risk Management

30 June

2020

30 June

2019

(427,088)

(221,734)

(39,301)

(387,787)

(648,822)

(427,088)

The Company’s principal financial instruments comprise receivables, payables, and cash

The Board of Directors has overall responsibility for the oversight and management of the Company’s
exposure to a variety of financial risks (including fair value interest rate risk, credit risk, liquidity risk and
cash flow interest rate risk).

The Company’s overall risk management program focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the financial performance of the Company.

Interest rate risks
The Company’s exposure to market interest rates relates to cash deposits held at variable rates. The
Board constantly analyses its interest rate exposure. Within this analysis consideration is given to
potential renewals of existing positions

Credit risk
The maximum exposure to credit risk at balance date is the carrying amount (net of provision of doubtful
debts) of those assets as disclosed in the Statement of Financial Position and notes to the financial
statements. The Company has adopted a policy of only dealing with creditworthy counterparties and
obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from
defaults. The Company’s exposure and the credit ratings of its counterparties are continuously monitored
and the aggregate value of transactions concluded is spread amongst approved counterparties.

Credit risk related to balances with banks and other financial institutions is managed by the board. The
Financial Risk Management (Cont’d)
board’s policy requires that surplus funds are only invested with counterparties with a Standard & Poor’s
rating of at least A+.
Financial Risk Management (Cont’d)

Financial Statements 30 June 2020

Torque Metals Limited

Liquidity risk
The responsibility for liquidity risk management rests with the Board of Directors. The Company’s
liquidity risk by maintaining sufficient cash or credit facilities to meet the operating requirements of the
business and investing excess funds in highly liquid short term investments

Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Company’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

Maturity profile of financial instruments
The following tables detail the Company’s exposure to interest rate risk as at 30 June 2020 and 30 June
2019:

30 June 2020

Financial Assets
Cash and Cash Equivalents
Trade and Other Receivables

Weighted average effective
interest rate
Financial Liabilities
Trade and Other Payables
Unsecured Loans
Convertible Notes

30 June 2019

Financial Assets
Cash and Cash Equivalents
Trade and Other Receivables

Weighted average effective
interest rate
Financial Liabilities
Trade and Other Payables
Unsecured Loans

Financial Risk Management (Cont’d)

Floating

Fixed
Interest

Non Interest

Interest Rate Maturing in

Bearing

1 year or less
$

2020

Total

-
-
-

nil

-
-
-
-

-
-
-

2,056
69,649
71,705

-
-
74,615
74,615

165,679
43,476
-
209,155

165,679
43,476
74,615
283,770

Floating

Fixed
Interest

Interest Rate Maturing in
1 year or less
$
$

Non Interest

Bearing

2019

Total

-
-
-

24,109
837
24,946

-
75,000
75,000

146,078
41,620
187,698

146,078
116,620
262,698

-
-
-

nil

-
-
-

Financial Statements 30 June 2020

Torque Metals Limited

Net Fair Value

The carrying value and net fair values of financial assets and liabilities at balance date are:

Financial Assets

Cash and Deposits

Receivables

Financial Liabilities

Payables

Unsecured Loans

Convertible Notes

2020

2019

Carrying

Net Fair

Carrying

Net Fair

Value

2,056

69,649

71,705

2,056

69,649

71,705

165,679

43,476

74,615

43,476

74,615

24,109

837

24,946

146,078

116,620

24,109

837

24,946

146,078

116,620

283,770

262,698

The financial instruments recognised at fair value in the statement of financial position have been
analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making
the measurements. All financial instruments measured at fair value are level one, meaning fair value is
determined from quoted prices in active markets for identical assets.

Sensitivity Analysis
Interest Rate Risk

The Company has performed sensitivity analysis relating to its exposure to interest rate risk at balance
date. This sensitivity analysis demonstrates the effect on the current year results and equity which could
result from a change in these risks

Sensitivity

Change in Loss

- Increase in interest rate by 100 basis points

- Decrease in interest rate by 100 basis points

Change in Equity
- Increase in interest rate by 100 basis points
- Decrease in interest rate by 100 basis points

16. Earnings per Share
a) Reconciliation of earnings to profit or loss:

Loss for the year

Loss used to calculate the basic and diluted EPS

b) Basic and diluted weighted average number of

ordinary shares outstanding during the year used
in calculating dilutive EPS

30 June

2020

(21)

21
(21)

2019

241

(241)

241
(241)

(221,734)

(387,787)

27,277,176

24,223,611

Financial Statements 30 June 2020

Torque Metals Limited

17. Commitments
In order to maintain rights of tenure to mining tenements, the Company would have the
following discretionary exploration expenditure requirements up until expiry of leases.
These obligations, which are subject to renegotiation upon expiry of the leases, are not
are not provided for in the financial statements and are payable:

Tenement Commitments
Not longer than one year
Longer than one year but not longer than five years
Longer than five years

30 June
2020
$

30 June
2019
$

288,000
642,378
-
930,378

210,000
209,000
-
419,000

The Company currently has commitments in excess of cash, however the Board believes it will
be able to raise the additional funds to satisfy the commitments for the future.
Tenement Commitments (Cont’d)
If the Company decides to relinquish certain leases and/or does not meet these obligations,
assets recognised in the statement of financial position may require review to determine the
appropriateness of carrying values. The sale, transfer or farm-out of exploration rights to third
parties will reduce or extinguish these obligations.

30 June
2020
$

30 June
2019
$

Tenement Capital Commitments
Not longer than one year
The Company has entered into a sale and purchase agreement with Tribal Mining Pty Ltd on 13
May 2020 to purchase tenement EL 77/2607 for a consideration of $50,000 (plus GST) payable 3
days after the Company is granted listing on an Australian Stock Exchange.

50,000

18. Operating Segments
The Company operates in Western Australia, Australia

19. Contingencies

The directors are not aware of any contingent liabilities or assets as at 30 June 2020.

20. Events after the reporting period

3 July 2020
• 3 June 2020 Prospectus withdrawn
24 July 2020
• The Company entered into an Underwriting Agreement with Martin Place Securities Pty. Ltd. to
raise a proposed capital raising of $600,000 (minimum subscription) and $900,000 (maximum
subscription) no later than 30 September 2020. The Underwriter will receive a fee of 6% and a
management fee of 1% on terms considered normal for such an agreement

28 July 2020
• 16,346,507 ordinary shares were allotted at 6.7 cents to raise $1,095,216 before costs of $64,838.

Financial Statements 30 June 2020

Torque Metals Limited

Events after the reporting period (Cont’d)

• The company entered into a Promissory Note with Martin Place Securities for an amount of
$290,000 of which $215,070 has been received, leaving an outstanding balance of $74,930 that is
payable no later than 19 November 2020.

• The Company was admitted to the Sydney Stock Exchange
• 2,000,000 unlisted options exercisable at 15 cents on or before three years from the date of issue,

issued to Martin Place Securities Pty. Ltd.

29 July 2020
• The Company acquired 100% ownership of the Paris Gold Project by:
a) Exercising the Austral Pacific Option Agreement with a payment of $550,000 +GST
b) Issuing 12,000,000 ordinary shares at a deemed value of 10 cents to Austral Pacific Pty.
c) Reimbursement of tenement expenses $223,867
• Upon completion the Company’s issued capital increased to 60,171,382 ordinary shares
19 August 2020

10 September 2020
• The Company issued a Replacement Prospectus to that dated 19 August 2020.
17 September 2020
• The Company issued a Supplementary Prospectus to that dated 10 September 2020.
30 September 2020
• The Company issued a Second Supplementary Prospectus to that dated 10 September 2020.

Financial Statements 30 June 2020

Torque Metals Limited

Additional Shareholders Information
information required by Sydney Stock Exchange Limited and not shown elsewhere in this Annual Report
is as follows. The information is provided as at 30 September 2020.

DETAILS OF HOLDERS OF EQUITY SECURITIES

ORDINARY SHAREHOLDERS

There are 60,171,382 fully paid ordinary shares on issue, held by 100 individual shareholders. Each
member entitled to vote may vote in person or by proxy or by attorney and on a show of hands every
person who is a member or a representative or a proxy of a member shall have one vote and on a poll
every member present in person or by proxy or attorney or other authorised representative shall have
one vote for each share held

20 LARGEST SHAREHOLDERS AS AT 30 SEPTEMBER 2020

Rank Name

AUSTRAL PACIFIC PTY LTD
TURF MOOR PTY LTD
GROUP # 1456530
MR TSHUNG HUI CHANG
TSHUNG HUI CHANG
GROUP # 1456508
MR SEAGER REX HARBOUR
MR SEAGER REX HARBOUR
GROUP # 1456506
BEARAY PTY LTD
BEARAY PTY LTD

Units
11,640,000
10,000,000
6,705,000
730,000
5,975,000
3,738,806
746,195
2,992,611
2,985,074
994,926
1,990,148

TRIBAL MINING PTY LTD

2,292,537

LEET INVEST (#1485626)

LEET INVESTMENTS PTY LTD

LEET INVESTMENTS PTY LIMITED

2,200,000

200,000

333,300

LEET INVESTMENTS PTY LIMITED

666,700

LEET INVESTMENTS PTY LIMITED
GROUP # 1456517
MARTIN PLACE SECURITIES NOMINEES PTY LTD
MARTIN PLACE SECURITIES NOMINEES PTY LTD
GROUP # 1456520
PATINA RESOURCES PTY LTD
PATINA RESOURCES PTY LTD
GROUP # 1456523
MR NEIL FRANCIS STUART
MR NEIL FRANCIS STUART
SEISTEND PTY LTD
GROUP # 1456512
LADYMAN SUPER PTY LTD
LADYMAN SUPER PTY LTD
GROUP # 1456526
MS SERENELLA TONELLO
MS SERENELLA TONELLO
GROUP # 1456528
MR JAMES PATRICK TUITE & MRS WENDY TUITE
MR JAMES PATRICK TUITE + MRS WENDY TUITE
MR LUO QI
MR DANIEL JAMES GREENE

KITSILANO INVESTMENTS PTY LTD
TELAN SUPER PTY LTD
LIEN PTY LTD

Totals: Top 20 holders
Total Remaining Holders
Total Holders

VOTING RIGHTS

450,000
149,985
300,015
450,000
149,985
300,015
450,000

49,772,312
10,399,070
60,171,382

Subject to any rights or restrictions for the time being attached to any class or classes (at present there
are none) at general meetings of shareholders or classes of shareholders:

(a)each shareholder entitled to vote, may vote in person or by proxy, attorney or representative;

(b)on a show of hands, every person present who is a shareholder or a proxy, attorney or representative
of a shareholder has one vote; and

(c)on a poll, every person present who is a shareholder or a proxy, attorney or representative of a
shareholder shall, in respect of each fully paid share held, or in respect of which he/she has appointed a
proxy, attorney or representative, have one vote for the share, but in respect of partly paid shares shall
have a fraction of a vote equivalent to the proportion which the amount paid up bears to the total issue
price for the shares.

HOLDERS OF NON-MARKETABLE PARCELS

There are 2 shareholders who hold less than a marketable parcel of shares.

STOCK EXCHANGE INFORMATION

DISTRIBUTION OF SHARE HOLDERS (AS AT 30 SEPTEMBER 2020)

1 - 1,000

1,001 - 5,000

5,001 - 10,000

10,001 - 100,000

100,001 and over

TOTAL
SUBSTANTIAL SHAREHOLDERS

Ordinary
Shares
-

5,000

10,000

1,410,099

58,746,283

60,171,382

As at report date, the following shareholders are recorded as Substantial Shareholders

Substantial Shareholder

Austral Pacific Pty. Ltd.

Turf Moor Pty. Ltd.

Tshung H. Chang
Seager Rex Harbour

Bearay Pty. Ltd.

Ordinary
Shares Held
11,640,000
10,000,000

6,705,000

3,738,806

2,985,074

% Held

19.3%
16.6%

11.1%

6.2%

5.0%

Financial Statements 30 June 2020

Torque Metals Limited

UNLISTED OPTIONS

2,000,000 unlisted options exercisable at 15 cents each on or before 27 July 2023 issued to Martin Place
Securities Pty. Ltd.

SHARE BUY-BACKS

There is no current on-market buy-back scheme.

OTHER INFORMATION

Torque Meals Limited is incorporated and domiciled in Australia and is a Public Listed Company limited
by Shares.

Financial Statements 30 June 2020

Torque Metals Limited

Tenements

INTEREST IN MINING TENEMENTS as at 25 September 2020

Tenement

Registered Holder 4

Tenement Name

Beneficial Interest

M 15/1175

Austral Pacific Pty. Ltd. 1

Paris Gold Project

M 15/479

Austral Pacific Pty. Ltd. 1

Paris Gold Project

M 15/480

Austral Pacific Pty. Ltd. 1

Paris Gold Project

M 15/481

Austral Pacific Pty. Ltd. 1

Paris Gold Project

M 15/482

Austral Pacific Pty. Ltd. 1

Paris Gold Project

M 15/496

Austral Pacific Pty. Ltd. 1

Paris Gold Project

M 15/497

Austral Pacific Pty. Ltd. 1

Paris Gold Project

M 15/498

Austral Pacific Pty. Ltd. 1

Paris Gold Project

M 15/1719

Austral Pacific Pty. Ltd. 1

Paris Gold Project

P 15/5992

Austral Pacific Pty. Ltd. 1

Paris Gold Project

P 15/6149

Austral Pacific Pty. Ltd. 1

Paris Gold Project

E15/1736

Jindalee Resources Ltd 2

Paris Gold Project

AEL15/1747**

Jindalee Resources Ltd 2

Paris Gold Project

AEL15/1752**

Jindalee Resources Ltd 2

Paris Gold Project

E77/2522

Torque Metals Limited

E77/2222

Talga Resources Ltd. 3

E77/2251

Talga Resources Ltd. 3

E77/2350

Talga Resources Ltd. 3

Bullfinch

100%

Note 1

Austral Pacific Pty. Ltd.

Tenements acquired 29 July 2020

Awaiting Stamp Duty Assessment before tenements may be transferred

Note 2

Note 3

into the name of Torque Metals Limited
Jindalee Resources
Limited

1st year Farm-In earning interest

Talga Resources Limited
Tenements acquired July 2018

Stamp Duty assessed and awaiting transfer into Torque Metals

Note 4

Torque Metals Limited is the Manager of all Tenements

Applications waiting for grant

Prospecting Licence

Exploration Licence

Mineral Licence