ACN 621 122 905
Financial statements for the year ended
30 June 2021
Financial statements for the period from
16 August 2017 (date of incorporation) through to
30 June 2018
Corporate Directory
Board of Directors
Ian D. Finch
Antony L. Lofthouse
Patrick N. Burke
Managing Director
Non-Executive Director
Non-Executive Director (appointed 8 February 2021)
Company Secretary
Neil W. McKay
Principal Place of Business
Unit 8
16 – 18 Nicholson Road
Subiaco WA 6008
Postal Address
PO Box 27
West Perth, Western Australia 6872
Auditors
Hall Chadwick WA Audit Pty. Ltd.
283 Rokeby Road
Subiaco WA 6008
Share Register
Advanced Share Registry Services Pty. Ltd.
110 Stirling Highway,
Nedlands, WA 6010
Stock Exchange Listing
Australian Stock Exchange
Perth Exchange:
Code : TOR
Banker
Westpac Banking Corporation
1257 Hay Street
West Perth, Western Australia 6005
2
Torque Metals Limited 30 June 2021
Contents
Corporate Directory ................................................................................................................................ 2
Contents .................................................................................................................................................. 3
Director’s Report ..................................................................................................................................... 5
Corporate Governance Statement ........................................................................................................ 14
Auditor’s Independent Declaration ...................................................................................................... 15
Independent Auditor’s Report .............................................................................................................. 16
Director’s Declaration ........................................................................................................................... 22
Statement of profit or loss and other comprehensive income for the year ended 30 June 2021 ....... 23
Statement of financial position as at 30 June 2021 .............................................................................. 24
Statement of changes in equity for the year ended 30 June 2021 ....................................................... 25
Statement of cash flow for the year ended 30 June 2021 .................................................................... 26
Notes to the financial statements for the Year 30 June 2021 .............................................................. 27
Additional Shareholders Information ................................................................................................... 46
Tenements ........................................................................................................................................... 48
3
Torque Metals Limited 30 June 2021
Chairman’s Report
Dear Members,
This has been a groundbreaking year for your Company.
I am delighted to report that, despite many challenges, it has been the most successful year since
incorporation.
With time running out on an agreed option to purchase the signature Paris gold project, and in a soft resource
market, we were able to raise sufficient funds to list the Company on the nascent Sydney Stock Exchange (SSX)
on July 29th 2020. This enabled us to acquire 100% ownership of this important high grade gold project.
Having acquired the Paris Project we set about consolidating our position in the area, approximately 120 kms
South East of Kalgoorlie. To the 68km2 of, mostly, mining titles that made up the Paris Project we were
successful in negotiating a joint venture with Jindalee Resources that accreted a further 75Km2 of title abutting
our Eastern and Southern boundaries. Thus, the “Paris Project” has already, more than doubled in area.
Paris, partnered with our second high grade gold project at Bullfinch, enabled us to seek support for a listing
on ASX. This support was duly forthcoming in the form of the major securities and investment firm of Euroz
Hartleys in Perth.
They understood the Company’s asset value, its strengths and aspirations and were able to raise $5.5 million
which formed the backbone of our successful ASX listing – which took place on June 25th, 2021.
With strong support behind us we were able to hit the ground running. Despite an industry-wide shortage of
drill rigs, the Company was able to commence drilling a range of gold targets at Paris immediately upon listing.
To the 30th June 2021 we had completed 36 holes for 3173m of a 7500m programme. We await the results
with eager anticipation.
I would like to take this opportunity to thank all involved in the evolution of the Company this year and
welcome on board all new shareholders. With solid support and two magnificent gold assets, the year is
certainly set for a period of strong growth.
Yours Sincerely,
Ian Finch
Chairman.
4
Torque Metals Limited 30 June 2021
Director’s Report
The directors of Torque Metals Limited (“Torque” or “the Company”) present their report on Torque for the year
ended 30 June 2021 (“the Year”).
Directors
The names of the directors of the Company during the year are:
Ian D. Finch
Antony (Tony) L. Lofthouse
Patrick N. Burke (Appointed 8 February 2021)
Neil W. McKay (Resigned 23 June 2021)
Directors have been in office since the start of the Year to the date of this report unless otherwise stated.
Ian D. Finch
Executive Chairman (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 more than 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
5,000,000 fully paid ordinary shares. 50% beneficial interest in Turf Moor Pty. Ltd. a
company in which he is a shareholder.
Directorships held in
other listed entities
None.
Antony L Lofthouse
Qualifications
Experience
Non-Executive Director
Bachelor of Science (Hons) Geology from the University of London and a Master of
Business Administration from the University of Western Australia
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
5
Torque Metals Limited 30 June 2021
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
50,000 fully paid ordinary shares (indirectly held)
Directorships held in
other listed entities
None.
Patrick N. Burke
Non-Executive Director (Appointed 8 February 2021)
Qualifications
Experience
LLB
Mr Burke holds a Bachelor of Laws from the University of Western Australia. He has
extensive legal and corporate advisory experience and over the last 15 years has acted
as a director for a large number of ASX, NASDAQ and AIM listed companies. His legal
expertise is in corporate, commercial and securities law in particular capital raisings
and mergers and acquisitions. Mr Burke’s corporate advisory experience includes
identification and assessment of acquisition targets, strategic advice, deal structuring
and pricing, funding, due diligence and execution 4 4 4 4
Interest in Shares
Directorships held in
other listed entities
nil
Western Gold Limited: Appointed 22 March 2021
Province Resources Limited: Appointed 9 November 2020
Mandrake Resources Limited: Appointed 4 August 2019
Meteoric Resources NL: Appointed 1 December 2017
Triton Minerals Limited: Appointed 22 July 2016
Significant changes in state of affairs
There were no significant changes in state of affairs of the Company during the Year except that the Company
was admitted to the Australian Securities Exchange on 23 June 2021
Principal Activities
During the financial year the principal activities of the consolidated entity consisted of mineral exploration.
Review of Operations
Highlights.
•
•
•
•
Exercised option to acquire 100% of the Paris Project.
Concluded Sensore Joint Venture adjacent to Paris
Torque successfully listed on ASX on 23 June 2021.
Commenced drilling immediately - drilling 36 RC holes for 3,173m by year end.
Projects.
The Paris Gold Project.
During the year Torque exercised its option to purchase the Paris / HHH gold mines (The Paris Gold Project) from
Austral Pacific Pty. Ltd. (Austral). The project, which comprises 9 mining leases and two prospecting leases
6
Torque Metals Limited 30 June 2021
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.
Mineral Resource Estimates
The Paris Gold Mining Area contains a JORC Code (2012) Mineral Resource Estimate of 314,000 tonnes at 3.24
g/t. Au, for 32,700 oz. of gold has as had previously been reported in the Torque Metals Limited Prospectus
dated 14 April 2021, in the Independent Technical Assessment Report prepared by Agricola Mining Consultants
Pty Ltd.
Resources for both HHH and Paris have been classified as Indicated Mineral Resources. The Paris Mineral is
reported above a block grade of 0.5 g/t Au using a 35 g/t Au top cut. The HHH Mineral Resource is reported
above a block grade of 0.5 g/t Au using a 50 g/t Au top cut.
Depleted Mineral Resource Estimate
Deposit
Paris
HHH
Total
Category
Indicated
Indicated
Tonnes
81,000
233,000
314,000
g/t Au
4.50
2.80
3.24
Ounce
11,700
21,000
32,700
Torque Metals confirms that it is not aware of any new information or data that materially affects the
information included in this announcement and that all material assumptions and technical parameters
underpinning any resource estimates quoted herein continue to apply and have not materially changed
Fig 1: Torque Leases, incorporating Jindalee Joint Venture Leases
7
Torque Metals Limited 30 June 2021
The Company commenced RC drilling at the Paris Project on 25 June 2021.
The programmes were designed to test the potential for gold resource extensions below, along strike and
adjacent to the Paris and HHH open pits. Additional drilling was also planned at the advanced exploration
prospects of Observation, Strauss and Marmaracs. In all, 8 areas of resource prospectivity are to be tested.
As at 30 June 2021, 36 RC holes have completed for an aggregate of 3,173m.
Fig 2. First drilling at the Paris Project – 25 June 2021
Sensore (Paris Gold Project)
The Company entered into a Farm-In – Joint Venture Agreement with Yilgarn Exploration Ventures Pty Limited
is a wholly owned subsidiary company of SensOre Limited on EL15/1752. On this single tenement Yilgarn wish
to earn a 51% stake, by expending $3 Mill over a three (3) year period with guaranteed minimum expenditures
of $300K in the first year and $700K in year 2. Thereafter they may earn up to a 70% stake by completing a
comprehensive mining feasibility study. Torque may subsequently buy back 10% from Yilgarn for $500,000.
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.
The Company also holds a 100% interest in five Exploration licences centred approximately 34km north of
Southern Cross in Western Australia. They are collectively known as the Bullfinch Project.
During the year several site visits were made in order to assess and rate the, over 200 pits, shafts and old mine
workings present within the tenements.
Compilation of an extensive database was commenced including all available Geophysical, Geological and
Geochemical data sets.
8
Torque Metals Limited 30 June 2021
The database was then interrogated, and prospects evaluated with a view to compiling a drilling programme
aimed at the 3 or 4 prospects likely to yield high grade gold resources. It is estimated that drilling at Bullfinch
will commence in the 3rd or 4th quarter of 2021.
Tribal Mining Tenement Acquisition (Bullfinch)
The Company exercised the 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.
Directors Remuneration Report- Audited
This report details the nature and amount of remuneration for each director of the Company.
Remuneration Policy (Audited)
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, and key performance indicators such as share price, 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 Executive Chairman’s 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.
Details of remuneration for the years ended 30 June 2021 and 30 June 2020
The remuneration for each key management personnel of the Company during the year was as follows
9
Torque Metals Limited 30 June 2021
Remuneration Policy (Audited) cont’d
2021
fixed Remuneration
Variable Remuneration
Salaries
Director/
Consulting Fees
Super
Total
Performance
Rights*
Total
Value of Rights
as % of
remuneration
Directors
Ian Finch
Neil McKay*
Tony Lofthouse**
Pat Burke***
Total
*Performance Rights were cancelled on 28 May 2021 as part of ASX listing requirements
51,062
42,065
947
947
95,021
50,536
38,397
861
947
90,741
526
3,668
86
0
4,280
-
-
-
-
-
51,062
42,065
947
947
95,021
-
-
-
-
2020
fixed Remuneration
Variable Remuneration
Salaries
Director/
Consulting Fees
Super
Total
Performance
Rights
Total
Directors
Ian Finch
Neil McKay
Tony Lofthouse
Tshung
Chang****
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
42,374
42,374
6,549
42,374
42,374
6,549
(45,881)
45,416
- (45,881)
45,416
Value of Rights
as % of
remuneration
100%
100%
100%
(100)%
Mr. Finch
Mr. McKay*
Mr. Lofthouse**
Mr. Burke***
Mr. Chang ****
Executive Chairman
Director
Director
Director
Director
Resigned 23 June 2021
Appointed 30 January 2020
Appointed 8 February 2021
Removed 30 January 2020
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Torque Metals Limited 30 June 2021
Directors Remuneration Report (Cont’d)
Key Management Personnel (KMP) Share and Performance Rights
Shares 2020
30 June 2019
Post Consolidation
Balance
1/07/19*
Granted as
Remuneration
Performance
Rights Exercised
(Cancelled)
Balance
30/06/20
Turf Moor Pty. Ltd1. 1 5,000,000
Tshung H. Chang2
3,575,000
8,575,000
-
-
-
-
-
-
5,000,000
-
5,000000
30 June 2021
Balance
1/07/20
Granted as
Remuneration
Performance
Rights Exercised
Turf Moor Pty. Ltd1. 1 5,000,000
-
-
Balance
30/06/21
5,000,000
*Shareholdings have been adjusted for the capital consideration of every 2 : 1 which took place on 9 February
2021
1 Mr. Finch and Mr. McKay are equal 50% shareholders in Turf Moor Pty. Ltd. which holds 5,000,000
Shares
2 Mr. Chang ceased to be a director on 30 January 2020.
Performance Rights (cancelled prior to listing on the ASX)
Performance Rights
Granted
Number
Grant Date
Fair Value
Performance
Rights
Expiry Date
Vested
Number
Ian D. Finch
Total
Neil W. McKay
Total
Antony L. Lofthouse
Total
Post Consolidated
500,000
666,667
833,333
2,000,000
500,000
666,666
833,334
2,000,000
250,000
333,333
416,667
1,000,000
5,000,000
4 Sept. 2018
4 Sept. 2018
4 Sept. 2018
4 Sept. 2018
4 Sept. 2018
4 Sept. 2018
11 May 2020
11 May 2020
11 May 2020
$0.05918
$0.0646
$0.10025
$0.05918
$0.0646
$0.10025
$0.0556
$0.0548
$0.1000
Performance Rights were cancelled on 28 May 2021 as part of ASX listing conditions.
-
-
-
-
-
-
-
-
-
-
Other transaction with Directors of the Company
Unsecured Convertible Notes from the families of two directors (Finch and McKay) on the following terms and
conditions were converted 23 December 2020.
Terms
Date of Issue
Sum
Term
Security
Interest Rate
Catherine A. Finch
3 September 2019
$33,000
6 months from date of issue
None
7.5 % p.a.
Giovanna C. McKay
3 September 2019
$15,200
6 months from date of issue
None
7.5% p.a.
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Torque Metals Limited 30 June 2021
Exercise Price
Number
Exercise
$0.134 (post consolidation)
113,433 (post consolidation)
Convertible at any time
$4.134 (post consolidation)
246,268 (post consolidation)
Convertible at any time
Review of Operation
The loss of the Company for the Year after providing for income tax, amounted to $1,820,026 (year ended 30
June 2020: $221,734. The expenditure incurred during the Year related to corporate and administration
expenditure, Initial Public Offering expenses and non-capitalized expenses relating to tenement acquisition.
Australian Accounting Standards Share Based Payments (AASB2-28) requires that the Company shall
immediately recognise the amount that would have otherwise been recognised as being received for the
remainder of the vesting period. No director/Key Manager Personnel received any benefit from the accounting
treatment.
Unlisted options issued during the year to providers of financial services related to capital raising have been
valued in accordance with the Black and Scholes and expensed in the year $1,120,372 (2020 : $nil).
Corporate
The Company raised a total of $6,646,148 (after costs):
Description
Placement
Placement
Conversion of Note
Initial Public Offering
Cost of Capital
Rounding Consolidation
Total
Meeting of Directors
Quantity
(Post
Consolidation)
4,500,000
8,173,253
583,582
27,500,000
(7)
40,756,828
Price
Total
$
$0.10
$0.134
$0.134
$0.20
$
450,000
1,095,216
78,200
5,500,000
(477,268)
$6,646,148
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
P. N. Burke
7
7
7
3
7
7
7
3
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
12
Torque Metals Limited 30 June 2021
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
The following options over issued shares in the Company were granted during the Year.
Date
28 July 2020*
23 Dec 2020*
2 June 2021
2 June 2021
Total
•
Number
1,000,000
2,250,000
3,875,000
5,500,000
12,625,000
Entity
Martin Place Securities Pty. Ltd.
Seed Capital
Zenix Nominees Pty. Ltd.
Zenix Nominees Pty. Ltd.
Terms
30 cents 3years to 27 July 2023
25 cents 3 years to 22 Dec 2023
27.5 cents 3 years to 1 June 2024
30 cents 3 years to 1 June 2024
Post 2 : 1 consolidation on 9 February 2021
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.
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 Year.
Events arising since the end of the Year
Paris Tailings
9 August 2021 – A 6 month option to acquire 100% of the Paris Tailings situated on ML15/497, $50,000 option
payable upon signing and a further $10,000 for a one month extension and an additional extension of 1 month
for the payment of $1. The Company is to complete a review and scoping study at which time the option can
be exercised at any time by the payment of $300,000 cash, $200,000 in share of the Company and $500,000 in
bullion from production.
Ordinary Shares Released from Escrow
Date
27 July 2021
7 September 2021
Non-Audit Services
Security
Ordinary Fully Paid
Ordinary Fully Paid
Number
2,237,093
8,250
During the period ending 30 June 2021, the Company’s Auditor, Hall Chadwick WA Audit Pty Ltd did not perform
13
Torque Metals Limited 30 June 2021
any non-audit services.
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2021 forms part of the Director’s Report and
can be found on page 13
Signed in accordance with a resolution of directors.
On behalf of the directors
Ian D. Finch
Executive Chairman
Corporate Governance Statement
The Company has established a corporate governance framework, the key features of which are set out in its
Corporate Governance statement which can be found on the Company’s website at www.torquemetals.com,
under the section marked “Corporate Governance”.
In establishing its corporate governance framework, the Company has referred to the recommendations set
out in the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations 4th
edition (Principles & Recommendations). The Company has followed each recommendation where the Board
has considered the recommendation to be an appropriate benchmark for its corporate governance practices.
Where the Company’s corporate governance practices follow a recommendation, the Board has made
appropriate statements reporting on the adoption of the recommendation.
In compliance with the “if not, why not” reporting regime, where, after due consideration, the Company’s
corporate governance practices do not follow a recommendation, the Board has explained it reasons for not
following the recommendation and disclosed what, if any, alternative practices the Company has adopted
instead of those in the recommendation
In the period from admission to the Australian Stock Exchange (23 June 2021) to the end of the reporting
period (30 June 2021) the Company used the cash it had at the time of admission in a way consistent with its
business objectives.
14
Torque Metals Limited 30 June 2021
To the Board of Directors
Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001
As lead audit Partner for the audit of the financial statements of Torque Metals Limited for the financial year ended
30 June 2021, I declare that to the best of my knowledge and belief, there have been no contraventions of:
•
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
Yours Faithfully,
HALL CHADWICK WA AUDIT PTY LTD
MARK DELAURENTIS CA
Chartered Accountants
Partner
Dated at Perth this 30th day of September 2021
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TORQUE METALS LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Torque Metals Limited (“the Company”), which comprises the
statement of financial position as at 30 June 2021, the statement of profit or loss and other
comprehensive income, the statement of changes in equity and the statement of cash flows for the year
then ended, and notes to the financial statements, including a summary of significant accounting
policies, and the directors’ declaration.
In our opinion:
a.
the accompanying financial report of the Company is in accordance with the Corporations Act
2001, including:
(i)
giving a true and fair view of the Company’s financial position as at 30 June 2021 and of
its financial performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b.
the financial report also complies with International Financial Reporting Standards as disclosed
in Note 1.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Company in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key Audit Matter
How our audit addressed the Key Audit Matter
Accounting for share based payments
As disclosed
in note 15 to
the
financial
Our procedures amongst others included:
statements, during the year ended 30 June
2021 the Consolidated Entity incurred share
based payments of $1,120,372.
Share based payments are considered to be a
key audit matter due to
•
•
•
the value of the transactions;
the complexities
the
recognition and measurement of these
instruments; and
involved
in
the judgement involved in determining
the inputs used in the valuations.
Management used the Black-Scholes option
valuation model to determine the fair value of
the options granted. This process involved
significant estimation and judgement required to
determine
the
fair value of
the equity
instruments granted.
•
•
•
•
Analysing agreements to identify the key
terms and conditions of share based
payments issued and relevant vesting
conditions in accordance with AASB 2
Share Based Payments;
Evaluating management’s Black-Scholes
the
Valuation Models and assessing
assumptions and inputs used;
Assessing the amount recognised during
the year in accordance with the vesting
conditions of the agreements; and
Assessing the adequacy of the disclosures
included in Note 15 to the financial
statements.
Capitalised Exploration and Evaluation
Costs
Our audit procedures included but were not
limited to:
the
As disclosed
financial
in note 9 to
statements, the Group has incurred significant
exploration and evaluation expenditures which
have been capitalised in accordance with the
requirement of Exploration for and Evaluation of
Mineral Resources (AASB 6). As at 30 June
2021, the Group’s capitalised exploration and
evaluation costs are carried at $3,695,023.
•
Assessing management’s determination
of its areas of interest for consistency with
the definition in AASB 6 Exploration and
Evaluation of Mineral Resources (“AASB
6”);
• Confirming rights to tenure for a sample of
tenements held and confirming rights to
tenure on tenements nearing expiry will be
renewed;
The recognition and recoverability of
the
capitalised exploration and evaluation costs was
•
Testing
to
capitalised exploration costs for the year
the Group’s
additions
Key Audit Matter
How our audit addressed the Key Audit Matter
considered a key audit matter due to:
•
The carrying value of capitalised
costs
exploration and evaluation
represents a significant asset of the
Group, we considered it necessary to
and
assess
circumstances existed to suggest the
carrying amount of this asset may
exceed the recoverable amount; and
whether
facts
• Determining
whether
impairment
involves significant
indicators exist
judgement by management.
Note 1(a) and 9 to the financial statements
contain the accounting policy and disclosures in
to
relation
expenditures.
exploration
and
evaluation
•
by evaluating a sample of recorded
expenditure for consistency to underlying
records, the capitalisation requirements of
the Group’s accounting policy and the
requirements of AASB 6;
By testing the status of the Group’s tenure
and planned
future activities, reading
board minutes and discussions with
management we assessed each area of
interest for one or more of the following
circumstances
indicate
impairment of the capitalised exploration
costs:
that may
o The licenses for the rights to
explore expiring in the near future
or are not expected
to be
renewed;
o Substantive
expenditure
for
further exploration in the area of
is not budgeted or
interest
planned;
o Decision or intent by the Group to
discontinue activities
the
specific area of interest due to lack
of commercially viable quantities
of resources;
in
o Data indicating that, although a
development in the specific area is
likely to proceed, the carrying
amount of the exploration asset is
unlikely to be recorded in full from
successful development or sale;
and
Assessing the appropriateness of the related
disclosures in the financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Company’s annual report for the year ended 30 June 2021, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial report or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error. In Note 1, the directors also state in accordance with Australian Accounting Standard AASB 101
Presentation of Financial Statements, that the financial report complies with International Financial
Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Company or to
cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
•
•
•
•
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Company
to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2021. The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with s 300A of the Corporations Act 2001. Our responsibility is to
express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Auditor’s Opinion
In our opinion, the Remuneration Report of the Company, for the year ended 30 June 2021, complies
with section 300A of the Corporations Act 2001.
HALL CHADWICK WA AUDIT PTY LTD
Chartered Accountants
MARK DELAURENTIS CA
Partner
Dated at Perth this 30th day of September 2021
Director’s Declaration
In accordance with a resolution of the directors of Torque Metals Limited, the directors of the Company
declare that:
•
•
•
the financial statements and notes, as set out, are in accordance with the Corporations Act 2001 and
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 give a true and fair view of the financial position as at 30 June 2021 and of the performance for
the year ended on that date of the Company;
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
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
Executive Chairman
Perth
30 September 2021
22
Torque Metals Limited 30 June 2021
Statement of profit or loss and other comprehensive income for the
year ended 30 June 2021
Year Ended
Year Ended
30 June 2021
30 June 2020
Note
$
$
-
50,000
(390,892)
(14,813)
(1,291,326)
-
(172,995)
(1,820,026)
-
2
2
15
2
2
5
-
-
(74,124)
(16,191)
(45,417)
(43,567)
(42,435)
(221,734)
-
(1,820,026)
(221,734)
-
-
(1,820,026)
(221,734)
(1,820,026)
(221,734)
(1,820,026)
(221,734)
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
Basic weighted average earnings/(loss) per share
Diluted weighted average earnings/(loss) per share
Cents
Cents
19
19
(0.04)
(0.04)
(0.01)
(0.01)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
23
Torque Metals Limited 30 June 2021
Statement of financial position as at 30 June 2021
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
Option Reserves
Performance Reserve
Equity Reserve
Accumulated losses
Total equity
30 June
2021
$
Note
30 June
2020
$
7
8
9
10
11
12
13
14
16
17
5,084,472
37,108
5,121,580
3,695,023
3,695,023
8,816,603
769,920
-
-
769,920
769,920
8,046,683
9,041,144
1,120,372
354,015
-
(2,468,848)
8,046,683
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
The above statement of financial position should be read in conjunction with the accompanying notes
24
Torque Metals Limited 30 June 2021
Statement of changes in equity for the year ended 30 June 2021
Equity
Accumulated
Reserve
Losses
Option
Reserve
Issued
Capital
Total
Performance
Rights
Reserve
$
137,644
-
-
45,417
-
-
-
183,060
183,060
$
$
720,300
(427,088)
-
462,850
-
-
-
(21,746)
(221,734)
-
-
-
-
-
(648,822)
1,161,404
(648,822)
Balance as at 1 July 2019
Total comprehensive Income/loss
for the Period
Issue of ordinary shares
Performance Rights issued
Option Reserve
Equity Reserve
Transaction costs
Balance as at 1 July 2020
Total comprehensive Income/loss
for the Period
Balance as at 30 June 2020
1,161,404
-
(1,820,026)
-
Issue of ordinary shares
Performance Rights issued
Option Reserve
Equity Reserve
Transaction costs
8,357,008
-
-
-
(477,268)
-
-
-
-
-
-
170,955
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
1,120,372
-
-
$
-
$
430,856
-
-
-
-
13,592
-
13,592
13,592
-
-
-
(13 592)
-
(221,734)
462,850
45,417
-
13,592
(21,746)
709,234
709,234
(1,820,026)
8,357,008
170,955
1,120,372
(13,592)
(477,268)
Balance as at 30 June 2021
9,041,144
(2,468,848)
354,015
1,120,372
-
8,046,683
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes
25
Torque Metals Limited 30 June 2021
Statement of cash flow for the year ended 30 June 2021
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 to 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 2021
Notes
30 June 2021
$
30 June 2020
$
6
(2,684)
(2,684)
(601,045)
(827,099)
(1,428,144)
(150,231)
(150,231)
(219,799)
(88,959)
(308,758)
6,646,148
441,104
-
(43,476)
(48,200)
(30,000)
(11,228)
6,513,244
5,082,416
2,056
5,084,472
(80,600)
1,856
48,200
30,000
(3,624)
436,936
-22,053
24,109
2,056
The above statement of cash flow should be read in conjunction with the accompanying notes
26
Torque Metals Limited 30 June 2021
Notes to the financial statements for the Year 30 June 2021
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
These 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 30 September 2021 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 ($1,820,026) (2020: $221,734) and experienced net cash outflow from
operations of $2,684 (2020: outflow $150,231). The Company has liabilities of $769,920 (2020: $283,770) and
cash on hand of $5,084,472(2020: $2,056).
The Directors have prepared a cash flow forecast which indicates that the Company will have sufficient cash
flows to meet all commitments and working capital requirements for the 12 month period from the date of
signing this financial report. The Directors believe it is appropriate to prepare these accounts on a going
concern basis because of the following factors:
• the Company has the ability to curtail discretionary expenditure as and when required in order to
manage its cash flows.
Based on the cashflow forecast and other factors referred to above, the Directors are satisfied that the going
concern basis of preparation is appropriate
Exploration, Evaluation and Development Expenditure
(a)
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.
27
Torque Metals Limited 30 June 2021
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.
Financial Instruments Financial Assets
(b)
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 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
28
Torque Metals Limited 30 June 2021
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).
Cash and cash equivalents
(c)
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 overdraft
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 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 reorganization 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 recogognised
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.
Revenue and Other Income
(e)
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.
29
Torque Metals Limited 30 June 2021
All revenue is stated net of the amount of goods and services tax (GST).
Impairment of Assets
(f)
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
Trade and other payables
(g)
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, as recognised as an expense on an accrued basis.
Provisions
(h)
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
Goods and service tax (GST)
(i)
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.
Income tax
(j)
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.
30
Torque Metals Limited 30 June 2021
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended
that net settlement or simultaneo31ecognized31ion 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 recognised 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 recognised.
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.
Share Based Payments
(k)
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.
Contributed equity
(l)
Ordinary issued share capital 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)
Earnings Per Share
(m)
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 a bonus element. Diluted earnings per share is calculated as net earnings
31
Torque Metals Limited 30 June 2021
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.
Interest in Joint Operations
(n)
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.
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 Gr’up’s
consolidated financial statements only to the extent of other part’es’ 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
Critical Accounting Estimates and Judgements
(o)
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
32
Torque Metals Limited 30 June 2021
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.
Fair value measurements
(p)
The Group measures and recognises the asset, ‘Financial assets held for trading’ at fair value on a
Recurring basis after initial recognition.
The Group does not subsequently measure any liabilities at fair value on a non-recurring basis.
Fair Value Hierarchy
(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.
Measurements based on
unobservable inputs for the asset
or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more
valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market
data. 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
33
Torque Metals Limited 30 June 2021
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 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.
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.
34
Torque Metals Limited 30 June 2021
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.
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.
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).
35
Torque Metals Limited 30 June 2021
2. Expenses
Administrative expenses
Exploration written off
Initial Public Offering expenses
Interest Paid
Share Based Payment Net Movement
2a. Share Based Payments
Performance Rights - Movement for the year
Performance Rights brought to account in accordance with
AASB2 (28) upon cancellation
Options issued during the year
2a
15d
4. Key Management Personnel
Short-term employee benefits
Post-employment benefits
Share based payments
No termination benefits were paid to any Key Management Personnel
4. Auditors Remuneration
Remuneration of the auditor for:
Auditing or reviewing the financial report
5. Income tax benefit/(expense)
(a) Current Tax Expense
Current Year
Under/(over) provided in prior years
Total
30 June
2021
390,892
-
172,995
14,813
1,291,326
1,870,026
30 June
2020
74,124
43,567
42,435
16,191
45,417
221,734
-
45,417
170,954
1,120,372
1,291,326
-
-
45,417
Year Ended
30 June
2021
Year Ended
30 June
2020
95,021
-
-
95,021
-
-
45,416
45,416
15,000
15,000
12,000
12,000
-
-
-
-
-
-
(b) Reconciliation of income tax expense to prima facie tax payable
Profit before tax
Income tax expense/(benefit) using the domestic corporation
tax rate of 26% (2020: 27.5%)
Tax effect of permanent differences:
Non-deductible expenses
Capital Raising Costs
Capitalised exploration
(1,820,026)
(21,734)
(473,207)
(60,977)
336,760
124,090)
-
13,625
(12,263)
(12,483)
36
Torque Metals Limited 30 June 2021
Change in tax rates
temporary differences not brought to account
(c) Deferred tax assets
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
Income tax benefit/(expense) (Cont’d)
(d) Deferred tax liabilities
Exploration Expenditure
Other
Non-recognition of deferred tax assets
8,024
(252,512)
252,512
-
532,215
16,215
164,219
-
712,650
(313,026)
399,624
(399,624)
-
-
(72,098)
72,098
-
193,239
3,001
39,285
-
235,525
(88,413)
147,112
(147,112)
-
30 June 2021
$
30 June 2020
$
313,026
-
(313,026)
-
88,413
-
(88,413)
-
(e) Tax Losses
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 26% (2020:27.5%)
2,046,982
532,215
702,686
193,239
The benefit for tax losses will only be obtained if:
(a) The company and consolidated entity derive future assessable income of a nature and an
amount sufficient to enable the benefit from the deductions for the losses to be realised;
(b) The company and the consolidated entity continue to comply with the conditions for
deductibility imposed by law; and
(c) No changes in tax legislation adversely affect the ability of the Company to realise these
benefits.
6. 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
Option Reserve Movement
Issue of Shares
37
Torque Metals Limited 30 June 2021
30 June
2021
(1,820,026)
12,901
-
170,955
1,120,372
20,000
30 June
2020
(221,736)
16,191
43,567
45,417
-
-
Operating loss before changes in working capital
Decrease / (Increase) in receivables and prepayments
Increase / (Decrease) in payables and accruals
Net cash used in operating activities
(495,798)
32,542
460,572
(2,684)
(116,561)
(68,812)
35,142
(150,231)
Non-cash financing and investing activities
No non-cash financing and investing activities occurred during the Period.
7. Cash on Hand and Equivalents
5,084,472
2,056
8. Trade Receivables
G.S.T. receivables
Other
9. Tenements
Tenement Acquisition
17,374
19,734
37,108
30 June
2021
$
26,535
43,114
69,649
30 June
2020
$
3,695,023
921,299
Represented by:
Acquisition of Bullfinch Project from Talga Resources Ltd
397,493
52,090
Acquisition of Bullfinch Project from Tribal Mining Pty Ltd. (a)
Acquisition of Paris Gold Project from Austral Pacific Pty Ltd (b)
2,031,306
Joint Venture from Jindalee Resources Ltd.
Exploration and evaluation expenditure
Opening Balance
Expenditure for the period
Expenditure written off
Closing Balance
Total Exploration and Expenditure
10,190
2,491,079
321,500
882,444
-
1,203,944
3,695,023
397,493
-
192,116
10,190
599,799
276,108
88,959
(43,567)
321,500
921,299
9 (a) Acquisition of Bullfinch Project from Tribal Mining Pty. Ltd.
The Company exercised an Acquisition Agreement with Tribal to acquire 100% of EL77/2607 in consideration
for $50,000 cash and 10% of any gold recovered from the Tenement during an approved bulk sampling
programme
9 (b) Acquisition of Paris Gold from Austral Pacific Pty. Ltd.
Option Conditions
The Option was exercised on 29 July 2020
i.
Consideration
The consideration for the purchase of the Tenements was the:
a.
b.
stock exchange;
Payment by Torque to Austral of the Option Fee of $100,000.
Payment of $650,000, less the Option Fee, within 5 business days of Torque listing on an accredited
38
Torque Metals Limited 30 June 2021
The issue of $1,200,000 in ordinary fully paid shares in Torque within 5 business days of Torque listing
c.
on an accredited stock exchange;
ii.
Milestone / Performance Payments
Torque will pay Austral the following amounts upon successfully reporting additional resources, in any
JORC category:
The first 50,000 ozs - $100,000:- 50% in cash and 50% in shares, calculated at the previous 7 day
Total 100,000 ozs - $200,000:- 50% in cash and 50% in shares, calculated at the previous 7 day VWAP;
Total 200,000 ozs - $400,000:- 50% in cash and 50% in shares, calculated at the previous 7 day VWAP;
Total 500,000 ozs - $1,000,000:- 50% in cash and 50% in shares, calculated at the previous 7 day
a.
VWAP:
b.
c.
d.
VWAP;
iii.
Royalty
Torque and Austral entered into a Royalty Deed that sets out the terms on which the Royalty is to be paid.
The Royalty commences after the first 2,500 ozs of gold produced;
a.
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 $2.9 million;
c.
payment of $2.9 million for $1,000
The Royalty may be purchased by the Company by way of a lump sum, or at any time after the
10. Trade and other payables
Trade Creditors
Other creditors and accrued expenses
Trade and other payables are non-interest bearing liabilities stated at cost.
11. Convertible Notes
(a) Associates of Directors
(b) Other
Less Equity Reserve
30 June
2021
555,000
214,920
769,920
30 June
2020
154,767
10,912
165,679
-
-
-
-
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 (post consolidation) at
the election of the Note Holder.
Opening Balance
2019 Notes Issued
Financial Liability
Conversion into equity
12. Unsecured Loans
(i) Advances from Directors
74,615
-
-
(74,615)
-
-
-
-
64,608
-
10,007
74,615
43,476
43,476
(i) Working capital advances, with no fixed term of repayment and without interest
39
Torque Metals Limited 30 June 2021
13. Issued Capital
a. Ordinary Shares
Opening balance for
the period
Placement at $0.067
Convertible Note at $0.067
Placement at $0.05
Placement to Vendor
Cost relating to share issue
2 : 1 Consolidation
Issue to MPS
Placement at $0.20
Cost relating to share issue
Year ended 30 June 2021
No.
$
Year ended 30 June 2020
No.
$
31,824,876
16,346,506
1,167,164
9,000,000
12,000,000
-
1,161,404
1,095,216
91,792
450,000
1,200,000
-
24,916,667
6,908,209
-
-
-
-
-
720,300
462,850
-
-
(21,746)
70,338,546
3,998,412
31,824,876
1,161,404
35,169,266
149,253
27,500,000
-
3,998,412
20,000
5,500,000
(477,268)
-
-
-
-
-
-
62,818,519
9,041,144
31,824,876
1,161,404
b. 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 2021 and 2020 are as follows:
Working Capital
Cash and Cash Equivalents
Trade and Other Receivables
Current Liabilities
Working Capital (Deficit) Position
14.Option Reserve
Opening Balance
Issuance of Options Financial Services
Closing Balance
30 June
2021
5,084,472
37,108
(769,920)
4,351,660
$
-
1,120,372
1,120,372
30 June
2020
2,056
69,649
(283,770)
(212,065)
$
-
-
15 Share Based Payments
(a) Unlisted Options
i) 1,000,000 (post consolidation) options with an expiry date of 27 July 2023 were issued on 28 July 2020
pursuant to the Martin Place Securities Pty. Ltd. Corporate Advisory letter dated 22 April 2020 at an exercise
price of $0.30 each
The options were valued at $0.0534 and during the year ended 30 June 2021 $106,857 was expensed as
share based payments.
ii) 3,875,000 (post consolidation) options with an expiry date of 1 June 2024 were issued on 2 June 2021
pursuant to the Euroz Harletys I.P.O. Capital Raising Mandate dated 17 December 2020.
The options were valued at $0.1102 cents and during the year ended 30 June 2021 $426,939 was
expensed as share based payments at an exercise price of $0.275 each
iii) 5,500,000 (post consolidation) options with an expiry date of 1 June 2024 were issued on 2 June 2021
pursuant to the Euroz Harleys I.P.O. Capital Raising Mandate dated 17 December 2020.
40
Torque Metals Limited 30 June 2021
The options were valued at $0.1067 cents and during the year ended 30 June 2021 $586,576 was
expensed as share based payments at an exercise price of $0.30
each
iv) 2,250,000 (post consolidation) options with an expiry date of 22 December 2023 were issued on
23 December 2020 pursuant to a 1 for 2 free attaching option to raise $450,000 to sophisticated
Investors on 22 December 2020 at an exercise price of $0.25
each
(b) Option valuation assumptions
The fair value of the options granted we estimated as at the date of grant using a Black-Scholes option
valuation model and a Monte Carlo simulation valuation model. The following table lists the inputs to the
models:
Dividend Yield
%
Expected
Volatility (%)
Risk Free
interest
Rate (%)
Expected
life
(years)
Share price
at
grant date
Exercise
Price
Financial Services Options
Options issued 27 July 2020
Options issued 2 June 2021
Options issued 2 June 2021
nil
nil
nil
100
100
100
25
7
7
3
3
3
$0.20
$0.20
$0.20
$0.30
$0.275
$0.30
(c) Options outstanding at end of year
The following table illustrate the number and weighted average exercise prices (WAEP)of share options
granted as share based payments on issue during the year
Outstanding at 1 July
Granted during the year
Outstanding 30 June
2021
Number
2021 WAEP
$
2020
Number
2020 WAEP
12,625,000
12,625,000
$0.283
-
-
-
-
The weighted average remaining contractual life for options outstanding as at 30 June 2021 is
2.5years (2020 nil)
(d) Share based Payments Summary
Class
Quantity
Grant Date
Value
recognised
during year
$
Exercise
Price
$
Vesting Date
Value
recognised in
future years
$
2021
Options
Options
Options
Options
1,000,000
2,500,000
5,500,000
3,875,000
28/07/2020
23/12/2020
2/06/2021
2/06/2021
106,857
-
586,576
426,939
1,120,372
0.300
0.250
0.300
0.275
27/07/2023
22/12/2023
1/06/2024
1/06/2024
-
-
-
-
-
41
Torque Metals Limited 30 June 2021
16 Performance Rights
The Company issued (post consolidation) 6,000,000 performance rights to the Directors on 4 September
2018.The share rights were divided into three classes of 1,500,000, 2,000,000 and 2,500,000 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.
10,000,000 (5,000,000 post consolidation) performance rights were cancelled.
Performance Rights
Balance at beginning of reporting period
Adjustment for the year
Performance rights cancelled
Performance Rights forfeited
Performance rights issued to directors
Year ended 30 June 2021
No.
$
Year ended 30 June 2020
No.
$
5,000,000
(5,000,000)
-
-
-
183,060
-
170,955
-
354,015
6,000,000
-
(2,000,000)
1,000,000
5,000,000
137,644
84,748
-
(45,881)
6,549
183,060
17. Accumulated Losses
Opening Balance
Net Loss attributable to members
Closing Balance
2021
$
(648,822)
(1,820,026)
(2,468,848)
2020
$
(427,088)
(221,734)
(648,822)
18 Financial Risk Management
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
board’s policy requires that surplus funds are only invested with counterparties with a Standard & Poor’s
rating of at least A+.
42
Torque Metals Limited 30 June 2021
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 2021 and 30 June 2020:
30 June 2021
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 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
Floating
Interest Rate
$
Fixed Interest
Maturing in
1 year or less
$
-
-
-
nil
-
-
-
-
-
-
-
-
-
-
-
Floating
Interest Rate
$
Fixed Interest
Maturing in
1 year or less
$
-
-
-
nil
-
-
-
-
-
-
-
-
-
74,615
74,615
Non Interest
Bearing
$
5,084,472
37,108
5,121,580
2021
Total
$
5,084,472
37,108
5,121,580
769,920
-
-
769,920
769,920
-
-
769,920
Non Interest
Bearing
$
2,056
69,649
71,705
165,679
43,476
-
209,155
2020
Total
$
2,056
69,649
71,705
165,679
43,476
74,615
283,770
43
Torque Metals Limited 30 June 2021
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
2021
2020
Carrying
Value
$
Net Fair
Value
$
Carrying
Value
$
Net Fair
Value
$
5,084,472
37,108
5,121,580
5,084,472
37,108
5,121,580
769,920
-
-
769,920
769,920
-
-
769,920
2,056
69,649
71,705
165,679
43,476
74,615
283,770
2,056
69,649
71,705
165,679
43,476
74,615
283,770
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
19. 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
44
Torque Metals Limited 30 June 2021
30 June
2021
$
50,845
(50,845)
50,845
(50,845)
30 June
2020
$
21
(21)
21
(21)
(1,820,025)
(1,820,025)
(221,734)
(221,734)
2,360,509
43,985,566
20. 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
2021
$
30 June
2020
$
1,010,534
3,280,468
4,138,600
8,429,602
288,000
642,378
-
930,378
The Company currently has commitments in excess of cash, however the Board believes will be able to raise
the additional funds to satisfy the commitments for the future
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.
Tenement Capital Commitments
Not longer than one year
30 June
2021
$
-
30 June
2020
$
50,000
21. Operating Segments
The Company operates in Western Australia, Australia
22. Contingencies
The directors are not aware of any contingent liabilities or assets as at 30 June 2021.
23. Events after the reporting period
Paris Tailings
9 August 2021 – A 6 month option to acquire 100% of the Paris Tailings situated on ML15/497, $50,000 option
payable upon signing and a further $10,000 for a one month extension and an additional extension of 1 month
for the payment of $1. The Company is to complete a review and scoping study at which time The Option can
be exercised at any time by the payment of $300,000 cash, $200,000 in share of the Company and $500,000 in
bullion from production
Ordinary Shares Released from Escrow
Date
27 July 2021
7 September 2021
Security
Ordinary Fully Paid
Ordinary Fully Paid
Number
2,237,093
8,250
45
Torque Metals Limited 30 June 2021
Additional Shareholders Information
Information required by Australian Stock Exchange Limited and not shown elsewhere in this Annual Report is
as follows. The information is provided as at 24 September 2021.
DETAILS OF HOLDERS OF EQUITY SECURITIES
ORDINARY SHAREHOLDERS
There are 62,818,519 fully paid ordinary shares on issue, held by 369 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 24 SEPTEMBER 2021
Rank Name
TWO TOPS PTY LTD
BEARAY PTY LTD
BLUE COASTERS PTY LTD
FAIRBROTHER HOLDINGS PTY LTD
OCEANIC CAPITAL PTY LTD
LADYMAN SUPER PTY LTD
OCEAN REEF HOLDINGS PTY LTD
AUSTRAL PACIFIC PTY LTD
1
2
TURF MOOR PTY LTD
3 MR TSHUNG HUI CHANG
4 MR PHILLIP RICHARD PERRY
5
6
7 MR SEAGER REX HARBOUR
8
9
10
11
12
13 MANDOLIN NOMINEES PTY LTD
14
15
16 MR WILLIAM EWAN SANDOVER
17 MR NEIL FRANCIS STUART
18
19
20
PATINA RESOURCES PTY LTD
TRIBAL MINING PTY LTD
JINDABYNE CAPITAL PTY LTD
CERTANE CT PTY LTD
KHE SANH PTY LTD
Totals: Top 20 holders of TOR ORDINARY FULLY PAID
Total Remaining Holders Balance
Total Holders Balance
Stock Exchange Information as at 24 September 2021
Units
5,820,000
5,000,000
3,352,500
2,300,000
1,750,000
1,492,537
1,166,801
930,000
900,000
797,323
773,134
750,000
750,000
715,500
650,000
625,000
624,999
623,134
620,149
562,500
30,203,577
32,614,942
62,818,519
% of Units
9.26%
7.96%
5.34%
3.66%
2.79%
2.38%
1.86%
1.48%
1.43%
1.27%
1.23%
1.19%
1.19%
1.14%
1.03%
0.99%
0.99%
0.99%
0.99%
0.90%
48.08%
51.92%
100%
DISTRIBUTION OF
SHAREHOLDERS
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
TOTAL
NUMBER OF
HOLDERS
NUMBER OF
UNITS
8
23
34
175
129
369
2,103
76,988
321,077
9,736,278
52,682,073
62,818,519
% OF TOTAL
ISSUED CAPITAL
0.00%
0.12%
0.51%
15.50%
83.86%
100%
As at report date, the following shareholders are recorded as Substantial Shareholders
Austral Pacific Pty. Ltd.
Turf Moor Pty. Ltd.
Mr. Tshung Hui Chang
5,820,000 9.26%
5,000,000 7.96%
3,352,500 5.34%
46
Torque Metals Limited 30 June 2021
each shareholder entitled to vote, may vote in person or by proxy, attorney or representative;
on a show of hands, every person present who is a shareholder or a proxy, attorney or representative
VOTING RIGHTS
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)
(b)
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 8 shareholders who hold less than a marketable parcel of shares.
UNLISTED OPTIONS
Date
28 July 2020
Number
1,000,000
23 Dec 2020
2 June 2021
2 June 2021
Total
2,250,000
3,875,000
5,500,000
12,6250,000
Entity
Martin Place Securities Pty.
Ltd.
Seed Capital
Zenix Nominees Pty. Ltd.
Zenix Nominees Pty. Ltd.
Terms
30 cents 3years to 27 July 2023
25 cents 3 years to 22 Dec 2023
27.5 cents 3 years to 1 June 2024
30 cents 3 years to 1 June 2024
SHARE BUY-BACKS
There is no current on-market buy-back scheme.
OTHER INFORMATION
Torque Metals Limited is incorporated and domiciled in Australia and is a Public Listed Company limited by
Shares.
47
Torque Metals Limited 30 June 2021
Tenements
INTEREST IN MINING TENEMENTS as at 24 September 2021
Tenement
Registered Holder 2
Tenement Name
Beneficial Interest
M 15/1175
Torque Metals Limited
Paris Gold Project
M 15/479
M 15/480
M 15/481
M 15/482
M 15/496
M 15/497
M 15/498
Torque Metals Limited
Paris Gold Project
Torque Metals Limited
Paris Gold Project
Torque Metals Limited
Paris Gold Project
Torque Metals Limited
Paris Gold Project
Torque Metals Limited
Paris Gold Project
Torque Metals Limited
Paris Gold Project
Torque Metals Limited
Paris Gold Project
M 15/1719
Torque Metals Limited
Paris Gold Project
P 15/5992
Torque Metals Limited
Paris Gold Project
P 15/6149
Torque Metals Limited
Paris Gold Project
E15/1736
EL15/1747
EL15/1752
E77/2522
E77/2222
E77/2251
E77/2350
E77/2607
Jindalee Resources Ltd 1
Paris Gold Project
Jindalee Resources Ltd 1
Paris Gold Project
Jindalee Resources Ltd 1
Paris Gold Project
Torque Metals Limited
Torque Metals Limited
Torque Metals Limited
Torque Metals Limited
Torque Metals Limited
Bullfinch
Bullfinch
Bullfinch
Bullfinch
Bullfinch
Note 1
Jindalee Resources Limited
1st year Farm-In earning interest
Note 2
Torque Metals Limited is the Manager of all Tenements
P
E
M
Prospecting Licence
Exploration Licence
Mineral Licence
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%
0%
0%
100%
100%
100%
100%
100%
48
Torque Metals Limited 30 June 2021