ANNUAL
REPORT
FOR THE YEAR ENDED
31 MARCH 2022
ABN 18 124 462 82 6
CONTENTS
CORPORATE DIRECTORY .................................................................................................................. 2
REVIEW OF OPERATIONS ................................................................................................................. 3
DIRECTORS’ REPORT ...................................................................................................................... 13
AUDITORS’ INDEPENDENCE DECLARATION ................................................................................... 20
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ........ 21
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................. 23
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................. 24
CONSOLIDATED STATEMENT OF CASH FLOWS .............................................................................. 26
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................................................ 27
DIRECTORS’ DECLARATION ............................................................................................................ 56
INDEPENDENT AUDITOR’S REPORT ............................................................................................... 57
ADDITIONAL SECURITIES EXCHANGE INFORMATION ................................................................... 60
CORPORATE DIRECTORY
DIRECTORS/MANAGEMENT
Tony Leibowitz
John Young
Neil Biddle
Derek Marshall Chief Executive Officer
Non-Executive Chairman
Executive Director
Non-Executive Director
SHARE REGISTRY
Computershare Investor Services Pty Ltd
GPO Box D182
Perth WA 6841
AUSTRALIA
Tel: +61 8 9323 2000
COMPANY SECRETARY
Bermuda
Apex Corporate Services Ltd.
Vallis Building, 4th Floor
58 Par-la-Ville Road
Hamilton HM 11
Bermuda
AUDITORS
Hall Chadwick WA Audit Pty Ltd
283 Rokeby Road
Subiaco
WA 6008
Australia
(Local Agent and Company Secretary)
Russell Hardwick
WEBSITE
www.trekmetals.com.au
REGISTERED OFFICE OF INCORPORATION
Trinity Hall
43 Cedar Avenue
Hamilton HM 12
BERMUDA
REGISTERED OFFICE – AUSTRALIA
130 Stirling Highway
North Fremantle WA 6159
AUSTRALIA
Tel: +61 8 6215 0371
POSTAL ADDRESS
Locked Bag 4
North Fremantle WA 6159
AUSTRALIA
TREK METALS LIMITED | ANNUAL REPORT 2022
2
REVIEW OF OPERATIONS
The year to 31 March 2022 has delivered positive progress for Trek Metals Limited (“Trek” or “the
Company”) across its asset portfolio in the Pilbara region of Western Australia, with the completion
of a successful drilling program at the Pincunah Project and reconnaissance and fieldwork programs
at the Tambourah and Jimblebar Projects. In addition, the Company secured a new farm-in
agreement with Buxton Resources providing an exciting high-impact IOCG exploration opportunity
in the Great Sandy Desert.
PINCUNAH PROJECT
Trek completed its maiden Reverse Circulation drilling program at the 100%- owned Pincunah Project
(E45/4909), 100km south of Port Hedland, in July 2021, delivering highly encouraging results and
highlighting the potential for a large-scale VMS base metal system at Valley of the Gossans (VOG)
prospect.
VALLEY OF THE GOSSANS DRILLING PROGRAM
Laboratory assay results from drilling at VOG confirmed the drilling intersected multiple horizons of
classic VMS-style mineralisation and alteration, with highly anomalous zinc, copper and silver, plus
multiple pathfinder elements indicating a very fertile volcanic environment.
Highlights from the assay results included:
• 88m @ 17.0g/t Ag from 0m VRC001
Inc. 4m @ 223g/t Ag from 20m
• 25m @ 6.70g/t Ag from 112m VRC006
Inc. 3m @ 0.75% Cu from 121m
• 20m @ 4.17g/t Ag & 1.48% Zn from 171m VRC006
Inc. 1m @ 5.99% Zn from 171m &
6m @ 3.76% Zn from 184m
• 7m @ 0.99% Zn from 149m VRC008
• 70m @ 7.39g/t Ag from 0m VRC009
Inc. 2m @ 0.40% Cu & 0.2g/t Au from 46m
A three-hole follow-up program was undertaken to further test the base metal mineralised
stratigraphy, as well as an Induced Polarisation chargeability anomaly.
Drill-hole VRC023, which was completed to test the IP chargeability anomaly, returned:
• 34m @ 99.8g/t Ag from 66m down-hole, including 10m @ 317g/t Ag from 73m
Given the extent of the surface geochemical anomaly and the encouraging results received from
drilling to date, the VOG prospect is a high priority for Trek. The Company is planning to undertake
deeper diamond drilling during 2022 given the excellent correlation seen between the modelled
chargeability anomalism and the observed mineralisation (Figure 2). Significantly, the chargeability
anomaly is modelled to extend and broaden at depth, providing a high-priority deep drill target
(Figure 2).
TREK METALS LIMITED | ANNUAL REPORT 2022
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Figure 1: Valley of the Gossans drill collar locations with selected Significant Intercepts, highlighting the recent high grade
silver intercept in VRC023, which was drilled to test the modelled IP chargeability anomaly.
Figure 2: Drill-hole VRC023, drilled to test a chargeability anomaly, returned outstanding silver grades and thicknesses.
Significantly the chargeable response continues at depth, providing a clear drill target
TREK METALS LIMITED | ANNUAL REPORT 2022
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PINCUNAH HELICOPTER EM SURVEY
Trek completed a highly successful maiden helicopter-borne electromagnetic (EM) survey over the
Pincunah Project during the December Quarter, identifying multiple high-priority base metal targets.
The data and results interpreted from the high-resolution XciteTM EM and magnetic survey have
further reinforced the prospectivity of the Pincunah Project for significant new discoveries,
particularly in light of encouraging drill results from the emerging Valley of the Gossans VMS system.
The survey defined 10 high priority zones with anomalous conductive responses that represent
compelling volcanogenic massive sulphide (VMS) copper-zinc-lead (Cu-Zn-Pb), magmatic nickel-
copper (Ni-Cu) and intrusive-related copper-gold (Cu-Au) targets.
The highest priority targets are:
• Anomaly A, which is interpreted to sit within the same stratigraphic horizon along strike
from the VMS base metal system at Valley of the Gossans.
• Anomaly B, which occurs as a cohesive multi-line conductive zone over 600m strike length
sitting at the base of the mapped volcanic Coucal Formation.
• Anomaly F, which has a consecutive response over 1.2km of strike within Euro Basalt. This
anomaly is possibly stratigraphic, however the strong double peak anomalism increasing in
amplitude towards the centre of anomaly makes this a high priority target.
Figure 3: Helicopter electromagnetic conductive anomalies representing base metal VMS & Ni-Cu targets at Trek’s 100%-
owned Pincunah Project. Late time conductors in red diamonds and mid-time in blue diamonds.
NEW TARGET IDENTIFIED AT VOG
In late 2021, the Company extended the surface geochemical coverage at VOG, as an extensive >2km
long multi-element geochemical anomaly defined by Trek earlier in the year had not been closed off
(refer ASX: TKM 16th February 2021).
Assay results from this Phase 2 soils program defined numerous additional target areas with
anomalous base metal values.
The new surface geochemistry results significantly upgrade the prospectivity of airborne EM
conductive target “Anomaly A” as a compelling VMS target along strike from VOG discovery.
TREK METALS LIMITED | ANNUAL REPORT 2022
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Figure 4: Conductive target zone “A” has been significantly upgraded with co-incident anomalous base metal
geochemistry, including significant Zinc (top) Copper (bottom) defined during Phase 2 soil sampling along strike from
Valley of the Gossans. Additional new Zinc-Copper targets have also been identified.
2022 FIELDWORK PROGRAM
Field activities commenced subsequent to the end of the reporting period, with an orientation soil
survey being undertaken over the known mineralisation at VOG and over Conductor A. This is being
conducted to assess the best sampling methodology and confirm the applicability of in-field
geochemical analyses. The team will then undertake systematic surface geochemistry over all high-
priority electromagnetic conductors defined during last year’s maiden helicopter-borne EM survey.
The data generated will allow for target ranking prior to drill testing.
TREK METALS LIMITED | ANNUAL REPORT 2022
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TAMBOURAH PROJECT
The Tambourah Project (E45/5484 & E45/5839) is considered highly prospective for gold & Lithium
Caesium Tantalum (LCT) pegmatite deposits. The Project hosts the Western Shaw Greenstone Belt,
which occurs on the eastern limb of an anticline folded around the Tambourah Dome. The
greenstone rocks comprise Archean-aged metavolcanic, metasedimentary, and various granitoids
that occur as large plutons and smaller intrusives.
Reconnaissance fieldwork was conducted at the Tambourah Project during the reporting period,
designed to follow-up previously identified prospective areas on Trek’s 100%-owned E45/5484
tenement. Trek collected 12 rock chip samples from tenement E45/5484. These samples on
E45/5484 returned an exceptional high-grade result of 178g/t Au from sample TM1368, supported
by other high-grade results from nearby samples including 13.042g/t Au from sample TM1366 and
5.79g/t Au from TM1371.
In addition, the Company collected a total of 216 rock samples from a number of outcropping highly
gossanous quartz veins from the Western Shaw tenement, E45/4960. These rock chip samples were
designed to provide a due diligence assessment to support the proposed acquisition of tenement
E45/4960. Following analysis of the assay results, the Company decided not to exercise its option
over E45/4960 and will focus its attention on its existing tenements.
Al follow-up program of rock chip sampling is planned at Tambourah to further assess key targets.
JIMBLEBAR PROJECT
An historical data review and re-modelling of raw data during the reporting period identified several
highly conductive off-hole targets at the 100%-owned Jimblebar Project in the Pilbara region of WA,
highlighting the potential for massive sulphide nickel-copper mineralisation.
Hampton Hill Mining NL intersected semi-massive nickel sulphide with 2 metres returning 1.36%
nickel & 0.62% Cu from 54m in drill-hole CP007 at the Millipede East Prospect (WAMEX A089942).
These results are indicative of a fertile magmatic sulphide system at Millipede East.
The defined mineralisation correlates with modelled EM plates. The defined plates plunge in a south-
easterly direction and there is potential for additional mineralisation at depth. Previous drilling at
Millipede West did not intersect the modelled downhole EM conductive plates and represents a
compelling nickel-copper sulphide target (Figures 5 & 6).
TREK METALS LIMITED | ANNUAL REPORT 2022
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Figure 5: Off-hole conductors related to nickel-copper massive sulphide mineralisation at Millipede are high priority drill
ready targets. Background imagery magnetic TMI-RTP, highlighting geological trends, with Millipede West along strike
from Millipede East. Planned holes have white collars & JBRPLAN pre-fix.
Figure 6: Untested off-hole conductors at Millipede West are likely related to massive nickel-copper sulphide
mineralisation and are high priority drill ready targets. Planned holes have dashed traces and JBRPLAN pre-fix
TREK METALS LIMITED | ANNUAL REPORT 2022
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CORPORATE
APPOINTMENT OF CHIEF EXECUTIVE OFFICER
Trek appointed highly experienced geologist and Australian mining executive Mr Derek Marshall as
Chief Executive Officer, effective from the 1 September 2021.
Mr Marshall, who graduated with a Bachelor of Science (Geology) from the University of Western
Australia (UWA) with first-class honours, has worked with both major mining companies and a
number of ASX-listed explorers over the past 19 years. He has significant experience in managerial
and technical roles with explorers in remote locations, ranging from greenfields exploration to
Bankable Feasibility Level studies.
He was most recently in a senior role with Newcrest (ASX: NCM) as part of the exploration team for
the Havieron Gold-Copper Project, located 45km east of Telfer in Western Australia. In this role, he
was responsible for leading the project-based exploration team and provided technical oversight for
exploration programs. Since he joined Newcrest, the project has expanded from four rigs to nine drill
rigs, delivered an initial Inferred Resource of 52Mt @ 2.0g/t Au and 0.31% Cu for 3.4Moz Au and
160Kt Cu and commenced an exploration decline.
As the Exploration Manager at Buxton Resources Limited (ASX: BUX), Mr Marshall worked with the
Managing Director to formulate a belt-scale nickel-copper sulphide exploration opportunity. This
strategy resulted in the discovery of high-tenor, high-grade, and mineable widths of Ni-Cu-Co
sulphide mineralisation. Earlier in his career, Mr Marshall was also involved with a 4-year, $42 million
drill-out and Bankable Feasibility Study of a major offshore lead-zinc project in Greenland.
FARM-IN AGREEMENT WITH BUXTON RESOURCES
Trek has also secured a new high-quality exploration opportunity during the reporting period after
entering into a Farm-in and Joint Venture Agreement with Buxton Resources (ASX: BUX) (“Buxton”)
over Buxton’s Centurion IOCG Project, located 400km south of Halls Creek in the Great Sandy Desert
region of Western Australia.
The Centurion Project encompasses a high-quality Iron Oxide Copper Gold (IOCG) exploration target
which represents a unique, walk-up drilling opportunity in a frontier mineral province. The target
consists of a coincident large-scale magnetic anomaly extending over an area of 3.5km by 5km with
a coincident gravity high in a slightly offset position. This is a characteristic geophysical signature of
Tier-1 IOCG deposits such as Olympic Dam and Prominent Hill in South Australia.
CRA completed a single historical drill-hole (VE001) at the target which failed to penetrate the
Canning Basin cover but did intersect clasts of altered intrusives and geochemical anomalism
consistent with local derivation from an IOCG setting. Trek intends to fast-track its assessment of the
IOCG opportunity by drilling a single deep parent diamond drill-hole, together with a proposed W1
daughter hole (Figure 8). Drilling will commence as soon as practicable, subject to drill rig availability,
permitting and access.
Trek’s exploration team believes the Centurion target represents an exceptional exploration
opportunity to evaluate a standout geophysical target with all the hallmarks of a large-scale, Tier-1
IOCG system. The lack of effective historical drilling in the area adds to the strong investment case
for this Farm-in and Joint Venture Agreement. To complement this opportunity Trek has applied for
additional tenure surrounding and in close proximity to the Centurion target.
TREK METALS LIMITED | ANNUAL REPORT 2022
9
Preparations and design are well advanced for a deep diamond hole to evaluate the central portion
of the target, providing a platform for follow-up down-hole geophysics and any daughter/wedge
holes which will be appropriately targeted depending on the results of the parent hole.
Under the Farm-in and Joint Venture terms (“JV”), Trek will be required to drill test the Centurion
IOCG target within 21 months of signing of the JV and shall sole fund $500,000 of expenditure
including satisfying a minimum of at least 300 metres of diamond core drilling (Stage 1). On
completion of Stage 1, Trek may elect to withdraw from the JV or will have earned a 51% interest in
the tenement.
If results from the Stage 1 first drill hole are positive/encouraging, Trek will have the right to elect to
proceed to Stage 2 whereby spending a further $3 million of expenditure on the tenement within 3
years Trek may earn a further 24% interest in the tenement, taking it to a potential 75% overall
tenement interest. Buxton will be free-carried at 25% project equity level until a Decision to Mine
milestone is reached where both parties may elect to form a co-contributing Joint venture.
Figure 7: Centurion Project, summary of open file geophysics. The magnetic image is overlain by airborne gravity
contours and seismic lines, along with historical CRA drill-hole CRA VE001 (abandoned in the cover sequence above the
IOCG target) and the planned VE002 diamond drill-hole.
TREK METALS LIMITED | ANNUAL REPORT 2022
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Figure 8: Cross-section looking north-west through inversion iso-shells, with CRA’s hole VE001 and the provisionally
planned VE002 (1km vertical and a 650m wedge hole).
SALE OF 20% INTEREST IN KROUSSOU ZINC-LEAD PROJECT
Trek has reached agreement with Apollo Minerals Limited (Apollo Minerals, ASX: AON) for Apollo to
acquire the remaining 20% interest in the Kroussou zinc-lead project (Kroussou Project or Project),
located in western Gabon in central Africa. This agreement follows the Earn-in Agreement (EIA)
signed with Apollo Minerals in 2019 (refer ASX Release, 4 September 2019) for Apollo to earn an
interest of up to 80% in the Kroussou Project.
The consideration payable to Trek, which is subject to approval by Apollo shareholders at a general
meeting which is expected to be held during June 2022, will be:
(i)
(ii)
3,000,000 AON fully-paid ordinary shares; and
1,000,000 share options exercisable into ordinary shares at 12c per share expiring 30
June 2024
In addition, the parties have reached agreement with Battery Minerals Limited (ASX: BAT) to release
and terminate any remaining royalty and payment obligations pursuant to the Deed of Termination
and settlement entered into in September 2019, with Apollo to make a payment to Battery Minerals
of $250,000 in cash.
TREK METALS LIMITED | ANNUAL REPORT 2022
11
CAPITAL RAISING
Trek completed a $5.55 million capital raising during the December Quarter to fast-track the next
phase of exploration across its highly prospective Pilbara portfolio, including the emerging VMS
discovery at the Valley of the Gossans prospect. The capital raising comprised a share placement of
30.43 million shares at an issue price of $0.115 per share to existing and new professional,
sophisticated and other institutional investors to raise a total of $3.5 million (Placement).
In addition, the Company also undertook a Share Purchase Plan (SPP or Plan) to eligible shareholders
on the same terms as the placement which raised an additional $2.049 million, increasing the total
raising to ~$5.55 million. Trek’s Directors took up their full entitlement in the SPP.
FINANCIAL REVIEW
The Group incurred a loss for the year of AU$2,185,622 (2021 Loss: AU$274,164). Significant
expenditure items during the period include:
Exploration and evaluation expenditure impaired of AU$653,581 (2021: Nil);
Directors and Consulting Fees of AU$179,768 (2021: AU$152,661); and
Share based payment of AU$736,830 (2021: AU$52,299).
The group began the year with AU$4,715,309 in cash and ended the year with AU$6,366,832 in cash.
Subject to the disclosures elsewhere in this report, the Directors believe the Group is in a stable
financial position to continue to explore its projects and to identify new opportunities within the
resources sector.
Lastly, I would like to thank all our staff, consultants and stakeholders for their ongoing efforts on
behalf of the Company and look forward to progressing our projects to create value for shareholders.
John Young
Executive Director
1 June 2022
COMPETENT PERSONS STATEMENT
The information in this report relating to Exploration Results is based on information compiled by the
Company’s Chief Executive Officer, Mr Derek Marshall, a Competent Person, and Member of the
Australian Institute of Geoscientists (AIG). Mr Marshall has sufficient experience relevant to the style
of mineralisation and to the type of activity described to qualify as a competent person as defined in
the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves.” Mr Marshall has disclosed that he holds Performance Rights in the Company. Mr
Marshall consents to the inclusion in this announcement of the matters based on his information in
the form and content in which it appears.
TREK METALS LIMITED | ANNUAL REPORT 2022
12
DIRECTORS’ REPORT
The Directors present their report and the audited financial statements of Trek Metals Limited
(“TKM”, “Trek” or the “Company”) and its controlled entities (“Group”) for the year ended 31 March
2022.
PRINCIPAL ACTIVITIES
The principal activities of the Company and its subsidiaries (“the Group”) is to progress the
exploration of its mineral properties and to identify suitable acquisitions in the mineral resources
sector.
RESULTS AND DIVIDEND
The loss for the Group for the year ended 31 March 2022 was AU$2,185,622 (31 March 2021:
AU$274,164). The Directors do not recommend the payment of a dividend.
DIRECTORS
The following persons held office as directors during the financial year and to the date of this report.
Directors were in office for the entire period and to the date of this report unless otherwise stated:
Name, qualifications
and independence
status
Tony Leibowitz
Non-Executive
Chairman
Appointed
4 September
2020
Experience, special responsibilities and other Directorships in listed entities
Experience
Mr Leibowitz has over 30 years of corporate finance, investment banking and
broad commercial experience and has a proven track record of providing the
necessary skills and guidance to assist companies grow and generate sustained
shareholder value. Previous roles include Chandler Macleod Limited and
Pilbara Minerals Limited, where as Chairman and an early investor in both
companies, he was responsible for substantial increases in shareholder value
and returns. Mr Leibowitz was a global partner at PricewaterhouseCoopers and
is a Fellow of the Institute of Chartered Accountants in Australia.
Special responsibilities
None
Directorships held in other listed entities during the three years prior
to the current year
Ensurance Limited
Bardoc Gold Limited (resigned 13 April 2022)
Greenvale Mining Limited
TREK METALS LIMITED | ANNUAL REPORT 2022
13
Neil Biddle
Non-Executive
Director
Appointed
4 September
2020
Experience
Mr Biddle is a geologist and Corporate Member of the Australasian Institute of
Mining and Metallurgy and has over 30 years’ professional and management
experience in the exploration and mining industry. Mr Biddle was a founding
Director of Pilbara Minerals Limited, serving as Executive Director from May
2013 to August 2016, serving as a Non-Executive Director from August 2016 to
26 July 2017. Throughout his career, Mr Biddle has served on the Board of
several ASX listed companies, including Managing Director of TNG Ltd from
1998 - 2007, Border Gold NL from 1994 - 1998 and Consolidated Victorian
Mines from 1991 – 1994.
Special responsibilities
None
Directorships held in other listed entities during the three years prior to the
current year
Bardoc Gold Limited (resigned 13 April 2022)
Greenvale Mining Limited
John Young
Experience
Executive
Director
Appointed
2 September
2019
Mr Young has a Bachelor of Applied Science (Geology) and is a member of
AusIMM. Mr Young is a highly experienced geologist who has worked on
exploration and production projects encompassing gold, uranium and specialty
metals, including tungsten, molybdenum, tantalum and lithium.
Mr Young’s corporate experience includes appointments as Chief Executive
Officer of Marenica Energy Limited and CEO and Director of Thor Mining PLC.
Mr Young was Pilbara Minerals Exploration Manager from June 2014 until
August 2015, appointed Technical Director in September 2015 and transitioned
to Non-Executive Director in July 2017 until his resignation in April 2018. Mr
was also the Managing Director of Bardoc Gold Limited from May 2017 to April
2019 and then a Non-Executive Director until his resignation in April 2022. Mr
Young is also a Non-Executive Director of AIM listed Mosman Oil and Gas and
Chairman of ASX Listed Rarex Limited and Green Technology Metals Limited,
Special responsibilities
None
Directorships held in other listed entities during the three years prior
to the current year
Green Technology Metals
Mosman Oil & Gas Limited
Rarex Limited
Bardoc Gold Limited (resigned 13 April 2022)
TREK METALS LIMITED | ANNUAL REPORT 2022
14
COMPANY SECRETARY(S)
Australia - Russell Hardwick – Local Agent and Joint Company Secretary
Bermuda – c/o Apex Corporate Services Limited
CORPORATE GOVERNANCE
The directors of the Group support and adhere to the principles of corporate governance, recognising
the need for the highest standard of corporate behaviour and accountability. The company has
adopted a revised Corporate Governance plan taking into account the 4th edition of the Corporate
Governance Principles and Recommendations. Please refer to the Corporate Governance Statement
on the Company’s website https://trekmetals.com.au/corporate/corporate-governance.
BOARD MEETINGS
The Directors held three (3) “in-person” meetings during the year in addition to nine (9) board
matters were dealt with by Circular resolution signed by all Directors.
The following table shows their attendance at physical Board meetings which were restricted due to
the impacts of Covid 19 with the majority of matters dealt with by Circular Resolution:
Name
Tony Leibowitz
Neil Biddle
John Young
BOARD COMMITTEES
No. of meetings attended
3
0
3
Eligible to attend
3
3
3
The Company does not have an Audit, Remuneration or Nomination Committee. Given its size and
composition, the Board considers that at this stage, no efficiencies or other benefits would be gained
by establishing separate board committees. To assist the Board to fulfil its function it has adopted
charters for each of these committees. In accordance with the Company’s Board Charter, the Board
carries out the duties that would ordinarily be carried out by the Audit, Remuneration and
Nomination Committees under the charters in place for each of these.
KEY MANAGEMENT SHARES, RIGHTS AND OPTION HOLDINGS
NUMBER OF SHARES HELD BY KEY MANAGEMENT
The number of ordinary shares in Trek Metals Limited held by each Key Management Personnel of
the Group during the financial year is as follows:
31 March 2022
Tony Leibowitz
Neil Biddle
John Young
Derek Marshall
Balance 1 April
2021
Exercise of Options/
Rights received as
compensation
Net Change
Other
Balance
31 March 2022
11,195,215
10,052,857
6,030,000
-
-
-
-
-
2,771,738
260,869
521,738
93,476
13,966,953
10,313,726
6,551,738
93,476
TREK METALS LIMITED | ANNUAL REPORT 2022
15
31 March 2021
Balance 1 April
2020
Exercise of Options/
Rights received as
compensation
Net Change
Other
Balance
31 March 2021
Tony Leibowitz
Neil Biddle
John Young
Greg Bittar*
Michael Bowen*
11,195,215
10,052,857
6,030,000
4,801,785
6,189,285
*Both Mr Bittar and Mr Bowen resigned on 4 September 2020, the amounts noted in the table above represent holdings at date of
resignation.
2,827,075
10,052,857
3,500,000
4,087,500
5,475,000
8,368,140
-
2,530,000
714,285
714,285
-
-
-
-
-
NUMBER OF PERFORMANCE RIGHTS HELD BY KEY MANAGEMENT PERFORMANCE RIGHTS HELD
BY KE MANAGEMENT PERSONNEL
The number of performance rights held by each Key Management Personnel of the Group during the
financial year is as follows:
31 March 2022
Balance 1
April 2021
Granted as
Compensation
Vested during
the year
Tony Leibowitz
Neil Biddle
John Young
Derek Marshall
3,000,000
3,000,000
6,000,000
-
-
-
-
6,000,000
-
-
-
-
31 March 2021
Tony Leibowitz
Neil Biddle
John Young
Greg Bittar*
Michael Bowen*
Balance 1
April 2020
Granted as
Compensation
Vested during
the year
Exercised
during the
year
-
-
-
-
-
3,000,000
3,000,000
6,000,000
-
-
-
-
-
-
-
Exercised
during the
year
Balance
31 March 2022
Vested and
Exercisable
-
-
-
-
-
-
-
-
-
3,000,000
3,000,000
6,000,000
6,000,000
-
-
-
-
Balance
31 March 2021
Vested and
Exercisable
3,000,000
3,000,000
6,000,000
-
-
-
-
-
-
-
*Both Mr Bittar and Mr Bowen resigned on 4 September 2020, the amounts noted in the table above represent holdings at date of
resignation.
NUMBER OF OPTIONS HELD BY KEY MANAGEMENT PERSONNEL
The number of options over ordinary shares held by each Key Management Personnel of the Group
during the financial year is as follows:
31 March 2022
Tony Leibowitz
Neil Biddle
John Young
Derek Marshall
31 March 2021
Tony Leibowitz
Neil Biddle
John Young
Greg Bittar*
Michael Bowen*
Balance 1 April
2021
Other changes
during the year
Total Exercisable
31 March 2022
Balance
31 March 2022
1,500,000
500,000
1,875,000
-
-
-
-
-
1,500,000
500,000
1,875,000
-
1,500,000
500,000
1,875,000
-
Balance 1 April
2020
Other changes
during the year
Total Exercisable
31 March 2021
Balance
31 March 2021
-
-
1,875,000
3,625,000
3,500,000
1,500,000
500,000
-
-
-
1,500,000
500,000
1,875,000
3,625,000
3,500,000
1,500,000
500,000
1,875,000
3,625,000
3,500,000
*Both Mr Bittar and Mr Bowen resigned on 4 September 2020, the amounts noted in the table above represent holdings at date of
resignation.
TREK METALS LIMITED | ANNUAL REPORT 2022
16
DIRECTORS’ AND SENIOR MANAGEMENT REMUNERATION
The Board of Directors is responsible for determining and reviewing compensation arrangements for
the directors and senior management. The Board assesses the appropriateness of the nature and
amount of remuneration of non-executive directors and executives on a periodic basis by reference
to relevant employment market conditions. The Company recognises that it operates in a
competitive environment and to operate effectively it must be able to attract, motivate and retain
key personnel. The compensation structures are designed to attract suitably qualified candidates,
reward the achievement of strategic objectives, and achieve the broader outcome of creation of
value for shareholders. The compensation structures take into account:
▪ The capability and experience of the key management personnel;
▪ Size of the Group;
▪ The key management personnel’s ability to control the performance; and
▪ The Group’s exploration success and identification of new investments.
Salaries and fees paid to Directors and Senior Executives have been determined in relation to salaries
paid to comparable companies, management responsibility and experience. The salaries and fees are
reviewed regularly to ensure that Directors and Executrices are appropriately rewarded for their
efforts in enhancing shareholder value. Where required, the Board obtains independent advice as
required on the appropriateness of compensation packages of the Company given trends of
comparative companies and the objectives of the Company’s compensation strategy.
The Board policy is to remunerate Non-Executive Directors at market rates for time, commitment
and responsibilities. Directors may also provide consultancy services to the Company and are
remunerated at market rates.
On 4th March 2021, shareholders approved a new Incentive Performance Rights and Option Plan
(“Plan”) and the participation by Directors in that plan. Key management personnel and staff are also
entitled to participate in the plan. Any rights or options issued are valued using standard valuation
techniques such as Black-Scholes methodology or Binomial.
The objectives of the Plan is to reward Directors, senior management and staff in a manner that
aligns remuneration with the creation of shareholder wealth. The amounts disclosed as part of
remuneration for the financial year have been determined by allocating the grant date fair value
based on the probability of the vesting conditions being achieved over the life of the rights or options.
The remuneration policy has been tailored to increase goal congruence between Shareholders,
Directors and Executives. As part of each of the key management personnel’s remuneration package,
there is a performance-based component consisting of the issue of Performance rights or options to
encourage the alignment of management and Shareholders’ interests. The Board determines
appropriate vesting conditions that includes specific milestones and/or a premium over the
prevailing share price to provide potential rewards over a period of time and to align interests with
those of shareholders.
A summary of the operating losses and share prices at year end for the last four years are as follows:
Post
consolidation
(8:1)
2019
($1,217,440)
$0.04
(2.58c)
Net Profit/(Loss)
Share price at year end
Earnings per share
2020
($3,539,630)
2021
($274,164)
2022
($2,185,622)
$0.014
(2.51c)
$0.063
(0.128c)
$0.074
(0.778c)
TREK METALS LIMITED | ANNUAL REPORT 2022
17
Remuneration earned and the value ascribed to share based payments which were expensed during
the year ended 31 March 2022 in relation to Directors and Key Management Personnel is
summarised as follows:
Fixed Remuneration
Variable
Remuneration
Options/Rights
Granted
AU$
Total
Remuneration
AU$
Value of Rights
/ Options as a
%
Remuneration
Super
AU$
Total
AU$
2022
Non-Executive
Tony Leibowitz
Neil Biddle
Executive
John Young
Derek Marshall(1)
Directors/
Consulting
Fees
AU$
90,493
54,795
180,000
151,667
476,955
(1) Mr Marshall was appointed on 1 September 2021.
6,764
5,411
-
15,167
27,342
-
-
-
-
-
96,856
96,856
193,712
175,034
562,458
194,113
157,062
373,712
341,868
1,066,755
49.9%
61.7%
51.8%
51.2%
Fixed Remuneration
Options/Rights
Granted
AU$
Super
AU$
Total
AU$
Variable
Remuneration
Options/Rights
Granted
AU$
Total
Remuneration
AU$
Value of Rights
/ Options as a
%
Remuneration
39,126
31,300
68,750
55,500
3,717
2,974
-
-
-
-
-
-
61,149
25,149
-
-
14,298
100,596
103,992
59,423
68,750
55,500
167,798
455,463
58.8%
42.3%
-
-
8.5%
2021
Non-Executive
Tony Leibowitz(1)
Neil Biddle(1)
Gregory Bittar(2)
Michael Bowen(2)
Executive
John Young
153,500
348,176
(1) Mr Leibowitz and Mr Biddle were both appointed on 4 September 2020.
(2) Mr Bittar and Mr Bowen both resigned on 4 September 2020.
-
6,691
-
-
KEY MANAGEMENT PERSONNEL
The remuneration structure for key Management and Directors is based on a number of factors
including length of service, experience, responsibilities and the performance of the Company.
The Company has entered into an employment contract with Mr Derek Marshall as the Company’s
Chief Executive Officer. The contract commenced on 1 September 2021 on a continuing basis with
no fixed term. The agreement specifies the duties and obligations of the Chief Executive Officer and
contains normal commercial termination clauses including the provision of three months written
notice during the first 12 months of employment and after the first 12 months of employment by
giving not less than six months written notice.
TREK METALS LIMITED | ANNUAL REPORT 2022
18
POST BALANCE DATE EVENTS
Sale of Gabon interest
On 25 March 2022, the Company reached agreement with Apollo Minerals Limited (Apollo Minerals,
ASX: AON) for Apollo to acquire the remaining 20% interest in the Kroussou zinc-lead project
(Kroussou Project or Project), located in western Gabon in central Africa. The consideration payable
to Trek, which remains subject to approval by Apollo shareholders at a general meeting which will
be held in June 2022, is:
(i)
(ii)
3,000,000 AON fully-paid ordinary shares (with an estimated value of $240,000 based
on the last available price of AON Shares; and
1,000,000 share options exercisable into ordinary shares at 12c per share expiring 30
June 2024
On 16th May 2022, the Group signed a conditional agreement with Pilbara Minerals Ltd to acquire
the strategic base metals exploration tenement E45/4640 which is located immediately adjacent to
Trek’s existing Pincunah Project.
CHANGE OF REPORTING CURRENCY
On 1 April 2021, Trek Metals Limited changed its reporting (presentation) currency from US dollars
to Australian dollars. This change in reporting currency better reflects the Company’s current and
future underlying activities. Accordingly, quarterly reports, half-year and annual reports will be
reflected in Australian dollars including where required relevant comparative information.
NON-AUDIT SERVICES
The Group may decide to employ the auditor on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the Company and/or Group are important. Should
the Group engage the auditor for non-audit related services; the provision of the non-audit services is
compatible with the general standard of independence for the auditors imposed by the Corporations
Act 2001.
During the financial year ended 31 March 2022 the group’s auditors Hall Chadwick provided the Group
with no other non-audit related services provided.
Signed on behalf of the Board.
John Young
Executive Director
1 June 2022
TREK METALS LIMITED | ANNUAL REPORT 2022
19
To the Board of Directors,
Auditor’s Independence Declaration
As lead audit Director for the audit of the financial statements of Trek Metals Limited for the financial
year ended 31 March 2022, I declare that to the best of my knowledge and belief, there have been no
contraventions of the auditor independence requirements of any applicable code of professional conduct
in relation to the audit.
Yours Faithfully
HALL CHADWICK WA AUDIT PTY LTD
CHRIS NICOLOFF CA
Director
Dated Perth, Western Australia this 1st day of June 2022
CONSOLIDATED STATEMENT OF
PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
YEAR ENDED
31 MARCH 2022
AU$
YEAR ENDED
31 MARCH 2021
AU$
NOTES
Continuing Operations
Investment revenue
Other income
Share based payment expense
Exploration expenses
Impairment of capitalised Exploration &
evaluation expenditure
Foreign exchange gain/(loss)
Other operating expenses
Loss before tax
Income tax expense
Loss for the year
6
6
22
11
6
8
25,511
-
(736,830)
(435)
(653,581)
3
(820,290)
14,437
-
(52,299)
(31,157)
-
237,045
(442,190)
(2,185,622)
(274,164)
-
-
(2,185,622)
(274,164)
Attributable to:
Equity holders of the Parent
Loss per share for loss attributable to the
ordinary equity holders of the Parent:
Basic loss per share
Diluted loss per share
7
7
(2,185,622)
(274,164)
Cents/share
Cents/share
(0.778)
(0.778)
(0.128)
(0.128)
Notes forming part of these financial statements are included on pages 27 to 55.
TREK METALS LIMITED | ANNUAL REPORT 2022
21
CONSOLIDATED STATEMENT OF
PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2022
YEAR ENDED
31 MARCH 2022
AU$
YEAR ENDED
31 MARCH 2021
AU$
NOTES
Loss for the year
(2,185,622)
(274,164)
Other comprehensive income/(loss)
Items that may be reclassified to profit or
loss
Exchange differences arising on translation
of foreign operations
Total Comprehensive Loss for the Year
Attributable to Owners of the Company
17(c)
(196,218)
(2,381,840)
(331,035)
(605,199)
Notes forming part of these financial statements are included on pages 27 to 55.
TREK METALS LIMITED | ANNUAL REPORT 2022
22
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
AS AT 31 MARCH 2022
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Non-current Assets
Property, plant and equipment
Exploration and evaluation expenditure
Other assets
Total non-current assets
Total Assets
LIABILITIES
Current Liabilities
Trade and other payables
Provision
Total current liabilities
Total Liabilities
NET ASSETS
Equity
Capital and reserves
Issued capital
Reserves
Accumulated loss
Total Equity
31 MARCH 2022
AU$
31 MARCH 2021
AU$
NOTES
9
10
11
14
15
16
17
6,366,832
90,327
17,390
6,474,549
318,875
3,703,707
1,151
4,023,733
4,715,309
53,783
7,816
4,776,908
79,632
2,049,134
1,199
2,129,965
10,498,282
6,906,873
171,188
8,885
180,073
277,821
3,357
281,178
180,073
281,178
10,318,209
6,625,695
34,969,682
55,757,269
(80,408,742)
10,318,209
34,568,285
51,620,098
(79,562,688)
6,625,695
Notes forming part of these financial statements are included on pages 27 to 55.
TREK METALS LIMITED | ANNUAL REPORT 2022
23
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2022
Consolidated
Note
Issued Capital
AU$
Share Premium
Reserve
AU$
Share Based
Payments Reserve
Foreign Currency
Translation Reserve
Accumulated
Losses
Total Equity
AU$
AU$
AU$
AU$
Balance at 1 April 2021
34,568,285
47,223,165
1,640,152
2,756,781
(79,562,688)
6,625,695
Loss for the year
Other comprehensive
income/(loss)
Total comprehensive loss
for the year
Transactions with owners,
recorded directly in equity
Issue of ordinary shares
Issue of ordinary shares on
exercise of share options
Share based payments
Expiry of share options
Share issue expenses
Balance at 31 March 2022
16
16
22
17(b)
16
-
-
-
-
-
-
892,020
4,657,480
9,353
22,647
-
-
(499,976)
34,969,682
-
-
-
-
-
-
-
(4,000)
996,830
(1,339,568)
-
-
(2,185,622)
(2,185,622)
(196,218)
-
(196,218)
(196,218)
(2,185,622)
(2,381,840)
-
-
-
-
-
-
-
-
1,339,568
5,549,500
28,000
996,830
-
-
(499,976)
51,903,292
1,293,414
2,560,563
(80,408,742)
10,318,209
Notes forming part of these financial statements are included on pages 27 to 55.
TREK METALS LIMITED | ANNUAL REPORT 2022
24
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2021
Consolidated
Note
Issued Capital
AU$
Share Premium
Reserve
AU$
Share Based
Payments Reserve
AU$
Foreign Currency
Translation Reserve
AU$
Accumulated
Losses
AU$
Total Equity
AU$
Balance at 1 April 2020
33,292,046
44,344,203
1,483,088
3,087,816
(79,288,524)
2,918,629
Loss for the year
Other comprehensive
income/(loss)
Total comprehensive loss
for the year
Transactions with owners,
recorded directly in equity
Issue of ordinary shares
-
-
-
-
-
-
1,561,021
2,878,962
-
-
-
-
Share based payments
22
Share issue expenses
Balance at 31 March 2021
-
(284,782)
34,568,285
-
-
157,064
-
-
(274,164)
(274,164)
(331,035)
-
(331,035)
(331,035)
(274,164)
(605,199)
-
-
-
-
-
-
4,439,983
157,064
(284,782)
47,223,165
1,640,152
2,756,781
(79,562,688)
6,625,695
Notes forming part of these financial statements are included on pages 27 to 55.
TREK METALS LIMITED | ANNUAL REPORT 2022
25
CONSOLIDATED STATEMENT OF
CASH FLOWS
FOR THE YEAR ENDED 31 MARCH 2022
YEAR ENDED
31 MARCH 2022
AU$
YEAR ENDED
31 MARCH 2021
AU$
NOTES
Cash flows from operating activities
Payments to suppliers and employees
Payments for exploration and evaluation
Interest received
Net cash used by operating activities
9
Cash flows from investing activities
Payments for exploration and evaluation
Payments for property, plant & equipment
Payments for exploration tenements
Cash flows from loan to other entities
Acquisition of subsidiary, net of cash acquired
Net cash used by investing activities
Cash flows from financing activities
Proceeds from issue of share capital
Payments for share issue costs
Net cash generated by financing activities
(863,926)
-
25,511
(838,415)
(2,482,444)
(365,143)
-
-
-
(2,847,587)
5,577,501
(239,976)
5,337,525
(633,532)
(31,157)
14,437
(650,252)
(378,275)
(4,427)
(59,186)
(31,043)
(217,505)
(690,436)
4,240,156
(176,782)
4,063,374
Net increase in cash and cash equivalents
1,651,523
2,722,686
Cash and cash equivalents at beginning of the
year
Effects of exchange rate changes on the balance of
cash held in foreign currencies
Cash and cash equivalents at the end of year
4,715,309
2,189,979
9
-
6,366,832
(197,356)
4,715,309
Notes forming part of these financial statements are included on pages 27 to 55.
TREK METALS LIMITED | ANNUAL REPORT 2022
26
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
NOTE 1:
CORPORATE INFORMATION
Trek Metals Limited is a limited company incorporated in Bermuda, whose shares are publicly traded
on the Australian Securities Exchange.
The consolidated financial statements of the Company as at and for the year ended 31 March 2022
comprise the Company and its subsidiaries (together referred to as the “Group” and individually as
“Group entities”) and the Group’s interest in associates and jointly controlled entities.
The principal activities of the Company and its subsidiaries (“the Group”) is to progress the
exploration of its mineral properties and to identify suitable acquisitions in the mineral resources
sector.
(a)
Statement of Compliance
These financial statements are general purpose financial statements which have been prepared in
accordance with the Australian Accounting Standards and Interpretations.
The financial statements comprise the consolidated financial statements of the Group. For the
purposes of preparing the consolidated financial statements, the Company is a for-profit entity.
Accounting Standards include Australian Accounting Standards. Compliance with Australian
Accounting Standards ensures that the financial statements and notes of the company and the Group
comply with International Financial Reporting Standards (‘IFRS’).
(b) Going Concern
This financial report has been prepared on the 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 Group incurred a loss for the year of AU$2,185,622 (2021: loss of AU$271,164) and cash outflows
from operating activities of AU$838,415 (2021: AU$650,252).
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.
Based on the cash flow forecasts and other factors referred to above, the directors are satisfied that
the going concern basis of preparation is appropriate. In particular, given the Company’s history of
raising capital to date, the directors are confident of the Company’s ability to raise additional funds
as and when they are required.
NOTE 2: ADOPTION OF NEW AND REVISED STANDARDS
Accounting Standards that are mandatorily effective for the current reporting year
The Group has adopted all of the new and revised Standards and Interpretations issued by the
Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for
an accounting period that begins on or after 1 January 2021. New and revised Standards and
amendments thereof and Interpretations effective for the current year that are relevant to the Group
include:
• AASB 2018-6 Amendments to Australian Accounting Standards – Definition of a Business
• AASB 2018-7 Amendments to Australian Accounting Standards – Definition of Material
TREK METALS LIMITED | ANNUAL REPORT 2022
27
•
•
•
AASB 2019-1 Amendments to Australian Accounting Standards – References to the Conceptual
Framework
AASB 2019-3 Amendments to Australian Accounting Standards – Interest Rate Benchmark
Reform
AASB 2019-5 Amendments to Australian Accounting Standards – Disclosure of the Effect of New
IFRS Standards Not Yet Issued in Australia.
The Directors have determined that there is no material impact of the new and revised Standards
and Interpretations on the Group and, therefore, no material change is necessary to Group
accounting policies
NOTE 3:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
The consolidated financial statements have been prepared on the basis of historical cost, except for
certain financial instruments that are measured at fair values at the end of each reporting period, as
explained in the accounting policies below. Historical cost is generally based on the fair values of the
consideration given in exchange for goods and services. All amounts are presented in AU dollars,
unless otherwise noted. Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date,
regardless of whether that price is directly observable or estimated using another valuation
technique. In estimating the fair value of an asset or a liability, the Group takes into account the
characteristics of the asset or liability if market participants would take those characteristics into
account when pricing the asset or liability at the measurement date. Fair value for measurement
and/or disclosure purposes in these consolidated financial statements is determined on such a basis,
except for share-based payment transactions that are within the scope of AASB 2, leasing
transactions that are within the scope of AASB 16, and measurements that have some similarities to
fair value but are not fair value, such as net realisable value in AASB 2 or value in use in AASB 136.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2
or 3 based on the degree to which the inputs to the fair value measurements are observable and the
significance of the inputs to the fair value measurement in its entirety, which are described as
follows:
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that
the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for
the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
(a)
Basis of Consolidation
The consolidated financial statements incorporate the financial statements of the Company and
entities (including structured entities) controlled by the Company and its subsidiaries. Control is
achieved when the Company:
has power over the investee;
is exposed, or has rights, to variable returns from its involvement with the investee; and
has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate
that there are changes to one or more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the
investee when the voting rights are sufficient to give it the practical ability to direct the relevant
activities of the investee unilaterally. The Company considers all relevant facts and circumstances in
TREK METALS LIMITED | ANNUAL REPORT 2022
28
assessing whether or not the Company's voting rights in an investee are sufficient to give it power,
including:
the size of the Company's holding of voting rights relative to the size and dispersion of holdings of
the other vote holders;
potential voting rights held by the Company, other vote holders or other parties;
rights arising from other contractual arrangements; and
any additional facts and circumstances that indicate that the Company has, or does not have, the
current ability to direct the relevant activities at the time that decisions need to be made, including
voting patterns at previous shareholders' meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and
ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a
subsidiary acquired or disposed of during the year are included in the consolidated statement of
profit or loss and other comprehensive income from the date the Company gains control until the
date when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of
the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is
attributed to the owners of the Company and to the non-controlling interests even if this results in
the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with the Group's accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
(b) Impairment of Assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell
and value in use, is compared to the asset’s carrying value. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which
the estimate of future cash flows have not been adjusted. Any excess of the asset’s carrying value
over its recoverable amount is expensed to the income statement.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash
generating unit) is increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have been recognised
for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised
immediately in the income statement.
Where a reasonable and consistent basis of allocation can be identified, corporate assets are also
allocated to individual cash-generating units, or otherwise they are allocated to the smallest group
of cash generating units for which a reasonable and consistent allocation basis can be identified.
TREK METALS LIMITED | ANNUAL REPORT 2022
29
(c) Changes in accounting policies
Change in functional and presentation currency
On 1 April 2021, the Company changed its presentation currency from US dollars (US$) to Australian
dollars (AU$). The Company believes that the change in presentation currency will provide
shareholders with a more accurate reflection of the Company’s underlying performance and enhance
the comparability for Trek’s financial information.
The change in presentation currency represents a voluntary change in accounting policy which is
accounted for retrospectively. Comparative information included in this financial report, previously
reporting in USD and the statement of financial position at the opening of the comparative period (1
April 2020) has been restated into AU$ as follows:
• The Statement of Profit or Loss has been translated into AU$ using the average foreign
currency rates prevailing for the relevant period. The average rate of the comparative period
presented was as follows:
-
12 months from 1 April 2020 to 31 March 2021 - US$:AU$ 0.717045
• Assets and Liabilities in the Statement of Financial Position have been translated into AU$ at
the closing foreign exchange rates at the relevant balance sheet dates. The exchange rates
at each comparative reporting date presented were as follows:
-
-
31 March 2020 - US$:AU$ 0.716990
31 March 2021 - US$:AU$ 0.761690
• The Equity section of the Statement of Financial Position has been translated into AU$ using
historical exchange rates.
• Cashflows from operating and investing activities in the Statement of Cash Flows have been
translated into AU$ using the average foreign currency rates prevailing for the relevant
period.
• Cashflows from financing activities in the Statement of Cash Flows have been translated into
AU$ using the foreign currency rate prevailing at the date of each transaction.
(d) Foreign Currency Transactions and Balances
a.
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary
economic environment in which that entity operates. The functional currency and presentation
currency of the parent is AUD. The consolidated financial statements are presented in AU Dollars.
On 1 April 2021, Trek Metals Limited changed its reporting (presentation) currency from US dollars
to Australian dollars. This change in reporting currency better reflects the Company’s current and
future underlying activities. Accordingly, all future quarterly reports, half-year and annual reports
will be reflected in Australian dollars including where required relevant comparative information.
b.
Transaction and balances
Foreign currency transactions are translated into functional currency using the exchange rates
prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-
end exchange rate. Non-monetary items measured at historical cost continue to be carried at the
exchange rate at the date of transaction. Non-monetary items measured at fair value are reported
at the exchange rate at the date when fair values were determined.
Exchange differences arising on the transition of monetary items are recognised in the income
statement in the period in which they arise, except where deferred in equity as a qualifying cash
flow.
TREK METALS LIMITED | ANNUAL REPORT 2022
30
Exchange differences arising on the translation of non-monetary items are recognised directly in
equity to the extent that the gain or loss is directly recognised in equity; otherwise the exchange
difference is recognised in the income statement.
c.
Group companies
The financial results and position of foreign operations whose functional currency is different from
the Group’s presentation currency are translated as follows:
Assets and liabilities are translated at period-end exchange rates prevailing at that reporting date;
Income and expenses are translated at average exchange rates for the period; and
Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences on translation of foreign operations are transferred directly to the Group’s
foreign currency translation reserve in the balance sheet. These differences are recognised in the
income statement in the period in which the operation is disposed.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the
Group’s foreign operations are expressed in AUD using exchange rates prevailing at the end of the
reporting period. Income and expense items are translated at the average exchange rates for the
period, unless exchange rates fluctuated significantly during that period, in which case the exchange
rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised
in other comprehensive income and accumulated in equity (attributed to non-controlling interests
as appropriate).
(e) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are
subsequently measured at amortised cost. Any difference between the proceeds (net of transaction
costs) and the redemption amount is recognised in profit or loss over the period of the borrowings
using the effective interest method. Fees paid on the establishment of loan facilities are recognised
as transaction costs of the loan to the extent that it is probable that some or all of the facility will be
drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no
evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised
as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
The fair value of the liability portion of a convertible note is determined using a market interest rate
for an equivalent non-convertible borrowing. This amount is recorded as a liability on an amortised
cost basis until extinguished on conversion or maturity of the notes. The remainder of the proceeds
is allocated to the conversion option. This is recognised and included in shareholders’ equity, net of
income tax effects.
Borrowings are removed from the balance sheet when the obligation specified in the contract is
discharged, cancelled or expired. The difference between the carrying amount of a financial liability
that has been extinguished or transferred to another party and the consideration paid, including any
non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or
finance costs.
Where the terms of a financial liability are renegotiated and the entity issues equity instruments to
a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised
in profit or loss, which is measured as the difference between the carrying amount of the financial
liability and the fair value of the equity instruments issued.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting period.
TREK METALS LIMITED | ANNUAL REPORT 2022
31
NOTE 4:
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the Group’s accounting policies, which are described in Note 3, the directors are
required to make judgments, estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be relevant.
Actual results may differ from these estimates. The 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 if the revision affects only that period, or in the period of the revision
and future periods if the revision affects both current and future periods.
The following are the critical judgments and estimations that the directors have made in the process
of applying the Group’s accounting policies and that have the most significant effect on the amounts
recognised in the financial statements.
a.
Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a
number of factors, including whether the Group decides to exploit the related lease itself or, if not,
whether it successfully recovers the related exploration and evaluation asset through sale. Factors
which could impact the future recoverability include the level of proved, probable and inferred
mineral resources, future technological changes which could impact the cost of mining, future legal
changes and the approval of the Environmental Impact Study (including changes to environmental
restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration evaluation expenditure is determined not to be
recoverable in the future, this will reduce profits and net assets in the period in which this
determination is made.
In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest
have not yet reached a stage which permits reasonable assessment of the existence or otherwise of
economically recoverable reserves. To the extent that it is determined in the future that this
capitalised expenditure should be written off, this will reduce profits and net assets in the period in
which this determination is made.
b.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined
by using a Black Scholes model.
c.
Taxation
Balances disclosed in the financial statements and the notes thereto related to taxation are based
on the best estimates of the directors. These estimates take into account both the financial
performance and position of the Group 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 the directors’ best estimate, pending an
assessment by the applicable taxation authorities.
TREK METALS LIMITED | ANNUAL REPORT 2022
32
NOTE 5:
SEGMENT INFORMATION
(a)
Identification of reportable segments
The Group operates predominantly in the mining and exploration industry. This comprises
exploration and evaluation activities that relate to the Gold and Base metals projects in the Pilbara
of Western Australia and the Kroussou zinc-lead project in Gabon which is subject to an earn-in
agreement with Apollo Minerals Limited.
The Group has identified its operating segments based on the internal reports that are provided to
the Board of Directors (chief operating decision makers) to assess performance and determine the
allocation of resources. Management has identified the operating segments based on the principal
location of its projects, being Australia and Africa, and its ASX listing and management location in
Australia.
(b) Basis of accounting for purposes of reporting by operating segments:
(i) Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors are determined in
accordance with accounting policies that are consistent to those adopted in the annual financial
statements of the Group.
(ii) Inter-segment transactions
Inter-segment loans payable and receivable are initially recognised at the consideration
received/to be received net of transaction costs. If inter-segment loans receivable and payable
are generally on commercial terms.
(iii) Segment assets
Where an asset is used across multiple segments, the asset is allocated to that segment that
receives majority economic value from that asset. In the majority of instances, segment assets
are clearly identifiable on the basis of their nature and physical location.
(iv) Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the
liability and the operations of the segment. Borrowings and tax liabilities are generally considered
to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other
payables and certain direct borrowings.
The following is an analysis of the Group’s results by reportable operating segment for the period:
SEGMENT LOSS
31 MAR 2022
AU$
31 MAR 2021
AU$
Continuing operations
Exploration and evaluation
Corporate
Consolidated segment loss for the year from all operations
(654,016)
(1,531,606)
(2,185,622)
(31,157)
(243,007)
(271,164)
TREK METALS LIMITED | ANNUAL REPORT 2022
33
The following is an analysis of the Group’s assets by reportable operating segment:
Continuing operations
Exploration and evaluation
Unallocated corporate assets
Consolidated segment assets
SEGMENT ASSETS
31 MAR 2022
AU$
31 MAR 2021
AU$
4,102,671
6,395,611
10,498,282
2,049,134
4,857,739
6,906,873
The following is an analysis of the Group’s liabilities by reportable operating segment:
Continuing operations
Exploration and evaluation
Unallocated corporate liabilities
Consolidated segment liabilities
NOTE 6: RECONCILIATION OF LOSS
SEGMENT LIABILITIES
31 MAR 2022
AU$
31 MAR 2021
AU$
55,433
124,640
180,073
92,845
188,333
281,178
Interest revenue is recognised when it is probable that the economic benefits will flow to the Group
and the amount of revenue can be measured reliably. Interest revenue is accrued on a time basis, by
reference to the principal outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected life of the financial asset
to that asset’s net carrying amount on initial recognition.
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST),
except:
(i) where the amount of GST incurred is not recoverable from the taxation authority, it is
recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
(ii) for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables.
TREK METALS LIMITED | ANNUAL REPORT 2022
34
The loss before tax from continuing operations after charging expenses and receiving income was as
follows:
Investment Revenue
Interest revenue
Total Investment Revenue
Other Operating Expenses
Auditor’s remuneration
Communications costs
Consultants
Contract accounting and company secretarial
Wages, oncosts and recruitment costs
Directors’ fees and consultant fees
Insurance
Rental costs
Legal
Corporate & statutory costs
Travel
Software expenses
Business development/conferences
Depreciation
Other costs
Total Other Operating Expenses
NOTE 7:
EARNINGS PER SHARE
31 MAR 2022
AU$
31 MAR 2021
AU$
25,511
25,511
14,437
14,437
(36,002)
(4,790)
(49,081)
(86,100)
(170,860)
(179,768)
(34,097)
(23,543)
(23,568)
(86,725)
(12,064)
(7,334)
(38,904)
(54,448)
(13,006)
(820,290)
(25,764)
(5,003)
(46,976)
(69,084)
-
(152,661)
(10,720)
(6,512)
(41,136)
(54,163)
(3,630)
(1,959)
(3,338)
-
(21,244)
(442,190)
The calculation of the basic and diluted (loss) /earnings per share is based on the following information:
Earnings
Loss attributable to the ordinary equity holders of the
Company used in calculating basic and diluted loss per
share:
From continuing operations
Shares
Weighted average number of ordinary shares used as
the denominator in calculating basic loss per share
Adjustment for calculation of diluted earnings per share:
Options
Weighted average number of ordinary shares and
potential ordinary shares used as the denominator in
calculating diluted loss per share
31 MAR 2022
AU$
31 MAR 2021
AU$
(2,185,622)
(2,185,622)
(274,164)
(274,164)
280,929,853
214,584,644
-
-
280,929,853
214,584,644
Basic Loss per Share
Total basic loss per share attributable to the ordinary
equity holders of the Company
Cents/share
Cents/share
(0.778)
(0.128)
Total diluted loss per share attributable to the ordinary
equity holders of the Company
(0.778)
(0.128)
TREK METALS LIMITED | ANNUAL REPORT 2022
35
The following number of potential ordinary shares are not dilutive and are therefore excluded from
the weighted average number of ordinary shares in the year ended 31 March 2022:
Unlisted Options
Performance Rights
NOTE 8:
INCOME TAX
31 MAR 2022
20,150,000
22,675,000
42,825,000
31 MAR 2021
32,700,539
15,825,000
48,525,539
The charge for current income tax expenses is based on the profit for the year adjusted for any non-
assessable or disallowed items. It is calculated using tax rates that have been enacted or are
substantively enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in the
financial statements. 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 taxable
profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is
realised or liability is settled. Deferred tax is credited in the income statement except where it relates
to items that may be credited directly to equity, in which case the deferred tax is adjusted directly
against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will
be available against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income taxation legislation and the anticipation that
the Group will derive sufficient future assessable income to enable the benefit to be realised and
comply with the conditions of deductibility imposed by the law.
Major components of income tax for the year ended 31 March 2022 are as follows:
Current income
Current income tax (benefit) expense
Derecognition of current income tax expense (benefit)
31 MAR 2022
AU$
31 MAR 2021
AU$
706,204
(706,204)
443,360
(443,360)
Deferred income tax
Relating to origination and reversal of temporary difference
Derecognition of current income tax benefit (expense)
Adjustment in respect of prior year tax losses/STA
Income tax expense reported in income statement
(2,712,237)
2,242,514
469,723
-
118,613
380,211
(498,824)
-
TREK METALS LIMITED | ANNUAL REPORT 2022
36
A reconciliation of the income tax expense applicable to the loss from operating activities before
income tax at the statutory income tax rate to income tax expense at the Group’s effective income
tax rates is as follows:
Loss from operating activities before income tax
31 MAR 2022
AU$
(2,185,622)
31 MAR 2021
AU$
(274,164)
Prima facie tax benefit on loss from ordinary activities at 30%
(2021: 30%)
(655,687)
(82,249)
Tax effect of amounts which are not deductible (taxable) in
calculating taxable income
- Non-deductible expenses
-
-
-
International tax rate differential
Tax loss not brought to account as a deferred tax asset
Temporary differences not brought to account
At effective income tax rate of 0% (31 March 2021: 0%)
386,114
9,905
722,821
(463,153)
-
15,947
486
443,360
(377,544)
-
Income tax expensed reported in income statement
-
-
Unrecognised deferred tax balances relate to the following:
Deferred tax assets at 30% (2021: 30%)
Provisions
Other assets
Capitalised Expenses
Capitalised Exploration costs
Trade and other payables
Property, plant & equipment
Exploration & evaluation expenditure
Un-realised foreign exchange gains
Business related costs
Total Deferred Tax Assets
31 MAR 2022
AU$
31 MAR 2021
AU$
1,699
(5,217)
4,761
117,999
11,425
(92,982)
(712,123)
(1)
227,046
(447,393)
9,225
(2,345)
4,761
129,799
8,779
(21,097)
2,689
(122,682)
150,401
159,530
Potential deferred tax assets for the Group are attributable to Gabonese and Australian tax losses
carried forward by the subsidiaries and future benefits to exploration expenditure and other
temporary differences allowable for deduction. Deferred tax assets have not been brought to
account in the consolidated statements as at 31 March 2022 because the directors are of the opinion
that it is not appropriate to regard full realisation of the deferred tax assets as probable.
These benefits will only be obtained if:
a) The subsidiaries derive future assessable income of a nature and of an amount sufficient to
enable the benefit from the deductions to be realised; and
b) The subsidiaries continue to comply with the conditions for deductibility imposed by tax
legislation; and
c) No changes in tax legislation adversely affect the subsidiaries in realising the benefit from the
deduction of the losses.
TREK METALS LIMITED | ANNUAL REPORT 2022
37
Unused tax losses not brought to account are as follows:
Opening unused tax losses
Add: losses for the year
Less: Prior year adjustment
Unused tax losses
31 MAR 2022
AU$
5,677,315
2,409,404
1,565,744
9,652,463
31 MAR 2021
AU$
5,845,512
1,494,551
(1,662,748)
5,677,315
NOTE 9:
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term
highly liquid investments with original maturities of three months or less, and bank overdrafts.
Bank balances
Term deposit (1)
31 MAR 2022 31 MAR 2021
AU$
4,693,861
21,448
4,715,309
AU$
6,345,329
21,503
6,366,832
(1) A$20,000 of the cash and cash equivalents is restricted and set aside to offset credit card limits.
(a)
Reconciliation of profit or loss after income tax to net cash flow from operating activities
Loss for the year
Share-based payment expense
Impairment of exploration expenditure
Depreciation
Leave provision
Net exchange differences
Change in operating assets and liabilities, net of effects
from sale of subsidiary:
(Increase)/decrease in trade and other receivables
Increase/(decrease) in other assets – current & non-
current
(Decrease)/increase in trade and other payables
(Decrease)/increase in provisions
Net cash outflow from operating activities
(b) Non-cash investing and financing activities
31 MAR 2022
AU$
31 MAR 2021
AU$
(2,185,622)
736,830
653,581
54,448
(7,314)
(3)
(274,164)
52,299
-
-
-
(237,045)
(46,119)
(36,041)
48
(49,792)
5,528
(838,415)
(78)
(155,223)
-
(650,252)
31 MAR 2022
AU$
31 MAR 2021
AU$
Acquisition of ACME Pilbara Pty Ltd via the issue of shares
(refer Note 11)
Acquisition of Tenement E45/5484 via issue of shares
-
-
333,333
50,250
TREK METALS LIMITED | ANNUAL REPORT 2022
38
NOTE 10: TRADE AND OTHER RECEIVABLES
Current
Other receivables
31 MAR 2022
AU$
31 MAR 2021
AU$
90,327
90,327
53,783
53,783
Trade and other receivables are non-interest bearing, have no security held against them and are,
on average, on terms of 15 days.
NOTE 11: EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation expenditure primarily consist of activities including drilling, assaying,
geochemical and geophysical investigations and independent geological consultants in respect of
each identifiable area of interest. These costs are capitalised provided the rights to tenure of the
area of interest is current and either:
a)
the expenditures are expected to be recouped through successful development and exploitation
or sale of the area of interest; or
b) activities in the area of interest have not at the reporting date reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and
active and significant operations in or relating to, the area of interest are continuing.
When the technical feasibility and commercial viability of extracting a mineral resource have been
demonstrated then any capitalised exploration and evaluation expenditure is reclassified as
capitalised mine development. Prior to reclassification, capitalised exploration and evaluation
expenditure is measured at cost and assessed for impairment.
(a)
Impairment
All capitalised exploration and evaluation expenditure is monitored for indications of impairment on
a cash-generating unit basis. The cash generating unit shall not be larger than the area of interest. If
sufficient data exists to determine technical feasibility and commercial viability, and facts and
circumstances suggest that the carrying amount exceeds the recoverable amount, the capitalised
expenditure which is not expected to be recovered is charged to the income statement.
31 MAR 2022 31 MAR 2021
AU$
AU$
Exploration and Evaluation Expenditure
3,703,707
2,049,134
Movement during the period:
Opening balance
Acquisition of ACME Pilbara Pty Ltd
Additions for the period
Impairments
Closing balance at balance date
2,049,134
-
2,308,154
(653,581)
3,703,707
1,000,000
533,233
515,901
-
2,049,134
The Group’s exploration properties may be subject to claim under Native Title (or jurisdiction
equivalent), or contain sacred sites, or sites of significance to the indigenous people of Australia,
Zambia and Gabon. As a result, exploration properties or areas within the tenements may be subject
to exploration restrictions, mining restrictions and/or claims for compensation. At this time, it is not
possible to quantify whether such claims exist, or the quantum of such claims.
TREK METALS LIMITED | ANNUAL REPORT 2022
39
The Company policy is to charge exploration expenditure to specific areas of interest. Exploration
expenditure that cannot be attributed to specific areas of interest is written off.
Recoverability of the Group’s carrying value of interests in mineral projects is subject to the
successful development and exploitation of the exploration properties or alternatively, the sale of
these tenements at amounts at least equal to the book values.
Kroussou (Gabon) exploration expenditure
The Group had previously capitalised exploration and evaluation expenditures for the Kroussou
Project. Following the Earn-in agreement with Apollo Minerals Limited and the proposed sale of the
company’s remaining interest to Apollo (Refer ASX Release 25 March 2022) the Company has
impaired the carrying value based on an estimate of the value of the sale consideration expected to
be received of $240,000.
Acquisition of ACME Pilbara Pty Ltd
On 14 August 2020, Trek acquired ACME Pilbara Pty Ltd (ACME). The acquisition of ACME was
deemed an asset acquisition.
Purchase consideration
- Cash
-
Issue of fully paid ordinary shares (6,666,667 @ $0.03AUD)
Less:
- Cash on hand
Net Liabilities acquired
Exploration assets at cost
NOTE 12: SUBSIDIARIES
Fair value
AU$
200,000
333,333
533,333
100
100
533,233
The consolidated financial statements include the financial statements of Trek Metals Limited and
the subsidiaries listed below:
COUNTRY OF
INCORP’N
CLASS OF
SHARE
CAPITAL
HELD
HOLDING & VOTING CAPACITY (%)
31 MAR 2022
31 MAR 2021
TM Resources Pty Ltd
Australia
Ordinary
Trek Management Pty Ltd
Australia
Ordinary
Elm Resources Pty Ltd
Australia
Ordinary
Select Exploration
Mauritius
Ordinary
Select Exploration (Gabon) *
Gabon
Ordinary
ACME Pilbara Pty Ltd
Australia
Ordinary
Anaheim Pty Ltd
Australia
Ordinary
100
100
100
100
100
100
100
100
100
100
100
100
100
0
* On 4 September 2019 the Company entered into an Earn-in Agreement (EIA) with Apollo Minerals Limited
(Apollo Minerals, ASX: AON) for Apollo Minerals to earn-in an interest of up to 80% in the Kroussou zinc-lead
project (Kroussou Project or Project) in western Gabon. On 25 March 2022, Trek reached a further agreement
with Apollo Minerals for Apollo to acquire all of its remaining interest in the Kroussou Project. The agreement is
subject to approval by Apollo shareholders at a general meeting which is to be held during June 2022 with
settlement expected shortly after.
TREK METALS LIMITED | ANNUAL REPORT 2022
40
NOTE 13:
INVESTMENTS IN ASSOCIATES
An associate is an entity over which the Group has significant influence. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but is not control
or joint control over those policies. Trek Metals Limited holds 49% of the share capital of Cape
Resources Limited company controlled by Glencore International AG (Glencore). There were no
contributions by Trek Metals in 2022. The investment in this associate is carried at $Nil (2021:nil).
NOTE 14: TRADE AND OTHER PAYABLES
Current
Trade and other payables
Accrued expenses
31 MAR 2022 31 MAR 2021
AU$
AU$
102,370
68,818
171,188
189,819
88,002
277,821
Trade payables and accruals are non-interest bearing and have repayment terms within 30 days.
NOTE 15: PROVISIONS
Provisions are recognised when the Group 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 the balance sheet date, taking into account the risks and
uncertainties surrounding the obligation. Where a provision is measured using the cash flow
estimated to settle the present obligation, its carrying amount is the present value of those cash
flows.
Current
Other provisions
NOTE 16:
ISSUED CAPITAL
31 MAR 2022 31 MAR 2021
AU$
AU$
8,885
8,885
3,357
3,357
Authorised ordinary shares of par £0.01 each, carrying one vote per share and rights to dividends.
The ordinary shares on issue is summarised as follows:
31 MARCH 2022
Issued and fully paid ordinary shares
As at 1 April 2021
Allotments
16/04/2021 Exercise of options at $0.056
16/09/2021 Exercise of options at $0.056
26/10/2021 Placement at $0.115 per share (1)
30/11/2021 Share purchase plan at $0.115 per share (2)
Share Issue costs
Balances as at 31 March 2022
(1)
(2)
Shares issued pursuant to capital raising of $3.5M.
Shares issued pursuant to share purchase plan raising $2.05M.
NUMBER
OF SHARES
ISSUED
CAPITAL
AU$
SHARE
PREMIUM
AU$
261,703,691
34,568,285
47,223,165
100,000
400,000
30,434,783
17,821,676
-
310,460,150
1,787
7,566
558,941
333,079
(499,976)
34,969,682
4,613
18,034
2,941,059
1,716,421
-
51,903,292
TREK METALS LIMITED | ANNUAL REPORT 2022
41
31 MARCH 2021
Issued and fully paid ordinary shares
As at 1 April 2020
Allotments
23/07/2020 Placement at $0.035 per share – Tranche 1 (1)
13/08/2020 Acquisition shares at $0.05 per share (2)
31/08/2020 Placement at $0.035 per share – Tranche 2 (1)
18/01/2021 Acquisition shares at $0.067 per share (3)
3/02/2021 Placement at $0.06 per share (4)
18/02/2021 Exercise of options at $0.056
5/03/2021 Issue of shares to Director at $0.06
Share Issue costs
Balances as at 31 March 2021
(1)
(2)
(3)
(4)
Shares issued pursuant to capital raising of $1.0M.
Shares issued as consideration for the acquisition of ACME Pilbara Pty Ltd.
Shares issued as consideration for the acquisition of tenement E45/5484.
Shares issued pursuant to capital raising of $2.7M.
NUMBER
OF SHARES
ISSUED
CAPITAL
AU$
SHARE
PREMIUM
AU$
174,782,262
33,292,046
44,344,203
19,550,672
6,666,667
9,020,757
750,000
45,000,000
100,000
5,833,333
-
261,703,691
349,691
121,760
163,323
13,253
806,127
1,800
105,067
(284,782)
34,568,285
334,582
211,573
152,404
36,997
1,893,873
4,600
244,933
-
47,223,165
Performance Rights
At 31 March 2022, the number of Performance Rights of the Company on issue are:
Performance Rights Issued
Class A
Class B
Class C
Class D
Class E
Class F
Class G
Class H
Class I
Class J
Class K
Options on Issue
Fair value at
Grant Date
(AU$)
0.0492
0.0452
0.0420
0.0663
0.0663
0.0663
0.0725
0.0686
0.0664
0.0864
0.0799
Grant
date
05/03/21
05/03/21
05/03/21
05/03/21
05/03/21
05/03/21
01/09/21
01/09/21
01/09/21
21/01/22
21/01/22
Expiry
05/03/25
05/03/25
05/03/25
05/03/25
05/03/25
05/03/25
01/09/25
01/09/25
01/09/25
28/01/26
28/01/26
No of rights
4,375,000
4,000,000
4,000,000
900,000
900,000
900,000
2,000,000
2,000,000
2,000,000
800,000
800,000
22,675,000
Vested
#
-
-
-
900,000
-
-
-
-
-
-
-
900,000
Unissued ordinary shares of the Company under option at 31 March 2022 are as follows:
Options issued
Options issued as Share Based
Payments:
Directors
Directors
Consultant
Broker Options
Consultant
Director
Broker Options
Broker Options
Options outstanding and
exercisable as at 31 March 2022
No of
options
Exercise
price
(AU$)
Fair value
at Grant
Date (AU$)
Grant
date
Expiry
Vested
#
1,875,000
3,750,000
2,525,000
2,500,000
1,500,000
2,000,000
1,000,000
5,000,000
20,150,000
0.056
0.056
0.056
0.056
0.056
0.100
0.100
0.200
0.016
0.008
0.008
0.008
0.020
0.036
0.036
0.052
02/09/19
03/10/19
03/10/19
03/10/19
01/07/20
05/03/21
05/03/21
26/10/21
30/09/23
30/09/23
30/09/23
30/09/23
30/06/24
05/03/23
05/03/23
31/10/23
1,875,000
3,750,000
2,525,000
2,500,000
-
2,000,000
1,000,000
5,000,000
18,650,000
TREK METALS LIMITED | ANNUAL REPORT 2022
42
NOTE 17: RESERVES
(a)
Share Premium Reserve
The share premium reserve records the amounts paid by shareholders for shares in excess of their
nominal value. See note 16 for further information.
(b)
Share-Based Payment Reserve
The share-based payment reserve records the fair value of options and performance rights granted
to staff and directors, and suppliers.
Movement in unlisted options
Number
AU$
Balance at 1 April 2021
Issue of options exercisable at AU$0.20 each expiring 31/10/2023
Options lapsed
Options exercised
Options expensed
Balance at 31 March 2022
27,806,250
5,000,000
(12,156,250)
(500,000)
-
20,150,000
1,599,663
260,000
(1,338,201)
(4,000)
15,000
532,462
Movement in performance rights
Number
AU$
Balance at 1 April 2021
Issue of Classes G – I (1 September 2021)
Issue of Classes J – K (28 January 2022)
Expiry of rights
Rights expensed
Balance at 31 March 2022
(c)
Translation Reserve
15,825,000
6,000,000
1,600,000
(750,000)
-
22,675,000
40,489
-
-
(1,367)
721,830
760,952
Exchange differences relating to the translation of the net assets of the Group’s foreign operations
from their functional currencies to the Group’s presentation currency of AUD are recognised directly
in other comprehensive income and accumulated in the foreign currency translation reserve. Gains
and losses on hedging instruments that are designated as hedges of net investments in foreign
operations are included in the foreign currency translation reserve. Exchange differences previously
accumulated in the foreign currency translation reserve (in respect of translating both the net assets
of foreign operations and hedges of foreign operations) are reclassified to profit or loss on the
disposal or partial disposal of the foreign operation.
Movement in foreign currency translation
Opening balance
Translation of foreign currency financial statements into
the functional currency
Exchange differences realised on change in functional
reporting currency
Closing balance
31 MAR 2022
AU$
2,756,781
(196,218)
31 MAR 2021
AU$
3,087,816
227,287
-
(558,322)
2,560,563
2,756,781
TREK METALS LIMITED | ANNUAL REPORT 2022
43
NOTE 18: FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised when a Group entity becomes a party to the
contractual provisions of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted
from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at
fair value through profit or loss are recognised immediately in profit or loss.
(a)
Financial Assets
On initial recognition, financial assets are classified as measured at:
Amortized cost;
Fair Value through Other Comprehensive Income (“FVOCI”) – debt investment;
FVOCI – equity investment; or
Fair Value through Profit or Loss (“FVTPL”)
The classification of financial assets is generally based on the business model in which a financial
asset is managed and its contractual cash flow characteristics. A financial asset (unless it is a trade
receivable without a significant financing component that is initially measured at the transaction
price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are
directly attributable to its acquisition. For financial assets measured at amortized cost, these assets
are subsequently measured at amortized cost using the effective interest method. The amortized
cost is reduced by impairment losses.
Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss.
Any gain or loss on derecognition is recognized in profit or loss.
As of 31 March 2022, the Group’s financial instruments consist of cash and cash equivalents, trade
and other receivables and trade and other payables.
Cash and cash equivalents and other receivables are classified as amortised cost under AASB 9. The
trade and other payables are designated as other financial liabilities, which are measured at
amortised cost.
The cash and cash equivalents, trade and other receivables, and trade and other payables
approximate their fair value due to their short-term nature.
The Group classified the fair value of the financial instruments according to the following fair value
hierarchy based on the amount of observable inputs used to value the instruments:
The three levels of the fair value hierarchy are:
Level 1 – Values based on unadjusted quoted prices available in active markets for identical assets
or liabilities as of the reporting date.
Level 2 – Values based on inputs, including quoted prices, time value and volatility factors, which can
be substantially observed or corroborated in the marketplace. Prices in Level 2 are either directly or
indirectly observable as of the reporting date.
Level 3 – Values based on prices or valuation techniques that are not based on observable market
data.
Impairment of financial assets
The Group assesses the recoverability of financial assets using an ‘expected credit loss’ (“ECL”)
model. This impairment model is applied to financial assets measured at amortized cost, contract
assets and debt investments at Fair Value Through Other Comprehensive Income (“FVOCI”), but not
to investments in equity instruments.
TREK METALS LIMITED | ANNUAL REPORT 2022
44
In accordance with AASB 9, loss allowances are measured on either of the following bases:
12-month ECLs: these are ECLs that result from possible default events within the 12 months after
the reporting date; and
Lifetime ECL: these are ECLs that result from all possible default events over the expected life of a
financial instrument.
ECLs are probability-weighted estimates of credit losses. Credit losses are measured at the present
value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance
with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the
effective interest rate of the financial asset.
Categories of financial instruments
Financial assets
Cash and bank balances
Trade and other receivables
Financial liabilities
Trade and other payables
31 MAR 2022
AU$
31 MAR 2021
AU$
6,366,832
90,327
4,715,309
53,783
171,188
277,821
Financial Risk Management objectives and policies
The Group’s risk oversight and management program focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects and ensure that net cash flows are sufficient
to support the delivery of the Group’s financial targets whilst protecting future financial security. The
Group continually monitors and tests its forecast financial position against these objectives and may
undertake forward-rate agreements when necessary to ensure the objectives are achieved.
The Group’s activities expose it to a variety of financial risks; market, credit and liquidity. These risks
are managed by senior management in line with policies set by the Board. The Group’s principal
financial instruments comprise cash and short-term deposits. Other financial instruments include
trade receivables and trade payables, which arise directly from operations.
It is, and has been throughout the period under audit, Group policy that no speculative trading in
financial instruments be undertaken.
Market risk
(a)
Interest Rate Risk
The Group is exposed to interest rate risk, which is the risk that a financial instrument’s value will
fluctuate as a result of changes in market interest rates. The Group manages this risk by maintaining
an appropriate mix between fixed and floating rate instruments.
The effective weighted average interest rates on classes of financial assets and financial liabilities are
as follows:
31 March 2022
Weighted
Ave
Effective
Int Rate
%
Less than
1 month
AU$
1 month
– 1 year
AU$
1 – 5
years
AU$
5+ years
AU$
Total
AU$
Financial Assets
Non-interest bearing
Fixed interest rate instruments
Variable interest rate instruments
Total Financial Assets
-
0.15
0.51
0.50
90,327
21,503
6,345,329
6,457,159
Financial Liabilities
Non-interest bearing
Total Financial Liabilities
-
-
171,188
171,188
-
-
-
-
-
-
-
-
-
-
-
-
90,327
-
-
21,503
- 6,345,329
- 6,457,159
-
-
171,188
171,188
TREK METALS LIMITED | ANNUAL REPORT 2022
45
Financial assets are classified based upon their expected maturity whilst financial liabilities are
classified based upon their contractual maturity.
31 March 2021
Weighted
Ave
Effective
Int Rate
%
Less than
1 month
AU$
1 month
– 1 year
AU$
1 – 5
years
AU$
5+ years
AU$
Total
AU$
Financial Assets
Non-interest bearing
Fixed interest rate instruments
Variable interest rate instruments
Total Financial Assets
-
0.3
0.51
0.50
53,783
21,449
4,693,860
4,769,092
Financial Liabilities
Non-interest bearing
Total Financial Liabilities
(b) Currency risk
-
-
277,821
277,821
-
-
-
-
-
-
-
-
-
-
-
-
53,783
-
-
21,449
- 4,693,860
- 4,769,092
-
-
277,821
277,821
The Group has subsidiaries operating in Africa and Australia, whose businesses are conducted
predominantly in Central African Franc, Euro, Australian Dollars, and US dollars respectively,
exposing the Group to exchange rate fluctuations.
The Group manages this risk by monitoring foreign exchange rates, maintaining the majority of cash
assets in Australia Dollars, and limiting the amounts transferred to the subsidiaries to that which is
required to sustain operations. The Group has not entered into any derivative financial instruments
to hedge such transactions.
Foreign exchange differences on retranslation of the foreign subsidiaries’ assets and liabilities are
taken to the translation reserve.
At year end the Group has AU$Nil (2021: AU$Nil) in Euros, AU$5,846 (2021: AU$5,373) in Central
African Franc. The maximum exposure to credit risk is represented by the carrying amount of each
of these assets in the balance sheet.
The following table summarises the sensitivity of financial instruments held at the balance sheet date
to movements in the exchange rate of the Central African Franc to the Australian Dollar, with all
other variables held constant. The sensitivities are based on an analysis of actual historical rates for
the preceding five-year period.
IMPACT ON PROFIT
IMPACT ON EQUITY
XAF/AUD +10%
XAF/AUD -10%
31 MAR 2022 31 MAR 2021 31 MAR 2022
AU$
(610)
610
AU$
597
(597)
AU$
610
(610)
31 MAR 2021
AU$
(597)
597
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the
Group’s result for the year ended 31 March 2022 would increase/decrease by AU$32,365 (2021:
increase/decrease by AU$23,975). This is mainly attributable to the Group’s exposure to interest
rates on its variable rate investments.
TREK METALS LIMITED | ANNUAL REPORT 2022
46
(c)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Group. Due to the current nature of the Group’s operations there is no significant
concentration of credit risk. The credit risk on liquid funds is limited because the counterparties are
banks with high credit ratings assigned by international credit-rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of any allowances
for losses, represents the Group’s maximum exposure to credit risk without taking account of the
value of any collateral or other security obtained.
(d)
Capital Risk Management
The Group manages capital to ensure that companies in the Group will be able to continue as a going
concern while maximising the return to stakeholders through the optimisation of the debt to equity
balance. The Group’s focus has been to raise sufficient funds through equity to fund exploration
activity. Management also aims to maintain a capital structure that ensures the lowest cost of capital
available to the entity. The Group monitors capital on the basis of the gearing ratio and the external
borrowings currently in place however this is not required since the facility was extinguished in the
prior period.
(e)
Liquidity risk
Liquidity risk refers to the risk that the Group will have insufficient funds to meet its operational
requirements. The Group manages liquidity risk by monitoring forecast cash flows and ensuring that
adequate liquidity levels are maintained. The undiscounted contractual or expected maturities of the
financial assets and liabilities are reported in the tables under “Interest rate risk”.
(f)
Fair Values
Monetary financial assets and liabilities not readily traded in an organised financial market have been
valued at cost, which approximates fair value.
The carrying amount of cash and cash equivalents approximate net fair value.
The carrying amounts and net fair values of financial assets and liabilities as at the reporting date are
as follows:
Financial Assets
Trade and other receivables
Financial Liabilities
Trade and other payables
FAIR VALUE
HIERARCHY
31 MAR 2022
AU$
31 MAR 2021
AU$
Level 2
90,327
53,783
Level 2
171,188
277,821
TREK METALS LIMITED | ANNUAL REPORT 2022
47
NOTE 19: COMMITMENTS
a. The Group has committed to the following minimum expenditure in relation to the Kroussou
project.
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
31 MAR 2022
AU$
31 MAR 2021
AU$
965,502
287,911
-
1,253,413
1,561,185
-
-
1,561,185
In September 2019, the Company entered into an Earn-in Agreement (EIA) with Apollo Minerals
Limited (“Apollo”) for Apollo to earn-in an interest of up to 80% in the Kroussou zinc-lead project.
Trek has not incurred any further expenditure in relation to the Kroussou Project whilst Apollo
completes its earn-in obligations. Apollo have confirmed that a renewal request for the Kroussou
license has been filed by Select Exploration Gabon which included a budgeted minimum exploration
spend of 1,571,600,000 CFA to be spent over the 3 years from 18 July 2021 (amount spent from
renewal date to 31 March 2022 is XAF 1,016,035,917, AU $2,292,287).
On 25 March 2022, Trek reached a further agreement with Apollo Minerals for Apollo to acquire all
of its remaining interest in the Kroussou Project. The agreement is subject to approval by Apollo
shareholders at a general meeting which is to be held during June 2022 with settlement expected
shortly after. Accordingly, the above capital commitments have been shown in the commitments of
Trek Metals Limited at 31 March 2022, but subject to completion of the sale of its remaining interest
will not be shown as capital commitments in future reporting periods.
b. The Group has committed to the following minimum expenditure in relation to the ACME
Pilbara tenements.
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
31 MAR 2022
AU$
31 MAR 2021
AU$
162,000
512,937
27,112
702,049
88,000
228,526
-
316,526
c. The Group has committed to the following minimum expenditure in relation to the Anaheim
tenements.
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years
31 MAR 2022
AU$
31 MAR 2021
AU$
151,000
748,729
51,397
951,126
-
-
-
-
TREK METALS LIMITED | ANNUAL REPORT 2022
48
NOTE 20: CONTINGENCIES
a.
TM Resources Acquisition
On 16 September 2016, the Company, and the shareholders of TM Resources Pty Ltd (TM) entered
into a Share Sale Agreement which resulted in the Company acquiring all the shares on issue in TM.
The Company paid AUS$10,000 on execution of the Share Sale Agreement.
The Company also agreed to pay the following contingent consideration:
1. Trek Metals Limited (TML) shares to the value of A$50,000 within 7 days of the grant of the
tenements that TM has applied for.
2. A$1,000,000 upon the public release by TML of Mineral Resource Estimate in respect of the Lawn
Hill Project of between 550Kt Zn eq - 1.1Mt Zn eq; and
3. A$3,000,000 upon the public release by TML of a Mineral Resource Estimate in respect of the
Lawn Hill Project of greater than 1.1Mt Zn eq.
b.
Kroussou Earn-in Agreement Sale to Apollo Minerals Limited
On 4 September 2019 the Company entered into an Earn-in Agreement (EIA) with Apollo Minerals
Limited (Apollo Minerals, ASX: AON) for Apollo Minerals to earn-in an interest of up to 80% in the
Kroussou zinc-lead project (Kroussou Project or Project) in western Gabon. Trek, through a wholly
own subsidiary, entered into a Sale Agreement and Royalty Deed with Battery Minerals Limited on
27 April 2018 in which Trek acquired 100% of the Kroussou Project from Trek JV partner, Battery
Minerals Limited (ASX:BAT) (Battery Minerals Arrangements).
On 11th May 2020, Apollo Minerals confirmed that all conditions precedent for the EIA had been
satisfied. With the EIA becoming effective, Trek and Battery Minerals have mutually agreed to
terminate the Royalty Deed and certain terms of the Sale Agreement entered into on 27 April 2018.
On 25 March 2022, Trek reached agreement with Apollo Minerals for Apollo to acquire its remaining
interest in the Kroussou Project. The consideration payable to Trek, which is subject to approval by
Apollo shareholders at a general meeting to be held during June 2022, will be:
(i)
(ii)
3,000,000 AON fully-paid ordinary shares; and
1,000,000 share options exercisable into ordinary shares at 12c per share expiring 30
June 2024
In addition, the parties have reached agreement with Battery Minerals Limited (ASX: BAT) to release
and terminate any remaining royalty and payment obligations, with Apollo to make a payment to
Battery Minerals of $250,000 in cash.
Pending approval of the transaction by Apollo shareholders, settlement is expected to occur in late
June 2022 which will remove any future contingencies for the Company.
TREK METALS LIMITED | ANNUAL REPORT 2022
49
NOTE 21: RELATED PARTIES
(a)
Subsidiaries
The subsidiaries and associates of the Group are identified in Note 12. Transactions between the
Company and its subsidiaries, which are related parties of the Company, have been eliminated on
consolidation and are not disclosed in this note. Details of transactions between the Group and other
related parties are disclosed below.
(b) Directors
The Directors of the Company during the year, and up to the date of this report, were as follows:
Tony Leibowitz
Neil Biddle
John Young
(c)
Related party transactions (other than director fees)
Mr Tony Leibowitz, Mr Neil Biddle and Mr John Young are all directors of Bardoc Gold Limited which
provided office premises and administration to the Company during the year totalling AU$30,828
(2021: AU$9,300). Of this amount, AU$2,249 (2021: AU$1,700) was included in payables and accruals
at the end of the reporting period.
Mr Tony Leibowitz provided additional executive services for the capital raising during the year
totalling AU$22,000 (2021: nil) paid to Kalonda Pty Ltd/Leibowitz Corporate, a company controlled
by Mr Tony Leibowitz.
Mr John Young provided normal Executive Director consulting services to the Company during the
year totalling AU$180,000 (2021: AU$124,900). Of this amount, AU$15,000 (2021: AU$15,000) was
included in payables and accruals at the end of the reporting period.
(d)
Compensation of Key Management Personnel
The remuneration of directors and other members of key management during the year was as
follows:
Short term benefits
Share based payments
31 MAR 2022
AU$
504,297
562,458
1,066,755
31 MAR 2021
AU$
354,867
100,596
455,463
The remuneration of directors and key management is determined by the board having regard to
the performance of individuals and market trends. At the end of the reporting period the following
amounts were payable to KMPs:
AU$15,000 (2021: AU$15,000) was payable to Mr Young;
There were no other balances outstanding from/to related parties.
TREK METALS LIMITED | ANNUAL REPORT 2022
50
NOTE 22: SHARE BASED PAYMENTS
Equity-settled share-based payments to directors, employees and others providing similar services
are measured at the fair value of the equity instrument at the grant date.
The fair value determined at the grant date of the equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will
eventually vest. At the end of each reporting period, the Group revises its estimate of equity
instruments expected to vest. The impact of the revision of the original estimates, if any, is
recognised in profit or loss over the remaining vesting period, with a corresponding adjustment to
the Share Based Payments Reserve.
The Trek Metals Ltd Employee Incentive Performance Rights and Options Plan (“Plan”) was approved
at the General Meeting of shareholders on 4 March 2021.
(a) Options issued
The following broker options were issued as part of the Placement conducted in October 2021:
YEAR ENDED 31 MARCH 2022
No of
options
Exercise
price
(AU$)
Grant
date
Expiry
Vested
#
FV @ grant
date (AU$/
unit)
Broker Options
5,000,000
0.200 26/10/21 31/10/23
5,000,000
0.052
There has been no alterations of terms or conditions of the above share-based payments. Options
granted carry no dividend or voting rights. When exercisable, each option is convertible into one
ordinary share of the Company with full dividend and voting rights.
Options at beginning of year
Options granted
Options lapsed
Options forfeited/cancelled
Options exercised
Options at end of year
31 MAR 2022
31 MAR 2021
Weighted
average
exercise price
(AU$)
0.218
0.200
(0.047)
-
0.056
0.098
No of options
27,806,250
5,000,000
(12,156,250)
-
(500,000)
20,150,000
No of options
23,562,500
4,500,000
(156,250)
-
(100,000)
27,806,250
Weighted
average
exercise price
(AU$)
0.160
0.218
(0.160)
-
0.056
0.218
TREK METALS LIMITED | ANNUAL REPORT 2022
51
Share options pricing model
The fair value of the equity-settled share options granted during the year is estimated as at the date
of grant using a Black Scholes Option Pricing model. The following table lists the inputs to the model
used for the valuation of options issued during the year ended 31 March 2022:
Number of Options
Fair values at measurement date
US$/share
Grant date share price – AU$/share
Exercise price – AU$/share
Expected volatility %
Options life in years
Dividend yield
Risk-free interest rate %
Broker
Options
5,000,000
0.052
0.115
0.200
111.2
2
-
1.27
The weighted average fair value of options granted during the period is AU$0.052 (2021: AU$0.024).
The expected life of the share options is based on historical data and is not necessarily indicative of
exercise patterns that may occur. The expected volatility reflects the assumption that the historical
volatility over a period similar to the life of the options is indicative of future trends, which may not
necessarily be the actual outcome.
(b)
Performance Rights issued
The Company has the following Performance Rights issued to Directors, employees and consultants
in existence during the current and previous reporting periods.
Class Grant date
Expiry Date
Performance Rights 2022
Opening
Balance 1
April 2021
Granted
during the
year
Expired
during the
year
Vested
during
the year
A
B
C
D
E
F
G
H
I
J
K
5/03/2021
5/03/2025
5/03/2021
5/03/2025
5/03/2021
5/03/2025
5/03/2021
5/03/2025
5/03/2021
5/03/2025
5/03/2021
5/03/2025
1/09/2021
1/09/2025
1/09/2021
1/09/2025
1/09/2025
1/09/2021
21/01/2022 28/01/2026
21/01/2022 28/01/2026
4,375,000
4,375,000
4,375,000
900,000
900,000
900,000
-
-
-
-
-
-
-
-
-
-
-
2,000,000
2,000,000
2,000,000
800,000
800,000
-
(375,000)
(375,000)
-
-
-
-
-
-
-
-
-
-
-
900,000
-
-
-
-
-
-
-
Rights
Vested
at 31
March
2022
-
-
-
900,000
-
-
-
-
-
-
-
Rights
Unvested
at 31 March
2022
4,375,000
4,000,000
4,000,000
-
900,000
900,000
2,000,000
2,000,000
2,000,000
800,000
800,000
TREK METALS LIMITED | ANNUAL REPORT 2022
52
Class
Grant date
Expiry Date
Performance Rights 2021
Opening
Balance 1
April 2020
Granted
during the
year
Vested during
the year
A
B
C
D
E
F
5/03/2021
5/03/2021
5/03/2021
5/03/2021
5/03/2021
5/03/2021
5/03/2025
5/03/2025
5/03/2025
5/03/2025
5/03/2025
5/03/2025
-
-
-
-
-
-
4,375,000
4,375,000
4,375,000
900,000
900,000
900,000
-
-
-
-
-
-
Rights
Vested
at 31 March
2021
-
-
-
-
-
-
Rights
Unvested
at 31 March
2021
4,375,000
4,375,000
4,375,000
900,000
900,000
900,000
Valuation of the performance rights was undertaken with the following factors and assumptions being used
in determining the fair value of each right on the grant date.
Class
Grant Date
Period
(years)
Valuation
per right
AU$
Performance Rights
Probability
Vesting Conditions
A
5/03/2021
4
$0.0492
100%
B
5/03/2021
4
$0.0452
100%
C
D
E
F
5/03/2021
5/03/2021
5/03/2021
5/03/2021
G
1/09/2021
4
4
4
4
4
$0.0420
100%
$0.0663
100%
$0.0663
100%
$0.0663
100%
$0.0725
100%
H
1/09/2021
4
$0.0686
100%
I
1/09/2021
4
$0.0664
100%
J
21/01/2022
4
$0.0864
95%
K
21/01/2022
4
$0.0799
90%
10-day VWAP of shares being greater than
A$0.15 per share.
The holder remains employed or engaged with
the Company for 12 months.
10-day VWAP of shares being greater than
A$0.20 per share.
The holder remains employed or engaged with
the Company for 18 months.
10-day VWAP of shares being greater than
A$0.25 per share.
The holder remains employed or engaged with
the Company for 24 months.
The holder remains employed or engaged with
the Company for 12 months.
The holder remains employed or engaged with
the Company for 18 months.
The holder remains employed or engaged with
the Company for 24 months.
10-day VWAP of shares being greater than
A$0.15 per share.
The holder remains employed or engaged with
the Company for 12 months.
10-day VWAP of shares being greater than
A$0.20 per share.
The holder remains employed or engaged with
the Company for 18 months.
10-day VWAP of shares being greater than
A$0.25 per share.
The holder remains employed or engaged with
the Company for 24 months.
10-day VWAP of shares being greater than
A$0.20 per share.
The holder remains employed or engaged with
the Company for 12 months.
10-day VWAP of shares being greater than
A$0.25 per share.
The holder remains employed or engaged with
the Company for 24 months.
TREK METALS LIMITED | ANNUAL REPORT 2022
53
Grant Date
Expiry Date
Performance Rights
Class
5 March 2021
5 March 2021
5 March 2021
5 March 2021
5 March 2021
5 March 2021
1 Sept 2021
1 Sept 2021
1 Sept 2021
21 Jan 2022
21 Jan 2022
5 March 2025
5 March 2025
5 March 2025
5 March 2025
5 March 2025
5 March 2025
1 Sept 2025
1 Sept 2025
1 Sept 2025
28 Jan 2026
28 Jan 2026
Class A
Class B
Class C
Class D
Class E
Class F
Class G
Class H
Class I
Class J
Class K
Total
Valuation
AU$
$215,250
$180,800
$168,000
$59,670
$59,670
$59,670
$145,000
$137,200
$132,800
$69,084
$63,936
Expense
recorded to 31
March 2022
AU$
$215,250
$129,237
$89,983
$59,670
$42,653
$31,960
$83,822
$52,827
$38,385
$11,735
$5,430
Expenses arising from share-based payment transactions:
Total expenses arising from share-based payment transactions recognised during the period as follows:
Expensed to Equity (shares issue costs)
Options issued to directors and brokers
Expensed to Statement of Profit or Loss
Options issued to staff and consultants
Performance Rights issued to key management personnel
Performance Rights issued to staff and consultants
Total Share based payments expense
NOTE 23: POST-BALANCE SHEET EVENTS
2022
AU$
2021
AU$
260,000
260,000
15,000
562,458
159,372
736,830
996,830
108,000
108,000
9,043
30,550
12,706
52,299
160,299
Sale of Gabon interest
On 25 March 2022, the Company reached agreement with Apollo Minerals Limited (Apollo Minerals, ASX: AON)
for Apollo to acquire the remaining 20% interest in the Kroussou zinc-lead project (Kroussou Project or Project),
located in western Gabon in central Africa. The consideration payable to Trek, which remains subject to
approval by Apollo shareholders at a general meeting which will be held in June 2022, is:
(i)
(ii)
3,000,000 AON fully-paid ordinary shares (with an estimated value of $240,000 based on the last
available price of AON Shares; and
1,000,000 share options exercisable into ordinary shares at 12c per share expiring 30 June 2024
On 16 May 2022, the Group signed a conditional agreement with Pilbara Minerals Ltd to acquire the strategic
base metals exploration tenement E45/4640 which is located immediately adjacent to Trek’s existing Pincunah
Project.
Other than described above, no other matters or circumstances have arisen since the end of the financial year
which significantly affected or may significantly affect the operations of the Group, the results of those
operations, or the state of affairs of the Group in subsequent financial years.
TREK METALS LIMITED | ANNUAL REPORT 2022
54
NOTE 24: REMUNERATION OF AUDITORS
Audit or review of the financial report
Other Non-audit services
31 MAR 2022
AU$
33,000
-
31 MAR 2021
AU$
33,453
1,200
33,000
34,653
The auditor of Trek Metals Limited is Hall Chadwick WA Audit Pty Ltd. The auditor provided no non-
audit services during the year. (2021: AU$1,200).
TREK METALS LIMITED | ANNUAL REPORT 2022
55
DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 31 MARCH 2022
The Directors declare that:
a)
b)
c)
d)
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;
in the directors’ opinion, the attached financial statements are in compliance with
International Financial Reporting Standards, as stated in Note 1 to the financial statements;
in the directors’ opinion, the attached financial statements and notes thereto are in
compliance with accounting standards and giving a true and fair view of the financial position
and performance of the consolidated entity; and
this declaration has been made after receiving a declaration to the directors by the Chairman
and Company Secretary.
On behalf of the Board
John Young
Executive Director
1 June 2022
TREK METALS LIMITED | ANNUAL REPORT 2022
56
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF TREK METALS LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Trek Metals Limited (“the Company”) and its subsidiaries (“the
Consolidated Entity”), which comprises the consolidated statement of financial position as at 31 March
2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year then ended, and
notes to the financial statements, including a summary of significant accounting policies, and the directors’
declaration.
In our opinion:
a.
the financial report of Trek Metals Limited presents fairly, in all material respects the consolidated
entity’s financial position as at 31 March 2022 and its financial performance for the year then ended
in accordance with Australian Accounting Standards; and
b.
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 1a.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Those standards require that
we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit
to obtain reasonable assurance about whether the financial report is free from material misstatement. 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 Consolidated Entity in accordance
with the auditor independence requirements of 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
Capitalised Exploration and Evaluation Costs
Our audit procedures included but were not limited to:
As disclosed in note 11 to the financial statements, the
• Assessing management’s determination of its
Group has
incurred significant exploration and
areas of interest for consistency with the
evaluation expenditures which have been capitalised
definition
in AASB 6 Exploration and
in accordance with the requirement of Exploration for
Evaluation of Mineral Resources (“AASB 6”);
and Evaluation of Mineral Resources (AASB 6). As at
31 March 2022, the Group’s capitalised exploration
and evaluation costs are carried at $3,703,707.
• 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
•
Testing the Group’s additions to capitalised
exploration and evaluation costs was considered a key
exploration costs for the year by evaluating a
audit matter due to:
•
The carrying value of capitalised exploration
and evaluation costs represents a significant
asset of
the Group, we considered
it
necessary to assess whether facts and
sample
of
recorded
expenditure
for
consistency
to underlying
records,
the
capitalisation requirements of the Group’s
accounting policy and the requirements of
AASB 6;
circumstances existed to suggest the carrying
• By testing the status of the Group’s tenure
amount of
this asset may exceed
the
and planned future activities, reading board
recoverable amount; and
• Determining whether impairment indicators
exist
involves significant
judgement by
management.
minutes and discussions with management
we assessed each area of interest for one or
more of the following circumstances that may
indicate
impairment of
the capitalised
exploration costs:
•
The licenses for the rights to explore
expiring in the near future or are not
expected to be renewed;
• Substantive expenditure
for
further
exploration in the area of interest is not
budgeted or planned;
• Decision or intent by the Group to
discontinue activities in the specific area
of interest due to lack of commercially
viable quantities of resources; and
• Data
indicating
that, although a
development in the specific area is likely
to proceed, the carrying amount of the
Key Audit Matter
How our audit addressed the Key Audit Matter
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.
Change of Presentation Currency
Our procedures included, amongst others:
(Refer to Note 3c)
During the period the Consolidated Entity changed its
•
Translating the trial balances to USD in
presentation currency from Great British Pounds
accordance with AASB 121 The Effects of
(USD) to United States Dollars (AUD) as this was
Changes in Foreign Exchange Rates.
deemed more relevant.
• Cross referencing calculated balances to the
• Obtaining the relevant final trial balances.
This has been deemed a key audit matter due to the
• Ensuring the disclosures in relation to the
infrequent nature of this change and its pervasiveness
change are adequate.
to the financial statements.
financial report.
Share based payments – AUD $736,830
Our procedures included, amongst others:
(Refer to Note 22)
• Obtaining a reconciliation of the share based
The share based payment expense has been deemed
payments in existence during the period.
a key audit matter as a result of the judgement
• Enquiring with management whether there
involved in determining the inputs to the valuation
have been any new options issued during
model.
the period.
• Obtaining management’s calculation of the
As disclosed in Note 22, during the period the entity
fair value of options issued during the period
granted options to suppliers as part of the
and assessing the inputs.
consideration for work performed and also to
• Assessing the amount recognised during the
employees and directors under the Employee Share
period against the vesting conditions of the
Option Plan.
options.
These options are subject to the measurement and
vesting of options issued in prior periods.
recognition criteria of AASB 2 “Share-based
Payments”.
• Ensuring the relevant disclosure is complete
and accurate.
• Enquiring with management about the
There are various inputs applied to the model used to
calculate the value of the options.
Other Information
The directors are responsible for the other information. The other information comprises the information included in
the Consolidated Entity’s annual report for the year ended 31 March 2022, 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 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 1a, the directors also state, that the financial report complies
with International Financial Reporting Standards.
In preparing the financial report, the directors are responsible for assessing the Consolidated Entity’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 Consolidated Entity or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. 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 Consolidated Entity’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 Consolidated Entity’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 Consolidated Entity 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.
•
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Consolidated Entity to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the Consolidated Entity audit. We remain solely responsible
for our audit opinion.
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.
HALL CHADWICK WA AUDIT PTY LTD
CHRIS NICOLOFF CA
Director
Dated in Perth, Western Australia this 1st day of June 2022
ADDITIONAL SECURITIES EXCHANGE
INFORMATION AS AT 27 MAY 2022
STOCK EXCHANGE LISTING
Trek Metals Limited is listed on the Australian Securities Exchange. The Company’s ASX code is TKM.
SUBSTANTIAL SHAREHOLDERS (HOLDING NOT LESS THAN 5%)
The Company is incorporated in Bermuda as an exempted company and is subject to Bermudan Law.
It is not subject to Chapters 6, 6A, 6B and 6C of the Australian Corporations Act 2001 dealing with
the acquisition of shares (including substantial shareholdings and takeovers) and shareholders are
not required to provide written notifications relating to becoming a substantial holder, changes in
substantial holdings or ceasing to be a substantial holder.
The following holder has a greater that 5% interest.
Name of Holder
Mr Alex Jordan Continue reading text version or see original annual report in PDF
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