Waterloo Brewing
Annual Report 2019

Plain-text annual report

ABN: 87 145 011 178 Corporate Directory & Contents Corporate Directory Board of Directors Executive Chairman Thomas Sanders Mark Edwards Non-Executive Director Michael Kitney Non-Executive Director Non-Executive Director Linton Putland Senior Management Alastair Barker Exploration Manager Michelle Simson Manager Corporate Affairs/Company Secretary Principal Place of Business & Registered Office 12 Walker Avenue West Perth, Western Australia 6005 +61 8 9226 3666 +61 8 9226 3668 Tel: Fax: Email: breaker@breakerresources.com.au Website: www.breakerresources.com.au ABN 87 145 011 178 Cover photo: Lake Roe RC and diamond drilling Contents Auditors Rothsay Chartered Accountants Level 1, 4 Ventnor Avenue West Perth, Western Australia 6005 Solicitors Steinepreis Paganin Level 4, 16 Milligan Street Perth, Western Australia 6000 Share Registry Automic Registry Services Level 5, 126 Phillip Street Sydney, New South Wales 2000 Tel: 1300 288 664 (within Australia) +61 2 9698 5414 (outside Australia) hello@automic.com.au Email: Website: www.automic.com.au Securities Exchange Listing in Breaker Shares and Partly Paid Shares Resources NL are quoted on ASX Limited (codes: BRB and BRBCA). The Home Exchange is Perth, Western Australia. Chairman’s Letter ____________________________________________________________________________________________ 2 Review of Activities __________________________________________________________________________________________ 3 Tenement Schedule _______________________________________________________________________________________ 11 Directors’ Report ___________________________________________________________________________________________ 12 Auditor’s Independence Declaration _____________________________________________________________________ 23 Statement of Profit or Loss and Other Comprehensive Income __________________________________________ 24 Statement of Financial Position ____________________________________________________________________________ 25 Statement of Changes in Equity ___________________________________________________________________________ 26 Statement of Cash Flows __________________________________________________________________________________ 27 Notes to the Financial Statements _________________________________________________________________________ 28 Directors’ Declaration _____________________________________________________________________________________ 47 Independent Audit Report ________________________________________________________________________________ 48 ASX Additional Information ________________________________________________________________________________ 52 1 Breaker Resources NL     Chairman’s Letter  Dear Shareholder, It has been a year of ongoing discovery, consolidation and systematic de-risking, and although this success is not yet reflected in the share price, we are taking steps to make this happen. Breaker’s flagship asset and prime focus is the Bombora gold deposit at its 100% owned Lake Roe Gold Project located 100km east of Kalgoorlie, 60km south- southeast of the operating 3.5Moz Carosue Dam gold mine, and 35km north of the 0.9Moz Karonie gold deposits. The Bombora deposit is situated on a granted Mining Lease within a highly prospective 600km2 tenement package, of which less than 10% has been systematically explored. The style of mineralisation is comparable to other well-known dolerite-hosted gold deposits such as the Paddington, St Ives and Golden Mile deposits. The discovery extends over a strike length of 3.2km, and is open in all directions after 223,000m of RC and diamond drilling. Drilling to date has focused mainly on creating a near-term, high-margin open pit mining option which can be expanded with further drilling during and beyond the feasibility process. An updated open pit Mineral Resource of 1.0Moz at 1.3g/t was released in early September 2019 with an emphasis on ongoing de-risking in preparation for a preliminary open pit PFS. The recovered Resource is viewed as a conservative estimate that only captures gold mineralisation to a variable depth of 180m to 300m below surface, and which contains inbuilt mining dilution and cautious top-cuts. The high-grade nature of the gold mineralisation is a characteristic of the deposit and should not be under-estimated. It creates mining optionality that potentially allows the early scheduling of high-grade mineralisation in an open pit scenario for example, or potential for longer-term underground mining. An underground resource has not yet been quantified despite the presence of significant known mineralisation at depth (eg. 6.1m @ 10.54g/t Au 130m below Resource). Similar unquantified growth potential is present along strike from Bombora. Further afield, regional exploration within the broader Lake Roe tenement package is starting to yield some very encouraging results, further reinforcing the camp- scale growth potential. What distinguishes the Bombora gold deposit from many peer group deposits is the greenfields nature of the discovery, the scale, the high-grade nature of the mineralisation which starts 5m below surface, and the camp-scale growth potential which is expected to take many years to crystallise. The strategic nature of the Lake Roe Gold Project has led to several unsolicited enquiries from corporate and other entities which may present opportunity to accelerate unlocking the value from the project. The Board of Breaker has consequently decided to undertake a strategic review to consider a range of potential partnering, funding and other asset initiatives, with a focus on maximising shareholder value. The Company makes no assurances that a transaction will eventuate, and will assess all options purely on their value-adding potential. The results of the strategic review could materially impact ongoing technical studies and, as a result, completion of the PFS has been deferred to allow the Company sufficient time to assess the impact of the review on various development options. The strategic review will also aim to lay a platform for a significant step-up in drilling activities to increase the current Resource and to continue expanding the Company’s development options. In closing, I would like to thank our committed staff and technical team, including contractors and suppliers, for their hard work and dedication. I would also like to thank our shareholders for their continued support as we embark on another exciting year with a firm commitment to building shareholder value. Yours sincerely Tom Sanders Chairman 2019 Annual Report 2     Review of Activities Review of Exploration Activities Activities during 2018/19 were focused on refining the Mineral Resource for the Bombora Deposit at the Lake Roe Gold Project, located approximately 100km east of Kalgoorlie. Reverse circulation (RC) and diamond drilling was undertaken, with a total of 68,000m drilled. An open pit pre-feasibility study (PFS) was also progressed. The strike length of the Bombora discovery increased from 2.2km to 3.2km during the year, as drilling defined additional mineralisation1. The deposit lies within an 8km gold system that remains open in all directions. Updated Mineral Resource The maiden Mineral Resource estimate for the Bombora Deposit was completed in April 2018 and comprised 11,876,000t at 1.6g/t gold for 624,000oz2. An updated JORC 2012 estimate, incorporating additional drilling results, was released in September 20183: Table 1: September 2018 Bombora Deposit Mineral Resource (0.5g/t Au cut-off) Classification Tonnes Au (g/t) Indicated Inferred Total 12,549,000 12,050,000 24,599,000 1.5 1.2 1.4 Ounces 624,000 460,000 1,084,000 The updated Resource represented a 74% increase in ounces and contained a high-grade core of 808,000oz at 2.0g/t Au (12.5Mt reported above 1.0g/t Au) or 417,000oz at 3.4g/t Au (3.9Mt reported above 2.0g/t Au)3. The Resource was limited at depth by the extent of the shallow drilling completed (150m to 250m from surface) and open to the north and south. A further update of the Bombora Resource was finalised after the end of the reporting period and released on 2 September 20194. It captures gold mineralisation to a variable depth of 180m to 300m below surface, and includes mining dilution expected in an open pit mining scenario. The Mineral Resource is summarised in Table 2 below. Areas of Indicated and Inferred mineralisation are shown on Figures 1 and 24. Table 2: September 2019 Bombora Deposit Mineral Resource (0.5g/t Au cut-off) Tonnes Grade Ounce Indicated Inferred Grand Total oxide trans fresh Total oxide trans fresh Total 141,000 1,842,000 16,373,000 18,356,000 214,000 922,000 3,717,000 4,853,000 23,210,000 1.3 1.4 1.4 1.4 1.0 0.9 1.2 1.1 1.3 6,000 83,000 714,000 803,000 7,000 27,000 144,000 178,000 981,000 3 Breaker Resources NL     Review of Activities  Figure 1: Long-section showing distribution of Indicated and Inferred mineralisation Figure 2: Long-section highlighting structure and growth potential 2018/19 Drilling For the period July 2018 to April 2019, normal drilling operations at Lake Roe comprised two RC and two diamond rigs. The trend of a new lode discovery every quarter continued, with the Eastern; Boneyards and Harlequin; Morant and North Extension; and Daisy lodes being discovered during the period. The three year-long first phase of Resource drilling of the Bombora Gold Deposit concluded in April 2019 to enable consolidation and review of data and planning for phase two. As at the end of the reporting period, aircore drilling focussed on water exploration and sterilisation drilling for infrastructure planning purposes was underway, with 4,198m completed before 30 June 2019. Drilling at Bombora has focused mainly on building the critical mass for a large, high-margin open pit with the objective of early cash flow. Judicious extensional drilling however has been successful in outlining substantial growth potential in several areas, both within and outside the known 8km-long Bombora gold system. 2019 Annual Report 4       Review of Activities Highlight intersections5 during the period included: Hole_ID BBRC0901 BBRC0908 BBRC0909 BBRC0911 BBRC0915 BBRD0784 BBRD0787 BBRC0937 BBDD0067 BBRC0923 BBRC0925 BBRD0848 BBDD0068 BBRC1020 BBDD0078 BBRC0995 BBRD0782 BBRD1146 BBDD0083 BBRD1261 BBRC1269 BBRC1279 BBRD1135 BBRD1261 BBRD1111 BBDD0086 Interval at g/t Au 4m at 13.70 8m @ 1.28 3m @ 6.84 15m @ 1.53 20m @ 1.66 6m @ 4.31 45m @ 2.14 35m @ 3.83 22m @ 3.12 12m @ 3.21 12m @ 3.40 3m @ 10.74 From 32m 80 154 140 60 230 194 81 25 68 180 176 4.63m @ 5.64 46.33 9m @ 13.86 15m @ 4.99 4m @ 10.79 47 82 44 Includes 2m @ 9.82g/t 5m @ 3.36g/t 8m @ 3.21g/t 1m @ 17.26g/t 17m @ 3.23g/t 5m @ 10.96g/t & 10m @ 6.09g/t 5m @ 12.38g/t 5m @ 4.7g/t & 3m @ 6.76g/t 4m @ 8.22g/t 1.64m @ 18.99g/t 2.44m @ 10.39g/t 4m @ 29.99g/t 11.1m @ 6.26g/t 12.94m @ 2.35 247.06 5.17m @ 4.44g/t & 3.17m @ 6.78g/t 4m @ 20.3 27m @ 2.57 29m @ 1.69 12m @ 2.31 8m @ 4.44 14m @ 18.86 29m @ 1.69 9.6m @ 1.43 9.17m @ 7.17 84 23 258 228 64 245 258 185.4 491.83 21m @ 3.11g/t 8m @ 3.81g/t 4m @ 6.30g/t 4m @ 8.00g/t 6.82m @ 36.87g/t 14m @ 2.61g/t & 8m @ 3.81g/t 4m @ 2.96g/t 6.1m @ 10.54g/t & 1.48m @ 42.02g/t Other Gold Prospects Whilst the main drilling focus continues to be the Bombora Deposit, drilling was also undertaken during the period at the Bombora South, Crescent and Claypan Shear North Prospects. Primary gold mineralisation was identified at Bombora South with intercepts including 20m @ 0.76g/t Au from 44m (including 8m @ 1.37g/t; BBRC1065) and 7m @ 0.95g/t from 146m (including 1m @ 3.22g/t; BBRD0407)5. At the Crescent Prospect, located approximately 2km north of Bombora, drilling confirmed the discovery of continuous shallow gold mineralisation over a 300m x 200m area with good open pit potential to the north and down-dip6. This is the first satellite gold system identified outside the main Bombora deposit. Thirty seven shallow exploratory RC holes were completed at Claypan Shear North and were designed to penetrate a nominal 10m into fresh rock. The highlight from the program is BBRC1322, on the northernmost line which terminated in mineralisation. This hole returned fresh rock intercepts of 2m @ 1.89g/t Au from 44m (including 1m @ 3.46g/t from 44m), and 2m @ 0.82g/t Au from 55m to end-of-hole (EOH) (including 1m @ 1.33g/t from 56m to EOH)7. Both intercepts are associated with shearing, biotite-albite-sulphide alteration and quartz veining, similar to that observed at Bombora and Crescent. The drilling at Lake Roe has progressively built an understanding of the nature, distribution and geometry of the gold mineralisation, starting from scratch (a rare greenfields discovery concealed by transported cover). It has also successfully proven continuity and upgraded the mining potential of what is the dominant style of mineralisation in WA’s Eastern Goldfields. 5 Breaker Resources NL     Review of Activities  Bombora Deposit Geology Gold mineralisation at Bombora is largely stratabound, occurring preferentially in the 100-150m thick, iron- rich quartz dolerite portion of the Bombora Sill (Figure 3). The quartz dolerite is located on the footwall (western) side of the sill, due to overturning of the stratigraphy. Variably-plunging lodes are formed where different mineralised structures intersect the quartz dolerite (Figures 3 and 4). Four main mineralised structure types have been recognised: steep lodes, flat lodes, west lodes, and stockwork zones. Steep lodes occur in ductile shear zones that are NNW-trending and sub-vertical (Figure 3), and have gently south-plunging intersections with the quartz dolerite (Figure 4). Mineralisation is hosted in lode-style (vein-poor) silica-albite-biotite-sulphide alteration zones. These structures are interpreted to be the primary fluid pathways within the deposit, and the controlling structures on domains of flat lodes and west lodes. Steep lodes account for approximately 50% of the contained gold at Bombora, and the down- plunge extensions of the major steep lodes are the primary targets for the assessment of the deposit’s underground mining potential. Figure 3: Bombora gold deposit geology at 300mRL (~15m below current land surface); Major steep lodes are labelled 2019 Annual Report 6     Review of Activities Figure 4: Long-section of the Bombora deposit, showing major steep and flat lodes. The southerly plunge of the steep lodes is caused by their intersection with the favourable quartz dolerite. Flat lodes are gently north- to northeast-dipping (5-30°; Figures 4 and 5), sinistral-reverse shear zones that host laminated quartz reef zones up to 3m wide, with sulphidised haloes. They have gentle north-plunging intersections with the quartz dolerite. Several major flat lodes (Cornucopia, Cousin, and the North Point reefs) are broadly focused around a major left-hand bend in the steep Tura Lode (Figure 4). The Crescent Prospect is hosted in a strong flat lode structure located ~2km north of Bombora. The host rocks at Crescent are low-iron dolerite, basalt and sedimentary rocks, highlighting the camp-scale potential for mineralisation outside of fractionated dolerite sills. West lodes occur in moderately (40-50°) west-dipping reverse shear zones, which have sub-horizontal intersections with the quartz dolerite. Mineralisation is associated with shear-parallel quartz-sulphide veins and/or flat-lying tension veinlets, and is interpreted to mostly post-date steep and flat lode mineralisation. West lodes can be well mineralised outside of the quartz dolerite, most significantly in the hangingwall dolerite between ~6600600mN and 6601400mN. Key examples of west lodes include the Harmat Fault and the Quarries structures. Stockwork mineralisation at Bombora is mostly within the Harmat Stockwork, a near-surface mineralised body focused around the west-dipping Harmat Fault between ~6601600mN and 6601800mN (Figures 4 and 5). Internal stockwork vein orientations in this zone vary between sub-horizontal, west-dipping and north-dipping. A ~30-40m wide swarm of moderately west-dipping, biotite-(ex)pyroxene-calcite lamprophyre dykes runs the full length of the Bombora deposit, sub-parallel to mineralised west lodes. Individual dykes are typically 1-10m in true thickness. The lamprophyres are late- to post-tectonic (unfoliated), and are interpreted to post-date most or all gold mineralisation. 7 Breaker Resources NL     Review of Activities  Figure 5: Perspective view of major flat lodes in relation to Tura lode (looking southwest) Lake Roe Pre-Feasibility Study PFS activities have been ongoing throughout the year, with the potential development pathway for the Bombora Gold Deposit being progressed in parallel to drilling. The PFS is well advanced and some aspects have been completed to feasibility level. The PFS will use the input from the September 2019 Resource update to trigger further open pit optimisation, design and scheduling studies. The output from the optimisation is also expected to guide further drilling by highlighting where the optimised pit shell is constrained by drilling or where there is potential to materially increase Reserves. The PFS will look at several processing options including standalone processing at a range of rates up to 2.5Mtpa. In addition to metallurgical testwork and process design, the PFS includes geotechnical, hydrological, environmental, heritage, geological and mine engineering aspects. The deposit is on a granted mining lease with a clear development pathway and the studies undertaken to date do not highlight any impediments to development. Manna Lithium Prospect The Manna Prospect is located approximately 15km south of Bombora and outcropping lithium-bearing pegmatite was discovered in the area in early 2018. First-pass rock-chip sampling identified widespread enrichment in lithium (up to 3.81% Li2O), tantalum (up to 366ppm Ta2O5) and niobium (up to 251ppm Nb2O5) and strong evidence of chemical zoning8. Mapping and sampling during the period confirmed the presence of a spodumene-rich, lithium-cesium-tantalum (LCT) pegmatite system over a 3.4km x 1km area; an area which is constrained by outcrop limits and the extent of sampling. Drilling during the fourth quarter of 2018 was designed to obtain first-pass information on the width, grade and continuity of the lithium-bearing pegmatite observed at surface. Ten reconnaissance RC drill holes were completed for a total of 1,503m. Intersections included 17m @ 1.80% Li2O (BMRC0009), 14m @ 1.03% Li2O (BMRC0001) and 9m @ 1.60% Li2O (BMRC0002)9. The drilling indicates a 150m- to 200m-wide swarm of spodumene-rich dykes extending over a distance of at least 700m, with individual pegmatite dykes up to 15m in (true) width. The mineralised pegmatite encountered in the drilling can generally be linked to mineralised pegmatite observed at surface, suggesting good continuity in the dip dimension. 2019 Annual Report 8     Review of Activities The reconnaissance line of five RC drill holes extending southeast of the main pegmatite outcrop identified new lithium-mineralised pegmatite in two holes, BMRC0007 and BMRC0008. BMRC0007 and BMRC0008 both intercepted a ~20m wide zone of multiple lithium-mineralised pegmatite dykes (up to 4m @ 1.65% Li2O in BMRC0008)9. This mineralisation is not exposed at surface and also remains open in all directions. Further afield (outside the 3.4km x 1km area), a new, separate zone of lithium-bearing pegmatite was discovered ~2km to the east-southeast. Further mapping and rock chip sampling are planned to assess the potential of this area. Collectively, the results highlight the potential for a large, previously unexplored field of LCT pegmatite. Figure 6: Plan of the spodumene-dominant zone of the Manna Lithium Prospect, showing the maiden RC drilling collars and results, plus surface mapping and rock chip information Other Exploration The Ularring Rock Project is located 100km east of Perth and covers the Centre Forest and Southern Brook gold-copper prospects. Deep Ground Penetrating Radar (DGPR) technology was trialled over the prospects and a previously unexplored high-tenor tungsten groundwater anomaly located along strike to the north of the gold- copper mineralisation. A total of 20 traverses over 20 line kilometres was acquired. The DGPR successfully imaged the sub-surface around the prospect areas and data was generally of good quality although penetration depth was negatively impacted in local areas of saline groundwater. A multitude of fault-like, dyke-like, crystalline and deep weathering anomalies were observed and recorded, as well as interesting notch-shaped features and paleo-channels. The exact nature of these anomalies is at present unknown and warrants further investigation given the strongly anomalous dissolved tungsten. 9 Breaker Resources NL     Review of Activities  In addition to the DGPR over the tungsten-in-water anomaly, a high-resolution Drone Magnetic Survey (DMS) was flown over a 24.6km2 area. A total of 615 line kilometres was surveyed at 40m line spacing on a nominal 0.6m station spacing. The dataset is of very high quality (more comparable to high resolution ground magnetics than conventional aeromagnetics). Several zones of hypothermal alteration (magnetic depletion) have been interpreted from the DMS, which in conjunction with the DGPR data, are expected to result in a number of drill targets. As at 30 June 2019, the Company held approximately 1,035km2 of tenements comprising a granted mining lease at Lake Roe, as well as nine granted exploration licences and one exploration licence application across the Lake Roe, Pinjin and Ularring Rock Project areas. Review of Corporate Activities Linton Putland was appointed a non-executive director of the Company on 16 August 2018. A mining engineer with more than 30 years’ experience, Mr Putland currently provides advice on project management, mine planning, feasibility study management, preparation of mining proposals, mining tenders and contracts in addition to business development and due diligence. Throughout the year the Company was represented at a range of industry conferences including Diggers & Dealers in Kalgoorlie, Resources Rising Stars events in Sydney, Melbourne and the Gold Coast, the Precious Metals Investment Symposium in Perth, the RIU Explorers and Resources Round-up events in Fremantle and Sydney and the Swiss Mining Institute Investor Conference in Zurich and Geneva. On 1 October 2018 the Company announced the conduct of a capital raising comprising a placement to institutional and sophisticated investors. The placement raised $10.595million before costs and resulted in the issue of 36,537,898 shares at a price of 29 cents. A further placement was announced on 15 May 2019, raising $6.3million before costs. The placement price of $0.30 represented a 14.3% discount to the closing share price before the offer was announced. The 21,000,000 placement shares were issued to investors on 22 May 2019. Other equity movements during the reporting period included the paying up of partly paid shares and the issue, lapse and expiry of unlisted options. Subsequent to year end, the Company announced a call on its partly paid shares. The call was due and payable on 4 October 2019 and the forfeiture and auction process arising from the call are ongoing at the date of this report. As at 30 June 2019, the Company’s capital structure comprised:  203,689,492 fully paid ordinary shares (ASX: BRB)  4,615,373 partly paid ordinary shares (ASX: BRBCA)  9,150,000 unlisted options at various exercise prices and expiry dates. At the beginning of the period the Company’s fully paid ordinary shares were trading at $0.26, and the Company had a market capitalisation of $38.7million and as at 30 June 2019, the share price was $0.32 and the market capitalisation $65.9million. ______________________________________ 1 ASX Release 21 March 2019 2 ASX Release 18 April 2018 (maiden Resource comprised 11,876,000t at 1.6g/t Au for 624,000oz of which 5,276,000t at 1.6g/t Au for 264,000oz was Indicated and 6,600,000t at 1.7g/t Au for 360,000oz was Inferred) 3 ASX Release 6 September 2018 4 ASX Release 2 September 2019 5 ASX Releases 4 September 2018, 23 October 2018, 12 December 2018, 31 January 2019, 21 March 2019, 29 April 2019 & 12 July 2019 6 ASX Release 12 December 2018 7 ASX Release 12 July 2019 8 ASX Release 30 April 2018 9 ASX Release 13 November 2018 2019 Annual Report 10     Tenement Schedule Tenement Schedule The following is a summary of tenements held by Breaker Resources NL as at 30 June 2019. Project Lake Roe Pinjin Ularring Rock Tenement Number E28/2515 E28/2522 E28/2551 E28/2555 E28/2556 E28/2559 E28/2920 M28/388 E28/2629 E70/4686 E70/4901 Status Granted Granted Granted Granted Granted Granted Application Granted Granted Granted Granted Percentage Held/Earning % 100 100 100 100 100 100 100 100 100 100 100 Photo 1: Aircore Drilling at Lake Roe Gold Project Photo 2: Diamond Drilling at Lake Roe Gold Project COMPETENT PERSONS STATEMENT The information in this report that relates to Exploration Results is based on and fairly represents information and supporting documentation compiled by Tom Sanders, Competent Person, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Sanders is an executive of Breaker Resources NL and his services have been engaged by Breaker on an 80% of full time basis; he is also a shareholder in the Company. Mr Sanders has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 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 Sanders consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The reference in this report to the Mineral Resources is based on information announced to the ASX on 18 April 2018, 6 September 2018 and 2 September 2019. Breaker confirms that it is not aware of any new information or data in relation to the Resources that materially affects the information included in the relevant market announcements that has not been updated in subsequent announcements, and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply to the relevant estimates and have not materially changed. 11 Breaker Resources NL               Directors’ Report  Directors’ Report The directors of Breaker Resources NL herewith submit the financial report for the year ended 30 June 2019. In order to comply with the provisions of the Corporations Act 2001 (Cth), the directors report as follows: Information about Officeholders Directors The names of the directors of the Company during the financial year and up to the date of this report are provided below. Thomas Sanders BSc (Geology); MSc (Mineral Economics); MAusIMM; FAICD Executive Chairman (appointed 2 July 2010) Tom Sanders is a geologist with over 35 years’ experience in the Australian mining industry. He has extensive experience in project generation, exploration, feasibility, mining and corporate management with a strong emphasis on gold and nickel in Western Australia (WA). Mr Sanders has published works on nickel and gold in WA, in addition to regional mineralisation studies on the eastern Kimberley region under contract to the Geological Survey of WA. Mr Sanders has managed a large number of exploration projects, several of which he progressed into production during a 23 year period based in the Kalgoorlie region in WA. He has extensive production experience on several underground and open pit gold and nickel operations. Mr Sanders was responsible for identifying Breaker’s initial projects and guiding the Company to a successful ASX listing in 2012. Mr Sanders previously founded Navigator Resources Limited and steered that company from initial project acquisition to ASX-listing. He then managed the building of a two million ounce gold resource inventory through discovery and acquisition and identified the Cummins Range rare earth resource. During the past three (3) years, Mr Sanders has not served as a director on any other listed company. Mark Edwards BJuris; LLB Non-Executive Director (appointed 2 July 2010) Mark Edwards is a solicitor with over 30 years of experience in resources and corporate law. He has advised a number of ASX-listed companies active in the resources sector and on a range of resources projects in Australia and overseas, including significant nickel, gold and iron ore projects. His professional work has involved him in many facets of the resources industry ranging from ASX listings, exploration and mining joint ventures to project development agreements and project financing. During the past three (3) years, Mr Edwards has not served as a director on any other listed company. Michael Kitney Assoc. Met; Post Grad Dip (Extractive Metallurgy); MSc (Mineral Economics); MAICD; MAusIMM Non-Executive Director (appointed 2 July 2010) Mike Kitney is a process engineer with over 40 years’ experience in the mining industry. He has participated in the development and construction of projects throughout Australia, Africa, south east Asia and the former Soviet Union. Mr Kitney’s particular strengths are in production and mineral processing, all aspects of environmental management, project evaluation and assessment and leadership of interdisciplinary project teams. He brings to the Company vast project development expertise and practical experience in commissioning new projects. 2019 Annual Report 12     Directors’ Report Mr Kitney has previously held senior technical and project management positions with Kasbah Resources Limited, Alcoa Australia Limited, Minproc Engineers Limited, Property Company of London plc, British Phosphate Commissioners, Nelson Gold Corporation Limited and Avocet Mining plc. He is currently a technical consultant to ASX-listed Prospect Resources Limited. During the past three (3) years, Mr Kitney has served as a director on ASX-listed General Mining Corporation Limited (appointed 20 October 2015; ceased 5 August 2016). Linton Putland BEng (Mining), MSc (Mineral Economics), MAusIMM, GAICD Non-Executive Director (appointed 16 August 2018) Linton Putland holds a degree in mining engineering and a masters in science from the Western Australian School of Mines and has over 30 years' experience in mining operations, joint ventures and corporate management in Australia, Africa and the Americas over a wide range of commodities. Mr Putland is principal of LJ Putland & Associates, a private mining consultancy company which was founded in 2002, providing advisory and consultancy services in mining project and company evaluation and due diligence appraisals with a focus on corporate growth. During this period he has also been Managing Director of a privately owned exploration company, with joint venture interests in Africa. Prior to this he held corporate and senior management roles in IAMGOLD Corporation, AurionGold Limited, Delta Gold NL and Pancontinental Mining Limited. During the past three (3) years, Mr Putland has served as a director on ASX-listed Pacific Energy Limited (appointed 18 October 2016) and Azumah Resources Limited (appointed 18 July 2018). Company Secretary The name of the company secretary of the Company during or since the end of the financial year and up to the date of this report, and the term of their appointment, are provided below. Michelle Simson EMBA (Dist.); GradDipACG; ACIS; AGIA Company Secretary (appointed 22 October 2012) Michelle Simson has nearly 25 years’ administration experience, including the last 15 years in the resources industry working in both exploration and mining companies in the commodities of gold and uranium. She has previously held positions with Agincourt Resources Limited, Nova Energy Limited and Navigator Resources Limited and has completed an Executive Master of Business Administration with Distinction at the University of Western Australia and a Graduate Diploma in Applied Corporate Governance. She is a Chartered Secretary and member of the Governance Institute of Australia. During the past three (3) years, Miss Simson has not served as a director on any other listed company. Board Committee Membership As at the date of this report, the Board has an Audit Committee, Nomination Committee, Remuneration Committee and a Risk Committee. Three of the four directors comprise membership of each committee and the respective chairmen are:  Audit Committee: Mark Edwards;  Nomination Committee: Linton Putland;  Remuneration Committee: Mike Kitney; and  Risk Committee: Tom Sanders. 13 Breaker Resources NL   Directors’ Report  Directors’ Meetings The number of meetings of directors (including meetings of committees of directors) held during the year and the number of meetings attended by each director is as follows: Board of Directors Committee Meetings Audit Nomination Remuneration Risk Director Held Present Held Present Held Present Held Present Held Present Tom Sanders Mark Edwards Mike Kitney Linton Putland (appointed 16/08/2018) 4 4 4 3 Directors’ Interests 4 4 4 3 1 2 2 1 1 2 2 1 1 1 1 - 1 1 1 - - 1 1 1 - 1 1 1 2 - 2 2 2 - 2 2 The following table sets out each director’s relevant interest in shares and options in shares of the Company or a related body corporate as at the date of this report. Director Tom Sanders Mark Edwards Mike Kitney Linton Putland Fully paid ordinary shares Partly paid ordinary shares Unlisted share options Number 22,544,660 1,778,190 1,468,544 - Number 309,871 65,000 58,125 - Number 3,000,000 1,250,000 1,250,000 1,250,000 During the financial year 4,250,000 share options were granted to directors of the Company as part of their remuneration (2018: Nil). Directors’ and Officers’ Insurance During the financial year, Breaker paid a premium to insure the directors and secretary of the Company. Details of the premium are subject to a confidentiality clause under the contract of insurance. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of the Company and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities. Corporate Structure Breaker Resources NL is a no liability public company limited by shares, domiciled and incorporated in Australia.  Principal Activities During the year the Company carried out exploration activities on its tenements in Western Australia with the objective of identifying gold and other economic mineral deposits. 2019 Annual Report 14     Directors’ Report Operational Review Activities Review A review of the exploration activities undertaken during the year commences on page 1. Financial Review During the year total exploration expenditure incurred by the Company amounted to $14,418,057 (2018: $13,351,027). In line with the Company’s accounting policies, all exploration expenditure is written off as it is incurred. Net administration and other expenses amounted to $1,892,150 (2018: $720,575). The Company’s operating loss after income tax for the year is $16,310,207 (2018: $14,071,602). At year end the Company held cash and cash equivalents and term deposits of $4,925,956 (2018: $5,173,422). Operating Results for the Year Summarised operating results are as follows: Revenues and profit/(loss) from ordinary activities before income tax expenses 98,086 (16,310,207) Revenues Results $ $ Shareholder Return Summarised shareholder return is as follows: Basic profit/(loss) per share Dividends 2019 cents 2018 cents (9.30) (9.90) No dividends were paid or declared during the year. No recommendation for payment of dividends has been made. Share Options As at the date of this report, there are 9,150,000 unissued ordinary shares of Breaker Resources NL in respect of which options are outstanding. This number comprises: Type of option Unlisted Unlisted Unlisted Unlisted Unlisted Number 2,500,000 2,000,000 150,000 250,000 4,250,000 Exercise price Expiry date $0.448 $0.432 $0.644 $0.730 $0.465 31 December 2019 31 December 2019 31 December 2019 31 December 2020 31 December 2021 No person entitled to exercise any option referred to above has or had, by virtue of the option, a right to participate in any share issue of any other body corporate. Share Options Issued The following options were issued by Breaker Resources NL during the financial year: 15 Breaker Resources NL   Directors’ Report  Type of option Number Exercise price Expiry date Comment Unlisted  4,250,000 $0.465 31 December 2021 Issued under Company’s Incentive Option Scheme Shares Issued on Exercise of Options There were Nil shares issued due to the exercise of options during the financial year. Share Options that Expired/Lapsed The following options expired or lapsed during the financial year: Type of option Number Exercise price Expiry date Reason for lapse Unlisted 250,000 $0.690 31 December 2019 Cessation of employment Unlisted 500,000 $0.400 30 June 2019 Expired Significant Changes in State of Affairs During the financial year there were no significant changes in the state of affairs of the Company other than those referred to in the Financial Statements and notes thereto. Subsequent Events There were no matters or circumstances arising since the end of the reporting period that have significantly affected or may significantly affect the operations of the Company and the results of those operations or the state of the affairs of the Company in the financial period subsequent to 30 June 2019. Likely Developments and Expected Results The Company expects to maintain a similar status and level of activities to that at present and hence there are no likely developments in the entity's operations. Environmental Regulations and Performance Breaker is subject to significant environmental regulation in respect to its exploration activities. The Company aims to ensure that the appropriate standard of environmental care is achieved, and in doing so, that it is aware of and is in compliance with all environmental legislation. The directors of the Company are not aware of any breach of environmental legislation for the year under review. Proceedings on Behalf of the Company No persons have applied for leave pursuant to section 237 of the Corporations Act 2001(Cth) to bring, or intervene in, proceedings on behalf of Breaker Resources NL. Non-Audit Services There were no non-audit services performed during the year by the auditors for the Company (or by another person or firm on the auditor’s behalf). 2019 Annual Report 16       Directors’ Report Auditor’s Independence Declaration The Auditor’s Independence Declaration is included on page 18 and forms part of the Directors’ Report for the financial year ended 30 June 2019. Remuneration Report This Remuneration Report, which forms part of the Directors’ Report, sets out information about the remuneration of Breaker Resources NL’s key management personnel for the financial year ended 30 June 2019. The information provided in this report has been audited as per the requirements of section 308(3C) of the Corporations Act 2001 (Cth). The report is set out under the following main headings:  Key management personnel;  Principles used to determine the components and amount of compensation;  Details of remuneration;  Details of share-based compensation; and  Details of service agreements and employment contracts. Key Management Personnel For the purposes of this report, key management personnel of the Company are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly. The key management personnel during the year were:  Tom Sanders  Mark Edwards  Mike Kitney  Linton Putland  Alastair Barker  Michelle Simson Executive Chairman Non-Executive Director Non-Executive Director Non-Executive Director Exploration Manager Manager Corporate Affairs/Company Secretary Principles Used to Determine the Components and Amount of Compensation Remuneration Committee The role of the Remuneration Committee is to assist the Company in fulfilling its corporate governance responsibilities relating to remuneration by reviewing and making appropriate recommendations on: remuneration packages of executive directors, non-executive directors and officers;   employee incentive and equity-based plans including the appropriateness of performance hurdles and total payments proposed; recruitment, retention and termination policies and procedures for senior executives; and   superannuation arrangements. Remuneration Policy The remuneration policy of Breaker Resources NL has been designed to align key management personnel objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the Company’s results. The Board of Breaker Resources NL believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best key management personnel to run and manage the Company. The policy for determining the nature and amount of remuneration for senior executives of the Company is summarised below:  The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed by the Board. The Board reviews executive packages annually by 17 Breaker Resources NL   Directors’ Report  reference to the Company’s performance, executive performance and comparable information from industry sectors and other listed companies in similar industries.  The Board may exercise discretion in relation to approving incentives, bonuses and options. The policy is designed to attract and retain the highest calibre of executives and reward them for performance that results in long-term growth in shareholder wealth.  Executives are also eligible to participate in the employee incentive option scheme.  Where applicable, executives receive a superannuation guarantee contribution required by the government, which during the reporting period was 9.5%. Some individuals may choose to sacrifice part of their salary to increase payments towards superannuation.  All remuneration paid to key management personnel is valued at the cost to the Company and expensed. Options are valued using the Black-Scholes methodology. The Board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The Board determines payments to the non-executive directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders in general meeting. The current remuneration pool limit is $300,000 and is currently utilised to a level of $144,000 per annum. The base fee paid to non-executive directors is $48,000 per annum inclusive of superannuation. Fees for non-executive directors are not linked to the performance of the Company however to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the Company and are able to participate in the employee incentive option scheme, although any allocation must be approved by shareholders in general meeting. There is no retirement benefit plan for directors. Performance Based Remuneration The Company currently has no individual performance based remuneration component built into key management personnel remuneration packages. Company Performance, Shareholder Wealth and Key Management Personnel Remuneration The remuneration policy has been tailored to increase the direct positive relationship between shareholders’ investment objectives and key management personnel performance. Currently, this is facilitated through the issue of options to key management personnel to encourage the alignment of personal and shareholder interests. The Company believes this policy will be effective in increasing shareholder wealth. Use of Remuneration Consultants The Company did not employ the services of any remuneration consultants during the financial year ended 30 June 2019. Details of Remuneration The key management personnel of the Company are disclosed above. Remuneration packages contain the following elements:  Short-term employee benefits – cash salary and fees, cash bonuses, non-monetary benefits and other;  Post-employment benefits – including superannuation and termination; and  Share-based payments – shares and options granted. 2019 Annual Report 18     Directors’ Report The remuneration for each director and each of the other key management personnel of the Company during the year was as follows: Key management personnel Short-term Post-employment Share- based payments Salary & fees Non- monetary Super- annuation Retirement benefits Options Total $ $ Tom Sanders  2019  2018 313,875 314,659 Mark Edwards  2019  2018 Mike Kitney  2019  2018 Linton Putland2 47,000 40,000 53,3301 42,558  2019 52,3163 Alastair Barker  2019  2018 Michelle Simson  2019  2018 253,750 259,938 223,040 226,944 - - - - - - - - - - - $ - - - - 7,833 6,667 3,638 - - 23,880 24,823 $ $ $ - - - - - - - - - - - 517,729 831,604 - - - - - 314,659 47,000 40,000 61,163 49,225 206,851 262,805 - - - - 253,750 259,938 246,920 251,767 Notes 1 In addition to directors’ fees of $39,167 and associated superannuation of $7,833 during 2018/19, Metallurgical Design, an entity controlled by Mike Kitney, was paid fees of $14,163, at arm’s length market rates, under an agreement for the provision of project management services for Lake Roe metallurgical testwork. 2 Linton Putland was appointed a director on 16 August 2018. 3 In addition to directors’ fees of $38,297 and associated superannuation of $3,638 during 2018/19, LJ Putland & Associates, an entity controlled by Linton Putland, was paid fees of $14,019, at arm’s length market rates, under an agreement for the provision of project management services for Lake Roe engineering studies. No director or executive appointed during the year received a payment as part of his or her consideration for agreeing to hold the position. Details of Share-Based Compensation Shares Nil shares in the Company were issued to key management personnel as part of their remuneration during the year (2018: Nil). Options 4,250,000 options in the Company were issued to key management personnel as part of their remuneration during the year (2018: Nil). There were Nil options exercised or sold by key management personnel during the year (2018: Nil). 19 Breaker Resources NL   Directors’ Report  During the year, the following share-based payment arrangements for key management personnel were in existence: Option series Grant date Expiry date Fair value per option at grant Vesting date 60532 60533 28 November 2016 31 December 2019 5 December 2016 31 December 2019 BRBOPT07 22 November 2018 31 December 2021 BRBOPT07 22 November 2018 31 December 2021 cents 22.36 17.48 16.55 17.26 28 November 2016 5 December 2016 28 November 2018 29 November 2018 Shareholdings of Key Management Personnel The numbers of ordinary shares in the Company during the financial year in which each director of Breaker Resources NL and other key management personnel of the Company holds a relevant interest, including their closely related parties, are detailed below: Key management personnel Balance at start of year Fully Paid Ordinary Shares Granted as compen- sation Received on exercise of options Number Number Number Tom Sanders  2019  2018 Mark Edwards  2019  2018 Mike Kitney  2019  2018 Linton Putland1  2019 Alastair Barker  2019  2018 Michelle Simson  2019  2018 22,544,660 21,027,067 1,778,190 1,666,108 1,468,544 1,468,544 - 373,162 228,912 16,300 - - - - - - - - - - - - - - - - - - - - - - - Notes 1 Linton Putland was appointed a director on 16 August 2018. Other changes Number Balance at year end Number - 22,544,660 1,517,593 22,544,660 - 112,082 1,778,190 1,778,190 - - - - 144,250 - 16,300 1,468,544 1,468,544 - 373,162 373,162 16,300 16,300 2019 Annual Report 20           Directors’ Report Key management personnel Tom Sanders  2019  2018 Mark Edwards  2019  2018 Mike Kitney  2019  2018 Linton Putland1  2019 Alastair Barker  2019  2018 Michelle Simson  2019  2018 Partly Paid Ordinary Shares Balance at start of year Number Granted as compensation Other changes Number Number Balance at year end Number 309,871 1,309,871 65,000 65,000 58,125 58,125 - - 6,250 - - - - - - - - - - - - - - (1,000,000) - - - - - - (6,250) - - 309,871 309,871 65,000 65,000 58,125 58,125 - - - - - Notes 1 Linton Putland was appointed a director on 16 August 2018. Option Holdings of Key Management Personnel The numbers of options over ordinary shares in the Company during the financial year in which each director of Breaker Resources NL and other key management personnel of the Company holds a relevant interest, including their closely related parties, are detailed below: Key management personnel Balance at start of year Granted as compen- sation Exercised Other changes Balance at year end Vested and exercisable Number Number Number Number Number Number Tom Sanders  2019  2018 Mark Edwards - -  2019  2018 1,250,000 1,250,000 3,000,000 - - - - - 1,250,000 1,250,000 - 1,250,000 Mike Kitney  2019  2018 Linton Putland1  2019 Alastair Barker  2019  2018 1,000,000 1,000,000 - - 21 Breaker Resources NL - - - - - - - - - - - - - - - - - - 3,000,000 3,000,000 - - 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 1,250,000 1,000,000 1,000,000 1,000,000 1,000,000     Directors’ Report  Michelle Simson  2019  2018 1,000,000 1,000,000 - - - - - - 1,000,000 1,000,000 1,000,000 1,000,000 Notes 1 Linton Putland was appointed a director on 16 August 2018. Details of Service Agreements and Employment Contracts Service agreements are in place between the Company and Executive Chairman Tom Sanders and Exploration Manager Alastair Barker. Manager Corporate Affairs/Company Secretary Michelle Simson is employed via contract. Details of these arrangements as at 30 June 2019 are provided below:  Service Agreement: Tom Sanders – Executive Chairman  Term of agreement – Initial term of two (2) years and further terms of two (2) years, subject to termination provisions; commenced 18 April 2012 (subject to ASX listing).  An annual consultancy fee of $319,300* (inclusive of superannuation, plus GST) is paid to Goldfields Geological Associates, an entity controlled by Mr Sanders, for the provision of services by Mr Sanders on a minimum of 80% of fulltime basis.  The agreement continues until terminated by either Goldfields Geological Associates or the Company. Subject to the Corporations Act 2001 (Cth) and the ASX Listing Rules, Mr Sanders is entitled to a minimum notice period of 12 months and the Company is entitled to a minimum notice period of three (3) months.  Goldfields Geological Associates will be reimbursed for expenses incurred on the Company’s behalf.  Service Agreement: Alastair Barker – Exploration Manager  Term of agreement – Initial term of two (2) years and further terms of one (1) year subject to termination provisions; commenced 18 April 2012 (subject to ASX listing).  An annual consultancy fee of $257,500* (inclusive of superannuation, plus GST) is paid to Horizon Resources Pty Ltd, an entity controlled by Mr Barker, for the provision of services by Mr Barker on a minimum of 80% of fulltime basis.  The agreement continues until terminated by either Horizon Resources Pty Ltd or the Company. Subject to the Corporations Act 2001 (Cth) and ASX Listing Rules, Mr Barker is entitled to a minimum notice period of 12 months (or six (6) months after the initial term). The Company is entitled to a minimum notice period of three (3) months.  Employment Contract: Michelle Simson – Manager Corporate Affairs/Company Secretary  Base salary of $227,630* per annum (exclusive of superannuation).  Payment of termination benefit on termination by the employer, other than for gross misconduct, equals three (3) months’ salary.  Notice period of three (3) months. * The figures stated represent the respective fees as at 30 June 2019. An increase was implemented during 2018/19. Signed in accordance with a resolution of directors made pursuant to section 298(2) of the Corporations Act 2001 (Cth). On behalf of the directors TOM SANDERS Executive Chairman Perth, 22 August 2019 2019 Annual Report 22     Auditor’s Independence Declaration  23 Breaker Resources NL   Statement of Profit or Loss and Other Comprehensive Income  Statement of Profit or Loss and Other Comprehensive Income for the Financial Year ended 30 June 2019 Income Government grant and incentive Interest income Other income Total income Expenses Administration expenses Depreciation expenses Employee benefits expenses Exploration and evaluation expenses Share-based payment expenses Other expenses Total expenses Notes 2019 $ 2018 $ 4 4 4 4 4 4 - 91,086 7,000 98,086 30,000 207,210 20,490 257,700 (785,535) (172,758) (304,747) (570,818) (103,063) (239,657) (14,418,057) (13,351,027) (724,580) (2,616) (64,737) - (16,408,293) (14,329,302) Profit/(Loss) before income tax (16,310,207) (14,071,602) Income tax expense 6 - - Profit/(Loss) for the year (16,310,207) (14,071,602) Other comprehensive income - - Total comprehensive income/(loss) for the year (16,310,207) (14,071,602) Profit/(Loss) attributable to owners of the Company (16,310,207) (14,071,602) Total comprehensive income/(loss) attributable to owners of the Company (16,310,207) (14,071,602) Basic and diluted profit/(loss) per share attributable to the ordinary equity holders of the Company (cents per share) 15 (9.30) (9.90) The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. 2019 Annual Report 24   Statement of Financial Position  Statement of Financial Position as at 30 June 2019 Current Assets Cash and cash equivalents Term deposits Trade and other receivables Other financial assets Prepaid service Total Current Assets Non-Current Assets Plant and equipment Total Non-Current Assets Total Assets Current Liabilities Trade and other payables Total Current Liabilities Total Liabilities Net Assets Equity Contributed equity Share-based payment reserve Accumulated profit/(loss) Notes 2019 $ 2018 $ 7 7 8 9 11 10 12 3,875,956 1,050,000 353,321 71,755 - 5,173,422 - 295,703 70,390 12,103 5,351,032 5,551,618 429,867 429,867 460,119 460,119 5,780,899 6,011,737 541,396 541,396 1,227,956 1,227,956 541,396 1,227,956 5,239,503 4,783,781 13 53,092,600 37,051,251 1,747,915 1,140,114 (49,601,012) (33,407,584) Capital and reserves attributable to owners of the Company 5,239,503 4,783,781 Total Equity 5,239,503 4,783,781 The above Statement of Financial Position should be read in conjunction with the accompanying notes. 25 Breaker Resources NL   Statement of Changes in Equity Statement of Changes in Equity for the Financial Year ended 30 June 2019 Attributable to owners of the Company Contributed Equity $ Notes Share- based Payments Reserve $ Accumulated Profit/(Losses) $ Total $ Balance at 30 June 2017 25,342,430 1,817,586 (20,078,191) 7,081,825 Profit/(Loss) for the year Total comprehensive income/(loss) for the year Options issued during the year Options expired and transferred to accumulated losses Transactions with owners in their capacity as owners: Contributions of equity net of transaction costs - - - - - (14,071,602) (14,071,602) - (14,071,602) (14,071,602) 64,737 - 64,737 (742,209) 742,209 - 13 11,708,821 - - 11,708,821 Balance at 30 June 2018 37,051,251 1,140,114 (33,407,584) 4,783,781 Profit/(Loss) for the year Total comprehensive income/(loss) for the year Options issued during the year Options expired/withdrawn and transferred to accumulated loss Transactions with owners in their capacity as owners: Contributions of equity net of transaction costs - - - - - (16,310,207) (16,310,207) - (16,310,207) (16,310,207) 724,580 - 724,580 (116,779) 116,779 - 13 16,041,349 - - 16,041,349 Balance at 30 June 2019 53,092,600 1,747,915 (49,601,012) 5,239,503 The above Statement of Changes in Equity should be read in conjunction with the accompanying notes. 2019 Annual Report 26     Statement of Cash Flows  Statement of Cash Flows for the Financial Year ended 30 June 2019 Cash flows from operating activities Payments to suppliers and employees Payments for exploration and evaluation expenditure Receipts from government grant and incentive Other income received Interest received Notes 2019 $ 2018 $ (1,128,117) (854,330) (15,070,750) (12,331,074) - 7,000 91,086 30,000 20,490 207,210 Net cash inflow/(outflow) from operating activities 17 (16,100,781) (12,927,704) Cash flows from investing activities Payments for plant and equipment Payments for other financial assets Investment in term deposits Withdrawn from term deposits (186,669) (1,365) (263,675) (733) (7,350,000) (10,750,000) 6,300,000 14,334,522 Net cash inflow/(outflow) from investing activities (1,238,034) 3,320,114 Cash flows from financing activities Proceeds from issue of ordinary shares Share issue transaction costs 16,905,143 11,557,187 (863,794) (583,091) Net cash inflow/(outflow) from financing activities 16,041,349 10,974,096 Net increase/(decrease) in cash and cash equivalents (1,297,466) 1,366,506 Cash and cash equivalents at the beginning of the period 5,173,422 3,806,916 Cash and cash equivalents at the end of the period 7 3,875,956 5,173,422 The above Statement of Cash Flows should be read in conjunction with the accompanying notes. 27 Breaker Resources NL     Notes to the Financial Statements   Notes to the Financial Statements for the Year ended 30 June 2019 1. General information Breaker Resources NL is a public company listed on the Australian Securities Exchange, incorporated in Australia and operating in Australia. The Company’s registered office and its principal place of business is 12 Walker Avenue, West Perth WA 6005. Breaker Resources NL’s principal activity is mineral exploration and it is a for-profit entity for the purposes of preparing the Financial Statements. These Financial Statements are for Breaker Resources NL as an individual entity and are presented in the Australian currency. The Financial Statements were authorised for issue by the directors on 22 August 2019. The directors have the power to amend and reissue the Financial Statements. 2. Significant accounting policies The principal accounting policies adopted in the preparation of the Financial Statements are set out below. (a) Basis of preparation These general purpose financial statements have been prepared in accordance with the Corporations Act 2001 (Cth) (Corporations Act) and Australian Accounting Standards and Interpretations (Standards) issued by the Australian Accounting Standards Board (AASB). The Financial Statements and notes of the Company also comply with International Financial Reporting Standards issued by the International Accounting Standards Board. These Financial Statements have been prepared under the historical cost convention. Historical cost is generally based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted. Going concern The Financial Statements have been prepared on the basis of going concern which assumes continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. The ability of the Company to continue as a going concern is dependent upon funding to provide adequate working capital for a further 12 months from the date of signature of the Financial Statements. The directors intend to raise capital if it is needed. Therefore, they are satisfied that the going concern basis of preparation is appropriate. The Financial Statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern. (b) New and revised accounting standards i. Amendments to Accounting Standards that are mandatorily effective for the current year In the current year, the Company has applied the below applicable amendments to Standards issued by the AASB that are mandatorily effective for an accounting period that begins on or after 1 July 2018, and therefore relevant for the current year end. 2019 Annual Report 28   Notes to the Financial Statements   AASB 9 ‘Financial Instruments’ and the relevant amending standards In the current year, the Company has applied AASB 9 Financial Instruments (as amended) and the related consequential amendments to other Standards that are effective for an annual period that begins on or after 1 July 2018. The transition provisions of AASB 9 allow an entity not to restate comparatives. The adoption has had no impact on the Company’s financial position, profit or loss, other comprehensive income or total comprehensive income in the current year or previous year. AASB 9 introduced new requirements for: - - - the classification and measurement of financial assets and financial liabilities; impairment of financial assets; and general hedge accounting. Details of these new requirements as well as their impact on the Financial Statements are described below. The date of initial application (ie. the date on which the Company has assessed its existing financial assets and financial liabilities in terms of the requirements of AASB 9) is 1 July 2018. Accordingly, the Company has applied the requirements of AASB 9 to instruments that continue to be recognised as at 1 July 2018 and has not applied the requirements to instruments that have already been derecognised as at 1 July 2018. All recognised financial assets that are within the scope of AASB 9 are required to be subsequently measured at amortised cost or fair value on the basis of the entity’s business model for managing the financial assets and the contractual cash flow characteristics of the financial assets. Specifically: - Debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding, are subsequently measured at amortised cost; - Debt investments that are held within a business model whose objective is both to collect the contractual cash flows and to sell the debt instruments, and that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding, are subsequently measured at fair value through other comprehensive income (FVTOCI); and - All other debt investments and equity investments are subsequently measured at fair value through profit or loss (FVTPL). When a debt investment measured at FVTOCI is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment. In contrast, for an equity investment designated as measured at FVTOCI, the cumulative gain or loss previously recognised in other comprehensive income is not subsequently reclassified to profit or loss. Debt instruments that are subsequently measured at amortised cost or at FVTOCI are subject to impairment (see below). The directors of the Company reviewed and assessed the Company’s existing financial assets as at 1 July 2018 based on the facts and circumstances that existed at that date and concluded that the initial application of AASB 9 has had the following impact on the Company’s financial assets as regards their classification and measurement: 29 Breaker Resources NL   Notes to the Financial Statements   - Financial assets classified as held-to-maturity and loans and receivables under AASB 139 that were measured at amortised cost continue to be measured at amortised cost under AASB 9 as they are held within a business model to collect contractual cash flows and these cash flows consist solely of payments of principal and interest on the principal amount outstanding. Impairment of financial assets In relation to the impairment of financial assets, AASB 9 requires an expected credit loss model as opposed to an incurred credit loss model under AASB 139. The expected credit loss model requires the Company to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial assets. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognised. Specifically, AASB 9 requires the Company to recognise a loss allowance for expected credit losses on: - - - - debt investments measured subsequently at amortised cost or at FVTOCI; lease receivables; trade receivables and contract assets; and financial guarantee contracts to which the impairment requirements of AASB 9 apply. The directors assess all its financial assets, including cash and bank balances and receivables, having as low credit risk at each reporting date as they are held with reputable banking institutions or government bodies. Classification and measurement of financial liabilities One major change introduced by AASB 9 in the classification and measurement of financial liabilities relates to the accounting for changes in the fair value of a financial liability designated as at FVTPL attributable to changes in the credit risk of the issuer. Specifically, AASB 9 requires that the changes in the fair value of the financial liability that is attributable to changes in the credit risk of that liability be presented in other comprehensive income, unless the recognition of the effects of changes in the liability's credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability's credit risk are not subsequently reclassified to profit or loss, but are instead transferred to retained earnings when the financial liability is derecognised. Previously, under AASB 139, the entire amount of the change in the fair value of the financial liability designated as at FVTPL was presented in profit or loss. The application of AASB 9 has had no impact on the classification and measurement of the Company’s financial liabilities. Disclosures in relation to the initial application of AASB9 There were no financial assets or financial liabilities which the Company had previously designated as at FVTPL under AASB 139 that were subject to reclassification or which the Company has elected to reclassify upon the application of AASB 9. There were no financial assets or financial liabilities which the Company has elected to designate as at FVTPL at the date of initial application of AASB 9. AASB 2016-5 ‘Amendments to Australian Accounting Standards – Classification and Measurement of Share-based Payment Transactions’, The Company has adopted AASB 2016-5 for the first time in the current year. The amendments clarify the following: 2019 Annual Report 30   Notes to the Financial Statements   - In estimating the fair value of a cash-settled share-based payment, the accounting for the effects of vesting and non-vesting conditions should follow the same approach as for equity-settled share-based payments; - Where tax law or regulation requires an entity to withhold a specified number of equity instruments equal to the monetary value of the employee’s tax obligation to meet the employee’s tax liability which is then remitted to the tax authority, ie. the share-based payment arrangement has a ‘net settlement feature’, such an arrangement should be classified as equity-settled in its entirety, provided that the share-based payment would have been classified as equity-settled had it not included the net settlement feature; and - A modification of a share-based payment that changes the transaction from cash- settled to equity-settled should be accounted for as follows:   the original liability is derecognised; the equity-settled share-based payment is recognised at the modification date fair value of the equity instrument granted to the extent that services have been rendered up to the modification date; and  any difference between the carrying amount of the liability at the modification date and the amount recognised in equity should be recognised in profit or loss immediately. ii. New and revised Accounting Standards in issue not yet adopted At the date of authorisation of the Financial Statements, the Standards applicable to the Company’s business listed below were in issue but not yet effective. The potential effect of the revised Standards on the Company’s financial statements has not yet been determined. AASB 9 ‘Lease’, effective for annual reporting periods beginning on or after 1 January 2019, expected to be initially applied in the financial year ending 30 June 2020. AASB 2008-1 ‘Amendments to Australian Accounting Standards – Annual Improvements 2015-2017 Cycle’, effective for annual reporting periods beginning on or after 1 January 2019, expected to be initially applied in the financial year ending 30 June 2020. (c) Segment reporting An operating segment is defined as a component of an entity that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Company’s chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors. (d) Government grants Government grants are not recognised until there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognised in profit or loss in the period in which they become receivable. (e) Interest income Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. 31 Breaker Resources NL   Notes to the Financial Statements   (f) Income tax The income tax expense for the year is the tax payable on the current year’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It creates provisions, where appropriate, on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the Financial Statements. However, the deferred tax income is not accounted for if it arises from initial recognition of an asset or liability in a transaction that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise these temporary differences and losses. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. (g) Impairment of non-financial assets At the end of each reporting period, the Company reviews the carrying amounts of its non- financial assets to determine whether there is any indication that those assets have suffered an impairment loss. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. 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 estimates of future cash flows have not been adjusted. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. When an impairment loss subsequently reverses, the carrying amount of the asset 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 determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. 2019 Annual Report 32   Notes to the Financial Statements   (h) Cash and cash equivalents For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short term highly liquid investments with original maturities of three (3) months or less that are readily convertible to known amounts of cash and which are not subject to significant risk of changes in value, and bank overdrafts. (i) (j) Trade and other receivables Receivables are recognised and carried at original invoice amount less a provision for any uncollectible debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. Financial assets There are three principal classification categories for financial assets: measured at amortised cost, at FVTOCI and at 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. Debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding, are subsequently measured at amortised cost. Debt investments that are held within a business model whose objective is both to collect the contractual cash flows and to sell the debt instruments, and that have contractual cash flows that are solely payments of principal and interest on the principal amount outstanding, are subsequently measured at FVTOCI. All other debt investments and equity investments are subsequently measured at FVTPL. Impairment The Company assesses at each reporting date whether there is an expected credit loss in relation to the impairment of financial assets, The Company accounts for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial assets. (k) Plant and equipment All plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the Statement of Profit or Loss and Other Comprehensive Income during the reporting period in which they are incurred. Depreciation of plant and equipment is calculated using the straight line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term. All plant and equipment is depreciated at the rate of 25% per annum. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (refer to Note 2(g)). Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the Statement of Profit or Loss and Other Comprehensive Income. 33 Breaker Resources NL   Notes to the Financial Statements   (l) Exploration and evaluation costs Exploration and evaluation costs are written off in the year they are incurred. (m) (n) Trade and other payables These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. The amounts are unsecured, non-interest bearing and are paid on normal commercial terms. They are presented as current liabilities unless payment is not due within 12 months after the reporting period. Employee benefits Short-term obligations Liabilities for wages and salaries, including non-monetary benefits, and annual leave that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The short-term employee benefit obligations are presented as payables. Other long-term employee benefit obligations The liabilities for long service leave and annual leave that are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period of government bonds with terms and currencies that match, as closely as possible, the estimated future cash outflows. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss. (o) Share-based payments The Company provides benefits to employees (including directors and contractors) and suppliers in the form of share-based payment transactions, whereby employees and suppliers render goods or services in exchange for shares or rights over shares (equity-settled transactions) (refer to Note 18). The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value of options is determined by an internal valuation using a Black-Scholes option pricing model. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which any performance conditions are fulfilled, ending on the date on which the relevant employees or suppliers become fully entitled to the award (vesting date). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects:   the extent to which the vesting period has expired; and the number of options that, in the opinion of the directors of the Company, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition. 2019 Annual Report 34   Notes to the Financial Statements   Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award. (p) Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. (q) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the Statement of Financial Position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows. (r) Critical judgements, estimates and assumptions The preparation of these Financial Statements requires the use of certain critical accounting estimates, which, by definition, will seldom equal the actual results. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Financial Statements are: Environmental issues Balances disclosed in the Financial Statements and notes thereto are not adjusted for any pending or enacted environmental legislation, and the directors’ understanding thereof. At the current stage of the Company’s development and its current environmental impact, the directors believe such treatment is reasonable and appropriate. 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 Company as they pertain to current income taxation legislation, and the directors’ understanding thereof. No adjustment has been made for pending or future taxation legislation. The current income tax position represents the directors’ best estimate, pending an assessment by the Australian Taxation Office. 35 Breaker Resources NL   Notes to the Financial Statements   3. Financial risk management The Company’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk), credit risk and liquidity risk. The Company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Company. Risk management is carried out by the Board via the audit and risk committees as the Company believes that it is crucial for all directors to be involved in this process. The Executive Chairman, with the assistance of senior management as required, has responsibility for identifying, assessing, treating and monitoring risks and reporting to the Board on risk management. (a) Market risk Foreign exchange risk As all current operations are within Australia the Company is not exposed to foreign exchange risk. Commodity price risk Given the current level of operations the Company is not directly exposed to commodity price risk. Interest rate risk The Company is exposed to movements in market interest rates on cash and cash equivalents and bank deposits. The Company’s policy is to monitor the interest rate yield curve out to six (6) months to ensure a balance is maintained between the liquidity of cash assets and the interest rate return. The entire balance of cash and bank deposits for the Company of $4,925,956 (2018: $5,173,422) is subject to interest rate risk. The weighted average interest rate received on cash and cash equivalents by the Company was 1.71% (2018: 1.53%). Sensitivity analysis At 30 June 2019, if interest rates had changed by -/+ 100 basis points from the weighted average rate for the year with all other variables held constant, post-tax loss for the Company would have been $50,497 lower/higher (2018: $62,987) as a result of lower/higher interest income from cash and cash equivalents. (b) Credit risk The Company has no significant concentrations of credit risk. The maximum exposure to credit risk at balance date is the carrying amount of those assets as disclosed in the Statement of Financial Position and Notes to the Financial Statements. As the Company does not presently have any debtors, lending, significant stock levels or any other credit risk, a formal credit risk management policy is not maintained. (c) Liquidity risk The Company manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash and marketable securities are available to meet the current and future commitments of the Company. Due to the nature of the Company’s activities, being mineral exploration, the Company does not have ready access to credit facilities, with the primary source of funding being equity raisings. The Board constantly monitors the state of equity markets in conjunction with the Company’s current and future funding requirements, with a view to initiating appropriate capital raisings as required. The financial liabilities of the Company are generally confined to trade and other payables as disclosed in the Statement of Financial Position. All trade and other payables are non-interest bearing and due within 12 months of the reporting date. 2019 Annual Report 36   Notes to the Financial Statements   (d) Fair value estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. All financial assets and financial liabilities of the Company at the balance date are recorded at amounts approximating their carrying amount due to their short-term nature. 4. Income and expenses (a) Income from continuing operations includes the following revenue items: Government grant and incentive Interest income Other (b) Loss for the year includes the following specific expenses: Depreciation expenses Exploration and evaluation expenses (c) Employee benefit expenses: Wages and superannuation Directors’ fees Annual leave provision Other 5. Operating segments 2019 $ - 91,086 7,000 98,086 2018 $ 30,000 207,210 20,490 257,700 2019 $ 2018 $ 172,758 103,063 14,418,057 13,351,027 2019 $ 139,441 128,936 616 35,754 304,747 2018 $ 134,940 80,000 (5,706) 30,423 239,657 For management purposes, the Company has identified only one (1) reportable segment as exploration activities undertaken in Australia. This segment includes activities associated with the determination and assessment of the existence of commercial economic reserves from the Company’s mineral assets in this geographic location. Segment performance is evaluated based on the operating profit and loss and cash flows and is measured in accordance with the Company’s accounting policies. Segment revenue Reconciliation of segment revenue to total revenue before tax: Government grant and incentive Interest revenue Other income Total revenue 37 Breaker Resources NL 2019 $ 2018 $ - - 91,086 7,000 98,086 - 30,000 207,210 20,490 257,700   Notes to the Financial Statements   Segment result Reconciliation of segment result to loss before tax: Depreciation expenses Other corporate and administration income/(expenses), net Net profit/(loss) before tax 2019 $ 2018 $ (14,418,057) (13,351,027) (172,758) (1,719,392) (103,063) (617,512) (16,310,207) (14,071,602) Segment operating assets 381,562 399,309 Reconciliation of segment operating assets to total assets: Other corporate and administration assets Total assets Segment additions to non-current assets Other corporate additions to non-current assets Total additions to non-current assets 5,399,337 5,780,899 5,612,428 6,011,737 134,261 6,545 140,806 240,782 64,441 305,223 Segment operating liabilities 381,974 1,046,770 Reconciliation of segment operating liabilities to total liabilities: Other corporate and administration liabilities Total liabilities 6. Income tax Income tax expense Current tax Deferred tax Numerical reconciliation of income tax expense to prima facie tax payable Profit/(Loss) from continuing operations before income tax expense Prima facie tax benefit at the Australian tax rate of 30% (2018: 27.5%) Tax effect of amounts which are not deductible (taxable) in calculating taxable income:  Capital raising costs  Entertainment  Share-based payment 159,422 541,396 181,186 1,227,956 2019 $ 2018 $ - - - - (16,310,207) (14,071,602) (4,893,062) (3,869,691) (133,214) 3,926 221,005 (85,164) 1,841 (223,483) (4,801,345) (4,176,497) Movements in unrecognised temporary differences (29,633) (49,958) Tax effect of current year tax losses for which no deferred tax asset has been recognised Income tax expense 4,830,978 4,226,455 - - 2019 Annual Report 38   Notes to the Financial Statements   Unrecognised temporary differences Deferred tax liabilities on income tax account Prepayments Plant and equipment FBT payable DTA used to offset DTL Deferred tax liabilities Deferred tax assets on income tax account Accruals Provisions Capital raising costs Carry forward tax losses DTA used to offset DTL 2019 $ 2018 $ 21,458 121,577 - 15,256 116,864 803 (143,035) (132,923) - - 19,500 12,280 386,860 10,576,826 (143,035) 10,852,431 29,929 12,832 254,533 7,222,804 (132,923) 7,387,175 Deferred tax liabilities - - Breaker Resources NL is no longer considered a base rate entity for income tax purposes and is therefore subject to income tax at a rate of 30% (2018: 27.5%). As a result, the deferred tax assets of the Company have been adjusted in the 2019 year to reflect the increase in corporate tax rate applicable to the Company. Net deferred tax assets have not been brought to account as it is not probable within the immediate future that tax profits will be available against which deductible temporary differences and tax losses can be utilised. The Company’s ability to use losses in the future is subject to the Company satisfying the relevant tax authority’s criteria for using these losses. The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profit will be available against which the Company can utilise benefits. The utilisation of tax losses is dependent on the Company satisfying the continuity of ownership test or the same business test at the time the tax losses are applied against taxable income. The Company participated in the federal government’s 2016/17 Exploration Development Incentive Scheme (EDI) for eligible exploration entities. As a result the Company has foregone 2017 income tax losses to the extent of $7,111,915 in exchange for the EDI credits of $1,955,776 for the eligible shareholders. 7. Cash and cash equivalents Cash at bank and in hand Cash and cash equivalents as shown in the Statement of Financial Position and the Statement of Cash Flows 2019 $ 2018 $ 3,875,956 5,173,422 3,875,956 5,173,422 39 Breaker Resources NL   Notes to the Financial Statements   2019 $ 2018 $ Term deposits classified separate to cash on face of Statement of Financial Position 1,050,000 - Cash and cash equivalents include short-term deposits made for varying periods of between one (1) month and three (3) months depending on the immediate cash requirements of the Company and earn interest at the respective short-term deposit rates. As at 30 June 2019, the Company had a term deposit of $1,050,000 with maturity of four (4) months (2018: Nil). 8. Trade and other receivables Prepayments GST receivable and FBT instalment Other receivables 2019 $ 71,529 281,792 - 353,321 2018 $ 55,475 238,689 1,539 295,703 The carrying amounts of trade and other receivables are assumed to be the same as their fair values, due to their short-term nature. 9. Other financial assets Term deposits as a security Other financial assets 10. Plant and equipment 2019 $ 70,992 763 71,755 2018 $ 70,390 - 70,390 2019 2018 Furniture & office equipment $ Exploration equipment $ Motor vehicles $ Total $ Furniture & office equipment $ Exploration equipment $ Motor vehicles $ Total $ Cost 132,999 184,628 799,758 1,117,385 126,454 165,650 684,475 976,579 Accumulated depreciation (84,694) (141,908) (460,916) (687,518) (65,644) (126,588) (324,228) (516,460) Net book amount 48,305 42,720 338,842 429,867 60,810 39,062 360,247 460,119 Opening net book amount 60,810 39,061 360,248 460,119 6,104 37,551 214,304 257,959 Additions 6,545 18,979 115,282 140,806 64,441 13,881 226,901 305,223 Depreciation charge (19,050) (15,320) (136,688) (171,058) (9,735) (12,371) (80,957) (103,063) Closing net book amount 48,305 42,720 338,842 429,867 60,810 39,061 360,248 460,119 2019 Annual Report 40   Notes to the Financial Statements   11. Prepaid service Prepaid service 2019 $ 2018 $ - 12,103 The Company issued 500,000 options to a supplier in exchange of the use of certain intellectual property owned by the supplier for a period of three (3) years to the year ended 30 June 2019. The prepaid service was amortised over the agreed period of the use of the property. 12. Trade and other payables Trade creditors Other payables and accruals 2019 $ 412,890 128,506 541,396 2018 $ 1,056,826 171,130 1,227,956 Trade payables are unsecured and are usually paid within 30 days of recognition. The carrying amounts of trade and other payables are assumed to be the same as their fair values, due to their short-term nature. 13. Contributed equity (a) Share capital 2019 2018 Notes Number $ Number $ Ordinary shares fully paid (b),(d) 203,689,492 53,046,447 146,101,594 37,004,598 Ordinary shares partly paid (b),(d) 4,615,373 46,153 4,665,373 46,653 Total issued capital 208,304,865 53,092,600 150,766,967 37,051,251 (b) Movements in ordinary share capital Beginning of the year Issued during the year:  Fully paid shares issued in exchange for services  Placements to sophisticated and professional investors  Fully paid shares under a Share Purchase Plan  Partly paid shares converted to fully paid shares  Transaction costs End of the year 2019 2018 Number $ Number $ 150,766,967 37,051,251 133,493,607 25,342,430 - - 1,036,167 734,725 57,537,898 16,895,643 14,285,715 10,000,000 - - - - 1,951,478 1,366,000 9,500 (863,794) - - 191,187 (583,091) 208,304,865 53,092,600 150,766,967 37,051,251 41 Breaker Resources NL   Notes to the Financial Statements   (c) Movements in options on issue Beginning of the year  Issued  Expired or lapsed End of the year 2019 Number 5,650,000 4,250,000 (750,000) 2018 Number 5,800,000 250,000 (400,000) 9,150,000 5,650,000 All options on issue are exercisable on a 1:1 basis for the Company’s ordinary shares and carry no rights to dividends and no voting rights. The options are exercisable at prices between $0.432 and $0.730 and expire between 31 December 2019 and 31 December 2021. (d) Ordinary shares Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one (1) vote, and upon a poll each share is entitled to one (1) vote, in proportion to the number of and amounts paid as a proportion of the issue price on the shares held (excluding any amounts paid up in advance of a call). Ordinary shares have no par value and the Company does not have a limited amount of authorised capital. The partly paid ordinary shares have a total issue price of $0.20 and are paid up to $0.01. The balance is payable by calls made by the Company no earlier than four (4) years after the date of issue (December 2013). Upon becoming fully paid, each partly paid share will rank equally in all respects with the other issued fully paid shares in the Company. (e) Capital risk management The Company’s objective when managing capital is to safeguard its ability to carry on as a going concern, so that it may continue to provide returns for shareholders and benefits for other stakeholders. Due to the nature of the Company’s activities, being mineral exploration, the Company does not have ready access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of capital risk management is the current working capital position against the requirements of the Company to meet exploration programs and corporate overheads. The Company’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required. The working capital position of the Company at 30 June 2019 and 30 June 2018 is as follows: Cash and cash equivalents Term deposits Trade and other receivables Other financial assets Trade and other payables Working capital position 14. Dividends 2019 $ 3,875,956 1,050,000 353,321 71,755 2018 $ 5,173,422 - 295,703 70,390 (541,396) (1,227,956) 4,809,636 4,311,559 No dividends were paid during the financial year. No recommendation for payment of dividends has been made. 2019 Annual Report 42   Notes to the Financial Statements   15. Loss per share (a) Reconciliation of earnings used in calculating profit/(loss) per share 2019 $ 2018 $ Profit/(Loss) attributable to the owners of the Company used in calculating basic and diluted profit/(loss) per share (16,310,207) (14,071,602) (b) Weighted average number of shares used as the denominator Weighted average number of ordinary shares used as the denominator in calculating basic and diluted loss per share 175,292,538 142,156,382 2019 Number 2018 Number (c) Information on classification of options As the Company has made a loss for the year ended 30 June 2019, all options on issue are considered antidilutive and have not been included in the calculation of diluted earnings per share. These options could potentially dilute basic earnings per share in the future. 16. Commitments (a) Exploration Commitments The Company must maintain current rights of tenure to tenements, which requires outlays of expenditure in 2019/20. Under certain circumstances these commitments are subject to the possibility of adjustment to the amount and/or timing of such obligations however they are expected to be fulfilled in the normal course of operations. Estimated expenditure on mining, exploration and prospecting leases for 2019/20 as at the date of this report: 2019 $ 2018 $ 635,100 365,000 (b) Capital Commitments There are no capital expenditure commitments for the Company as at 30 June 2019. (c) Lease Commitments: Company as Lessee The Company leases its office under a non-cancellable operating lease expiring within one (1) year. Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows: Within one (1) year Later than one (1) year but not later than five (5) years 2019 $ 45,551 - 45,551 2018 $ 45,551 - 45,551 43 Breaker Resources NL   Notes to the Financial Statements   17. Reconciliation of loss after income tax to net cash outflow from operating activities Reconciliation of net loss after income tax to net cash flow from operating activities Net profit/(loss) for the year Non-cash items Depreciation of non-current assets Disposal of plant and equipment Share-based payments of employee options Share-based payments in exchange of services Change in operating assets and liabilities (Increase)/decrease in trade and other receivables Increase/(decrease)in trade and other payables 2019 $ 2018 $ (16,310,207) (14,071,602) 172,758 2,616 724,580 12,104 (57,618) (645,014) 103,063 - 64,737 747,929 (15,029) 243,198 Net cash inflow/(outflow) from operating activities (16,100,781) (12,927,704) (a) Non-cash transactions During the year, the Company granted 4,250,000 options to its employees as incentives. The value of the options was included in the Share-based Payments (refer to Note 18). 18. Share-based payments (a) Employee share options The Company provides benefits to employees (including directors and eligible contractors) of the Company in the form of share-based payment transactions, whereby employees render services in exchange for options to acquire ordinary shares. Options are granted under the plan for no consideration. The table below summarises the share-based payment options granted by Breaker Resources NL: 2019 2018 Weighted average exercise price cents 46.0 46.5 69.0 46.3 46.3 Number 5,150,000 4,250,000 250,000 9,150,000 9,150,000 Weighted average exercise price cents 45.6 73.0 40.4 43.7 46.0 Number 5,300,000 250,000 400,000 5,150,000 4,900,000 Outstanding at the beginning of the year Granted Forfeited/cancelled/expired Outstanding at year end Exercisable at year end A total of 250,000 unlisted employee options lapsed during the year. The weighted average remaining contractual life of share options outstanding at the end of the financial year was 1.46 years (2018: 1.50 years) and the exercise prices ranged from 43.2 cents to 73.0 cents (2018: 43.2 cents to 73.0 cents). 2019 Annual Report 44   Notes to the Financial Statements   The weighted average fair value of the employee share options granted during the year was 16.76 cents (2018: 25.90 cents). The fair value of the options was estimated using a Black-Scholes pricing model. Expected volatility was based on the historical movement of the underlying share price around its average share price. The assumption that the historical volatility is indicative of future trends may also not necessarily be the actual outcome. Inputs into the pricing model BRBOPT07 Grant date share price Exercise price Expected volatility Option life Risk-free interest rate $0.350 $0.465 84.8% 3.09 years 2.09% (b) Other party options In addition to options issued to employees, the Company may also issue unlisted options to other parties. There were no other party options granted during the year. (c) Share-based payments expenses During the year, an amount of $724,580 was recognised as a share-based payment expense. An amount of $116,779 was transferred from the share-based payment reserve to accumulated losses as a result of the lapse or expiry of 750,000 options. 19. Key management personnel transactions The aggregate compensation made to directors and other members of key management personnel of the Company is set out below: Short term benefits Post-employment benefits 2019 $ 895,311 35,351 930,662 2018 $ 915,589 31,490 947,079 There were no loans to/from key management personnel during the year. Detailed remuneration disclosures are provided in the Remuneration Report commencing on page 12. 20. Related party transactions In addition to the services provided by Mr Sanders, the value of which is shown as Mr Sanders’ remuneration in the Remuneration Report commencing on page 12, Goldfields Geological Associates is also reimbursed for other Company expenses including software maintenance and other out-of-pocket costs incurred on the Company’s behalf. The value of these expenses incurred during the year was $41,762 (2018: $8,411). The Company had no other transactions with related parties during the year except as outlined above and the payments to the key management personnel disclosed in the Remuneration Report commencing on page 12. There were no guarantees provided to related parties during the year. 45 Breaker Resources NL     Notes to the Financial Statements   21. Remuneration of auditor During the year the following fees were paid or payable for services provided by the auditor of the Company, its related practices and non-related audit firms: (a) Audit services Rothsay Chartered Accountants – audit and review of financial reports Total remuneration for audit services 2019 $ 2018 $ 22,000 22,000 22,000 22,000 (b) Non-audit services There were Nil non-audit services provided by the auditor of the Company, Rothsay Chartered Accountants, during the year (2018: Nil). 22. Subsequent events There were no matters or circumstances arising since the end of the reporting period that have significantly affected or may significantly affect the operations of the Company and the results of those operations or the state of the affairs of the Company in the financial period subsequent to 30 June 2019. 2019 Annual Report 46   Directors’ Declaration  Directors’ Declaration The directors declare that:  the Financial Statements comprising the Statement of Profit or Loss and Other Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and accompanying notes set out on pages 23 to 41 are in accordance with the Corporations Act 2001 (Cth), including: i. complying with Accounting Standards, the Corporations Regulations 2001 (Cth) and other mandatory professional reporting requirements; and ii. giving a true and fair view of the Company’s financial position as at 30 June 2019 and of its performance for the financial year ended on that date;  in the opinion of the directors there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable;  a statement that the attached financial statements are in compliance with International Financial Reporting Standards has been included in the Notes to the Financial Statements; and  the directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A of the Corporations Act 2001 (Cth). Signed in accordance with a resolution of the directors made pursuant to section 295(5) of the Corporations Act 2001 (Cth). On behalf of the directors TOM SANDERS Executive Chairman Perth, 22 August 2019 47 Breaker Resources NL   Independent Audit Report 2019 Annual Report 48   Independent Audit Report   49 Breaker Resources NL   Independent Audit Report 2019 Annual Report 50   Independent Audit Report   51 Breaker Resources NL   ASX Additional Information ASX Additional Information Additional information required by the Australian Securities Exchange and not shown elsewhere in this report is provided below. The information is current as at 30 September 2019. Corporate Governance Statement The 2019 Corporate Governance Statement of Breaker Resources NL is available on the Company’s website at http://www.breakerresources.com.au/company/corporate-governance. Distribution of Equity Securities Analysis of numbers of equity security holders by size of holding: Fully paid ordinary shares Partly paid shares* Number of holders Number of shares Number of holders Number of shares 1-1,000 1,001-5,000 5,001-10,000 10,001-100,000 116 520 316 901 25,053 1,500,788 2,659,902 33,831,316 100,001 and over 241 165,760,433 2,094 203,777,492 8 25 8 20 11 72 3,775 67,730 56,058 692,484 3,707,326 4,527,373 * Note: A call has been made on the partly paid shares which is due and payable on 4 October 2019. Unmarketable Parcel There are 253 holders of unmarketable parcels of fully paid ordinary shares, based on the closing market price of $0.28 on 30 September 2019. Restricted Securities There are no restricted securities on issue. Voting Rights All fully paid ordinary shares carry one (1) vote per share without restriction. Holders of partly paid shares are entitled to a fraction of one (1) vote which is equivalent to the proportion which the amount paid bears to the total issue price. Unlisted options carry no attaching voting rights. Substantial Shareholders The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations Act, and the details of their holding at the time of notification, are: Shareholder 1 2 Mr Thomas Stephen Sanders & Mrs Helen Sanders Norfolk Enchants Pty Ltd Voting interest Number Voting power % 22,560,154 15,500,000 12.33% 8.48% 2019 Annual Report 52     ASX Additional Information Top 20 Shareholders The names of the 20 largest holders of quoted fully paid ordinary shares (ASX: BRB) are: Shareholder Ordinary shares Number Equity held % Norfolk Enchants Pty Ltd Mr Thomas Stephen Sanders & Mrs Helen Sanders BT Portfolio Services Limited Mr Thomas Stephen Sanders & Mrs Helen Sanders JP Morgan Nominees Australia Pty Ltd Gurravembi Investments Pty Ltd Kurraba Investments Pty Ltd Twynam Investments Pty Ltd HSBC Custody Nominees (Australia) Limited Brispot Nominees Pty Ltd Ilwella Pty Ltd T T Nicholls Pty Ltd Gurravembi Investments Pty Ltd Ausdrill International Pty Ltd Tom Hume Pty Ltd Kemast Investments Pty Ltd Bradley Scott Dvorak UBS Nominees Pty Ltd BNP Paribas Noms Pty Ltd 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Mark Robert Edwards 16,500,000 13,960,715 9,000,000 8,559,945 7,396,547 6,500,000 5,021,429 3,913,743 3,342,166 3,174,803 3,091,650 2,756,471 2,700,000 1,994,460 1,870,000 1,844,828 1,661,534 1,636,736 1,605,829 1,532,035 98,062,891 8.10 6.85 4.42 4.20 3.63 3.19 2.46 1.92 1.64 1.56 1.52 1.35 1.32 0.98 0.92 0.91 0.82 0.80 0.79 0.75 48.12 The names of the 20 largest holders of quoted partly paid ordinary shares (ASX: BRBCA) are: Shareholder Ordinary shares Number Equity held % Jasper Hill Resources Pty Ltd HSBC Custody Nominees (Australia) Limited Mr Benjamin Campbell Cheetah Holdings Pty Ltd Mr Thomas Stephen Sanders & Mrs Helen Sanders The Straits Nominees Pty Ltd Mr Murray Leslie Siviour T T Nicholls Pty Ltd Bradley Scott Dvorak 1 2 3 4 5 6 7 8 9 10 Mr Gavin Victor Hayres & Ms Amanda Yip 11 Ms Stephanie Ann Reynolds & Mr Simon Taylor Reynolds 12 13 Mr Luke Patrick Thomas Sanders 13 Mark Robert Edwards 14 Mr Michael John Kitney & Mrs Dale Jayne Kitney 15 15 Mr Graham Robert Foreman Kahala Holdings Pty Ltd 16 17 Pendan Pty Ltd 18 Mr Glenn Turner 19 20 Ms Susan Clarkson Talex Investments Pty Ltd Allora Equities Pty Ltd Future Super Pty Ltd 1,096,934 437,500 368,308 312,742 309,871 300,000 248,171 219,768 140,526 136,803 136,703 65,217 65,000 65,000 58,125 50,000 50,000 46,294 43,478 39,000 29,000 25,298 4,243,738 24.23 9.66 8.14 6.91 6.84 6.63 5.48 4.85 3.10 3.02 3.02 1.44 1.44 1.44 1.28 1.10 1.10 1.02 0.96 0.86 0.64 0.56 93.74 53 Breaker Resources NL   ASX Additional Information Unquoted Securities Details of unquoted securities on issue are: Class Securities Number Holders Number Unlisted 43.2 cent options, exercisable on or before 31 December 2019 Unlisted 44.8 cent options, exercisable on or before 31 December 2019 Unlisted 64.4 cent options, exercisable on or before 31 December 2019 Unlisted 73 cent options, exercisable between 16 October 2018 and 31 December 2020 Unlisted 46.5 cent options, exercisable on or before 31 December 2021 2,000,000 2,500,000 150,000 250,000 4,250,000 2 2 1 1 2 Holders of 20% or more of the class There are no relevant holders of 20% or more of a class of unquoted securities. On-market Buy-back There is no current on-market buy-back. 2019 Annual Report 54     ABN: 87 145 011 178 12 Walker Avenue, West Perth, Western Australia 6005 Tel: +61 8 9226 3666 | Fax: +61 8 9226 3668 Email: breaker@breakerresources.com.au www.breakerresources.com.au 

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