ZENITH MINERALS LIMITED
(ABN 96 119 397 938)
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2022
TABLE OF CONTENTS
Corporate Information .................................................................................................................................... 1
Chairman’s Report ......................................................................................................................................... 2
Review of Operations .................................................................................................................................... 4
Directors’ Report .......................................................................................................................................... 25
Auditors Independence Declaration ............................................................................................................ 40
Consolidated Financial Statements .................................................................................................................
Consolidated Statement of Profit or Loss and Other Comprehensive Income .............................. 41
Consolidated Statement of Financial Position ................................................................................ 42
Consolidated Statement of Changes in Equity ............................................................................... 43
Consolidated Statement of Cash Flows ......................................................................................... 44
Notes to the Consolidated Financial Statements ........................................................................... 45
Directors’ Declaration .................................................................................................................................. 77
Independent Audit Report............................................................................................................................ 78
Corporate Governance Statement .............................................................................................................. 83
Additional Shareholder Information ............................................................................................................. 84
Interest in Mining Tenement ........................................................................................................................ 86
CORPORATE INFORMATION
DIRECTORS
David J E Ledger (Executive Chairman)
Michael J Clifford (Managing Director)
Stanley A Macdonald (Non-Executive Director)
Julian D Goldsworthy (Non-Executive Director)
Emma J Scotney (Non-Executive Director)
COMPANY SECRETARY
Nicholas Ong
AUSTRALIAN BUSINESS NUMBER
96 119 397 938
REGISTERED OFFICE AND
PRINCIPAL PLACE OF BUSINESS
2nd Floor, 33 Ord Street
WEST PERTH WA 6005
PO Box 1426
WEST PERTH WA 6872
Telephone: +61 (0)8 9226 1110
Email: info@zenithminerals.com.au
Website: www.zenithminerals.com.au
SHARE REGISTER
Automic Registry Services | Automic Group
Level 5, 191 St Georges Terrace
PERTH WA 6000
Level 5,126 Phillip Street
SYDNEY NSW 2000
Securityholder Correspondence: -
GPO Box 5193
SYDNEY NSW 2001
Telephone:
1300 288 664 (Within Australia)
From Overseas: +61 (0)2 9698 5414
Email: hello@automicgroup.com.au
AUDITORS
PKF Perth
Level 4/ 35 Havelock Street
WEST PERTH WA 6005
Telephone: +61 (0)8 9426 8999
Facsimile: +61 (0)8 9426 8900
SOLICITORS
Allion Partners
Level 9/ 863 Hay Street
PERTH WA 6000
Telephone: +61 (0)8 9216 7100
Facsimile: +61 (0)8 9324 1075
BANKERS
ANZ
1275 Hay Street
WEST PERTH WA 6005
Telephone: +61 (0)8 6165 8300
Facsimile: +61 (0)8 6165 8399
SECURITIES EXCHANGE LISTING
Australian Securities Exchange
Home Exchange: Perth, Western Australia
Code: ZNC
1
CHAIRMAN’S REPORT
Zenith Minerals Limited
Dear Shareholders,
It is with great pleasure that I report on what has been a transformational year for the Company. Continued
exploration success across our diverse tenements that contain gold and base metals has been most
encouraging, further extending on the work that has been building from years prior.
What did transform the development pathway for the business was a joint venture agreement that the Board
entered into in January 2022 with EV Metals Group, a global battery materials and technology company
committed to a clean energy future. As part of their plan’s they seek to develop a business model based on the
upstream, midstream and downstream integration of proprietary supply chains. This includes the exploration of
battery minerals, primarily lithium, to develop and construct a battery minerals complex on the west coast of
Saudi Arabia at Yanbu City.
The EV Metals Joint Venture
Zenith Minerals entered into an agreement to form a lithium joint venture (JV) with EV Metals Group plc (EVM)
to explore for, mine and process mineral resources containing lithium and other battery metals (JV Agreement)
in January 2022. This requires for Zenith to pivot into being a pure lithium company focused initially on the
exploration and development of two existing projects within the portfolio along with searching for additional
complimentary assets in the battery minerals space.
The JV Agreement includes ZNC’s 100% owned Split Rocks and Waratah Well lithium projects (Initial Projects)
and provides each party with the non-exclusive rights to introduce additional projects containing lithium and
other battery metals (Lithium Minerals) to the JV. Both Initial Projects are 100% owned by ZNC with EVM earning
a 60% interest of the rights to all Lithium Minerals in each project by sole funding the completion of the feasibility
studies up to the decision to mine within 24 months from the start of the JV Agreement.
Fundamental to this agreement, EVM is required to spend a minimum of $7M on exploration for Lithium Minerals
in each of the Initial Projects in those 24 months. As part of the execution of the JV agreement between Zenith
and EVM, a placement of $6m was offered to EVM via the issuance of 20m shares in Zenith at $0.30, a 20%
premium to the Volume Weighted Average Price at the time. This investment provided additional cash to the
balance sheet whilst also reflecting the opportunity with an improved share price. Over and above the initial $7m
investment to earn their 60% interest, Zenith will be fully funded through to a Bankable Feasibility Study to
develop any of these two projects.
About EV Metals
EVM is fast-tracking the staged development of midstream and downstream processing facilities for production
of high purity chemicals and cathode active materials (CAM) containing lithium, nickel, cobalt, manganese and
other metals required in rechargeable batteries used in electric vehicles and renewable energy storage.
EVM is developing transparent and geopolitically aligned supply chains targeting electric vehicle and battery cell
manufacturers in high growth markets across UK, Europe and the Kingdom of Saudi Arabia (KSA). EVM is a
private concern based in Western Australia with over 100 personnel at offices and facilities in Perth, KSA, UK,
Germany and Poland. Yanbu provides a strategic location adjacent to a deep-water port on the Red Sea and
ideally situated for importing raw materials and exporting battery chemicals to target markets. The Battery
Chemicals Complex comprises staged development and expansions of a Lithium Chemicals Plant, a Nickel
Chemicals Plant and Cathode Active Materials Plant.
EV Metals delivers to the shareholders of Zenith a level of technical and engineering expertise not typically found
in other mid-capitalised companies listed on the ASX. Their assistance with project assessment, exploration
targets plus drilling permits and applications is a highly appreciated benefit they deliver to the exploration budget
they provide to the joint venture.
The Future Direction
With the demands on senior management, as they work on further battery minerals opportunities (primarily
lithium and nickel), the board has determined that to provide the requisite focus to the gold and base metal
opportunities already owned prior to the EV Metals transaction, it would be best served through a new business
with its own board and senior management. To this end, Mackerel Metals Limited has been established.
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CHAIRMAN’S REPORT
Zenith Minerals Limited
At the time of writing, an application has been lodged with the ASX seeking approval to list that will be followed
by seeking shareholder approval to do so.
Your board considers this the best way to unlock the true value of the assets that had been the focus for
shareholders before the formation of the EV Metals joint venture. This will include the 25% owned joint venture
with Rumble Resources in the highly regarded Earaheedy Zinc/Lead project in Western Australia, the 100%
owned Develin Creek Copper/ Zinc project in Queensland and our developing gold projects sitting across Split
Rocks (WA), Red Mountain (QLD) and the interest in the Cowarra project (NSW).
As part of the spin-out of these assets into Mackerel Metals, a prospectus will be issued inviting new investors
to subscribe for shares in the new Company to raise between $6m and $10m. This will provide a positive
exploration budget for the new team to continue the development work done to date on these assets. Existing
shareholders will be offered an in-specie distribution of shares in Mackerel reflecting their current holding in
Zenith and a priority allocation to subscribe for additional securities in the new business. In support of this spin-
out, both Zenith and EV Metals plan to subscribe for shares in Mackerel Metals.
The Outlook for 2023
There is a great deal to look forward to in the coming year as we continue to commit to an exploration programme
across an increasingly expanding battery minerals portfolio. Our commitment to defining a resource that adds
value to our capitalisation is unwavering. With the ongoing support from our management team and joint venture
partner, we are confident that results can be delivered across our lithium target areas.
With Mackerel Metals and its new management team taking the gold and base metal projects forward, having a
budget capable of being able to add value through further exploration will deliver increasing shareholder value.
The future of Zenith, as shareholders see it today, will transition through to be a battery mineral focused business
that is in keeping with the longer-term strategy of the joint venture. With a strong and committed partner across
the lithium portfolio, we expect that the coming 12 months will deliver strong exploration success as has been
seen to date.
There will be no change to the current board and senior management. The current CEO, Mick Clifford, with his
strong technical, geological and management team, will remain with Zenith. The ongoing success of the
business has been driven and directed by Mick Clifford and I sincerely appreciate the support he has provided
to me throughout this year. I also would like to thank the board for their continued contribution to the direction of
the Company and welcome our newest non-executive director, Emma Scotney, who has made an immediate
positive impact to Zenith.
Mr David J E Ledger
Executive Chairman
30 September 2022
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Zenith Minerals Limited
OPERATIONS REPORT
Zenith Minerals Limited (ASX:ZNC) is an Australian-based battery minerals explorer leveraged to the increasing
global demand for metals critical to the production processes of new energy industrial sectors.
The Company currently has three lithium projects all located in Western Australia. Split Rocks, located within the
Southern Cross region mid-way between Perth and Kalgoorlie, is now being systematically explored under the
terms of the joint venture between Zenith and EV Metals Group (EVM). It covers landholdings of approximately
660sqkm in the Forrestania greenstone belt immediately north of the established Mt Holland lithium deposit.
Waratah Well, located approximately 20km northwest of the regional town of Yalgoo in the Murchison Region,
holds a lithium-caesium-tantalum pegmatite target with ongoing exploration. More recently, Zenith acquired a third
lithium prospect, the Mt Ida North Project, located approximately 95km west of the regional town of Leonora in
WA’s Goldfields Region.
In January 2022, Zenith entered into a joint venture with EV Metals Group (“EVM”), a global battery materials and
technology company focused on the production of high purity chemicals and battery materials required in
rechargeable batteries for electric vehicles and renewable energy storage. EVM can earn a 60% interest in the
lithium rights in these projects, with Zenith retaining a 40% project share, under terms that see Zenith funded
through to bankable feasibility on any of the project developments. Any lithium concentrate produced from these
projects will provide critical raw material supply for the Yanbu complex, Saudi Arabia, as part of an integrated
global supply chain currently being developed by EVM. This will contribute to meeting the growing demand for
stable, long-term supplies of critical raw materials, high purity chemicals and cathode-active materials. The
number of Australian-based lithium/battery metal projects currently in the JV could be further expanded over time
if appropriate acquisition opportunities present themselves.
Zenith Minerals also holds an extensive portfolio of gold and base metal projects that includes 100% interest in
Split Rocks Gold adjacent to the lithium site, 100% of the Develin Creek copper/zinc project in northern
Queensland, 100% of the Red Mountain gold project in Queensland and a 25% interest in the Earaheedy zinc/lead
project in Western Australia. It is proposed that these assets will be transferred into a separate ASX-listed
company called Mackerel Metals Ltd.
HIGHLIGHTS
LITHIUM JOINT VENTUE WITH EV METALS GROUP
▪ The Split Rocks project area contains the Rio Lithium Pegmatite. Follow-up drill program to assess the size
of the Rio Lithium Pegmatite (20m @ 1.0% Li2O, incl. 10m @ 1.7% Li2O - ASX Release 4-Apr-22) is ongoing
with 2 drill rigs on site. Results for 21 holes reported post year end (ASX 20-Sep-22) include:
o
o
o
o
o
ZVRC032 - 24m @ 0.7% Li2O, incl. 3m @ 2.7% Li2O & 1m @ 1.5% Li2O within a broader interval
of 104m @ 0.3 % Li2O to end of hole
ZVRC037 - 25m @ 0.7% Li2O, incl. 5m @ 1.1% Li2O & 3m @ 1.1% Li2O & 2m @ 1.2% Li2O within
a broader interval of 116m @ 0.3 % Li2O
ZVRC040 - 12m @ 0.6% Li2O, incl. 4m @ 1.2% Li2O within a broader interval of 88m @ 0.3 % Li2O
to end of hole
ZVRC043 – 7m @ 1.3% Li2O within a broader interval of 56m @ 0.3% Li2O to end of hole
ZVRC044 – 10m @ 1.0% Li2O within a broader interval of 62m @ 0.3% Li2O
▪
Lithium pegmatite mineralisation is a mixture of eucryptite and petalite with minor spodumene and
lepidolite identified to date.
▪ The amenability of eucryptite mineralisation to conventional treatment processes has been shown by
positive sighter flotation testwork and bench scale calcination-leach tests, hence confirming the potential
of eucryptite as a viable lithium target (ASX Release 26-Jul-22).
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▪ Pegmatite outlined over >1200m length and >600m width, with lithium mineralised zone identified over
>1200m with an open-ended higher-grade zone >450m length.
▪ Mineralisation remains open to the north, south, east and at depth with 15 of 22 holes drilled to date either
ending in pegmatite or deemed too short to test the target.
▪ Permits received for a further 84 RC and 84 diamond holes at Rio.
▪ One RC rig to be joined by a diamond drill rig to enable deeper drill testing.
▪ Waratah Well drilling to follow up on significant lithium results, in thick pegmatites, (7m @ 0.67% Li2O - ASX
Release 6-Jul-22) now scheduled for October 2022.
▪ Drill testing of Ni-Cu-PGE target, located adjacent to the lithium prospect area, is scheduled for late
September – early October.
▪ Mt Ida North project being explored under the Australian Lithium Alliance - EV Metals (60% : ZNC 40%) -
Drilling (~2,400m) to test the lithium target now planned for October 2022.
DEMERGER OF NON-LITHIUM ASSETS
To allow the Zenith team to focus on activities that generate Battery Minerals projects, ZNC is planning to demerge
the non-Battery Minerals projects, including base metals and gold assets, into a new Company called Mackerel
Metals Limited to be listed on ASX. Any such demerger will be subject to ZNC Board approval, tax advice
favourable to ZNC, as well as shareholder, ASX, ASIC and other regulatory approvals. ZNC shareholders will
benefit by way of an in-specie distribution of the shares in the new listed Company. Further updates and
information on the Demerger will be provided by Zenith in due course.
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Zenith Minerals Limited
GOLD & BASE METAL PROJECTS
▪ Zenith Minerals Ltd (ASX: ZNC) owns a 25% free carried interest in the Earaheedy Joint Venture zinc project,
with Rumble Resources owning the remaining 75%.
▪ The 2021 drilling program was expanded to over 50,000m, primarily to further drill and scope the new Tonka
zinc discovery (ASX Release 13-Dec-21 & 21-Dec-22). A second 50,000m drill program commenced in early
2022, with results for 38 RC holes currently awaited.
▪ Work to date has been successful in defining very widespread flat-lying zinc-lead mineralised bodies such as
Chinook, Tonka and Navajoh as well as defining multiple discrete, continuous high-grade zinc-lead zones
including: Kalitan, Spur, Colorado and Magazine, that remain open ended.
▪ Significant developments arising from drilling activity post the reporting period at the (ASX Release 30-Aug-
22), include:
o Doubling the length of the high-grade zinc rich Colorado Fault Zone to 2.5km. Results include: 12m @
9.7% Zn + Pb and 4m @ 11.5% Zn + Pb.
o Strong zinc assay results and pending assays (supported by pXRF) from the Magazine Fault Zone.
o Drilling of a new gravity target returned high-grade zinc within a broader mineralised zone, 1.3km from
the Navajoh Prospect.
▪ An independent technical study to determine the optimum drill spacing for a maiden resource at Earaheedy
has also commenced.
▪ Preparations for drilling on the Company’s 100% owned Earaheedy project are well advanced with drilling
planned to commence before the end of the calendar year 2022.
▪ A detailed review of the Dulcie Far North high-grade gold prospect at Split Rocks highlights significant
potential with permitting for follow-up drilling in progress.
▪ Drilling at Split Rocks with a gold focus has to date tested 14 targets with outstanding results returned at 6
prospects (ASX Releases 5-Aug-20, 2-Sep-20, 19-Oct-20, 28-Oct-20, 15-Jan-21, 11-Mar-21, 21-Apr-21, 24-
Jun-21, 13-Jul-21, 30-Sep-21, 16-Jan-22, 14-Jun-22):
• Dulcie North: 32m @ 9.4 g/t Au, incl 9m @ 31.4 g/t Au
• Dulcie Laterite Pit: 2m @ 14.5 g/t Au, incl. 1m @ 20.8 g/t Au, 18m @ 2.0 g/t Au (EOH) incl. 1m @ 23.7
g/t Au, 14m @ 3.5 g/t Au and 3m @ 17.9 g/t Au
• Estrela Prospect: 2m @ 9.8 g/t Au
• Dulcie Far North: 7m @ 7.8 g/t Au incl 5m @ 10.6 g/t Au, 5m @ 5.6 g/t Au incl. 4m @ 6.8 g/t Au, 4m @
10.2 g/t Au, 5m @ 7.4 g/t Au, 8m @ 4.2 g/t Au
• Water Bore: 3m @ 6.6 g/t Au
• Scott’s Grey: 8m @ 4.1 g/t Au, 12m @ 1.7 g/t Au
▪ Drilling at the Develin Creek copper-zinc project during the year culminated in the Company announcing an
updated Indicated and Inferred Mineral Resource of 4.9Mt @ 1.2% Cu, 1.4% Zn, 0.2 g/t Au and 7 g/t Ag (ASX
Release 7-Jun-22).
ZENITH LITHIUM JOINT VENTURE
Zenith is transitioning to a pure lithium company to refocus on minerals containing lithium and related metals
required for rechargeable lithium-ion batteries for electric vehicles and renewable energy storage (“Battery
Minerals”), backed by an alliance with the EV Metals Group (EVM), as detailed in ASX Release 14-Jan-22.
The agreement includes a joint venture over Zenith’s Split Rocks and Waratah Well projects in Western Australia,
as well as a non-exclusive right to bring additional projects to the joint venture by either party, to explore for
lithium/EV metals (Figure 1).
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Figure 1: Zenith Lithium Joint Venture - Project Locations
SPLIT ROCKS LITHIUM-TANTALUM PROJECT – WA (EVM Earning 60%)
Zenith has been systematically exploring the Split Rocks project, with landholdings of approximately 660 sqkm in
the Forrestania greenstone belt – Western Australia, for lithium. This emerging lithium district is host to SQM-
Wesfarmers Mt Holland/Earl Grey lithium deposit containing a Measured, Indicated & Inferred Mineral Resource
of 189Mt @ 1.5% Li2O (66Mt @ 1.58 % Li2O Measured, 106Mt @ 1.52% Li2O Indicated, and 17Mt @ 1.11% Li2O
Inferred) (reported in KDR:ASX Release 19-Mar-2018).
Drilling, as part of an ongoing exploration campaign to scope the size of the host pegmatite and contained lithium
mineralisation at Rio, has returned significant lithium mineralisation (Figures 2- 5). In the immediate area of the
Rio pegmatite, a further 22 holes have now been completed (ZVRC029 to ZVRC050) in addition to the initial
discovery drill section of 4 holes (ZVRC001 to ZVRC004). Assay results are available for 21 holes (ASX Release
20-Sep-22).
Lithium drill results include:
▪
ZVRC032 - 24m @ 0.7% Li2O, incl. 3m @ 2.7% Li2O & 1m @ 1.5% Li2O within a broad interval of 104m
@ 0.3 % Li2O to end of hole
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▪ ZVRC037 - 25m @ 0.7% Li2O, incl. 5m @ 1.1% Li2O & 3m @ 1.1% Li2O & 2m @ 1.2% Li2O within a
broad interval of 116m @ 0.3 % Li2O
▪ ZVRC040 - 12m @ 0.6% Li2O, incl. 4m @ 1.2% Li2O within a broad interval of 88m @ 0.3 % Li2O to end
of hole
▪ ZVRC043 – 7m @ 1.3% Li2O within a broad interval of 56m @ 0.3% Li2O to end of hole
▪ ZVRC044 – 10m @ 1.0% Li2O within a broader interval of 62m @ 0.3% Li2O
New results are follow-up to discovery hole ZVRC002 that intersected:
▪
20m @ 1.0% Li2O, incl.10m @ 1.7% Li2O within a broad interval of 108m @ 0.4% Li2O (ASX Release 4-
Apr-22).
Lithium pegmatite mineralisation identified to date is a mixture of eucryptite and petalite (with minor spodumene)
confirmed by multiple methods, including optical microscopy, SEM, Raman spectroscopy and XRD analyses,
whilst some lepidolite has been identified in visual chip logging and XRD.
Based on a detailed mineralogical investigation of 7 samples from the initial 4 drill holes, consulting geologist-
mineralogist Dr Marcus Sweetapple noted: “The form of crystallization of eucryptite as either monomineralic
cuttings, and either adjoining quartz or with subhedral-euhedral quartz inclusions, is suggested to indicate that
eucryptite is part of a primary pegmatitic mineral assemblage, and has not been formed from the hydrothermal
alteration or replacement of other lithium silicates.
Eucryptite is interpreted to form relatively pure discrete bodies or units within the pegmatite and could therefore
be in a form favourable for selective mining and processing. Although less petalite is noted in XRD done to date,
from comparison with other known pegmatite bodies, it would be expected to be a volumetrically more important
mineral species than eucryptite.
In one sample, both petalite and spodumene were noted. These minerals, together with eucryptite, form a
continuous series under different P-T conditions and their occurrence together is not unexpected.”
The amenability of eucryptite mineralisation to conventional treatment processes has been shown by positive
sighter flotation testwork and bench scale calcination-leach tests, hence confirming the potential of eucryptite as
a viable lithium target (ASX Release 26-Jul-22).
Lithium mineralisation extends well out into the wall rocks. A good example of this is in hole ZVRC039, the south-
eastern most hole completed to date, that intersected 62m @ 0.2% Li2O to end of hole, all within the mafic host
rock. The lithium mineralisation is presumed to be holmquistite (lithium amphibole) and is indicative of a deeper
pegmatite source below where the hole terminated.
Strongly anomalous LCT elements that occur in association with lithium (maximum value 4.0% Li2O), include the
following maximums: Cs 2,210 ppm, Rb >5,000 ppm, Nb 1,317 ppm, Ta 914 ppm, Be 482 ppm and Sn 0.1%.
The Rio pegmatite has now been outlined over >1200m length and 600m width, with a higher-grade central lithium
mineralised zone identified over >450m length.
Forward Program
Lithium mineralisation at Rio remains open to the north, south, east and at depth, with 15 of 22 holes drilled to
date either ending in pegmatite or deemed too short to test the target zone. Permits are now in place to enable
drilling of up to a further 84 RC and 84 diamond holes in the immediate Rio area. The current RC rig will be joined
by a diamond drill rig to enable deeper drill testing focusing on the eastern side and depth extents.
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Figure 2: Split Rocks Lithium Pegmatite Target Zone and Approved Drill Holes
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Figure 3: Rio Pegmatite – Map with Significant Lithium Drill Results
Figure 4: Rio Pegmatite – Long Section with Significant Lithium Drill Results
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Zenith Minerals Limited
Figure 5: Rio Pegmatite – Cross Section with Significant Lithium Drill Results
WARATAH WELL LITHIUM-TANTALUM PROJECT – WA (EVM Earning 60%)
The Waratah Well Project is located approximately 20km northwest of the regional town of Yalgoo in the
Murchison Region of Western Australia.
An initial drilling program in early 2022 confirmed the presence of widespread lithium-bearing pegmatite dykes
over a 4km zone, open to the north and east under soil cover at Waratah Well (ASX Release 10-Mar-22).
Subsequent follow-up drilling, in mid-calendar year 2022, confirmed the presence of thick pegmatites under soil
cover in the northeast portion of the project area. 22 out of the 47 holes in that program intersected pegmatites,
ranging in thickness from 1m up to 24m, the thickest pegmatite identified in the project area to date. Significant
lithium results were intersected in 3 drill holes. The higher lithium zones occurred at the base of the pegmatites
in fresh rock, implying that the lithium may be depleted in the near surface weathered zone (ASX Release 6-Jul-
22). Better results include:
• ZWWRC029 - 7m @ 0.67% Li2O, including 3m @ 1.31% Li2O at the base of the 24m thick pegmatite,
with the upper potion being strongly weathered.
• ZWWRC030 – 22m @ 0.22% Li2O including 1m @ 0.61% Li2O, upper portion of the pegmatite also
weathered
• ZWWRC016 – 11m @ 0.13% Li2O
XRD analysis shows that the lithium minerals, of the better mineralised zones, are predominantly petalite with
only minor lithium mica and holmquistite. The chemistry and conditions of formation of petalite are more like those
of spodumene than the lithium micas.
This is a very positive change in lithium mineralogy and now forms a focus area with a follow-up drill program
(2000m) now planned to commence in October 2022.
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Background on the Waratah Well Project
The key lithium target at Waratah Well is blind lithium spodumene mineralisation beneath the outcropping tantalum
bearing dykes, a geological architecture like that noted at the Bald Hills lithium mine (formerly owned by
ASX:TAW). A similar picture is also noted at Liontown’s (ASX:LTR) Kathleen Valley lithium project whereby
relatively narrow surface pegmatite dykes merge at depth to form a thick, flat-lying lithium spodumene rich sill
(ASX Release 24-Jan-22).
A new Ni-Cu-PGE drill target has been identified by Zenith’s technical team as part of a holistic approach to
exploration on the Waratah Well project area (ASX Release 6-Sep-22). The target is defined by a strong Ni-Cu-
PGE surface soil anomaly with coincident EM conductors, hosted within a mafic-ultramafic intrusion. The intrusion
is also the host to lithium-rich pegmatites that are the focus of exploration at Waratah Well.
AUSTRALIAN LITHIUM ALLIANCE
Zenith and EV Metals Group have also agreed to work together on a non-exclusive basis to assess lithium
opportunities in Australia under a strategic initiative referred to herein as the Australian Lithium Alliance (ALA).
Zenith and EV Metals Group will each fund their respective share of costs on assessing, exploring and any future
development capital on a 40% - 60% basis respectively, with EV Metals Group owning marketing rights to any
offtake. Each party will bring to the arrangement their respective technical, financial and management skills to
assess lithium opportunities. The Mt Ida North option agreement announced to the ASX on 23-May-22 is being
pursued under the ALA partnership.
MT IDA NORTH LITHIUM PROJECT – WA (ZNC 40%)
The Mt Ida North Project is located approximately 95km west of the regional town of Leonora in the Goldfields
Region of Western Australia.
Reconnaissance mapping and sampling by Zenith’s technical team have identified a zone of high rubidium and
tantalum-bearing pegmatite dykes that crop out over a 1km x 1km area, with a cluster with very high density
focused in an area 1km x 500m in the southeast of the project area. The generally sub-vertical pegmatite dykes
are up to 20m thick and lie close to the greenstone - Copperfield granite contact.
The geological setting of Mt Ida North is like that of a recent lithium pegmatite discovery at Mt Ida by ASX listed
Red Dirt, located approximately 15km along strike to the south (ASX Release 23-May-22).
Drill testing is planned with an initial 12-hole RC program now scheduled to commence in late-September 2022
(Figure 6).
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Figure 6: Mt Ida North Project Location
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GOLD-COPPER & ZINC PROJECTS
EARAHEEDY ZINC PROJECT – WA (Zenith 25% free carry to end BFS, ASX: RTR 75%)
Zenith Minerals Ltd (ASX: ZNC) owns a 25% free-carried interest in the Earaheedy Joint Venture zinc project,
whilst Rumble owns 75%.
A 50,000m drilling program in 2021 to further drill and scope the new Tonka zinc discovery (ASX Release 13-
Dec-21 & 21-Dec-22) was quickly followed up by a second 50,000m drill program that commenced in early 2022.
Work to date has been successful in defining very widespread flat-lying zinc-lead mineralised bodies such as
Chinook, Tonka and Navajoh as well as defining multiple discrete, continuous high-grade zinc-lead zones
including: Kalitan, Spur, Colorado and Magazine, that remain open ended.
Earaheedy Project Background
The Earaheedy Zinc project forms a key component of Zenith’s base metal and gold portfolio for which an
application has been submitted to ASX to be demerged into a separate listed entity (Mackerel Metals), so that
Zenith may focus on its core lithium business.
Programs at Earaheedy are conducted under management by our JV partner, Rumble Resources Ltd. Work to
date has been successful in defining very widespread flat-lying zinc-lead mineralised bodies such as Chinook,
Tonka and Navajoh as well as defining multiple discrete, continuous high-grade zinc-lead zones including: Kalitan,
Spur, Colorado and Magazine.
Next Steps
▪ A further 38 RC and diamond holes from infill and extensional drilling at the Colorado and Magazine Fault
Zones, remain to be reported.
▪ Early interpretation of the preliminary Airborne Gravity Gradiometric (AGG) data has highlighted the Fault
Zones as potentially a series of stacked high grade east-west mineralising structures within the extensive
broad mineralised envelope (8km x 2km) at Tonka -Navajoh. Multiple new targets are being generated
from this preliminary data and the Company is currently planning further RC/DDH drilling to test these
areas in the near term.
▪ Sighter metallurgical test work to develop a preliminary flowsheet for the sulphide flotation concentrate is
progressing well.
▪ An independent technical study to determine the optimum drill spacing for a maiden resource has
commenced.
Further details of these new Earaheedy Joint Venture highlights are detailed in the appended RTR ASX Release
dated 30-Aug-22.
EARAHEEDY ZINC PROJECT – WA (Zenith 100%)
The Earaheedy Zinc Project (EZP) covers an area of ~673km2 within the emerging base metal province and
comprises six exploration licences granted to a wholly-owned subsidiary of Zenith. The Company is well
advanced in planning and permitting a maiden reconnaissance drilling programme to commence testing, over
100km of strike, within the highly zinc prospective Frere Formation and Yelma Formation contact. The contact is
one of the key controls to zinc mineralisation at the adjacent Earaheedy Zinc joint venture (Figure 7).
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REVIEW OF OPERATIONS
Zenith Minerals Limited
Figure 7: Project Location Map – Showing 100% Owned Earaheedy Zinc Project and Joint Venture (Note
Applications E69/3868 and E69/3870 are second in time and Zenith retains second priority right).
SPLIT ROCKS GOLD PROJECT – Western Australia (Zenith 100%)
Zenith’s Split Rocks project is located within the Southern Cross region in the Forrestania greenstone belt,
approximately halfway between Perth and Kalgoorlie. Several very large current and formerly operated gold mines
located north and south along strike from Zenith’s project area attest to the regional gold endowment of this area
(Figure 8).
Drilling to date by Zenith has tested 14 targets with outstanding results returned to date at 6 prospects – Figure 9
(ASX Releases 5-Aug-20, 2-Sep-20, 19-Oct-20, 28-Oct-20, 15-Jan-21, 11-Mar-21, 21-Apr-21, 24-Jun-21, 13-Jul-
21, 30-Sep-21, 16-Jan-22, 14-Jun-22):
▪ Dulcie North: 32m @ 9.4 g/t Au, incl 9m @ 31.4 g/t Au
▪ Dulcie Laterite Pit: 2m @ 14.5 g/t Au, incl. 1m @ 20.8 g/t Au, 18m @ 2.0 g/t Au (EOH) incl. 1m @ 23.7
g/t Au, 14m @ 3.5 g/t Au and 3m @ 17.9 g/t Au
▪ Estrela Prospect: 2m @ 9.8 g/t Au
▪ Dulcie Far North: 7m @ 7.8 g/t Au incl 5m @ 10.6 g/t Au, 5m @ 5.6 g/t Au incl. 4m @ 6.8 g/t Au, 4m @
10.2 g/t Au, 5m @ 7.4 g/t Au, 8m @ 4.2 g/t Au
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Zenith Minerals Limited
▪ Water Bore: 3m @ 6.6 g/t Au
▪ Scott’s Grey: 8m @ 4.1 g/t Au, 12m @ 1.7 g/t Au
Note Zenith retains gold rights at Dulcie Far North, Dulcie North, Dulcie Laterite Pit Zone and Scott’s Grey below
6m, subject to the Dulcie option agreement (refer to ASX Release 21-Mar-19). Extensive gold-focused drill
programs are planned with a key focus on the Dulcie Far North high-grade gold zone. Permitting for drilling is in
progress.
Figure 8: Split Rocks Project Location Map Showing Zenith tenements, Dulcie Heap Leach Gold Operation
(DHLGO*) Prospect and Regional Gold Endowment. (*Gold rights below 6m subject to option agreement).
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REVIEW OF OPERATIONS
Zenith Minerals Limited
Figure 9: Split Rocks Project Gold Targets and Significant RC - Aircore Drill Results (yellow captions) showing
gold drill targets, and areas of Planned Drilling
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REVIEW OF OPERATIONS
Zenith Minerals Limited
DEVELIN CREEK COPPER- ZINC PROJECT – Queensland (Zenith 100%)
Following Zenith drilling at Develin Creek in 2014, 2021 and 2022, an updated Mineral Resource estimate has
been completed for the Company’s 100% owned Develin Creek project located in Queensland (ASX Release 8-
Aug-22).
The Zenith drilling verified the past results that extended and improved the geological interpretation. The Mineral
Resource is interpreted and reported at a 0.5% Cu eq (copper equivalent) cut-off suitable for open pit assessment.
The updated Mineral Resource for the Sulphide City – Scorpion – Window copper – zinc deposits at the 0.5% Cu
eq cut-off includes:
Indicated
Inferred
Total
Copper equivalence Cu eq = (Cu + 0.45*Zn) and based on current rounded metal prices in June 2022 of A$8400/tonne Cu,
A$3300/t Zn and preliminary recoveries for Cu of 72% and Zn of 82%.
2.2 Mt @ 1.3% Cu, 1.3% Zn, 0.2 g/t Au and 8 g/t Ag
2.7 Mt @ 1.1% Cu, 1.4% Zn, 0.2 g/t Au and 7 g/t Ag
4.9 Mt @ 1.2% Cu, 1.4% Zn, 0.2 g/t Au and 7 g/t Ag
This update represents a 90% increase in tonnage and a 30% increase in overall contained metal from the
previous estimate announced on 15-Feb-2015. This difference is attributed in part to a lower cut-off grade for
reporting but is also the result of some resource extensions from recent Zenith drilling as well as a more robust
interpretation that captures more or the mineralisation.
The estimate does not include the massive copper-zinc sulphide mineralisation identified at Snook and other
prospects to the south, also within the Develin Creek project area.
Develin Creek Project Background
The Develin Creek project is in central Queensland. Drilling at the Sulphide City and Scorpion deposits by Zenith
during the year has returned strong massive copper-zinc sulphides (ASX Release 5-Jul-21), including:
• 34m @ 3.5% Cu+Zn, incl 10m @ 6.0% Cu+Zn, and
• 29m @ 3.5% Cu+Zn, incl 12.3m @ 6.7% Cu+Zn
This drilling program is part of a broader plan to build upon the existing JORC resource and add potential tonnage
to the Develin Creek copper-zinc volcanogenic massive sulphide (VMS) inventory.
Zenith’s technical team outlined the Snook target located 30km south of the existing JORC resources. An initial
maiden drill test intersected 3m of massive and semi-massive sulphides at a depth of only 20m downhole. This
zone returned: 3m @ 1.57% Cu, 1.07% Zn, 0.37% Pb, 43 g/t Ag and 0.2 g/t Au, including 2m of massive sulphide
grading: 1.95% Cu, 1.34% Zn, 0.48% Pb, 55 g/t Ag and 0.3 g/t Au (ASX Release 7-Dec-20).
Subsequent follow-up drilling during the year has now extended the footprint of massive sulphides to a length of
150m (ASX Release 16-Dec-21 and 24-Mar-22), with the zone remaining open along strike to the south (Figures
10).
The Snook drill program and that completed at the nearby Wilsons North prospect now confirm a cluster of
massive sulphides is present within the Company’s landholdings, reaffirming the highly prospective nature of the
Develin Creek project.
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REVIEW OF OPERATIONS
Zenith Minerals Limited
Figure 10: Develin Creek Project Outline and Areas Subject to Drill Testing in 2021
RED MOUNTAIN GOLD-SILVER PROJECT – Queensland (Zenith 100%)
A zone of surface gold and silver mineralisation was discovered by Zenith at Red Mountain in SE Queensland, in
a previously unrecognised felsic volcanic breccia complex first identified by Zenith’s field team.
Drilling to date has outlined a discrete sub-vertical high-grade gold zone (Western Zone) to a vertical depth of
200m. Results include (ASX Releases 3-Aug-20 & 13-Oct-20, 9-Nov-20, 21-Jan-21, 13-May-21):
• 13m @ 8.0 g/t Au from surface, incl. 6m @ 16.7 g/t Au
• 15m @ 3.5 g/t Au, incl. 2m @ 22.4 g/t Au
• 12m @ 4.9 g/t Au, incl. 6m @ 9.4 g/t Au
• 5m @ 10.4 g/t Au, incl 1m @ 49.9 g/t Au
• 5m @ 3.5 g/t Au & 54.3 g/t Ag
• 10m @ 2.7 g/t Au from surface, incl. 4m @ 4.9 g/t Au
• 7m @ 4.4 g/t Au
The zone remains open at depth below hole ZRMDD044 where a wide zone of gold (88m @ 0.3 g/t Au from 223m
to 311m) was intersected, associated with rhyolite dykes.
The Red Mountain project is located between two gold mines, Cracow (Aeris Resources Limited (ASX:AUR) and
Mount Rawdon (ASX:EVN). Mineralisation at Red Mountain is considered by Zenith to be analogous to known
gold deposits in Queensland, including the Mt Wright gold deposit. Mt Wright was exploited by Resolute Mining
Limited as an underground operation, with mineralisation having a strike length of only 200m but vertical extent
of over 1.2km.
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Zenith Minerals Limited
Gold mineralisation (Western High-Grade Zone) remains open vertically below the current drilling, and will be the
focus of further planned step-out testing along with drill testing of the copper-gold target in the core of the breccia
pipe in early 2023.
PRIVATEER GOLD PROJECT – Queensland (Zenith 100%)
The Privateer gold project in Queensland was secured via a 100% owned exploration licence (ASX Release 30-
Mar-22). Zenith sampling during the year has confirmed the presence of high-grade gold at surface, with rock
samples returning up to 3.5 g/t Au and 2.5 g/t Ag associated with epithermal style quartz veining.
Limited sparse historic (30 years ago) shallow drilling returned very high-grade, near surface gold and silver
results including:
• 0.5m @ 28.5 g/t Au and 35 g/t Ag from only 58m below surface, that has never been followed up (diamond
drill hole).
• 3m @ 2.6g/t Au from 38m downhole (percussion hole)
• 2m @ 1.0 g/t Au and 70.5 g/t Ag from 64m downhole
The geochemical association, host rocks and quartz vein textures at Privateer point towards a low-sulphidation
epithermal gold style geological target with a well know analogue being the Cracow Gold Mine located some 70km
to the west.
AUBURN GOLD PROJECT – Queensland (Zenith 100%)
The Auburn gold project in Queensland was also secured via a 100% owned exploration licence (ASX Release
12-Apr-22) during the year. Zenith’s reconnaissance sampling has confirmed the presence of high-grade gold at
surface. From a total of 49 rock samples, 9 returned results greater than 1 g/t Au with a peak value of 23.3 g/t Au.
An initial soil sampling program over the central portion of the project area has defined several strong gold
anomalies. Three of these are associated with, and extending from, historic gold mines, with strike lengths of up
to 600m, and another three anomalies away from known gold workings. Peak soil result of 1.1 g/t Au. No on-
ground exploration has been reported for over 25 years.
Mineralisation is hosted within sheared granitic rocks. All gold mineralised rock specimens (> 1 g/t Au) are strongly
altered with no or very rare quartz veining. Host rocks, alteration, paucity of quartz veining and trace elements
indicate potential for an intrusion related gold system (IRGS).
COWARRA GOLD PROJECT – New South Wales (Zenith 22.3%, earning up to 47%)
A 10-hole RC program for a total of ~1,200m was completed during the year, with 7 holes completed at the Victoria
prospect, 2 at Democrat and 1 at the King prospect. Final assays results are anticipated in late-September 2022.
Cowarra Project Background
The Cowarra gold project is located between Canberra and Cooma and consists of one granted exploration
licence and comprises multiple gold zones hosted in Lachlan Orogenic Belt sedimentary rocks associated with
gold mineralised strike extensive shear zones. Host rocks and structural setting are like that of some of the major
Victorian gold deposits.
Previous drilling results from the Cowarra-Victoria gold deposit include:
• 35m @ 2.3 g/t Au from 23m depth in CRC001
• 15m @ 4.2 g/t Au from 57m depth in CRC022
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REVIEW OF OPERATIONS
Zenith Minerals Limited
Multiple regional prospects and targets extend for over 8km of strike around the Victoria gold deposit with rock
chip sampling up to 23 g/t Au and previous drill results providing significant project upside, including:
Democrat Prospect
• 4m @ 10.5 g/t Au in CRC029
• 12m @ 1.9 g/t Au in CRC013
Ambassador Prospect
• 8.1m @ 4.3 g/t Au in 10CWD-A1
• 1m @ 12.0 g/t Au & 5m @ 3.0 g/t Au in CWD101
Vanderbilt Prospect
• 5m @ 4.2 g/t Au in CRC014
JMT Target – 75 rock samples over 1km of strike, average 6.1 g/t Au, no drilling to date.
The Cowarra gold project is situated on NSW State Lands set aside for minerals. Permitting for drilling is well
advanced, with drilling anticipated to commence in the third quarter of 2022.
The Cowarra gold project was previously mined by BHP in the 1930’s and later Horizon Pacific in the 1980’s with
average run-of mine grades between 6 – 8 g/t Au, with gold recovered by an industry standard carbon in leach
(CIL) on site processing plant.
Gold mineralisation at Cowarra extends over some 8km within the granted EL with soil and rock chip anomalies
requiring follow-up (Figure 11).
Figure 11: Long Section of the Cowarra Gold Project – Democrat Prospect to JMT Prospect through
Victoria Mine with Significant Drill and Rock Sample Gold Results
Zenith has an option to provide staged funding to the Cowarra Project owner Oxley Resources Limited. On 24-
Sep-21, the Company completed Stage 1 investment of $140k into Oxley and in January 2022 (11-Jan-22)
completed a further subscription in Oxley of $70k, taking its current equity to 22.3%.
In addition, the Company has agreed with Oxley that it may subscribe for new or offer to purchase existing Oxley
shares (to the value of $750k at ZNC’s sole election), such that its total holdings could increase to 47% of Oxley.
Refer to ASX Release 13-May-21 for background on the transaction.
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REVIEW OF OPERATIONS
Zenith Minerals Limited
KAVAKLITEPE GOLD PROJECT – TURKEY (Zenith ~20%)
The Company is seeking to divest its share of the Kavaklitepe gold project, located in Turkey. Exploration and
evaluation of the Kavaklitepe gold project is now managed by Gubretas Maden, a Turkish mining company that
owns the nearby Sogut gold mine (under development).
Drilling to date on two prospect areas at Kavaklitepe has returned encouraging results:
Kuzey Zone drill intersections:
• 20m @ 15.6 g/t Au,
• 16m @ 4.7 g/t Au,
• 21m @ 3.29 g/t Au,
• 14m @ 6.09 g/t Au,
• 16m @ 4.7 g/t Au, and
• 7.8m @ 7.3g/t Au
Continuous Kuzey Zone surface rock chip
results:
• 54m @ 3.33 g/t Au,
• 10m @ 12.2 g/t Au,
• 44m @ 3.37 g/t Au,
• 15m @ 10.1 g/t Au and 6.5m @ 5.18 g/t
Au.
New Opportunities and Divestments
Divestments completed during the year included:
• Flanagans copper project to ASX:BIM (BIM ASX Release 24-Jun-22)
• Vivash Iron project to LSE AIM:UFO (ASX Release 31-May-22)
•
Jackadgery option to ASX:TG1 (ASX Release 16-May-22)
The Company advises that it is currently in ongoing and incomplete negotiations in connection with several
potential project acquisitions and disposals. This work has included assessment of various 3rd party lithium
properties in Australia.
Project generation is a core skill of the Company with new rare earth element prospective tenements secured
during the year for which the Company is seeking a partner.
The Company will provide appropriate disclosure should negotiations and agreements be completed.
Mineral Resource Statement
Develin Creek Copper-Zinc-Gold-Silver Project Mineral Resource
Following Zenith drilling at Develin Creek in 2014, 2021 and 2022, an updated Mineral Resource estimate has
been completed for the Company’s 100% owned, Develin Creek project located in Queensland (ASX Release 8-
Aug-22).
The Zenith drilling verified the past results that extended and improved the geological interpretation. The Mineral
Resource is interpreted and reported at a 0.5% Cu eq (copper equivalent) cut-off suitable for open pit assessment.
The updated Mineral Resource for the Sulphide City – Scorpion – Window copper – zinc deposits at the 0.5% Cu
eq cut-off includes:
Indicated
2.2 Mt @ 1.3% Cu, 1.3% Zn, 0.2 g/t Au and 8 g/t Ag
Inferred
2.7 Mt @ 1.1% Cu, 1.4% Zn, 0.2 g/t Au and 7 g/t Ag
Total
4.9 Mt @ 1.2% Cu, 1.4% Zn, 0.2 g/t Au and 7 g/t Ag
Copper equivalence Cu eq = (Cu + 0.45*Zn) and based on current rounded metal prices in June 2022 of A$8400/tonne Cu,
A$3300/t Zn and preliminary recoveries for Cu of 72% and Zn of 82%.
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REVIEW OF OPERATIONS
Zenith Minerals Limited
This update represents a 90% increase in tonnage and a 30% increase in overall contained metal from the
previous estimate announced on 15-Feb-2015. This difference is attributed in part to a lower cut-off grade for
reporting, but is also the result of some resource extensions from recent Zenith drilling, as well as a more robust
interpretation that captures more or the mineralisation.
The estimate does not include the massive copper-zinc sulphide mineralisation identified at Snook and other
prospects to the south, also within the Develin Creek project area.
Red Lake Manganese Mineral Resource
There was no change to the Red Lake Inferred Mineral Resource for manganese previously released to the ASX
in August 2014.
Red Lake Manganese Mineral Resource Estimate as at August 2014
Classification
Reporting Cut-off
Grade
Tonnes
(Mt)
Mn % Fe % SiO2 % Al2O3 % P % S % LOI %
Inferred
25% Mn
20% Mn
15% Mn
10% Mn
0.2
0.5
1.1
1.4
30.0
25.1
20.8
19.0
14.1
16.1
17.7
19.1
13.8
17.0
20.5
20.8
7.9
8.9
9.3
9.6
0.24 0.03 12.1
0.25 0.06 11.9
0.24 0.17 11.5
0.26 0.19 11.4
Note: The CSA Mineral Resource was estimated within constraining wireframe solids based on the specified
nominal lower cut-off grade for Mn. The Mineral Resource is quoted from all blocks above the specified Mn
cut-off grade %. Differences may occur due to rounding.
Lockeridge Manganese Mineral Resource
There was no change to the Lockeridge Inferred Mineral Resource for manganese previously released to the ASX
on 15-Apr15.
Lockeridge Manganese Mineral Resource Estimate as at April 2015
Reporting Cut-off
Grade
20% Mn
15% Mn
10% Mn
Classification
Tonnes (Mt) Mn % Fe % Si02% Al2O3 % P % S % LOI %
Inferred
30.2
23.4
20.6
Note: The Mineral Resource was estimated within constraining wireframe solids based on the specified
nominal lower cut-off grade for Mn. The Mineral Resource is quoted from all blocks above the specified Mn
cut-off grade %. Differences may occur due to rounding.
0.12 0.01 5.7
0.15 0.01 10.4
0.16 0.01 12.0
18.9
25.4
27.6
7.0
6.7
6.9
1.0
1.9
2.6
4.1
4.7
5.1
Mineral Resource Governance and Internal Controls
Zenith Minerals Limited ensures that the Mineral Resource estimates quoted are subject to governance
arrangements and internal controls. All the Company’s Mineral Resources have been estimated by independent
third-party competent persons, or for selected inferred resources, by suitably qualified and experienced Company
personnel.
All resources have been subject to review by Zenith Minerals Limited technical staff and by a subcommittee
appointed by the Board of Directors. The Company re-affirms that its Mineral Resources are reported in
accordance with the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’ (the JORC Code) 2012 Edition.
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REVIEW OF OPERATIONS
Zenith Minerals Limited
Competent Persons Statement
The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by
Mr Michael Clifford, who is a Member of the Australian Institute of Geoscientists and an employee of Zenith Minerals Limited.
Mr Clifford has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration,
and to the activity which he is undertaking, 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 Clifford consents to the inclusion in the
report of the matters based on his information, in the form and context in which it appears.
The information in this report that relates to the Develin Creek Mineral Resources is based on information compiled by Mr
John Horton, who is a Fellow and Chartered Professional of the Australasian Institute of Mining and Metallurgy and a full time
employee of ResEval Pty Ltd. Mr Horton has sufficient experience which is relevant to the style of mineralisation and type of
deposit under consideration, and to the activity which he is undertaking, 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 Horton
consents to the inclusion in the report of the matters based on his information, in the form and context in which it appears.
The information in this report that relates to the Lockeridge and Red Lake Mineral Resources is based on information compiled
by Mr Michael Clifford, who is a Member of the Australian Institute of Geoscientists and an employee of Zenith. Mr Clifford has
sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration, and to the activity
which he is undertaking, 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 Clifford consents to the inclusion in the report of
the matters based on his information, in the form and context in which it appears.
Investments
The Company holds investments in various listed entities because of project-based transactions.
Bradda Head Holdings Ltd (LON:BHL)
43.9M shares
NickelX Limited (ASX:NKL)
0.5M shares
Rumble Resources Ltd (ASX:RTR)
3.8M shares
Techgen Limited (ASX:TG1)
0.22M shares
American Rare Earths Ltd (ASX:ARR)
2.5M shares
Alien Metals Ltd (LSE AIM:UFO)
7.827M shares
Bindi Metals Limited (ASX:BIM)
1.25M shares
Covid-19
In relation to COVID-19, Zenith’s Board is mindful of the significant impact the virus has had on the community
and is continuing to assess the potential risks associated with its activities. Zenith’s projects are in remote country
areas or on grazing properties where Zenith’s crew are geographically isolated.
The Company continues to act on advice provided by the Federal and State Governments, with the health and
safety of Zenith’s crew, contractors, and local stakeholders a priority.
Material ASX Releases Previously Released
The Company has released all material information that relates to Exploration Results, Mineral Resources and
Reserves, Economic Studies and Production for the Company’s Projects on a continuous basis to the ASX and
in compliance with JORC 2012. The Company confirms that it is not aware of any new information that materially
affects the content of this ASX release and that the material assumptions and technical parameters remain
unchanged.
24
DIRECTOR’S REPORT
Zenith Minerals Limited
The Directors present their report, together with the financial statements of the consolidated entity, being Zenith
Minerals Limited and subsidiaries ("the Consolidated Entity") it controlled at the end of, or during, the year ended
30 June 2022, and the auditors' report thereon.
1. DIRECT ORS
The Directors of the Consolidated Entity at any time during or since the end of the financial year and up to the date
of this report, unless otherwise stated are:
David J E Ledger
Executive Chairman, appointed 2 May 2022
Qualifications:
Experience:
David Ledger has spent over 35 years in investment banking with experience
working in the United Kingdom and Australia. He is a former Executive
Director of a major European Bank and has been advising institutional and
corporate clients throughout his career. He currently works in Sydney in his
own advisory firm, working across multiple sectors.
Other Current Directorships:
Former Directorships (last 3
years):
None
None
Special Responsibilities:
Corporate and investor relations
Interest in Shares:
Interest in Options
350,000
4,000,000 Unlisted Options subject to shareholder approval.
Contractual Right to Shares:
None
Michael J Clifford
Managing Director, appointed 18 March 2014
Qualifications:
Experience:
BSc. (Hons), 1987, MSc
Mick Clifford is a geologist with over 30 years’ experience in the exploration
industry. Mick held senior technical and business development roles and
explored for most major metal commodities during a successful career with
Billiton Australia, Acacia Resources and AngloGold Ashanti, rising to the
position of Regional Exploration Manager Australia. Mick was Managing
Director of ASX listed PacMag Metals Ltd from 2005 until its takeover in 2010,
when he co-founded private explorer S2M2 Coal Pty Ltd. He is experienced
in international exploration, exploring for gold, copper and coal and has had
exposure to mining and exploration in Australia, USA, Brazil, Indonesia, PNG,
Angola, Democratic Republic of Congo, Mexico, Mongolia and Turkey.
Other Current Directorships:
Former Directorships (last 3
years):
None
None
Special Responsibilities:
Technical & Corporate
Interest in Shares:
Interest in Options
3,317,988 Ordinary Shares
4,500,000 Unlisted Options. 2,000,000 Unlisted Options subject to
shareholder approval.
Contractual Right to Shares:
None
25
DIRECTOR’S REPORT
Zenith Minerals Limited
Stanley A Macdonald
Non-Executive Director, appointed 24 April 2006
Experience:
Stan Macdonald has been associated with the mining and exploration
industry for over 25 years.
Other Current Directorships:
None
Former Directorships (last 3
years):
Gascoyne Resources Limited (Non-Executive Director from 20 April 2011,
resigned 8 October 2018)
Special Responsibilities:
Company promotion and project acquisition
Interest in Shares:
Interest in Options
5,570,072 Ordinary Shares
1,250,000 Unlisted Options. 4,000,000 Unlisted Options subject to
shareholder approval.
Contractual Right to Shares:
None
Julian D Goldsworthy
Non-Executive Director, appointed 29 August 2013
Qualifications:
Experience:
B. App. Sc. (Geology)
Julian Goldsworthy was formerly Exploration Manager at Giralia
Resources NL prior to its takeover by Atlas Iron Ltd, and was Chief
Geologist at Gascoyne Resources Limited. He has substantial prior
experience in the minerals industry with Newcrest Mining (and its
predecessor Newmont Australia) where he
led and conducted
successful exploration programs for gold in Australia and South
America.
Other Current Directorships:
None
Former Directorships (last 3
years):
Gascoyne Resources Limited (Executive Director appointed 2 June
2019, resigned on 2 June 2019)
Special Responsibilities:
Technical and Corporate
Interest in Shares:
Interest in Options
2,726,180 Ordinary Shares
1,250,000 Unlisted Options. 1,000,000 Unlisted Options subject to
shareholder approval.
Contractual Right to Shares:
None
Emma J Scotney
Non-Executive Director, appointed 5 May 2022
Qualifications:
Experience:
LLB (Hons), B.A, GAICD, GradDipMgmt (Strategy and Finance)
Emma Scotney is a highly experienced Business Advisor and Corporate
Lawyer, who has over 25 years’ combined experience in the property,
agricultural and mining industries. She provides in-house counsel services
to an ASX-listed global mining technology company, advising on corporate
and commercial matters, including mergers and acquisitions and corporate
governance policy. Emma is also a Commissioner of the Insurance
Commission of Western Australia.
Other Current Directorships:
Minerals 260 Limited (Non-Executive Director from 1 November 2021)
Former Directorships (last 3
years):
Nil
Special Responsibilities:
Corporate governance
Interest in Shares:
Interest in Options
Nil
Incentive Options – 1,000,000 Unlisted Options subject to shareholder
approval.
Contractual Right to Shares:
Nil
26
DIRECTOR’S REPORT
Zenith Minerals Limited
Peter J Bird
Qualifications:
Experience:
Non-Executive Director, appointed 30 March 2020
Non-Executive Chairman, appointed 30 September 2020
Executive Chairman, appointed 16 October 2020
Stepped down on 30 October 2021
BSc (Hons) (Geology)
Peter Bird has a wide experience in operational mining geology and
exploration in large multinational corporations. He has worked in business
development and treasury, with extensive experience as a mining analyst and
in investor relations and human resources before becoming a company
director. Peter was Deputy Chairman and CEO of Asiamet Resources Limited,
Australia, from 2017 (listed on the AIM market of the London Stock Exchange),
prior to joining Zenith. He has previously served as Managing Director of
Heemskirk Consolidated Ltd, of which he was a joint founder, and was Non-
Executive Chairman of Excelsior Gold Ltd.
Other Current Directorships:
None
Former Directorships (last 3
years):
Asiamet Resources Limited, Australia, listed on the AIM market of the London
Stock Exchange (Deputy Chairman and CEO, appointed 20 February 2017,
resigned 31 January 2020)
Special Responsibilities:
Technical and Corporate
Interest in Shares:
Interest in Options
None
1,250,000 Unlisted Options
Contractual Right to Shares:
None
Graham D Riley
Qualifications:
Experience:
Non-Executive Director, appointed 2 May 2018
Retired on 30 November 2021
B. Juris LLB
Graham is a qualified legal practitioner, having gained his Bachelor of Law
and Bachelor of Jurisprudence Degrees. After 10 years legal practice as
a partner of a commercial firm in Perth, he resigned to pursue private
interests in the resources and exploration sector, where he continues to
act in a non-executive capacity. Graham previously served as Non-
Executive Chairman of Giralia Resources NL, Buru Energy NL, Entek
Energy Limited, Red Hill Iron Limited and a Director of Adelphi Energy NL.
He was also a Non-Executive Director of Arc Energy Limited.
Other Current Directorships:
None
Former Directorships (last 3
years):
Gascoyne Resources Limited (Non-Executive Director from 19 October
2009, resigned 8 October 2018).
Special Responsibilities:
Legal, Technical and Corporate
Interest in Shares:
Interest in Options
Contractual Right to Shares:
9,000,000 Ordinary Shares
None
None
‘Other current directorships’ mentioned above are current directorships for listed entities only,
excluding directorships of all other types of entities, unless otherwise stated.
‘Former directorships (last 3 years)’ mentioned above are directorships held in the last 3 years for
listed entities only, excluding directorships of all other types of entities, unless otherwise stated.
27
DIRECTOR’S REPORT
Zenith Minerals Limited
2. COMPANY SECRETARY
Nicholas Ong
Nicholas Ong was appointed Company Secretary on 16 November 2020.
He is experienced in mining project finance, mining and milling contract
negotiations, mine CAPEX & OPEX management, and toll treatment gold
reconciliation. Nicholas is a Fellow of the Governance Institute of Australia
and holds a Bachelor of Commerce and a Master of Business Administration
from the University of Western Australia. Nicholas is currently a Company
Secretary of several ASX listed companies.
3. DIRECTORS' MEETINGS
The number of Directors' meetings (including meeting of committees of directors) and number of meetings
attended by each of the directors of the Group during the financial year are:
Mr D J E Ledger
Mr M J Clifford
Mr S A Macdonald
Mr J D Goldsworthy
Ms E J Scotney
Mr P J Bird
Mr G D Riley
MEETINGS
B
1
5
5
5
1
4
4
A
1
5
5
5
1
4
4
A = Number of meetings attended
B = Number of meetings held during the time the Directors held office during the year.
4. REMUNERATION REPORT – AUDITED
The remuneration report is set out under the following main headings:
A. Principles of Compensation
B. Key Management Personnel Remuneration
C. Equity Instruments
The information provided under headings A-C includes remuneration disclosures that are required under the
Corporations Act 2001 and the Corporations Regulations 2001. These disclosures have been transferred from
the financial report and have been audited.
Details of the remuneration of the key management personnel of the Consolidated Entity are set out in
tables provided under heading ‘B. Key Management Personnel Remuneration’. Key management
personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
A. Principles of Compensation - Audited
Compensation levels for key management personnel of the entity are competitively set to attract and retain
appropriately qualified and experienced Directors and Executives.
The objective of the Consolidated Entity’s reward framework is to ensure reward for performance is
competitive and appropriate. The framework aligns executive reward with achievement of strategic
objectives and creation of long-term growth and success for shareholders.
The Board ensures that remuneration satisfies the following criteria:
•
•
•
•
•
•
competitiveness and reasonableness
transparency
acceptability to shareholders
attracts and retains high caliber executives
rewards capability, experience and performance
performance alignment of executive compensation.
28
DIRECTOR’S REPORT
Zenith Minerals Limited
A. Principles of Compensation – Audited (cont.)
The full Board acts on behalf of Nomination and Remuneration Committee matters and is responsible for
determining and reviewing the remuneration packages for its directors and executives. Remuneration of key
management personnel for the year ended 30 June 2022 has been determined by the Board. In this respect
consideration is given to normal commercial rates of remuneration for similar levels of responsibility that is
market competitive and complementary to the reward strategy of the consolidated entity. Alignment to
shareholders interests focuses on pursuing long term growth in shareholder wealth, consisting of growth in
share price and success of the Company within an appropriate control framework. The structure of non-
executive directors’ remuneration and executive remuneration are separate as recommended by Corporate
Governance Council best practice.
Executive Remuneration
The consolidated entity aims to reward executives with a level of remuneration based on their position and
responsibility, which has a mix of both fixed and variable components. The remuneration of executives and
reward framework comprises a combination of:
• base pay and non-monetary benefits
• performance linked incentives
•
• other remuneration such as superannuation and long service leave.
share based payments
Fixed Compensation
Fixed compensation consists of base compensation (which is calculated on a total basis and includes any FBT
charges related to employee benefits including motor vehicles), as well as employer contributions to
superannuation funds. Compensation levels are reviewed annually by the Board of Directors acting in their
capacity as the Nomination and Remuneration Committee through a process that considers individual and
overall performance of the Consolidated Entity and comparable market remunerations.
Performance Linked Compensation
Performance-linked remuneration consists of long-term incentives in the form of options over ordinary shares
of the Consolidated Entity. Performance-linked remuneration is not based on specific financial indicators such
as earnings or dividends as the Consolidated Entity is at the exploration stage and during this period is expected
to incur operating losses. There is no separate profit-share plan or short-term incentive components.
Long-Term Incentive
Long-term incentives comprise of long service leave and share based payments in the form of share options,
which are granted from time to time to encourage sustained performance in the realisation of strategic
outcomes and growth in shareholder wealth. Options are granted for no consideration and do not carry voting
or dividend entitlements. The exercise price of the options is determined after taking into account the underlying
share price performance during the period leading up to the date of the grant. Subject to specific vesting
conditions, each option is convertible into one ordinary share. There is presently no stated policy restricting
key management personnel from limiting their exposure to risk in relation to options granted. The Board of
Directors acting in their capacity as the Nomination and Remuneration Committee, review the long-term
incentives for executives on an annual basis during its review process of the executive’s performance.
Consequences of Performance on Shareholder Wealth
The overall level of key management personnel compensation takes into account the performance of the
Consolidated Entity over a number of years.
Performance in respect of the current financial year and the previous four financial years is detailed in the table
below:
2022
$
2021
$
2020
$
2019
$
2018
$
Profit/(Loss) attributable to owners of the Group
Basic Profit/(Loss) per Share
Share Price at financial year end ($)
Changes in share price (from initial listing of 25 cents)
1,465,147 2,010,141
0.0027
0.25
-
0.0044
0.28
0.03
(383,397)
(0.002)
0.12
-0.13
(695,492)
(0.003)
0.08
-0.17
(682,929)
(0.003)
0.18
-0.07
29
DIRECTOR’S REPORT
Zenith Minerals Limited
A. Principles of Compensation – Audited (cont.)
During the financial years noted above, there were no dividends paid or other returns of capital made by the
Consolidated Entity to shareholders. The Consolidated Entity’s performance is impacted by a number of factors
including employee performance. The measures of performance of the Consolidated Entity set out in the table
above have been taken into consideration in the determination of appropriate levels of remuneration by the
Board acting in its capacity as the Nomination and Remuneration Committee.
Non-Executive Compensation
Remuneration of Non-executives comprise fees in the form of cash and statutory superannuation entitlements,
quantified by having regard to industry practice and the need to obtain appropriately qualified, independent
persons. Fees may contain non-monetary elements. Fees and payments to non-executive directors have
regard to the demands and responsibilities of their role which covers all main board activities and membership
of applicable sub-committees.
The Board, acting as the Nomination and Remuneration Committee, reviews non-executive director fees and
payments annually. The Board may receive advice from independent remuneration consultants to ensure non-
executive directors’ fees and payments are appropriate and in line with the market. The Chairman’s fees are
determined independently to other non-executive director fees, based on similar comparative roles in the
marketplace. The Chairman is not present at discussions regarding the determination of his own remuneration.
Non-executives do not receive share options or other incentives.
Total compensation for all non-executive directors, agreed at a general meeting on 14 March 2006 is that the
maximum non-executive director remuneration be $200,000 per annum.
Voting and comments made at The Consolidated Entity’s 2021 Annual General Meeting (‘AGM’)
At the 2021 AGM, 99.25% of the votes received supported the adoption of the remuneration report for the year
ended 30 June 2021. There was no specific feedback received at the AGM, regarding its remuneration
practices.
B. Key Management Personnel Remuneration - Audited
The following table discloses the remuneration of the key management personnel of the Consolidated
Entity.
The key management personnel of the Consolidated Entity consisted of the following directors:
• Mr D J E Ledger – Executive Chairman (appointed 2 May 2022)
• Mr M J Clifford – Managing Director
• Mr S A Macdonald – Non-Executive Director
• Mr J D Goldsworthy – Non-Executive Director
• Ms E J Scotney – Non-Executive Director (appointed 2 May 2022)
• Mr P J Bird – Executive Chairman (retired 30 October 2021)
• Mr G D Riley - Non-Executive Director (retired 30 November 2021).
30
DIRECTOR’S REPORT
Zenith Minerals Limited
The key management personnel of Zenith Minerals Limited and subsidiaries include the directors and the following executive officers:-
Short-Term Benefits
Post-
Employment
Benefits
Cash
Salary
& Fees
Cash
Bonus
Non-
Monetary
Benefits
Super-
annuation
Share-
Based
Payments
Options
TOTAL
Other
Long
Term
Benefits
Long
Service
Leave
$
$
$
$
$
$
$
S300A(1)(e)(i) S300A(1)(e)(vi)
Proportion of
Remuneration
Performance
Related
%
Value of
Options as
Proportion of
Remuneration
%
Non- Executive
Directors:
S A Macdonald
J D Goldsworthy
EJ Scotney
G D Riley
Executive
Director:
D J E Ledger
PJ Bird
M J Clifford
Other Key
Management
Personnel:
M J Nelmes
TOTAL
TOTAL
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
33,750
32,500
86,850
32,500
7,500
-
12,500
32,500
42,500
-
218,428
183,090
244,658
254,075
-
66,960
646,186
619,940
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,065
3,450
3,088
8,685
3,088
750
-
1,250
3,088
-
-
8,067
17,394
24,466
24,137
-
-
-
5,531
-
46,668
2,065
58,066
31
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
98,103
-
98,103
-
-
-
-
-
-
-
98,103
19,084
156,965
37,200
133,691
95,535
133,691
8,250
-
13,750
35,588
42,500
-
226,495
298,587
288,207
437,242
-
-
-
72,491
19,084
711,938
451,274
1,131,345
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
73.38%
-
73.38%
-
-
-
-
-
-
-
32.86%
6.62%
35.90%
-
-
-
-
DIRECTOR’S REPORT
Zenith Minerals Limited
Analysis of Bonuses Included in Remuneration – Audited
No short-term incentive cash bonuses have been awarded as remuneration to directors of the Consolidated Entity
or to Consolidated Entity executives.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Non-Executive Directors:
S A Macdonald
J D Goldsworthy
E J Scotney
G D Riley
Executive Director:
P J Bird
D J E Ledger
M J Clifford
Fixed Remuneration
Remuneration linked to
performance
2022
2021
2022
2021
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
No key management personnel appointed during the period received a payment as part of his or her
consideration for agreeing to hold the position.
Service Contracts
Remuneration and other terms of employment for the other key management personnel are formalised in service
agreements. The major provisions of the agreement relating to remuneration are set out below.
David JE Ledger
- Executive Chairman, appointed 2 May 2022
- Annually renewable contract
- Base salary of $255,000 per annum.
- Issue of unlisted options, subject to shareholder approval
- Three month notice period is prescribed on termination, with or without cause.
Stanley A Macdonald
Julian D Goldsworthy
Emma J Scotney
- Non-Executive Director, appointed 24 April 2006
- Annually renewable contract
- Base salary of $45,000 per annum plus superannuation of 10%
- No notice period is prescribed on termination.
- Non-Executive Director, appointed 29 August 2013
- Annually renewable contract
- Base salary of $45,000 per annum plus superannuation of 10%
- Additional consulting paid at daily rate.
- No notice period is prescribed on termination.
- Non-Executive Director, appointed 2 May 2022
- Annually renewable contract
- Base salary of $45,000 per annum plus superannuation of 10%
- No notice period is prescribed on termination.
Michael J Clifford
- Managing Director appointed 18 March 2014
Terms of Agreement
- The agreement is annually renewable. To terminate the agreement, the
Consolidated Entity must provide six months’ notice, or the Managing Director must
provide three months’ notice.
32
DIRECTOR’S REPORT
Zenith Minerals Limited
Analysis of Bonuses Included in Remuneration – Audited (cont.)
Michael J Clifford (cont)
If serious misconduct is committed by the executive, the agreement may be
immediately
the
Consolidated Entity may provide the executive with a payment in lieu of notice of
termination for all or part of the notice period.
the Consolidated Entity. On
terminated by
termination,
Remuneration and
Benefits
- Annual base salary of $255,000 inclusive of 10% superannuation for the
financial year to 30 March 2022 and adjusted to $308,000 from 1 April 2022.
Salary is reviewed annually by the Board acting as the Nomination and
Remuneration Committee.
C. Equity Instruments – Audited
Share-Based Compensation
i) Issue of shares
There were no shares issued to the directors and other key management personnel as part of
compensation during the year ended 30 June 2022 (2021: Nil)
Options were exercised during the year using the cashless exercise method. The unpaid amount
expensed as Share-Based Compensation.
ii) Options
For Zenith Minerals Limited options granted over ordinary shares during the current financial year or
future reporting years affecting remuneration of directors and other key management personnel, the
terms and conditions are as follows:
2022: Nil
2021:
Name
Number
Options
Granted
Grant date Expiry date
Exercise
price
Fair value at
grant date
Vesting
Date
M Clifford
2,000,000 25 Nov 2020 14 May 2023 $0.1097
$0.078483
S A
Macdonald
J D
Goldsworthy
P J Bird
1,250,000 25 Nov 2020 14 May 2023 $0.1097
$0.078483
1,250,000 25 Nov 2020 14 May 2023 $0.1097
$0.078483
1,250,000 25 Nov 2020 14 May 2023 $0.1097
$0.078483
Vests at date of
grant
Vests at date of
grant
Vests at date of
grant
Vests at date of
grant
Options granted carry no dividend or voting rights.
33
DIRECTOR’S REPORT
Zenith Minerals Limited
Share-Based Compensation (cont.)
Values of options over ordinary shares granted, exercised, lapsed for directors and other key management
personnel as part of compensation during the year are set out below:
2022:
Name
Director:
M J Clifford
S A Macdonald
J D Goldsworthy
P J Bird
2021:
Name
Director:
M J Clifford
S A Macdonald
J D Goldsworthy
P J Bird
Value of
options granted
during the
year
$
Value of options
exercised
during the
year
$
Value of
options lapsed
during the
year
$
Remuneration
consisting of
options for the
year
%
19,084
-
-
-
-
-
-
-
-
-
-
-
6.62%
-
-
-
Value of
options granted
during the
year
$
Value of options
exercised
during the
year
$
Value of
options lapsed
during the
year
$
Remuneration
consisting of
options for the
year
%
156,965
98,103
98,103
98,103
-
-
-
-
-
-
-
-
35.90%
73.38%
73.38%
32.86%
Shares issued on exercise of options
1,705,828 options granted under Zenith Minerals Limited’s Employee Option Plan were exercised into
ordinary shares during the year ended 30 June 2022 using the cashless exercise mechanism (2021: Nil).
iii) Ad ditional disclosur es relating to key mana g eme nt personn el
Share Holding
The number of shares in Zenith Minerals Limited held during the financial year by each director and other key
management personnel of the Consolidated Entity, including their personally related parties, are set out
below. There were no shares granted during the reporting period as compensation.
2022
Name
Balance at
the start of
the year
Received
as part of
remuneration
Ordinary Shares
Additions
Other changes
Balance at
the end of
the year
5,570,072
2,726,180
-
3,317,988
350,000
-
-
-
-
-
450,464
350,000
-
-
-
-
(9,000,000)
-
-
-
-
800,464
(9,000,000)
11,964,240
Directors:
Stanley A Macdonald
Julian D Goldsworthy
Graham D Riley
Michael J Clifford
David J E Ledger
Peter J Bird
Emma J Scotney
Total
5,570,072
2,726,180
9,000,000
2,867,524
-
-
-
20,163,776
-
-
-
-
-
-
-
-
34
DIRECTOR’S REPORT
Zenith Minerals Limited
Option Holding
The number of options over ordinary shares in Zenith Minerals Limited held during the financial year by directors
and other key management personnel of the Consolidated Entity, including their personally related parties,
are set out below:
2022
Name
Balance at
the start of
the year
Granted as
Remuneration
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year**
Directors:
Stanley A Macdonald
Julian D Goldsworthy
Michael J Clifford
Graham D Riley
Peter J Bird
Total
1,250,000
1,250,000
5,500,000
-
1,250,000
9,250,000
-
-
-
-
-
-
-
-
(1,000,000)
-
(1,250,000)
(2,250,000)
-
-
-
-
-
-
1,250,000
1,250,000
4,500,000
-
-
7,000,000
** All options are vested and exercisable at 30 June 2022.
Other Transactions With Key Management Personnel And Their Related Parties
During the financial year ended 30 June 2022, other transactions with key management personnel and
their related parties were as follows:
i)
Provision of Serviced Office – During the financial year ended 30 June 2022, fees of $3,872
(2021: $7,745) were received from Creekwood Nominees Pty Ltd, a director related entity of
Mr S A Macdonald and fees of $2,827 from Satinbrook Pty Ltd, a director related entity of Mr
G D Riley (2021: $7,025).
All transactions were made on normal commercial terms and conditions and at market rate.
There are no loans to directors and executives
This concludes the remuneration report, which is audited.
35
DIRECTOR’S REPORT
Zenith Minerals Limited
5 . ACT I V IT I E S
The principal activity of the Consolidated Entity during the course of the financial year was mineral
exploration predominantly in Australia and also including Turkey (Europe) and United States of America.
Following listing on ASX on 29 May 2007, the Consolidated Entity commenced exploration activity
wherever it assessed there was an opportunity of success.
There was no significant change in the nature of the activity of the Consolidated Entity during the year.
6 . OPERATING & FINANCIAL REVIEW
Overview
During the year, the Consolidated Entity undertook mineral exploration activities predominantly in Australia.
Objectives
The Group's objectives are to pursue opportunities in exploration and mining for precious and other minerals in
areas which are highly prospective for mineralisation.
Financial Results
The profit for the financial year ended 30 June 2022, attributable to members of the Consolidated Entity,
after income tax is $1,465,147 (2021: $2,010,141).
No dividends were paid or recommended for payment during the financial year ended 30 June 2022
(2021: Nil).
Review of Financial Condition
During the year, the net assets of the Consolidated Entity increased by $13,539,191 from $12,980,910 at 30
June 2021 to $26,520,101 at 30 June 2022.
The directors consider that the Consolidated Entity holds a valuable portfolio of mineral tenements with a
carrying value at 30 June 2022 of $11,096,281 (2021: $6,714,651). During the financial year, the
consolidated entity booked an impairment loss on capitalised exploration and evaluation expenditure of
$158,137 (2021: $443,758) following its review of its portfolio of mineral tenements.
In relation to COVID-19, Zenith’s Board is mindful of the significant impact the virus is having on the
community and is continuing to assess the potential risks associated with its activities. Zenith’s projects are
in remote country areas or on grazing properties where Zenith’s crew are geographically isolated. The
Company will continue to act on advice provided by Federal and State Governments with the health and
safety of Zenith’s crew, contractors and local stakeholders a priority.
7 . SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no other significant changes in the state of affairs of the Consolidated Entity during the financial
year ended 30 June 2022.
8 . EVENTS SUBSEQUENT TO REPORTING DATE
On 29 September 2022, Zenith entered into a deed of variation with Oxley Resources Ltd, to remove
remaining of tranche 2 placement and amend tranche 3 placement to 1,875,000 shares for $150,000 at $0.08
per share. Tranche 3 placement will complete by 30 September 2022.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not significantly impacted
the Consolidated Entity up to date, it is not practicable to estimate the potential impact, positive or negative,
after the reporting date. The situation is rapidly developing and is dependent on measures imposed by the
Australian Government and other countries, such as maintaining social distancing requirements, quarantine,
travel restrictions and any economic stimulus that may be provided.
36
DIRECTOR’S REPORT
Zenith Minerals Limited
No other matter or material event has arisen since 30 June 2022, which has significantly affected or may
significantly affect the Consolidated Entity’s operations, the results of those operations, or the Consolidated
Entity’s future state of affairs.
9 . L IK EL Y D E VEL O P ME NT S
The Consolidated Entity will continue to pursue its policy of acquiring and testing attractive mineral
properties with a view to developing properties capable of economic mineral production.
Further information about likely developments in the operations of the Consolidated Entity and the
expected results of those operations in future financial years has not been included in this report because
disclosure of the information would be likely to result in unreasonable prejudice to the Consolidated Entity.
1 0 . EN V IRO N MENT AL R EG UL AT I ON
The Consolidated Entity is subject to significant environmental regulation in relation to its exploration
activities from the Department of Minerals and Petroleum (West Australian operations), Code of Environmental
Compliance for exploration and mineral development projects, Version 1.1 and provision of the Environmental
Heritage Protection Act 1994 (Queensland operations), State Lands Department of Arizona laws and
regulations (Arizona state lease), The General Mining Act of 1872 United States (Federal Lode mining claims
Arizona), Turkish Mining Law as administered by the Mining Affairs General Directorate of the Ministry of
Energy and Natural Resources (Turkish operations) and aims to ensure that it complies with all relevant
environmental legislation. The directors are not aware of any significant breaches during the period covered by
this report.
1 1 . INDEMNIT Y AND INSURANCE OF OFF ICERS
The Consolidated Entity has indemnified the Directors and Officers for costs incurred by them in defending
civil or criminal proceedings that may be brought against the Directors and Officers in their capacity, of
the Consolidated Entity, and any other payments arising from liabilities incurred by the Directors and
Officers in connection with such proceedings.
This does not include such liabilities that arise from conduct involving a willful breach of duty by the Directors
or Officers of the improper use of their position or of information to gain advantage for themselves or someone
else or to cause detriment to the Consolidated Entity.
During the financial year, the company paid a premium in relation to a contract to insure the Directors and
Officers of the Consolidated Entity against a liability to the extent permitted by the Corporations Act 2001. The
contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
1 2 . INDEMNIT Y AND INSURANCE OF AUDIT ORS
The Consolidated Entity has not, during or since the end of the financial year, indemnified or agreed to
indemnify the auditor of the company or any related entity against a liability incurred by the auditor.
During the financial year, the Consolidated Entity has not paid a premium in respect of a contract to
insure the auditor of the company or any related entity.
37
DIRECTOR’S REPORT
Zenith Minerals Limited
1 3 . SHARE OPT IONS
Shares Under Option
Unissued ordinary shares of Zenith Minerals Limited under option at the date of this report are as follows:
Date options
granted
Expiry date
16 July 2021
14 May 2020
14 July 2024
14 May 2023
25 November 2019
24 November 2022
13 July 2020
13 July 2020
31 December 2023
31 December 2023
Exercise
Price
$0.379
$0.1097
$0.087
$0.14
$0.16
Number under
option
750,000
700,000
3,300,000
2,000,000
2,000,000
25 November 2020
14 May 2023
$0.1097
4,500,000
No option holder has any right under the options to participate in any other share issue of the Group.
14. SHARES ISSUED ON THE EXERCISE OF OPTIONS
There were 2,495,272 ordinary shares issued by Zenith Minerals Limited during the year ended 30
June 2022 and up to the date of this report on the exercise of options granted.
15. PROCEEDINGS ON BEHALF OF THE GROUP
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any
proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group
for all or any part of those proceedings. The Group was not a party to any such proceedings during the
period.
16. DIVIDENDS
No dividends were paid or provided for during the year.
17. NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor (PKF) for non-audit services provided during the
financial year are outlined in Note 9 to the financial statements.
The directors are satisfied that the provision for non-audit services during the financial year, by the auditor
(or by another person or firm on the auditor’s behalf), is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001.
The directors are of the opinion that the services do not compromise the external auditor’s independence
requirements of the Corporations Act 2001 due to the following reasons:
•
•
all non-audit services have been reviewed and approved to ensure that they do not impact the
integrity and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out
in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional
and Ethics Standards Board, including reviewing or auditing the auditor’s own work, acting in a
management or decision-making capacity for the company, acting as advocate for the company or
jointly sharing economic risks and rewards.
18. OFFICERS OF THE COMPANY WHO ARE FORMER AUDIT PARTNERS OF PKF
There are no officers of the company who are former audit partners of PKF.
38
DIRECTOR’S REPORT
Zenith Minerals Limited
19. AUDITORS’ INDEPENDENCE DECLARATION
A copy of the auditors’ independence declaration as required under section 307C of the Corporations
Act 2001 is set out on the following page.
20. AUDITOR
PKF Perth continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the directors
Mr David J E Ledger
Executive Chairman
Dated: 30 September 2022
Perth, WA.
39
PKF Perth
AUDITOR’S INDEPENDENCE DECLARATION
TO THE DIRECTORS OF ZENITH MINERALS LIMITED
In relation to our audit of the financial report of Zenith Minerals Limited for the year ended 30 June 2022, to the
best of my knowledge and belief, there have been no contraventions of the auditor independence requirements
of the Corporations Act 2001 or any applicable code of professional conduct.
PKF PERTH
SIMON FERMANIS
AUDIT PARTNER
30 SEPTEMBER 2022
WEST PERTH
WESTERN AUSTRALIA
Level 4, 35 Havelock Street, West Perth, WA 6005
PO Box 609, West Perth, WA 6872
T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au
PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or
inactions of any individual member or correspondent firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
40
FINANCIAL STATEMENTS
Zenith Minerals Limited
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR ENDED 30 JUNE 2022
NOTE
5
16
14
6
27
17
18
16
16
19
16
7
11
8
Revenue from continuing operations
Profit on part disposal of equity investment in
Associate
Net fair value gain on other financial assets
Other revenue
Interest revenue
Expense
Employee benefits expenses
Share option based payment
Depreciation
Premises costs
Exploration expenditure expensed
Impairment loss on exploration & evaluation
expenditure
Loss on recognition of associate
Impairment on investment in associate
Amortisation expense
Share of losses of Associate accounted for using
equity method
Other operating expenses
Profit from continuing operations before income
tax
Income tax expense
Profit from continuing operations after income tax
benefit for the year
Net profit after tax from discontinued operations
Net profit for the year
Other comprehensive income
Items that might be reclassified subsequently to profit
or loss:
Other comprehensive loss for the year (net of tax)
Total comprehensive profit/(loss) for the year
Profit/(Loss) per share
Continuing operations
Basic profit/(loss) per share
Diluted profit/(loss) per share
Discontinued operations
Basic profit/(loss) per share
Diluted profit/(loss) per share
Continuing and discontinued operations
Basic profit/(loss) per share
Diluted profit/(loss) per share
10
10
10
10
10
10
Consolidated Entity
2022
$
1,118,444
-
2,436,574
-
10,084
(579,339)
(305,594)
(6,341)
(113,937)
(39,739)
(158,137)
(114,421)
-
-
10,437
2021
$
247,239
159,776
3,063,086
2,370
4,165
(683,268)
(451,276)
(7,587)
(58,255)
(21,367)
(443,758)
-
(428,636)
(12,668)
(3,950)
(792,884)
(570,580)
1,465,147
795,291
-
1,465,147
795,291
-
1,214,850
1,465,147
2,010,141
(75,246)
(75,246)
1,465,147
1,934,895
Cents
Cents
0.44
0.43
-
-
0.44
0.43
0.27
0.26
0.42
0.39
0.69
0.65
Foreign currency translation
22(a)
-
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction
with the notes to the consolidated financial statements.
41
FINANCIAL STATEMENTS
Zenith Minerals Limited
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2022
NOTE
Consolidated Entity
2022
$
2021
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial asset at fair value through profit or loss
Interest in associate
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Exploration and evaluation expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Employee benefits
TOTAL CURRENT LIABILITIES
12
13
14
16
15
17
18
19
20
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
7,906,087
171,630
7,467,583
127,710
38,260
1,832,183
98,426
4,636,593
-
18,899
15,711,270
6,586,101
16,356
11,096,281
20,834
6,714,651
11,112,637
6,735,485
26,823,907
13,321,586
156,451
147,355
210,786
129,890
303,806
340,676
303,806
340,676
26,520,101
12,980,910
21
22(a)
22(b)
38,780,371
704,773
(12,965,043)
26,543,450
867,650
(14,430,190)
26,520,101
12,980,910
The consolidated statement of financial position is to be read in conjunction with the notes to the consolidated
financial statements.
42
FINANCIAL STATEMENTS
Zenith Minerals Limited
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2022
Issued Capital
Reserves
$
$
Accumulated
Losses
$
Total
$
Balance at 1 July 2021
26,543,450
867,650
(14,430,190)
12,980,910
Profit/(Loss) for the period
Other comprehensive income
Total comprehensive income
Transactions with owners,
recorded directly in equity
Issue of shares, net of transaction
costs (note 21)
-
-
-
11,634,514
-
-
-
-
Exercise of options
602,407
(281,645)
Issue of employee options (note 22)
-
118,768
1,465,147
-
1,465,147
-
1,465,147
1,465,147
-
-
-
11,634,514
320,762
118,768
Balance at 30 June 2022
38,780,371
704,773
(12,965,043)
26,520,101
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
Issued Capital
Reserves
$
$
Accumulated
Losses
$
Total
$
Balance at 1 July 2020
22,134,472
98,636
(16,440,331)
5,792,777
Profit/(Loss) for the period
Other comprehensive income
Total comprehensive income
Transactions with owners,
recorded directly in equity
Issue of shares, net of transaction
costs (note 21)
Issue of employee options (note 22)
Issue of broker options
-
-
-
-
(75,246)
(75,246)
2,010,141
-
2,010,141
(75,246)
2,010,141
1,934,895
4,408,978
-
-
-
451,276
392,984
-
-
-
4,408,978
451,276
392,984
Balance at 30 June 2021
26,543,450
867,650
(14,430,190)
12,980,910
The consolidated statement of changes in equity is to be read in conjunction with the notes to the consolidated
financial statements.
43
FINANCIAL STATEMENTS
Zenith Minerals Limited
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2022
NOTE
Consolidated Entity
2022
$
2021
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Cash paid to suppliers and employees
Payments for capitalised exploration and expenditure
Government grants and tax incentives
Interest received
Tax paid
650,236
(1,542,378)
(4,767,424)
-
10,084
-
100,447
(1,150,993)
(3,379,570)
131,000
4,165
(88,147)
NET CASH (USED IN) OPERATING ACTIVITIES
28
(5,649,462)
(4,383,098)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of investments
Proceeds on sale of tenements
Payments for equity investments
Payments for plant and equipment
NET CASH FROM (USED IN) INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issues of equity securities
Cost of issuing equity securities
Proceeds from exercise of options
Repayment of lease liability
-
191,446
(231,694)
(4,836)
(45,084)
487,064
15,000
-
(9,929)
492,135
12,000,000
5,100,000
(365,486)
(298,037)
133,934
-
-
(46,923)
NET CASH PROVIDED BY FINANCING ACTIVITIES
11,768,448
4,755,040
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the
financial period
Effect of movement in exchange rates on cash held
CASH AND CASH EQUIVALENTS AT THE END OF THE
FINANCIAL PERIOD
6,073,904
864,077
1,832,183
968,107
-
-
12
7,906,087
1,832,183
The consolidated statement of cash flows is to be read in conjunction with the notes to the consolidated
financial statements.
44
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
1. REPORTING ENTITY
Zenith Minerals Limited and controlled entities (“Consolidated Entity”) is domiciled in Australia, incorporated in
Australia, publicly listed on the ASX and limited by shares. The address of the Consolidated Entity registered
office and principal place of business is Level 2, 33 Ord Street, West Perth, Western Australia, 6005.
The Consolidated Entity is involved in mineral exploration.
2. BASIS OF PREPARAT ION
(a) Statement of Compliance
These general-purpose financial statements have been prepared in accordance with Australian
Accounting Standards (AASBs), Interpretations issued by the Australian Accounting Standards Board
(AASB) and the Corporations Act 2001, as appropriate for for-profit orientated entities.
These financial statements of the Consolidated Entity comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
The Consolidated Financial Statements were approved by the Board of Directors on 30 September
2022. The directors have the power to amend and reissue the financial statements. Comparative information
is for period 1 July 2020 to 30 June 2021.
(b) Basis of Measurement
These financial statements have been prepared on the historical cost and accrual accounting basis,
except for the revaluation of financial assets and liabilities at fair value through profit or loss and financial
assets at fair value through other comprehensive income.
In accordance with the Corporations Act 2001, these financial statements present the results of the
Consolidated Entity with supplementary information about the parent entity being included in at note
31.
(c) Functional and Presentation Currency
These financial statements are presented in Australian dollars, which is the Consolidated Entity’s
functional currency.
(d) Use of Estimates and Judgements
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the Financial Statements. Management continually
evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenues and
expenses.
Management bases its judgements, estimates and assumptions on historical experience and on other
various factors, including expectations of future events, management believes to be reasonable under
the circumstances. The resulting accounting judgements and estimates will seldom equal the related
actual results. The judgements, estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within
the next financial year are discussed below.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic
has had, or may have, on the consolidated entity based on known information. Consideration extends to
the suppliers, staffing and geographic regions in which the consolidated entity operates. The impact of
the Coronavirus (COVID-19) pandemic is ongoing and while it has not significantly impacted the
consolidated entity up to date, it is not practicable to estimate the potential impact, positive or negative,
after the reporting date.
45
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
2. BASIS OF PREPARAT ION (cont.)
(d) Use of Estimates and Judgements (cont.)
Income tax
The consolidated entity is subject to income taxes in the jurisdictions in which it operates. Significant
judgement is required in determining the provision for income tax. There are many transactions and
calculations undertaken during the ordinary course of business for which the ultimate tax determination
is uncertain. The consolidated entity recognises liabilities for anticipated tax audit issues based on the
consolidated entity's current understanding of the tax law. Where the final tax outcome of these matters
is different from the carrying amounts, such differences will impact the current and deferred tax provisions
in the period in which such determination is made.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the consolidated entity
considers it is probable that future taxable amounts will be available to utilise those temporary differences
and losses.
Exploration and evaluation expenditure
The Consolidated Entity capitalises expenditure relating to exploration and evaluation where it is considered
likely to be recoverable or where the activities have not reached a stage which permits a reasonable
assessment of the existence of reserves. Key judgements are applied in considering costs to be
capitalised, including determining those expenditures directly related to these activities and allocating
overheads between those that are expensed and capitalised. While there are certain areas of interest
from which no reserves have been extracted, the directors are of the continued belief that such
expenditure should not be written off since feasibility studies in such areas have not yet concluded.
Factors that could impact the future recoverability include the level of reserves and resources, future
technological changes, costs of drilling and production, production rates, future legal changes and
changes to commodity prices. To the extent that capitalised costs are determined not to be recoverable
in the future, they will be written off in the period in which this determination is made.
As at 30 June 2022, the carrying value of capitalised exploration expenditure is $11,096,281 (2021:
$6,714,651).
Impairment of Non-Financial Assets
The Consolidated Entity assesses impairment at each reporting date by evaluating conditions specific
to the Consolidated Entity and to the particular asset that may lead to impairment of assets. Where an
impairment trigger exists, the recoverable amount of the asset is determined. Fair value less cost of
disposal or value-in-use calculations performed in assessing recoverable amounts incorporate a
number of key estimates. Impairment loss recorded in the current financial year was $23,336 (2021:
$443,758).
Share Based Payments
The Consolidated Entity measures the cost of equity settled transactions with consultants and employees
by reference to the fair value of the equity instruments at the date at which they are granted. The fair
value is determined using a Black Scholes model, taking into account the terms and conditions upon
which the instruments were granted. The accounting estimates and assumptions relating to equity settled
share-based payments would not impact carrying amounts of assets and liabilities within the next annual
reporting period but may impact profit or loss and equity (note 27).
Estimation of Useful Lives of Assets
The Consolidated Entity determines the useful lives and related depreciation and amortisation charges
for its property, plant & equipment and finite live intangible assets. Events such as technical innovations
or other events could change the useful lives of assets significantly. Depreciation and amortisation
charges will increase where the useful lives are less than the previously estimated lives, or technically
obsolete or non-strategic assets which have been abandoned or sold will be written down or written off.
46
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
2. BASIS OF PREPARAT ION (cont.)
Fair Value Measurement Hierarchy
The Consolidated Entity is required to classify all assets and liabilities measured at fair value,
using a three level hierarchy which is based on the lowest level of input that is significant to the
entire fair value measurement, being: Level 1: Quoted prices (unadjusted) in active markets for
identical assets or liabilities that the entity can access at the measurement date; Level 2: Inputs
other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly; and Level 3: Unobservable inputs for the asset or liability. In determining
what is significant to fair value there is considerable judgement required. Therefore, the category
the asset or liability is placed in can be subjective.
The fair value of assets and liabilities classified as level 3 is determined by the use of valuation models.
These include discounted cash flow analysis or use of observable inputs requiring significant
adjustments based on unobservable inputs.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of these financial statements are set out below.
These policies have been consistently applied unless otherwise stated.
New or Amended Accounting Standards and Interpretations Adopted
The Consolidated Entity has adopted all of the new or amended Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting
period. There was no material impact on the financial report as a result of adopting the new accounting
standards.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted by the Consolidated Entity for the annual reporting period ended 30 June 2022. The impact
has not yet been determined.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Zenith
Minerals Limited (the “Company”) as at 30 June 2022 and the results of all subsidiaries for the year then
ended. Zenith Minerals Limited and its subsidiaries together are referred to in these financial statements
as the ‘Consolidated Entity’ or the ‘Group’.
Subsidiaries are all those entities over which the Consolidated Entity has control. The Consolidated Entity
controls an entity when the Consolidated Entity is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the activities of
the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Consolidated
Entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Consolidated
Entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the
impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary
to ensure consistency with the policies adopted by the Consolidated Entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference
between the consideration transferred and the book value of the share of the non-controlling interest acquired
is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit
or loss and other comprehensive income, statement of financial position and statement of changes in equity of
the Consolidated Entity. Losses incurred by the Consolidated Entity are attributed to the non-controlling interest
in full, even if that results in a deficit balance.
47
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Principles of consolidation (cont.)
Where the Consolidated Entity loses control over a subsidiary, it derecognises the assets including goodwill,
liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences
recognised in equity. The Consolidated Entity recognises the fair value of the consideration received and the
fair value of any investment retained together with any gain or loss in profit or loss.
Associates
Associates are entities over which the consolidated entity has significant influence but not control or joint
control. Investments in associates are accounted for using the equity method. Under the equity method, the
share of the profits or losses of the associate is recognised in profit or loss and the share of the movements
in equity is recognised in other comprehensive income. Investments in associates are carried in the
statement of financial position at cost plus post-acquisition changes in the consolidated entity's share of net
assets of the associate. Goodwill relating to the associate is included in the carrying amount of the investment
and is neither amortised nor individually tested for impairment. Dividends received or receivable from
associates reduce the carrying amount of the investment.
When the consolidated entity's share of losses in an associate equals or exceeds its interest in the associate,
including any unsecured long-term receivables, the consolidated entity does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the associate.
The consolidated entity discontinues the use of the equity method upon the loss of significant influence over
the associate and recognises any retained investment at its fair value. Any difference between the associate's
carrying amount, fair value of the retained investment and proceeds from disposal is recognised in profit or
loss.
Operating segments
Operating segments are presented using the ‘management approach’, where the information presented is
on the same basis as the internal reports provided to the Chief Operating Decision Makers (‘CODM’). The
CODM is responsible for the allocation of resources to operating segments and assessing their
performance.
Foreign currency translation
The financial statements are presented in Australian dollars, which is the Consolidated Entity’s functional and
presentation currency.
Foreign Currency Transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss.
Foreign Operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates
at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars
using the average exchange rates, which approximate the rate at the date of the transaction, for the period.
All resulting foreign exchange differences are recognised in other comprehensive income through the foreign
currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is
disposed of.
48
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as
part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are
subsequently measured at either amortised cost or fair value depending on their classification. Classification
is determined based on both the business model within which such assets are held and the contractual cash
flow characteristics of the financial asset unless, an accounting mismatch is being avoided.
Investments and other financial assets are initially measured at fair value. Transaction costs are included as
part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are
subsequently measured at either amortised cost or fair value depending on their classification. Classification
is determined based on both the business model within which such assets are held and the contractual cash
flow characteristics of the financial asset unless, an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the consolidated entity has transferred substantially all the risks and rewards of ownership.
When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is
written off.
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are
classified as financial assets at fair value through profit or loss. Typically, such financial assets will be either:
(i) held for trading, where they are acquired for the purpose of selling in the short-term with an intention of
making a profit, or a derivative; or (ii) designated as such upon initial recognition where permitted. Fair value
movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
consolidated entity intends to hold for the foreseeable future and has irrevocably elected to classify them as
such upon initial recognition.
Loans
Loans are recognised initially at fair value, net of transaction costs. Subsequent to initial recognition loans
are measured at amortised cost using the effective interest method, less any impairment losses.
Finance costs
Finance costs directly attributable to qualifying assets are capitalised as part of the asset. All other finance
costs are expensed in the period in which they are incurred
Revenue
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is
expected to be entitled in exchange for transferring goods or services to a customer.
For each contract with a customer, the consolidated entity: identifies the contract with a customer; identifies
the performance obligations in the contract; determines the transaction price which takes into account
estimates of variable consideration and the time value of money; allocates the transaction price to the
separate performance obligations on the basis of the relative stand-alone selling price of each distinct good
or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a
manner that depicts the transfer to the customer of the goods or services promised.
49
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Revenue(cont.)
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such
as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other
contingent events. Such estimates are determined using either the 'expected value' or 'most likely amount'
method. The measurement of variable consideration is subject to a constraining principle whereby revenue
will only be recognised to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur. The measurement constraint continues until the uncertainty
associated with the variable consideration is subsequently resolved. Amounts received that are subject to the
constraining principle are recognised as a separate refund liability.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered based on
either a fixed price or an hourly rate.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant period
using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary
to match them with the costs that they are intended to compensate.
Rent
Rent revenue from investment properties is recognised on a straight-line basis over the lease term. Lease
incentives granted are recognised as part of the rental revenue. Contingent rentals are recognised as
income in the period when earned.
Income tax
The income tax expense or benefit for the period is the tax payable on the current period's taxable income based
on the income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised in prior periods, where applicable.
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect
of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been
enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised
as a liability (or asset) to the extent that it is unpaid (or refundable)
Deferred tax
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates that are expected
to apply in the period in which the liability is settle or the asset realised, based on the tax rates (and tax laws)
that have been enacted or substantively enacted, except for:
• When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset
or liability in a transaction that is not a business combination and that, at the time of the transaction,
affects neither the accounting nor taxable profits; or
50
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Income tax(cont.)
• When the taxable temporary difference is associated with interests in subsidiaries, associates or joint
ventures, and in the timing of the reversal can be controlled and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax liabilities are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses
The carrying amount of recognised deferred tax assets and unrecognised deferred tax assets is reviewed at
the end of each reporting period and reduced to the extent that it is no longer probably that sufficient future
taxable profits will be available to allow all or part of the asset to be recovered. Previously unrecognised
deferred tax assets are recognised to the extent that it is probable that there are future taxable profits available
to recover the asset.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set-off current tax
assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and when they
relate to income taxes levied by the same taxation authority on either the same taxable entity or different
taxable entities which intend to settle simultaneously.
Current and non-current classification
Assets and liabilities are presented in the Statement of Financial Position based on c urrent and non-
current classification.
The asset is classified as current when:
i)
ii) it’s held primarily for the purpose of trading;
iii) it’s expected to be realised within 12 months after the reporting period; or
iv) the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
It’s either expected to be realised or intended to be sold or consumed in normal operating cycle;
for at least 12 months after the reporting period.
it’s either expected to be settled in normal operating cycle;
All other assets are classified as non-current.
A liability is classified as current when:
i)
ii) it’s held primarily for the purpose of trading;
iii) it’s due to be settled within 12 months after the reporting period; or
iv) there is no unconditional right to defer the settlement of the liability for at least 12 months after the
reporting period.
All other liabilities are classified as non-current. Deferred tax assets and liabilities are always classified as
non-current.
Impairment
(i)
Financial Assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are
either measured at amortised cost or fair value through other comprehensive income. The measurement of
the loss allowance depends upon the consolidated entity's assessment at the end of each reporting period
as to whether the financial instrument's credit risk has increased significantly since initial recognition, based
on reasonable and supportable information that is available, without undue cost or effort to obtain.
51
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Impairment (cont.)
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month
expected credit loss allowance is estimated. This represents a portion of the asset's lifetime expected credit
losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset
has become credit impaired or where it is determined that credit risk has increased significantly, the loss
allowance is based on the asset's lifetime expected credit losses. The amount of expected credit loss
recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls
over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in profit
or loss.
(ii)
Non-Financial Assets
The carrying amounts of the Consolidated Entity’s non-financial assets, deferred tax assets, are reviewed for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the assets carrying amount exceeds
its recoverable amount. Impairment losses are recognised in profit or loss.
The recoverable amount is the higher of the assets fair value less costs of disposal and value-in-use. In value
in use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount
rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have
independent cash flows are grouped together to form a cash-generating unit.
Cash and cash equivalents
Cash and cash equivalents include cash on hand and at call and deposits with banks or financial institutions and other
short term, highly liquid investments with original maturities of three months or less, which are readily convertible
to cash, and which are subject to an insignificant risk of changes in value. Bank overdrafts that are repayable on
demand and form an integral part of the Group’s cash management are included as a component of cash and
cash equivalents for the purpose of the statement of cash flows.
Receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are generally
due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses
a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been
grouped based on days overdue.
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are generally
due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses
a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been
grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Contract assets
Contract assets are recognised when the consolidated entity has transferred goods or services to the
customer but where the consolidated entity is yet to establish an unconditional right to consideration. Contract
assets are treated as financial assets for impairment purposes.
52
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Customer acquisition costs
Customer acquisition costs are capitalised as an asset where such costs are incremental to obtaining a
contract with a customer and are expected to be recovered. Customer acquisition costs are amortised on a
straight-line basis over the term of the contract.
Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained or
which are not otherwise recoverable from a customer are expensed as incurred to profit or loss. Incremental
costs of obtaining a contract where the contract term is less than one year is immediately expensed to profit
or loss.
Customer fulfilment costs
Customer fulfilment costs are capitalised as an asset when all the following are met: (i) the costs relate directly
to the contract or specifically identifiable proposed contract, (ii) the costs generate or enhance resources of
the consolidated entity that will be used to satisfy future performance obligations; and (iii) the costs are
expected to be recovered. Customer fulfilment costs are amortised on a straight-line basis over the term of
the contract.
Joint ventures
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have
rights to the net assets of the arrangement. Investments in joint ventures are accounted for using the
equity method. Under the equity method, the share of the profits or losses of the joint venture is recognised
in profit or loss and the share of the movements in equity is recognised in other comprehensive income.
Investments in joint ventures are carried in the statement of financial position at cost plus post-acquisition
changes in the consolidated entity’s share of net assets of the joint venture. Goodwill relating to the joint
venture is included in the carrying amount of the investment and is neither amortised nor individually tested
for impairment. Income earned from joint venture entities reduce the carrying amount of the investment.
Property, plant and equipment
(i) Recognition and Measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment
losses. Cost includes expenditure that is directly attributable to the acquisition of the item.
(i) Subsequent Costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of
the item if it is probable that the future economic benefits embodied within the part will flow to the Consolidated
Entity and its costs can be measured reliably. The costs of the day-to-day servicing of property, plant and
equipment are recognised in profit or loss as incurred.
(ii) Derecognition
An item of property plant and equipment is derecognised upon disposal or when there is no future economic
benefit to the consolidated entity. Gains and losses between the carrying amount and the disposal proceeds
are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred
directly to retained profits.
(iii) Depreciation
Depreciation is calculated on a reducing balance basis so as to write off the net cost or other revalued amount
of each asset over its expected useful life to its estimated residual value. The estimated useful lives, residual
values and depreciation method is reviewed at the end of each annual reporting period.
53
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Property, plant and equipment (cont.)
The following rates are used in the calculation of depreciation:
• Plant and equipment
• Motor vehicles
• Office furniture and fittings
•
Computer and Office Equipment
10% - 33%
25%
10%
33%
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured
at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease
payments made at or before the commencement date net of any lease incentives received, any initial direct
costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be
incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain
ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life.
Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability for
short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on these
assets are expensed to profit or loss as incurred.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be made over the term of the lease, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's
incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under
residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably
certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend
on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts
are remeasured if there is a change in the following: future lease payments arising from a change in an index
or a rate used; residual guarantee; lease term; certainty of a purchase option and termination penalties. When
a lease liability is remeasured, an adjustment is made to the corresponding right-of use asset, or to profit or
loss if the carrying amount of the right-of-use asset is fully written down.
Exploration and evaluation expenditure
Exploration and evaluation costs, including the costs of acquiring licences, are capitalised as exploration and
evaluation assets on an area of interest basis. Costs incurred before the Group has obtained the legal rights
to explore an area are recognised in the profit or loss statement.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and
either:
(i)
(ii)
the expenditures are expected to be recouped through successful development and exploitation of the
area of interest, or by its sale; or
activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or other wise of economically recoverable reserves.
Where a project or area of interest has been abandoned, the expenditure incurred is written off in the year in
which the decision is made.
54
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Trade and other payables
Trade payables and other accounts payable are recognised when the Consolidated Entity becomes obliged
to make future payments resulting from the purchase of goods and services. Due to their short-term nature they
are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid
within 30 days of recognition.
Contract liabilities
Contract liabilities represent the consolidated entity's obligation to transfer goods or services to a customer
and are recognised when a customer pays consideration, or when the consolidated entity recognises a
receivable to reflect its unconditional right to consideration (whichever is earlier) before the consolidated entity
has transferred the goods or services to the customer.
Provisions
Provisions are recognised when the Consolidated Entity has a present obligation as a result of a past event, it is
probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made
of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at reporting date, taking into account the risks and uncertainties surrounding the
obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate
specific to the liability.
The increase in the provision due to the passage of time is recognised as a finance cost.
Employee benefits
(i) Short term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected
to be settled within 12 months of the reporting date, are recognised in current other payables in respect of
employees' services up to the reporting date and are measured at the amounts expected to be paid when the
liabilities are settled.
(ii) O t h e r l o n g t e r m e m p l o y e e b e n e f it s
The liability for annual leave and long service leave not expected to be settled within 12 months of the
reporting date are recognised in non-current liabilities, provided there is an unconditional right to defer
settlement of the liability. The liability is measured as the present value of expected future payments to be
made in respect of services provided by employees up to the reporting date 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
reporting date on national government bonds with terms to maturity and currency that match, as closely as
possible, the estimated future cash outflows.
(iii) Share-based payment transactions
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in
exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of
services, where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes option pricing model that takes into account the
exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price
volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the
option, together with non-vesting conditions that do not determine whether the consolidated entity receives
the services that entitle the employees to receive payment. No account is taken of any other vesting
conditions.
55
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Employee benefits (cont.)
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in
equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant
date fair value of the award, the best estimate of the number of awards that are likely to vest and the
expired portion of the vesting period.
The amount recognised in profit or loss for the period is the cumulative amount calculated at each
reporting date less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by
applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms
and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of
the liability is calculated as follows:
• During the vesting period, the liability at each reporting date is the fair value of the award at that date
multiplied by the expired portion of the vesting period.
• From the end of the vesting period until settlement of the award, the liability is the full fair value of the
liability at the reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the
cash paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to
market conditions are considered to vest irrespective of whether or not that market condition has been met,
provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not
been made. An additional expense is recognised, over the remaining vesting period, for any modification that
increases the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the consolidated entity or employee, the failure to satisfy
the condition is treated as a cancellation. If the condition is not within the control of the consolidated entity or
employee and is not satisfied during the vesting period, any remaining expense for the award is recognised
over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled
award, the cancelled and new award is treated as if they were a modification.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date; and assumes that
the transaction will take place either: in the principal market; or in the absence of a principal market, in the
most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming they act in their economic best interest. For non-financial assets, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, are used, maximising the
use of relevant observable inputs and minimising the use of unobservable inputs.
56
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)
Fair value measurement
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that
reflects the significance of the inputs used in making the measurements. Classifications are reviewed each
reporting date and transfers between levels are determined based on a reassessment of the lowest level
input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal
expertise is either not available or when the valuation is deemed to be significant. External valuers are
selected based on market knowledge and reputation. Where there is a significant change in fair value of an
asset or liability from one period to another, an analysis is undertaken, which includes a verification of the
major inputs applied in the latest valuation and a comparison, where applicable, with external sources of
data.
Share 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.
Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the loss attributable to equity holders of the Consolidated Entity,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the financial years, adjusted for bonus elements in ordinary shares issued during the
year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation
to dilutive potential ordinary shares.
Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
• where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the
cost of acquisition of an asset or as part of an item of expense; or
• for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables.
Cash flows are included in the Statement of Cash Flows on a gross basis. The GST component of cash
flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority
is classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to the
tax authority.
57
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
4. OPERATING SEGMENTS
Identification of Reportable Operating Segments
The Consolidated Entity operates in geographical locations, Australia, United States of America (USA),
and Turkey-Europe (as acquired through the 2014 acquisition), and is organised into one operating
segment being mineral, mining and exploration and all of the Consolidated Entity’s resources are
employed for this purpose.
Identification of Reportable Operating Segments
The Consolidated Entity operates in geographical locations, Australia, United States of America (USA),
and Turkey-Europe (as acquired through the 2014 acquisition), and is organised into one operating
segment being mineral, mining and exploration and all of the Consolidated Entity’s resources are
employed for this purpose.
This operating segment is based on the internal reports that are reviewed and used by the Board of
Directors (who are identified as the Chief Operating Decision Makers (‘CODM’)) in asses sing
performance and in determining the allocation of resources.
The CODM review expenditure in exploration. The accounting policies adopted for internal reporting
to the CODM are consistent with those adopted in the financial statements.
Geographical Information
Sales to external customers
2022
$
1,118,444
1,118,444
2021
$
247,239
247,239
Geographical non-current
assets
2022
$
11,124,301
11,124,301
2021
$
6,735,464
6,735,464
Australia
5. REVENUE
Other Revenue
Exploration Income - Profit on Sale of Tenement Interest
Exploration Income – JV Contributions
Government Grant – COVID-19
Other revenue
Revenue from Continuing operations
6. OTHER REVENUE
Profit on part disposal of right of use asset
Consolidated Entity
2022
$
2021
$
404,477
617,139
-
96,828
1,118,444
94,411
-
81,000
71,828
247,239
Consolidated Entity
2022
$
-
-
2021
$
2,370
2,370
58
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
7. OTHER OPERATING EXPENSE
Consolidated Entity
Accounting and Admin Services
Auditors Remuneration
Computer Expenses
Consulting Fee
Legal Expenses
Motor Vehicle Expense
Share Registry and Securities Exchange
Fringe Benefits Tax
Subscriptions, Publications, Memberships
Insurance
Interest on lease liability
Marketing and Media
Sundry Administration Expenses
8. DISCONTINUED OPERATIONS
30 June 2022
30 June 2021
Sale of Wyoming Rare Pty Ltd
Proceeds
Carrying value of exploration expenditure
Profit on sale
Sale of interest in Zenolith (USA) LLC
Proceeds
- Cash (250,000 USD)
- Shares in Bradda Head Lithium Limited
Carrying value of investment in Zenolith (USA)
Profit on sale
Net profit from discontinued operations
9
2022
$
91,800
46,825
48,938
54,000
257,328
11,415
82,924
118
9,424
2,834
-
62,002
125,276
792,884
2021
$
67,642
50,456
25,389
36,000
11,413
3,940
54,543
4,916
11,190
51,180
1,073
156,207
94,631
570,580
Consolidated Entity
2022
$
2021
$
-
-
-
-
-
-
-
-
-
281,250
(108,461)
172,789
322,514
726,067
1,048,581
(6,520)
1,042,061
1,214,850
59
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
9. AUDITOR’S REMUNERATION
During the financial year the following fees were paid or payable for services provided by PKF Perth, the
auditor of the Group:
Consolidated Entity
Audit services
Auditors of the Group
Audit and review of financial report – payable to PKF Perth
Audit and review of financial report – payable to other audit firms
Total remuneration for audit services
Non-audit services
Total Audit Services
10. PROFIT/(LOSS) PER SHARE
Continuing operations
Basic profit/(loss) per share – cents
Diluted profit/(loss) per share – cents
Discontinued operations
Basic profit/(loss) per share – cents
Diluted profit/(loss) per share – cents
Continuing and discontinued operations
Basic profit/(loss) per share – cents
Diluted profit/(loss) per share – cents
2022
$
46,825
-
46,825
-
46,825
2021
$
44,670
5,786
50,456
-
50,456
Consolidated Entity
2021
2022
(Cents)
(Cents)
0.44
0.43
-
-
0.44
0.43
0.27
0.26
0.42
0.39
0.69
0.65
Consolidated Entity
2022
$
2021
$
The profit/(loss) and weighted average number of ordinary shares
used in the calculation of basic and diluted profit/(loss) per share
are as follows:
Profit/(Loss) used in calculation of earnings per share
- continuing operations
- discontinued operations
Weighted average number of ordinary shares for the purposes of
basic profit/(loss) per share
Weighted average number of ordinary shares for the purposes of
diluted profit/(loss) per share
1,465,147
-
795,291
1,214,850
329,577,580
292,683,318
344,721,432
309,233,318
11. INCOME TAX EXPENSE
a)
Income Tax Expense
Current tax
Aggregate Income tax expense
60
Consolidated Entity
2022
$
2021
$
-
-
-
-
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
11. INCOME TAX EXPENSE (cont.)
Income tax expense is attributable to:
Profit from continuing operations
Profit from discontinued operations
Aggregate income tax expense
Deferred tax - origination and reversal of temporary
Differences
-
-
-
-
-
-
-
The prima facie income tax expense on pre-tax accounting loss from operations reconciles to the income
tax expense in the financial statements as follows:
Loss before tax
1,465,147
2,010,141
Prima facie tax benefit on profit/(loss) at 25% (2021: 26%)
366,287
522,637
Add:
Tax effect of:
Other non-allowable items
Share based payments
Overs/unders from prior year
Tax losses not recognised
Deferred tax balances (recognised)
Income tax expense on pre-tax net profit/(loss)
25,696
76,399
1,217
1,180,684
(1,650,283)
(306,462)
117,332
3,164
1,089,239
(1,425,909)
-
-
Consolidated Entity
2021
2022
The applicable average weighted tax rates are as follows:
0%
0%
Deferred Tax Assets
At 25% (2021: 25%)
Carry forward losses
Provisions and accruals
Merger/acquisition costs
Lease liability
Right of use asset
Consolidated Entity
2022
$
2021
$
7,741,330
47,124
4,069
-
-
6,557,900
39,838
4,069
213
2,575
7,792,523
6,604,595
Tax benefit of the above Deferred Tax Assets will only be obtained if:
a) The company derives future assessable income or a nature and of an amount sufficient to enable
the benefits to be utilised; and
b) The company continues to comply with the conditions for deductibility imposed by law; and
c) No changes in income tax legislation adversely affect the company in utilising the benefits.
61
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
11. INCOME TAX EXPENSE (cont.)
Deferred Tax Liabilities
At 25% (2021: 25%)
Exploration expenditure
Capital raising costs
Property, plant and equipment
Financial asset
Prepayments
Consolidated Entity
2022
$
2021
$
2,605,815
34,591
4,089
1,429,930
5,313
1,532,300
38,610
5,209
820,787
472
4,079,738
2,397,378
The above Deferred Tax Liabilities have not been recognised as they have given rise to the carry forward
revenue losses for which the Deferred Tax Asset has not been recognised.
12. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Deposits at call
Consolidated Entity
2022
$
2021
$
7,905,087
1,000
1,831,183
1,000
7,906,087
1,832,183
a) Reconciliation to cash and cash equivalents at the end of the
year.
The above figures are reconciled to cash and cash
equivalents at the end of the financial year, as shown in the
Statement of Cash Flows, as follows:
Balances as above
Cash and cash equivalents in statement of cash flows
7,906,087
7,906,087
1,832,183
1,832,183
The Group’s exposure to interest rate risk and sensitivity analysis for financial assets and liabilities are
disclosed in note 25.
13. TRADE AND OTHER RECEIVABLES
Current
Other receivables (i)
Consolidated Entity
2022
$
2021
$
171,630
171,630
98,426
98,426
(i) Other receivables are non-interest bearing and are normally settled on 30 day terms.
None of the consolidated entity’s other receivables are past due (2021: Nil).
62
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
14. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS
Current
Listed ordinary shares – at fair value
through profit and loss.
Reconciliation
Reconciliation of the fair values at the beginning and end of the
current and previous financial years.
Opening fair value
Additions
Disposals
Revaluation increment
Closing fair value
Non-Current
Unlisted investment – at fair value through profit and loss
Reconciliation
Reconciliation of the fair values at the beginning and end of
the current and previous financial years.
Opening fair value
Revaluation decrement
Closing fair value
15. OTHER CURRENT ASSETS
Bonds & deposits
Prepayments
16. INTEREST IN ASSOCIATE
Consolidated Entity
2022
$
2021
$
7,467,583
4,636,593
4,636,593
394,416
-
2,436,574
7,467,583
-
-
-
-
630,742
1,018,318
(75,650)
3,063,183
4,636,593
-
6,520
(6,520)
-
Consolidated Entity
2022
$
2021
$
17,010
21,250
38,260
17,010
1,889
18,899
The consolidated entity has a 22.5% (2021: nil) interest in Oxley Resources Pty Ltd. The consolidated entity’s
investment in Oxley Resources Pty Ltd is accounted for using the equity method in the consolidated financial
statements.
Summarised statement of financial position of Oxley Resources Pty Ltd
Cash and cash equivalents
Trade and other receivables
Exploration and evaluation expenditure
Non-current assets
Trade and other payables
Net assets/ equity
Zenith’s 22.5% share
Impairment recognised
Zenith’s carrying account of investment in Oxley Resources Pty Ltd
63
Consolidated Entity
2022
$
2021
$
240,844
25,499
494,430
-
(194,169)
566,604
127,710
-
127,710
-
-
-
-
-
-
-
-
-
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
16. INTEREST IN ASSOCIATE (cont.)
Summarised statement of profit or loss of Oxley Resources Pty Ltd
Administration Costs
Loss for the period
Movement Reconciliation:
Balance at beginning of financial year
Payments for investment
Share of loss recognised
Impairment
Balance at end of financial year
-
-
Consolidated Entity
2022
$
2021
$
-
231,694
10,437
(114,421)
127,710
-
-
-
-
-
-
-
The consolidated entity has a 20% (2021: 20%) interest in Kavak Madencilik A.Ş., which is a for-profit joint
venture established to explore mineral resources in Turkey. The consolidated entity’s investment in Kavak
Madencilik A.Ş. is accounted for using the equity method in the consolidated financial statements. During the
year the consolidated entity’s interest in Kavak Madencilik A.Ş. was fully impaired from the prior year as
management are not intending to contribute further to this investment.
Summarised statement of financial position of Kavak Madencilik:
Cash and cash equivalents
Trade and other receivables
Other current assets
Exploration and evaluation expenditure
Trade and other payables
Net assets/ equity
Zenith’s 20% share (2021:20%) of Kavak Madencilik’s net assets
Impairment recognised
Zenith’s carrying account of investment in Kavak Madencilik
Summarised statement of profit or loss of Kavak Madencilik:
Administration Costs
Loss for the period
Movement Reconciliation:
Balance at beginning of financial year
Payments for investment
Share of loss recognised
Profit on part disposal of investment
Foreign exchange loss
Impairment
Balance at end of financial year
64
Consolidated Entity
2022
$
2021
$
-
-
-
-
-
-
-
-
-
64,465
3,729
322,672
1,867,411
(115,105)
2,143,172
428,634
(428,634)
-
-
-
(16,337)
(16,337)
Consolidated Entity
2022
$
2021
$
-
-
-
-
-
-
-
348,055
-
(3,950)
159,776
(75,246)
(428,636)
-
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
17. PLANT AND EQUIPMENT
Plant and equipment – at cost
Less: Accumulated depreciation
Motor vehicles – at cost
Less: Accumulated depreciation
Computer equipment and software – at cost
Less: Accumulated depreciation
Consolidated Entity
2021
2022
$
$
25,822
(24,843)
979
99,570
(92,242)
7,328
36,211
(28,162)
8,049
25,822
(24,354)
1,468
99,570
(89,597)
9,973
34,348
(24,955)
9,393
Carrying Amount
16,356
20,834
a) Movement Reconciliation
Cost
Balance at 1 July 2020
Additions
Disposals/Write-off
Balance at 30 June 2021
Balance at 1 July 2021
Additions
Disposals/Write-off
Balance at 30 June 2022
Depreciation
Balance at 1 July 2020
Depreciation for the year
Depreciation on asset write off
Balance at 30 June 2021
Balance at 1 July 2021
Depreciation for the year
Depreciation on asset write off
Balance at 30 June 2022
Carrying Amount
At 30 June 2021
At 30 June 2022
Plant &
Equipment
Motor
Vehicles
$
$
Computer
Equipment
& Software
$
25,822
-
-
25,822
25,822
-
-
25,822
23,620
734
-
24,354
24,354
489
-
24,843
94,652
4,918
-
99,570
99,570
-
-
99,570
86,273
3,324
-
89,597
89,597
2,646
-
92,243
29,337
5,011
-
34,348
34,348
1,863
-
36,211
21,426
3,529
-
24,955
24,955
3,206
-
28,161
Total
$
149,811
9,929
-
159,740
159,740
1,863
-
161,603
131,319
7,587
-
138,906
138,906
6,341
-
148,220
1,468
979
9,973
7,327
9,393
8,050
20,834
16,356
65
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
18. EXPLORATION AND EVALUATION EXPENDITURE
Balance at beginning of financial year
Capitalised expenditure
Less capitalised expenditure written against proceeds
Less impairment of exploration expenditure
Balance at end of financial year
Exploration and Evaluation Assets
Consolidated Entity
2021
$
2022
$
6,714,651
4,728,608
(188,841)
(158,137)
11,096,281
3,993,265
3,294,194
(129,050)
(443,758)
6,714,651
The recoverability of the carrying amounts of exploration and evaluation assets is dependent on the
successful development and commercial exploitation or sale of the respective area of interest as well as
maintaining rights of tenure.
During the financial year, the consolidated entity booked an impairment loss on capitalised exploration and
evaluation expenditure of $158,137 (2021: $443,758) following its review of its portfolio of mineral
tenements, whereby decisions have been made for certain areas of interest, not to incur substantial
expenditure on further exploration for and evaluation of mineral resources.
Capitalised expenditure written off totaling $nil (2021: $nil) is as a result of decisions being made for certain
areas of interest being abandoned or the right to explore has expired or will not be renewed.
19. TRADE AND OTHER PAYABLES
Current
Other payables (a)
Accrued fees and employment expenses (b)
Consolidated Entity
2021
2022
$
$
79,145
77,306
156,451
122,895
87,889
210,784
Terms and Conditions
Terms and conditions relating to the above financial instruments
a) Other payables are non-interest bearing and are normally settled on 30 day terms.
b) Sundry creditors and accruals are non-interest bearing and have an average term of 30 days.
20. EMPLOYEE BENEFITS
Current liabilities
Employee benefits
Consolidated Entity
2021
2022
$
$
147,355
147,355
129,891
129,891
66
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
21. ISSUED CAPITAL
(a) Share capital
Fully paid ordinary shares
Balance at beginning of year
2022
Shares
No.
2022
$
2021
Shares
No.
2021
$
294,360,030
26,543,450
243,360,030
22,134,472
Issue of ordinary shares (i)
47,906,977
12,000,000
51,000,000
5,100,000
Exercise of options (ii)
2,495,272
602,407
Costs of issue
-
(365,486)
-
-
-
(691,022)
Total
2022
344,762,279
38,780,371
294,360,030
26,543,450
During the year to 30 June 2022, the following changes to equity securities took place:
(i) On 5 August 2021 the Company completed a capital raising via the placement of 27,906,977 shares at
$0.215 per share raising $6,000,000 (before costs).
On 19 January 2022 the Company completed a capital raising vis the placement of 20,000,000 shares
at $0.30 per share raising $6,000,000 (before costs).
(ii) 2,495,272 shares were issued on exercise of 4,000,000 options under the Employee Option Plan (note
27).
(b) Ordinary Shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled
to one vote per share at meetings of the Group. All shares rank equally with regard to the Group’s residual
assets. Ordinary shares do not have a par value.
(c) Options
Information relating to Zenith Minerals Limited’s Employee Option Plan, including details of options issued,
exercised and lapsed during the financial year and options outstanding at the end of the financial year, is set
out in Note 27.
(d) There is no current on market share buy-back.
22. RESERVES AND RETAINED LOSSES
(a) Reserves
Options reserve
Balance at beginning of financial year
Issue of Staff Options
Issue of Broker Options
Exercise of options
Balance at end of financial year
Foreign Currency Translation Reserve
Balance at beginning of financial year
Foreign currency translation
Balance at end of financial year
Total Reserves
67
Consolidated Entity
2021
2022
$
$
1,053,133
118,768
-
(281,645)
890,256
208,873
451,276
392,984
-
1,053,133
(185,483)
-
(185,483)
(110,237)
(75,246)
(185,483)
704,773
867,650
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
22. RESERVES AND RETAINED LOSSES (cont.)
(b) Accumulated losses
Movements in accumulated losses were as follows:
Balance at beginning of financial year
Profit for the year
Balance at end of financial year
Options Reserve
(14,430,190)
1,465,147
(16,440,331)
2,010,141
(12,965,043)
(14,430,190)
The options reserve is used to recognise the benefit on the issue of options.
Foreign Currency Reserve
The reserve is used to recognise exchange differences arising from the translation of the financial
statements of foreign operations to Australian dollars.
23. FINANCIAL INSTRUMENTS
Overview
The Consolidated Entity has exposure to the following risks from their use of financial instruments:
• Credit risk
Liquidity risk
•
• Market risk
•
This note presents information about the Consolidated Entity’s exposure to each of the above risks, their
objectives, policies and processes for measuring and managing risk and the management of capital.
The Consolidated Entity does not use any form of derivatives as it is not at a level of exposure that requires
the use of derivatives to hedge its exposure. Exposure limits are reviewed by management on a continuous
basis. The Consolidated Entity does not enter into or trade financial instruments, including derivative financial
instruments, for speculative purposes.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. Management monitors and manages the financial risks relating to the operations of the
Consolidated Entity through regular reviews of the risks identified.
Credit Risk
Credit risk is the risk of financial loss to the Consolidated Entity if a customer or counterparty to a financial
instrument fails to meet its contractual obligations, and arises principally from the Consolidated Entity’s
receivables from customers and investment securities. For the Consolidated Entity, it arises from receivables
due from director related parties. At the reporting date there were no significant concentrations of credit risk.
The consolidated entity does not hold any collateral.
Cash and Cash Equivalents
The Consolidated Entity limits its exposure to credit risk by only investing in liquid securities and only with counter
parties that have an acceptable credit rating.
Trade and Other Receivables
As the Consolidated Entity operates in the mining explorer sector, it does not have trade receivables and
therefore is not exposed to credit risk in relation to trade receivables.
68
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
23. FINANCIAL INSTRUMENTS (cont.)
Exposure to Credit Risk
The carrying amount of the Consolidated Entity’s financial assets represents the maximum credit exposure. The
Consolidated Entity’s maximum exposure to credit risk at the reporting date was:
Cash and cash equivalents
Other receivables
Financial asset at fair value through profit or loss
Impairment Losses
Consolidated Entity
2021
2022
$
$
7,906,087
171,630
7,467,583
1,832,183
98,426
4,636,593
15,545,300
6,567,203
None of the Consolidated Entity’s other receivables are past due (2021: Nil). The allowance accounts in
respect of financial assets are used to record impairment losses unless the Consolidated Entity is satisfied
that no recovery of the amount owing is possible, at that point the amount is considered irrecoverable and is
written off against the financial asset directly. At 30 June 2022 the Consolidated Entity does not have any
collective impairment on its other receivables (2021: Nil).
Guarantees
The Consolidated Entity’s policy is to not provide financial guarantees. No guarantees have been
provided during the year.
Liquidity Risk
Liquidity risk is the risk that the Consolidated Entity will not be able to meet its financial obligations as they
fall due. The Consolidated Entity’s approach to managing liquidity is to ensure, as far as possible, that it will
always have sufficient liquidity (mainly cash and cash equivalents) to meet its liabilities when due, under
both normal and stressed conditions, without incurring unacceptable losses or risking damage to the
Consolidated Entity’s reputation. The Consolidated Entity manages liquidity risk by maintaining
adequate reserves by continuously monitoring forecast and actual cash flows. The Consolidated Entity
does not have any external borrowings.
The following are the contractual maturities of financial liabilities, including estimated interest
payments and excluding the impact of netting agreements. The cashflows in the maturity analysis
below are not expected to occur significantly earlier than contractually disclosed above.
Non-derivatives
Consolidated Entity – 30 June 2022
Weighted
Average Interest
Rate
-
Non-interest bearing
Other payables*
Interest bearing
Lease liability
Contractual
cash flows
1 year
or less
1 to 2
years
2 to 5
years
Over 5
years
156,451
156,451
-
-
-
-
-
-
-
-
-
* The weighted average interest rate on other payables is Nil% as it is non-interest bearing.
Consolidated Entity - 30 June 2021
Weighted
Average Interest
Rate
Non-derivative
Non Interest
Bearing
Non-interest bearing
Other payables*
Interest bearing
Lease liability
-
-
Contractual
cash flows
1 year
or less
1 to 2
years
2 to 5
years
Over 5
years
210,785
210,785
-
-
-
-
-
*The weighted average interest rate on other payables is Nil% as it is non interest bearing.
69
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
23. FINANCIAL INSTRUMENTS (cont.)
Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will affect the Consolidated Entity’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return.
Currency Risk
The Consolidated Entity is exposed to foreign currency risk through foreign exchange rate
fluctuations when it enters into certain transactions denominated in foreign currency. Foreign
exchange risk arises from future commercial transactions and recognised financial assets and
financial liabilities denominated in a currency that is not the entity’s functional currency. The risk is
measured using sensitivity analysis and cash flow forecasting.
At 30 June, the carrying amount of the Consolidated Entity’s financial assets denominated in foreign
currencies as detailed below.
Financial Assets
Cash and cash equivalents denominated in US dollars
Consolidated Entity
2022
$
2021
$
-
-
A 5% movement in foreign exchange rates would increase or decrease the loss before tax by $Nil
(2021: $3,396).
Interest Rate Risk
The Consolidated Entity is exposed to interest rate risk, however to maintain liquidity, cash is invested for
periods generally not exceeding 90 Days.
Cash Flow Sensitivity Analysis for Variable Rate Instruments
A change of 100 basis points in interest rates at the reporting date would have increased (decreased)
equity and profit or loss by the amounts shown below. The analysis is performed on the same basis as for
2021.
2022
Profit or Loss
2021
Profit or Loss
100 bp
Increase
$
100 bp
Decrease
$
100 bp
Increase
$
100 bp
Decrease
$
Cash & cash equivalents
100
(100)
42
(42)
Fair Values
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Fair Value Hierarchy
The table below details the consolidated entity’s assets and liabilities, measured or disclosed at fair value,
using a three-level hierarchy, based on the lowest level of input that is significant to the entire fair value
measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can
access at the measurement date
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly
Level 3: Unobservable inputs for the asset or liability.
70
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
23. FINANCIAL INSTRUMENTS (cont.)
Consolidated –
30 June 2022
Assets
Financial assets at fair value
through profit or loss
Total Assets
Consolidated –
30 June 2021
Level 1
$
Level 2
$
Level 3
$
Total
$
7,467,583
7,467,583
Level 1
$
Level 2
$
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
Level 3
$
Assets
Financial assets at fair value
through profit or loss
Total Assets
4,636,593
4,636,593
There were no transfers between levels during the financial year.
The carrying amounts of other receivables, trade and other payables are assumed to approximate their fair
values due to their short-term nature.
Valuation techniques for fair value measurements categorised within level 2:
Unquoted investments have been valued using their share of the net asset value.
Capital Management
The Consolidated Entity’s objectives when managing capital is to safeguard the Consolidated Entity’s
ability to continue as a going concern, so as to maintain a strong capital base sufficient to maintain future
exploration and development of its projects.
In order to maintain or adjust the capital structure, the Consolidated Entity may return capital to
shareholders, issue new shares or sell assets for in-specie distributions. The Consolidated Entity’s focus
has been to raise sufficient funds through equity to fund exploration and evaluation activities.
The Consolidated Entity monitors capital on the basis of the gearing ratio, however there are no external
borrowings as at reporting date. The Consolidated Entity encourages employees to be shareholders
through the issue of free options to employees.
There were no changes in the Consolidated Entity’s approach to capital management during the financial
year. The Consolidated Entity is not subject to any externally imposed capital requirements.
24. EXPLORATION COMMITMENTS
The Consolidated Entity has certain obligations to perform minimum exploration work and expend
minimum amounts on works on mining tenements in order to retain its interests in these tenements,
which would be approximately $629,478 during the next 12 months (2021: $789,000). There are no
commitments beyond 12 months in relation to tenements. These obligations may be varied from
time to time, subject to approval and are expected to be fulfilled in the normal course of operations
of the entity.
71
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
25. KEY MANAGEMENT PERSONNEL DISCLOSURES
Key Management Personnel Compensation
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated Entity
2021
$
2022
$
646,186
46,668
19,084
711,938
619,940
60,131
451,274
1,131,345
Information regarding key management personnel compensation is provided in the Remuneration
Report section of the Directors Report.
26. RELATED PARTY TRANSACTIONS
(a) Parent Entity and Ultimate Controlling Parent
Zenith Minerals Limited is the parent entity and ultimate controlling entity of the Group.
(b) Subsidiaries
Interests in subsidiaries are set out in Note 30.
(c) Key Management Personnel
Disclosures relating to key management personnel are set out in Note 25.
(d) Transactions with Related Parties
The following transactions occurred with related parties during the financial year:
i) Provision of Serviced Office – During the financial year ended 30 June 2022, there was fee
revenue of:
a. $3,873 (2021: $7,745) from Creekwood Nominees Pty Ltd, a director related entity of
Mr S A Macdonald;
b. $2,827 (2021: $7,025) from Satinbrook Pty Ltd, a director related entity of Mr G D Riley.
(e) Outstanding balances arising from transactions with related parties
The following balances arising from transactions with related parties are outstanding as at 30 June
2022:
Current receivables:
Trade and other receivables
Current payables:
Accrued fees and employment expenses
Consolidated Entity
2022
$
2021
$
-
3,795
51,105
25,208
(f) There were no loans to or from related parties at the current and previous reporting date.
All transactions were made on normal commercial terms and conditions and at market rates.
27. SHARE BASED PAYMENTS
Employee Option Plan
The establishment of the Zenith Minerals Limited's Employee Option Plan was approved by Directors
resolution dated 27 February 2007. A current version of the Zenith Minerals Limited's Employee Option
Plan was approved by shareholders at the Annual General Meeting held on 24th November 2016 and three
years later on 20th November 2019.
The Board may offer free options to persons ("Eligible Persons") who are:
72
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
27. SHARE BASED PAYMENTS (cont.)
i)
full time, part time or casual employees, a contractor or an associated body corporate of the Company
who have accepted a written offer of engagement; or
ii) Directors of the company or any subsidiary based on a number of criteria including contribution to the
Consolidated Entity, period of employment, potential contribution to the Consolidated Entity in the future
and other factors the Board considers relevant.
Options granted under the plan carry no dividend or voting rights.
When exercisable, each option is convertible into one ordinary share, in any event no later than thirty days, after
the receipt of a properly executed notice of exercise and application monies. The Consolidated Entity will
issue to the option holder, the number of shares specified in that notice. The Consolidated Entity will apply
for official quotation of all shares issued and allotted pursuant to the exercise of the options.
Options may not be transferred other than to an associate of the holder.
Set out below is the summary of options granted under the plan:
2022:
Grant Date
Expiry Date Exercise
Price
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Number
Number
Number
Expired or
Forfeited
during the
year
Number
01 Dec 2020 14 May 2023
$0.1097 5,750,000
- (1,250,000)
14 May 2020 14 May 2023
$0.1097 1,200,000
25 Nov 2019 24 Nov 2022
$0.087
3,950,000
28 Sep 2018 28 Sep 2021
$0.18
1,650,000
-
-
-
(500,000)
(650,000)
Balance at
end of the
year
Exercisable
at end of
the year
Number
Number
4,500,000
4,500,000
700,000
700,000
3,300,000
3,300,000
-
-
-
- (1,650,000)
-
-
16 Jul 2021
14 Jul 2024
$0.3790
-
750,000
-
-
750,000
750,000
12,550,000
750,000 (2,400,000) (1,650,000)
9,250,000
9,250,000
Balance at
end of the
year
Exercisable
at end of
the year
Number
Number
5,750,000
5,750,000
1,200,000
1,200,000
3,950,000
3,950,000
1,650,000
1,650,000
-
-
-
-
- 12,550,000 12,550,000
2021:
Grant Date
Expiry Date Exercise
Price
Balance at
start of the
year
Granted
during the
year
Exercised
during the
year
Number
Number
Number
Expired or
Forfeited
during the
year
Number
01 Dec 2020 14 May 2023
$0.1097
-
5,750,000
14 May 2020 14 May 2023
$0.1097 1,200,000
25 Nov 2019 24 Nov 2022
$0.087 3,950,000
28 Sep 2018 28 Sep 2021
$0.18
1,650,000
-
-
-
6,800,000
5,750,000
-
-
-
-
-
73
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
27. SHARE BASED PAYMENTS (cont.)
Zenith Minerals Limited
Weighted
average
exercise
price
Number of
Options
2022
2022
Weighted
average
exercise
Price
2021
$0.11
Number of
options
2021
6,800,000
Outstanding at the beginning of the period
Exercised during the period
Granted during the period
Forfeited during the period
Lapsed during the period
$0.11
$0.13
$0.38
-
-
12,550,000
(4,050,000)
-
-
750,000
$0.1097
5,750,000
-
-
-
-
-
-
Outstanding at end of the period
Exercisable at the end of the period
$0.12
$0.12
9,250,000
9,250,000
$0.11
$0.11
12,550,000
12,550,000
For the options granted during the 2022 financial year, the valuation model inputs used in the Black-
Scholes Model to determine the fair value at the grant date, are as follows:
2022:
Grant date
Expiry date
16 Jul 2021
14 Jul 2024
2021:
Grant date
Expiry date
01 Dec 2020
14 May 2023
Share
price at
grant
date
$0.26
Share
price at
grant
date
$0.130
Exercise
price
Expected
volatility
Dividend
yield
$0.3790
113.00%
-
Exercise
price
Expected
volatility
Dividend
yield
$0.1097
100.00%
-
Risk-
free
interest
rate
0.25%
Risk-
free
interest
rate
0.25%
Fair value
at grant
date
$0.158358
Fair value
at grant
date
$0.078483
The expected price volatility is based on the historical volatility (based on the remaining life of the
options), adjusted for any expected changes to future volatility due to public available information.
Total expense recognised as share-based payments for the 2022 financial year was $305,594 (2021:
$451,276).
The weighted average remaining contractual life of share options outstanding at the end of the year was
0.8 years (2021: 1.8 years).
The weighted average exercise price during the financial year was $0.12 (2021: $0.12).
74
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
28. RECONCILIATION OF PROFIT/(LOSS) BEFORE INCOME TAX EXPENSE TO NET
CASH USED IN OPERATING ACTIVITIES
Profit/(Loss) for the year
Add:
Non-cash items
Share of losses of Associate accounted for using equity method
Net fair value (gain)/loss on other financial assets
Impairment of investment in associate
Depreciation and amortisation
Depreciation of right of use asset
Interest on unwinding of lease liabilities
Share based payment
Profit on sale of discontinued operations
Profit on disposal of party equity investment in associate
Profit on sale of tenements
Profit on part disposal of right-of-use asset
Changes in operating liabilities:
Decrease/(Increase) in trade and other receivables
Decrease/(Increase) in exploration expenditure capitalised
Increase/(Decrease) in trade and other payables
Increase/(Decrease) in provisions
Net cash (used in) operating activities
Consolidated Entity
2021
2022
$
$
1,465,147
2,010,141
-
(2,436,574)
-
9,314
-
-
305,594
-
-
(404,477)
-
(92,565)
(4,464,185)
(49,181)
17,465
(5,649,462)
3,950
(3,063,086)
428,636
7,587
12,668
1,073
451,276
(1,214,849)
(159,776)
(94,411)
(2,370)
2,604
(2,850,435)
113,058
(29,163)
(4,383,098)
(a) Non-cash investing and financing activities.
During 2022, there were no non-cash investing and financing activities to disclose other than those in Note 29.
29. SUBSEQUENT EVENTS
On 29 September 2022, Zenith entered into a deed of variation with Oxley Resources Ltd, to remove remaining
of tranche 2 placement and amend tranche 3 placement to 1,875,000 shares for $150,000 at $0.08 per share.
Tranche 3 placement will complete by 30 September 2022.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has not significantly impacted the
Consolidated Entity up to date, it is not practicable to estimate the potential impact, positive or negative, after the
reporting date. The situation is rapidly developing and is dependent on measures imposed by the Australian
Government and other countries, such as maintaining social distancing requirements, quarantine, travel
restrictions and any economic stimulus that may be provided.
No other matter or material event has arisen since 30 June 2022, which has significantly affected or may
significantly affect the Consolidated Entity’s operations, the results of those operations, or the Consolidated
Entity’s future state of affairs.
3 0 . S U B S I D I A R I E S
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly
owned subsidiaries in accordance with the accounting policy described in note 3.
Name
Nanutarra Minerals Pty Ltd
Earaheedy Minerals Pty Ltd
S2M2 Coal Pty Ltd
Mackerel Metals Pty Ltd
Mamucoal Pty Ltd
S2M2 Eastern Coal Pty Ltd
BlackDragon Energy (Aus) Pty Ltd
Zacatecas Minerals Pty Ltd
Fossil Prospecting Pty Ltd
Principal place of
business/country of
incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
75
Ownership interest
2022
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
2021
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
NOTES TO THE FINANCIAL STATEMENTS
Zenith Minerals Limited
Name
Caldera Metals Pty Ltd
Wyoming Rare Pty Ltd
Lighthouse Min Pty Ltd
Reel Min Pty Ltd
Lifeboat Min Pty Ltd
Principal place of
business/country of
incorporation
Australia
Australia
Australia
Australia
Australia
Ownership interest
2022 2021
% %
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
The Consolidated Entity is incorporated in Australia and its principal activity is exploration.
31. PARENT ENTITY DISCLOSURES
As at and throughout the financial year ended 30 June 2022, the parent entity of the Group was Zenith
Minerals Limited.
Result of Parent Entity:
Profit (loss) for the period
Other comprehensive income (loss)
Total Comprehensive Income (loss) for the period
Financial Position of Parent Entity at Year End:
Current assets
Total Assets
Current liabilities
Total Liabilities
Total Equity of the Parent Entity Comprising of:
Share capital
Reserves
Retained earnings/(losses)
2022
$
1,216,770
-
1,216,770
2021
$
1,816,656
-
1,816,656
2022
$
2021
$
15,579,991
6,585,958
25,754,412
12,399,739
303,798
303,798
340,675
340,675
38,780,371
890,256
(14,220,013)
26,543,440
1,053,133
(15,537,509)
25,450,614
12,059,064
The Parent Entity has no guarantees at 30 June 2022 (2021: Nil)
Contingent Assets and Liabilities
There are no contingent assets and liabilities at reporting date (2021: Nil) other than what is disclosed in Note
33.
32. DIVIDENDS
No dividends have been paid or provided for.
33. CONTINGENT ASSETS AND LIABILITIES
There are no contingent assets and liabilities at reporting date (2021: Nil).
76
DIRECTORS’ DECLARATION
Zenith Minerals Limited
1.
In the opinion of the directors of Zenith Minerals Limited:
(a)
the Financial Statements and notes thereto, are in accordance with the Corporations Act 2001,
including:
i) giving a true and fair view of the Consolidated Entity's financial position as at 30 June 2022 and
Remuneration Report marked as audited, and its performance for the financial year ended on
that date; and
ii) complying with Australian Accounting Standards, the Corporations Regulations 2001 and other
mandatory professional reporting requirements;
(b)
(c)
the Financial Report also complies with International Financial Reporting Standards as issued
by the International Accounting Standards Board as disclosed in note 2(a);
there are reasonable grounds to believe that the Company and the Consolidated Entity will be able
to pay its debts as and when they become due and payable.
2. The Directors have been given the declarations required by Section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to s.295(5) (a) of the Corporations Act
2001.
On behalf of the Directors
David J E Ledger
Executive Chairman
Dated: 30 September 2022
PERTH, WA
77
PKF Perth
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF ZENITH MINERALS LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Zenith Minerals Limited (the company), which comprises
the consolidated statement of financial position as at 30 June 2022, the consolidated statement of profit or loss
and other comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies
and other explanatory information, and the directors’ declaration of the company and the consolidated entity
comprising the company and the entities it controlled at the year’s end or from time to time during the financial
year.
In our opinion the accompanying financial report of Zenith Minerals Limited is in accordance with the
Corporations Act 2001, including:
i) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its
performance for the year ended on that date; and
ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the consolidated entity in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
Level 4, 35 Havelock Street, West Perth, WA 6005
PO Box 609, West Perth, WA 6872
T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au
PKF Perth is a member firm of the PKF International Limited family of legally independent firms and does not accept any responsibility or liability for the actions or inactions of
any individual member or correspondent firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
78
PKF Perth
Key Audit Matter
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report of the current year. This matter were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate audit opinion on this
matters. For each matter below, our description of how our audit addressed this matter are provided in that
context.
1. Valuation of Capitalised Exploration Expenditure
Why significant
How our audit addressed the key audit matter
As at 30 June 2022 the carrying value of exploration
(2021:
and evaluation assets was $11,096,458
$6,714,651), as disclosed in Note 18. This represents
41% of total assets of the consolidated entity.
The consolidated entity’s accounting policies in respect
of:
•
•
its use of estimates and judgements in exploration
and evaluation expenditure is outlined in Note 2
(d), and;
recognition of exploration and evaluation
expenditure is outline in Note 3
Significant judgement is required:
•
•
in determining whether facts and circumstances
indicate that the exploration and evaluation assets
should be tested for impairment in accordance
with Australian Accounting Standard AASB 6
Exploration
for and Evaluation of Mineral
Resources (“AASB 6”); and
in determining the treatment of exploration and
evaluation expenditure in accordance with AASB
6, and the consolidated entity’s accounting policy.
In particular:
o whether the particular areas of interest meet
the recognition conditions for an asset; and
o which elements of exploration and evaluation
expenditures qualify for capitalisation for each
area of interest.
Our work included, but was not limited to, the following
procedures:
• conducting a detailed review of management’s
assessment of impairment trigger events prepared in
accordance with AASB 6 including:
o
o
o
assessing whether the rights to tenure of the
areas of interest remained current at reporting
date as well as confirming that rights to tenure
are expected to be renewed for tenements that
will expire in the near future;
to
holding discussions with the directors and
the status of ongoing
management as
exploration programmes
the areas of
interest, as well as assessing if there was
evidence that a decision had been made to
discontinue activities in any specific areas of
interest; and
for
obtaining and assessing evidence of
the
consolidated entity’s future intention for the
areas of interest, including reviewing future
budgeted expenditure and
related work
programmes.
• considering whether exploration activities for the
areas of interest had reached a stage where a
reasonable assessment of economically recoverable
reserves existed;
testing, on a sample basis, exploration and
evaluation expenditure incurred during the year for
compliance with AASB 6 and
the consolidated
entity’s accounting policy; and
reviewing the impairment calculations provided and
related assumptions and disclosures in Note 3 and
18 for accuracy and completeness.
•
•
79
PKF Perth
Other Information
Those charged with governance are responsible for the other information. The other information comprises the
information included in the consolidated entity’s annual report for the year ended 30 June 2022 but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon, with the exception of the Remuneration Report.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Directors’ for the Financial Report
The Directors of the company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the Directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of this financial
report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting
from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
consolidated entity’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the Directors.
80
PKF Perth
• Conclude on the appropriateness of the Directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the consolidated entity’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures
in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or
conditions may cause the consolidated entity to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the consolidated entity to express an opinion on the group financial report. We are
responsible for the direction, supervision and performance of the group audit. We remain solely responsible
for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the Directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
Opinion
We have audited the Remuneration Report included in the Directors’ Report for the year ended 30 June 2022.
In our opinion, the Remuneration Report of Zenith Minerals Limited for the year ended 30 June 2022 complies
with section 300A of the Corporations Act 2001.
81
PKF Perth
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
PKF PERTH
SIMON FERMANIS
AUDIT PARTNER
30 SEPTEMBER 2022
WEST PERTH
WESTERN AUSTRALIA
82
Zenith Minerals Limited
CORPORATE GOVERNANCE STATEMENT
Zenith Minerals Limited and its subsidiaries (‘Group’) Corporate Governance Statement outlines the main
corporate governance practices of Zenith Minerals Limited and its subsidiaries (‘Group’) in place throughout the
financial year ended 30 June 2021, which comply with the 3rd Edition of the Australian Securities Exchange
(‘ASX’) Corporate Governance Principles and Recommendations of the ASX Corporate Governance Council,
unless otherwise stated.
The Group’s Corporate Governance Statement for the financial year ending 30 June 2022 is current as at 30th
September 2022 and has been approved by the Board of Directors of Zenith Minerals Limited.
The Corporate Governance Statement
https://www.zenithminerals.com.au/corporate/corporate-governance-policies/
is available on
the Zenith Minerals Limited website at
The company’s ASX Appendix 4G, which is a checklist that cross-references the ASX Principles and
Recommendations to the relevant disclosures in either this statement, the Annual Report or the company website,
is contained in the website at www.zenithminerals.com.au.
83
ADDITIONAL SHAREHOLDERS INFORMATION
Zenith Minerals Limited
In Compliance with ASX Requirements
The shareholder information set out below was applicable as at 29 September 2022.
1.
DISTRIBUTION OF EQUITY SECURITIES
a) Analysis of numbers of shareholders by size of holding – ordinary fully paid shares (ZNC)
Holding Ranges
Holders
Total Units
% Issued Share Capital
0 up to and including 1,000
1,000 up to and including 5,000
5,000 up to and including 10,000
10,000 up to and including 100,000
> 100,000
Totals
458
790
359
962
311
159,408
2,087,341
2,933,097
33,055,033
306,527,400
2,880
344,762,279
0.05%
0.61%
0.85%
9.59%
88.91%
100.00%
b) Number of shareholders holding less than a marketable parcel – 685 (at 29 September 2022).
2.
PARTICULARS OF TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest holders of quoted shares are listed below:
Shareholder Shares Issued
1 HSBC Custody Nominees (Australia) Limited
2 Citicorp Nominees Pty Limited
3 BNP Paribas Noms Pty Ltd
4 Ms Nada Granich
5 Ms Suzi Queli Miquilini
6 Abingdon Nominees Pty Ltd
7 Breamlea Pty Ltd
8 Greenhill Road Investments Pty Ltd
9 GDR Pty Ltd
10 Custodial Services Limited
11 Mr Austin Sydney Evan Miller
12 Mr John Bevan Tilbrook
13 Tintern (Vic) Pty Ltd
14 BNP Paribas Nominees Pty Ltd
15 EV Metals Group Plc
16 Struven Nominees Pty Ltd
17 Yandal Investments Pty Ltd
18
Mr John Bevan Tilbrook & Mrs Pauline Tilbrook & Mr John Edwin
Tilbrook
19 Grey Willow Pty Ltd
20 Abingdon Nominees Pty Ltd
TOTAL FOR TOP 20:
Fully Paid Ordinary
Shares
Number held % of total
32,432,449
28,172,404
27,307,049
8,883,404
8,283,446
7,446,353
6,826,364
5,052,823
5,000,000
4,664,452
4,151,853
4,050,000
4,028,228
3,992,727
3,654,677
3,647,834
3,588,417
3,450,000
3,450,000
2,931,976
9.41%
8.17%
7.92%
2.58%
2.40%
2.16%
1.98%
1.47%
1.45%
1.35%
1.20%
1.17%
1.17%
1.16%
1.06%
1.06%
1.04%
1.00%
1.00%
0.85%
173,814,456
50.42%
84
ADDITIONAL SHAREHOLDERS INFORMATION
Zenith Minerals Limited
3 . V O T I N G R I G H T S
Ordinary Shares: At general meetings of the Company, each member entitled to vote may vote in person
or by proxy or attorney or representative. On a show of hands every person who is a member or a
representative of a member has one vote, and on a poll every person present in person or by proxy or
attorney has one vote for each share held.
Options: No voting rights
4.
SUBSTANTIAL SHAREHOLDERS
Substantial shareholders in the Company are:
Ordinary Shares
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
5.
UNQ UOT ED EQ UIT Y SE CU R IT I ES
The following unquoted options are on issue:
Number
held
32,432,449
28,172,404
% Interest
9.41%
8.17%
27,307,049
7.92%
Number on
Issue
Number of
Holders
Options issued under the Company’s Employee Option Plan to take up
ordinary shares:
- Exercisable at 8.87 cents each by 24 November 2022
- Exercisable at 10.97 cents each by 14 May 2023
- Exercisable at 37.9 cents each by 14 July 2024
- Exercisable at 14 cents expiring 31 December 2023
- Exercisable at 16 cents expiring 31 December 2023
3,250,000(1)
5,150,000(2)
750,000(3)
2,000,000(4)
2,000,000(5)
4
8
4
1
1
(1) Persons holding 20% or more:
M J Clifford
Melinda Nelmes
(2) Persons holding 20% or more:-
M J Clifford
(3) Persons holding 20% or more:-
A D’Hulst
P Snook
(4) Persons holding 20% or more:
C G Nominees (Australia) Pty Ltd
(5) Persons holding 20% or more:
C G Nominees (Australia) Pty Ltd
6 . On -m ar k e t b u yb a c k
There is no current on-market buyback.
85
77%
23%
29%
67%
20%
100%
100%
ADDITIONAL SHAREHOLDERS INFORMATION
Zenith Minerals Limited
7 . R e str i c t ed s e cu r it i e s
There are no restricted securities on issue.
86
INTERESTS IN MINING TENEMENTS
Zenith Minerals Limited
INTERESTS IN MINING TENEMENTS
PROJECT
LOCATION
TENEMENT
NUMBER
HOLDER
Earaheedy Zinc JV
Earaheedy Mn
Earaheedy Mn
Earaheedy Mn
Earaheedy Zinc
Earaheedy Zinc
Earaheedy Zinc
Earaheedy Zinc
Earaheedy Zinc
Earaheedy Zinc
Develin Creek
Develin Creek
Auburn
Privateer
Red Mountain
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
QLD
QLD
QLD
QLD
QLD
E69/3464
E69/2733
E69/3414
R69/2
E38/3620
E69/3872
E69/3886
E69/3887
E69/3869
E38/3619
Rumble Resources Ltd
Fossil Prospecting Pty Ltd
Zenith Minerals Limited
Zenith Minerals Limited
Zenith Minerals Limited
Zenith Minerals Limited
Zenith Minerals Limited
Zenith Minerals Limited
Zenith Minerals Limited
Zenith Minerals Limited
Zenith Minerals Limited
EPM16749
EPM17604
Mackerel Metals Limited
Mackerel Metals Limited
ZENITH
MINERALS
INTEREST
75%
25%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
STATUS
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
EPM27517 Black Dragon Energy (AUS) Pty Ltd
100%
Granted
EPM27552 Black Dragon Energy (AUS) Pty Ltd
100%
Granted
EPM26384 Black Dragon Energy (AUS) Pty Ltd
100%
Granted
Waratah Well
WA
E59/2170 Black Dragon Energy (AUS) Pty Ltd
Waratah Well
WA
E59/2321 Black Dragon Energy (AUS) Pty Ltd
Mt Ida North
WA
E29/994
Mark Selga
Yalgoo Potash
Yalgoo Potash
Yalgoo Potash
WA
WA
WA
E59/2622
E59/2623
E59/2624
Zenith Minerals Limited
Zenith Minerals Limited
Zenith Minerals Limited
Split Rocks
WA
E77/2375 Black Dragon Energy (AUS) Pty Ltd
Lithium JV
(ZNC 100%,
EVM earning
60%) other
minerals 100%
As Above
Aust Lithium
Alliance option
to acquire -
ZNC 40%,
EVM 60%,
ZNC other
minerals 100%
100%
100%
100%
Lithium JV
(ZNC 100%,
EVM earning
60%) other
minerals 100%
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
WA
E77/2394 Black Dragon Energy (AUS) Pty Ltd As above
E77/2395 Black Dragon Energy (AUS) Pty Ltd As above
E77/2386 Black Dragon Energy (AUS) Pty Ltd As above
E77/2388 Black Dragon Energy (AUS) Pty Ltd As above
E77/2453 Black Dragon Energy (AUS) Pty Ltd As above
E77/2454 Black Dragon Energy (AUS) Pty Ltd As above
E77/2455 Black Dragon Energy (AUS) Pty Ltd As above
E77/2456 Black Dragon Energy (AUS) Pty Ltd As above
E77/2457 Black Dragon Energy (AUS) Pty Ltd As above
E77/2513 Black Dragon Energy (AUS) Pty Ltd As above
E77/2514 Black Dragon Energy (AUS) Pty Ltd As above
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
87
INTERESTS IN MINING TENEMENTS
Zenith Minerals Limited
INTERESTS IN MINING TENEMENTS cont.
PROJECT
LOCATION
TENEMENT
NUMBER
HOLDER
ZENITH
MINERALS
INTEREST
STATUS
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
Split Rocks
WA
WA
WA
WA
WA
WA
WA
WA
WA
E77/2515 Black Dragon Energy (AUS) Pty Ltd As above
E77/2555 Black Dragon Energy (AUS) Pty Ltd As above
E77/2598 Black Dragon Energy (AUS) Pty Ltd As above
E77/2616 Black Dragon Energy (AUS) Pty Ltd As above
P77/4506 Black Dragon Energy (AUS) Pty Ltd As above
P77/4507 Black Dragon Energy (AUS) Pty Ltd As above
P74/379 Black Dragon Energy (AUS) Pty Ltd As above
E74/634 Black Dragon Energy (AUS) Pty Ltd As above
Aust Lithium
Alliance ZNC
40%, EVM
60% ZNC other
minerals 100%
E77/4490 Black Dragon Energy (AUS) Pty Ltd
Split Rocks-Dulcie
WA
M77/1292
RR & Assoc & Highscore PL
Split Rocks-Dulcie
Split Rocks-Dulcie
Split Rocks-Dulcie
Split Rocks-Dulcie
Split Rocks-Dulcie
Split Rocks-Dulcie
Split Rocks-Dulcie
Split Rocks-Dulcie
Split Rocks-Dulcie
WA
WA
WA
WA
WA
WA
WA
WA
WA
M77/1250
RR & Assoc & Highscore PL
L77/226
RR & Assoc & Highscore PL
P77/4368
RR & Assoc & Highscore PL
L77/256
L77/244
RR & Assoc & Highscore PL
RR & Assoc & Highscore PL
M77/1267
RR & Assoc & Highscore PL
M77/1246
RR & Assoc & Highscore PL
M77/1290
RR & Assoc & Highscore PL
M77/581
RR & Assoc & Highscore PL
ZNC Gold
rights to sub-
6m subject to
option
agreement
As above
As above
As above
As above
As above
As above
As above
As above
As above
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Kavaklitepe
Turkey
EL20079861
Gubretas Maden Yatirimlari
Anonim Siketi
~20%
Granted
88