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RESOURCE BASE LIMITED. Annual Report 2022
65667_rns_2022-09-20_58b12ad9-c0f3-4ee0-9810-974c90f42972.pdf
Annual Report
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ANNUAL REPORT 30 JUNE 2022
ASX:RBX
CORPORATE INFORMATION
DIRECTORS
Mr James Myers Non-Executive Chairman Mr Paul Hissey Non-Executive Director Ms Ailsa Osborne Executive Director, CFO and Company Secretary
COMPANY SECRETARY
Ms Ailsa Osborne
REGISTERED AND PRINCIPAL OFFICE
Suite 4.01, Level 4 105 St Georges Terrace Perth WA 6000 Telephone (08) 6102 8072 Website www.resourcebase.com.au
POSTAL ADDRESS
Suite 4.01, Level 4 105 St Georges Terrace Perth WA 6000
AUDITORS
BDO Audit (WA) Pty Ltd Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth, WA 6000
SHARE REGISTER
Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace Perth WA 6000
Resource Base Limited shares are listed on the Australian Securities Exchange (ASX code: RBX)
| ACN | 113 385 425 |
|---|---|
| ABN | 57 113 385 425 |
| ASX Code | RBX |
In this report, the following definitions apply:
"Board" means the Board of Directors of Resource Base Limited
"Resource Base" or the "Company" means Resource Base Limited ABN 57 113 385 425
CONTENTS FOR THE YEAR ENDED 30 JUNE 2022
| Directors' Report | 4 |
|---|---|
| Remuneration Report | 12 |
| Auditor's Independence Declaration | 20 |
| Consolidated Statement of Profit or Loss and Other Comprehensive Income | 21 |
| Consolidated Statement of Financial Position | 22 |
| Consolidated Statement of Cashflows | 23 |
| Consolidated Statement of Changes in Equity | 24 |
| Consolidated Notes to the Financial Statements | 25 |
| Directors' Declaration | 53 |
| Independent Auditor's Report | 54 |
| Additional ASX Information | 58 |
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as the 'consolidated entity') consisting of Resource Base Limited (referred to hereafter as the 'company' or 'parent entity') and the entities it controlled at the end of, or during, the year ended 30 June 2022.
DIRECTORS
The following persons were directors of Resource Base Limited during the whole of the financial year and up to the date of this report, unless otherwise stated:
| Director | Position | Appointed | Resigned |
|---|---|---|---|
| James Myers | Non-Executive Chairman | 13 September 2022 | |
| Non-Executive Director | 1 June 2020 | 13 September 2022 | |
| Paul Hissey | Non-Executive Director | 12 July 2021 | |
| Ailsa Osborne | Executive Director, CFO and | 13 September 2022 | |
| Company Secretary | |||
| Shannon Green | Executive Chairman and CEO | 1 June 2020 | 13 September 2022 |
| John Lewis | Non-Executive Director | 26 October 2020 | 11 February 2022 |
PRINCIPAL ACTIVITIES
During the financial year ended 30 June 2022 the Company's primary focus was to complete the acquisition of the Black Range Project in Victoria, Australia and achieve re-admission to the Official List of the ASX. Following successful re-admission to the ASX, the Company turned its attention to advancing development of the newly acquired Black Range Project and expanding its portfolio with the acquisition of the Mitre Hill Project.
DIVIDENDS
There were no dividends paid, recommended, or declared during the current or previous financial year.
REVIEW OF OPERATIONS
Resource Base is a strategic metals explorer targeting clay hosted REE and VHMS in Victoria and South Australia. The Company's flagship project is the Mitre Hill Project in South Australia's premier rare earth elements (REE) district. The Company is focussed on its exploration at its two 100% owned Projects, being the Mitre Hill Project and the Black Range Project.
On 12 July 2021, the ASX admitted the Company to trade its shares on the ASX main board following the completion of an over-subscribed initial public offer (IPO) which raised $5,500,000 pursuant to the Prospectus dated 7 May 2021.
The Black Range Project was settled on 2 July 2021 with the Consideration shares issued by the Company to the Vendor and the applicable transfer documentation with respect to EL4590 was completed and lodged Earth Resources Regulation (Victoria) for processing.
On 23 December 2021, the Company finalised the acquisition of 100% of Mitre Hill Pty Ltd (Mitre Hill), the owner of one (1) strategic Exploration Licence and four (4) strategic Exploration Licence Applications over ground located within the Murray Basin in Victoria and South Australia, prospective for ionic clay hosted Rare Earth Elements (REE) mineralisation (Mitre Hill Project).
Mitre Hill Project
Background
On 27 September 2021, Resource Base announced that it had executed a binding term sheet to acquire 100% of Mitre Hill Pty Ltd (Mitre Hill), the owner of five (5) strategic Exploration Licence Applications over ground located within the Murray Basin in Victoria and South Australia, prospective for ionic clay hosted Rare Earth Elements (REE) mineralisation (Mitre Hill Project). The acquisition was finalised on 23 December 2021.
Post-acquisition, the Company has submitted a further (25) applications for Exploration Licences in Victoria expanding the Mitre Hill Project to 7,022km2 of land prospective for clay hosted Rare Earth Elements (REE) within the southern margin of the Murray Basin, the Project consists of one (4) granted tenements and twenty-five (25) applications in Victoria and one (1) granted tenement in South Australia.
Upon granting of all tenements Mitre Hill will hold the largest position within a potential emerging Clay hosted Rare Earth precinct located in the southern margin of the Murray Basin across Victoria and South Australia. Refer figures 1 and 2 below for the regional setting, and tenement locations.
Figure 1: Regional setting of the Mitre Hill Project
Figure 2: Map showing Mitre Hill tenements and AR3 and Savic tenement areas
Exploration Activities
The Company commenced exploration activities in January 2022 with the initial broadly spaced drilling along roadside reserves on tenement EL007646 commencing in March 2022.
The results released on 18 May 2022, confirmed the potential for broader occurrence of REE across the Southern Murray Basin, consistent with the Company's geological hypothesis, which formed the basis for the Company's strategy to expand tenement holdings.
Following from the positive results of the initial roadside drilling, the Company commenced step out drilling in the northwest area of Mitre Hill Project Tenement EL007646 where the higher-grade clay hosted REE mineralisation was discovered.
Results from 56 of the 125 air-core holes drilled in the step out program on farmland within EL007646 were received from the Bureau Veritas assay laboratory in Adelaide. See Table 1 below for a selection of notable intersections.
| Hole ID | Depth From | Thickness (m) | TREO_ppm | NdPr Oxidesppm |
|---|---|---|---|---|
| MHAC220087 | 3 | 3 | 508 | 91.2 |
| MHAC220028 | 4 | 3 | 473 | 89.3 |
| MHAC220088 | 3 | 3 | 470 | 93.8 |
| MHAC220089 | 5 | 2 | 918 | 203.8 |
| MHAC220032 | 3 | 2 | 889 | 186.2 |
| MHAC220082 | 4 | 2 | 821 | 182.1 |
| MHAC220061 | 7 | 1 | 1,134 | 251.4 |
| MHAC220076 | 8 | 1 | 1,071 | 233.7 |
| MHAC220060 | 6 | 1 | 1,028 | 223.2 |
Table 1: Notable Intersections
From the 56 holes currently assayed 53 holes intercepted REE mineralisation grade above 350ppm TREO or 95% of holes assayed to date intercepted REE mineralisation grade above 350ppm TREO with maximum intercept grade being 1,397ppm TREO. Refer figure 3 below for location of drilling and intercepted mineralisation.
The mineralisation is very shallow with an average depth to the upper boundary of the Mineralisation only 5m and occurs in clayey sediments located proximal to the upper boundary of an underlying limestone unit which is known to be very widespread throughout the region.
These results prove the consistency of mineralisation and gives the exploration team confidence in planning step out drilling from broadly spaced reconnaissance programs utilising easily accessible roadsides.
Figure 3: Location of drilling and intercepted mineralisation on EL007646
DIRECTORS REPORT FOR THE YEAR ENDED 30 JUNE 2022
Air core drilling continues on high priority tenement EL007647, refer figure 4 below, located closely to and along strike from AR3's Red Tail and Yellow Tail JORC compliant clay hosted REE resources.
Initially broad spaced drilling along existing road accesses is being undertaken.
Samples from the first 15 holes have now been shipped to the laboratory for analysis with results expected during October.
Black Range Project
Background
The Black Range Project (124km2) in Victoria's premier porphyry and VHMS target district, the Mount Stavely Volcanic Complex (MSVC) in Western Victoria, captures three fault-bound segments of the MSVC volcanics with a combined strike length of approximately 55 kilometres. The Project includes the advanced Eclipse prospect which is prospective for copper, gold and zinc.
The Mount Stavely Volcanic Complex is considered an analogue of the Mt Read Volcanics in Tasmania, which is host to a number of world-class VHMS deposits (Rosebery, Hellyer, Que River), the giant Mt Lyell Cu-Au deposit, and the Henty Au deposit.
Numerous other targets, including Anomaly F, Honeysuckle, Anomaly K and Mt Bepcha are associated with MSVC rocks across the tenement but have seen little work to date.
Petrological studies indicate that important VHMS style hydrothermal alteration and is well developed on the Eclipse prospect. Resource Base will utilise systematic geophysics, drilling and geochemical analyses combined with petrological and hyperspectral SWIR alteration mapping to vector towards zones with high mineralisation potential as identified from comparison with known VHMS deposits in the Mt Read Volcanics and around the world.
Exploration Activities
During the year the company commenced a large-scale geophysical survey program, designed to test the priority target area between the Eclipse and New Moon prospects, a 4km strike of defined volcanic graben which is host to the Eclipse prospect.
The Preliminary results, released on 18 November 2021, from the Gravity and IP/Resistivity geophysical survey programs have identified numerous target areas to be tested. This preliminary gravity data has proven useful in understanding geology of the Eclipse Prospect area, particularly under Grampians Sandstone cover and when combined with magnetic data.
Combined interpretation of IP/Resistivity, Gravity and Magnetic geophysical data sets has identified a new zone of interest on the western margin of the Eclipse Basin (refer announcement on 18 November 2021 for more details).
Following on from the geophysics program initial air-core drilling commenced at the Black Range Project mid November 2021 and concluded mid-December. The Company completed 1,800 meters of air-core drilling under the initial program with the continuation of this initial ~3,000m drill program commencing in February. The Company drilled a further 1,500m located in the southeast portion of the tenement.
The geological features observed from the initial phase of air-core drilling in the Eclipse area of the Company's Black Range Project were highly encouraging . A new prospect, the Nebula Prospect, has been defined over an IP anomaly approximately 800m in length situated some 750m East of the Eclipse Prospect.
As announced year end on 28 July 2022, further drilling intercepted sulphide rich zone of alteration on the Callisto target approximately 2km south of the Eclipse and Nebula mineralisation.
DIRECTORS REPORT FOR THE YEAR ENDED 30 JUNE 2022
Ongoing work will aim to fingerprint the mineralisation with elemental isotope studies and geophysics to determine if it forms part of the VHMS occurring at Eclipse and Nebula. If so,this will help vector towards prospective geological horizons to the South, away from known mineralisation.
FINANCIAL POSITION
The company made a loss for the year of $2,190,286 (2021: $1,659,785). Cash reserves were $2,143,967 (30 June 2021: $97,937) representing an increase of $2,046,030.
CORPORATE ACTIVITIES
On 12 July 2021, Mr Paul Hissey was appointed as Non-Executive Director.
On 12 July 2021, the ASX admitted the Company to trade its shares on the ASX main board following the completion of an over-subscribed initial public offer (IPO) which raised $5,500,000 pursuant to the Prospectus dated 7 May 2021.
The IPO and re-quotation on the ASX was a condition precedent of the agreement to acquire the Black Range Project (EL4590) from Navarre Minerals Limited which was entered into on 16 February 2021.
Additionally, as part of the IPO the Company settled a range of debts with ASIPAC into 1,685,640 Shares and 1,685,640 Options and with former Directors of the Company into 278,898 shares in the restructured company.
A total of 27,500,000 Shares were issued at a price of $0.20 per Share under the Offer, and a total of 10,154,538 Shares and 9,685,640 Options were issued upon settlement of the Offer pursuant to secondary offers and issues as detailed in the Company's Prospectus.
As a result, the completion of the IPO the Black Range Project was settled and the transfer of EL4590 was completed and lodged with the local authority.
On 27 September 2021, the Company announced the execution of a binding term sheet for the material acquisition of five exploration licence applications over ground located within the Murray Basin across Victoria and South Australia, totalling a significant package of 1,380km2 (collectively the Mitre Hill Project) with potential to be prospective for ionic clay hosted Rare Earth Elements (REE).
The Company also announced firm commitments had been received to raise $1.2 million through the issue of six (6) million shares at an issue price of $0.20 per share, being a 4.1% premium to the 14-day VWAP, to progress exploration work as the Exploration Licence Applications are granted.
On 28 September 2021, the Company announced it had appointed Mr Shannon Green as Executive Chairman and CEO on a full-time basis.
On 1 December 2021, the Company announced the appointment of Ms Ailsa Osborne as Chief Financial Officer effective immediately and Company Secretary effective 1 January 2022 following the resignation of Ms Shannon Coates as Company Secretary.
On 11 February 2022, the Company announced the resignation of Non-Executive Director John Lewis, effective immediately.
On 21 March 2022, with effect from the commencement of business the companies share register was transferred from Link Market Services Ltd to Computershare Investor Services Pty Limited
On 27 April 2022, the Company announced the establishment of an Unmarketable Parcel Sale Facility for shareholders who held less than A$500 worth of fully paid ordinary shares in the Company. The completion of the of the Unmarketable Parcel share sale was announced on 30 June 2022, a total of 147,300 shares were sold under the Facility, from 343 holders of Unmarketable Parcels at a price of $0.1394 per share.
On 20 May 2022, the Company announced the appointment of BDO Audit (WA) Pty Ltd (BDO) as the Company's auditor with effect immediately. This appointment followed the resignation of Elderton Audit Pty Ltd (Elderton) and ASIC's consent to same.
EVENTS SUBSEQUENT TO REPORTING DATE
On 23 August 2022, the Company advised that, 2,000,000 Tranche 1 Performance Rights forming part consideration for the acquisition of 100% interest in Mitre Hill Pty Ltd vested and could therefore be exercised by the relevant holder. The expiry date for the Performance Rights is 22 September 2025.
On 13 September 2022, the Company announced the resignation of Executive Chairman and CEO Mr Shannon Green effective immediately. Mr Jamie Myers was appointed as Non-Executive Chairman and Ms Ailsa Osborne, the Company's CFO and Company Secretary stepped onto the Board.
There have been no other transactions or events of a material and unusual nature likely, in the opinion of the Directors of the Company, to significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the consolidated entity.
ENVIRONMENTAL REGULATION
The economic entity holds participating interests in a number of mining and exploration tenements. The various authorities granting such tenements require the tenement holder to comply with the terms of the grant of the tenement and all directions given to it under those terms of the tenement. There were no breaches of these regulations during the 2022 or 2021 financial year.
AUDITOR'S INDEPENDENCE DECLARATION
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 forms part of the Directors' Report and is included on page 20.
DIRECTOR AND COMPANY SECRETARY INFORMATION
Mr James Myers | Non-Executive Chairman
Appointed 1 June 2020
Qualifications: Nil
Other current directorships: NorTech Strategic Minerals Limited, Alice Queen Limited (ASX:AQX) Former directorships (last 3 years): Pathfinder Resources Ltd (ASX: PF1) Interests in Shares and Options over Shares in the Company: 100,000 shares and 1,500,000 options held indirectly
Mr Myers has over 15 years' experience in numerous equities dealing and corporate advisory roles specifically focused on providing capital and deal generation for the small-cap sector. Mr Myers is the founder of and Managing Director of Molo Capital.
DIRECTORS REPORT FOR THE YEAR ENDED 30 JUNE 2022
Mr Myers has extensive small cap experience, most recently working side-by-side with experienced Executive Chairman, Mr Shannon Green, in the re-organisation, recapitalisation and marketing of Lindian Resources Limited (ASX: LIN) (ASX: LIN) and Pathfinder Resources Ltd (ASX: PF1).
Mr Paul Hissey | Non-Executive Director Appointed 12 July 2021
Qualifications: Bachelor of Science (Hons) in Applied Geology, Graduate Diploma in Applied Finance, MBA. Other current directorships: Nil. Former directorships (last 3 years): Nil Interests in Shares and Options over Shares in the Company: Nil
Mr Hissey has more than 20 years' experience in the resources sector, split evenly between both mining and capital markets. He commenced his career working in numerous open pit and underground, base and precious metals operations in North Queensland, and lead the mine geology team at the world class Olympic Dam deposit in South Australia for BHP. In addition, Mr Hissey worked as a UK-based technical consultant on a range of commodities through Europe and Africa conducting due diligence and resource estimates, before returning to the Victorian gold fields as a resource geologist and eventually transitioning to equities markets.
Mr Hissey spent a combined 10 years as a rated equity analyst with Goldman Sachs and Royal Bank of Canada writing institutional research on the full suite of Australian publicly listed mining companies providing extensive exposure to not only leading mining companies and their executives but also resource investors worldwide. Mr Hissey is Currently Chief Financial Officer of ASX listed exploration company Navarre Minerals Limited.
He holds a Bachelor of Science (Hons) in Applied Geology from the University of South Australia as well as a Graduate Diploma in Applied Finance from Kaplan and an MBA from the Chifley Business School (La Trobe University). Mr Hissey has been a Member of the AusIMM for more than 20 years.
Ms Ailsa Osborne| Executive Director, CFO and Company Secretary
Appointed CFO on 1 December 2021, Company Secretary on 1 January 2022 and Executive Director 13 September 2022
Qualifications: B Buss. CPA Other current directorships: Xlr8 Limited Former directorships (last 3 years): Nil Interests in Shares and Options over Shares in the Company: 10,000 shares held indirectly
Ms Osborne has more than 17 years of professional experience in the mineral resources industry. Ms Osborne most recently was Chief Financial Officer and Company Secretary of Pathfinder Resources Limited (ASX:PF1) and has held senior finance roles in a number of listed companies operating in Australia and Internationally including, South America, Indonesia, and Africa.
Ms Osbornes qualifications include, CPA, BComm. Accounting and Business Law, and a Graduate Diploma of Applied Corporate Governance and Risk Management.
Mr Shannon Green | Executive Chairman & CEO
Appointed 1 June 2020, Resigned 13 September 2022
Qualifications: Qld SSE Mine Managers Certificate, Graduate Diploma Mining Engineering, Diploma of Mining (Surface & underground) and a Diploma of (Finance) Other current directorships: NorTech Strategic Minerals Limited, XLR8 Metals Limited Former directorships (last 3 years): Pathfinder Resources Ltd (ASX: PF1), Lindian Resources Limited (ASX: LIN)
Interests in Shares and Options over Shares in the Company: 1,500,000 options held indirectly
DIRECTORS REPORT FOR THE YEAR ENDED 30 JUNE 2022
Mr Green has considerable corporate experience includes, project transactions, capital raisings, marketing, technical and commercial due diligence experience. Mr Green has over 20 years mining and project development, corporate, resource development and mining operations experience, with extensive experience working in Africa and Australia having managed several significant projects from Feasibility through construction and into operation and held senior leadership roles with several Australian iron ore and gold mining operations.
Mr John Lewis | Executive Director
Appointed 26 October 2020, Resigned 11 February 2022
Qualifications: B Buss. CA Other current directorships: Nil Former directorships (last 3 years): Nil Interests in Shares and Options over Shares in the Company: Nil
Mr Lewis is a Chartered Accountant with, in excess of 25 years post qualification experience. Mr Lewis spent 15 years working in the Accounting Profession mainly in the area of Corporate Reconstruction for firms including Deloitte.
For the past 15 years, Mr Lewis has held numerous positions in the mining industry including as CFO and Company Secretary of Canyon Resources Limited and also Geopacific Resources Ltd where he managed a reverse takeover of the Company.
Ms Shannon Coates | Company Secretary
Appointed 1 July 2020, Resigned 1 January 2022
Ms. Coates has over 25 years' experience in corporate law and compliance. Shannon is currently company secretary to a number of ASX listed companies and has provided company secretarial and corporate advisory services to boards across a variety of industries, including mineral resources, oil & gas, financial services, manufacturing and technology both in Australia and internationally.
MEETINGS OF DIRECTORS
The number of meetings of the company's Board of Directors ('the Board') held during the year ended 30 June 2022, and the number of meetings attended by each director were:
| Director | Directors' meetings | ||||
|---|---|---|---|---|---|
| Held while in office | Attended | ||||
| Shannon Green | 4 | 4 | |||
| Jamie Myers | 4 | 4 | |||
| Paul Hissey | 4 | 4 | |||
| John Lewis | 3 | 3 |
REMUNERATION REPORT (Audited)
The report details the nature and amount of remuneration for the Key management personnel of Resource Base Limited in accordance with the requirements of the Corporations Act 2001 and its Regulations. It also provides the remuneration disclosures required by Aus 25.4 to Aus 25.7.2 of AASB 124 Related Party Disclosures, which have been transferred to the Remuneration report in accordance with Corporations regulation 2M.6.04. For the purposes of this report, the term "executive" encompasses all directors of the Company.
Remuneration consists of a fixed remuneration and a long-term incentive portion as considered appropriate. The Board believes that options are an effective remuneration tool which preserves the cash reserves of the company whilst providing valuable remuneration.
The remuneration report is set out under the following main headings:
- Principles used to determine the nature and amount of remuneration
- Details of remuneration
- Executive service agreements
- Non-executive director service contracts
- Share-based compensation
- Additional information
- Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The Board has structured a remuneration framework that is market competitive and complementary to the reward strategy of the consolidated entity and company.
The reward framework is designed to align rewards to shareholders' interests. The Board have considered that it should seek to enhance shareholders' interests by:
- focus on sustained growth in shareholder wealth through growth in share price, and delivering constant or increasing return on assets as well as focusing the directors on key non-financial drivers of value; and
- attracting and retains high calibre executives.
In accordance with best practice corporate governance, the structure of non-executive director and executive director remuneration is separate.
Non-executive directors' remuneration
Non-executive directors' fees are paid within an aggregate limit which is approved by the shareholders from time to time. Retirement payments, if any, are agreed to be determined in accordance with the rules set out in the Corporations Act at the time of the Directors retirement or termination. Non-Executive Directors remuneration may include an incentive portion of bonuses and/or options as considered appropriate by the Board, which may be subject to shareholder approval in accordance with the ASX listing rules.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst directors is reviewed annually. The Board considers the amount of director fees being paid by comparable companies with similar responsibilities and the experience of the non-executive directors when undertaking the annual review process.
The Company determines the maximum amount for remuneration, including thresholds for share-based remuneration, for directors by resolution. Currently, the maximum amount of remuneration allocated to all nonexecutive directors approved by shareholders is $300,000. Further details regarding components of director and executive remuneration are provided in the notes to the financial statements. Included in the current year are shareholder approved one off bonus payments and options issued in accordance with the IPO Prospectus dated 7 May 2021 bringing the current year over the annual maximum allocation of $300,000.
Executive remuneration
In determining the level and make up of executive remuneration, the Board negotiates a remuneration to reflect the market salary for a position and individual of comparable responsibility and experience. Due to the limited size of the Company and of its operations and financial affairs, the use of a separate remuneration committee is not considered appropriate. Remuneration is regularly compared with the external market by participation in industry surveys and during recruitment activities generally. If required, the Board may engage an external consultant to provide independent advice in the form of a written report detailing market levels of remuneration for comparable executive roles.
Company performance, shareholder wealth and director and executive remuneration
The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives. The achievement of this aim has been through the issue of options to directors to encourage the alignment of personal and shareholder interests. The recipients of the options are responsible for growing the Company and increasing shareholder value. If they achieve this goal, the value of the options granted to them will also increase. Therefore, the options provide an incentive to the recipients to remain with the Company and to continue to work to enhance the Company's value.
Use of remuneration consultants
The company has not made use of remuneration consultants during the current or prior financial years.
Voting and comments made at the company's 16th December 2021 Annual General Meeting ('AGM')
On 16 December 2021 the Remuneration Report was approved unanimously on the show of hands. The proxies exercised by the Chairman were 96.62% in support of the adoption of the remuneration report for the year ended 30 June 2021. The company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.
| 30 June 2022 | Short Term EmploymentBenefits | PostEmploymentBenefits | TerminationBenefits | Equity SettledShare BasedPayments | Total | |
|---|---|---|---|---|---|---|
| Salary & Fees$ | Bonus2$ | Superannuation$ | Salary$ | Options$ | ||
| Non-Executive Directors | $ | |||||
| Jamie Myers | 50,000 | 100,000 | 5,000 | - | 221,742 | 376,742 |
| John Lewis | 53,667 | 100,000 | 5,367 | - | 221,742 | 380,776 |
| Paul Hissey | 50,000 | - | 5,000 | - | - | 55,000 |
| Executives | ||||||
| Shannon Green1 | 305,227 | 100,000 | 5,000 | - | 221,742 | 631,969 |
| Ian Cameron | 129,231 | - | 12,000 | - | - | 141,231 |
| Ailsa Osborne | 113,077 | - | 10,500 | - | - | 123,577 |
| Total Remuneration | 701,202 | 300,000 | 42,867 | - | 665,226 | 1,709,295 |
-
Mr Green was appointed 1 June 2020 and resigned 13 September 2022
-
A one off cash bonus was granted each to Messrs Green, Myers and Lewis in recognition of their effort and time spent in preparing for the IPO.
| Post | Equity Settled | |||||
|---|---|---|---|---|---|---|
| Short Term Employment | Employment | Termination | Share Based | |||
| 30 June 2021 | Benefits | Benefits | Benefits | Payments | Total | |
| Super | ||||||
| Salary & Fees | Bonus | annuation | Salary | Options | ||
| $ | $ | $ | $ | $ | $ | |
| Non-Executive Directors | ||||||
| Jamie Myers | 50,000 | - | 4,750 | - | - | 54,750 |
| Michael Kennedy | 3,285 | - | - | - | - | 3,285 |
| Executive Directors | ||||||
| Shannon Green | 162,500 | - | 14,250 | - | - | 176,750 |
| John Lewis | 33,333 | - | 3,167 | - | - | 36,350 |
| Total Remuneration | 249,118 | - | 22,167 | - | - | 271,285 |
The proportion of remuneration linked to performance and the fixed proportion are as follows:
| Fixed remuneration | At risk - STI | At risk - LTI | ||||
|---|---|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |
| % | % | % | % | % | % | |
| Non-Executive Directors | - | |||||
| Jamie Myers | 15 | 100 | 27 | - | 59 | - |
| Paul Hissey | 100 | - | - | - | - | - |
| Michael Kennedy | - | 100 | - | - | - | - |
| Executive Directors | - | |||||
| Shannon Green | 49 | 100 | 16 | - | 49 | - |
| John Lewis | 17 | 100 | 28 | - | 55 |
Executive service agreements (ESA)
Remuneration and other terms of employment for key management personnel are formalised in the Executive Service Agreements (ESA). Details of these agreements are as follows:
| Name: | Shannon Green |
|---|---|
| Title: | Executive Chairman and Chief Executive Officer |
| Agreement commenced: | 1 June 2020 |
| Agreement ceased | 13 September 2022 |
| Details: | $300,000 per year plus statutory superannuation |
| Name: | Ian Cameron |
| Title: | Exploration Manager |
| Agreement commenced: | 1 November 2021 |
| Details: | $180,000 per year plus statutory superannuation |
| Name: | Ailsa Osborne |
| Title: | Chief Financial Officer and Company Secretary |
| Agreement commenced: | 1 December 2021 |
| Details: | $180,000 per year plus statutory superannuation |
Termination by the Company
The Company may terminate the Executives employment without reason, by giving three (3) months' written notice and making a payment equal to three (3) months' salary, immediately by making payment ofsix (6) months' salary, or immediately if the Executive is convicted of any major criminal offence which brings the Company or its related body corporate into disrepute. The Company may otherwise terminate the Executive by giving on (1) month's written notice if the Executive:
- (i) is or becomes incapacitated by illness or injury for a period of two consecutive months (or any periods aggregating to two months in 12 months);
- (ii) is or becomes unsound of mind;
- (iii) commits any serious or persistent breach of any of the provisions contained in the Executive Service Agreement (ESA)that are not remedied within 14 days;
- (iv) is absent in, or demonstrates incompetence with regard to the performance of the Executive's duties under the ESA, or is neglectful of any duties under the ESA or otherwise does not perform all duties under this Agreement in a satisfactory manner, (provided the Executive is provided with a reasonable opportunity to remedy the specific matters complained of by the Board);
- (v) commits or becomes guilty of any Gross Misconduct; or
- (vi) refuses or neglects to comply with any lawful reasonable direction or order by the Company.
Termination by the Executive
The Executive may at their discretion, terminate the ESA if:
- (i) The Company commits any serious of persistent breach of the provisions contained in the ESA and the breach is not remedied within 28 days; or
- (ii) by giving three (3) months' written notice to the Company.
Expenses
The Company will reimburse the Executive for all reasonable expenses incurred by them in the performance of all duties in connection with the business of the Company.
The EAS otherwise contains provisions considered standard for an agreement of its nature (including representations and warranties and confidentiality provisions).
Non-executive director service contracts
On appointment to the Board all non-executive directors enter into a service agreement with the Company in the form of a letter of appointment. The term of appointment of all non-executive directorsis subject to re-nomination and re-election and Annual General Meetings and all non-executive directors are expected to serve a minimum term of three years. There is no notice period required by non-executive directors and non-executive directors are not entitled to annual or long service leave benefits.
Share-based compensation
Issue of shares
There were no shares issued to directors and other key management personnel as part of compensation during the year ended 30 June 2022.
Options
A total of 4,500,000 options were issued to Directors as compensation during the financial year ended 30 June 2022. As disclosed in the Prospectus dated 5 May 2021 the issue of these options was subject to the Company obtaining conditional approval from the ASX for admission to the Official List.
The valuation of the share-based payment transactions is measured by reference to fair value of the equity instruments at the date at which they are granted. The fair value has been determined using the Black-Scholes model, taking into account the terms and conditions upon which the options were granted.
The following inputs were used to value the options on issue:
| Shannon Green | James Myers | John Lewis |
|---|---|---|
| $0.1478 | $0.1478 | $0.1478 |
| 1,500,000 | 1,500,000 | 1,500,000 |
| 11 Feb 21 | 11 Feb 21 | 11 Feb 21 |
| 5 July 26 | 5 July 26 | 5 July 26 |
| $0.20 | $0.20 | $0.20 |
| 100% | 100% | 100% |
| 100% | 100% | 100% |
| 5 years | 5 years | 5 years |
| Nil | Nil | Nil |
| 0.41% | 0.41% | 0.41% |
| $0.20 | $0.20 | $0.20 |
Additional information
The earnings of the consolidated entity for the five years to 30 June 2022 are summarised below:
| 2022 | 2021 | 2020 | 2019 | 2018 | |
|---|---|---|---|---|---|
| $ | $ | $ | $ | $ | |
| Loss before income tax | (2,190,286) | (1,659,785) | (897,898) | (886,510) | (681,942) |
| Loss)after income tax | (2,190,286) | (1,659,785) | (897,898) | (886,510) | (681,942) |
| Share price at financial year end ($) | |||||
| * | 0.130 | - | - | - | 0.028 |
| Basic loss per share (cents per | |||||
| share) | (4.36) | (6.97) | (3.27) | (3.22) | (2.48) |
| * The company was suspended from official quotation at 30 June 2020 and was removed from the Official List of ASX on 20 November 2020 |
and was subsequently requoted on the Official List of the ASX on 12 July 2021 after a successful IPO.
REMUNERATION REPORT(Audited)
FOR THE YEAR ENDED 30 JUNE 2022
Additional disclosures relating to key management personnel
Shareholding
The movement during the reporting period in the number of ordinary shares in Resource Base Limited held directly, indirectly or beneficially, by each key management personnel including their related parties, is as follows:
| Held at start of the | Held at the end of | |||
|---|---|---|---|---|
| year or date of | Granted as | the year or date of | ||
| appointment | compensation | Purchases | resignation | |
| number | number | number | number | |
| Non-Executive Directors | ||||
| Jamie Myers | - | - | 100,000 | 100,000 |
| John Lewis | - | - | - | - |
| Paul Hissey | - | - | - | - |
| Executives | ||||
| Shannon Green | - | - | - | - |
| Ian Cameron | - | - | - | - |
| Ailsa Osborne | 10,000 | - | - | 10,000 |
| 10,000 | - | - | 110,000 |
Options
The movement during the reporting period in the number of options in Resource Base Limited held directly, indirectly or beneficially, by each key management personnel including their related parties, is as follows:
| Held at start of theyear or date of | Granted as | Held at the end ofthe year or date of | ||
|---|---|---|---|---|
| appointment | compensation | Purchases | resignation | |
| number | number | number | number | |
| Non-Executive Directors | ||||
| Jamie Myers | - | 1,500,0001 | - | 1,500,000 |
| John Lewis | - | 1,500,0001 | - | 1,500,000 |
| Paul Hissey | - | - | - | |
| Executives | ||||
| Shannon Green | - | 1,500,0001 | - | 1,500,000 |
| Ian Cameron | - | - | - | - |
| Ailsa Osborne | - | - | - | - |
| - | 4,500,0001 | - | 4,500,000 |
- Options granted pursuant to the Prospectus dated 5 May 2021.
- End of Remuneration Report -
SHARES UNDER OPTION
There were no unissued ordinary shares of Resource Base Limited under option outstanding at 30 June 2022.
SHARES ISSUED ON THE EXERCISE OF OPTIONS
There were no ordinary shares of Resource Base Limited issued on the exercise of options during the year ended 30 June 2022 and up to the date of this report.
DIRECTORS REPORT FOR THE YEAR ENDED 30 JUNE 2022
INDEMNITY AND INSURANCE OF OFFICERS
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith.
INDEMNITY AND INSURANCE OF AUDITOR
The company 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 company has not paid a premium in respect of a contract to insure the auditor of the company or any related entity.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.
NON-AUDIT SERVICES
There were no other non-audit services provided during the financial year by the auditor. During the financial year ended 30 June 2021, BDO Corporate Finance prepared the Independent Experts Report on Deferred Consideration included the IPO Prospectus dated 7 May 2021
There are no officers of the company who are former partners of BDO Audit (WA) Pty Ltd.
AUDITOR'S INDEPENDENCE DECLARATION
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out immediately after this directors' report.
AUDITOR
BDO Audit (WA) Pty Ltd 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,
James Myers | Non-Executive Chairman 21 September 2022
Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth WA 6000 PO Box 700 West Perth WA 6872 Australia
1
DECLARATION OF INDEPENDENCE BY ASHLEIGH WOODLEY TO THE DIRECTORS OF RESOURCE BASE LIMITED
As lead auditor of Resource Base Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief, there have been:
-
- No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
-
- No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Resource Base Limited and the entity it controlled during the period.
Ashleigh Woodley Director
BDO Audit (WA) Pty Ltd Perth, 21 September 2022
FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
| 30 Jun 2022 | 30 Jun 2021 | ||
|---|---|---|---|
| Notes | $ | $ | |
| Continuing Operations | |||
| Revenue | 4 | - | 2,466 |
| Interest revenue | 224 | 2,711 | |
| Expenses | |||
| Compliance and regulatory costs | (87,883) | (171,030) | |
| Consulting and professional fees | (51,700) | (574,057) | |
| Employee benefits | 4 | (644,435) | (271,285) |
| Share based payments expense | 14 | (949,915) | - |
| Other expenses | (447,244) | (155,810) | |
| Finance costs | 4 | (9,333) | (36,670) |
| Loss before income tax expense from continuingoperations | (2,190,286) | (1,203,675) | |
| Income tax expense | 5 | - | - |
| Loss after income tax expense from continuing | |||
| operationsLoss after income tax expense from discontinued | (2,190,286) | (1,203,675) | |
| operations | 6 | - | (456,110) |
| Loss after income tax expense for the year attributable | |||
| to the owners of Resource Base Limited | (2,190,286) | (1,659,785) | |
| Other comprehensive income for the year, net of taxTotal comprehensive loss for the year attributable to the | - | - | |
| owners of Resource Base Limited | (2,190,286) | (1,659,785) | |
| Earnings per share for loss from continuing operationsattributable to the owners of Resource Base Limited | |||
| Basic loss per share (cents per share) | 28 | (4.36) | (5.05) |
| Diluted loss per share (cents per share) | 28 | (4.36) | (5.05) |
| Earnings per share for loss from discontinued operationsattributable to the owners of Resource Base Limited | |||
| Basic loss per share (cents per share) | 28 | - | (1.91) |
| Diluted loss per share (cents per share) | 28 | - | (1.91) |
| Earnings per share for loss attributable to the owners ofResource Base Limited | |||
| Basic loss per share (cents per share) | 28 | (4.36) | (6.97) |
| Diluted loss per share (cents per share) | 28 | (4.36) | (6.97) |
The above consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
| 30 Jun 2022 | 30 Jun 2021 | ||
|---|---|---|---|
| Notes | $ | $ | |
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | 7 | 2,143,967 | 97,937 |
| Trade and other receivables | - | 21,719 | |
| Other assets | 27,964 | - | |
| Total current assets | 2,171,931 | 119,656 | |
| Non-current assetsExploration and evaluation | 8 | 4,814,226 | - |
| Plant and equipment | 9 | 377,187 | - |
| Other assets | 10,000 | - | |
| Total non-current assets | 5,201,413 | - | |
| Total assets | 7,373,344 | 119,656 | |
| Liabilities | |||
| Current liabilities | |||
| Trade and other payables | 10 | 218,011 | 910,693 |
| Provisions | 49,937 | - | |
| Borrowings | 11 | 9,759 | 3,428,938 |
| Total current liabilities | 277,707 | 4,339,631 | |
| Non-current liabilities | |||
| Borrowings | 11 | 47,115 | - |
| Total non-current liabilities | 47,115 | - | |
| Total liabilities | 324,822 | 4,339,631 | |
| Net assets / (liabilities) | 7,048,522 | (4,219,975) | |
| Equity | |||
| Issued capital | 13 | 26,821,929 | 14,932,001 |
| Reserves | 14 | 1,616,075 | 46,583 |
| Accumulated losses | (21,388,845) | (19,198,559) | |
| Total equity / (deficiency) | 7,048,522 | (4,219,975) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
The above consolidated statement of financial position is to be read in conjunction with the accompanying notes.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED STATEMENT OF CASH FLOWS
| 30 Jun 2022 | 30 Jun 2021 | ||
|---|---|---|---|
| Notes | $ | $ | |
| Cash flows from operating activities | |||
| Receipts from customers (inc. GST) | - | 2,466 | |
| Payments to suppliers and employees (inc. GST) | (1,873,531) | (1,262,372) | |
| (1,873,531) | (1,259,906) | ||
| Interest received | 224 | 2,711 | |
| Interest and other finance costs paid | (9,333) | (36,670) | |
| Net cash flows used in operating activities | 27 | (1,882,640) | (1,293,865) |
| Cash flows from investing activities | |||
| Payments for exploration expenditure | (1,913,226) | (450,254) | |
| Payments for plant and equipment | (327,032) | - | |
| Net cash flows used in investing activities | (2,240,258) | (450,254) | |
| Cash flows from financing activities | |||
| Proceeds from share issue | 6,700,000 | 350,048 | |
| Repayment of borrowings | (136,521) | - | |
| Share issue costs | (394,551) | (21,000) | |
| Proceeds from borrowings | - | 872,749 | |
| Net cash flows from financing activities | (6,168,928) | 1,201,797 | |
| Net increase/ (decrease) in cash and cash equivalents | 2,046,030 | 73,673 | |
| Cash and cash equivalents at beginning of period | 97,937 | 24,264 | |
| Cash and cash equivalents at end of period | 7 | 2,143,967 | 97,937 |
The above consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
| Accumulated | ||||
|---|---|---|---|---|
| Issued Capital | Reserve | losses | Total equity | |
| $ | $ | $ | $ | |
| Balance at 1 July 2020 | 14,602,953 | 46,583 | (17,538,774) | (2,889,238) |
| Comprehensive loss for the year | - | - | (1,659,785) | (1,659,785) |
| Total comprehensive loss for the year | - | - | (1,659,785) | (1,659,785) |
| Transactions with owners in their capacityas owners | ||||
| Shares issued | 350,048 | - | - | 350,048 |
| Cost of shares issued | (21,000) | - | - | (21,000) |
| Balance at 30 June 2021 | 14,932,001 | 46,583 | (19,198,559) | (4,219,975) |
| Balance at 1 July 2021 | 14,932,001 | 46,583 | (19,198,559) | (4,219,975) |
| Profit for the year | - | - | (2,190,286) | (2,190,286) |
| Total comprehensive profit for the year | - | - | (2,190,286) | (2,190,286) |
| Transactions with owners in their capacityas owners | ||||
| Shares issued | 12,570,000 | (46,583) | - | 12,523,417 |
| Cost of shares issued | (680,709) | 286,159 | - | (394,550) |
| Tranche 1 performance rights | - | 380,000 | - | 380,000 |
| Options issued | - | 949,916 | - | 949,916 |
| Balance at 30 June 2022 | 26,821,292 | 1,616,075 | (21,388,845) | 7,048,522 |
The above consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
CONTENTS
| 1 | Corporate Information | 26 |
|---|---|---|
| 2 | Statement of Significant Accounting Policies | 26 |
| 3 | Operating Segments | 33 |
| 4 | Expenses | 34 |
| 5 | Income Tax Expense | 34 |
| 6 | Discontinued Operations | 36 |
| 7 | Cash and Cash Equivalents | 36 |
| 8 | Exploration and Evaluation | 37 |
| 9 | Plant and Equipment | 37 |
| 10 | Trade and Other Payables | 38 |
| 11 | Borrowings | 38 |
| 12 | Liabilities Directly Associated with Assets Held for Sale | 39 |
| 13 | Issued Capital | 40 |
| 14 | Reserves | 41 |
| 15 | Dividends | 43 |
| 16 | Financial Instruments | 43 |
| 17 | Key Management Personnel Disclosure | 45 |
| 18 | Remuneration of Auditors | 45 |
| 19 | Asset Acquisition – Black Range Project | 46 |
| 20 | Asset Acquisition – Mitre Hill Project | 46 |
| 21 | Contingent Liabilities | 47 |
| 22 | Commitments | 48 |
| 23 | Related Party Transactions | 48 |
| 24 | Parent Entity Information | 50 |
| 25 | Interests in Subsidiaries | 51 |
| 26 | Events Subsequent to Reporting Date | 51 |
| 27 | Reconciliation of Loss After Income Tax to Net Cash Used in Operations | 51 |
| 28 | Earnings Per Share | 52 |
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
1. CORPORATE INFORMATION
Resource Base Limited ("Resource Base" or the "Company") is a company domiciled in Australia. The address of the Company's registered office is Suite 4.01, Level 4, 105 St Georges Terrace, Perth, Western Australia.
The Company is a for-profit entity and is primarily involved in identifying and investing in mineral exploration assets and conducting exploration activities on those assets.
2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
2.1. Adoption of new and amended accounting standards
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period, and determined that there was no material impact on its financial statements in the current reporting year.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2022. The consolidated entity has not yet assessed the impact of these new or amended Accounting Standards and Interpretations.
New or amended Accounting Standards and Interpretations adopted
The Company 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.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
2.2. Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board ('IASB').
2.3. Going concern basis
This report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and settlement of liabilities in the normal course of business.
The Consolidated Entity incurred a net loss after tax for the year ended 30 June 2022 of $2,190,286 (2021: $1,659,785) and experienced net cash outflows from operating activities of $1,882,640 (2021: $1,293,865). At 30 June 2022, the cash and cash equivalents balance was $2,143,967 (2021: $97,937).
The ability of the Consolidated Entity to continue as a going concern is principally dependent upon the ability of the Company raising capital from equity and debt markets as completed during the year and managing cashflow in line with available funds. These conditions indicate a material uncertainty that may cast significant doubt on whether the Consolidated Entity is able to continue as a going concern.
The Directors have prepared a cash flow forecast, which indicates that the Consolidated Entity will have sufficient cash flows to meet all currently forecasted commitments and working capital requirements for the 12 month period from the date of signing this financial report.
During the year, the Company raised $6,700,000 (2021: $350,048) from equity markets. The Company may need to raise further capital in order to fund future exploration programs.
Based on the cash flow forecasts, and other factors referred to above, the directors are satisfied that the going concern basis of preparation is appropriate. In particular, given the Company's history of raising capital to date, the Directors are confident of the Company's ability to raise additional funds as and when they are required, should the need arise.
Should the Consolidated entity not be able to realise its assets and extinguish its liabilities in the normal course of business and at amounts stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or to the amount and classification of liabilities that might result should the Consolidated Entity be unable to continue as a going concern and meet its debts as and when they fall due.
2.4. Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the consolidated entity's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2.24.
2.5. Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in note 24.
2.6. Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Resource Base Limited ('company' or 'parent entity') as at 30 June 2022 and the results of all subsidiaries for the year then ended. Resource Base Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.
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 deconsolidated 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.
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.
2.7. 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.
2.8. Income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the assets are recovered or liabilities are settled, based on those tax rates that are 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
- When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and 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 assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the carrying amount 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 only where there is a legally enforceable right to offset current tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
2.9. Discontinued operations
A discontinued operation is a component of the consolidated entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately on the face of the statement of profit or loss and other comprehensive income.
2.10. Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
2.11. Trade and other 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.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when there is objective evidence that the consolidated entity will not be able to collect all amounts due according to the original terms of the receivables.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
2.12. Non-current assets or disposal groups classified as held for sale
Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continued use. They are measured at the lower of their carrying amount and fair value less costs of disposal. For non-current assets or assets of disposal groups to be classified as held for sale, they must be available for immediate sale in their present condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the non-current assets and assets of disposal groups to fair value less costs of disposal. A gain is recognised for any subsequent increases in fair value less costs of disposal of a non-current assets and assets of disposal groups, but not in excess of any cumulative impairment loss previously recognised.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of assets held for sale continue to be recognised.
Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are presented separately on the face of the statement of financial position, in current assets. The liabilities of disposal groups classified as held for sale are presented separately on the face of the statement of financial position, in current liabilities.
2.13. Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment (excluding land) over their expected useful lives as follows:
| Plant and equipment | 5 years |
|---|---|
| Computer equipment | 3-5 years |
| Vehicles | 5 years |
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
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.
2.14. Exploration and evaluation
Expenditure on acquisition, exploration and evaluation relating to an area of interest is carried forward where rights to tenure of the area of interest are current and;
- It is expected that expenditure will be recouped through successful development and exploitation of the area of interest or alternatively by its sale; and/or
- Exploration and evaluation activities are continuing in an area of interest but at balance date have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves.
Where the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated then any capitalised exploration and evaluation expenditure is reclassified as capitalised "mine properties in development". Prior to reclassification, capitalised exploration and evaluation expenditure is assessed for impairment.
Exploration and evaluation assets are reviewed at each reporting date for indicators of impairment and are tested for impairment where such indicators exist. If testing performed indicates that the carrying value might not be recoverable the asset is written down to its recoverable amount. Any such impairment is recognised in profit or loss for the year.
Accumulated costs in relation to an abandoned area are written off to profit or loss in the period in which the decision to abandon the area in made.
An impairment loss is reversed to the extent that the asset's carrying amount does not exceed the recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in previous years.
2.15. Asset acquisitions
Where an acquisition does not meet the definition of a business combination the transaction is accounted for as an asset acquisition. The consideration transferred for the acquisition of an asset comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Consolidated Entity. The consideration transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs with regards to the acquisition are capitalised. Identifiable assets acquired and liabilities assumed in the acquisition are measured at their fair value at the acquisition date.
2.16. Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity prior to the end of the financial year and which are unpaid. 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.
2.17. Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement of financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a market rate for an equivalent non-convertible bond and this amount is carried as a non-current liability on the amortised cost basis until extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised as a finance cost. The remainder of the proceeds are allocated to the conversion option that is recognised and included in shareholders equity as a convertible note reserve, net of transaction costs. The carrying amount of the conversion option is not remeasured in the subsequent years. The corresponding interest on convertible notes is expensed to profit or loss.
Where the terms of a financial liability are renegotiated and the entity issues equity instruments to a creditor to extinguish all or part of the liability (debt for equity swap), a gain or loss is recognised in profit or loss, which is measured as the difference between the carrying amount of the financial liability and the fair value of the equity instruments issued.
Borrowings are classified as current liabilities unless the Consolidated Entity has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
2.18. Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) 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 the 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 resulting from the passage of time is recognised as a finance cost.
2.19. Employee benefits
Accumulation Superannuation Funds
Obligations for contributions to accumulation superannuation funds are recognised as an expense in profit or loss when they are due.
Short-Term Benefits
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be wholly settled within 12 months of the reporting date are recognised in current liabilities 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.
Long-Term Benefits
Liabilities for long service leave not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting date
2.20. Share based payments
The Consolidated Entity provides benefits to individuals acting as and providing services similar to employees (including Directors) of the Consolidated Entity in the form of share based payment transactions, whereby individuals render services in exchange for shares or rights over shares ("Equity Settled Transactions").
There is currently an Employee Share Option Plan (ESOP) in place, which provides benefits to Directors and individuals providing services similar to those provided by an employee.
The cost of these equity settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined by using the Black Scholes formula, taking into account the terms and conditions upon which the instruments were granted. In valuing equity settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Resource Base Limited ("Market Conditions").
The cost of the equity settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ("Vesting date"). The cumulative expense recognised for equity settled transactions at each reporting date until Vesting Date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the Directors of the Consolidated Entity, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of the market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The statement of comprehensive income charge or credit for a period represents the movement in cumulative expense recognised at the beginning and end of the period. No expense is recognised for awards that do not vest, except for awards where vesting is conditional upon a market condition.
Where the terms of an equity settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of the modification.
Where an equity settled award is cancelled, it is treated as if it had vested on the date of the cancellation, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they were a modification of the original award, as described in the previous paragraph.
The cost of equity-settled transactions with non-employees is measured by reference to the fair value of goods and services received unless this cannot be measured reliably, in which case the cost is measured by reference to the fair value of the equity instruments granted.
2.21. Issued capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
2.22. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to the owners of Resource Base Limited, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
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.
2.23. Goods and services tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
2.24. Critical accounting judgements, estimates and assumptions
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, revenue 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. 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.
Note 8 – Exploration and evaluation
The Consolidated Entity's policy for exploration and evaluation is discussed in Note 2.14. The application of this policy requires management to make certain assumptions as to future events and circumstances. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised exploration and evaluation expenditure, management concludes that the capitalised expenditure is unlikely to be recovered by future sale or exploration, then the relevant capitalised amount will be written off through the profit or loss. The carrying amount of exploration and evaluation is disclosed in the note.
Note 14 – Share based payments
The Consolidated Entity's policy for share based payments is discussed in Note 2.20 The Consolidated Entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a Black Scholes model, using the assumptions detailed in the note 14.
For asset acquisitions settled via share based payment arrangements, the Consolidated Entity measures the cost of the asset at the fair value of the asset acquired, or if this cannot be determined, at the fair value of the equity instruments. During the year the Consolidated Entity acquired the Black Range Project and the Mitre Hill Project via the issue of equity and as such the transaction is a share-based payment arrangement under AASB 2. Given the nature of the assets acquired, the fair value of the assets was unable to be determined and the transaction was recorded at the fair value of the equity instruments granted.
The fair value of the Performance Shares that may be issued under the arrangements of the Black Range Project Acquisition was deemed to be nil as the probability of conditions being met was assessed at 0% on acquisition date.
The fair value of the Tranche 1 Performance Shares that may be issued under the arrangements of the Mitre Hill Project Acquisition was calculated at $380,000 calculated with reference to the share price at date of settlement of $0.19 and the probability of conditions being met was assessed at 100% on acquisition date.
The fair value of the Trance 2 Performance Shares that may be issued under the arrangements of the Mitre Hill Project Acquisition was deemed to be nil as the probability of conditions being met was assessed at 0% on acquisition date.
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. As at 30 June 2022 deferred tax assets have not been recognised because their realisation is not deemed probable.
3. OPERATING SEGMENTS
Identification of reportable operating segments
The consolidated entity is organised into one operating segment, being the exploration of minerals in Australia. 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 assessing performance and in determining the allocation of resources.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
4. EXPENSES
Loss before income tax from continuing operations includes the following specific expenses:
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Depreciation - Plant and equipment | 6,718 | 203 |
| 6,718 | 203 | |
| Finance costs | ||
| Interest on amount payable on land acquisition | 6,191 | 4,253 |
| Interest on amounts payable to former directors | - | 12,635 |
| Interest and facility fees payable on loan from major shareholder | - | 284,193 |
| Premium Funding Costs | 3,142 | 1,789 |
| 9,333 | 36,670 | |
| Employee benefits expense | ||
| Employee benefits expense | 644,435 | 271,285 |
| 644,435 | 271,285 | |
| 5.INCOME TAX EXPENSE | ||
| 30 Jun 2022 | 30 Jun 2021 | |
| $ | $ | |
| Numerical reconciliation of income tax benefit and tax atthe statutory rate | ||
| Profit / (loss) before income tax expense from continuingoperationsProfit / (loss) before income tax expense from discontinued | (2,190,286) | (1,203,675) |
| operations | - | (456,110) |
(2,190,286) (1,659,785)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Tax at the statutory tax rate of 25% (2021: 30%) | (547,571) | (497,935) |
| Tax effect amounts which are not deductible/(taxable) incalculating taxable income: | ||
| Non-deductible expenditure | 167,126 | - |
| Section 40-880 deduction | (35,086) | - |
| Current year tax losses not recognised | 468,762 | 512,776 |
| Current year temporary differences not recognised | (53,231) | (14,840) |
| - | - |
| Unused tax losses for which no deferred tax asset has been | ||
|---|---|---|
| recognised | 16,067,953 | 13,562,433 |
| Potential tax benefit @ 25% (2021: 30%) | 4,016,988 | 4,068,730 |
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test is passed.
The taxation benefits of tax losses and temporary differences not brought to account will only be obtained if:
- i. the consolidated entity derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised;
- ii. the consolidated entity continues to comply with the conditions for deductibility imposed by law; and
- iii. no change in tax legislation adversely affects the consolidated entity in realising the benefits from deducting the losses.
FOR THE YEAR ENDED 30 JUNE 2022
6. DISCONTINUED OPERATIONS
Comprise the Broula King Asset which was sold on 18 December 2020 and was previously recognised as held for sale.
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Administration expenses | - | (6,253) |
| Corporate expenses | - | (251,258) |
| Care and maintenance expenses | - | (32,999) |
| Loss on sale of subsidiary | - | (165,600) |
| Movement in rehabilitation provision | - | - |
| Total expenses | - | (456,110) |
| Loss before income tax expense | - | (456,110) |
| Income tax expense | - | - |
| Loss after income tax expense from discontinued operations | - | (585,202) |
On 18 August 2020 the Company entered into a Binding term Sheet with Sunshine Reclamation Pty Ltd ("Sunshine") regarding the sale of the 100% owned subsidiary Broula King Joint Venture Pty Ltd (BKJV).
On 18 October Sunshine executed the option to acquire BKJV. Subject to this date the NSW government regulator indicated to the Company that BKJV was in breach of its environment obligations regard the BKJV site that significant penalties were being considered. Furthermore the regulators indicated and internal works by the Company indicated that there was likely to be a significant increase in the Environmental Bond over the BKJV ML 1617 which had a significant effect on the value of BKJV
As a result the Company and Sunshine renegotiated the terms of the sale of BKJV. On 18 December 2020 the Company transferred the one share it owned in BKJV to Sunshine for a total sale price in the amount of $100,000 which reflected a net loss of $165,600 in excess of expenses written off in the financial year of $290,510. The Company had in previous periods made provisions for the amount recoverable on sale of BKJV.
As at 18 December 2020 Sunshine assumed all responsibility for any and all present or future environmental liabilities of BKJV.
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Current | ||
| Cash at bank | 2,112,139 | 97,937 |
| Cash on deposit | 31,828 | - |
| 2,143,967 | 97,937 |
7. CASH AND CASH EQUIVALENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
8. EXPLORATION AND EVALUATION
| 30 Jun 2022 | 30 Jun 2021 | ||
|---|---|---|---|
| $ | $ | ||
| Black Range Project | |||
| Acquisition cost | 20 | 1,638,000 | - |
| Exploration and evaluation phases - at cost | 1,041,781 | - | |
| Net carrying amount Black Range Project | 2,679,781 | - | |
| Mitre Hill Project | |||
| Acquisition cost | 21 | 1,707,114 | - |
| Exploration and evaluation phases - at cost | 427,331 | - | |
| Net carrying amount Mitre Hill Project | 2,134,445 | - | |
| Total Exploration and Evaluation | 4,814,226 | - |
9. PLANT AND EQUIPMENT
| IT | Vehicles | Equipment | Total | |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| At 1 July 2020 | 203 | - | - | 203 |
| Depreciation | (203) | - | - | (203) |
| At 30 June 2021 | - | - | - | - |
| Cost | 4,726 | - | - | 4,726 |
| Accumulated Depreciation | (4,726) | - | - | (4,726) |
| At 30 June 2021 | - | - | - | - |
| At 1 July 2021 | - | - | - | - |
| Additions | 20,516 | 136,301 | 227,088 | 383,905 |
| Depreciation | (6,718) | - | - | (6,718) |
| At 30 June 2022 | 13,798 | 136,301 | 227,088 | 377,187 |
| Cost | 20,516 | 136,301 | 227,088 | 383,905 |
| Accumulated Depreciation | (6,718) | - | - | (6,718) |
| At 30 June 2022 | 13,798 | 136,301 | 227,088 | 377,187 |
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
10. TRADE AND OTHER PAYABLES
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Trade payables | 166,771 | 661,941 |
| Payable to directors | - | 220,814 |
| Provision | - | 12,500 |
| Other payables and accruals | 51,240 | 15,438 |
| Total trade and other payables | 218,011 | 910,693 |
Refer to note 16 for further information on financial instruments.
11. BORROWINGS
| Unsecured | |||||
|---|---|---|---|---|---|
| Unsecured | loans from | ||||
| Convertible | loan from | former | |||
| notes | major | Directors | Equipment | ||
| payable | shareholder | and officers | funding | Total | |
| Opening balance 1 July | 164,948 | 2,532,076 | 731,914 | - | 3,428,938 |
| New Funding | - | - | - | 56,874 | - |
| Repayments | - | - | (136,521) | - | (136,521) |
| Non-cash settlement | (164,948) | (2,532,076) | (595,393) | - | (3,292,417) |
| Closing balance | - | - | - | 56,874 | 56,874 |
| Current | - | - | - | 9,759 | 9,759 |
| Non- current | - | - | - | 47,115 | 47,115 |
| Total Borrowings | - | - | - | 56,874 | 56,874 |
On 17 February 2021, the group entered into ta debt for equity conversion agreement whereby it was agreed that all debts owed would be settled via the IPO process, completed on 8 July 2021, for equity. ASIPAC were also issued 1,685,640 Options, refer Note 14, as part of the IPO process.
The Unsecured loans from former Directors and officers were extinguished and converted to equity as part of the IPO process completed by the Company on 8 July 2021.
FOR THE YEAR ENDED 30 JUNE 2022
Financing arrangements
Unrestricted access was available at the reporting date to the following lines of credit:
| 30 June 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Shareholder loan | ||
| Total facility | - | 2,532,076 |
| Used at the reporting date | - | (2,532,076) |
| Available at the reporting date | - | - |
12. LIABILITIES DIRECTLY ASSOCIATED WITH ASSETS CLASSIFIED AS HELD FOR SALE
As disclosed in Note 2, liabilities relating to the consolidated entities Broula King project were in the 2020 Financial Year classified as directly associated with assets classified as held for sale
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Rehabilitation | - | - |
| - | - |
Rehabilitation
The Company sold the BKJV subsidiary on 18 December 2020. As a result the Company no longer has any responsibility for the rehabilitation at the BKJV mine site. The provision represented the value of estimated costs of the remediation work that will be required to comply with the environmental and legal obligations. At the BKJV mine site. The mine site was under care and maintenance for a number of years prior to its sale.
Movements in provisions
Movements in each class of provision during the current financial year, other than employee benefits, are set out below:
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Rehabilitation | ||
| Balance at the beginning of the year | - | 572,000 |
| Increase in expected rehabilitation costs | - | - |
| Decrease as a result of the sale of BKJV | - | (572,000) |
| Closing balance | - | - |
13. ISSUED CAPITAL
| 30 Jun 2022 | 30 Jun 2021 | 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|---|---|
| No. shares | No shares | $ | $ | |
| Share capital | ||||
| Opening | 5,936,614 | 27,491,373 | 14,932,001 | 14,602,953 |
| Consolidation of shares | - | (24,054,759) | - | - |
| Share issue for cash | - | 2,500,000 | - | 350,048 |
| Shares issued under the public offerShares issued as consideration for the | 27,500,000 | - | 5,500,000 | - |
| acquisition of Black Range Project | 7,600,000 | - | 1,520,000 | - |
| Shares issued to the facilitatorShares issued to lenders in satisfaction of | 590,000 | - | 118,000 | - |
| existing debts | 1,964,538 | - | 3,339,000 | - |
| Placement 1 October 2021Shares issued as consideration for the | 6,000,000 | - | 1,200,000 | - |
| acquisition of Mitre Hill Pty Ltd | 4,700,000 | - | 893,000 | - |
| Share issue costs | - | - | (680,709) | (21,000) |
| Ordinary shares fully paid | 54,291,152 | 5,936,614 | 26,821,292 | 14,932,001 |
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the company in proportion to the number of, and amounts paid on the shares held. The fully paid ordinary shares have no par value and the company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.
Capital risk management
The consolidated entity's objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the consolidated entity may issue new shares in order to meets its financing requirements.
The consolidated entity is subject to certain financing arrangements and meeting these are given priority in all capital risk management decisions. There have been no events of default on the financing arrangements during the financial year.
The capital risk management policy remains unchanged from the 30 June 2021 Annual Report.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
14. RESERVES
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Convertible note reserve | - | 46,583 |
| Performance right reserve | 380,000 | |
| Options reserve | 1,236,075 | - |
| 1,616,075 | 46,583 |
Convertible note reserve
The reserve is used to recognise the value of the equity portion of convertible notes.
Performance rights reserve
This reserve is used to recognised the increase in equity, over the period in which the performance conditions are fulfilled.
| 30 Jun 2022 | 30 Jun 2022 | ||
|---|---|---|---|
| Number | $ | ||
| Performance rights on issue at 1 July | - | - | |
| Rights issued as consideration Mitre Hill Pty Ltd | 21 | 2,000,000 | 380,000 |
| 2,000,000 | 380,000 |
Options
This reserve is used to recognised the increase in equity, of
| 30 Jun 2022 | 30 Jun 2022 | ||
|---|---|---|---|
| Note | Number | $ | |
| Options on issue at 1 July 2021 | - | - | |
| Options issued during the period | |||
| Share based payments a) | 8,000,000 | 949,916 | |
| Share issue costs b) | 2,500,000 | 286,159 | |
| Non-cash settlement of borrowings c) | 1,685,640 | - | |
| Placement options d) | 3,000,000 | - | |
| 15,185,640 | 1,236,075 |
FOR THE YEAR ENDED 30 JUNE 2022
| Directors and | Corporate | Lead | ||
|---|---|---|---|---|
| Co Seca) | Advisorya) | Managerb) | IR Consultantb) | |
| Fair value per option $ | 0.1478 | 0.0547 | 0.1145 | 0.1145 |
| Number of options | 5,500,000 | 2,500,000 | 2,000,000 | 500,000 |
| Exercise price | $0.20 | $0.25 | $0.25 | $0.25 |
| Grant date | 11 Feb 21 | 23 Dec 21 | 1 Apr 21 | 1Apr 21 |
| Expiry date | 5 Jul 26 | 23 Dec 24 | 5 Jul 24 | 5 Jul 24 |
| Vested | 100% | 100% | 100% | 100% |
| Expected volatility | 100.0% | 54.7% | 100.0% | 100.0% |
| Option life | 5 years | 3 years | 3 years | 3 years |
| Expected dividend yield | Nil | Nil | Nil | Nil |
| Risk free rate | 0.41% | 0.93% | 0.41% | 0.41% |
| Underlying share price at grant date | $0.20 | $0.19 | $0.20 | $0.20 |
a) Share based payments
5,500,000 Options were issued to the Directors and Company Secretary pursuant to the IPO. The Options are exercisable at $0.20 per Option on or before the date that is 5 years from the date of issue.
2,500,000 Options, exercisable at $0.25 on or before the date that is 3 years from their date of issue, were issued to Candour Advisory Pty Ltd in part consideration for corporate advisory services to be provided to the Company over a 12 month period.
b) Share issue costs
2,000,000 Options were issued to the Lead Manager pursuant to the IPO. The Options are exercisable at $0.25 per Option on or before the date that is 3 years from the date of issue.
500,000 Options were issued to the IR Consultant pursuant to the IPO, refer section 5.6 of the Prospectus dated 7 May 2021. The Options are exercisable at $0.25 per Option on or before the date that is 3 years from the date of issue.
c) Non-cash settlement of borrowings
1,685,640 options were issued to lender in satisfaction of debt owed. The Options are exercisable at $0.20 per Option on or before the date that is 5 years from the date of Issue.
d) Placement options
Pursuant to the Short form Prospect dated 1 October 2021, the Company raised $1.2 million through a placement of six (6) million Shares at an issue price of $0.20 per Share, together with one free attaching option for every two shares applied for and issued under the Placement. The Options are exercisable at $0.25 per Option on or before the date that is 3 years from the date of issue. The placement was approved by shareholders on 16 December 2021.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
The number and weighted average exercise prices of share options are as follows:
| Weighted | ||||
|---|---|---|---|---|
| Weighted | average | |||
| average | Number of | exercise | Number of | |
| exercise price | Options | price | Options | |
| 30 June 2022 | 30 June 2021 | |||
| Outstanding at 1 July | - | - | -- | |
| Granted during the year | $0.226 | 15,185,640 | -- | |
| Outstanding at 30 June | $0.226 | 15,185,640 | -- | |
| Exercisable at 30 June | $0.226 | 15,185,640 | -- |
The options outstanding at 30 June 2022 have an exercise price of between $0.20 and $0.25 and a weighted average remaining contractual life of approximately 4 years.
15. DIVIDENDS
There were no dividends paid, recommended or declared during the current or previous financial year.
16. FINANCIAL INSTRUMENTS
Financial risk management objectives
The consolidated entity's activities can expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and interest rate risk), credit risk and liquidity risk. The consolidated entity's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the consolidated entity. The consolidated entity uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks, ageing analysis for credit risk and beta analysis in respect of investment portfolios to determine market risk.
Risk management is carried out by the Board of Directors ('the Board'), which identifies, evaluates and hedges financial risks within the consolidated entity's operating units where considered appropriate.
Market risk
Foreign currency risk
The consolidated entity is not subject to significant levels of foreign exchange risk in relation to its financial instruments.
Price risk
The consolidated entity is not subject to significant levels of price risk in relation to its financial instruments.
Interest rate risk
The consolidated entity is not subject to significant levels of interest rate in relation to its financial instruments.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency credit information, confirming references and setting appropriate credit limits. The consolidated entity obtains guarantees where appropriate to mitigate credit risk. The maximum exposure to credit risk at the reporting date to recognised financial assets is $2,171,931, (2021: $119,656). Of this, $2,143,967 (2021: $97,937) is held in bank deposits and are held at financial institutions with a minimum AA credit rating. The consolidated entity does not hold any collateral.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Liquidity risk
Vigilant liquidity risk management requires the consolidated entity to maintain sufficient liquid assets (mainly cash and cash equivalents) and available borrowing facilities to be able to pay debts as and when they become due and payable.
The consolidated entity manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities.
Remaining contractual maturities
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the
earliest date on which the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
| Weightedaverage interestrate | 1 year or less | Between 1 and2 years | Between 2 and5 years | Remainingcontractualmaturities | |
|---|---|---|---|---|---|
| 2022 | % | $ | $ | $ | $ |
| Non-derivatives | |||||
| Non-interest bearing | |||||
| Trade payables | - | 166,771 | - | - | 166,771 |
| Other payables | - | 51,240 | - | - | 51,240 |
| Interest-bearing - fixed rate | |||||
| Equipment funding | 8.07% | 14,150 | 14,150 | 25,941 | 68,391 |
| Total non-derivatives | 232,161 | 14,150 | 25,941 | 286,402 |
| Weightedaverage interestrate | 1 year or less | Between 1 and2 years | Between 2 and5 years | Remainingcontractualmaturities | |
|---|---|---|---|---|---|
| 2021 | % | $ | $ | $ | $ |
| Non-derivatives | |||||
| Non-interest bearing | |||||
| Trade payables | - | 661,942 | - | - | 661,942 |
| Other payables | - | 27,938 | - | - | 27,938 |
| Payable to directors | - | 220,814 | - | - | 220,814 |
| Payable to former Directors | - | 521,326 | - | - | 521,326 |
| Interest-bearing - fixed rateUnsecured loan from major | |||||
| shareholder | 12.00% | 2,532,076 | - | - | 2,532,076 |
| Convertible notes payable | 8.00% | 164,948 | - | - | 164,948 |
| Payable to former directors | 12.00% | 210,588 | - | - | 210,588 |
| Total non-derivatives | 4,339,631 | - | - | 4,339,631 |
FOR THE YEAR ENDED 30 JUNE 2022
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
17. KEY MANAGEMENT PERSONNEL DISCLOSURES
Directors
The following persons were directors of Resource Base Limited during the financial year:
Shannon Green (appointed 1 June 2020, resigned 13 September 2022) Jamie Myers (appointed 1 June 2020) Paul Hissey (appointed 12 July 2021) John Lewis (appointed 26 October 2020)
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below:
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Short-term employee benefits | 701,202 | 249,118 |
| Bonus | 300,000 | - |
| Superannuation | 42,867 | 22,167 |
| Share based payments | 665,226 | - |
| 1,709,295 | 271,285 |
18. REMUNERATION OF AUDITORS
During the financial year the following fees were paid or payable for services provided by the auditor to the company:
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Audit services - RSM Australia Partners | ||
| Audit or review of the financial statements | - | 1,962 |
| Audit services – Elderton | ||
| Audit or review of the financial statements | 4,180 | 20,200 |
| Investigating Accountants Report | - | 12,000 |
| Audit services – BDO Audit (WA) Pty Ltd | ||
| Audit or review of the financial statements | 27,504 | - |
| Non audit services | - | 20,200 |
| 30,684 | 34,162 |
19. ASSET ACQUISITION – BLACK RANGE PROJECT
On 2 July 2021, the Company finalised the Acquisition Agreement.
The Company acquired 100% interest in the Black Range Project comprising EL4590. This is accounted for as an acquisition of an asset as management believes that this does not meet the definition of business acquisition as per AASB3.
The fair value of the consideration settled in equity, being 7,600,000 ordinary shares, was measured based on the share price of the company at acquisition date. The presumption that the fair value of the asset acquired can be reliably measured has been rebutted given the speculative nature of the asset being in early exploration phase.
The fair value of the contingent consideration to be settled in equity is measured using a probability of 0% likelihood of achieving the contingent event based on share price of the company at acquisition date. Refer note 21 for terms of contingent consideration.
The fair value of the purchase consideration has been allocated to the acquired asset as at the acquisition date as per the table below:
| 2 Jul 2021 | ||
|---|---|---|
| Note | $ | |
| Consideration: | ||
| Consideration shares | 1,520,000 | |
| Transaction costs | 118,000 | |
| Contingent consideration | 21 | - |
| Exploration and evaluation acquired | 3 | 1,638,000 |
20. ASSET ACQUISITION – MITRE HILL PROJECT
On 23 December 2021, the Company finalised the Acquisition of Mitre Hill Pty Ltd.
The Company acquired 100% interest in the Mitre Hill Project comprising one granted tenement EL7646 in Victoria, one Exploration Licence Application in South Australia (ELA 2021/00059) and three Exploration Licence Applications in Victoria (EL7641, EL7647, and EL7640) (together the Mitre Hill Project).
This is accounted for as an acquisition of an asset as management believes that this does not meet the definition of business acquisition as per AASB3.
The fair value of the consideration settled in equity, being 4,700,000 ordinary shares, was measured based on the share price of the company at acquisition date. The presumption that the fair value of the asset acquired can be reliably measured has been rebutted given the speculative nature of the asset being in early exploration phase.
The fair value of the Tranche 1 Performance Shares that may be issued under the arrangements of the Mitre Hill Project Acquisition was calculated at $380,000 calculated with reference to the share price at date of settlement of $0.19 and the probability of conditions being met was assessed at 100% on acquisition date.
The fair value of the Tranche 2 Performance Shares that may be issued under the arrangements of the Mitre Hill Project Acquisition was deemed to be nil as the probability of conditions being met was assessed at 0% on acquisition date. Refer note 21 for the terms of the performance shares. Refer note 21 for terms of contingent consideration.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
The fair value of the purchase consideration has been allocated to the acquired asset as at the acquisition date as per the table below:
| 23 Dec 2021 | ||
|---|---|---|
| Note | $ | |
| Consideration: | ||
| Consideration shares | 893,000 | |
| Tranche 1 performance rights | 21 | 380,000 |
| Transaction costsa) | 434,114 | |
| Contingent consideration | 21 | - |
| Exploration and evaluation acquired | 3 | 1,707,114 |
a) The Consolidated Entity incurred acquisition-related costs of $434,114 relating to stamp duty, advisory, consulting, and legal fees which are included in the asset acquisition transaction costs.
21. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent Consideration – Black Range Project
Pursuant to the Black Range Project Acquisition Agreement, as set out in section 9.2.1 of the Prospectus dated 7 May 2021, on completion of the Acquisition the Company issued 8,500,000 Performance Shares to the Vendors pro rata, each to convert into one (1) Share upon the satisfaction of the following milestones:
- a) (Class A Performance Shares): 2,500,000 Performance Shares will each convert upon the Company announcing an Inferred Mineral Resource (as defined in the JORC Code 2012 Edition) of:
- (i) A minimum of 100,000 ounces of gold at a minimum grade of no less than 1g/t; or
- (ii) A minimum of a combined 100,000 tonnes of copper and zinc each at a minimum grade of 1%; within 5 years of the Settlement Date: and
- b) (Class B Performance Shares): 6,000,000 Performance Shares will each convert upon the Company delivering a definitive feasibility study within 5 years of settlement relating to the Tenement area which indicates a Project net present value of greater than $250,000,000.
Management have assessed these performance shares as future obligations whose existence will be confirmed by uncertain future events that are not wholly within the control of the entity.
Contingent Consideration – Mitre Hill Project
Pursuant to the Mitre Hill Pty Ltd Acquisition Agreement, as set out in section 4.2.2 of the Short form Prospectus dated 1 October 2021, on completion the of the Acquisition the Company issued on 23 December 2021, 4,000,000 Performance Shares to the Vendors pro rata, each to convert into one (1) Share upon the satisfaction of the following milestones:
- a) (Tranche 1): 2,000,000 Performance Rights shall vest upon the Purchaser achieving, at ten (10) contiguous drill holes at least 50 metres apart on the ELs, intercept grades of a minimum of 600ppm total rare earth oxides (TREO) over at least one (1) metre, within fifteen (15) months of the Drop-Dead Date: and
- b) (Tranche 2): 2,000,000 Performance Rights shall vest upon the announcement by the Purchaser of a of a JORC compliant Inferred Mineral Resource (as defined in the JORC Code 2012 Edition) on the Els of 30 million tonnes or greater, grading a minimum of 700ppm TREO or greater, within two (2) years from the Drop-Dead Date.
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022
Pursuant to the Mitre Hill Pty Ltd Acquisition Agreement the Company agreed pay to the Vendors a royalty of 1% of the net smelter return on all minerals (on a pro-rata basis), mineral products and concentrates, produced and sold from the ELs (or any tenement(s) which may be granted in lieu of or relate to the same ground as the ELs);
Post year end the Company announced the vesting of the Tranche 1 performance rights, the rights have been valued as and included as consideration in the accounts at 30 June 2022.
The Tranche 2 performance rights have been assessed by management as future obligations whose existence will be confirmed by uncertain future events that are not wholly within the control of the entity.
There are no contingent assets at the reporting date.
22. COMMITMENTS
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Exploration expenditure – Black Range Project | ||
| Within 1 year | 1,450,000 | - |
| One year or later but no later than 5 years | 308,000 | - |
| 1,758,000 | - | |
| Exploration expenditure – Mitre Hill Project | ||
| Within 1 year | 199,050 | - |
| One year or later but no later than 5 years | 839,140 | - |
| 1,038,190 | - | |
| Exploration expenditure – Total | ||
| Within 1 year | 1,649,050 | - |
| One year or later but no later than 5 years | 1,147,140 | - |
| 2,796,190 | - |
In order to maintain current rights of tenure to the exploration lease the Company was required to meet minimum expenditure requirements of the State Mines Departments. These obligations are not recorded in the financial statements.
23. RELATED PARTY TRANSACTIONS
Parent entity
Resource Base Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 25.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2022
Key management personnel
Disclosures relating to key management personnel are set out in note 17 and the remuneration report included in the directors' report.
Transactions with related parties
The following transactions occurred with related parties:
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Payment for other expenses: | ||
| Finance expenses accrued on loan payable to Asipac Group | ||
| Pty Ltd (a major shareholder) | - | 48,916 |
| - | 48,916 |
Receivable from and payable to related parties
The following balances are outstanding at the reporting date in relation to transactions with related parties:
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Current payables: | ||
| Accrued director's fees | - | 220,813 |
| Accrued Superannuation | - | 15,438 |
| - | 236,251 |
No interest is payable by the consolidated entity in respect of these balances.
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Current borrowings: | ||
| Unsecured loan to Asipac Group Pty Ltd (a major shareholder) a) | - | 2,532,076 |
| Convertible note payable to Asipac Group Pty Ltd b) | - | 164,948 |
| - | 2,697,024 |
Terms and conditions
- a) The unsecured loan to Asipac Group Pty Ltd accrued interest at 12.00 % per annum payable semi-annually in arrears. Interest was payable on the due date in cash or could be capitalised on to the debt balance.
- b) The convertible note payable accrued interest at 8.00%per annum payable semi-annually in arrears.
Both the Convertible Note and the Unsecured loan were extinguished and converted to shares as part of the IPO process in on 8 July 2021. ASIPAC were also issued 1,685,640 Options, refer Note 14, as part of the IPO process. Refer Note 11 Borrowings for details of settlement.
FOR THE YEAR ENDED 30 JUNE 2022
24. PARENT ENTITY INFORMATION
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Statement of profit or loss and other comprehensive income | ||
| Loss after income tax | (2,189,991) | (4,182,390) |
| Total comprehensive Loss | (2,189,991) | (4,182,390) |
| Statement of financial position | ||
| Total current assets | 2,171,931 | 119,656 |
| Total assets | 7,373,639 | 119,656 |
| Total current liabilities | 277,708 | 3,595,603 |
| Total liabilities | 324,822 | 4,327,517 |
| Net (liabilities) / assets | 7,048,817 | (4,207,861) |
| Equity | ||
| Issued capital | 26,821,292 | 14,932,001 |
| Convertible note reserve | - | 46,583 |
| Performance rights reserve | 380,000 | |
| Option reserve | 1,236,075 | |
| Accumulated losses | (21,388,550) | (19,186,445) |
| 7,048,817 | (4,207,861) |
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2022 and 30 June 2021.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2022 and 30 June 2021, other than those disclosed in note 21.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment at as 30 June 2022 and 30 June 2021.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 2, except for, Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
25. INTERESTS IN SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary in accordance with the accounting policy described in note 1:
| Principal place of business / | 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|---|
| Name | Country of incorporation | % | |
| Mitre Hill Pty Ltd | Australia | 100 | - |
26. EVENTS SUBSEQUENT TO REPORTING DATE
On 23 August 2022, the Company advised that, 2,000,000 Tranche 1 Performance Rights forming part consideration for the acquisition of 100% interest in Mitre Hill Pty Ltd vested and can be exercised by the relevant holder. The expiry date for the Performance Rights is 22 September 2025.
On 13 September 2022, the Company announced the resignation of Executive Chairman and CEO Mr Shannon Green effective immediately. Mr Jamie Myers was appointed as Non-Executive Chairman and Ms Ailsa Osborne, the Company's CFO and Company Secretary stepped onto the Board.
There have been no other transactions or events of a material and unusual nature likely, in the opinion of the Directors of the Company, to significantly affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial years.
27. RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH USED IN OPERATIONS
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| $ | $ | |
| Profit / (loss) after income tax expense for the year | (2,190,286) | (1,659,785) |
| Adjustments for: | ||
| Depreciation and amortisation | 6,718 | 203 |
| Share based payments expense | 949,915 | - |
| Accrued interest expense | - | 36,670 |
| Change in operating assets and liabilities: | ||
| Decrease/(increase) in trade and other receivables | (21,719) | 50,061 |
| Decrease/(increase) in other operating assets | 27,964 | 3,204 |
| Increase/(decrease) in trade and other payables | (680,181) | 247,844 |
| Increase in other provisions | 37,437 | 27,938 |
| Net cash used in operating activities | (1,882,642) | (1,293,865) |
28. EARNINGS PER SHARE
| 30 Jun 2022 | 30 Jun 2021 | |
|---|---|---|
| Number | Number | |
| Weighted average number of ordinary shares used incalculating basic earnings per share | ||
| Basic | 50,228,960 | 23,820,153 |
| Diluted | 50,228,960 | 23,820,153 |
| $ | $ | |
| Earnings per share for loss from continuing operationsLoss after income tax attributable to the owners of | ||
| Resource Base Limited | (2,190,286) | (1,203,675) |
| Cents | cents | |
| Basic loss per share | (4.36) | (5.05) |
| Diluted loss per share | (4.36) | (5.05) |
| $ | $ | |
| Earnings per share for loss from discontinued operationsLoss after income tax attributable to the owners ofResource Base Limited | - | (456,110) |
| Cents | cents | |
| Basic loss per share | - | (1.91) |
| Diluted loss per share | - | (1.91) |
| $ | $ | |
| Earnings per share for loss | ||
| Loss after income tax attributable to the owners of | ||
| Resource Base Limited | (2,190,286) | (1,659,785) |
| cents | cents | |
| Basic loss per share | (4.36) | (6.97) |
| Diluted loss per share | (4.36) | (6.97) |
In accordance with a resolution of the Directors of Resource Base Limited, I state that:
- (1) In the opinion of the Directors:
- (a) the financial statements and notes set out on pages 21 to 52 and the Directors' Report are in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of the Company's financial position as at 30 June 2022 and of its performance for the year ended on that date; and
- (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
- (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
- (a) the financial statements and notes set out on pages 21 to 52 and the Directors' Report are in accordance with the Corporations Act 2001, including:
- (2) The Directors draw attention to Note 2.2 to the financial statements, which includes a statement of compliance with International Financial Reporting Standards.
- (3) The Directors have been given the declarations by the chief executive officer and chief financial officer for the year ended 30 June 2022 required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors.
James Myers | Non-Executive Chairman 21 September 2022
RESOURCE BASE LIMITED ACN 113 385 425 53 W. www.resourcebase.com.au
Tel: +61 8 6382 4600 Fax: +61 8 6382 4601 www.bdo.com.au
Level 9, Mia Yellagonga Tower 2 5 Spring Street Perth WA 6000 PO Box 700 West Perth WA 6872 Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Resource Base Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Resource Base Limited (the Company) and its subsidiary (the Group), 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, and notes to the financial report, including a summary of significant accounting policies, and the directors' declaration.
In our opinion the accompanying financial report of Resource Base Limited, is in accordance with the Corporations Act 2001, including:
- (i) Giving a true and fair view of the Group's financial position as at 30 June 2022 and of its financial 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 are independent of the Company in accordance with 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.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2.3 in the financial report which describes the events and/or conditions which give rise to the existence of a material uncertainty that may cast significant doubt about the group's ability to continue as a going concern and therefore the group may be unable to realise its assets and discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In addition to the matter described in the Material uncertainty related to going concern section, we have determined the matters described below to be the key audit matters to be communicated in our report.
Accounting for Exploration and Evaluation Assets
| Key audit matter | How the matter was addressed in our audit |
|---|---|
| At 30 June 2022, we note that the carrying value of theExploration and Evaluation Asset is significant to thefinancial statements, as disclosed in note 8.As a result, we considered it necessary to assesswhether any facts or circumstances exist to suggest thatthe carrying amount of this asset may exceed itsrecoverable amount. | Our procedures included, but were not limited to:•Reviewing executed transaction documentsto understand the key terms and conditionsof the acquisition;•Evaluating management's determination ofwhether the transaction constituted abusiness or asset acquisition and reviewing |
| Judgement is applied in determining the treatment ofexploration expenditure in accordance with AustralianAccounting Standard AASB 6 Exploration for andEvaluation of Mineral Resources. In particular:•Whether the conditions for capitalisation are | the valuation of consideration transferred;•Obtaining a schedule of the areas of interestheld by the Group and assessing whether therights to tenure of those areas of interestremained current at balance date; |
| satisfied;•Determination that the acquisitions did notmeet the definition of a business combinationin accordance with AASB 3 and thereforeconstituted an asset acquisition;•Which elements of exploration and evaluationexpenditures qualify for recognition; and | •Considering the status of the ongoingexploration programmes in the respectiveareas of interest by holding discussions withmanagement, and reviewing the Group'sexploration budgets, ASX announcements anddirectors' minutes;•Considering whether any such areas ofinterest had reached a stage where a |
• Whether facts and circumstances indicate that the exploration and evaluation assets should be tested for impairment.
reasonable assessment of economically recoverable reserves existed;
- Verifying, on a sample basis, exploration and evaluation expenditure capitalised during the year for compliance with the recognition and measurement criteria of AASB 6;
- Considering whether any facts of circumstances existed to suggest impairment testing was required; and
- Assessing the adequacy of the related disclosures in note 8, note 19, note 20 and note 21 of the Financial Report.
Other Matter
The financial report of Resource Base Limited, for the year ended 30 June 2021 was audited by another auditor who expressed an unmodified opinion on that report on 30 September 2021.
Other information
The directors are responsible for the other information. The other information comprises the information in the Company'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 we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group'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 Group or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar2\_2020.pdf
This description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included on pages 12 to 18 of the directors' report for the year ended 30 June 2022.
In our opinion, the Remuneration Report of Resource Base Limited, for the year ended 30 June 2022, complies with section 300A of the Corporations Act 2001.
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.
BDO Audit (WA) Pty Ltd
Ashleigh Woodley Director
Perth 21 September 2022
Additional information required by ASX Listing Rules and not shown elsewhere in the report is set out below. The information is current as of 16 September 2022.
1. CORPORATE GOVERNANCE
Pursuant to the ASX Listing Rules, the Company's Corporate Governance Statement will be released in conjunction with this report. The Company's Corporate Governance Statement is available on the Company's website at: https://resourcebase.com.au/about-us/corporate-governance/
2. SUBSTANTIAL SHAREHOLDERS
The number of shares held by substantial shareholders and their associates who have provided the Company with substantial shareholder notices are set out below:
| Name of substantial shareholder | Number of shares | Interest (%) |
|---|---|---|
| NAVARRE MINERALS LIMITED1 | 7,600,000 | 14.00 |
| HARBOUR VIEW CAPITAL PTY LTD3 | 3,350,000 | 6.00 |
| ASIPAC GROUP PTY LTD2 | 3,195,478 | 5.89 |
-
As lodged on 13 July 2021
-
As lodged on 30 July 2021
-
As lodged on 29 August 2022
3. VOTING RIGHTS
The voting rights attached to each class of equity security are as follows:
Ordinary Shares
Each Ordinary Share is entitled to one vote at all general meetings of the Company. Each shareholder entitled to vote may vote in person or by proxy, attorney or representative or, if a determination has been made by the Board in accordance with clause 13.35 of the Company's constitution, by Direct Vote.
On a poll, every person present who is a Shareholder or a proxy, attorney or representative of a Shareholder (or where a Direct Vote has been lodged) shall, in respect of each fully paid Ordinary Share held, or in respect of which they are appointed a proxy, attorney or representative, have one vote for the Share.
Options
There are no voting rights attached to any class of options on issue.
4. NON-MARKETABLE PARCELS
As at 16 September 2022, based on the Company's closing share price of $0.0980, an unmarketable parcel comprised 5,103 fully paid ordinary shares. There were 126 holders holding less than a marketable parcel of shares, for a total of 319,761 fully paid ordinary shares.
5. EQUITY SECURITIES
Analysis of equity securities on issue and the number of holders by size of holding as at 16 September 2022:
| Ordinary Shares | |||||
|---|---|---|---|---|---|
| Number of | Number of | ||||
| Range | holders | securities | % | ||
| 1 | - | 1,000 | 33 | 6,632 | 0.01 |
| 1,001 | - | 5,000 | 92 | 308,029 | 0.55 |
| 5,001 | - | 10,000 | 100 | 872,896 | 1.55 |
| 10,001 | - | 100,000 | 264 | 11,032,884 | 19.60 |
| 100,001 | and over | 103 | 44,070,711 | 78.29 | |
| Total | 592 | 56,291,152 | 100.00 |
ADDITIONAL ASX INFORMATION
Unlisted options exercisable at $0.20 on or before 5 July 2026
| Range | Number ofNumber ofholders | %securities | ||
|---|---|---|---|---|
| 1 | - | 1,000 | - | -- |
| 1,001 | - | 5,000 | - | -- |
| 5,001 | - | 10,000 | - | -- |
| 10,001 | - | 100,000 | - | -- |
| 100,001 | and over | 67,185,640 | 100.00 | |
| Total | 6 | 7,185,640100.00 |
Unlisted options exercisable at $0.25 on or before 5 July 2024
| Range | Number ofNumber of | % | ||
|---|---|---|---|---|
| holderssecurities | ||||
| 1 | - | 1,000 | -- | - |
| 1,001 | - | 5,000 | -- | - |
| 5,001 | - | 10,000 | -- | - |
| 10,001 | - | 100,000 | 6340,000 | 13.60 |
| 100,001 | and over | 42,160,000 | 86.40 | |
| Total | 102,500,000 | 100.00 |
6. UNQUOTED EQUITY SECURITY HOLDERS
As at 16 September 2022 the following classes of unquoted securities had holders with equal to or more than 20% of that class on issue:
| Unlisted options exercisable at $0.20 on or before 5 July 2026 | Interest (%) |
|---|---|
| ASIPAC GROUP PTY LTD | 23.46 |
| MOLO CAPITAL PTY LTD | 20.87 |
| JOANNE GREEN | 20.87 |
| Unlisted options exercisable at $0.25 on or before 5 July 2024 | Interest (%) |
| CANDOUR ADVISORY PTY LTD | 57.60 |
| IRX ENTERPRISES PTY LTD | 20.00 |
7. TWENTY LARGEST SHAREHOLDERS
The twenty largest holders of ordinary fully paid shares at 16 September 2022 are set out below:
| Name | Number of ordinaryshares held | %IC | |
|---|---|---|---|
| 1 | NAVARRE MINERALS LIMITED | 7,600,000 | 13.50 |
| 2 | HARBOUR VIEW CAPITAL PTY LTD | 3,350,000 | 5.95 |
| 3 | ASIPAC GROUP PTY LTD | 1,685,640 | 2.99 |
| 4 | BLACKBIRD CAPITAL PTY LTD | 1,675,000 | 2.98 |
| 5 | BRENT GRAEME PALMER | 1,675,000 | 2.98 |
| 6 | KINJUSCA PTY LTD | 1,509,838 | 2.68 |
| 7 | MR ADRIAN ALEXANDER VENUTI | 1,250,000 | 2.22 |
| 8 | FODEMO PTY LIMITED | 1,105,000 | 1.96 |
| 9 | IRONFURY PTY LTD | 945,000 | 1.68 |
| 10 | SAILORS OF SAMUI PTY LTD | 911,900 | 1.62 |
| 11 | SCINTILLA STRATEGIC INVESTMENTS LIMITED | 800,000 | 1.42 |
| 12 | BIG OAT PTY LTD | 715,000 | 1.27 |
| 13 | ZERRIN INVESTMENTS PTY LTD | 690,000 | 1.23 |
| 14 | ACTIVATED LOGIC PTY LIMITED | 590,000 | 1.05 |
| 15 | BMZ CAPITAL PTY LTD | 535,000 | 0.95 |
| 16 | CERTANE CT PTY LTD | 500,000 | 0.89 |
| 17 | MR ALAN CONIGRAVE | 500,000 | 0.89 |
| 18 | DEF6 PTY LTD | 500,000 | 0.89 |
| 19 | LUO QI PTY LTD | 500,000 | 0.89 |
| 20 | MR ANDREW PAPE + MS TARA LEE NOONAN | 430,000 | 0.76 |
| Total | 27,467,378 | 48.80 |
ADDITIONAL ASX INFORMATION
8. RESTRICTED SECURITIES
| Escrow Expiry | |||
|---|---|---|---|
| Securities | Number | Restriction Period | Date |
| Fully paid ordinary shares | 8,614,655 | 24 months from the date of officialquotation | 12 Jul 2023 |
| Fully paid ordinary shares | 6,200,000 | 12 months from the date of issue | 12 Dec 2022 |
| Options exercisable at $0.25 on orbefore 5 July 2024 | 2,500,000 | 24 months from the date of officialquotation | 12 Jul 2023 |
| Options exercisable at $0.20 on orbefore 5 July 2026 | 7,185,640 | 24 months from the date of officialquotation | 12 Jul 2023 |
| Performance Rights | 2,500,000 | 12 months from the date of issue | 23 Dec 2022 |
9. ON-MARKET BUY-BACK
There is no current on-market buy-back.
10. USE OF FUNDS
The Company confirms that since admission to the ASX on 8 July 2021, it has used its cash and assets in a form convertible to cash that it had at the time of admission in a way consistent with its business objectives.
11. MINING TENEMENT INTERESTS
Current interests in tenements held by RBX and its subsidiaries at 21 September 2022 are listed below:
Black Range Project
| Resource BaseLimited | ||||
|---|---|---|---|---|
| VictoriaTenements | TenementSize (km2) | ApplicationDate | DateGranted | |
| EL4590 | 124 | 14 February 2017 | ||
| EL007999 | 495 | 28 July 2022 | ||
| Total | 619 |
Mitre Hill Project
Mitre Hill Pty Ltd
| South AustraliaTenements | TenementSize (km2) | ApplicationDate | DateGranted |
|---|---|---|---|
| EL6708 | 809 | 28 May 2021 | 1 April 2022 |
ADDITIONAL ASX INFORMATION
Mitre Hill Pty Ltd
| VictoriaTenements | TenementSize (km2) | ApplicationDate | DateGranted |
|---|---|---|---|
| EL007640 | 490 | 23 July 2021 | 17 June 2022 |
| EL007641 | 103 | 11 June 2021 | 17 June 2022 |
| EL007646 | 28 | 22 June 2021 | 8 November 2021 |
| EL007647 | 30 | 11 June 2021 | 17 June 2022 |
| EL007888 | 6 | 2 March 2022 | |
| EL007889 | 15 | 2 March 2022 | |
| EL007891 | 6 | 2 March 2022 | |
| EL007892 | 4 | 2 March 2022 | |
| EL007893 | 9 | 2 March 2022 | |
| EL007894 | 6 | 2 March 2022 | |
| EL007895 | 13 | 2 March 2022 | |
| EL007896 | 24 | 2 March 2022 | |
| EL007897 | 44 | 2 March 2022 | |
| EL007898 | 204 | 2 March 2022 | |
| EL007899 | 353 | 2 March 2022 | |
| EL007900 | 456 | 2 March 2022 | |
| EL007982 | 500 | 21 July 2022 | |
| EL007983 | 499 | 14 July 2022 | |
| EL007984 | 233 | 14 July 2022 | |
| EL007985 | 500 | 14 July 2022 | |
| EL007986 | 498 | 14 July 2022 | |
| EL007989 | 492 | 28 July 2022 | |
| EL007990 | 257 | 28 July 2022 | |
| EL007991 | 90 | 28 July 2022 | |
| EL007992 | 242 | 28 July 2022 | |
| EL007995 | 90 | 28 July 2022 | |
| EL007993 | 439 | 11 August 2022 | |
| EL007994 | 498 | 11 August 2022 | |
| EL008002 | 84 | 11 August 2022 | |
| Total | 6,213 |