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SUPERIOR RESOURCES LIMITED Annual Report 2021
65848_rns_2021-10-31_2b207631-e23e-4a00-8a35-60c5cd1c801d.pdf
Annual Report
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ANNUAL REPORT
Corporate Directory
Directors
Peter Henry Hwang Carlos Alberto Fernicola Simon James Pooley
Corporate Secretary Carlos Alberto Fernicola
Stock Exchange ASX LIMITED ASX Code: SPQ
Company SUPERIOR RESOURCES LIMITED ABN 72 112 844 407
Registered Office
Unit 8, 61 Holdsworth Street COORPAROO QLD 4151
Principal Office Unit 8, 61 Holdsworth Street COORPAROO QLD 4151
Telephone: 07 3847 2887 Email: manager@superiorresources. com.au
Internet Address www.superiorresources.com.au
Postal Address PO Box 189 COORPAROO QLD 4151
Share Registry LINK MARKET SERVICES LIMITED Level 21, 10 Eagle Street BRISBANE QLD 4000
Postal Address Locked Bag A14 SYDNEY SOUTH NSW 1235
Telephone: 1300 554 474 Facsimile: 02 9287 0303
Email: registrars@linkmarketservices. com.au
Auditor
William Buck Level 21, 307 Queen Street BRISBANE QLD 4000
Telephone: 07 3229 5100 Facsimile: 07 3221 6027
CONTENTS
| Chairman and Managing Director's Review | 1 |
|---|---|
| Highlights | 3 |
| Review of Operations | 4 |
| Directors' Report | 14 |
| Auditor's Independence Declaration | 24 |
| Corporate Governance | 25 |
| Consolidated Statement of Profit or Loss | 26 |
| Consolidated Statement of other Comprehensive Income | 27 |
| Consolidated Statement of Financial Position | 28 |
| Consolidated Statement of Changes In Equity | 29 |
| Consolidated Statement of Cash Flows | 30 |
| Notes to the Consolidated Financial Statements | 31 |
| Directors' Declaration | 55 |
| Independent Auditor's Report | 56 |
| Shareholder Information | 60 |
| Tenement Schedule | 62 |
| Mineral Resources Statement | 63 |
Chairman and Managing Director's Review
Dear Fellow Shareholders
Welcome to your company's 2021 Annual Report.
Superior Resources has enjoyed a year of substantial growth across our project portfolio, with a tripling of our market capitalisation during fiscal 2021.
During the past year, our key focus has been on our emerging Steam Engine Gold Project in north-east Queensland, with the project showing compelling financial metrics at an early stage of defining the Mineral Resource.
Steam Engine picks up speed
In July 2020, the Board announced the start of drilling at Steam Engine, with a first phase, 2,500m RC and diamond core resource drilling program. The program aimed to support the completion of a Scoping Study and expand and upgrade the Mineral Resource at the project located 210km west of Townsville.
In September 2020, the first assays from the drilling program were announced and they showed significant gold mineralisation from both the Steam Engine and Eastern Ridge Lodes, which supported our confidence in the deposit.
With the positive results continuing at Steam Engine, in November 2020 the company launched a 3,000m, second phase RC drilling program to further expand and upgrade the Mineral Resource.
This led to December's announcement of a revised Mineral Resource Estimate, comprising 1.6 million tonnes (Mt) at 2.2 g/t gold for 112,000 oz. The 19% increase in total gold ounces was very positive, particularly amid high prices for the precious metal.
Our momentum continued into the new year, with Superior announcing spectacular results of up to 184 g/t Au from the phase two assays. Further strong results were reported in February, highlighting the project's potential.
In March 2021, Superior again upgraded Steam Engine's Mineral Resource estimate to 1.73 Mt @ 2.2 g/t Au for 122,000 oz, with a 31% increase in the JORC Measured and Indicated Resources and 9% rise in total contained gold.
A Scoping Study released in April 2021 showed a viable financial and technical case for a near-term, low capex open pit mining and toll treatment operation, based on mining 65% of the total estimated Mineral Resource to recover 70,000 oz gold.
Base-case economic modelling indicated that the project could deliver post-tax, life of mine cash flow of $24.4 million over a 21-month period of mining, based on an assumed gold price of A$2,200 per oz. At A$2,500 per oz, the post-tax cash flow is estimated to jump to $41 million.
These positive results led the company to immediately commence a Feasibility Study, along with further metallurgical test work and drilling programs aimed at expanding the Mineral Resource, including a maiden drilling program at the Dinner Creek Lode.
Importantly, Steam Engine is seen underpinning a greater Greenvale Project encompassing copper, gold and nickel, with potential to support a centralised standalone processing operation.
8,000m drilling program launched at Greenvale
Capitalising on strong market momentum and investor support, in June 2021 the Board committed to a fully funded, 8,000m drilling campaign at Greenvale, focused on Steam Engine, the Bottletree Copper Prospect and Wyandotte Copper Deposit.
Copper has captured market attention in 2021 and it is here where the Board identifies our greatest potential for value growth. Together with deep drilling at Bottletree, the company aims to deliver by calendar year-end up to two JORC compliant copper Mineral Resource estimates, one at Wyandotte and the other at the larger Cockie Creek Copper Prospect.
CHAIRMAN & MANAGING DIRECTOR'S REVIEW
Nickel has also found favour with investors thanks to the global electrification thematic. During the course of 2020, the Board initiated its nickel strategy by securing Queensland's most prospective nickel sulphide district. This area happens to be immediately adjacent to the company's Greenvale Project tenements and includes our new Dido, Phantom Creek and Arthur Range tenements.
In 2022, Superior aims to further advance its Big Mag and the new nickel tenements, which are seen as highly prospective for Voiseys Bay-style Ni-Cu-PGE magmatic sulphide ore deposit systems.
Post-balance date, on 17 September the company announced the commencement of diamond drilling at Bottletree, considered our most exciting large-scale copper prospect, and located just 5km from Steam Engine.
A two-stage, 2,300m program is planned targeting an untested core of a large, intense induced polarisation (IP) chargeability anomaly, with 3-D modelling indicates the potential for a major copper ore body.
Standout results have also continued at Steam Engine, including a near-surface intersection of 1m averaging 115.2 g/t Au.
Investor support
Superior's fully funded drilling campaign would not have been possible without the support of investors.
In July 2020, the company completed a successful $1.18 million capital raising comprising both a placement and nonrenounceable rights issue, with the funding primarily supporting Steam Engine's development.
Recently, in September 2021 the company completed an oversubscribed placement raising $1.258 million to fund a 5,000m extension to the original drilling program at Steam Engine and additional work at Bottletree.
The company thanks both longstanding and newer shareholders for their support, as we work to deliver more exciting progress from our project portfolio.
In the near term, with Steam Engine advancing rapidly both in terms of progress towards mining and expansion of its Resources, the project is showing promise as being a foundation to support the development of Greenvale's copper potential.
Copper is the main event at Greenvale. With potential access to clean and green power thanks to Genex Power's Kidston project, there is an opportunity for Superior to become a low carbon producer of the minerals needed for the world's electrification drive.
Superior has also advanced its marketing activities, with the launch of a new company website (https://www. superiorresources.com.au/) and presentations by our Managing Director to investors at resource industry and other events. Please subscribe via our homepage for the latest updates from the company.
As we look ahead to 2022, the opportunities are enormous for your company and we look forward to maximising value from successful exploration campaigns.
Finally, thanks to all our shareholders, directors, employees, contractors and all others associated with the company in what has been a positive year of advancement for the company. We look forward to further progress in the year ahead.
Carlos Fernicola Peter Hwang
Chairman Managing Director
HIGHLIGHTS
Drilling starts at Steam Engine Gold Project, 1 with spectacular results up to 184 g/t Au
8,000m drilling program launched across Greenvale Project, including expanded 2 copper, gold and nickel exploration programs
3 Investors back Superior with oversubscribed capital raisings
4 Base and precious metals prices firm as world economy recovers from COVID-19
Review of Operations
Superior Resources holds a portfolio of quality Tier 1 potential projects in North Queensland prospective for zinc-lead-silver, copper, gold, nickel-PGE and uranium.
Figure 1. Location map showing the Company's current portfolio of projects.
Mount Isa Mines Greenvale Nicholson Victor Townsville Cairns
Greenvale Project
The Greenvale Project (SPQ 100%) is highly prospective for VMS and porphyry copper, orogenic gold, Voiseys Bay style nickel-copper-PGE and zinc deposits and contains at least ten significant mineral prospects. The project is located within an area of notable economic significance, being proximal to the Kidston, Balcooma, Surveyor and Dry River South deposits and comprises the following:
| Bottletree | Potential VMS / porphyry(copper-gold) |
|---|---|
| Steam Engine Gold Deposit | High-grade orogenic lode gold(gold) |
| Big Mag | Potential magmaticNickel-Copper-PGE sulphide(nickel-copper) |
| Galah Dam | Potential porphyry / massivesulphide (copper-gold) |
| Cockie Creek | Porphyry copper-gold(copper-gold) |
| Wyandotte Copper | High-grade copper |
| Halls Reward | Cyprus style VMS(high-grade copper) |
| One Mile/One Mile Dam | VMS / massive sulphide(copper-zinc-gold) |
| Riesling | Broken Hill Style(zinc-lead-copper) |
| Lucky Creek | Lateritic Nickel-Cobalt |
Figure 1. Greenvale Project tenements and prospects shown over satellite imagery.
Steam Engine Gold Deposit
The Steam Engine Gold Deposit provides Superior with a strategic opportunity to realise signficant early cash flow, whilst also providing large scale deposit potential. This deposit contains at least two sub-parallel gold-bearing lodes, referred to as the Steam Engine Lode and the Eastern Ridge Lode. A third zone of sub-parallel mineralisation exists to the east of Eastern Ridge Lode (Dinner Creek Lode) and an area of gold mineralisation comprising multiple lodes (Southern Zone) is located between, and to the south of the Steam Engine and Eastern Ridge lodes.
The results of a Scoping Study for the mining and toll treatment of approximately 65% of the current Resource tonnes was finalised in April 2021.
The positive financial outcomes indicated by the study enabled the Company to immediately commence a Feasibility Study and mining lease application process.
Maiden drilling at the Dinner Creek Zone and Resource extension drilling at the Steam Engine Lode, totalling approximately 4,500m, commenced in June 2021.
Scoping Study and Revised Mineral Resource Estimate.
-
The Scoping Study indicates a viable financial and technical case for a near-term, low CAPEX, open pit mining and toll treatment operation (Project), based on mining 65% of the current Resource tonnage to recover 70,000 ounces Au.
-
Current total Mineral Resource comprises: 1.73 million tonnes at 2.2 g/t Au for 122,000 ounces1 , including:
-
Measured & Indicated: 850,000 tonnes @ 2.5 g/t Au (approx. 67,000 ounces)
-
Inferred: 880,000 tonnes @ 1.9 g/t Au (approx. 55,000 ounces)
-
Base-case economic modelling indicates that the Project will deliver robust financial metrics:
- post-tax LOM cash flow of A$24.2M @ A$2,200 per ounce Au, 21-month period of mining, post-tax LOM cash flow of A$41.0M @ A$2,500 per ounce Au, 24-month period of mining;
- NPV7% (post-tax): A$21.2M @ A$2,200/oz Au; A$35.9M @ A$2,500/oz Au;
- IRR (post-tax): 242% @ A$2,200/oz Au; 410% @ A$2,500/oz Au
The Scoping Study is based on the March 2021 revised Mineral Resource estimate of 1.73 million tonnes at 2.2 g/t Au for 122,000 ounces of gold, which incorporated the results of the 2020 Resource definition drilling programs. An open cut mining and toll treatment operation was selected for the base case scenario for the study. Pit optimisation and mine planning exercises resulted in pit shells which are scheduled to mine 1.1 million tonnes at 2.31 g/t Au to recover 70,000 ounces. This is equivalent to approximately 65% of the current Resource tonnage. A stand-alone gold mining and processing scenario was also examined, which highlighted a significant opportunity for substantially improved project economics in the event that the Mineral Resource is expanded.
The key financial outcomes from the Scoping Study are summarised in Table 1.
1 Total Mineral Resource estimate completed during March 2021; refer ASX Announcement dated 22 March 2021.
Table 1. Key Outcomes – Upside Scenario compared to Base Case Scenario
| Parameter | Base Case @ A$2,200 /oz | Upside Case @ A$2,500 /oz |
|---|---|---|
| Financial Summary | ||
| Overall Cash Flow (post-tax) | A$24.2M | A$41.0M |
| NPV7% (post-tax) | A$21.2M | A$35.9M |
| Internal Rate of Return (IRR) (post-tax) | 242% | 410% |
| All-in Sustaining Costs (AISC)1 | A$1,673 /oz | A$1,725 /oz |
| Payback Period | 11 months | 9 months |
| Funding | ||
| CAPEX (Pre-Production and Closure) | A$5.1M | A$5.1M |
| Funding Required2 | A$10.0M | A$9.0M |
| Return on Capital (post-tax) | 475% | 806% |
| Physical Outputs | ||
| Life of Mine (LOM) (Construction to Closure) | ~2.5 years | ~2.9 years |
| Total Ore | 1.131 Mt | 1.305 Mt |
| Ore Grade | 2.31 g/t | 2.24 g/t |
| Overall Gold Recovery | 84% | 84% |
| Gold Produced and Sold | 70,000 oz | 79,000 oz |
1 AISC calculated in accordance with the 2018 World Gold Council Updated Guidance Note
2 Includes pre-production CAPEX plus operating losses until profits are generated.
A breakeven analysis was conducted on each of the key variables, which provided the levels at which the pre-tax cash flow reduces to zero when all other parameters remain at base case levels.
Table 2. Breakeven Analysis
| Parameter | Breakeven Value |
|---|---|
| Gold Price | A$1,709 (US$1,299 @ 0.76 AUD/USD) |
| Gold Grade | 1.79 g/t |
| Gold Recovery – Steam Engine Lode Ore | 60% |
Table 3. Steam Engine Mineral Resource Estimate
A proposed site layout with the required site infrastructure in place was designed for the purpose of the Scoping Study.
Steam Engine Mineral Resource Estimate
| Classification | Cut-off Grade (g/t Au) | Tonnes | Grade (g/t Au) | Au (ounces) |
|---|---|---|---|---|
| Steam Engine (Main Zone) | ||||
| Measured | 0.5 | 240,000 | 2.6 | 20,000 |
| Indicated | 0.5 | 405,000 | 2.7 | 35,000 |
| Inferred | 0.5 | 620,000 | 2.0 | 40,000 |
| Steam Engine (Footwall Zone) | ||||
| Indicated | 0.5 | 60,000 | 1.8 | 3,000 |
| Inferred | 0.5 | 110,000 | 1.6 | 6,000 |
| Eastern Ridge | ||||
| Indicated | 0.5 | 145,000 | 2.0 | 9,000 |
| Inferred | 0.5 | 150,000 | 1.9 | 9,000 |
| TOTAL MINERAL RESOURCES @ 0.5 g/t Au cut-off (Steam Engine and Eastern Ridge Lodes) | ||||
| Measured | 240,000 | 2.6 | 20,000 | |
| Indicated | 610,000 | 2.4 | 47,000 | |
| Inferred | 880,000 | 1.9 | 55,000 | |
| TOTAL MINERAL RESOURCES | 1,730,000 | 2.2 | 122,000 |
Figure 2. Steam Engine Project conceptual site layout.
Dinner Creek Lode
Reconnaissance rock chip sampling of historically reported area of gold mineralisation during July identified a 1.2 kilometre long gossanous alteration zone located to the east of the Eastern Ridge Lode.
Rock chip samples taken from the alteration zone returned 7.6 g/t and 1.9 g/t gold, which complements historically reported rock chip assays of 4.3 g/t and 3.6 g/t gold.
The alteration zone potentially represents a newly recognised gold lode (Dinner Creek Lode) that is additional to the Steam Engine, Eastern Ridge and Southern Zone lodes. It was previously mapped by Pancontinental Resources during 1993 to 1994.
Field geological observations noted that gold-bearing rock outcrops at the Dinner Creek Lode appear to be a similar rock unit with similar alteration style to the Steam Engine Lode. The Dinner Creek Lode is notably thicker at surface compared to the Steam Engine and Eastern Creek lodes and is potentially longer in strike length.
Prior to Superior's drilling program in June, the Dinner Creek Lode had not been subjected to any modern or historical drilling, despite appearing at surface to be the longest and thickest lode zone.
Underground ore shoot system potential
Significant potential for the existence of a high-grade underground ore shoot system under the lodes was identified by the Company during the Mineral Resource re-modelling. The Company considers that such an ore shoot system is likely to be the feeder system responsible for gold mineralisation within the currently defined lodes, which in part are exposed at surface.
Figure 3. A portion of the Dinner Creek Lode zone showing mapped surface geology and recent rock chip Au assay results
Exploration Work – 2021 Drilling Programs
An 8,000m drilling campaign commenced in June 2021 with maiden drilling of the Dinner Creek Zone. The program at the Steam Engine Project currently comprises:
Dinner Creek:
13 reverse circulation (RC) holes for approximately 1,000m of drilling to confirm whether mineralised gold lode is developed at depth beneath the mapped gold-bearing lode at surface. If the results are positive, a follow up program will comprise an intense drill-out of the lode of up to 54 RC holes for 3,500m of drilling to define a maiden Mineral Resource
- Expansion of the total Mineral Resource:
- Down-dip and along-strike extension of the Steam Engine Lode – 8 RC holes for 1,275m of drilling; and
- Extension of high-grade ore shoots in Steam Engine Lode – up to 15 RC holes for approximately 2,000m of drilling.
The Company's priority objective at Steam Engine is to fasttrack the Resource expansion drilling programs. Actual drilling may be expanded, depending on assay results that are received as drilling progresses.
Wyandotte
The Wyandotte Prospect is a shallow zone of high-grade copper mineralisation, which is potentially associated with a deeper intrusion-related or porphyry system.
Historic drilling has targeted the copper mineralisation. However, there has been insufficient drilling to estimate a reportable Mineral Resource.
A technical study of the existing data was undertaken during the year in order to establish an exploration target to determine whether potential exists for expansion of the copper mineralisation. Planning of a Resource definition drilling program was also completed.
Exploration Target
The historic work that has been conducted on the mineralised zone has been determined by Superior to be sufficient to enable the estimation of an Exploration Target that meets the requirements of clauses 17 and 38 of the JORC Code 2012, ASX Listing Rules 5.7, 5.12 and 5.16 and ASX Listing Rules Guidance Note 31.
The Company has defined an Exploration Target, expressed as a tonnage and grade range2 .
Table 4. Exploration Target
| Tonnes | SG | Cu % | Cu tonnes | Range |
|---|---|---|---|---|
| 400,000 | 2.7 | 2.2% | 8,800 | Lower |
| 1,000,000 | 3.0 | 1.9% | 19,000 | Upper |
2021 Drilling Program
A total of 14 drill holes for 1,075m of drilling (30m to 150m drill hole depths) are designed to test the Exploration Target in the area of the historical drilling and also the potential for down-dip extensions of the copper mineralisation to approximately 100m vertical depth. The proposed holes will include four diamond core drill holes for up to 200m of diamond core drilling (40m to 50m depths) with the remainder being RC drill holes.
The initial 8,000m Greenvale drilling campaign contemplates the drilling of all 14 planned holes at Wyandotte for a total of 1,075m. Actual drilling may change as drilling progresses, depending on observations from recovered drill samples and assay results.
Big Mag
Big Mag (EPM26751, Twelve Mile Creek) is characterised by a regionally large high-order magnetic anomaly considered to be related to the same series of rocks as the old Greenvale nickel mine. Largely unexplored, it is prospective for magmatic nickelcobalt-copper-PGE sulphide mineralisation.
Desktop data review, land access preparations and initial exploration program planning was conducted during the year on the Big Mag Prospect as well as the greater Greenvale Project area for its potential to host magmatic nickel sulphide deposits.
Additionally, two new Exploration Permit for Minerals (EPM) applications were submitted (Dido and Arthur Range) covering substantial areas that are prospective for Voisey's Bay style magmatic nickel-copper-cobalt-PGE deposits.
The Company is progressing a target generation program on the Big Mag and Dido prospect areas. This exercise will be substantially based on high quality aerial VTEM and magnetic survey datasets.
To date, the exercise has identified several anomalous target areas, including potentially mineralised magma feeder dykes and mafic-ultramafic ovoid intrusions identified at Big Mag.
Bottletree
Bottletree is a large soil copper anomaly. Previous drilling confirmed extensive copper mineralisation at depth. The limits to this large copper mineralised system have not yet been delineated and it remains open both laterally and at depth.
Geophysical remodelling of MIMDAS IP survey data acquired over the prospect by Superior in 2018 was completed during the year. A program of four deep diamond core drill holes targeting the core of the high chargeability anomaly was planned on the basis of the remodelled IP data.
2021 Drilling Program
The planned drilling program will target the central, expected high-grade copper core of the chargeability and resistivity anomaly with up to three diamond core holes. These holes are expected to intersect the high chargeability zone at between 150m to 450m down-hole depth. A deeper and more extensive zone of the anomaly will also be targeted at between 400m and 750m (down-hole depth) with one diamond core drill hole.
The current 8,000m Greenvale drilling campaign contemplates the drilling of all four planned holes at Bottletree for a total of 2,100 metres. Actual drilling may change as drilling progresses, depending on observations from recovered core and assay results.
2 Refer ASX Announcement dated 15 June 2021 for further information regarding the Exploration Target.
CAUTIONARY STATEMENT (JORC, 2012)
Exploration Target: The Wyandotte Exploration Target has been calculated using historic drill hole and assay information by a Competent Person. The Exploration Target is reported in a form comprising a tonnage and copper mineralisation grade range. The Exploration Target does not constitute a Mineral Resource or Ore Reserve. The potential quantity and grade expressed by the Exploration Target is conceptual in nature as there has been insufficient exploration information to estimate a Mineral Resource. Furthermore, it is uncertain whether further exploration work will result in the estimation of a Mineral Resource.
Figure 4. 3-D modelled IP high chargeability and low resistivity iso-surfaces highlighting the Bottletree IP anomaly, viewed looking southwest. Proposed 2021 holes also shown.
Cockie Creek
Cockie Creek is a large potential porphyry copper-gold mineralised system that extends for over 1.2 kilometres. Two large chargeability anomalies identified beneath the shallower copper mineralisation are yet to be drill tested. Modelling has opened up the potential of the area to host a significant porphyry copper deposit.
Nicholson Project
The Nicholson Project (EPM15670 and EPM18203), together with the Victor Project is located northwest of Mount Isa and provides the Company with opportunities to discover similar Mount Isa style zinc-lead-copper deposits with a portfolio of drill-ready targets. The projects are located in the Carpentaria Zinc Province, which contains 20% of the world's zinc resource inventory.
In the region immediately surrounding Mount Isa, rocks prospective for Mount Isa Style deposits are exposed at or close to surface and as a consequence, have been intensely explored. In contrast, the Company's Nicholson and Victor projects are located in an equally prospective region that is relatively unexplored. These are the most likely areas within Queensland to make the next Mount Isa discovery. Exploration work completed to date has identified at least eight large high priority geophysical targets, each of which have potential to be caused by Tier 1-sized stratiform base metal deposits.
In addition, the project area also includes the Walford Creek West Zinc-Lead-Copper-Cobalt Prospect and the Hedleys Uranium Prospect.
Nicholson Project
| 8+ Tier 1 potential EM targets Mount Isa Style | (lead-zinc-silver) |
|---|---|
| Walford Creek West | Mount Isa Style(sulphide copper-leadzinc-cobalt) |
| Hedleys Uranium | Uranium |
Figure 5. Nicholson Project tenements and key prospect locations overlaid on regional geology
Hedleys Uranium
Hedleys Uranium is a strong, localised airborne uranium radiometric anomaly (Figure 6) associated with a major fault (Figure 7). The anomaly has previously been considered to be an anomaly related to radon gas dissolved in spring waters and has not previously been drilled.
Superior's work indicates that the source of the anomaly lies approximately 100 to 150m above the major unconformity between the sandstones and siltstones of the South Nicholson Group and the underlying carbonaceous siltstones of the Doomadgee Formation and the Mt Les Siltstone (Figure 8).
A number of major uranium deposits in the Athabasca Basin of Canada and the Alligator River Region of Australia lie on or close to similar unconformities (between Proterozoic reduced crystalline rocks and overlying sandstones). Hedleys Uranium therefore warrants further work.
Figure 6. Image of uranium airborne radiometrics showing the Hedleys Uranium Anomaly (bottom) compared with the Valhalla Uranium Deposit at the same scale. Valhalla has resources of 25,000 to 30,000 tonnes of contained U3 O8.
Figure 7. Satellite image of Hedleys Uranium showing the association of the uranium anomaly with a major fault. Note the position of the section in Figure 8.
Figure 8. Hypothetical section through Hedleys Uranium showing the possible location of the source of the uranium which may
have caused the airborne uranium anomaly. Refer Figure 7 for the section location.
Victor Project
The Victor Project comprises four exploration permits for minerals covering a total area of 438 sq km. Work conducted by the Company indicates that stratigraphy prospective for the discovery of Mount Isa Style deposits is likely to be present under moderate sedimentary cover within the Project area. This area is relatively unexplored.
Superior's exploration strategy is based on the mechanism of geochemical "leakage" of key metals (lead, zinc and copper) from a deeper Proterozoic mineralised source into the younger sediments overlying the Proterozoic, which may be one of the best methods of targeting prospective areas for Mount Isa style deposits.
Victor Project Mount Isa Style
(lead-zinc-silver)
Kingfisher Copper-cobalt
Figure 9. Diagrammatic representation of the 'leakage' concept.
No work was carried out during the year on the Nicholson and Victor Projects while the Company focussed on the development of the Greenvale Project.
CONTENTS
| Directors' Report | 143 |
|---|---|
| Auditor's Independence Declaration | 2413 |
| Corporate Governance | 2514 |
| Consolidated Statement of Profit or Loss | 2615 |
| Consolidated Statement of Other Comprehensive Income | 2716 |
| Consolidated Statement of Financial Position | 2817 |
| Consolidated Statement of Changes in Equity | 2918 |
| Consolidated Statement of Cash Flows | 3019 |
| Notes to the Consolidated Financial Statements | 3120 |
| Directors' Declaration | 5544 |
| Independent Auditor's Report | 5645 |
| Shareholder Information | 60 |
| Tenement Schedule | 62 |
| Mineral Resources Statement | 63 |
Company Background
Superior Resources Limited (Superior or the Company) is a Brisbane based ASX-listed company (ASX:SPQ) exploring for lead-zinc-silver, copper, gold and nickel sulphide deposits in Australia.
Superior currently holds a number of exploration permits and exploration permit applications in northern Queensland.
In northwest Queensland, exploration for Mount Isa style deposits has resulted in Superior holding a firstclass portfolio of properties for these deposits. Superior has an expanding portfolio of volcanogenic massive sulphide (VMS) and porphyry copper-gold, gold and magmatic nickel sulphide properties in the Greenvale area of north eastern Queensland with Mineral Resources defined for two properties.
Corporate Philosophy
Superior's aim is to increase shareholder value through the discovery, development and acquisition of significant mineral deposits and the Board maintains a strategy consistent with this aim.
Superior targets areas with potential for larger high-grade deposits of copper, lead-zinc-silver, gold and nickel sulphide. These include the large Mount Isa style projects in northwest Queensland and the high grade VMS deposits in northeast Queensland. The Company also holds a developing portfolio of gold, nickel, cobalt and uranium projects within its northwest and northeast Queensland properties.
More recently, Superior has commenced a program of assessment and development of its 100%-owned Steam Engine Gold Deposit and three advanced copper prospects at Greenvale.
Superior has adopted a conceptual approach in its search for Mount Isa style deposits which identifies permissive environments for these deposits and then explores these areas. Models, derived from existing large mineral deposits, are an integral part of this approach. Once a permissive environment is identified, Superior uses advanced exploration methods (particularly geophysics) with modern computer modelling of data to identify targets for further testing.
While a conceptual approach is also appropriate to a search for Proterozoic gold and VMS copper-gold deposits, Superior has adopted the more traditional approach in its search for these types of deposits by exploring around existing indications of mineralisation.
Your Directors present their report on the consolidated entity (referred to in this Report as the Group) consisting of Superior Resources Limited and the entities it controlled during the year ended 30 June 2021 (Report).
DIRECTORS
The following persons were Directors of the Company during the year and up to the date of this Report:
P H Hwang Managing Director C A Fernicola Chairman and Company Secretary S J Pooley Non-Executive Director
PRINCIPAL ACTIVITIES
During the year the principal activity of the Group was the continued evaluation and expansion of the Steam Engine Gold Deposit. The Group also continued exploration for copper-gold and magmatic nickel sulphide deposits in northern Queensland, Australia. There were no significant changes in the nature of the Company's activities during the year and no significant changes in activity are anticipated.
DIVIDENDS
There were no dividends paid to members during the financial year (2020: $nil).
REVIEW OF OPERATIONS
The loss after tax for the year was $569,583 (2020: loss of $461,100).
Coronavirus (Covid19) Impact
The impact of the Coronavirus (COVID-19) pandemic up to 30 June 2021 has been financially positive for the Group. The Queensland State and Australian Federal Governments have provided financial support by suspending the requirement to pay tenement rental fees and providing cash support (Jobkeeper and Cash Flow Boost) for continued employment of staff.
Summary
The principal activity of the Group during the full year period was exploration for gold, copper-gold and nickel-copper-PGE deposits in northern Queensland, Australia. There were no significant changes in the nature of the Group's activities during the reporting period.
- Greenvale Project (VMS and porphyry copper, gold and nickel-cobalt)
- o Developed a revised Mineral Resource Estimate on the Steam Engine Gold Deposit.
- o Commenced and completed two drilling programs at the Steam Engine Gold Deposit (Stage 1 and Stage 2 drilling programs).
- o Upgraded the Steam Engine Gold Deposit Mineral Resource Estimate, by 30% to 1.73 million tonnes @ 2.2 g/t Au for 122,000 ounces, comprising1:
- Measured & Indicated: 850,000 tonnes @ 2.5 g/t Au (approx. 67,000 ounces); and
- Inferred: 880,000 tonnes @ 1.9 g/t Au (approx. 55,000 ounces).
- o Commenced and completed a Scoping Study on the Steam Engine Gold Deposit on the basis of a mining and toll treatment operation.
- o On the basis of a highly positive Scoping Study on the Steam Engine Gold Deposit, the Group commenced a Feasibility Study to further define the economic models for the mining of the deposit.
1 Refer to ASX announcement dated 27 April 2021
REVIEW OF OPERATIONS – (continued)
- o Conducted a detailed field mapping and sampling program on the Dinner Creek Gold Lode at the Steam Engine Gold Deposit.
- o Prepared an 8,000m reverse circulation and diamond core drilling program on the Steam Engine Gold Deposit, Bottletree Copper Deposit and Wyandotte Copper Deposit.
- o Completed modelling of an Exploration Target on the Wyandotte Copper Deposit.
- o Commenced modelling of a revised Mineral Resource Estimate for the Cockie Creek Copper Deposit.
- o Conducted 3-D re-modelling of Induced Polarisation (IP) geophysical survey data acquired over the Bottletree Copper Prospect.
- o Conducted data review and geophysical modelling of magnetic and VTEM survey data at the Big Mag, Dido and Phantom Creek nickel-copper-PGE prospects.
- o Conducted a detailed field mapping and sampling program at the Halls Reward copper and nickel prospect area.
- o Applied for three new exploration permits for minerals (EPMs) (Dido, Phantom Creek and Arthur Range).
CORPORATE and COMMERCIAL
• The Group completed a capital raising campaign which commenced during the second calendar Quarter of 2020 comprising a two-tranche placement and a non-renounceable rights issue.
Allotment and issue of 122,176,641 shares and 40,725,515 options was completed on 14 July 2020. On 9 July 2020, 37,270,937 options were issued in relation to the placement of 111,812,810 shares on 27 May 2020.
The Lead Manager of the share placement and rights issue received 15,000,000 options on 9 July 2020.
- During the year, 59,704,432 options with an exercise price of $0.006 were exercised. This raised $357,876.
- The Company completed a capital raising via a private placement to sophisticated investors on 17 December 2020. Under the capital raising, 177,840,000 fully paid ordinary shares in the Company were issued at an issue price of $0.0125 per new share to raise $2,223,000. A further 10,000,000 shares may be issued to certain Directors to raise $125,000, subject to shareholder approval.
CASH CONSERVATION
The Company's Board continues to maintain the current cash conservation measures with respect to the Company's head office and administration.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There are no significant changes in the state of affairs of the Group during the financial year.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
Since the end of the financial year, the Group raised $1,258,090 (before costs) through the issue of 119,818,096 new shares at a value of $0.0105 per share. The new shares will be issued to sophisticated investors under s.708(8) of the Corporations Act 2001 (Cth) (Corporations Act) and ASX Listing Rule 7.1A.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR – (continued)
Other than the above, no matters or circumstances have arisen since 30 June 2021 that have significantly affected, or may significantly affect:
- (a) the Group's operations in future financial years, or
- (b) the results of those operations in future financial years, or
- (c) the Group's state of affairs in future financial years.
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has been financially positive for the Group up to 30 June 2021, it is not practical to estimate the potential impact, positive or negative, after the reporting date. The situation is continually developing and is subject to measures imposed by the Australian State and Federal Governments, such as maintaining social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS FROM OPERATIONS
The Group is currently conducting a Feasibility Study on the prospects for mining and processing of gold ore from the Steam Engine Gold Deposit. Based on the highly positive results of the recent Scoping Study and the general gold price forecasts, the Board considers that there are reasonable prospects of development of the deposit within the next two years.
The likelihood of realising forward gold prices is difficult. The actual price of gold at any point in the future depends on numerous foreseeable and unforeseeable factors.
Results from exploration activities are difficult to predict in advance and are uncertain.
REGULATORY MATTERS
The Group's operations are subject to substantial and significant regulatory control under various Queensland State and Commonwealth legislation. Significant matters that are regulated include mining, environmental, native title and real property. No matters of material concern have arisen in relation to regulatory control up to the date of this Report.
INFORMATION ON DIRECTORS
Peter Henry Hwang B.Sc.(Hons), LLB, MAIG, MGSA, MQLS
Managing Director.
Experience and expertise
Mr Hwang has over 10 years' experience as a gold, base metals and diamond exploration geologist and 20 years' experience as a solicitor practicing in Queensland and national law firms specialising in resources, commercial, M&A, infrastructure and native title law. He has extensive experience in advising on the development and permitting of mining and major infrastructure projects, mining transactions as well as resource sector mergers and acquisitions transactions.
Other current directorships None.
Former directorships in last 3 years None.
Special responsibilities Managing Director.
Interests in SPQ shares and options 46,796,621 ordinary shares. 3,899,717 options over unissued ordinary shares.
INFORMATION ON DIRECTORS – (continued)
Carlos Alberto Fernicola B.Com., FCA, F Fin FCIS FGIA CTA Graduate Diploma Advanced Accounting, Graduate Diploma Applied Finance and Investments, Graduate Diploma Corporate Governance and Graduate Certificate Financial Planning. Chairman.
Experience and expertise
Mr Fernicola is the Principal of Carlos Fernicola & Co., Chartered Accountants. Mr Fernicola is a Fellow of the Institute of Chartered Accountants in Australia, Fellow of the Governance Institute of Australia and Fellow of the Financial Services Institute of Australia. He has over 30 years of experience in accounting, taxation, audit and the financial services industry.
Other current directorships None.
Former directorships in last 3 years None.
Special responsibilities Chairman and Company Secretary. Member of the Audit Committee.
Interests in SPQ shares and options 51,999,998 ordinary shares.
Simon James Pooley B.Sc., MAIM, GAICD
Non-Executive Director.
Experience and expertise
Mr Pooley has 30 years' experience in mine development, operations and mineral exploration. He has held senior industry positions that have demonstrated leadership and management of base and precious metals exploration and mining operations, development of project assessment types including definitive and bankable feasibility studies and their conversion into mining operations and managed teams undertaking exploration evaluations and valuations, project evaluation, resource estimation and exploration management.
Other current directorships None.
Former directorships in last 3 years None.
Special responsibilities Member of the Audit Committee.
Interests in SPQ shares and options Nil.
COMPANY SECRETARY
The Company Secretary is Mr Carlos Alberto Fernicola, B.Com, FCA, FFin FCIS FGIA, CTA. Graduate Diploma Advanced Accounting, Graduate Diploma Applied Finance and Investments, Graduate Diploma Corporate Governance and Graduate Certificate Financial Planning.
Mr Fernicola was appointed to the position of Company Secretary on 11 November 2010.
MEETINGS OF DIRECTORS
The numbers of meetings of the company's Board of Directors held during the year ended 30 June 2021, and the numbers of meetings attended by each director were:
Board
| Director | MeetingsEligible to attend | Meetingsattended |
|---|---|---|
| PH Hwang | 5 | 5 |
| CA Fernicola | 5 | 5 |
| SJ Pooley | 5 | 5 |
Audit Committee
| Director | Meetings | Meetings |
|---|---|---|
| eligible to attend | attended | |
| CA Fernicola | 2 | 2 |
| SJ Pooley | 2 | 2 |
REMUNERATION REPORT (AUDITED)
The Directors are pleased to present your Group's 2021 remuneration report which sets out remuneration information for Superior Resources Limited's non-executive Directors, executive Directors, and other key management personnel.
The report contains the following sections:
- (a) Directors and key management personnel disclosed in this Report
- (b) Remuneration governance
- (c) Use of remuneration consultants
- (d) Executive remuneration policy and framework
- (e) Relationship between remuneration and Superior Resources Limited's performance
- (f) Non-executive director remuneration policy
- (g) Voting and comments made at the company's 2020 Annual General Meeting
- (h) Details of remuneration
- (i) Service agreements
- (j) Details of share-based compensation and bonuses
- (k) Equity instruments held by key management personnel
- (l) Loans to key management personnel
- (m) Other transactions with key management personnel
(a) Directors and key management personnel disclosed in this Report
Non-executive and executive Directors
- P H Hwang
- C A Fernicola
- S J Pooley
- K J Harvey (retired 28 November 2019)
Other key management personnel Name Position C A Fernicola Company Secretary
(b) Remuneration governance
The Board is responsible for:
- the over-arching executive remuneration framework;
- the operation of any established incentive plans which may apply to the executive team, including key performance indicators and performance hurdles;
- remuneration levels of executive Directors and other key management personnel; and
- non-executive Directors' fees.
The objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the long-term interests of the Group.
(c) Use of remuneration consultants
The Group has not engaged the services of any remuneration consultants during the current or prior financial years.
(d) Executive remuneration policy and framework
The combination of base pay and superannuation make up the executive Directors' total remuneration. Base pay for the executive Directors is reviewed annually to ensure the executives' pay is competitive with the market. The Board ensures that executive reward satisfies the following key criteria for good reward governance practices:
- competitiveness and reasonableness;
- acceptability to shareholders;
- transparency; and
- capital management.
REMUNERATION REPORT (AUDITED) – (continued)
Long-term incentives
In the event that the Board of Directors proposes to establish any long-term incentives for executive Directors, the Board will obtain approval at a general meeting of shareholders.
Any issue of options to executive Directors is designed to focus executives on delivering long-term shareholder returns.
(e) Relationship between remuneration and Superior Resources Limited's performance
There is no direct link between remuneration, company performance and shareholder wealth. The Group's activities focus on the objective of delivery of long-term shareholder returns.
(f) Non-executive director remuneration policy
Fees and payments to non-executive Directors reflect the demands which are made on, and the responsibilities of those Directors. Non-executive Directors' fees and payments are reviewed annually by the Board.
Non-executive Directors' fees are determined within an aggregate Directors' fee pool limit, which is periodically recommended for approval by shareholders. The maximum total pool currently stands at $250,000 in aggregate plus statutory superannuation.
(g) Voting and comments made at the company's 2020 Annual General Meeting
The 2020 remuneration report was passed by a show of hands and had less than 25% proxy votes cast against it. The company did not receive any feedback at the AGM or throughout the year on its remuneration practices.
(h) Details of remuneration
The following tables show details of the remuneration entitled to be received by the Directors and the key management personnel of the Group for the current and previous financial year.
Consistent with the Board's cash conservation measures that applied to the period up to February 2021, the Directors received between 50% and 65% of their respective remuneration entitlement during the reporting period.
REMUNERATION REPORT (AUDITED) – (continued)
| 2021 | Short-termbenefits | Postemploymentbenefits | Sharebasedpayments | |
|---|---|---|---|---|
| Name | Cash salaryand fees$ | Superannuation$ | Options$ | Total$ |
| Non-executive DirectorsC A FernicolaS J PooleyOther key management | 34,00026,484 | -2,516 | -- | 34,00029,000 |
| personnelC A Fernicola (CompanySecretary) | 29,000 | - | - | 29,000 |
| Sub-total non-executiveDirectors and other keymanagement personnel | 89,484 | 2,516 | - | 92,000 |
| Executive DirectorsP H Hwang - ManagingDirector | 223,083 | 21,193 | - | 244,276 |
| Totals | 312,567 | 23,709 | - | 336,276 |
| 2020 | Short-termbenefits | Postemploymentbenefits | Sharebasedpayments | |
|---|---|---|---|---|
| Name | Cash salaryand fees$ | Superannuation$ | Options$ | Total$ |
| Non-executive DirectorsC A FernicolaK J Harvey1S J Pooley2Other key management | 24,00021,91812,785 | -2,0821,215 | -- | 24,00024,00014,000 |
| personnelC A Fernicola (CompanySecretary) | 24,000 | - | - | 24,000 |
| Sub-total non-executiveDirectors and other keymanagement personnel | 82,703 | 3,297 | - | 86,000 |
| Executive DirectorsP H Hwang - ManagingDirector | 211,000 | 20,045 | - | 231,045 |
| Totals | 293,703 | 23,342 | - | 317,045 |
1 Retired 28 November 2019
2 Appointed 28 November 2019
REMUNERATION REPORT (AUDITED) – (continued)
(i) Service agreements
Remuneration and other terms of employment of the Managing Director are formalised in an agreement. The major provisions of the agreement relating to remuneration are set out below.
P H Hwang, Managing Director
- Term of employment agreement indefinite commencing 22 April 2013.
- Base salary was reviewed in February 2021 and set at $240,000 plus superannuation and is to be reviewed at least annually by the Board.
- Payment of a termination benefit on early termination by the Company, other than for gross misconduct, equal to six months remuneration.
- Agreement may be terminated by employee giving six months' notice in writing.
(j) Details of share-based compensation and bonuses
There have been no share-based compensation and bonuses affecting remuneration in the current or a future reporting period.
(k) Equity instruments held by key management personnel
The tables below show the number of shares and options in the company that were held during the financial year by key management personnel of the Group, including their close family members and entities related to them.
Ordinary Shares
| Name | Balance at thestart of theyear | Received onexercisingoptions | Net purchased/ (sold) | Other changes | Balance at theend of the year |
|---|---|---|---|---|---|
| P H Hwang | 46,796,621 | - | - | - | 46,796,621 |
| C A Fernicola | 48,000,001 | 3,999,997 | - | - | 51,999,998 |
| S J Pooley | 1,250,000 | - | (1,250,000) | - | - |
Options Over Unissued Ordinary Shares
| Name | Balance at thestart of theyear | OptionsExercised | Net purchased/ (sold) | Other changes | Balance at theend of the year |
|---|---|---|---|---|---|
| P H Hwang | 3,899,717 | - | - | - | 3,899,717 |
| C A Fernicola | 3,999,997 | (3,999,997) | - | - | - |
| S J Pooley | - | - | - | - | - |
All options are vested and exercisable.
(l) Loans to key management personnel
There were no loans to key management personnel during the financial period.
(m) Other transactions with key management personnel and/or their related parties
There were no other transactions with key management personnel or their related parties.
End of Remuneration Report
SHARES UNDER OPTION
92,996,452 options were issued during the year with an exercise price of $0.006 and an expiry date of 31 December 2021.
During the year and since year end, there were 59,704,432 shares issued on the exercise of options granted.
As at the date of this Report, a total of 86,419,683 options are on issue.
INSURANCE OF OFFICERS
During the year the Group paid a premium of $19,778 to insure the Directors and Secretary of the Company.
The risks insured include pecuniary orders and legal costs that may result from civil or criminal proceedings that may be brought against the officers in their capacity as officers and any other payments arising in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to any Court under section 237 of the Corporations Act 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.
No proceedings have been brought or intervened in or on behalf of the Company with leave of the Court under section 237 of the Corporations Act.
NON-AUDIT SERVICES
The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's expertise and experience with the Group are important.
Details of amounts paid or payable to the auditor for audit services provided during the year are outlined in Note 20 to the financial statements. No non-audit services were provided during the year.
AUDITOR'S INDEPENDENCE DECLARATION
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act is set out on page 13.
AUDITOR
The auditor of the Group is William Buck (Qld).
This Report is made in accordance with a resolution of the Directors.
CA Fernicola Chairman
Brisbane, 27th day of September 2021
AUDITOR'S INDEPENDENCE DECLARATION
AUDITOR'S INDEPENDENCE DECLARATION UNDER S 307C OF THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF SUPERIOR RESOURCES LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2021, there have been:
- no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
- no contraventions of any applicable code of professional conduct in relation to the audit.
William Buck (Qld) ABN 21 559 713 106
Junaide Latif Director
Brisbane, 27 September 2021
CORPORATE GOVERNANCE
Corporate Governance practices that form the basis of a comprehensive system of control and accountability for the administration of the Group have been adopted. The Board is committed to administering the policies and procedures with openness and integrity, pursuing the true spirit of corporate governance commensurate with the Company's needs.
The Company has reviewed its corporate governance practices against the Corporate Governance Principles and Recommendations (4th edition) published by the ASX Corporate Governance Council.
A description of the Company's current corporate governance practices is set out in the Company's corporate governance statement. This statement is available on the Company's website and can be viewed at www.superiorresources.com.au.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 30 JUNE 2021
| Note | 2021 | 2020 | |
|---|---|---|---|
| $ | $ | ||
| Operator fees received | - | 152,345 | |
| Other income | 8 | 101,862 | 42,916 |
| Accounting and audit fees | (26,116) | (27,810) | |
| Administration expenses | (527,967) | (417,357) | |
| Depreciation and amortisation | (3,790) | (2,352) | |
| Loss on disposal of Carnaby Resources Shares | - | (37,802) | |
| Office rent and outgoings | (15,427) | (15,125) | |
| Tenement expenditure written-off | 14 | (98,145) | (155,915) |
| Loss before income tax | (569,583) | (461,100) | |
| Income tax (expense) / benefit | 9 | - | - |
| Loss after tax for the year from continuingoperations attributable to owners of SuperiorResources Limited | (569,583) | (461,100) | |
| Earnings (loss) per share | Cents | Cents | |
| Basic earnings (loss) per share | 25 | (0.04) | (0.06) |
| Diluted earnings (loss) per share | 25 | (0.04) | (0.06) |
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2021
| Note | 2021$ | 2020$ | |
|---|---|---|---|
| Loss for the year from continuing operationsattributable to owners of Superior Resources Limited | (569,583) | (461,100) | |
| Items that will not be reclassified subsequently to profit orloss: | |||
| Fair value gains / (losses) on financial assets at fair valuethrough other comprehensive income, net of tax | 28,574 | (114,497) | |
| Other comprehensive income for the year, net of tax | 28,574 | (114,497) | |
| Total comprehensive income / (loss) for the year, netof tax, attributable to owners of Superior ResourcesLimited | (541,009) | (575,597) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021
| Note | 2021$ | 2020$ | |
|---|---|---|---|
| ASSETS | |||
| Current Assets | |||
| Cash and cash equivalents | 10 | 1,715,798 | 1,004,061 |
| Trade and other receivables | 11 | 46,798 | 36,851 |
| Financial assets | 12 | 40,059 | 11,485 |
| Total Current Assets | 1,802,655 | 1,052,397 | |
| Non-Current Assets | |||
| Plant and equipment | 13 | 13,018 | 8,382 |
| Exploration expenditure | 14 | 6,065,340 | 4,457,027 |
| Other | 15 | 33,500 | 32,500 |
| Total Non-Current Assets | 6,111,858 | 4,497,909 | |
| Total Assets | 7,914,513 | 5,550,306 | |
| LIABILITIES | |||
| Current Liabilities | |||
| Payables | 16 | 665,857 | 532,784 |
| Total Current Liabilities | 665,857 | 532,784 | |
| Non-Current Liabilities | |||
| Payables | 16 | - | 44,666 |
| Total Non-Current Liabilities | - | 44,666 | |
| Total Liabilities | 665,857 | 577,450 | |
| Net Assets | 7,248,656 | 4,972,856 | |
| Equity | |||
| Contributed equity | 17 | 14,960,308 | 12,202,019 |
| Reserves | 18 | (3,123,316) | (3,210,410) |
| Accumulated losses | (4,588,336) | (4,018,753) | |
| Total Equity | 7,248,656 | 4,972,856 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2021
| Issuedcapital | Reserves | Accumulatedlosses | Total | |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| Balance at 30 June 2020 | 12,202,019 | (3,210,410) | (4,018,753) | 4,972,856 |
| Loss for the year | - | - | (569,583) | (569,583) |
| Other comprehensive income / (loss) | - | 28,574 | - | 28,574 |
| Total comprehensive income forthe year | - | 28,574 | (569,583) | (541,009) |
| Transactions with owners in theircapacity as owners: | ||||
| Contributions of equity, net oftransaction costs | 2,758,289 | 58,520 | - | 2,816,809 |
| Balance at 30 June 2021 | 14,960,308 | (3,123,316) | (4,588,336) | 7,248,656 |
| Balance at 30 June 2019 | 10,975,213 | (3,095,913) | (3,557,653) | 4,321,647 |
| Loss for the year | - | - | (461,100) | (461,100) |
| Other comprehensive income / (loss) | - | (114,497) | - | (114,497) |
| Total comprehensive income forthe year | - | (114,497) | (461,100) | (575,597) |
| Transactions with owners in theircapacity as owners: | ||||
| Contributions of equity, net of | ||||
| transaction costs | 1,226,806 | - | - | 1,226,806 |
| Balance at 30 June 2020 | 12,202,019 | (3,210,410) | (4,018,753) | 4,972,856 |
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021
| Note | 2021$ | 2020$ | |
|---|---|---|---|
| Cash flows from operating activities | |||
| Receipts from customers (GST inclusive) | - | 156,809 | |
| Receipts from Government | 101,725 | 42,831 | |
| Payments to suppliers and employees (GSTinclusive) | (592,199) | (455,339) | |
| Interest received | 137 | 85 | |
| Net cash inflow (outflow) from operatingactivities | 24 | (490,337) | (255,614) |
| Cash flows from investing activities | |||
| Proceeds of disposal of investments | - | 190,683 | |
| Payments for exploration expenditure | (1,558,254) | (306,480) | |
| Payments for plant and equipment | (8,426) | (1,404) | |
| Payments of security deposits | (1,000) | (4,000) | |
| Net cash inflow (outflow) from investingactivities | (1,567,680) | (121,201) | |
| Cash flows from financing activities | |||
| Share application moneys received | 3,270 | 50,325 | |
| Proceeds on issue of shares | 2,922,081 | 1,272,588 | |
| Payment of capital raising costs | (155,597) | (45,782) | |
| Net cash inflow (outflow) from financingactivities | 2,769,754 | 1,277,131 | |
| Net increase (decrease) in cash held | 711,737 | 900,316 | |
| Cash at beginning of financial year | 1,004,061 | 103,745 | |
| Cash at the end of financial year | 10 | 1,715,798 | 1,004,061 |
1. General Information
Superior Resources Limited (Company) is a company limited by shares, incorporated, and domiciled in Australia. The Company's shares are listed on the Australian Securities Exchange.
The registered office and principal place of business of the Company is:
Unit 8, 61 Holdsworth Street Coorparoo QLD 4151 Ph 07 3847 2887
The financial statements are for the Group consisting of Superior Resources Limited and its subsidiaries (the consolidated entity or the Group).
2. Significant Accounting Policies
(a) Statement of compliance
These financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act, Australian Accounting Standards and Interpretations of the Australian Accounting Standard Board and in compliance with International Financial Reporting Standards ('IFRS') as issued by the International Accounting Standards Board. The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise.
The financial statements were authorised for issue by the Directors on 27 September 2021.
(b) Basis of preparation
Except for cash flow information, the financial statements have been prepared on an accrual basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
(c) Principles of consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of the Parent (Superior Resources Limited) and all of the subsidiaries (including any structured entities). Subsidiaries are entities the Parent controls. The Parent controls an entity when it 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 over the entity. A list of the subsidiaries or controlled operations is provided in Note 26.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions between Group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group.
The acquisition method of accounting is used to account for business combinations by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss, statement of other comprehensive income, statement of changes in equity and statement of financial position, respectively.
2. Significant Accounting Policies (continued)
(d) Revenue recognition
Revenue is recognised to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for the goods or services. Revenue is recognised when the performance obligations of a contract are satisfied.
Interest revenue is recognised using the effective interest rate method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue is recognised when it is received or when the right to receive payment is established.
All revenue is stated net of the amount of goods and services tax (GST).
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with the costs that they are intended to compensate. Government grants are recognised when there are reasonable assurance that the funding conditions will be complied and the grants will be received.
(e) Income Tax
The income tax expense or revenue for the period is the tax payable on the current period's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the assets and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
(f) Cash and cash equivalents
For the consolidated statement of cash flows presentation purposes, cash and cash equivalents includes cash on hand and 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, and bank overdrafts.
2. Significant Accounting Policies (continued)
(g) Financial instruments
Initial Recognition and Measurement
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument. Financial assets will be recognised on the date that the Group becomes contractually bound to the relevant asset purchase or sale transaction (i.e. trade date accounting is adopted).
Financial instruments (except for trade receivables) are initially measured at fair value plus transaction costs, except where the instrument is classified "at fair value through profit or loss", in which case transaction costs are expensed to profit or loss immediately. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.
Trade receivables are initially measured at the transaction price if the trade receivables do not contain a significant financing component or if the practical expedient was applied as specified in paragraph 63 of AASB 15: Revenue from Contracts with Customers.
Classification and Subsequent Measurement
Financial assets
Financial assets are subsequently measured at:
- amortised cost;
- fair value through other comprehensive income; or
- fair value through profit and loss.
Measurement is on the basis of the two primary criteria, being:
- the contractual cash flow characteristics of the financial asset; and
- the business model for managing the financial assets.
A financial asset that meets the following conditions is subsequently measured at amortised cost:
- the financial asset is managed solely to collect contractual cash flows; and
- the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates.
A financial asset that meets the following conditions is subsequently measured at fair value through other comprehensive income:
- the contractual terms within the financial asset give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding on specified dates; and
- the business model for managing the financial assets comprises both contractual cash flows collection and the selling of the financial asset.
By default, all other financial assets that do not meet the measurement conditions of amortised cost and fair value through other comprehensive income are subsequently measured at fair value through profit or loss.
2. Significant Accounting Policies (continued)
Financial liabilities
Financial liabilities are subsequently measured at:
- amortised cost; or
- fair value through profit and loss.
A financial liability is measured at fair value through profit and loss if the financial liability is:
- a contingent consideration of an acquirer in a business combination to which AASB 3 Business Combinations applies;
- held for trading; or
- initially designated as at fair value through profit or loss.
All other financial liabilities are subsequently measured at amortised cost using the effective interest method.
Equity instruments
At initial recognition, as long as the equity instrument is not held for trading and not a contingent consideration recognised by an acquirer in a business combination to which AASB 3 applies, the Group made an irrevocable election to measure any subsequent changes in fair value of the equity instruments in other comprehensive income, while the dividend revenue received on underlying equity instruments investment will still be recognised in profit or loss.
Regular way purchases and sales of financial assets are recognised and derecognised at settlement date in accordance with the Group's accounting policy.
Derecognition
Derecognition refers to the removal of a previously recognised financial asset or financial liability from the statement of financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (i.e. when the obligation in the contract is discharged, cancelled or expires). An exchange of an existing financial liability for a new one with substantially modified terms or a substantial modification to the terms of a financial liability, is treated as an extinguishment of the existing liability and recognition of a new financial liability.
The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder's contractual rights to its cash flows expires, or the asset is transferred in such a way that all the risks and rewards of ownership are substantially transferred.
All the following criteria need to be satisfied for derecognition of financial assets:
- the right to receive cash flows from the asset has expired or been transferred;
- all risk and rewards of ownership of the asset have been substantially transferred; and
- the Group no longer controls the asset (i.e. no practical ability to make unilateral decision to sell the asset to a third party).
2. Significant Accounting Policies (continued)
Impairment
The Group recognises a loss allowance for expected credit losses on:
- financial assets that are measured at amortised cost or fair value through other comprehensive income;
- lease receivables;
- contract assets (e.g. amount due from customers under construction contracts);
- loan commitments that are not measured at fair value through profit or loss; and
- financial guarantee contracts that are not measured at fair value through profit or loss.
Loss allowance is not recognised for:
- financial assets measured at fair value through profit or loss; or
- equity instruments measured at fair value through other comprehensive income.
Expected credit losses are the probability-weighted estimate of credit losses over the expected life of a financial instrument. A credit loss is the difference between all contractual cash flows that are due and all cash flows expected to be received, all discounted at the original effective interest rate of the financial instrument.
Recognition of expected credit losses in financial statements
At each reporting date, the Group recognises the movement in the loss allowance as an impairment gain or loss in the statement of profit or loss.
The carrying amount of financial assets measured at amortised cost includes the loss allowance relating to that asset.
Assets measured at fair value through other comprehensive income are recognised at fair value, with changes in fair value recognised in other comprehensive income. Amounts in relation to change in credit risk are transferred from other comprehensive income to profit or loss at every reporting period.
For financial assets that are unrecognised (e.g. loan commitments yet to be drawn, financial guarantees), a provision for loss allowance is created in the statement of financial position to recognise the loss allowance.
(h) Plant and equipment
Plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives, as follows:
Equipment / Software: 3 – 5 years
The asset's residual values and useful lives are reviewed and adjusted if appropriate at each balance date.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the consolidated statement of profit or loss. When revalued assets are sold, it is the Group policy to transfer the amounts included in other reserves in respect of those assets to retained earnings.
(i) Trade and other payables
These amounts represent liabilities for goods and services provided to the company prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
2. Significant Accounting Policies (continued)
(j) Exploration expenditure
Expenditure is accumulated separately for each area of interest until such time as the area is abandoned or sold. The realisation of the value of the expenditure carried forward depends on any commercial results that may be obtained through successful development and exploitation of the area of interest or alternatively by its sale. If an area of interest is abandoned or is considered to be of no further commercial interest the accumulated exploration costs relating to the area are written off against income in the year of abandonment. Some exploration expenditure may also be written off where areas of interest are partly relinquished and in cases where uncertainty exists as to the value, provisions for possible diminution in value are established.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to capitalise costs in relation to that area.
(k) Contributed equity
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.
(l) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the financial year but not distributed at balance date.
(m) Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Group, 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 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. Significant Accounting Policies (continued)
(n) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
(o) Employee benefits
Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave, which are expected to be settled within 12 months after the end of the period in which the employees render the related services, are recognised in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability for annual leave is recognised in the provision for employee benefits. All other short-term employee benefit obligations are presented as payables.
Other long-term employee benefit obligations
The liability for long service leave and annual leave which is not expected to be settled within 12 months after the end of the period in which the employees render the related services, is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period. Consideration is given to expected future wage and salary levels, employee departures and periods of service.
Expected future payments are discounted using market yields at the end of the reporting period on government bonds with terms and currencies that match, as closely as possible, the estimated future cash outflows.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting date, regardless of when the actual settlement is expected to occur.
(p) Parent entity financial information
The financial information for the parent entity, Superior Resources Limited, disclosed in note 27 has been prepared on the same basis as the consolidated financial statements.
(q) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.
Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in its financial statements, an additional (third) statement of financial position as at the beginning of the preceding period in addition to the minimum comparative financial statements is presented.
2. Significant Accounting Policies (continued)
(r) Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis, depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly (i.e. unforced) transaction between independent, knowledgeable and willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most advantageous market available to the entity at the end of the reporting period (i.e. the market that maximises the receipts from the sale of the asset or minimises the payments made to transfer the liability, after taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant's ability to use the asset in its highest and best use or to sell it to another market participant that would use the asset in its highest and best use.
The fair value of liabilities and the entity's own equity instruments (excluding those related to share-based payment arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial instruments, by reference to observable market information where such instruments are held as assets. Where this information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective note to the financial statements.
(s) Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any indication that a nonfinancial asset may be impaired. The assessment will include the consideration of external and internal sources of information including dividends received from subsidiaries, associates or joint ventures deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset's fair value less costs of disposal and value in use, to the asset's carrying amount. Any excess of the asset's carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (for example in accordance with the revaluation model in AASB 116: Property, Plant and Equipment). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible assets not yet available for use.
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
2. Significant Accounting Policies (continued)
(t) Coronavirus (Covid19)
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the Group based on known information. This consideration extends to the nature of the activities of the group including mineral exploration, capital raising, staffing and geographic regions in which the consolidated entity operates. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the Group unfavourably as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
3. New and Amended Accounting Standards
The Group 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 adopted.
There are no other standards that are not yet effective and that are expected to have a material impact on the consolidated entity in the current or future reporting periods and on foreseeable future transactions.
4. Financial Risk Management
The Group's overall risk management plan seeks to minimise potential risks resulting from the unpredictability of financial markets.
The Group does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risks to which the Group are exposed are credit risk, liquidity risk, market risk and cash flow interest rate risk.
4. Financial Risk Management (continued)
The Group holds the following financial assets and liabilities:
| 2021 | 2020 | |
|---|---|---|
| $ | $ | |
| Financial assets | ||
| Cash and cash equivalents | 1,715,798 | 1,004,061 |
| Other receivables | 15,398 | 10,771 |
| Financial assets at fair value through other comprehensive | ||
| income | 40,059 | 11,485 |
| 1,771,255 | 1,026,317 | |
| Financial liabilities | ||
| Trade and other payables | 574,701 | 574,701 |
| 574,701 | 574,701 |
Risk management is carried out by the Group's finance function under policies and objectives which have been approved by the Board of Directors. The Managing Director has been delegated the authority for designing and implementing processes which follow the objectives and policies.
The Board receives monthly reports which provide details of the effectiveness of the processes and policies in place.
(a) Credit risk
Credit risk is the risk of loss from a counterparty failing to meet its financial obligations to the Group.
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets is the carrying amount of those assets, net of any provision for expected credit loss, as disclosed in the consolidated statement of financial position and notes to the financial statements.
Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions. For bank and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available).
| 2021$ | 2020$ | |
|---|---|---|
| Trade and other receivables | 15,398 | 10,771 |
| 15,398 | 10,771 |
Other than cash and cash equivalents, the most significant financial assets are trade and other receivables. The Group does not have any material credit risk exposure to any single debtor or Group of debtors under financial instruments entered into by the Group. There were no past due debts at balance date requiring consideration of impairment provisions.
(b) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities to meet obligations when due.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows. No finance facilities were available to the Group at the end of the reporting period.
4. Financial Risk Management (continued)
Maturities of financial liabilities
The table below analyses the Group's financial liabilities into relevant maturity groupings.
| Contractual maturities offinancial liabilities | Within1 year | Between1 and 2years | Between2 and 5years | Over 5years | Totalcontractualcash flows | Carryingamount |
|---|---|---|---|---|---|---|
| At 30 June 2021 | $ | $ | $ | $ | $ | $ |
| Trade and other payables | 574,701 | - | - | - | 574,701 | 574,701 |
| 574,701 | - | - | - | 574,701 | 574,701 | |
| At 30 June 2020 | ||||||
| Trade and other payables | 416,357 | 44,666 | 461,023 | 461,023 | ||
| 416,357 | 44,666 | - | - | 461,023 | 461,023 |
(c) Market risk
The Group is exposed to equity securities price risk. This arises from securities investments held by the Group in Deep Yellow Limited and classified on the statement of financial position as financial assets.
The Group is not exposed to any commodity price risk.
The table below summaries the impact of increases and decreases in the Deep Yellow Limited share price on the Group's total comprehensive income and loss for the year and on equity. The analysis is based on the assumption that the share price had increased or decreased by 25% (2020: 25%) from balance date fair value with all other variables held constant.
| Impact on post-tax loss | Impact on reserves | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| $ | $ | $ | $ | |||||
| +25% | -25% | +25% | -25% | +25% | -25% | +25% | -25% | |
| Investment inDeep YellowLimited | - | - | - | - | 10,015 | (10,015) | 2,871 | (2,871) |
(d) Cash flow and fair value interest rate risk
As the Group has no significant interest-bearing assets or borrowings, the Group's income and operating cash flows are not materially exposed to changes in market interest rates.
(e) Fair value measurements
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The net fair value of financial assets and financial liabilities approximates the respective carrying values as disclosed in the consolidated statement of financial position and the notes to the financial statements.
5. Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.
Critical judgements in applying the entity's accounting policies
The Group has capitalised non-current exploration expenditure of $6,065,340 (2020: $4,457,027).
This amount includes costs directly associated with exploration. These costs are capitalised as an intangible asset until assessment of the permit is complete and the results have been evaluated. These costs include employee remuneration, materials, drilling costs, delay costs, rental payments and payments to contractors. The expenditure is carried forward until such a time as the asset moves into the development phase, is abandoned or sold. Given exploration activities have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of recoverable resources and the difficulty in forecasting cash flows to assess the fair value of exploration expenditure, there is uncertainty as to the carrying value of exploration expenditure. The ultimate recovery of the carrying value of exploration expenditure is dependent upon the successful development and commercial exploitation or, alternatively, sale of the Group's interest in the tenements.
6. Going Concern Principle
Notwithstanding that the Group incurred an operating loss after tax of $569,583 (2020: loss of $461,100) and a net cash outflow from operating activities of $490,337 (2020: $255,614) these financial statements have been prepared on a going concern basis which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The ability of the Group to continue as a going concern depends on one or more of the following:
- achieving sufficient future cash flows from operations to enable its obligations to be met;
- the success of cost saving initiatives, which include entering into Joint Venture arrangements and reducing tenement areas, so as to reduce the carrying and expenditure costs for tenements;
- cash flows from the sale of any of the Group's assets; and
- obtaining additional funding from capital raising activities.
The Directors acknowledge that to continue the exploration and development of the Group's exploration projects, the budgeted cash flows from operating and investing activities for the future will necessitate further capital raisings.
At the date of this Report and having considered the above factors, the Directors consider that the Group will be able to continue as a going concern and will be able to pay its debts as and when they fall due and payable.
In the event that the Group is unable to satisfy future funding requirements, a material uncertainty would exist that would cast significant doubt on the Group's ability to continue as a going concern with the result that the Group may be required to realise its assets at amounts different from those currently recognised, settle liabilities other than in the ordinary course of business and make provisions for costs which may arise as a result of cessation or curtailment of normal business operations.
7. Segment Information
The Group operates solely within one segment, being the mineral exploration industry in Australia.
8. Other Income
| 2021 | 2020 | ||
|---|---|---|---|
| $ | $ | ||
| Interest | 137 | 85 | |
| Government grants – Covid: | Jobkeeper | 55,800 | 12,000 |
| Cash flow boost | 45,925 | 30,831 | |
| 101,862 | 42,916 |
9. Income Tax
| 2021$ | 2020$ | |
|---|---|---|
| (a) Numerical reconciliation of income tax expense / (benefit)to prima facie tax payable: | ||
| Profit (loss) from continuing operations before income | ||
| tax expense | (569,583) | (461,100) |
| Tax at the Australian tax rate of 26% (2020: 27.5%) | (148,091) | (126,803) |
| Tax effect of permanent differences | (5,318) | (8,457) |
| Temporary differences not recognised | 153,409 | 135,260 |
| Income tax expense / (benefit) | - | - |
| (b) Tax losses | ||
| Unused tax losses for which no deferred tax asset has been | ||
| recognised | 14,771,759 | 12,424,397 |
| Potential tax benefit @ 26% (2020: 27.5%) | 3,840,657 | 3,416,709 |
| (c) Franking credits | ||
| Franking credits available for use in subsequent | ||
| financial year | 251,146 | 251,146 |
| 2021$ | 2020$ | |
|---|---|---|
| 10. Cash and Cash Equivalents | ||
| Cash at bank and on hand | 1,715,798 | 1,004,061 |
| 11. Trade and Other Receivables | ||
| CURRENT | ||
| Other receivables | 15,398 | 10,771 |
| Prepayments | 31,400 | 26,080 |
| 46,798 | 36,851 | |
| 12. Financial Assets | ||
| CURRENTDeep Yellow Limited1Investments in listed equity securities designated at fair value through | ||
| other comprehensive income | 40,059 | 11,485 |
| Total financial assets | 40,059 | 11,485 |
1Listed equity securities
The investment in listed equity securities are stated at fair value. AASB 13 Fair Value Measurement requires disclosure of fair value measurements by the level of the following fair value measurement hierarchy:
-
Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.
-
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability.
-
Level 3 – Inputs for the asset or liability that are not based on observable market data.
The listed equity securities are traded in an active market, being the Australian Securities Exchange, and consequently they are measured as a Level 1 instrument on the fair value hierarchy. The quoted market price, used to determine the value of these securities, is the bid price at balance date.
13. Plant and Equipment
| 2021 | 2020 | |
|---|---|---|
| $ | $ | |
| NON-CURRENT | ||
| Equipment / software – at cost | 95,167 | 86,740 |
| Accumulated depreciation | (82,149) | (78,358) |
| 13,018 | 8,382 | |
| Movement in Plant and Equipment | ||
| Opening net book amount | 8,382 | 9,330 |
| Additions | 8,426 | 1,403 |
| Depreciation charge | (3,790) | (2,351) |
| Closing net book amount | 13,018 | 8,832 |
| 14. Exploration Expenditure | ||
| 2021 | 2020 | |
| $ | $ | |
| Exploration phase property costs | ||
| Deferred geological, geophysical, drilling and other expenditure –at cost | ||
| Non-current | 6,065,340 | 4,457,027 |
| Total capitalised exploration expenditure | 6,065,340 | 4,457,027 |
| The capitalised exploration expenditure carried forward above has | ||
| been determined as follows: | ||
| Opening balance | 4,457,027 | 4,427,456 |
| Expenditure incurred during the year | 1,706,458 | 1,910,116 |
| Tenement expenditure written-offDerecognition of South 32 contributions | (98,145)*- | (155,915)(1,724,630) |
15. Non-Current Assets – Other
| 2021$ | 2020$ | ||
|---|---|---|---|
| Security deposits | 33,500 | 32,500 |
16. Payables
| 2021 | 2020 | |
|---|---|---|
| $ | $ | |
| Current liabilities | ||
| Trade payables and accrued expenses | 262,357 | 114,154 |
| Other payables – share application monies | 3,270 | 50,325 |
| Other payables – ATO | 10,688 | 7,547 |
| Other payables – related party (i) | 312,345 | 302,203 |
| Employee entitlements | 77,197 | 58,555 |
| 665,857 | 532,784 | |
| Non-current liabilities | ||
| Other payables – related party (ii) | - | 44,666 |
| - | 44,666 | |
| Total Payables | 665,857 | 577,450 |
(i) These amounts represent the unpaid Directors' remuneration that may be called within the next 12 months. The liability is unsecured, and no decision has been made by the Directors on the timing or nature of the consideration to be provided in settlement.
(ii) These amounts represent the unpaid Directors' remuneration for periods to 30 June 2016.
17. Contributed Equity
| 2021$ | 2020$ | |
|---|---|---|
| 1,381,335,791 (2020: 1,016,614,718) ordinary shares fully paid | 14,960,308 | 12,202,019 |
(a) Movements in ordinary share capital
| Issue price | ||||
|---|---|---|---|---|
| Date | Details | Number of shares | $ | $ |
| At 30 June 2019 | Balance | 688,043,740 | 10,975,213 | |
| 31 July 2019 | Shares issued | 57,375,000 | 0.008 | 459,000 |
| 27 May 2020 | Shares issued | 111,812,810 | 0.003 | 335,438 |
| 25 June 2020 | Shares issued | 159,383,168 | 0.003 | 478,150 |
| Share issue cost | (45,782) | |||
| 30 June 2020 | 1,016,614,718 | 12,202,019 | ||
| 9 July 2020 | Shares issued | 33,087,190 | 0.003 | 99,262 |
| 14 July 2020 | Shares issued | 89,089,451 | 0.003 | 267,268 |
| 13 October 2020 | Options exercised | 19,217,713 | 0.006 | 114,956 |
| 6 November 2020 | Options exercised | 27,895,010 | 0.006 | 167,370 |
| 6 November 2020 | Shares issued | 5,000,000 | 0.005 | 25,000 |
| 15 December 2020 | Shares issued | 800,000 | 0.0125 | 10,000 |
| 17 December 2020 | Shares issued | 3,000,000 | 0.0125 | 37,500 |
| 18 December 2020 | Shares issued | 22,840,000 | 0.0125 | 285,500 |
| 19 December 2020 | Shares issued | 80,000,000 | 0.0125 | 1,000,000 |
| 22 December 2020 | Shares issued | 71,200,000 | 0.0125 | 890,000 |
| 23 December 2020 | Options exercised | 8,329,476 | 0.006 | 49,977 |
| 19 March 2021 | Options exercised | 4,262,233 | 0.006 | 25,573 |
| Share issue cost | (214,117) | |||
| 30 June 2021 | 1,381,335,791 | 14,960,308 |
17. Contributed Equity (continued)
(b) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to one vote and upon a poll, each share is entitled to one vote.
(c) Share options
| Date | Details | Number ofoptions | Weighted AverageExercise Price$ | Expiry |
|---|---|---|---|---|
| At 30 June 2019 | Balance | 113,560,925 | 0.03 | |
| 31 August 2019 | Options expired | (113,560,925) | 0.03 | |
| 25 June 2020 | Options issued | 53,127,663 | 0.006 | 31-Dec-21 |
| At 30 June 2020 | Balance | 53,127,663 | ||
| 9 July 2020 | Options issued | 15,000,000* | 0.006 | 31-Dec-21 |
| 9 July 2020 | Options issued | 37,270,937 | 0.006 | 31-Dec-21 |
| 9 July 2020 | Options issued | 11,029,063 | 0.006 | 31-Dec-21 |
| 14 July 2020 | Options issued | 29,696,452 | 0.006 | 31-Dec-21 |
| 13 October 2020 | Options exercised | (19,217,713) | 0.006 | 31-Dec-21 |
| 6 November 2020 | Options exercised | (27,895,010) | 0.006 | 31-Dec-21 |
| 23 December 2020 | Options exercised | (8,329,476) | 0.006 | 31-Dec-21 |
| 19 March 2021 | Options exercised | (4,262,233) | 0.006 | 31-Dec-21 |
| At 30 June 2021 | Balance | 86,419,683 |
* The lead manager to the share placement and rights issue undertaken in June 2020 received 15 million options (during the year), having the same terms as options issued under the placement and rights issue at no consideration. The total value for the options granted is $58,520.
(d) Capital risk management
The Group's objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can continue to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
The capital structure of the Group includes cash and cash equivalents, equity attributable to equity holders comprising of contributed equity, reserves, and accumulated losses. To maintain or adjust the capital structure, the Group may issue new shares, sell assets to reduce debt or adjust the level of activities undertaken by the Group.
The Group monitors capital based on cash flow requirements for corporate overheads, exploration and evaluation expenditure. The Group's exposure to borrowings as at 30 June 2021 totals $nil (2020: $nil). The Group will continue to access capital markets and joint venture arrangements to satisfy anticipated funding requirements.
The Group's strategy to capital risk management is unchanged from prior years.
18. Reserves
| 2021$ | 2020$ | |
|---|---|---|
| Financial assets revaluation reserve | (3,181,836) | (3,210,410) |
| Share-based payment reserve | 58,520 | - |
| Total reserve | (3,123,316) | (3,210,410) |
| At beginning of year | (3,210,410) | (3,095,913) |
| Revaluation increment / (decrement) | 28,574 | (114,497) |
| Share-based payments | 58,520 | - |
| At end of year | (3,123,316) | (3,210,410) |
19. Key Management Personnel Disclosures
(a) Key management personnel compensation
| 2021$ | 2020$ | |
|---|---|---|
| Short-term employee benefits | 312,567 | 293,703 |
| Post-employment benefits | 23,709 | 23,342 |
| 336,276 | 317,045 |
Detailed remuneration disclosures are provided in the remuneration report on pages 8 to 11.
At 30 June 2021, $312,345 (2020: $346,869) remains payable.
(b) Equity instrument disclosures relating to key management personnel
(i) Options provided as remuneration and shares issued on exercise of such options
There have been no options granted affecting remuneration in the current or a future reporting period.
(ii) Option holdings
The numbers of options over ordinary shares in the Company held during the financial year by each Director of the Company and other key management personnel of the Group, including their related parties, is set out below.
| Name | Balance at thestart of theyear | OptionsExercised | Net purchased/ (sold) | Other changes | Balance at theend of the year |
|---|---|---|---|---|---|
| Directors of Superior Resources Limited | |||||
| P H Hwang | 3,899,717 | - | - | - | 3,899,717 |
| C A Fernicola | 3,999,997 | (3,999,997) | - | - | - |
| S J Pooley | - | - | - | - | - |
All options have vested and are exercisable on or before 31 December 2021.
19. Key Management Personnel Disclosures (continued)
(iii) Share holdings
The number of ordinary shares in the company held during the financial year by each Director of Superior Resources Limited and other key management personnel of the Group, including their personally related parties, is set out below.
| 2021 | Balance at thestart of the | Received onexercising | Net purchased | Other changes | Balance at the |
|---|---|---|---|---|---|
| Name | year | options | / (sold) | end of the year | |
| Directors of Superior Resources Limited | |||||
| P H Hwang | 46,796,621 | - | - | - | 46,796,621 |
| C A Fernicola | 48,000,001 | 3,999,997 | - | - | 51,999,998 |
| S J Pooley | 1,250,000 | - | (1,250,000) | - | - |
| 2020 | Balance at thestart of the | Received onexercising | Net purchased | Other changes | Balance at the |
|---|---|---|---|---|---|
| Name | year | options | / (sold) | end of the year | |
| Directors of Superior Resources Limited | |||||
| P H Hwang | 35,097,467 | - | 11,699,154 | - | 46,796,621 |
| C A Fernicola | 35,624,999 | - | 12,374,999 | - | 48,000,001 |
| K J Harvey1 | 31,193,040 | - | 10,397,679 | - | 41,509,719 |
| S J Pooley2 | 1,250,000 | - | - | - | 1,250,000 |
1 Retired 28 November 2019
2 Appointed 28 November 2019
20. Remuneration of Auditors
During the year, the following fees were paid or payable for services provided by the auditor, its related practices and nonrelated audit firms:
| 2021$ | 2020$ | |
|---|---|---|
| PKF Brisbane AuditAudit or review of financial report | - | 17,000 |
| William Buck (Qld)Review of financial reportAudit of financial report | 5,00015,000 | -15,000 |
| 20,000 | 32,000 |
21. Contingencies
There are no contingent liabilities affecting the Group as at the date of this Report (2020: nil).
22. Commitments
(a) Exploration commitments
So as to maintain current rights to tenure of various exploration and mining tenements, the Group is required to outlay amounts in respect of tenement rent to the relevant governing authorities and to meet certain annual exploration expenditure commitments. These outlays (exploration expenditure and rent), which arise in relation to granted tenements are as follows:
22. Commitments (continued)
| 2021$ | 2020$ | |
|---|---|---|
| Exploration expenditure commitmentsCommitments for payments under exploration permits for mineralsin existence at the reporting date but not recognised as liabilitiespayable is as follows: | ||
| Payable within one yearPayable between one and five years | 1,360,7057,437,694 | 1,171,2692,428,696 |
| 8,798,399 | 3,599,965 |
Outlays expressed as "Exploration Expenditure Commitments" may be varied from time to time, subject to approval of the relevant government departments, and may be relieved if a tenement is relinquished or certain contractual arrangements are entered into with third parties (e.g. a farm-in or joint venture arrangement). Cash security bonds totalling $33,500 (2020: $32,500) are currently held by the relevant governing authorities to ensure compliance with granted tenement conditions.
23. Events Occurring After Balance Date
Since the end of the financial year, the Group raised $1,258,090 (before costs) through the issue of 119,818,096 new shares at a value of $0.0105 per share. The new shares will be issued to sophisticated investors under s.708(8) of the Corporations Act and ASX Listing Rule 7.1A.
Other than the above, no matters or circumstances have arisen since 30 June 2021 that have significantly affected, or may significantly affect:
- (a) the Group's operations in future financial years, or
- (b) the results of those operations in future financial years, or
- (c) the Group's state of affairs in future financial years.
24. Reconciliation of Loss After Income Tax to Net Cash Flows From Operating Activities
| 2021$ | 2020$ | |
|---|---|---|
| Loss for the year after income tax | (569,583) | (461,100) |
| Depreciation and amortisationTenement expenditure written offLoss on disposal of Carnaby Resources Limited shares | 3,79098,145- | 2,352155,91537,802 |
| Changes in operating assets and liabilities:(Increase)/decrease in trade and other receivables(Increase) / decrease in prepaymentsIncrease/(decrease) in trade payablesIncrease/(decrease) in other payablesIncrease/(decrease) in employee entitlements | (4,627)(5,320)-(31,383)18,642 | (10,771)59,722(74,512)21,63913,339 |
| Net cash outflow from operating activities | (490,337) | (255,614) |
25. Earnings (loss) Per Share
| 2021Cents | 2020Cents | |
|---|---|---|
| (a) Basic earnings (loss) per share | ||
| Profit (loss) per share attributable to the ordinary equity holders ofthe company | (0.04) | (0.06) |
| (b) Diluted earnings (loss) per share | ||
| Profit (loss) per share attributable to the ordinary equity holders ofthe company | (0.04) | (0.06) |
| 2021$ | 2020$ | |
| (c) Reconciliations of earnings (loss) used in calculatingearnings per share | ||
| Basic earnings (loss) per shareProfit (loss) attributable to ordinary equity holders of the companyused in calculating basic earnings per share | (569,583) | (461,100) |
| Diluted earnings(loss) per shareProfit (loss) attributable to ordinary equity holders of the companyused in calculating diluted earnings per share | (569,583) | (461,100) |
| (d) Weighted average number of shares used as thedenominator | 2021Number | 2020Number |
| Weighted average number of ordinary shares used as thedenominator in calculating basic earnings (loss) per shareAdjustments for calculation of diluted earnings (loss) per share:Options | 1,268,571,172- | 753,123,457- |
| Weighted average number of ordinary shares and potentialordinary shares used as the denominator in calculating dilutedearnings (loss) per share | 1,268,571,172 | 753,123,457 |
Unissued ordinary shares under option are not included in the calculation of diluted earnings per share because they are antidilutive for the years ended 30 June 2021 and 30 June 2020. These shares under option could potentially dilute basic earnings per share in the future.
26. Related Party Disclosures
(a) Parent entity
The parent entity within the Group is Superior Resources Limited.
(b) Subsidiaries
The subsidiaries listed below have share capital consisting solely of ordinary shares which are held directly by the Group. The % ownership interests held equals the voting rights held by the Group.:
| % ownership interestHeld by the Group | Investment | ||||||
|---|---|---|---|---|---|---|---|
| Country ofincorporation | Principal Placeof Business | 2021 | 2020 | 2021$ | 2020$ | ||
| SubsidiariesSuperior GoldPty Ltd | Australia | Australia | 100 | 100 | 1,000 | 1,000 |
(d) Key management personnel
Disclosures relating to key management personnel are set out in Note 19.
27. Parent Entity Information
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
| 2021$ | 2020$ | |
|---|---|---|
| Statement of financial positionAssets | ||
| Current assets | 1,787,133 | 1,037,845 |
| Non-current assets | 6,112,858 | 4,498,909 |
| Total assets | 7,899,991 | 5,536,754 |
| Liabilities | ||
| Current liabilities | 643,276 | 511,842 |
| Non-current liabilities | - | 44,666 |
| Total liabilities | 643,276 | 556,508 |
| Net assets | 7,256,715 | 4,980,246 |
| Shareholders' equity | ||
| Issued capital | 14,960,308 | 12,202,019 |
| Reserves | (3,123,316) | (3,210,410) |
| Accumulated losses | (4,580,277) | (4,011,363) |
| 7,256,715 | 4,980,246 | |
Statement of profit or loss and other comprehensive income
| Loss for the year | (568,914) | (460,286) |
|---|---|---|
| Other comprehensive income/(loss) net of tax | 28,574 | (114,497) |
| Total comprehensive income/(loss) for the year | (540,340) | (574,783) |
(b) Contingent liabilities and commitments of the parent entity
The parent entity did not have any contingent liabilities as at 30 June 2021 or 30 June 2020.
The commitments of the parent entity are as disclosed at Note 22 for the Group.
DIRECTORS' DECLARATION
In the Directors' opinion:
-
- the financial statements and notes set out on pages 15 to 43, are in accordance with the Corporations Act*,* including:
- (a) complying with Accounting Standards, the Corporations Regulations 2001 (Cth) and other mandatory professional reporting requirements, and
- (b) giving a true and fair view of the Group's financial position as at 30 June 2021 and of its performance for the financial year ended on that date, and
-
- having regard to note 6 to the financial statements, there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.
Note 2(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.
The Directors have been given the declarations by the chief executive officer/chief financial officer as required by section 295A of the Corporations Act*.*
This declaration is made in accordance with a resolution of the Directors.
CA Fernicola Chairman
Brisbane, 27th September 2021
Superior Resources Limited
Independent auditor's report to the members
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Superior Resources Limited (the Company and its subsidiaries (the Group)), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of profit or loss, consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, and the Directors' declaration.
In our opinion, the accompanying financial report of the Group, 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 2021 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 Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
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 6 in the financial report, which indicates that the Group incurred a net loss after tax of $569,583 during the year ended 30 June 2021 and had net cash outflows from operations of $490,337. As stated in Note 6, these events or conditions, along with other matters as set forth in Note 6, indicate that a material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern. 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.
CARRYING VALUE OF EXPLORATION COSTS
Area of focus
Refer also to note 14
Capitalised exploration and evaluation assets represent over 77% of the Group's total assets. The carrying value of exploration and evaluation assets is impacted by the Group's ability, and intention, to continue to explore and evaluate these assets. The results of these activities then determine the extent to which it may or may not be commercially viable to develop and extract identified reserves.
Judgement is required in evaluating management's application of the requirements of AASB 6 Exploration for and Evaluation of Mineral Resources ("AASB 6"). AASB 6 is an industry specific accounting standard requiring the application of significant judgements, estimates and industry knowledge. This includes specific requirements for expenditure to be capitalised as an asset and subsequent requirements which must be complied with for capitalised expenditure to continue to be carried as an asset.
Due to the significance of this asset and the subjectivity involved in determining its carrying value and recoverable amount, this is a key audit matter.
How our audit addressed it
Our audit procedures included:
- — A review of the Directors' assessment of the criteria for the capitalisation of exploration and evaluation expenditure and their assessment of whether there are any indicators of impairment to capitalised costs;
- — Test the additions to capitalised expenditure for the year by agreeing a sample of recorded expenditure for consistency to underlying records, capitalisation requirements of the Group's accounting policy and the requirements of AASB 6;
- — Considering the Group's intention and ability to continue activities necessary to support a decision to develop the exploration and evaluation assets, which included an assessment of the Group's ability to fund such activities and a review of their future budgets;
- — Performing an assessment of whether any indicators of impairment existed in line with requirements of Australian Accounting Standards*,* including a review of the integrity of tenement title status and total commitments value; and
- — We assessed the adequacy of the Group's disclosures in respect of the carrying value of exploration costs.
Other Information
The Directors are responsible for the other information. The other information comprises the information in the Group's annual report for the year ended 30 June 2021, but does not include the financial report and the 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 ability of the Group 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 have no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with 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 these financial statements is located at the Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1\_2020.pdf This description forms part of our independent auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the Directors' Report for the year ended 30 June 2021.
In our opinion, the Remuneration Report of Superior Resources Limited, for the year ended 30 June 2021, 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.
William Buck (Qld) ABN 21 559 713 106
Junaide Latif Director
Brisbane, 27 September 2021
Shareholder Information
The information set out below was applicable at 26 October 2021.
A. DISTRIBUTION OF EQUITY SECURITIES
Analysis of numbers of equity security holders by size of holding:
| Class of security - Ordinary Shares | Number of Holders |
|---|---|
| Range | |
| 1 - 1,000 | 45 |
| 1,001 - 5,000 | 21 |
| 5,001 - 10,000 | 81 |
| 10,001 - 100,000 | 656 |
| 100,001 and over | 964 |
| Total | 1,767 |
The number of holders holding less than a marketable parcel of ordinary shares was 371 and they held 6,603,566 securities.
B. EQUITY SECURITY HOLDERS
Total of Ordinary Shares on Issue 1,502,852,975.
Twenty largest equity security holders
Holders of fully paid ordinary shares (ASX:SPQ):
| Ordinary Shares | ||
|---|---|---|
| Holder | Number | Percent |
| YARRAANDOO PTY LTD | 53,900,000 | 3.59 |
| MR GEOFFREY JAMES HARRIS | 51,115,439 | 3.40 |
| MR TERRY TAYLOR & MRS LYNDA LOUISE TAYLOR | 42,000,000 | 2.79 |
| HBH FAMILY PTY LTD | 38,722,221 | 2.58 |
| KJ HARVEY & ASSOCIATES PTY LTD | 37,424,053 | 2.49 |
| HAMILTON HAWKES PTY LTD | 36,232,891 | 2.41 |
| MR MARTIN JOHN ERIC HOLTMAN | 32,614,795 | 2.17 |
| AIHANMI PTY LTD | 30,000,000 | 2.00 |
| CHOICE CONSTRUCTIONS PTY LTD | 25,954,770 | 1.73 |
| MALACHITE AILURIDAE PTY LTD | 24,692,420 | 1.64 |
| JORLYN INVESTMENTS PTY LTD | 24,286,675 | 1.62 |
| ALTOR CAPITAL MANAGEMENT PTY | 22,000,000 | 1.46 |
| BNP PARIBAS NOMINEES PTY LTD | 21,539,324 | 1.43 |
| MR JOHN JOSEPH SCHOLL & MRS PATRICIA JOY SCHOLL | 20,009,556 | 1.33 |
| MR CARLOS ALBERTO FERNICOLA & MRS KERRIE ALISON FERNICOLA | 19,101,666 | 1.27 |
| BT PORTFOLIO SERVICES LIMITED | 17,812,500 | 1.19 |
| MR JOHN JOSEPH SCHOLL & MRS PATRICIA JOY SCHOLL | 17,098,610 | 1.14 |
| TERRA SEARCH PTY LTD | 16,397,221 | 1.09 |
| CAPITAL FINANCIAL ADVISERS PTY LTD | 14,604,585 | 0.97 |
| MR SIMON DAVID BEAMS & MR RICHARD HUTTON LESH & MR DAVID RANDAL JENKINS | 14,194,442 | 0.94 |
| Total | 559,701,168 | 37.24 |
Unquoted equity securities
| Unquoted Options | Number on issue | Number of Holders |
|---|---|---|
| Unlisted $0.006 options exercisable on or before 31 December 2021 | 84,720,595 | 139 |
Holders of greater than 20% of the unlisted equity securities
There are no holders with greater than 20% of the unlisted equity securities of Superior Resources Limited at the date of this report.
C. SUBSTANTIAL HOLDERS
Substantial holders of the Company's ordinary securities are set out below.
| Ordinary Shares | |||||
|---|---|---|---|---|---|
| Holder of Relevant Interest | Registered Holder | Number | Percent | ||
| YARRAANDOO PTY LTD | 53,900,000 | 3.59 | |||
| MR GEOFFREY JAMES HARRIS (6.99%) | MR GEOFFREY JAMES HARRIS | 51,115,439 | 3.40 |
D. VOTING RIGHTS
The voting rights attaching to each class of equity securities are set out below:
a. Ordinary shares
On a show of hands each member present at a meeting in person or by proxy shall have one vote and on a poll each share shall have one vote.
b. Options
No voting rights.
Tenement Schedule
Current interests in tenements held by the Company and its subsidiaries as at 25 October 2021 are set out below.
All tenements are located within Queensland. Exploration Permits for Minerals (EPM) are specified for all minerals other than coal.
| Tenement | Name | Project | Date of Grant | Date of Expiry | Area | Holder | SPQInterest | ||
|---|---|---|---|---|---|---|---|---|---|
| Northwest Queensland | |||||||||
| EPM15670 | Hedleys 2 | Nicholson | 21 Aug 06 | 20 Aug 26 | 186 km2 | SPQ | 100% | ||
| EPM18203 | Hedleys South | Nicholson | 29 May 14 | 28 May 24 | 114 km2 | SPQ | 100% | ||
| EPM19097 | Tots Creek | Victor | 27 Nov 14 | 26 Nov 24 | 108 km2 | SPQ | 100% | ||
| EPM19214 | Scrubby Creek | Victor | 27 Nov 14 | 26 Nov 24 | 90 km2 | SPQ | 100% | ||
| EPM26720 | Victor Extended | Victor | 30 Aug 18 | 29 Aug 23 | 60 km2 | SPQ | 100% | ||
| Northeast Queensland | |||||||||
| EPM18987 | Cockie Creek | Greenvale | 25 Sep 13 | 24 Sep 23 | 153 km2 | SPQ | 100% | ||
| EPM19247 | Cassidy Creek | Greenvale | 28 May 13 | 27 May 23 | 48 km2 | SPQ | 100% | ||
| EPM25659 | Dinner Creek | Greenvale | 21 Apr 15 | 20 Apr 25 | 192 km2 | SPQ | 100% |
| EPM25691 | Wyandotte | Greenvale | 7 Apr 15 | 6 Apr 25 | 90 km2 | SPQ | 100% |
|---|---|---|---|---|---|---|---|
| EPM26165 | Cockie South | Greenvale | 30 Jan 17 | 29 Jan 22 | 108 km2 | SPQ | 100% |
| EPM26751 | Twelve Mile Creek | Greenvale | 28 May 19 | 27 May 24 | 258 km2 | SPQ | 100% |
| EPM27754 | Dido | Greenvale | 12 Aug 21 | 11 Aug 26 | 300 km2 | SPQ | 100% |
| EPM27755 | Arthur Range | Greenvale | 12 Aug 21 | 11 Aug 26 | 300 km2 | SPQ | 100% |
| EPM27932 | Phantom Creek | Greenvale | Application | 300 km2 | SPQ | 100% |
Abbreviations:
SPQ Superior Resources Limited
EPM Exploration Permit for Minerals
Mineral Resources Statement
Mineral Resources as at 30 June 2021
| Project | Resourcecategory | Cut-offgrade(g/t Au) | Quantity(tonnes) | Average Grade(g/t Au) | Au(ounces) | Notes |
|---|---|---|---|---|---|---|
| Measured | 0.5 | 240,000 | 2.6 | 20,000 | 1, 2 | |
| Steam Engine | Indicated | 0.5 | 610,000 | 2.4 | 47,000 | 1, 2 |
| Gold Deposit | Inferred | 0.5 | 880,000 | 1.9 | 55,000 | 1, 2 |
| Total | 0.5 | 1,730,000 | 2.2 | 122,000 | 1, 2 |
Notes:
-
- Steam Engine Gold Deposit lies 500 metres south of the Gregory Development Road within EPM26165 "Cockie South", approximately 210km west northwest of Townsville, Queensland, Australia.
-
- Competent person Mineral Resources, Mr Kevin Richter (MAusIMM).
Steam Engine Prospect
Information in relation to the Steam Engine Gold Deposit Mineral Resource Estimate and related information were originally reported on the ASX Market Announcements Platform on 22 March 2021 ("Steam Engine revised Mineral Resource Estimate: JORC Measured and Indicated Resource upgraded by 31%") and complies with the guidelines of the 2012 JORC Code. Other than drill assay results received after 22 March 2021, the Company confirms that it is not aware of any new information that materially affects the information as originally reported. All material assumptions and technical parameters on which the Mineral Resource Estimate is based, continue to apply and have not materially changed. The effect of drill sample assay results received after 22 March 2021 is a likely increase to the total Mineral Resources of the Steam Engine Gold Deposit. However, the degree to which the Mineral Resource is increased or decreased will not be known until a recalculation of the Mineral Resource Estimate is made.
Information contained in this report that relates to the Steam Engine Gold Deposit Mineral Resource Estimate is based on information compiled by Mr Kevin Richter, an employee of Superior Resources Limited, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Richter has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Richter consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
Mineral Resources comparison 2020 to 2021
| Resourcecategory | 2020 | 2021 | |||||
|---|---|---|---|---|---|---|---|
| Project | Quantity(tonnes) | Averagegrade(g/t Au) | Au(ounces) | Quantity(tonnes) | Averagegrade(g/t Au) | Au(ounces) | |
| Steam EngineGold Deposit | Measured | - | - | - | 240,000 | 2.6 | 20,000 |
| Indicated | 370,000 | 2.5 | 30,000 | 610,000 | 2.4 | 47,000 | |
| Inferred | 900,000 | 2.2 | 64,000 | 880,000 | 1.9 | 55,000 | |
| Total | 1,270,000 | 2.3 | 94,000 | 1,730,000 | 2.2 | 122,000 |
The revised Steam Engine Mineral Resource Estimate, as published on 22 March 2021, resulted in an increase of 240,000 tonnes of Measured category, an increase of 240,000 tonnes of Indicated category and a decrease of 20,000 tonnes of Inferred category Resources. The total Resource increased by 460,000 tonnes with a 0.01 g/t Au reduction in average grade.
Mineral Resource and Ore Reserve Governance
The Mineral Resource Estimates as reported, have been generated by a suitably qualified person using industry standard best practice modelling and estimation methods.
Unless stated otherwise, Mineral Resources and Ore Reserves are compiled in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) 2012 Edition.
The Mineral Resources Statement included in this report has been reviewed by a suitably qualified Competent Person.
Reporting of Exploration Results
The reporting of some exploration results in this report reflects information that was originally reported in market announcements as referenced in various parts of this report. The Company confirms that it is not aware of any new information or data that materially affects the information included in the relevant original market announcement.
Other information contained in this report that relates to exploration results is based on information compiled by Mr Kevin Richter, an employee of Superior Resources Limited, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Richter has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Richter consents to the inclusion in this report of the matters based on his information in the form and context in which it appears.
Information contained in this report that relates to Exploration Activities is based on information evaluated by Mr Peter Hwang, an executive director and shareholder of Superior Resources Limited and a Member of the Australian Institute of Geoscientists. Mr Hwang has sufficient experience which is relevant to this style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person under the 2012 edition of the "Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Hwang consents to the inclusion in this report of the matters based on the information in the form and context in which it appears.
SUPERIOR RESOURCES LIMITED
ABN 72 112 844 407
Registered Office
Unit 8, 61 Holdsworth Street COORPAROO QLD 4151
Principal Office
Unit 8, 61 Holdsworth Street COORPAROO QLD 4151
T: 07 3847 2887 E: [email protected]
superiorresources.com.au