REG - Greatland Gold PLC - Final Results
28/10/2022 07:00
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RNS Number : 4688E Greatland Gold PLC 28 October 2022
28 October 2022
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Greatland Gold plc
("Greatland" or "the Company")
Final Results
Greatland Gold plc (AIM:GGP), a mining development and exploration company
with a focus on precious and base metals, announces its financial results for
the year ended 30 June 2022.
The 2022 Annual Report is available for download on our website at
https://greatlandgold.com (https://greatlandgold.com) and will be mailed out
to registered shareholders.
Chairman's Statement
I am delighted with the progress of Greatland Gold plc ("Company") and the
consolidated group ("Greatland" or the "Group") in what has been a landmark
year for the Company. We achieved several key milestones at our flagship asset
Havieron, including delivery of a Pre-Feasibility Study followed by our own
independent mineral resource update that substantially increased the Havieron
resource. The decline construction and other surface infrastructure activities
continued at pace and we have taken major steps towards bringing a tier-one
gold-copper project into production.
We also launched our inaugural Sustainability Report, which forms a key part
of our commitment to being a modern and sustainable resource company, and we
have cultivated a world class Board and Executive team to match our ambitions
as we mature beyond a junior explorer to a resource development company.
Havieron Joint Venture
The pace of development at Havieron from our original discovery is
extraordinary, such is the benefit of having Australia's largest gold producer
Newcrest Mining Limited ("Newcrest", ASX: NCM) as a joint venture partner.
This partnership with an experienced operator in the region has enabled a
greater level of investment in Havieron and an extensive programme of infill
and growth drilling has enhanced our understanding of the scale of the deposit
and accelerated its development.
During the year, a Pre-Feasibility Study was released on an initial segment of
the Havieron deposit which has detailed a development pathway to first gold
production and operating cashflow. The study revealed the tip of the iceberg
for Havieron with a fraction of the initial resource supporting the total
capex of the project, justifying the fast start approach to early cashflow
generation and reinvesting back into Havieron development and infrastructure.
This supports our belief that the profile of Havieron makes it a globally
unique opportunity for bringing a low risk, low capex tier-one gold-copper
mine into production.
The Havieron gold-copper discovery is a world class deposit and continues to
deliver excellent results, with significant intercepts of high-grade gold and
copper continuing to be found outside of and below the known resource shell.
With over 250,000 metres of drilling now completed, together with Newcrest, we
continue to enhance our understanding of the deposit and of the likelihood of
continuing to update and upgrade Havieron's Resource and Reserve.
In March 2022, the Company announced an independently verified update to the
Mineral Resource and Reserve to the Pre-Feasibility Study, reflecting an
additional 10 months of impressive drilling results. The Mineral Resource
increased by 50% to 5.5Moz Au and 218Kt Cu and Reserve increased to 2.4Moz Au
and 109Kt Cu, evidence that with each graduating study the size of Havieron
gets larger and larger.
In addition, the Board is delighted that Greatland will retain 30% ownership
in the Company's flagship asset on conclusion of the 5% option process under
the Havieron Joint Venture agreement. We believe this outcome delivers
substantial medium and long term value to Greatland.
Juri Joint Venture
We are making great progress at the Company's second joint venture with
Newcrest - Juri ("Juri JV") where the first year exploration programme was
completed and results revealed the discovery of broad intersections and
continuity of gold mineralisation at Black Hills. The results of the
exploration programme along with conducting geophysical surveys and other
tests have been valuable to refine and assess new targets for the second year
programme, currently underway. Newcrest has advanced the Juri JV to Stage 2,
which enables a potential increase in Newcrest's investment in the programme
without the need for Greatland to self-fund these activities.
100% owned projects
We remain excited by several other 100% owned prospects that display similar
geophysical characteristics to the Havieron gold-copper deposit, particularly
in the Paterson region. At Scallywag, adjacent to the Havieron project,
exploration drilling completed during the year identified gold mineralisation
had been intercepted in four of the seven holes. Adding to this,
electromagnetic testing identified new conductor targets which further
increases our confidence regarding prospectivity for finding mineralised
systems at Scallywag.
In addition, aero magnetic testing across our expanded footprint in the
Paterson region has uncovered strong gravity and near coincident magnetic
anomalies at the 100% owned Canning and Paterson South licences. Both targets
are analogous to the magnetic and gravity anomaly associated with the Havieron
gold-copper deposit, and follow-up exploration is warranted.
The Group significantly expanded its footprint in the Paterson province after
agreement was reached with Province Resources Limited to acquire the 100%
owned Pascalle tenement, the 100% owned Taunton tenement plus applications for
two exploration licences. This enabled the Group to expand its position in
the Paterson province to more than 1,000 square kilometres, including a
prospective area strategically located between Havieron and Telfer.
Corporate
During the year, Greatland was recognised and awarded the winner of the 2021
Commodity Discovery Fund award for its Havieron discovery, tremendous
recognition of Greatland's exploration team.
Greatland is committed to safe, responsible and sustainable exploration and we
continue to focus on improving health and safety training and processes, and
on further strengthening our relationships with the indigenous communities in
the areas that we operate as well as on our Environmental, Social and
Governance ("ESG") focus for developing a responsible and sustainable
resources company. In May 2022, the Group published its first Sustainability
Report, a current state assessment of material items related to ESG matters.
This assessment reveals a compliance driven approach to ESG and forms a
baseline to define a roadmap, enabling our business operations to enhance our
sustainability footprint.
The Group's financial position was fortified during and post year end. A
combination of fundraises, including proceeds raised from new cornerstone
investment partners, allowed the Company to secure a total of £11.9 million
during the year, with an additional £29.7 million raised in August 2022. In
September 2022, Greatland executed a debt commitment letter with a syndicate
of leading international banks of A$220 million (£130 million) and an equity
investment by Wyloo Metals of an initial strategic equity subscription of A$60
million (£35 million) plus an option to acquire up to an additional £35
million of Greatland shares at £0.1 per share.
As announced on 14 July 2022, Greatland successfully renegotiated the
contingent consideration due under the original 2016 Havieron acquisition,
agreeing with the vendor to issue a reduced number of shares and impose a
two-year restriction on the dealing of these shares. This reflects the
vendor's support for Greatland and conviction in Havieron.
During the year Greatland also underwent a transition to significantly enhance
its organisational capability to match its growth in corporate profile and
have the required skillset and expertise to oversee the development of its
flagship Havieron asset. Under the leadership of Managing Director, Shaun Day,
a number of high calibre new appointments were made in the areas of resource
geology, mine engineering, processing, corporate development, legal and
finance. After the retirement of Callum Baxter, Executive Director, during the
year, the Board was bolstered with the appointment of Paul Hallam as
Non-Executive Director, an industry veteran with four decades of Australian
and international resource experience.
Subsequent to the year end, Greatland further strengthened its Board
capability announcing the intention of three transformational appointments of
Australian corporate and mining industry leaders to assist the Company in
fulfilling its ambition to be a world class resource development company.
James 'Jimmy' Wilson, a former senior executive at BHP including the former
President of its iron ore division, joined as Executive Director on 12
September 2022. Mark Barnaba, eminent natural resources investment banker and
Deputy Chair of A$50 billion ASX-listed Fortescue Metals Group Ltd will join
as Non-Executive Chairman on or before 1 January 2023, at which time I will
assume a senior Non-Executive role, and Elizabeth Gaines, former Fortescue CEO
and Managing Director will join as a Non-Executive Director and Deputy Chair
on or before 1 January 2023. The addition of such a high-quality team of
successful professionals is a strong validation of the quality of Greatland's
assets, recognition of our strong management team developed under our Managing
Director, Shaun Day, and our potential for significant value creation for our
shareholders.
Greatland benefits from operating many of its assets in a tier-one mining
jurisdiction of Western Australia. The Fraser Institute 2021 Annual Survey of
Mining Companies ranked Western Australia as the number one jurisdiction out
of 84 worldwide based on mining investment attractiveness during the year.
This provides further support and security around Greatland's exploration and
development assets. The remote location, coupled with public health protocols
has resulted in minimal impact of COVID-19 on operations. At Havieron the JV
Manager, Newcrest, has implemented a COVID-19 plan and maintained measures to
reduce and mitigate the risk of the COVID-19 pandemic to its project workforce
and key stakeholders, and development has continued without interruption.
Looking ahead
Havieron provides an outstanding cornerstone project on which to develop and
pursue our aim to become a multi asset producer. It enables us to leverage our
established footprint and proven methodology in the Paterson region, one of
the world's most attractive jurisdictions for discoveries of tier-one,
gold-copper deposits.
I would like to thank my fellow Board members, the management team and our
staff for their excellent work and efforts over the last year, which have seen
us take such great leaps forward. On behalf of the Board, I thank our
shareholders for their strong support and their committed engagement with
Greatland. We are focused on executing our strategy to realise our ambitions
and maximise shareholder value over the long term. We look forward to an
exciting future with a high degree of anticipation for the Company's ongoing
success.
Alex Borrelli
Chairman
Strategic Report
The Managing Director presents the strategic report on the Group for the year
ended 30 June 2022.
Principal activities, strategies and business model
The principal activity of the Group is to explore for and develop precious and
base metal assets. The Board seeks to increase shareholder value by advancing
the development of the Havieron gold-copper project, the systematic
exploration of its existing resource assets, and by consideration of
financially disciplined opportunities to improve the asset portfolio.
The Group's strategy and business model is developed by the Managing Director
and is approved by the Board. The Managing Director who reports to the Board
is responsible for implementing the strategy and organisational matters with
the leadership team.
The Group aspires to become a multi-commodity resources company of significant
scale. This includes a focus on the creation of a modern and sustainable
resource business with responsible behaviours and environmental stewardship to
deliver long term success.
Business development and performance
The financial year ended 30 June 2022 represented a period of substantial
growth and organisational transition for the Company. During the year,
Greatland successfully advanced development and exploration across its
portfolio of project assets with several milestones achieved on the pathway to
developing the Group's flagship asset, the world class Havieron gold-copper
project in the Paterson region of Western Australia, discovered by Greatland
and under a joint venture with Newcrest.
Havieron Project, Western Australia (Greatland: 30%)
Havieron is currently in development under a joint venture with Newcrest,
Australia's largest gold producer. Havieron was discovered by Greatland in
2018 and has become established as one of the most exciting long-life
gold-copper deposits in development worldwide. It provides Greatland with a
strategic position in the Paterson Province of Western Australia, one of the
leading frontiers for the discovery of tier-one gold-copper deposits.
Newcrest assumed management of the Joint Venture in May 2019 and has since
been undertaking the ore body definition and technical studies required to
support regulatory approvals and investment decisions for a staged development
plan. Havieron is located just 45 kilometres from Newcrest's Telfer mine. This
allows Havieron to leverage Telfer's existing infrastructure and processing
plant to significantly reduce the project's capital expenditure and carbon
impact for a low-cost pathway to development under an ore tolling arrangement.
The Stage 1 Pre-Feasibility Study ("PFS") was completed on 12 October 2021, a
study that only covered a portion of Havieron's South-East Crescent segment,
reflecting a staged approach to the evaluation and development of the project.
The PFS outlined the pathway to achieve commercial production within two to
three years and delivered outstanding economics as the maiden PFS supports the
upfront capex of developing the project while generating strong early cash
flow, internal rate of return and payback. The study was a point in time
analysis using a February 2021 cut-off date for drilling with significant
additional information now available to be incorporated into future studies.
Infill and growth drilling continued during the year and has returned
excellent results demonstrating continuity of high-grade mineralisation at
Havieron with expansion of the mineralisation across all four current zones -
South East Crescent, Eastern Breccia, North West Crescent and Northern
Breccia. Drilling reinforced the potential for the Eastern Breccia corridor to
host crescent style high grade mineralisation. Havieron remains open laterally
and at depth.
In March 2022, Greatland independently updated the Havieron Mineral Resource
which demonstrated a substantial increase to the Resource and Reserve
announced in the maiden PFS, reflecting an additional 10 months of
consistently impressive drilling results. This update increased the Mineral
Resource estimate from 4.4 million gold equivalent ounces outlined in the PFS
to 6.5 million ounces of gold equivalent, an increase of almost 50% and
highlighted an 86% conversion of resource to reserve reinforcing the quality
of the Havieron asset and demonstrating a significant annual growth rate of
Havieron. For the first time, material from the Eastern Breccia was included
in the mineral resource estimate reflecting the expansion of the Havieron
system.
In July 2021, an official naming ceremony was held at site, where the entrance
to Havieron was renamed Kalajartu, being the traditional Martu name for this
place including the nearby camp on Martu country.
Early works construction activities continued at Havieron following the
completion of the box cut and portal entrance enabling the start of the
decline, which commenced in May 2021. The exploration decline development had
reached 489 metres just after the end of the financial year, despite a period
of slower advancement when navigating through a section of unconsolidated
ground. The ground conditions improved during the last quarter and subsequent
to the year end the improved conditions have enabled first full face blast
allowing for a notable acceleration of the decline advancement. The first
ventilation shaft blind bore was completed marking a major milestone which
significantly reduces the risk to future ventilation shaft construction. Works
to progress the necessary approvals and permits required to commence the
development of an operating underground mine and associated infrastructure at
the Havieron project continued to progress.
Work on the Feasibility Study ("FS") continued during the year along with
concurrent studies assessing growth options for Havieron. The FS is planned to
be extended to allow further time to maximise value and de-risk the project.
Juri Joint Venture, Western Australia (Greatland: 49%)
The Juri Joint Venture consists of the Black Hills and Paterson Range East
exploration licences in the prospective Paterson region. Under the joint
venture with Newcrest, Newcrest has the right to earn up to a 75% interest by
spending up to A$20 million in total as part of a two-stage farm-in over five
years.
The Juri JV undertook an exploration drilling programme over the Black Hills
and Paterson Range East tenements with encouraging results. This saw the
completion of a nine-hole drill programme and ground electromagnetic surveys
at Black Hills refined and identified prospective conductor targets for
further drilling.
In October 2021, the Juri JV advanced to Stage 2 marking an extension and
potential increase in investment from A$3 million to A$20 million by Newcrest.
This additional investment potentially enables Greatland to expand and
accelerate the 2022 Juri exploration programme without the need to self-fund
this activity. Furthermore, this commitment reflects the strength of our
relationship with Newcrest and our mutual belief in the benefits of our
partnership to uncover further deposits in the highly prospective Paterson
region.
Subsequent to the year end, drilling commenced at Black Hills, testing a
conductive plate interpreted from the electromagnetic surveys. Further
drilling is planned at Paterson Range East targeting electromagnetic anomalies
with coincident, geochemical or magnetic and gravity anomalies.
100% owned projects
Scallywag project, Western Australia
Adjacent to the Havieron mining lease, containing a further 20 kilometres of
strike of Yeneena Group metasediments located directly to the north-west of
Havieron.
Exploration work over the Scallywag licence E45/4701 consisted of airborne
Electro Magnetic ("EM") surveying and target identification of several
discrete EM anomalies that were identified along strike from known
mineralisation on the Black Hills tenement. Diamond drilling and downhole EM
work are ongoing to further refine these targets.
A second tenement along trend to the northwest of Scallywag (Wanman licence
E45/6134) was applied for during the period. The ballot process was decided in
the Company's favour and the tenure has progressed to negotiation of a land
access agreement.
Greater Paterson projects, Western Australia
The Greater Paterson project includes four granted exploration licences;
Rudall, Canning, Pascalle, Taunton and two exploration licence applications
(Salvation Well North and Salvation Well). The Paterson project is located in
the Paterson region of northern Western Australia. The licences collectively
cover more than 1,000 square kilometres of ground which is considered
prospective for intrusion related gold-copper systems and Telfer style gold
deposits along with the Havieron gold-copper resource.
During the year the Company was granted two exploration licences E45/5862
(Canning) and E45/5533 (Rudall).
A recent heritage survey conducted across the Havieron style magnetic anomaly
on the Rudall prospect will enable this target to be refined with ground
electromagnetics and drill tested within the current field season. A further
heritage survey is planned for the Canning tenement this field season to allow
for drill testing in 2023.
In September 2021, the Group entered into an agreement with Province Resources
Limited to acquire the 100% owned Pascalle tenement, the 100% owned Taunton
tenement and two tenement applications for exploration licences in the
Paterson Province of Western Australia. This enabled the Group to expand its
footprint in the Paterson province by over 1,000 square kilometres, including
a prospective area strategically located between Havieron and Telfer.
Ernest Giles project, Western Australia
The Ernest Giles project is located in central Western Australia, covering an
area of approximately 1,950 square kilometres with around 180 kilometres of
strike of rocks prospective for gold. The eastern Yilgarn Craton is one of the
most highly mineralised areas in Western Australia and is considered
prospective for large gold deposits.
During the year, Greatland refined its geological interpretation and
identified targets with settings strongly indicating Mt Magnet style mafic
BIF, Wallaby style syenite and typical Yilgarn style greenstone deposits
within the previously tested Meadows prospect. Follow up drilling and
geophysical surveys have been planned to test these targets. During the period
the Company also continued positive ongoing Native Title land access agreement
negotiations with traditional owners.
Panorama project, Western Australia
The Panorama project consists of three adjoining exploration licences,
covering 157 square kilometres, located in the Pilbara region of Western
Australia, in an area that is considered to be highly prospective for gold and
cobalt.
During the period, Greatland engaged external consultants to complete
processing and interpretation of the Airborne Electro-Magnetic ("AEM") survey
previously completed. This work identified fifteen priority targets from a
total of twenty eight discrete anomalies. Twelve of these are associated with
Ni prospective mafic-ultramafic rocks. In addition, several of the previous
surface sampling anomalies identified pathfinder geochemical targets. A
programme of surface geology mapping and soil sampling has been planned for
nine distinct areas, encompassing the AEM. A native title land access
agreement was successfully negotiated and signed with the Palyku group
allowing immediate access to the ground.
Bromus project, Western Australia
The Bromus project is located 25 kilometres South-West of Norseman in the
southern Yilgarn region of Western Australia. The Bromus project consists of
two licences, covering 87 square kilometres of under-explored greenstone and
intrusive granites of the Archean Yilgarn Block at the southern end of the
Kalgoorlie-Norseman belt.
During the period, Greatland identified an RC drill target based on soil
sampling which returned anomalous Cu, Zn and Ag coincident with an airborne EM
anomaly. A surface sampling program is also recommended to follow up anomalous
gold in soils in the north of the Bromus tenement. Greatland also advanced
land access negotiations.
Firetower project, Tasmania
The Firetower project is located in central north Tasmania, Australia and
covers an area of 62 square kilometres.
During the year the Group obtained a two-year extension to the term of this
licence and proposed ground geophysics, and diamond and RC drilling. The
Firetower project has strong base metals mineralisation and porphyry copper
potential over a 5 kilometres long structure.
Warrentinna project, Tasmania
The Warrentinna project is located 60 kilometres North-East of Launceston in
north-eastern Tasmania and covers an area of 37 square kilometres with 15
kilometres of strike prospective for gold.
During the period Greatland undertook Short Wave Infrared (SWIR) logging of
its completed diamond and RC drilling in order to refine the alteration
interpretation and vector to high grade mineralisation.
A two-year extension of term was applied for and granted.
Further details regarding developments by project can be found on the
Company's website at: https://greatlandgold.com/projects/
(https://greatlandgold.com/projects/)
Sustainability
On 5 May 2022, the Group published its first Sustainability Report, a current
state assessment of material items related to ESG matters. This assessment
reveals a combination of values orientation together with a compliance driven
approach and forms a baseline to define a roadmap, enabling our business
operations to enhance our sustainability footprint. This report is an
important and natural step as Greatland evolves from an explorer to developer
and to becoming a multi-commodity producer. The Sustainability Report can be
found on the Company's website at: https://greatlandgold.com/sustainability/
(https://greatlandgold.com/sustainability/)
Corporate
During the year, the organisational capacity of the Group was strengthened
from a junior explorer to be fit for purpose as a mid-tier developer. This
transition involved new hires in areas including resource geology, mine
engineering, processing, legal and finance together with enhancing our Board
experience with the appointment of a new Non-Executive Director.
Subsequent to the year end, on 14 July 2022, Greatland announced it had
successfully renegotiated the contingent consideration due under the original
2016 Havieron acquisition. Greatland agreed with the vendor a two-year
restriction on dealing with the Greatland shares to be issued and a reduction
of 4.5% in the number of Greatland shares to be issued, a saving of over 6.5
million shares. This reflected the vendor's support for Greatland and
conviction in the Havieron project.
The Company then announced the successful conclusion of the Havieron Joint
Venture 5% option process, with Greatland retaining its 30% interest in
Havieron.
Shortly afterwards, the Group's financial position was strengthened from the
issuance of new shares in August 2022. The fundraise experienced strong demand
with total gross proceeds raised of £29.7 million. The equity raising will
provide the Company the opportunity to add a significant institutional
presence to our share registry, reflecting the increasing maturity of our
business and the value proposition of Greatland.
On 12 September 2022, Greatland executed a debt commitment letter of A$220
million (£130 million) and an equity investment by Wyloo Metals of an initial
strategic equity subscription of A$60 million (£35 million) plus an option to
acquire up to an additional £35 million of Greatland shares at £0.1 per
share.
Principal Risks and Uncertainties
Management of the business and the execution of the Board's strategy are
subject to a number of key risks and uncertainties, our approach to managing
these is detailed below:
Risk Description Key Mitigators
Occupational health and safety Safety risks are inherent in exploration and mining activities and include Every Director and employee of the Company is committed to promoting and
both internal and external factors requiring consideration to reduce the maintaining a safe and sustainable workplace environment, including adopting
likelihood of negative impacts. The current highest risk, due to the COVID safe work practices. The Company regularly reviews occupational health
geological spread of exploration activities, is associated with transportation and safety policies and compliance with those policies. The Company also
of people to and from the project areas. engages with external occupational health and safety expert consultants to
ensure that policies and procedures are appropriate as the Company expands its
activity levels.
COVID-19 The Group may be affected by disruptions that the COVID-19 pandemic presents At present the Group believes that there should be no significant material
that include but are not limited to financial, operational, staff and disruption to its operations in the near term and continues to monitor these
community health and safety, logistical challenges and government regulation. risks in line with an infectious diseases management plan, global development
and the Group's business continuity plans.
Commodity price risk The principal commodities that are the focus of our exploration and On an ongoing basis we look at opportunities to further diversify our
development efforts (precious metals and base metals assets) are subject to commodity portfolio. In addition, we continuously review our costs as well as
highly cyclical patterns in global demand and supply, and consequently, the hedging strategies to make our current portfolio more resilient.
price of those commodities can be highly volatile.
Risk Description Key Mitigators
Havieron development approvals The potential future development of a mine at Havieron depends upon a number The Feasibility Study for the Havieron project continued during the year. The
of factors, including but not limited to, results from geotechnical, FS will explore further options that will better achieve the project
metallurgical and environmental studies, the grant of necessary permits and objectives and consideration of environmental, social and economic impacts.
other regulatory approvals, project economics, a positive decision to mine and
the ability to secure finance.
Funding Havieron development Raising sufficient debt and equity to fund the Company's share of the Havieron In August 2022, the Company raised £29.7 million through the issuance of new
Joint Venture is crucial to enable the Group to fast track the development of shares. Subsequently Greatland executed a debt commitment letter of A$220
Havieron including early works and other mine development activities. million (£130 million) and an equity investment by Wyloo Metals of an initial
strategic equity subscription of A$60 million (£35 million) plus an option to
acquire up to an additional £35 million of Greatland shares at £0.1 per
share.
Recruiting and retaining highly skilled directors and employees The Company's ability to execute its strategy is highly dependent on the We undertake ongoing initiatives to foster strong staff engagement and ensure
skills and abilities of its people. that remuneration packages are competitive in the market.
Mineral exploration discovery Inherent with mineral exploration is that there is no guarantee that the The Board regularly reviews our exploration and development programmes and
Company can identify a mineral resource that can be extracted economically. allocates capital in a manner that it believes will maximise risk-adjusted
return on capital, within our capital management plan.
Exploration work is conducted on a systematic basis. More specifically,
exploration work is carried out in a phased, results-based fashion and We apply advanced exploration techniques to undercover areas and regions that
leverages a wide range of exploration methods including modern geochemical and we believe are relatively under-explored.
geophysical techniques and various drilling methods.
We focus our activities on jurisdictions that we believe represent low
political and operational risk. We operate in jurisdictions where our team has
considerable on the ground experience. Presently all of the Company's projects
are in Australia, a country with established mining codes, stable government,
skilled labour force, excellent infrastructure and well-established mining
industry.
Directors Report
The Directors present their report on the consolidated entity (referred to as
"the Group") consisting of the parent entity, Greatland Gold Plc ("Greatland"
or "the Company") and the entity it controlled at the end of the year ended 30
June 2022 (the reporting period) and the independent auditor's report thereon.
Directors
The details of the Directors in office during the financial year and until the
date of this report are set out below.
Name Period of Directorship
Mr Alex Borrelli, Independent Non-Executive Chairman Appointed 18 April 2016 (reappointed on 14 December 2021)
Mr Shaun Day, Managing Director Appointed 15 December 2020 (reappointed on 14 December 2021)
Mr Clive Latcham, Independent Non-Executive Director Appointed 15 October 2018 (reappointed 8 December 2020)
Mr Paul Hallam, Non-Executive Director Appointed 1 September 2021 (reappointed on 14 December 2021)
Mr James Wilson, Executive Director Appointed 12 September 2022
The qualifications, experience, other directorships and special
responsibilities of the Directors in office for the financial year ending 30
June 2022 and up to the date of this report are detailed below.
Alex Borrelli Independent Non-Executive Chairman
Qualifications FCA
Experience Alex qualified as a Chartered Accountant and has many years of experience in
investment banking encompassing flotations, takeovers, and mergers and
acquisitions for private and quoted companies.
Other current listed company directorships Non-Executive Director of Red Rock Resources plc
Non-Executive Director of Bradda Head Lithium Limited
Non-Executive Director of Tiger Royalties and Investments plc
Non-Executive Director of BWA Group plc
Non-Executive Director of Kendrick Resources plc
Special responsibilities Member of the Audit and Risk Committee
Member of the Remuneration Committee
Shaun Day Managing Director
Qualifications FCA
Experience Shaun has over 20 years of experience in executive and financial positions
across mining, infrastructure, investment banking and international consulting
firms. Shaun has considerable capital markets experience with a track record
of leading successful transactions including M&A transactions and capital
raising.
Prior to joining Greatland, Shaun was CFO of Northern Star Resources Limited,
an ASX-100 company during its expansion to a global-scale Australian gold
producer. Prior to Northern Star, Shaun was CFO of SGX-50 listed Sakari
Resources Plc during a period of expansion ahead of its takeover by PTT plc.
Other current listed company directorships Non-Executive Director of Aurumin Limited
Clive Latcham Independent Non-Executive Director
Qualifications BE(Hons), MSc (Mineral Economics)
Experience Clive is a chemical engineer and mineral economist with over thirty years'
experience in senior roles in the mining sector. Clive joined Greatland from
ERM - Environmental Resource Management, the world's leading sustainability
consultancy group, where he is currently Senior External Advisor, and advisor
to the Chairman and Chief Executive Officer.
Prior to his role at ERM, Clive worked as an independent advisor to private
equity and mining consultancy firms, and spent nine years in senior roles with
Rio Tinto plc. During his time at Rio Tinto, Clive spent four years as Copper
Group Mining Executive, where he was responsible for managing Rio Tinto's
investments in the operating businesses of Escondida in Chile, Grasberg in
Indonesia, and Phalaborwa in South Africa and for the initial development of
new projects and acquisitions, including La Granja in Peru and La Sampala in
Indonesia.
Other current listed company directorships None
Special responsibilities Member of the Audit and Risk Committee (Chair)
Member of the Remuneration Committee
Paul Hallam Non-Executive Director
Qualifications BE (Hons) Mining, FAICD, FAusIMM
Experience Paul has more than 40 years Australian and international resource industry
experience. His operating and corporate experience is across a range of
commodities (iron ore, bauxite, alumina, aluminium, gold, silver, copper, zinc
and lead) and includes both surface and underground mining.
He has global experience stemming from his executive roles across multiple
cultural, regulatory and business environments. His former executive roles
include Director - Operations with Fortescue Metals Group, Executive General
Manager - Development & Projects with Newcrest Mining Ltd, Director -
Victorian Operations with Alcoa and Executive General Manager - Base and
Precious Metals with North Ltd; and also, mine management/development roles
for Battle Mountain Gold Company in Chile, Bolivia and Australia. In these and
previous roles Paul has held site and corporate accountability for all site
functions plus sales and marketing, stakeholder management, capital projects
and regulatory oversite and management for multiple mining operations.
Paul retired in 2011 to pursue a career as a professional Non-Executive
Director. He has held Australian and international Non-Executive Director
roles since 1997.
Other current listed company directorships Non-Executive Chairman of Coda Minerals Limited
Special responsibilities Member of the Audit and Risk Committee
Member of the Remuneration Committee (Chair)
James 'Jimmy' Wilson Executive Director
Qualifications BSc (Mechanical Engineering)
Experience James is a highly experienced mining and natural resources executive with deep
operational experience across a range of commodities and project styles. He
brings significant international infrastructure and supply chain experience
in Australia, South Africa, North and South America.
James spent more than 25 years with the world's biggest mining company BHP
and held various senior executive positions including as President of the iron
ore division, President of energy coal, President of stainless steel materials
and President and Chief Operating Officer of Nickel West. He successfully
managed the integration of the WMC Resources' nickel assets into BHP after
BHP's takeover of WMC. Earlier in his career James held a number of roles in
the gold industry with Anglo American.
After leaving BHP, James was appointed as the Chief Executive of CBH Group,
the Western Australian grain growers collection which is responsible for the
storage, handling, transport, processing, marketing and export of more than 90
percent of WA's grain production.
Other current listed company directorships None
Directors Interest
The Directors' holdings of shares and options in the Company as at 30 June
2022 are as follows:
Director Number of Shares Number of Options
Alex Borrelli 13,103,372 51,500,000
Shaun Day 375,000 5,000,000
Clive Latcham - 11,500,000
Paul Hallam - -
Principal activities
The principal activities of the Group during the year consisted of the mining
development of the Havieron project and the exploration and evaluation of
mineral tenements in Australia.
Results and dividends
· Net loss after tax of £11,365,645 (2021: £5,519,648);
· Operating cash outflow of £5,961,397 (2021: £2,695,685);
· Net assets of £5,725,602 (2021: £4,154,893), with cash of
£10,386,473 as at 30 June 2022 (2021: £6,212,057)
Going Concern
The Group has incurred a loss before tax of £11,365,645 (2021: £5,519,648)
and had a net cash outflow of £34,932,650 (2021: £16,266,226) from operating
and investing activities. At reporting date there were net current assets of
£14,831,306 (2021: £7,134,881), with cash of £10,386,473 (2021:
£6,212,057). The loss resulted from exploration and administrative related
costs, and an unrealised foreign exchange loss of £2,735,818 from the loan
held by the Australian subsidiary with Newcrest Operations Limited in respect
of the Havieron Joint Venture.
Subsequent to the year end, the Group's financial position was strengthened
from the issuance of new shares in August 2022. The fundraise experienced
strong demand with total gross proceeds raised of £29.7 million. In addition,
the Company announced on 12 September 2022 the execution of a debt commitment
letter of A$220 million (£130 million) and equity agreement with Wyloo Metals
of an initial strategic equity subscription of A$60 million (£35 million)
plus an option to acquire up to an additional £35 million of Greatland shares
at £0.1 per share.
As such, the Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable
future. In addition, the Group is able to significantly reduce expenditure on
its own exploration programmes if it wishes to do so. The Group also has the
ability to raise capital for expansion purposes if required, and has
demonstrated an ability to do so in the past.
Having prepared forecasts based on current resources and assessing methods of
obtaining additional finance, the Directors believe the Group has sufficient
resources to meet its obligations for the foreseeable future.
Taking these matters into consideration, the Directors continue to adopt the
going concern basis of accounting in the preparation of the financial
statements. The financial statements do not include the adjustments that would
be required should the going concern basis of preparation no longer be
appropriate.
Likely developments and expected results
A review of the current and future development of the Group's business is
given in the Strategic Report.
Risk Management
The Board considers risk assessment to be important in achieving its strategic
objectives. There is a process of evaluation of performance targets through
regular reviews by senior management to forecasts. Project milestones and
timelines are regularly reviewed.
A risk register is maintained by the Company that identifies key risks in
areas including corporate strategy, financial, staff, occupational health and
safety, environmental and traditional owner engagement. The register is
reviewed periodically and is updated as and when necessary, with all employees
and directors being responsible for identifying, managing and mitigating
risks.
Refer to Strategic Report for detailed information on the principal risks and
uncertainties and for further detailed information on the financial risks
refer to Note 19.
Key performance indicators
The board has defined the following seven Key Performance Indicators ("KPIs")
during the year to monitor and assess the performance of the Company as it
advances from an exploration company into a resource development company.
Performance Target Rationale Our performance in 2022
Total Shareholder Return ("TSR") measured over preceding three years against The performance of Greatland's share price demonstrates the total return to TSR performance for the financial year 2022 was negative 45%, compared to
the VanEck Junior Gold Miners ETF ("GDXJ") the shareholders over the preceding three years. Our strategy aims to maximise negative 33% for GDXJ. The TSR performance over the preceding three years is a
shareholder returns through the commodity cycle, and TSR is a direct measure performance target for the Group's Long Term Incentive Plan.
of that.
ESG Sustainability Report Greatland is committed to safe, responsible and sustainable exploration and In May 2022, the Group published its first Sustainability Report. This
development. The Company continues to focus on improving health and safety assessment reveals a compliance driven approach to ESG and forms a baseline to
training and processes, and on further strengthening relationships with the business operations to enhance our sustainability footprint.
indigenous communities in the areas that we operate, as well as on our ESG
focus for developing a responsible and sustainable resources company.
Safety Performance Supporting our people and their safety is our number one priority and Greatland achieved its goal of maintaining a safe workplace for all. There
essential to everything we do. We believe that non-financial performance is were no fatalities at the Company's projects during the year (2021: nil).
connected to long term value created and this is best demonstrated when
sustainability is embedded throughout our business.
Fund Greatland's share of the Havieron Joint Venture development costs to Raising sufficient debt and equity to fund the Company's share of the Havieron The Company focused on securing a debt commitment letter and raising
first production Joint Venture is crucial to enable the Group to fast track development of additional capital through the issuance of new shares. In August 2022, the
Havieron including early works and other mine development activities, plus Company raised £29.7 million through the issuance of new shares. In addition
accelerate exploration activities at the Group's 100% owned licences to target Greatland executed a debt commitment letter with a syndicate of leading
new discoveries similar to Havieron in the Paterson region. international banks of A$220 million (£130 million) and an equity investment
by Wyloo Metals of an initial strategic equity subscription of A$60 million
(£35 million).
JORC Resource Growth of the JORC Resource is a crucial component to Greatland's long term In March 2022, the Company announced an independently verified update to the
strategy. Mineral Resource and Reserves to the Pre-Feasibility Study, reflecting an
additional 10 months of impressive drilling results. The Mineral Resource
increased by 50% to 5.5Moz Au and 218Kt Cu and Reserve increased to 2.4Moz Au
and 109Kt Cu.
Advancement of Feasibility Study for Havieron Havieron provides an outstanding cornerstone project on which to develop and The Feasibility Study for the Havieron project continued during the year and
pursue the Company's aim to become a multi asset producer. It enables the explored further options for project objectives and consideration of various
Company to leverage our established footprint and proven methodology in the factors including but not limited to environmental, social and economic
Paterson region, one of the world's most attractive jurisdictions for impacts.
discoveries of tier-one, gold-copper deposits.
Corporate development activity Corporate development activity is a crucial component to amplify Greatland's Ongoing corporate activity was undertaken during 2022, including marketing
growth strategy and support the transition of the business from an explorer to activity, progressing options to undertake a cross listing onto the Australian
a developer and producer. Stock Exchange and consideration and analysis of potential merger and
acquisition opportunities.
Share Capital
Information relating to shares issued during the year is given in Note 12 to
the accounts.
Substantial Shareholdings
On 30 June 2022 and 30 September 2022, the following were registered as being
interested in 3% or more of the Company's ordinary share capital:
30 September 2022 30 June 2022
Ordinary shares of £0.001 each Shareholding % Ordinary shares of £0.001 each Shareholding %
Hargreaves Lansdown (Nominees) Limited 1,226,072,935 26.81% 1,180,901,300 29.01%
Interactive Investor Services Nominees Limited 645,960,684 14.13% 610,113,634 14.99%
Vidacos Nominees Limited 372,569,934 8.15% 219,305,505 5.39%
HSDL Nominees Limited 355,584,267 7.78% 351,931,230 8.65%
Barclays Direct Investing Nominees Limited 238,178,990 5.21% 228,493,061 5.61%
JIM Nominees Limited 218,063,390 4.77% 213,663,023 5.25%
State Street Nominees Limited 217,281,225 4.75% 247,923,427 6.09%
Lawshare Nominees Limited 210,301,869 4.60% 202,432,256 4.97%
Aurora Nominees Limited 178,359,737 3.90% 25,416,685 0.62%
Refer to events after reporting period below for further details regarding
equity raises subsequent to the year end.
Political donations
During the period there were no political donations (2021: nil).
Auditors
PKF Littlejohn LLP has served as the Company's auditors since 2020. The
Directors will place a resolution before the annual general meeting to
reappoint PKF Littlejohn LLP as auditors for the coming year.
PKF Littlejohn LLP has signified its willingness to continue in office as
auditor.
Directors' Indemnity
The Company has maintained Directors' and Officers' insurance during the year.
Such provisions remain in force at the date of this report.
Events after the reporting period
Havieron project contingent consideration
On 14 July 2022, Greatland announced it had successfully renegotiated its
obligations with respect to the contingent consideration due under the
original 2016 acquisition of the Havieron project. The original consideration
for this 2016 transaction comprised an initial payment of A$25,000 in cash and
65,490,000 new ordinary shares and a further 145,530,000 new ordinary shares
issued in Greatland Gold plc, conditional upon Greatland's ownership interest
in Havieron reducing to 25% or less or upon a decision to mine at Havieron
whichever occurs earlier. This latter tranche of shares, modified as described
below, was issued to the vendor's nominee, a private Australian investment
vehicle, Five Diggers Pty Ltd.
In return for removing the conditionality on the contingent element of the
consideration, the following modifications were agreed:
a) a two-year restriction on dealing with the Greatland Gold plc's
shares to be issued to Five Diggers Pty Ltd, comprising:
- 12-month lock in, which prohibits any disposals of the shares in
this period, subject to carve outs (such as recommend takeovers), plus
- a subsequent 12-month orderly market arrangement, requiring
that, during this period, the shares may only be traded in consultation with
Greatland Gold plc's broker and through the broker (subject to customary carve
outs); and
b) a reduction in the number of shares being issued by 4.5%, being a
reduction of over 6.5 million shares, to a total of 138,981,150 new ordinary
shares issued in Greatland Gold plc
The contingent consideration of 138,981,150 new ordinary shares issued in
Greatland Gold plc were issued with a value of £16.1 million in aggregate at
£0.116 per ordinary share, based on the closing price on 2 August 2022. The
contingent consideration of £16.1 million will be capitalised as mine
development as it forms part of the contingent consideration for the Havieron
project.
Option for 5% Havieron Joint Venture interest
Subsequent to the year end the process for determining the option price for
the 5% joint venture interest under the Havieron Joint Venture Agreement
("JVA") was finalised. This resulted in an option price of US$60m at which
Newcrest could acquire an additional 5% interest in the Havieron Joint Venture
from Greatland. On 19 August 2022, Newcrest elected not to exercise its option
and as a result Greatland's interest in the Havieron project remains at 30%.
Funding secured for development of Havieron
Subsequent to the year end the Group's financial position was strengthened
from the issuance of new shares on 25 August 2022. The fundraise experienced
strong demand with total gross proceeds raised of £29.7 million, which
included the cornerstone participation of Tribeca Investment Partners. A
total of 362,880,180 placing shares were placed at an issue price of £0.082
per new ordinary share.
In addition, the Company announced on 12 September 2022 the execution of a
debt commitment letter of A$220 million (£130 million) and equity agreement
with Wyloo Metals of an initial strategic equity subscription of A$60 million
(£35 million) and additional future potential equity contribution of £35
million. The debt commitment letter, including term sheet, was signed for a
seven-year term, self-arranged debt syndicate with three leading banks:
Australia and New Zealand Banking Group ("ANZ"), HSBC Bank ("HSBC") and ING
Bank (Australia) ("ING"). The facility comprises a A$200 million Facility A
seven-year amortising Term Debt Facility and a A$20 million Facility B which
is a five-year Revolving Credit Facility. Facility A interest will be charged
at benchmark (Australian BBSY) plus margin of 3.50% p.a. reducing to
3.25% p.a. post project completion, Facility B will be charged at a margin
of 4.50% p.a. Financial close and draw down is subject to customary project
financing conditions including completion of reporting requirements,
Feasibility Study criteria and agreeing final documentation.
The strategic equity investment from Wyloo Metals ("Wyloo"), a privately owned
metals company with a focus on investing in the responsible development of the
next generation of mines was approved by the shareholders on 7 October 2022.
The initial strategic equity subscription of A$60 million (£35 million) was
priced at £0.082 per share, being the same price at which equity was raised
in the recent placing and small premium to the five-day volume weighted
average price ("VWAP") of 9 September 2022, and resulting in Wyloo becoming
Greatland's largest shareholder with approximately 8.6% of shares on issue.
Wyloo also has an additional future potential equity contribution of £35
million. Wyloo's further potential investment is through the issue of warrants
to subscribe for additional equity as ordinary shares at an exercise price of
£0.1 per share. If the warrants are exercised in full, the average price of
Wyloo's investment in Greatland would be just over £0.09 per share being a
10.6% premium to the five-day VWAP to 9 September 2022.
Transformational appointments to the Board
Subsequent to the year end, Greatland further strengthened its Board
capability announcing the intention of three transformational appointments of
Australian corporate and mining industry leaders to assist the Company in
fulfilling its ambition to be a world class resource development company.
Jimmy Wilson, a former senior executive at BHP including the former President
of its iron ore division, joined as Executive Director on 12 September 2022.
Mark Barnaba, eminent natural resources investment banker and Deputy Chair of
A$50 billion ASX-listed Fortescue Metals Group Ltd will join as Non-Executive
Chairman on or before 1 January 2023 and Elizabeth Gaines, former Fortescue
CEO and Managing Director will join as a Non-Executive Director and Deputy
Chair on or before 1 January 2023.
The Company granted co-investment options to subscribe for new ordinary shares
in the Company to its proposed Directors, Mark Barnaba and Elizabeth Gaines,
and to Paul Hallam an existing Non-Executive Director. Mark Barnaba was
granted 100,000,000 options, Elizabeth Gaines granted 55,000,000 options and
Paul Hallam granted 40,000,000 options. The co-investment option structure has
been designed to create strong and immediate alignment with shareholders to
deliver substantial share price growth, with the options being set at £0.119,
representing a 45 percent premium to the equity placement in August 2022 of
£0.082. In addition, the Company granted Jimmy Wilson options to subscribe
for 40,000,000 new ordinary shares in the Company under substantively the same
terms as the co-investment options.
No other matter or circumstance has arisen since 30 June 2022 that has
significantly affected the Company's operations, results or state of affairs,
or may do so in future years.
Streamlined energy and carbon reporting ("SECR")
Greenhouse gas emissions, energy consumption and energy efficiency disclosures
have not been provided because the Company has consumed less than 40,000 kWh
of energy during the period in the UK.
Control Procedures
The Board has approved financial budgets and cash forecasts; in addition, it
has implemented procedures to ensure compliance with accounting standards and
effective reporting.
Environmental Responsibility
The Company is aware of the potential impact that its subsidiary companies and
operations may have on the environment. The Company ensures that it and its
subsidiaries at a minimum comply with the local regulatory requirements and
the revised Equator Principles with regard to the environment.
Cultural awareness
The Company continues to engage with the traditional land owners to understand
and respect cultural heritage as a necessary part in obtaining clearances to
access projects across its Australian operations and operate within the
appropriate protocols.
Health and Safety
The Group aims to achieve and maintain a high standard of workplace health,
safety and wellbeing. In order to achieve this objective, the Group provides
mental health wellbeing training, mentoring and supervision for employees and
ongoing pastoral care support plus regularly reviewing and implementing high
standards for workplace safety.
Employment Policies
The Group is committed to promoting policies which ensure that high calibre
employees are attracted, retained and motivated, to ensure the ongoing success
for the business. Employees and those who seek to work within the Group are
treated equally regardless of gender, marital status, creed, colour, race or
ethnic origin.
Provision of Information to Auditor
So far as each of the Directors is aware at the time this report is approved:
· there is no relevant audit information of which the Company's auditor
is unaware; and
· the Directors have taken all steps that they ought to have taken to
make themselves aware of any relevant audit information and to establish that
the auditor is aware of that information.
By order of the Board
Shaun Day
Managing Director
Enquiries:
Greatland Gold PLC info@greatlandgold.com (mailto:info@greatlandgold.com)
Shaun Day www.greatlandgold.com (http://www.greatlandgold.com)
SPARK Advisory Partners Limited (Nominated Adviser) +44 (0)20 3368 3550
Andrew Emmott/James Keeshan
Berenberg (Joint Corporate Broker and Financial Adviser) +44 (0)20 3207 7800
Matthew Armitt/Jennifer Lee/Jack Botros
Canaccord Genuity (Joint Corporate Broker and Financial Adviser) +44 (0)20 7523 8000
James Asensio/Patrick Dolaghan
SI Capital Limited (Joint Broker) +44 (0)14 8341 3500
Nick Emerson/Sam Lomanto
Gracechurch Group (Media and Investor Relations) +44 (0)20 4582 3500
Harry Chathli/Alexis Gore/Henry Gamble
Notes for Editors:
Greatland Gold plc (AIM:GGP) is a mining development and exploration company
with a focus on precious and base metals. The Company's flagship asset is the
world-class Havieron gold-copper deposit in the Paterson region of Western
Australia, discovered by Greatland and presently under development in Joint
Venture with Newcrest Mining Ltd. Newcrest holds a joint venture interest of
70% (30% Greatland).
Havieron is located approximately 45km east of Newcrest's Telfer gold mine
and, subject to positive feasibility study and decision to mine vote, will
leverage the existing infrastructure and processing plant to significantly
reduce the project's capital expenditure and carbon impact for a low-risk and
low-cost pathway to development.
Construction is well advanced and continuing with the box cut and decline to
develop the Havieron deposit originally commenced in February 2021. An
extensive growth drilling programme continues at Havieron with a view to
further expanding the understanding and scale of the ore body.
Greatland has a proven track record of discovery and exploration success. It
is pursuing the next generation of tier-one mineral deposits by applying
advanced exploration techniques in under-explored regions. The Company is
focused on safe, low-risk jurisdictions and is strategically positioned in the
highly prospective Paterson region. Greatland has a total six projects across
Australia with a focus on becoming a multi-commodity mining company of
significant scale.
consolidated statement of comprehensive income
for the year ended 30 June 2022
Note 2022 2021
£
£
Continuing Operations
Revenue - -
Exploration and evaluation expenses (3,022,034) (3,470,443)
Administrative expenses 3 (5,415,416) (1,848,796)
Operating Loss (8,437,450) (5,319,239)
Other income - 10,000
Foreign exchange gains / (losses) 3 (2,735,818) (193,976)
Finance income 5 1,675 982
Finance costs 5 (194,052) (17,415)
Loss before tax (11,365,645) (5,519,648)
Income tax expense 6 - -
Loss for the year (11,365,645) (5,519,648)
Other comprehensive income:
Exchange differences on translation of foreign operations 517,919 (48,735)
Total comprehensive income for the year attributable to equity holders of (10,847,726) (5,568,383)
parent
Earnings per share (EPS):
Basic EPS attributable to ordinary equity holders of the parent (pence) 7 (0.28) (0.14)
Diluted EPS attributable to ordinary equity holders of the parent (pence) 7 (0.28) (0.14)
The above consolidated statement of comprehensive income should be read in
conjunction with the accompanying notes.
Consolidated Statement of Financial Position
as at 30 June 2022
Note 2022 2021
£ £
ASSETS
Exploration and evaluation assets 15 93,572 -
Mine development 16 35,581,890 12,887,699
Right of use asset 17 272,235 341,912
Property, plant and equipment 18 95,450 120,356
Total non-current assets 36,043,147 13,349,967
Cash and cash equivalents 8 10,386,473 6,212,057
Advanced joint venture cash contributions 9 8,415,112 4,203,923
Trade and other receivables 14 - 78,198
Other current assets 425,959 154,215
Total current assets 19,227,544 10,648,393
TOTAL ASSETS 55,270,691 23,998,360
LIABILITIES
Trade and other payables 10 4,188,189 3,458,565
Lease liabilities 17 208,049 54,947
Total current liabilities 4,396,238 3,513,512
Borrowings 11 43,102,711 12,189,790
Lease liabilities 17 70,208 293,452
Provisions 25 1,975,932 3,846,713
Total non-current liabilities 45,148,851 16,329,955
TOTAL LIABILITIES 49,545,089 19,843,467
NET ASSETS 5,725,602 4,154,893
EQUITY
Share capital 12 4,070,547 3,947,270
Share premium 12 36,166,273 24,064,307
Reserves 1,206,840 532,177
Retained earnings (35,718,058) (24,388,861)
TOTAL EQUITY 5,725,602 4,154,893
The above consolidated statements of financial position should be read in
conjunction with the accompanying notes.
Alex
Borrelli
Shaun
Day
Chairman Managing Director
Consolidated Statement of Changes in Equity
for the year ended 30 June 2022
Foreign currency translation reserve Share- based payment reserves
£
£
Note Share capital Share premium Merger reserve Retained earnings
£
£
£
£ Total equity
£
At 1 July 2021 3,947,270 24,064,307 225,000 129,585 177,592 (24,388,861) 4,154,893
Loss for the year - - - - - (11,365,645) (11,365,645)
Other comprehensive income - - - 517,919 - - 517,919
Total comprehensive loss for the year - - - 517,919 - (11,365,645) (10,847,726)
Transactions with owners in their capacity as owners:
Share-based payments 24 - - - - 193,192 - 193,192
Transfer on exercise of options - - - - (36,448) 36,448 -
Share capital issued 12 123,277 12,796,899 - - - - 12,920,176
Cost of share issue 12 - (694,933) - - - - (694,933)
Total contributions by and distributions to owners of the Company 123,277 12,101,966 - - 156,744 36,448 12,418,435
At 30 June 2022 4,070,547 36,166,273 225,000 647,504 334,336 (35,718,058) 5,725,602
Foreign currency translation reserve Share- based payment reserves
£
£
Note Share capital Share premium Merger reserve Retained earnings
£
£
£
£ Total equity
£
At 1 July 2020 3,760,207 19,878,782 225,000 178,320 372,953 (19,090,241) 5,325,021
Loss for the year - - - - - (5,519,648) (5,519,648)
Other comprehensive income - - - (48,735) - - (48,735)
Total comprehensive loss for the year - - - (48,735) - (5,519,648) (5,568,383)
Transactions with owners in their capacity as owners:
Share-based payments 24 - - - - 25,667 - 25,667
Transfer on exercise of options - - - - (221,028) 221,028 -
Share capital issued 12 187,063 4,185,525 - - - - 4,372,588
Total contributions by and distributions to owners of the Company 187,063 4,185,525 - - (195,361) 221,028 4,398,255
At 30 June 2021 3,947,270 24,064,307 225,000 129,585 177,592 (24,388,861) 4,154,893
The above consolidated statement of changes in equity should be read in
conjunction with the accompanying notes.
Consolidated Statement of Cash
Flows
for the year ended 30 June 2022
Note 2022 2021
£ £
Cash flows from operating activities
Loss for the year (11,365,645) (5,519,648)
Depreciation 3 37,291 175,884
Amortisation 3 133,100 64,946
Other non-cash items 14,428 -
Unwind of discount on provisions 5 177,300 -
Share-based payment expense 24 193,192 25,667
Unrealised foreign exchange loss 3 2,735,818 193,976
Lease liability interest expense 17 14,785 17,415
Increase in other current assets 82,435 (54,333)
Increase in payables & other liabilities 2,020,079 2,400,408
Decrease in provisions (4,180) -
Net cash outflow from operating activities (5,961,397) (2,695,685)
Cash flows from investing activities
Interest received 5 1,675 982
Interest payable (14,970) (17,415)
Payments for exploration and evaluation assets 15 (90,008) -
Payments for mine development and fixed assets 16 (18,193,132) (9,082, 454)
Year-end advanced joint venture cash contributions 9 (8,415,112) (4,203,923)
Payments for interest on mine development 11 (2,259,706) (267,731)
Net cash outflow from investing activities (28,971,253) (13,570,541)
Cash flows from financing activities
Proceeds from issue of shares 12 12,920,176 4,372,588
Transaction costs from issue of shares 12 (694,933) -
Proceeds of borrowings 11 26,494,533 12,189,790
Repayment of lease obligations 17 (54,899) (63,925)
Payments for prepaid borrowing costs for debt (275,982) -
Net cash inflow from financing activities 38,388,895 16,498,453
Net increase in cash and cash equivalents 3,456,245 232,227
Net foreign exchange differences 718,171 (42,915)
Cash and cash equivalents at the beginning of the period 6,212,057 6,022,745
Cash and cash equivalents at the end of the period 8 10,386,473 6,212,057
The above consolidated statement of cash flows should be read in conjunction
with the accompanying notes.
1. Principal Accounting Policies
1.1 Corporate information
The Group financial statements of Greatland Gold plc for the year ended 30
June 2022 were authorised for issue by the board on 27 October 2022 and the
statement of financial position signed on the board's behalf by Mr Shaun Day
and Mr Alex Borrelli. Greatland Gold plc is a public limited company
incorporated and domiciled in England and Wales. The Company's ordinary shares
are traded on AIM (AIM: GGP).
The principal accounting policies adopted by the Group and Company are set out
below.
New standards, amendments and interpretations adopted by the Group
There are no IASB and IFRIC standards that have been issued with an effective
date after the date of the financial statements which are expected to have a
material impact on the Group.
New and amended Standards and Interpretations issued but not effective
At the date of approval of these financial statements, the following standards
and interpretations which have not been applied in these financial statements
were in issue but not yet effective (and in some cases had not been adopted by
the UK):
· Amendments to IFRS 17: Insurance Contracts - effective 1 January
2023
· Amendments to IAS 1 Presentation of Financial Statements:
Classification of Liabilities as Current or Non-current - effective 1 January
2023*
· Amendments to IAS 1: Presentation of Financial Statements and
IFRS Practice Statement 2: Disclosure of Accounting Policies - effective 1
January 2023*
· Amendments to IAS 8: Accounting policies, Changes in Accounting
Estimates and Errors - Definition of Accounting Estimates - effective 1
January 2023*
· Amendments to IAS 12: Income Taxes - Deferred Tax related to
Assets and Liabilities arising from a Single Transaction - effective 1 January
2023*
*subject to UK endorsement
The new and amended Standards and Interpretations which are in issue but not
yet mandatorily effective are not expected to be material.
1.2 Basis of preparation
The Group's financial statements have been prepared in accordance with UK
adopted international accounting standards and in accordance with the
requirements of the Companies Act 2006.
The consolidated financial statements have been prepared on the historical
cost basis, except for the measurement to fair value of assets and financial
instruments as described in the accounting policies below, and on a going
concern basis.
The amounts presented in the consolidated financial statements are rounded to
the nearest £1.
Going Concern
The Group has incurred a loss before tax of £11,365,645 (2021: £5,519,648)
and had a net cash outflow of £34,932,650 (2021: £16,266,226) from operating
and investing activities. At reporting date there were net current assets of
£14,831,306 (2021: £7,134,881), with cash of £10,386,473 (2021:
£6,212,057). The loss resulted from exploration and administrative related
costs, and an unrealised foreign exchange loss of £2,735,818 from the loan
held by the Australian subsidiary with Newcrest Operations Limited in respect
of the Havieron Joint Venture.
Subsequent to the year end the Group's financial position was strengthened
from the issuance of new shares in August 2022 with total gross proceeds
raised of £29.7 million. In addition, the Company announced on 12 September
2022 the execution of a debt commitment letter of A$220 million (£130
million) and equity agreement with Wyloo Metals of an initial strategic equity
subscription of A$60 million (£35 million) plus an option to acquire up to an
additional £35 million of Greatland shares at £0.1 per share.
1.2 Basis of preparation (continued)
As such, the Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the foreseeable
future. In addition, the Group is able to significantly reduce expenditure on
its own exploration programmes if it wishes to do so. The Group also has the
ability to raise capital for expansion purposes, if required and has
demonstrated a consistent ability to do so in the past.
Greatland has considered sensitivities which include increases to costs to the
Havieron development. In this situation, the Company could cease exploration
activities and reduce overheads. Having prepared forecasts based on current
resources and assessing methods of obtaining additional finance, the Directors
believe the Group has sufficient resources to meet its obligations for a
period of 12 months from the date of approval of these financial statements.
Taking these matters into consideration, the Directors continue to adopt the
going concern basis of accounting in the preparation of the financial
statements. The financial statements do not include the adjustments that would
be required should the going concern basis of preparation no longer be
appropriate.
Reclassification of administrative expenses
The portion of the Group's administrative expenses which are charged as
overheads to the Juri Joint Venture was previously presented as other income
on the face of the statement of comprehensive income. However, management
considers it more relevant for overhead recovered to be presented net of
administrative expenses in line with its accounting policy for joint
operations, which is to recognise its share of expenses. Prior year
comparatives as at 30 June 2021 have been restated by reclassifying £355,645
from other income to administrative expense. The net effect on the statement
of comprehensive income is nil.
Reclassification of mine development
Joint venture cash calls are paid in advance of expenditure being incurred for
the Havieron Joint Venture. Greatland's share of the cash call was previously
presented as mine development on the face of the statement of financial
position. However, management considers it more relevant to present cash calls
paid in advance as a separate line of the statement of financial position as a
current asset. Once the funds have been incurred they are transferred out of
current assets and into mine development (Note 16) or exploration expense
(Note 15) depending on the nature of the transaction. Prior year comparatives
as at 30 June 2021 have been restated by reclassifying £4,203,923 from mine
development (non-current asset) to advance joint venture contributions
(current asset). The net effect on the statement of comprehensive income is
nil.
Other accounting policies
Significant and other accounting policies that summarise the measurement basis
used and are relevant in understanding the financial statements are provided
throughout the notes to the financial statements.
1.3 Significant accounting judgements, estimates and assumptions
The preparation of financial statements requires the use of accounting
estimates which, by definition, will seldom equal the actual results.
Management also needs to exercise judgement in applying the Group's accounting
policies.
This note provides an overview of the areas that involved a higher degree of
judgement or complexity, and of items which are more likely to be materially
adjusted due to estimates and assumptions. Detailed information about each of
these estimates and judgements is included in other notes together with
information about the basis of calculation for each affected line item in the
financial statements.
Description Key estimate or judgement Note
Mine development The recoverable amount of mine development is dependent on the successful Note 16
development and commercial exploration, or alternatively, sale of the
respective area of interest.
Provisions Rehabilitation, restoration and dismantling provisions are reassessed at the Note 25
end of each reporting period. The estimated costs include judgement regarding
the Group's expectation of the level of rehabilitation activities that will be
undertaken, timing of cash flows, technological changes, regulatory
obligations, cost inflation and discount rates.
Impairment on loan due from subsidiary The parent entity holds a loan due from a 100% owned subsidiary. The Note 14
recoverable amount of the loan is dependent on the successful development and
commercial exploration, or alternatively, sale of the respective area of
interest.
1.4 Basis of consolidation
The consolidated accounts combine the accounts of the Company and its 100%
owned subsidiary, Greatland Pty Ltd.
In the Company's statement of financial position, the investment in Greatland
Pty Ltd includes the nominal value of shares issued together with the cash
element of the consideration. As required by the Companies Act 2006, no
premium was recognised on the share issue. In preparing group consolidated
financial statements, the amount by which the fair value of the shares issued
exceeded their nominal value was recorded within a merger reserve on
consolidation, rather than in a share premium account.
Subsidiaries are those entities controlled directly or indirectly by the
Company. The Company controls an investee 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. The results of the
subsidiaries acquired are included in the Consolidated Statement of
Comprehensive Income from the date of acquisition using the same accounting
policies as those of the Group. The consideration transferred in a business
combination is the fair value at the acquisition date of the assets
transferred and the liabilities incurred by the Group and includes the fair
value of any contingent consideration arrangement. Acquisition-related costs
are recognised in the income statement as incurred. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair value at the acquisition
date.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring their accounting policies in line with those used by
other members of the Group.
All intra-group balances and transactions, including any unrealised income and
expenses arising from intragroup transactions, are eliminated in full in
preparing the consolidated financial statements. Unrealised gains arising from
transactions with equity accounted investees are eliminated against the
investment to the extent of the Group's interest in the investee. Unrealised
losses are eliminated in the same way as unrealised gains, but only to the
extent that there is no evidence of impairment.
1.5 Foreign currencies
Both the functional and presentational currency of Greatland Gold plc is
sterling (£). Each group entity determines its own functional currency and
items included in the financial statements of each entity are measured using
that functional currency.
The functional currency of the foreign subsidiary, Greatland Pty Ltd, is
Australian Dollars (A$).
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the rate of exchange ruling at the balance sheet
date. All differences are taken to the income statement.
On consolidation of a foreign operation, assets and liabilities are translated
at the balance sheet rates, income and expenses are translated at rates ruling
at the transaction date. Gains/losses arising on translation of foreign
controlled entities into pounds sterling are taken to the Foreign Currency
Translation Reserve.
2 Segmental information
An operating segment is a component of the Group that engages in business
activities from which it may earn revenue and incur expenditure and about
which separate financial information is available that is evaluated regularly
by the Group's Chief Operating Decision Makers (CODM), who is the Managing
Director, in deciding how to allocate resources and in assessing performance.
Segment name Description
UK The UK sector consists of the parent company which provides investor relations
and corporate functions as well as administrative and management services to
the subsidiary undertaking based in Australia.
Australia This segment consists of the development activities for the Havieron Joint
Venture in Western Australia and exploration and evaluation activities
throughout Australia.
Segment information is evaluated by the executive management team and is
prepared in conformity with the accounting policies adopted for preparing the
financial statements of the Group.
2 Segmental information (continued)
Segment results
Income statement for the year ended 30 June 2022 UK Australia Group
£ £ £
Revenue - - -
Exploration and evaluation costs - (2,984,742) (2,984,742)
Administrative and other costs (2,055,670) (3,226,647) (5,282,317)
Operating loss (2,055,670) (6,211,389) (8,267,059)
Depreciation and amortisation expenses (37,699) (132,692) (170,391)
Other income - - -
Finance income 6 1,669 1,675
Foreign exchange losses - (2,735,818) (2,735,818)
Finance expense (3,253) (190,799) (194,052)
Loss before income tax (2,096,616) (9,269,029) (11,365,645)
Income statement for the year ended 30 June 2021 UK Australia Group
£ £ £
Revenue - - -
Exploration and evaluation costs - (3,294,558) (3,294,558)
Administrative and other costs (1,088,816) (695,035) (1,783,851)
Operating loss (1,088,816) (3,989,593) (5,078,409)
Depreciation and amortisation expenses (25,133) (215,697) (240,830)
Other income 10,000 - 10,000
Finance income 20 962 982
Foreign exchange losses - (193,976) (193,976)
Finance expense (6,100) (11,315) (17,415)
Loss before income tax (1,110,029) (4,409,619) (5,519,648)
Adjustments and eliminations
Net finance income, finance costs and taxes are not allocated to individual
segments as they are managed on a Group basis.
Segment assets and liabilities
Assets and Liabilities as at 30 June 2022 UK Australia Group
£ £ £
Segment assets 711,163 54,559,528 55,270,691
Segment liabilities (1,954,625) (47,590,464) (49,545,089)
Assets and Liabilities as at 30 June 2021 UK Australia Group
£ £ £
Segment assets 5,359,105 18,639,255 23,998,360
Segment liabilities (426,530) (19,416,937) (19,843,467)
3 Expenses
Profit before income tax includes the following expenses:
Note 2022 2021
£ £
Administrative expenses (a) 5,415,416 1,848,796
Auditors' remuneration:
Total audit of financial reports to PKF Littlejohn LLP 40,600 40,600
Total review of financial reports to PKF Littlejohn LLP 9,000 -
Total audit of financial reports to PKF Perth for the subsidiary 11,405 -
Total audit of financial reports to Charles Foti & Co - 6,345
Depreciation 37,291 175,884
Amortisation of right-of-use assets 133,100 64,946
Foreign exchange (gains)/losses (b) 2,735,818 193,976
(a) Administrative expenses
The Group incurred £1,331,410 in relation to the Havieron Joint Venture 5%
option and valuation work including updating the Reserve and Resource. In
addition, £1,025,295 of costs were recognised for national insurance
contributions relating to options, with the remaining increase relating to
increased activity and growth in the business.
(b) Foreign exchange (gains)/losses
The Group has recognised an unrealised foreign exchange loss of £2,735,818
(2021: £193,976) in the income statement predominately a result of the
US$52,360,179 loan held by the Australian subsidiary with Newcrest Operations
Limited in respect of the Havieron Joint Venture. The functional currency of
the Australian subsidiary is Australian dollars while the loan is denominated
in US dollars. The unrealised foreign exchange loss was incurred as a result
of the movements of the Australian dollar against the US dollar during the
period.
On consolidation, these balances are retranslated to sterling (£)
presentation currency.
4 Employee information
Group Group
2022 2021
£ £
Director and employee costs comprised:
Wages and salaries 2,150,301 1,696,082
Bonus 728,631 338,068
Pension / superannuation 171,065 169,723
Share-based payments 193,192 25,667
Total director and employee benefits 3,243,189 2,229,540
Average Number Average Number
Exploration 9 8
Administrative 8 7
Recognition and measurement
Employee benefits
Wages, salaries and defined contribution superannuation expense are recognised
as and when employees render their services. Expenses for non-accumulating
personal leave are recognised when the leave is taken and measured at the
rates paid or payable.
Share-based payments
The accounting policy, key estimates and judgements relating to employee
share-based payments are set out in Note 24.
5 Finance income and finance costs
Note 2022 2021
£ £
Finance income
Interest on bank deposits calculated using the effective interest rate method 1,675 982
Total finance income 1,675 982
Finance costs
Bank charges (1,967) -
Interest on lease liabilities (14,785) (17,415)
Provisions: Unwinding of discount 25 (177,300) -
Total finance costs (194,052) (17,415)
Recognition and measurement
Interest income is recognised as interest accrues using the effective interest
method.
Provisions and other payables are discounted to their present value when the
effect of the time value of money is significant. The impact of the unwinding
of these discounts is reported in finance costs.
Refer to Note 16 for borrowing costs capitalised.
6 Taxation
2022 2021
£ £
Analysis of charge in year
Deferred tax - -
Current tax - -
Total - -
There was no deferred or current tax during the year or in prior year.
Factors affecting tax charge for the year
The tax assessed on the loss on ordinary activities for the period differs
from the standard rate of the corporation tax in the UK of 19% (2021: 19%) and
Australia of 30% (2021: 25%). The differences are explained below:
2022 2021
£ £
Loss before tax for the year (11,365,645) (5,519,648)
Weighted average applicate rate of tax of 27.7% (2021: 22.5%) (3,148,284) (1,241,921)
Increase (decrease) in income tax due to:
Permanent differences 704,730 5,775
Temporary differences (1,130,875) -
Tax losses on which no deferred tax asset is recognised 3,574,429 1,236,146
Income Tax Expense - -
(a) Change in applicable tax rate
The weighted average applicable tax rate of 27.7% (2021: 22.5%) used is a
combination of the standard rate of the corporation tax rate for entities in
the United Kingdom of 19% (2021: 19%), and 30% (2021: 25%) in Australia.
The Australian Government passed legislation which reduced the corporate tax
rate for small and medium base rate entities to 25% for the 2021-22 and later
income years. In prior year, Greatland expected to qualify as a base rate
entity given it had a turnover of less than $50 million and less than 80% of
its assessable income being passive income for the foreseeable future, it
adopted a 25% tax rate.
In the current year, Greatland has remeasured its deferred tax balances at
30%, based on the effective tax rate that will apply in the year the temporary
differences are expected to reverse as it is anticipated Greatland will have
aggregated turnover greater than $50 million in future years.
No deferred tax asset for tax losses has been recognised because there is
insufficient certainty at this stage of the timing of suitable future profits
against which they can be recovered.
6 Taxation (continued)
2022 2021
£ £
Losses carried forward:
Brought forward losses 30 June 2021 24,361,440 17,073,458
Currency exchange movements 439,805 (221,029)
Prior year adjustment (2,102,620) 1,989,363
Current year losses 12,754,844 5,519,648
Losses carried forward 30 June 2022 35,453,469 24,361,440
Recognition and measurement
Current tax assets and liabilities for the current and prior periods are
measured as the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or substantially enacted by the balance sheet date.
Full provision is made for deferred taxation resulting from timing differences
which have arisen but not reversed at the balance sheet date.
Deferred tax assets on carried forward losses are only recorded where it is
expected that future trading profits will be generated in which this asset can
be offset. The carrying amount of deferred tax assets is reviewed at each
balance sheet date and reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to allow all or part of the
asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset realised. Deferred tax is
charged or credited to profit or loss, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
7 Earnings per Share
2022 2021
£ £
Loss for the period (11,365,645) (5,519,648)
Weighted average number of ordinary shares of £0.001 in issue 4,016,373,291 3,872,578,735
Loss per share (0.28) pence (0.14) pence
The weighted average number of the Group shares including outstanding options
and the contingent consideration for Havieron is 4,097,373,291 (2021:
3,975,828,735). Dilutive earnings per share are not included on the basis
inclusion of potential ordinary shares would result in a decrease in loss per
share, and is considered anti-dilutive.
Subsequent to the year end the following share transactions occurred that were
not retrospectively adjusted in the calculation of earnings per share:
· Contingent consideration for Havieron of 138,981,150 new ordinary
shares issued on 2 August 2022
· 362,880,180 placing shares from the equity raise completed on 25
August 2022; and
· The initial strategic equity investment from Wyloo Metals of A$60
million (£35 million)
For further details, refer to events after the reporting period in Note 28.
Recognition and measurement
Basic earnings per share is calculated as net profit attributable to members
of the parent, adjusted to exclude any costs of servicing equity (other than
dividends) and preference share dividends, divided by the weighted average
number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members
of the parent, adjusted for:
· Costs of servicing equity (other than dividends) and preference
share dividends;
· The after tax effect of dividends and interest associated with
dilutive potential ordinary shares that have been recognised as expenses; and
Other non-discretionary changes in revenues or expenses during the period that
would result from the dilution of potential ordinary shares; divided by the
weighted average number of ordinary shares and dilutive potential ordinary
shares, adjusted for any bonus element.
8 Cash and cash equivalents
Group Group
2022 2021
£ £
Cash at bank 10,386,473 6,212,057
Total cash and cash equivalents 10,386,473 6,212,057
Recognition and measurement
Cash and cash equivalents in the balance sheet and statement of cash flows
comprise cash at bank and on hand and short-term deposits that are readily
convertible to known amounts of cash with insignificant risk of change in
value. Short-term deposits are usually between one to three months depending
on the short term cash flow requirements of the Group.
9 Advanced joint venture cash contributions
Group Group
2022 2021
£ £
Havieron joint venture cash call 8,415,112 4,203,923
Total advanced joint venture cash contributions 8,415,112 4,203,923
Recognition and measurement
Joint venture cash calls are paid in advance of expenditure being incurred.
Once the funds have been incurred they are transferred out of current assets
and into the relevant asset or expenditure depending on the nature of the
transaction.
10 Payables and other liabilities
Group Group
2022 2021
£ £
Trade creditors 2,608 1,169,705
Payroll tax and other statutory liabilities 281,498 419,647
Juri joint venture funds received in advance 948,744 334,578
Accruals 2,857,716 1,367,197
Other payables 97,623 167,438
Total payables and other liabilities 4,188,189 3,458,565
Recognition and measurement
Trade payables and other payables are carried at amortised cost and represent
liabilities for goods and services provided to the Group prior to the end of
the financial year that are unpaid and arise when the Group becomes obliged to
make future payments in respect of the purchase of these goods and services.
The amounts are unsecured and are usually paid within 30 days of
recognition.
Other payables
Other payables include the company's liabilities for annual leave which are
classified as short-term benefits.
Short term employee benefits are liabilities for wages and salaries, including
non-monetary benefits, annual leave and accumulating sick leave that are
expected to be settled wholly within 12 months after the end of the period in
which the employees render the related service are recognised in respect of
employees' services up to the end of the reporting period and are measured at
the amounts expected to be paid when the liabilities are settled. The
liabilities are presented as current other payables in the balance sheet.
11 Borrowings
Group Group
2022 2021
£ £
Opening balance 12,189,790 -
Debt drawdown 24,234,861 11,879,983
Facility B fees 185,569 -
Capitalised interest 2,074,137 267,731
Effect of foreign exchange revaluation 2,735,829 193,976
Adjustment of currency translation 1,682,525 (151,900)
Total non-current borrowings 43,102,711 12,189,790
The above amounts owing relate to a loan agreement with Newcrest Operations
Limited dated 29 November 2020 in respect of the Havieron Joint Venture.
The loan is made up of both Facility A and Facility B. Facility B came into
effect in October 2021, when the Stage 4 commitment was satisfied by Newcrest.
Interest is calculated on the LIBOR rate plus a margin of 8% pa. Interest is
calculated every 90 days. Refer to Note 19 for maturities of financial
liabilities.
Recognition and measurement
At initial recognition, financial liabilities are classified as financial
liabilities at fair value through profit or loss, amortised cost, or as
derivatives designated as hedging instruments in an effective hedge, as
appropriate. All financial liabilities are recognised initially at fair value
and, in the case of those measured at amortised cost, net of directly
attributable transaction costs. The subsequent measurement of financial
liabilities depends on their classification, as described below:
Financial liabilities measured at amortised cost
Trade and other payables and borrowings are measured at amortised cost using
the effective interest method. Gains and losses are recognised in profit or
loss when the liabilities are derecognised as well as through the effective
interest method amortisation process.
Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the effective
interest. The effective interest amortisation is included as finance costs in
the statement of profit or loss.
12 Share Capital and Share Premium
No. of Shares Share Capital Share Premium
£
£
Balance at 1 July 2021 of authorised fully paid shares 3,947,270,143 3,947,270 24,064,307
Issued at £0.03 - exercise of options on 29 July 2021 250,000 250 7,250
Issued at £0.025 - under block listing authority on 2 August 2021 6,216,216 6,216 149,190
Issued at £0.025 - under block listing authority on 1 September 2021 10,810,812 10,811 259,459
Issued at £0.145 - from fundraise on 19 November 2021 82,000,000 82,000 11,808,000
Issued at £0.014 - exercise of options on 18 March 2022 3,000,000 3,000 39,000
Issued at £0.02 - exercise of options on 18 March 2022 3,000,000 3,000 57,000
Issued at £0.03 - exercise of options on 17 May 2022 9,000,000 9,000 261,000
Issued at £0.025 - exercise of options on 17 May 2022 9,000,000 9,000 216,000
Less: transaction costs on share issue - - (694,933)
Balance at 30 June 2022 of authorised fully paid shares 4,070,547,171 4,070,547 36,166,273
Total authorised fully paid shares issued during 30 June 2022 123,277,028 123,277 12,101,966
12 Share Capital and Share Premium (continued)
No. of Shares Share Capital Share Premium
£
£
Balance at 1 July 2020 of authorised fully paid shares 3,760,206,631 3,760,207 19,878,783
Issued at £0.014 - exercise of options on 02 July 2020 14,000,000 14,000 182,000
Issued at £0.02 - exercise of options on 24 July 2020 5,000,000 5,000 95,000
Issued at £0.025 - exercise of options on 29 July 2020 1,250,000 1,250 30,000
Issued at £0.025 - under block listing authority on 04 August 2020 1,591,893 1,592 38,205
Issued at £0.025 - under block listing authority on 01 September 2020 11,891,892 11,892 285,405
Issued at £0.02 - exercise of options on 25 September 2020 6,000,000 6,000 114,000
Issued at £0.007 - exercise of options on 25 September 2020 2,500,000 2,500 15,000
Issued at £0.025 - exercise of options on 28 September 2020 13,000,000 13,000 312,000
Issued at £0.03 - exercise of options on 28 September 2020 5,000,000 5,000 145,000
Issued at £0.025 - exercise of options on 29 September 2020 3,000,000 3,000 72,000
Issued at £0.03 - exercise of options on 29 September 2020 3,000,000 3,000 87,000
Issued at £0.025 - under block listing authority on 01 October 2020 32,816,214 32,816 787,589
Issued at £0.025 - under block listing authority on 02 November 2020 13,763,512 13,764 330,324
Issued at £0.025 - under block listing authority on 31 December 2020 5,645,404 5,645 135,490
Issued at £0.025 - exercise of options on 28 January 2021 5,000,000 5,000 120,000
Issued at £0.03 - exercise of options on 28 January 2021 5,000,000 5,000 145,000
Issued at £0.007 - exercise of options on 28 January 2021 2,500,000 2,500 15,000
Issued at £0.025 - under block listing authority on 01 February 2021 6,996,487 6,996 167,916
Issued at £0.025 - under block listing authority on 01 March 2021 2,351,351 2,351 56,433
Issued at £0.025 - under block listing authority on 01 April 2021 5,216,218 5,216 125,189
Issued at £0.025 - exercise of options on 06 April 2021 9,000,000 9,000 216,000
Issued at £0.03 - exercise of options on 06 April 2021 9,000,000 9,000 261,000
Issued at £0.02 - exercise of options on 06 May 2021 9,000,000 9,000 171,000
Issued at £0.02 - exercise of options on 03 June 2021 14,000,000 14,000 266,000
Issued at £0.025 - under block listing authority on 30 June 2021 540,541 541 12,973
Balance at 30 June 2021 of authorised fully paid shares 3,947,270,143 3,947,270 24,064,307
Total authorised fully paid shares issued during 30 June 2021 187,063,512 187,063 4,185,524
Capital management
Management controls the capital of the Group in order to generate long-term
shareholder value and ensure that the Group can fund operations and continue
as a going concern. Management effectively manages the Group's capital by
assessing the Group's financial risks and adjusting its capital structure in
response to changes in these risks and in the market. These responses include
share issues and debt considerations. Given the nature of the Group's current
activities the entity will remain dependent on debt and equity funding in the
short to medium term until such time as the Group becomes self-financing from
the commercial production of mineral resources.
Recognition and measurement
Share capital is the nominal value of shares issued at £0.001.
Share premium is the amount subscribed for share capital in excess of nominal
value, less share issue cost.
Ordinary shares participate in dividends and the proceeds on winding up the
Company in proportion to the number of shares held. At shareholder meetings
each ordinary share is entitled to one vote when a poll is called, otherwise
each shareholder has one vote on a show of hands.
13 Dividends
No dividends were paid or proposed by the Directors (2021: nil).
14 Trade and other receivables
Group Group
2022 2021
£ £
Current trade and other receivables
Other debtors - 78,198
Loans due from subsidiary - -
Total current trade and other receivables - 78,198
The loan due from the subsidiary was interest free throughout the period and
has no fixed repayment date. An impairment of £2,700,000 was made against the
loan in 2015. Following the completion of the Pre-Feasibility Study for the
Havieron project, the investment in Greatland Pty Ltd is considered to be
fully recoverable by management and therefore the impairment reversed during
30 June 2022 (2021: nil).
Key estimates and assumptions - Impairment on loan due from subsidiary
The Company holds a loan due from a 100% owned subsidiary, Greatland Pty Ltd.
Greatland Pty Ltd holds the Group's interest in the Havieron Joint Venture.
The recoverable amount of the loan is dependent on the successful development
and commercial exploration of the Havieron Joint Venture, or alternatively,
sale of the respective area of interest. Management has concluded the loan
will be recoverable on this basis.
Recognition and measurement
Trade and other receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest method,
less any allowance for the expected future issue of credit notes and for
non-recoverability due to credit risk. The Group applies the IFRS 9 simplified
approach to measuring expected credit losses which uses a lifetime expected
loss allowance for all trade receivables and contract assets. To measure
expected credit losses, trade receivables and contract assets have been
grouped based on shared risk characteristics. No such credit loss has been
recorded in these financial statements as any effect would be immaterial.
15 Exploration and evaluation assets
2022 2021
£ £
As at 1 July - -
Expenditure and exploration tenements acquired 90,008 -
Adjustment of currency translation 3,564 -
As at 30 June 93,572 -
Recognition and measurement
Exploration and evaluation and development assets includes acquisition costs,
costs associated with exploring, investigating, examining and evaluating an
area of mineralisation, and assessing the technical feasibility and commercial
viability of extracting the mineral resource from that area. Other than
acquisition costs, exploration and evaluation expenditure incurred on licences
where the commercial viability of extracting the mineral resource has not yet
been established is generally expensed when incurred. Once the commercial
viability of extracting the mineral resource is demonstrable (at which point,
the Group considers it probable that economic benefits will be realised), the
Group capitalises any further evaluation costs incurred. These costs are
classified as mine development.
The recoverability of the exploration and evaluation assets is dependent on
the successful development and commercial exploration, or alternatively, sale
of the respective area of interest.
Exploration and evaluation and development assets are assessed for impairment
if:
· Insufficient data exists to determine commercial viability; or
· Other facts and circumstances suggest that the carrying amount
exceeds the recoverable amount.
An exploration and evaluation asset will be reclassified to mine development
when the technical feasibility and commercial viability of extracting a
mineral resource are demonstrable and a decision has been made to develop and
extract the resource. Exploration and evaluation assets shall be assessed for
impairment, and any impairment loss shall be recognised, before
reclassification to mine properties. No amortisation is charged during the
exploration and evaluation phase.
16 Mine Development
Note 2022 2021
£ £
As at 1 July 12,887,669 -
Additions 21,171,351 8,929,976
Adjustment to rehabilitation provision 25 (2,230,432) 3,813,372
Capitalised Facility B fees 11 185,569 -
Capitalised interest 11 2,074,137 267,731
Adjustment of currency translation 1,493,596 (123,380)
As at 30 June 35,581,890 12,887,699
Recognition and measurement
Mine Development
Mine development is stated at historical cost, less depreciation and
impairment losses, if any. Historical cost includes expenditure that is
directly attributable to the acquisition of the items and costs incurred in
bringing the asset into use.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item flow to the Group and the cost of
the item can be measured reliably. The carrying amount of the replaced part is
de-recognised. All other repairs and maintenance costs are recognised in the
income statement as incurred.
An item of mine development is derecognised upon disposal or when no future
economic benefits are expected from its use or disposal. Any gain or loss
arising on derecognition of the asset (calculated as the difference between
the net disposal proceeds and the carrying amount of the asset) is included in
the income statement when the asset is derecognised.
Capitalised borrowing costs
General and specific borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying asset are capitalised
during the period of time that is required to complete and prepare the asset
for its intended use or sale. Qualifying assets are assets that necessarily
take a substantial period of time to get ready for their intended use or sale.
All other borrowing costs are recognised in income in the period in which they
are incurred.
Key estimates and assumptions - Mine Development
The recoverable amount of mine development is dependent on the successful
development and commercial exploration, or alternatively, sale of the
respective area of interest. The Group's estimate of the Ore Reserve and
Mineral Resource is based on information compiled by appropriately qualified
persons relating to the geological data on the size, depth and shape of the
ore body, and requires complex geological judgments to interpret the data. The
estimation of Ore Reserves is based on factors such as estimates of foreign
exchange rates, commodity prices, future capital requirements, and production
costs along with geological assumptions and judgments made in estimating the
size and grade of the ore body and removal of waste material. Management have
determined the mine development asset to be recoverable based on the Havieron
Reserve and Resource Update released on 3 March 2022. Future changes in these
estimates may impact upon the carrying value of mine properties, property,
plant and equipment, and provision for rehabilitation. A copy of the Havieron
Reserve and Resource Update is available on the company's website:
https://greatlandgold.com (https://greatlandgold.com)
http://www.greatlandgold.com/ (http://www.greatlandgold.com)
17 Leases
(i) Amounts recognised in the balance sheet
Group Group
2022 2021
£ £
Right-of-use asset
Office and other leases 272,235 341,912
Lease liabilities
Current lease liabilities 208,049 54,947
Non-current lease liabilities 70,208 293,452
Total lease liabilities 278,257 348,399
Maturity analysis of undiscounted future lease payments
Within one year 213,654 70,637
Later than one year but not later than five years 70,753 200,161
Later than five years - 123,636
Total undiscounted future lease payments 284,407 394,434
Additions to the right-of-use assets during the 2022 financial year were
£267,782 (2021: nil).
(ii) Depreciation of right-of-use assets
The amortisation disclosed in the statement of profit or loss includes
£133,100 (2021: £64,946) for right-of-use assets.
(iii) Interest on lease liabilities
The interest expense disclosed in the statement of profit or loss includes
£14,785 (2021: £17,415) for lease liabilities.
(iv) The group's leasing activities and how these are accounted for
The Group leases various offices, warehouses, equipment and vehicles. Rental
contracts are typically made for fixed periods of 6 months to 8 years.
Payments associated with short-term leases of equipment and vehicles and all
leases of low-value assets are recognised on a straight-line basis as an
expense in the statement of profit or loss. Short-term leases are leases with
a lease term of 12 months or less without a purchase option. Low-value assets
comprise IT equipment and small items of office furniture. Lease payments for
short-term leases and leases of low value assets amount to £63,751 (2021:
£21,942) are recognised as expenses in profit or loss.
(v) Extension and termination options
Extension options have not been included in the various leases on the basis it
is not reasonably certain the lease terms are to be extended.
Recognition and measurement
Assets and liabilities arising from a lease are initially measured on present
value basis. Lease liabilities include the net present value of the
following lease payments:
· fixed payments (including in-substance fixed payments), less any
lease incentives receivable
· variable lease payments that are based on an index or a rate,
initially measured using the index or rate as at the commencement date
· amounts expected to be payable by the group is reasonably certain
to exercise that option, and
· payments of penalties for terminating the lease, if the lease
term reflects the group exercising that option
The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be readily determined, which is generally the case
for leases in the group, the lessee's incremental borrowing rate is used,
being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset
in a similar economic environment with similar terms, security and conditions.
The group is exposed to potential future increases in variable lease payments
based on an index or rate, which are not included in the lease liability until
they take effect. When adjustments to lease payments based on an index or rate
take effect, the lease liability is reassessed and adjusted against the
right-of-use asset.
Lease payments are allocated between principal and finance costs. The finance
cost is charged to profit or loss over the lease period so as to produce a
constant periodic rate of interest on the remaining balance of the liability
for each period.
17 Leases (continued)
Right-of-use assets are measured at cost comprising the following:
· the amount of the initial measurement of lease liability
· any lease payments made at or before the commencement date less
any lease incentives received
· any initial direct costs, and restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset's
useful life and the lease term on a straight-line basis. If the group is
reasonably certain to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset's useful life.
18 Property, plant and equipment
Leasehold Improvements
Motor Vehicles Equipment £ Total
£ £ £
Cost
At 1 July 2021 130,901 247,375 6,167 384,443
Disposals - (75,290) (6,432) (81,722)
Additions 19,708 23,677 - 43,385
Adjustment to currency translation 5,640 10,655 265 16,560
At 30 June 2022 156,249 206,417 - 362,666
Accumulated Depreciation
At 1 July 2021 53,009 210,917 161 264,087
Disposals - (60,663) (316) (60,979)
Additions 26,638 10,513 142 37,293
Adjustment to currency translation 17,302 9,500 13 26,815
At 30 June 2022 96,949 170,267 - 267,216
Net book value
At 30 June 2022 59,300 36,150 - 95,450
At 30 June 2021 77,892 36,458 6,006 120,356
Leasehold Improvements
Motor Vehicles Equipment £ Total
£ £ £
Cost
At 1 July 2020 117,546 120,451 6,320 244,317
Disposals (32,837) - - (32,837)
Additions 49,050 129,853 - 178,903
Adjustment to currency translation (2,858) (2,929) (153) (5,940)
At 30 June 2021 130,901 247,375 6,167 384,443
Depreciation
At 1 July 2020 44,955 67,294 7 112,256
Disposals (19,160) - - (19,160)
Additions 28,660 147,068 156 175,884
Adjustment to currency translation (1,446) (3,445) (2) (4,893)
At 30 June 2021 53,009 210,917 161 264,087
Net book value
At 30 June 2021 77,892 36,458 6,006 120,356
At 30 June 2020 72,591 53,157 6,313 132,061
18 Property, plant and equipment (continued)
Recognition and measurement
Plant and equipment is stated at historical cost. Historical cost includes
expenditure that is directly attributable to the acquisition of the items and
costs incurred in bringing the asset into use.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item flow to the Group and the cost of
the item can be measured reliably. The carrying amount of the replaced part is
de-recognised. All other repairs and maintenance costs are recognised in the
income statement as incurred.
An item of property, plant and equipment and any significant part initially
recognised is derecognised upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss arising on
derecognition of the asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in the
income statement when the asset is derecognised.
Depreciation
Depreciation is calculated using the straight-line method to allocate their
costs over their estimated useful lives, or in the case of leasehold
improvements and curtained leased plant and equipment, the shorter lease term
as follows:
· Motor vehicles:
8 years
· Equipment:
5 years
· Leasehold improvements: 2 - 10 years
19 Financial Instruments
This note explains the Group's material exposure to financial instrument risks
and how these risks could affect the Group's future financial performance.
Financial Instrument Risks Exposure arising from Measurement Management
Market risk - foreign exchange Recognised financial assets and liabilities not denominated in GBP Cash flow forecasting Assessment of use of financial instruments, hedging contracts or techniques to
mitigate risk
Sensitivity analysis
Market risk - interest rate Long-term borrowings at variable rates Cash flow forecasting Assessment of use of financial instruments, hedging contracts or techniques to
mitigate risk
Sensitivity analysis
Credit risk Cash and cash equivalents Credit ratings Diversification of banks, credit limits, investment grade credit ratings
Liquidity risk Borrowings and other liabilities Rolling cash flow forecasts Availability of committed credit lines and borrowing facilities, equity raises
There have been no changes in financial risks from the previous year. The
Group did not have any hedging in place at 30 June 2022. Details on commodity
price risk is included in Principal Risks and Uncertainties.
19 Financial Instruments (continued)
(a) Market Risk
(i) Foreign currency risk and sensitivity analysis
The Group's exposure to foreign currency risk at the end of the reporting
period, expressed in GBP, was as follows:
30 June 2022 30 June 2021
USD AUD USD AUD
$ $ $ $
Cash and cash equivalents - 17,196,375 - 1,919,436
Borrowings 52,360,179 - 16,856,024 -
The following table demonstrates the sensitivity of the exposure at the
balance sheet date to a reasonably possible change in AUD/USD/GBP exchange
rate, with all other variables held constant. The impact on the Group's profit
before tax and equity is due to changes in the fair value of monetary assets
and liabilities.
Effect on profit before tax
2022 2021
£ £
USD/GBP exchange rate - increase 10% (2021: 10%) (4,310,271) (1,218,979)
USD/GBP exchange rate - decrease 10% (2021: 10%) 4,310,271 1,218,979
AUD/GBP exchange rate - increase 10% (2021: 10%) 975,207 104,356
AUD/GBP exchange rate - decrease 10% (2021: 10%) (975,207) (104,356)
(ii) Interest rate risk management and sensitivity analysis
The Group's policy is to retain its surplus funds in interest bearing deposit
accounts including term deposits available up to twelve months' maximum
duration. The increase / decrease of 2% in interest rates will impact the
Group's income statement by a gain/loss of £218,116 (2021: £124,862). The
Group considers that a +/-2% movement in interest rates represents reasonable
possible changes.
The Group has borrowing facilities with Newcrest as part of the Havieron
project with a total facility limit of US$50 million, excluding interest.
Interest is calculated on the LIBOR rate plus a margin of 8% pa. Interest is
calculated every 90 days. Under the Group's accounting policy, interest on the
loan is capitalised to mine development and therefore movements in interest
rates had no impact on the profit or loss in the current year.
(b) Credit risk
Credit risk is the risk that a counterparty will not meet its obligations
under a financial instrument or customer contract, leading to a financial
loss. The Group is exposed to credit risk from its financing activities,
including deposits with financial institutions. At the reporting date, the
carrying amount of the Group's financial assets represents the maximum credit
exposure.
The credit risk on cash and cash equivalents is managed by restricting dealing
and holding of funds to banks which are assigned high credit ratings by
international credit rating agencies. The Group's cash and cash equivalents as
at 30 June 2022 are predominately held with financial institutions with an
investment grade long term credit rating with Standard & Poor's. As
short-term deposits have maturity dates of less than twelve months, the Group
has assessed the credit risk on these financial assets using life time
expected credit losses. In this regard, the Group has concluded that the
probability of default on the term deposits is relatively low. Accordingly, no
impairment allowance has been recognised for expected credit losses on the
short-term deposits.
(c) Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting
obligations associated with financial liabilities that are settled by
delivering cash or another financial asset. The Group's approach to managing
liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking damage
to the Group's reputation. The Group manages liquidity risk by conducting
regular reviews of the timing of cash flows in order to ensure sufficient
funds are available to meet these obligations.
To date the Group has relied upon debt and equity funding to finance
operations. The Directors are confident that adequate cash resources exist to
finance operations to commercial exploitation, but controls over expenditure
are carefully managed.
19 Financial Instruments (continued)
(i) Maturities of financial liabilities
The table below analyses the Group's financial liabilities into relevant
maturity groupings based on their contractual maturities. The amounts
disclosed in the table are contractual discounted cash flows. Balances due
within 12 months equal their carrying balances as the impact of discounting is
not significant.
Contractual maturities of financial liabilities Total contractual cashflows
At 30 June 2022 Less than 6 months 6- 12 months Between 1 and 2 years Between 2 and 5 years Over 5 years £ Carrying amount
£ £ £ £ £ £
Trade payables 3,269,517 918,672 - - - 4,188,189 4,188,189
Borrowings - - 43,102,711 - - 43,102,711 43,102,711
Lease liabilities 113,667 99,987 70,753 - - 284,407 278,257
Total liabilities 3,383,184 1,018,659 43,173,464 - - 47,575,307 47,569,157
Contractual maturities of financial liabilities Total contractual cashflows
At 30 June 2021 Less than 6 months 6- 12 months Between 1 and 2 years Between 2 and 5 years Over 5 years £ Carrying amount
£ £ £ £ £ £
Trade payables 3,458,565 - - - - 3,458,565 3,458,565
Borrowings - - - 12,189,790 - 12,189,790 12,189,790
Lease liabilities 35,053 35,584 58,255 141,906 123,636 394,434 348,399
Total liabilities 3,493,618 35,584 58,255 12,331,696 123,636 16,042,789 15,996,754
20 Commitments
Capital commitments
Capital expenditure contracted for at the end of the reporting period but not
recognised as liabilities is as follows:
Group
2022 2021
£ £
Within one year 5,384,329 -
Later than one year but not later than five years - -
Later than five years - -
Total capital commitments 5,384,329 -
21 Investment in subsidiary - Company
2022 2021
£ £
As at 1 July 50,000 50,000
Reversal of impairment 200,000 -
As at 30 June 250,000 50,000
In 2015 an impairment of £200,000 was made against the investment in the
subsidiary. Following the completion of the Pre-Feasibility Study for the
Havieron project, the investment in Greatland Pty Ltd is considered to be
fully recoverable by management and therefore the impairment reversed during
the year ended 30 June 2022 (2021: nil).
21 Investment in subsidiary - Company (continued)
The parent company of the Group holds more than 20% of the share capital of
the following company:
Company Country of registration Class Proportion held Nature of business
Greatland Pty Ltd Australia Common 100% Mining development and exploration of precious and base metals
The registered address of Greatland Pty Ltd is Level 3, 502 Hay Street,
Subiaco, WA 6008.
Recognition and measurement
Investments in subsidiary companies are classified as non-current assets and
included in the statement of financial position of the Company at cost, less
any provision for impairment.
Investments in subsidiaries that suffered an impairment are reviewed for
possible reversal of the impairment at the end of each reporting period.
22 Interest in joint operations
Greatland Pty Ltd, a subsidiary of Greatland Gold plc has the following joint
ventures accounted for as joint arrangements:
% interest
Company 2022 2021 Nature of business
Havieron Joint Venture 30% 30% Mining development and exploration of precious and base metals
Juri Joint Venture 49% 75% Exploration of precious and base metals
Recognition and measurement
A joint operation is a joint arrangement whereby the parties of the
arrangement have rights to the assets, and obligations for the liabilities,
relating to the arrangement.
When the Group undertakes its activities under joint operations, the Group as
a joint operator recognises in relation to its interest in a joint operation:
· Its assets, including its share of any assets held jointly
· Its liabilities, including its share of any liabilities incurred
jointly
· Its revenue from the sale of its share of the output arising from
the joint operation
· Its share of the revenue from the sale of the output by the joint
operation
· Its expenses, including its share of any expenses incurred
jointly.
Havieron Joint Venture
The Havieron project is operated under a Joint Venture Agreement between
Greatland and Newcrest Operations Limited entered into on 29 November 2020.
The agreement provides a formal framework for the arrangements between the two
parties beyond the existing Farm-in Agreement and facilitates the expansion of
exploration activities at Havieron and the acceleration of early works,
including the construction of a box-cut and decline.
As at 30 June 2022, Newcrest had met the Stage 4 expenditure requirement
(US$65 million) resulting in an overall joint venture interest of 70% and 30%
for Greatland.
Juri Joint Venture
The Juri Joint Venture consists of two exploration licences in the prospective
Paterson region, Black Hills and Paterson Range East, under a Joint Venture
with Newcrest. Newcrest has the right to earn up to 75% interest by spending
up to A$20m in total as part of a two-stage farm-in over five years. On 19
October 2021, Newcrest advanced to Stage 2 and earned an additional 26%
interest, resulting in Greatland's interest reducing from 75% to 49%.
Greatland has continued in the role of Manager for the Juri Joint Venture.
23 Related party transactions
(a) Remuneration of key management personnel
The remuneration of the directors, and other key management personnel of the
Group, is set out below in Note 27.
(b) Transactions with Directors
During the year, the following directors of the Company participated in the
share subscription in November 2021 at an issue price of £0.145 per share, as
follows:
Number of Shares Subscribed £
Shaun Day (Managing Director) 375,000 54,400
(c) Ultimate Controlling Party
There is considered to be no ultimate controlling entity.
24 Share-based payments
The Company grants share options and performance rights to employees as part
of the remuneration to enable them to purchase ordinary shares in the Company.
Performance rights granted
The Group issued 2 million performance shares on 8 July 2021 to Christopher
Toon as part of his appointment as Chief Financial Officer, subject to the
achievement of certain performance criteria. In the prior year, the Group
issued 5 million options to Shaun Day as Managing Director. The fair value of
the performance options using an adjusted Black-Scholes method and assumptions
were as follows:
Fair value of performance rights and assumptions 2022 2021
Grant date 8 July 2021 5 May 2021
Fair value £0.18 £0.076
Share price at grant date £0.19 £0.20
Exercise price £0.01 £0.25
Expected volatility 74% 51%
Vesting date 30 June 2024 5 May 2024
Expected dividends 0.00% 0.00%
Risk free interest rate 0.155% 0.5%
Valuation methodology Black-Scholes Black-Scholes
The share-based payments expense recognised in the statement of comprehensive
income for performance rights granted during the year was £116,731 (2021:
£11,833). The share-based payment expense, related to the performance rights
granted in during the year, to be recognised in future periods is £237,719
(2021: £217,533), based on service conditions being met.
The total share-based payments expense recognised in the statement of
comprehensive income for the year was £193,192 (2021: £25,667).
24 Share-based payments (continued)
Share options and performance rights outstanding
Share options outstanding at the end of the year have the following expiry
dates and exercise prices:
Date of grant Exercisable from Expiry date Exercise price Number granted Number at
30 June 2022
20-Apr-2016 20-Apr-2016 20-Apr-2023(1) £0.002 100,000,000 25,000,000
18-Jan-2017 18-Jul-2017 18-Jul-2023(1) £0.0028 75,000,000 14,000,000
18-Aug-2017 18-Feb-2018 16-Feb-2023(1) £0.007 60,000,000 7,500,000
7-Sep-2018 7-Sep-2019 6-Sep-2023(1) £0.014 39,500,000 2,500,000
7-Sep-2018 7-Sep-2019 6-Sep-2023(1) £0.02 39,500,000 2,500,000
22-Mar-2019 21-Mar-2020 22-Mar-2023 £0.025 20,000,000 13,750,000
26-Sep-2019 26-Sep-2020 25-Sep-2023 £0.025 32,000,000 3,000,000
26-Sep-2019 26-Sep-2020 25-Sep-2023 £0.03 32,000,000 5,750,000
5-May-2021 5-May-2024 4-May-2026 £0.25 5,000,000 5,000,000
8-Jul-2021 30-Jun-2024 7-Jul-2031 £0.01 2,000,000 2,000,000
405,000,000 81,000,000
(1) The remaining options outstanding were granted to Alex Borrelli and a one
year extension to the expiry dates was granted by the Board during the year
Date of grant Exercisable from Expiry date Exercise price Number granted Number at
30 June 2021
20-Apr-2016 20-Apr-2016 20-Apr-2022(2) £0.002 100,000,000 25,000,000
18-Jan-2017 18-Jul-2017 18-Jul-2022 £0.0028 75,000,000 14,000,000
18-Aug-2017 18-Feb-2018 16-Feb-2022(2) £0.007 60,000,000 7,500,000
7-Sep-2018 7-Sep-2019 6-Sep-2022 £0.014 39,500,000 5,500,000
7-Sep-2018 7-Sep-2019 6-Sep-2022 £0.02 39,500,000 5,500,000
22-Mar-2019 21-Mar-2020 22-Mar-2023 £0.025 20,000,000 13,750,000
26-Sep-2019 26-Sep-2020 26-Sep-2023 £0.025 32,000,000 12,000,000
26-Sep-2019 26-Sep-2020 26-Sep-2023 £0.03 32,000,000 15,000,000
5-May-2021 5-May-2024 4-May-2026 £0.25 5,000,000 5,000,000
403,000,000 103,250,000
(2) The remaining options outstanding were granted to Alex Borrelli and a one
year extension to the expiry dates was granted by the Board during the year
Share-based payments
Weighted average exercise price Number of options Weighted average exercise price Number of options
2022 2022 2021 2021
Outstanding at the beginning of the year £0.026 103,250,000 £0.0073 204,500,000
Exercised during the year £0.025 (24,250,000) £0.0177 (106,250,000)
Forfeited during the year - - - -
Granted during the year £0.01 2,000,000 £0.25 5,000,000
Outstanding at the end of the year £0.026 81,000,000 £0.025 103,250,000
Exercisable at the end of the year £0.011 74,000,000 £0.014 98,250,000
24 Share-based payments (continued)
Recognition and measurement
The Group measures the cost of equity-settled transactions with employees by
reference to the fair value of the equity instruments at the date at which
they were granted. Non-vesting conditions and market vesting conditions are
factored into the fair value of the options granted. As long as all other
vesting conditions are satisfied, a charge is made irrespective of whether the
marketing vesting conditions are satisfied. The cumulative expense is not
adjusted for failure to achieve market vesting conditions or where a
non-vesting condition is not satisfied.
Estimating fair value for share-based payment transactions requires
determining the most appropriate valuation model, which is dependent on the
terms and conditions of the grant. This estimate also requires determining the
most appropriate inputs to the valuation model including the expected life of
the share option, volatility and dividend yield and making assumptions about
them.
The fair value of options granted to directors and others in respect of
services provided is recognised as an expense in the profit and loss account
with a corresponding increase in equity reserves - the share-based payment
reserve.
On exercise or cancellation of share options, the proportion of the
share-based payment reserve relevant to those options is transferred to the
profit and loss account reserve. On exercise, equity is also increased by the
amount of the proceeds received.
The fair value is measured at grant date and the charge is spread over the
relevant vesting period.
25 Provisions
Group Group
2022 2021
£ £
Non-current Provisions
Employee benefits 29,161 33,341
Make good provision 15,243 -
Rehabilitation, restoration and dismantling 1,931,528 3,813,372
Total non-current provision 1,975,932 3,846,713
Movements in each class of provision during the financial year are set out
below:
Employee benefits Make good provision
£
Rehabilitation £ Total
£ £
As at 1 July 3,813,372 33,341 - 3,846,713
Arising during the year - (5,402) 14,662 9,260
Adjustment to rehabilitation provision (2,230,432) - - (2,230,432)
Unwinding of discount 177,300 - - 177,300
Adjustment to currency translation 171,288 1,222 581 173,091
As at 30 June 1,931,528 29,161 15,243 1,975,932
Rehabilitation, restoration and dismantling provision
During the year a £2,230,432 reduction was made to the rehabilitation
provision based on a review of the current disturbance at Havieron by the JV
Manager. The rehabilitation estimate in prior year was based on the
Pre-Feasibility Study. The current year adjustment has resulted in a
corresponding decrease to the Mine Development rehabilitation asset, refer to
Note 16.
25 Provisions (continued)
Recognition and measurement
Employee Benefits
The leave obligations cover the company's liabilities for long service leave
which are classified as other long-term benefits.
The Group has liabilities for long service leave that are not expected to be
settled wholly within 12 months after the end of the period in which the
employees render the related service. These obligations are therefore measured
as the present value of expected future payments to be made in respect of
services provided by employees up to the end of the reporting period, using
the projected unit credit method. Consideration is given to expected future
wage and salary levels, experience of employee departures and periods of
service. Expected future payments are discounted using market yields at the
end of the reporting period of high-quality corporate bonds with terms and
currencies that match, as closely as possible, the estimated future cash
outflows. Remeasurements as a result of experience adjustments and changes in
actuarial assumptions are recognised in profit or loss. 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 12 months after
the reporting period, regardless of when the actual settlement is expected to
occur.
Rehabilitation, restoration and dismantling
The Group recognises a provision for the estimate of the future costs of
restoration activities on a discounted basis at the time of disturbance. The
nature of these restoration activities includes dismantling and removing
structures, rehabilitating mines, dismantling operating facilities, closure of
plant and waste sites, and restoration, reclamation and re-vegetation of
affected areas. When the liability is initially recognised, the present value
of the estimated costs is capitalised by increasing the carrying amount of the
related assets to the extent that it was incurred by the
development/construction of the asset.
Over time, the discounted liability is increased for the change in the present
value based on a discount rate that reflects current market assessments.
Additional disturbances or changes in rehabilitation costs will be recognised
as additions or changes to the corresponding asset and rehabilitation
liability when incurred. The unwinding of the effect of discounting the
provision is recorded as a finance cost in the statement of comprehensive
income. The carrying amount capitalised as a part of mining assets is
depreciated/amortised over the life of the related asset.
Rehabilitation and restoration obligations arising from the Group's
exploration activities are recognised immediately in the income statement. If
a change to the estimated provision results in an increase in the
rehabilitation liability and therefore an addition to the carrying value of
the related asset, the Group considers whether this is an indication of
impairment of the asset. If the revised assets, net of rehabilitation
provisions, exceed the recoverable amount, that portion of the increase to the
provision is charged directly to the statement of comprehensive income.
Key estimates and assumptions - Rehabilitation provisions
The Group assesses its rehabilitation, restoration and dismantling
(rehabilitation) provision at each reporting date. Significant estimates and
assumptions are made in determining the provision as there are numerous
factors that will affect the ultimate amount payable. These factors include
estimates of the extent, timing and costs of rehabilitation activities,
technological changes, regulatory changes, cost increases as compared to the
inflation rates, and changes in discount rates. These uncertainties may result
in future actual expenditure differing from the amounts currently provided.
The provision at reporting date represents management's best estimate of the
present value of the future rehabilitation costs. The pre-tax discount rate
used in the calculation of the provision is 4.5%.
26 Key Management Personnel
2022 Short-term employee benefits Post employment benefits Long-term benefits Share-based payment expense Total remuneration
£
£ £ £ £
Shaun Day 493,947(2) 13,390 6,141 76,461 589,939
Callum Baxter(1) 263,470 22,646 - - 286,116
Alex Borrelli 102,917 1,321 - - 104,238
Clive Latcham 68,500 - - - 68,500
Paul Hallam(3) 57,856 5,786 - - 63,642
Other key management personnel(4) 400,669 24,313 3,662 116,731 545,375
Total 1,387,359 67,456 9,803 193,192 1,657,810
(1) Callum Baxter resigned as Executive Director on 31 August 2021
(2) Shaun Day's bonus accrual of £194,068 is subject to approval at the next
Remuneration Committee meeting
(3) Paul Hallam commenced as Non-Executive Director on 1 September 2021
(4) Key management personnel, other than the directors, included in the table
above consist of the aggregated remuneration of Christopher Toon (Chief
Financial Officer, joined on 8 July 2021) and Damien Stephens (Exploration
Manager, joined on 6 December 2021).
2021 Short-term employee benefits Post employment benefits Long-term benefits Share-based payment expense Total remuneration
£
£ £ £ £
Shaun Day(1) 295,065 28,031 - 11,797 334,893
Callum Baxter 421,261 40,020 - 3,901 465,182
Gervaise Heddle(2) 348,790 29,194 - 3,901 381,885
Alex Borrelli 105,000 1,315 - - 106,315
Clive Latcham 80,000 - - 650 80,650
Total 1,250,116 98,560 - 20,249 1,368,925
(1) Shaun Day commenced on 8 February 2021
(2) Gervaise Heddle resigned as Executive Director on 12 March 2021
27 Contingent liabilities
Havieron project contingent consideration
On 14 July 2022, Greatland announced it had successfully renegotiated its
obligations with respect to the contingent consideration due under the
original 2016 acquisition of the Havieron project. The consideration for this
transaction comprised an initial payment of $25,000 in cash and 65,490,000 new
ordinary shares and (originally) a further 145,530,000 new ordinary shares
issued in Greatland Gold plc, the parent entity of Greatland Pty Ltd,
conditional upon Greatland's ownership interest in Havieron reducing to 25%
(or less) or upon a decision to mine at Havieron (whichever occurs earlier).
This latter tranche of shares (modified as described below) was issued to the
vendor's nominee, Five Diggers Pty Ltd.
In return for removing the conditionality on the contingent element of the
consideration, the following modifications were agreed:
a) a two-year restriction on dealing with the Company's shares to be
issued to Five Diggers Pty Ltd, comprising:
- 12-month lock in, which prohibits any disposals of the shares in
this period, subject to carve outs (such as recommend takeovers), plus
- a subsequent 12-month orderly market arrangement, requiring
that, during this period, the shares may only be traded in consultation with
Greatland Gold plc's broker and through the broker (subject to customary carve
outs); and
b) a reduction in the number of shares being issued by 4.5%, being a
reduction of over 6.5 million shares, to a total of 138,981,150 new ordinary
shares issued in the Company
The contingent consideration of 138,981,150 new ordinary shares issued in the
Company were issued with a value of £16.1 million in aggregate at £0.116 per
ordinary share, based on the closing price on 2 August 2022. The contingent
consideration of £16.1 million will be capitalised as mine development as it
forms part of the contingent consideration of the Havieron project.
27 Contingent liabilities (continued)
Contingent consideration for acquisition of tenements
As announced on 16 September 2021, the Company entered into an agreement with
Province Resources Limited ("PRL") to acquire the 100% owned Pascalle
tenement, the 100% owned Taunton tenement plus applications for two
exploration licences in the Paterson Provision of Western Australia for
consideration of cash and shares. Greatland paid consideration of £90,008
during the year for three tenements, and is required to pay an additional
£107,520 in cash or in fully paid ordinary shares in the capital of Greatland
on completion of the transfer of all four tenements.
The conditions attached to the contingently issued shares were not satisfied
at the end of the reporting period.
28 Events after the reporting period
Havieron project contingent consideration
On 14 July 2022, Greatland announced it had successfully renegotiated its
obligations with respect to the contingent consideration due under the
original 2016 acquisition of the Havieron project. Refer to further
information disclosure in Note 27.
Option for 5% Havieron Joint Venture interest
Subsequent to the year end the process for determining the option price for
the 5% joint venture interest under the Havieron Joint Venture Agreement
("JVA") was finalised. This resulted in an option price of US$60 million at
which Newcrest could acquire an additional 5% interest in the Havieron Joint
Venture from Greatland. On 19 August 2022, Newcrest elected not to exercise
its option and as a result Greatland's interest in the Havieron project
remains at 30%.
Funding secured for development of Havieron
Subsequent to the year end the Group's financial position was strengthened
from the issuance of new shares on 25 August 2022. The fundraise experienced
strong demand with total gross proceeds raised of £29.7 million, which
included the cornerstone participation of Tribeca Investment Partners. A
total of 362,880,180 placing shares were placed at an issue price of £0.082
per new ordinary share.
In addition, the Company announced on 12 September 2022 the execution of a
debt commitment letter of A$220 million (£130 million) and equity agreement
with Wyloo of an initial strategic equity subscription of A$60 million (£35
million) and additional future potential equity contribution of £35 million.
The debt commitment letter, including term sheet, was signed for a seven-year
term, self-arranged debt syndicate with three leading banks: ANZ, HSBC and
ING. The facility comprises a A$200 million Facility A seven-year amortising
Term Debt Facility and a A$20 million Facility B which is a five-year
Revolving Credit Facility. Facility A interest will be charged at benchmark
(Australian BBSY) plus margin of 3.50% p.a. reducing to 3.25% p.a. post
project completion, Facility B will be charged at a margin of 4.50% p.a.
Financial close and draw down is subject to customary project financing
conditions including completion of reporting requirements, Feasibility Study
criteria and agreeing final documentation.
The strategic equity investment from Wyloo, a privately owned metals company
with a focus on investing in the responsible development of the next
generation of mines was approved by the shareholders on 7 October 2022. The
initial strategic equity subscription of A$60 million (£35 million) was
priced at £0.082 per share, being the same price at which equity was raised
in the recent placing and small premium to the five-day VWAP of 9 September
2022, and resulting in Wyloo becoming Greatland's largest shareholder with
approximately 8.6% of shares on issue.
Wyloo also has an additional future potential equity contribution of £35
million. Wyloo's further potential investment is through the issue of warrants
to subscribe for additional equity as ordinary shares at an exercise price of
£0.1 per share. If the warrants are exercised in full, the average price of
Wyloo's investment in Greatland would be just over £0.09 per share being a
10.6% premium to the five-day VWAP to 9 September 2022.
28 Events after the reporting period (continued)
Transformational appointments to the Board
Subsequent to the year end, Greatland further strengthened its Board
capability announcing the intention of three transformational appointments of
Australian corporate and mining industry leaders to assist the Company in
fulfilling its ambition to be a world class resource development company.
Jimmy Wilson, a former senior executive at BHP including the former President
of its iron ore division, joined as Executive Director on 12 September 2022.
Mark Barnaba, eminent natural resources investment banker and Deputy Chair of
A$50 billion ASX-listed Fortescue Metals Group Ltd will join as Non-Executive
Chairman on or before 1 January 2023 and Elizabeth Gaines, former Fortescue
CEO and Managing Director will join as a Non-Executive Director and Deputy
Chair on or before 1 January 2023.
The Company granted co-investment options to subscribe for new ordinary shares
in the Company to its proposed Directors, Mark Barnaba and Elizabeth Gaines,
and to Paul Hallam an existing Non-Executive Director. Mark Barnaba was
granted 100,000,000 options, Elizabeth Gaines granted 55,000,000 options and
Paul Hallam granted 40,000,000 options. The co-investment option structure has
been designed to create strong and immediate alignment with shareholders to
deliver substantial share price growth, with the options being set at £0.119,
representing a 45 percent premium to the equity placement in August 2022 of
£0.082. In addition, the Company granted Jimmy Wilson options to subscribe
for 40,000,000 new ordinary shares in the Company under substantively the same
terms as the co-investment options.
No other matter or circumstance has arisen since 30 June 2022 that has
significantly affected the Company's operations, results or state of affairs,
or may do so in future years.
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