Last checked at 27 Mar 2020 07:00
27 March 2020
Resolute Mining Limited
(Resolute or the Company)
2019 Annual Report
Resolute Mining Limited (ASX/LSE: RSG) is pleased to advise that the Company's Annual Report for the year ended 31 December 2019 is available at the Company's website www.rml.com.au.
The full financial report is available at the Company's website www.rml.com.au.
The following sections are set out in this announcement:
· Directors' Report
· Consolidated Statement of Comprehensive Income
· Consolidated Statement of Financial Position
· Consolidated Statement of Changes in Equity
· Consolidated Cash Flow Statement
Please refer to the 2019 Annual Report for:
· Notes to and forming part of the Financial Statements
· Auditor's Independence Declaration
· Independent Auditor's Report
· Mineral Resources and Ore Reserves Statement
· Further information pertaining to the Company's operational and financial performance, sustainability performance, risk management, corporate governance and corporate directory
For further information, contact:
John Welborn Managing Director & CEO | Jeremy Meynert General Manager - Business Development & Investor Relations |
About Resolute
Resolute is a successful, dividend paying gold miner with more than 30 years of experience as an explorer, developer and operator of gold mines in Australia and Africa which have produced more than 8 million ounces of gold. The Company trades on the Australian Securities Exchange (ASX) and the London Stock Exchange (LSE) under the ticker RSG.
Resolute has a Global Mineral Resource base of more than 19 million ounces of gold. The Company's flagship asset is the world class Syama Gold Mine in Mali which has the ability to produce 300,000 ounces of gold per annum from existing processing infrastructure. Resolute has commissioned the world's first automated underground mine at Syama which will deliver a low cost, large scale operation with a mine life beyond 2032. The Mako Gold Mine in Senegal is a high quality, low cost asset with average annual production of approximately 140,000 ounces of gold. A binding agreement has been signed to sell the Ravenswood Gold Mine in Queensland, Australia for up to A$300 million. A strategic review is currently underway of the Bibiani Gold Mine in Ghana.
Resolute's guidance for FY20 has been set at production of 500,000 ounces of gold at an AISC of US$980 per ounce. FY20 Guidance will be revised once the sale of Ravenswood has been finalised.
Contact Information
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Authorised by Mr John Welborn, Managing Director & CEO
ASX/LSE: RSG Capital Summary Fully Paid Ordinary Shares: 1,057,099,666 Current Share Price (ASX):A$0.925 as at 26 March 2020 Market Capitalisation: A$978 million FY20 Guidance: 500,000oz @ AISC US$980/oz | Board of Directors Mr Martin Botha Non-Executive ChairmanMr John Welborn Managing Director & CEO Ms Yasmin Broughton Non-Executive Director Mr Mark Potts Non-Executive Director Ms Sabina Shugg Non-Executive Director Mr Peter Sullivan Non-Executive Director | Contact John Welborn Managing Director & CEO Jeremy Meynert GM - BD & IRLevel 2, Australia Place | 15-17 William StPerth, Western Australia 6000T: +61 8 9261 6100 | F: +61 8 9322 7597E: contact@rml.com.au |
Directors' Report
Your Directors present their report on the consolidated entity (referred to hereafter as the Group or Resolute) consisting of Resolute Mining Limited and the entities it controlled for the year ended 31 December 2019.
Corporate Information
Resolute Mining Limited (Resolute or the Company) is a company limited by shares that is incorporated and domiciled in Australia.
Directors
The names and details of the Directors of Resolute in office during the year ended 31 December 2019, and until the date of this report are as follows. Directors were in office for the entire period unless otherwise stated.
Names, qualifications, experience and special responsibilities
Marthinus (Martin) Botha (Non-Executive Chairman)
BScEng
Mr Martin Botha was appointed Chairman in June 2017 after being appointed to the Board in February 2014. Mr Botha is an Engineering Surveyor by training with 30 years' experience in international investment banking. A founding director in Standard Bank Plc's London-centred international operations, Mr Botha established and led the development of the core global natural resources trading and financing franchises, as well as various geographic operations, including those in the Russian Commonwealth of Independent States, Turkey and the Middle East. Mr Botha is currently non-executive Chairman of Sberbank CIB (UK) Ltd, a securities broker regulated by the UK Financial Services Authority, and is a non-executive director of Zeta Resources Limited (appointed 2013). Mr Botha graduated with first class honours from the University of Cape Town and is based in London.
Mr Botha is Chair of the Nomination Committee, and a member of the Audit and Risk Committee and the Remuneration Committee.
John Welborn (Managing Director and Chief Executive Officer)
BCom, FCA, FAIM, MAICD, MAusIMM, JP
Mr John Welborn was appointed Managing Director and Chief Executive Officer on 1 July 2015. Mr Welborn is a Chartered Accountant with a Bachelor of Commerce degree from the University of Western Australia and is a Fellow of the Institute of Chartered Accountants in Australia, a Fellow of the Australian Institute of Management and is a member of the Australian Institute of Mining and Metallurgy, and the Australian Institute of Company Directors.
Mr Welborn is a Director of the World Gold Council (appointed 2017), a Non-Executive Director of Equatorial Resources Limited (appointed 2010) and is Chairman of Orbital Corporation Limited (appointed 2014).
Mr Welborn is Chair of the Safety, Security and Environment Committee.
Yasmin Broughton (Non-Executive Director)
BComm, PG Law, FAICD
Ms Yasmin Broughton is a Non-Executive Director and was appointed to the Board in June 2017. Ms Broughton is a corporate lawyer with significant experience working as both a director and an executive in a diverse range of industries. Ms Broughton has over 16 years' experience working with ASX-listed companies as an officer and has a deep understanding of corporate governance, including compliance and managing complex legal issues. Ms Broughton is also a non-executive director of Synergy, the Insurance Commission of Western Australia and Edge Employment Solutions Inc.
Ms Broughton is Chair of the Audit and Risk Committee, and a member of the Remuneration Committee and the Nomination Committee.
Mark Potts (Non-Executive Director)
BSc (Hons)
Mr Mark Potts is a Non-Executive Director and was appointed to the Board in June 2017. Mr Potts is a leading global technology executive who for more than 30 years has consistently combined innovation, strategy, vision, technology and execution to drive business disruption and results for a range of international organizations. Most recently Mr Potts was the Chief Technology Officer and Vice President for Corporate Strategy at Hewlett-Packard Enterprise. Mr Potts has previously been the founder of several venture-backed start-ups in a variety of industries in Australia, the United States, and the United Kingdom. Of relevance for Resolute is Mr Potts' extensive experience in leading business through technology lead innovation and disruption. Mr Potts is a sought-after leader, strategic advisor, and speaker in technology, innovation, its application within organisations for business advantage, and future directions in technology. Mr Potts is currently a director of Linear Clinical Research Limited (appointed 2019) and a non-executive director of iCetana (appointed 2018).
Mr Potts is Chair of the Remuneration Committee (from 20 February 2020), and a member of the Audit and Risk Committee and the Nomination Committee.
Sabina Shugg (Non-Executive Director)
BSc (Mining Engineering), MBA
Ms Sabina Shugg was appointed to the Board as a Non-Executive Director on 7 September 2018. Ms Shugg is a mining engineer with over 30 years' experience involving senior operational roles with leading mining and consulting organisations including Normandy, Newcrest, and KPMG. Ms Shugg holds a Master of Business Administration from the University of Western Australia, a Mining Engineering degree from the Western Australian School of Mines, and a Western Australian First Class Mine Manager's Certificate of Competency. Ms Shugg currently serves as the Director of the Kalgoorlie Campus for Curtin University - WA School of Mines. In her role as Founder and Chair of Women in Mining and Resources WA, Ms Shugg was awarded the inaugural Women in Resources Champion by the Chamber of Minerals and Energy of Western Australia for being an outstanding role model for the resources industry and broader community. In 2015, Ms Shugg was awarded a Member of the General Division of the Order of Australia for significant service to the mining industry through executive roles in the resources sector and as a role model and mentor to women.
Ms Shugg is a member of the Remuneration Committee, the Safety, Security and Environment Committee, the Audit and Risk Committee and the Nomination Committee.
Peter Sullivan (Non-Executive Director)
BEng, MBA
Mr Peter Sullivan was appointed Managing Director and Chief Executive Officer of the Company in 2001 and retired as Chief Executive Officer on 30 June 2015 at which point he became a Non-Executive Director of the Company. Mr Sullivan is an engineer and has been involved in the management and strategic development of resource companies and projects for over 25 years. Mr Sullivan is also a director of GME Resources Limited (appointed 1996), Zeta Resources Limited (appointed 2013) and Panoramic Resources Limited (appointed 2015).
Mr Sullivan is a member of the Remuneration Committee (Chair until 19 February 2020), the Audit and Risk Committee and the Nomination Committee.
General Counsel / Company Secretary
Amber Stanton
LLB
Ms Amber Stanton is a corporate lawyer and was appointed as General Counsel / Company Secretary in August 2017. Prior to joining Resolute, Ms Stanton was a partner at two international law firms, specialising in mergers and acquisitions, capital markets, energy and resources and general corporate and commercial matters. Ms Stanton was the WA winner of the 2011 Telstra Business Women's Award (Corporate and Private Sector).
Interests in the shares and options of Resolute and related bodies corporate
As at the date of this report, the interests of the directors in shares, options and performance rights of Resolute and related bodies corporate were:
Fully Paid Ordinary Shares | Performance Rights | |
M. Botha1 | - | - |
J. Welborn2 | 3,250,000 | 5,563,749 |
Y. Broughton3 | - | - |
M. Potts | 79,097 | - |
S. Shugg4 | - | - |
P. Sullivan | 2,367,946 | - |
5,697,043 | 5,563,749 |
1) Mr Botha has subscribed for 45,455 fully paid ordinary shares in tranche 2 of the Company's recent equity raising as approved by shareholders at the extraordinary general meeting held on 27 February 2020.
2) Ms Broughton has subscribed for 27,273 fully paid ordinary shares in tranche 2 of the Company's recent equity raising as approved by shareholders at the extraordinary general meeting held on 27 February 2020.
3) Ms Shugg has subscribed for 27,273 fully paid ordinary shares in tranche 2 of the Company's recent equity raising as approved by shareholders at the extraordinary general meeting held on 27 February 2020.
4) Mr Welborn has subscribed for 300,000 fully paid ordinary shares in tranche 2 of the Company's recent equity raising as approved by shareholders at the extraordinary general meeting held on 27 February 2020.
As at the date of this report, there were no options on issue.
Nature of Operations and Principal Activities
The principal activities of entities within the consolidated entity during the year were:
· gold mining; and
· prospecting and exploration for minerals.
There has been no significant change in the nature of those activities during the year.
Significant Changes in the State of Affairs
There have been no significant changes in the state of affairs of the Company other than those stated throughout this report.
Significant Events after Reporting Date
On 15 January 2020, the Group announced the sale of the Ravenswood Gold Mine for $100 million of upfront value and up to $200 million in potential payments contingent on future gold prices, future gold production and the investment outcome of EMR Capital from the Ravenswood Gold Mine.
On 16 January 2020, the Group drew down a further US$5.0 million ($7.1 million) on its syndicated loan facility as provided for in the Syndicated Facility Agreement.
On 20 January 2020, the Group entered into forward contracts to sell 37,200 ounces at an average US$1,562 per ounce in scheduled monthly deliveries of 1,200 ounces between July 2020 and December 2020 and scheduled monthly deliveries of 5,000 ounces between January 2021 and June 2021.
On 23 January 2020, the Group completed an equity raising via an Institutional Placement to raise $146 million. These funds were utilised on 3 February 2020 to repay the US$130 million acquisition bridge loan facility provided by Taurus Funds Management Limited ("Taurus") in relation to Toro Gold Limited ("Toro Gold"). The facility was provided for an initial term of six months and has been repaid in full, at the maturity date, avoiding termination or extension fees.
On 28 January 2020, the Group agreed to terms with Taurus for the acquisition of the 1.1% royalty held by entities associated with Taurus over gold production from the Mako Gold Mine in Senegal (Mako). The termination value of the royalty has been agreed at US$12 million with consideration to be paid in cash or in shares at the election of the royalty holders.
On 17 February 2020, the Group entered into forward contracts to sell 30,000 ounces at an average US$1,590 per ounce in scheduled monthly deliveries of 5,000 ounces between January 2021 and June 2021.
On 26 February 2020, the Group successfully completed its Share Purchase Plan (SPP). The SPP closed on 21 February 2020, with valid applications received from 1,168 shareholders for 21,212,747 ordinary shares at an issue price of $1.10 per share. The total amount raised from the SPP is approximately $23.3 million.
On 27 February 2020, the Group received notice that the Mali Government tax authorities and Ministry of Finance had taken certain steps internally to offset the Group's VAT withholding tax liabilities (note E.3) with the Group's VAT tax assets (note D.1). At the date of signing this report, the Group has not received any confirmation of offset occurring.
On 28 February 2020, the Group entered into forward contracts to sell 30,000 ounces at an average US$1,670 per ounce in scheduled monthly deliveries of 5,000 ounces between July 2021 and December 2021.
On 25 March 2020, the Group completed the refinancing of the Group's syndicated loan as governed by the Syndicated Facility Agreement. The new US$300 million facility comprises a three-year US$150 million revolving credit facility and a four-year US$150 million term loan facility. As part of the refinance the group repaid the outstanding balance of the Project Facility Agreement (US$63.5 million plus interest accrued).
Subsequent to year end, the global impacts of the coronavirus COVID-19 pandemic has created volatility in commodity prices and resulted in Government regulated restrictions and put pressure on supply chain structures. Resolute's response recognises that the Group places the highest priority on the safety and wellbeing of its employees and contractors. Keeping the Group's operations running is critically important for employees, local communities, and all of the Group's stakeholders. Resolute has taken actions to ensure that the impact of COVID-19 is minimised across all aspects of Group operations. A COVID-19 Management Team has been deployed and business continuity programs established to ensure the safety and wellbeing of all employees and contractors while maintaining Group operations.
As at the date of this report, Resolute's operations have not been materially impacted by Government regulated COVID-19 related restrictions and the Group has not amended current production or cost guidance. Operations are continuing at all of the Group's mines and exploration areas. The Group maintains sufficient staff and inventory of supplies and equipment to support current operations. The challenges presented by COVID-19 are fluid and continue to change on an almost daily basis. Resolute will continue to assess and update the Group's response. Further escalation of the COVID-19 pandemic, and the implementation of further Government regulated restrictions or extended periods of supply chain disruption, has the potential to impact the Groups earnings, cash flow and carrying value of the Syama, Mako, Ravenswood and Bibiani cash generating units. The Financial Statements are prepared based on circumstances as at 31 December 2019, with recent developments as a result of COVID-19 considered a non-adjusting subsequent event.
Environmental Regulation Performance
The consolidated entity holds licences and abides by Acts and Regulations issued by the relevant mining and environmental protection authorities of the various countries in which the Group operates. These licences, Acts and Regulations specify limits and regulate the management of discharges to the air, surface waters and groundwater associated with the mining operations as well as the storage and use of hazardous materials.
There have been no significant known breaches of the consolidated entity's licence conditions or of the relevant Acts and Regulations. Levels of sulphate and some trace elements have been measured above license limits at the Ravenswood operation. The operation is cooperating with the Queensland Department of Environment and Science to evaluate and control surface and groundwater quality.
Responsibility Statement
In the opinion of the directors and to the best of their knowledge, the Directors' report includes a fair review of the development and performance of the business and the financial position of the consolidated entity, together with a description of the principal risks and uncertainties that the consolidated entity faces.
Remuneration Report
The following information has been audited.
The Remuneration Report outlines the Director and Executive remuneration arrangements of the Company and the Group in accordance with the requirements of the Corporations Act 2001 and its Regulations. The following information has been audited as required by section 308(c) of the Corporations Act 2001.
The Remuneration Report is presented under the following sections:
1. Letter from the Chair of the Remuneration Committee
2. Remuneration governance
3. Remuneration policy and outcomes
4. Non-Executive Director (NED) remuneration arrangements and outcomes
5. Additional disclosures
6. Loans to Key Management Personnel (KMP) and their related parties
1. Letter from the Chair of the Remuneration Committee
Dear Shareholders,
On behalf of the Board of Directors of Resolute I am pleased to present the Company's Remuneration Report for the full financial year ending 31 December 2019, following the change to a 31 December year end in 2018.
The Company's last Remuneration Report for the period of 6 months ended 31 December 2018 received substantial support at the Company's annual general meeting held on 20 May 2019, with 99.6% of votes in favour of the report. The Company was also seeking Shareholder approval of a special issue of Performance Rights to Mr John Welborn, which was withdrawn at the meeting prior to voting based on proxy votes received. The Chairman advised at the meeting that the Board intended to consult with Shareholders to understand concerns and ensure the Board's remuneration strategy for the CEO was clearly communicated with the aim of ensuring broad Shareholder support.
Following a series of consultations with Shareholders and proxy advisors following the AGM, the Company held an extraordinary general meeting on 21 November 2019 where the grant of Performance Rights to CEO Mr John Welborn was approved by Shareholders. We continue to engage with Shareholders and proxy advisors on our remuneration framework and disclosure.
The Board is satisfied that the current remuneration framework is appropriate, fit-for-purpose and consistent with our current business strategy. It is also properly set to incentivise for desired behaviours within our risk framework. As a result, only minor changes were made to the Long-Term Incentive Plan (LTIP) during 2019, predominantly the change from a Reserves and Resources metric in prior years to an Ore Reserve Replacement metric. We have nevertheless significantly enhanced our level of disclosure to provide a higher level of transparency and better comprehension of our remuneration framework, particularly with regard to:
· Objectives of our remuneration framework;
· Pay mix (the disclosure of the pay mix and total remuneration opportunity is discussed at maximum levels as opposed to target remuneration);
· Short Term Incentive Plan (STI) targets and outcomes; and
· CEO long term incentive (LTI) arrangements.
Business Outcomes
FY19 was a pivotal year which saw the Company enhance the quality of its portfolio through the acquisition of Mako, a low cost, high quality gold mine and through continued exploration success at Tabakoroni providing confidence that the underground mine will generate strong cash flows in the future. Operationally, Resolute continued to generate strong results at the Tabakoroni Open Pit Mine, at Mako, and at its flagship Syama Underground Mine where commissioning was completed during the year. The detection of a crack in the shell of the Syama roaster, a key component of the sulphide processing circuit, impacted sulphide production in the December 19 Quarter and resulted in lower output than forecast for Syama. Pleasingly, repairs to the roaster were safely and efficiently completed by mid-December 2019, with gold production from the sulphide circuit recommencing and ramping up to capacity.
Resolute seeks to operate its business responsibly, with careful consideration for the health and safety of our people, the communities surrounding our sites, and the environment around us. In mid-2019, as a member of the World Gold Council, Resolute committed to the Responsible Gold Mining Principles. We have a Sustainability Performance Framework to reflect this commitment and govern the way the Company operates in order to meet international standards of good practice in areas of social development, human rights, environmental protection and health and safety. Our strong focus on health and safety was reflected in a reduction in our total reportable injury frequency rate to 2.09 at 31 December 2019 from 2.77 at 30 June 2019.
Remuneration Outcomes
Actual performance for the year ending 31 December 2019 for the KMP STIP outcome was 19% of the maximum outcome possible.
Of the 3,108,389 Performance Rights granted in 2016 (performance hurdle tested), 559,154 Performance Rights vested on 30 June 2019. The Reserves and Resources Growth performance hurdle outcome, which accounts for 25% of the total vesting outcome, was 106%, triggering vesting. No Performance Rights were granted linked to the TSR hurdle, which accounts for 75% of the total vesting outcome. The next period in which an LTIP grant will be tested to determine the level of vesting is 30 June 2020, for awards granted on 1 July 2017 and the CEO Performance Rights.
Non-Executive Director Remuneration
An independent review of NED fees was completed in 2019. Following this review, from 1 March 2019, the Chairman's annual fee increased to $180,000 from $175,000 and NED annual base fees increased from $90,000 to $100,000. In addition, the Chair of the Audit and Risk Committee now receives an annual Committee Chair fee of $15,000 and the Chair of the Remuneration Committee receives an annual Committee Chair fee of $10,000. Members of Committees do not receive a separate fee.
Proposed Remuneration Changes for 2020
Long Term Incentive Plan
The LTI comparator group used to measure relative Total Shareholder Return (TSR) is reviewed annually prior to LTIP invitations being despatched to ensure relevant companies are included, being gold producers of a similar size and operational locations. Details of the performance criteria for the LTIP and the comparator group of companies is included in the Remuneration Report in Section 3.
Our remuneration strategy is underpinned by our core values and performance culture which includes setting challenging stretch operational, financial and non-financial targets, and rewarding their achievement. Our key focus areas are safety, growth, innovation, value creation and long-term sustainability, with the Board exercising discretion to recognise achievement where outcomes may not accurately reflect performance.
We will commit to consider the concerns and suggestions regarding Executive pay and remuneration disclosure and outcomes raised by our Shareholders and engage with the required regulatory and external advisory services where required.
We thank our Shareholders for their continued support.
[ELECTRONICALLY SIGNED]
Yours sincerely
Peter SullivanChair - Remuneration Committee (as at 31 December 2019)
2. Remuneration Governance
Remuneration Committee
The Remuneration Committee is responsible for determining and reviewing the compensation arrangements for Non-Executive Directors, the Chief Executive Officer and Executives. Executive remuneration is reviewed annually having regard to individual and business performance, relevant comparative information and internal and independent external information. The Remuneration Committee is also tasked with determining performance targets, performance against those targets and remuneration outcomes.
In accordance with best practice governance, the Remuneration Committee is comprised solely of independent Non-Executive Directors, as follows:
Peter Sullivan (Chair until 19 February 2020)
Martin Botha
Yasmin Broughton
Mark Potts (Chair from 20 February 2020)
Sabina Shugg
Nomination Committee
The Nomination Committee is responsible for Board and Board Committee membership, succession planning and performance evaluation.
In accordance with best practice governance, the Nomination Committee is comprised solely of independent Non-Executive Directors, as follows:
Martin Botha (Chair)
Yasmin Broughton
Mark Potts
Sabina Shugg
Peter Sullivan
Use of Remuneration Consultants
To ensure the Remuneration Committee is fully informed when making remuneration decisions, it seeks external remuneration advice as appropriate. Remuneration consultants are engaged by, and report directly to, the Remuneration Committee. In selecting remuneration consultants, the Remuneration Committee considers potential conflicts of interest and requires independence from KMP and other Executives as part of their terms of engagement.
During 2019, the Reward Practice Pty Ltd and Egan Associates were engaged as remuneration consultants to assist with various remuneration matters including the provision of benchmarking data for Executive remuneration. There were no remuneration recommendations, as defined by the Corporations Act, provided by The Reward Practice Pty Ltd and Egan Associates during the year.
3. Remuneration Policy and Outcomes
3a. Key Management Personnel
The Remuneration Report details the remuneration arrangements for KMP who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, including any Director (whether Executive or otherwise) of the parent company.
For the purposes of this report, the term "Executive" includes the Chief Executive Officer (CEO) and other Executives of the Company and the Group.
Key management personnel
(i) Directors
Name Position held during the year
M. Botha Non-Executive Director (Non-Executive Chairman)
J. Welborn Managing Director and Chief Executive Officer
Y. Broughton Non-Executive Director
M. Potts Non-Executive Director
S. Shugg Non-Executive Director
P. Sullivan Non-Executive Director
(ii) Executives
Name Position held during the year
P. Beilby Chief Operating Officer (retired effective 31 March 2019)
D. Kelly Acting Chief Operating Officer (appointed 1 April 2019)
L. de Bruin Chief Financial Officer (resigned as Chief Financial Officer effective 13 December 2019)
A. Stanton General Counsel and Company Secretary
3b. Remuneration Policy
The Board recognises that the performance of the Company depends upon the quality of its Executives. To achieve its financial and operating objectives while operating in Africa, the Company must attract, motivate and retain highly skilled Directors and Executives. The Remuneration Committee is tasked with the responsibility to monitor and review the remuneration framework and provide recommendations to the Board. As part of the continual review process, the Remuneration Committee has from time to time engaged external consultants regarding structural changes to the remuneration framework.
The Company embodies the following principles in its remuneration framework:
· Provides competitive rewards to attract high calibre Executives;
· Structures remuneration at a level that reflects the Executive's duties and accountabilities and is competitive within Australia;
· Benchmarks remuneration against appropriate groups;
· Aligns Executive incentive rewards with the creation of value for Shareholders; and
· Supports achievements consistent with the World Gold Council's Responsible Gold Mining Principles.
Business Objective Mine Gold. Create Value. Our goal is to create sustainable value for all stakeholders. The Company's remuneration framework aims to incentivise for both operational and financial performance, with focus on growth in gold production, managing cost, and improving operating cash-flows, whilst ensuring the safety and wellbeing of employees and contractors at all times.
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Remuneration Objectives
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Competitive Remuneration Provide rewards to attract, motivate and retain highly skilled Executives. The Company aims to attract talent, and reward Executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company and to ensure total remuneration is competitive by market standards.
| Shareholder Alignment Align Executive incentive rewards with the creation of value for Shareholders. Resolute's goal is to maintain its status as a unique and highly attractive investment for Shareholders, with focus on sustainable value creation. The remuneration framework serves to ensure sustainable growth and share price appreciation, a healthy balance sheet, and an ability to pay dividends.
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↓ | |
It is the Remuneration Committee's policy that employment contracts are entered into with the Chief Executive Officer and Executives. Details of these contracts are outlined later in this report.
In accordance with best practice governance, the structure of NED and Executive remuneration is separate and distinct.
3c. Remuneration Framework
The Executive remuneration framework consists of Fixed Annual Remuneration (FAR) and short and long term incentives as outlined in the table below:
Remuneration Component | Purpose | Link to Performance | |
Fixed annual remuneration | The level of FAR is set to provide a base level of remuneration which is both appropriate to the position and is competitive in the market. | Company and individual performance are considered as part of the annual remuneration review. While market and sector peer benchmarking is conducted regularly to ensure the FAR remains competitive, the levels of FAR for the Managing Director and CEO and other Executives are set primarily with regard to their responsibilities and performance, talent, skills and experience, taking into account the size, complexity, scope of operations and structure of Resolute's business. | |
Short term incentive | The objective of the annual "at risk" STI is to generate greater alignment between performance and remuneration levels to drive operational excellence. | Internal performance measures including safety, production and costs which represent key business drivers are considered and assessed to determine annual outcomes. | |
Long term incentive | The objective of the LTI is to reward Executives in a manner which aligns a significant portion of remuneration with the creation of Shareholder wealth. | Vesting of awards is dependent upon both an external measure (TSR performance against a peer group) and an internal measure (ore reserve replacement). | |
Overall remuneration level and mix | |||
How is overall remuneration and mix determined? | Remuneration levels are considered annually through a review that considers comparative market data, the performance of the Company and individual, and the broader economic environment. The Company aims to reward Executives with a level and mix (proportion of fixed, short term incentives and long-term incentives) of remuneration appropriate to their position, responsibilities and performance within the Company and that which is aligned with targeted market comparators. In 2019, remuneration benchmarking was undertaken with reference to industry peers (see LTI comparator groups listed below) for the TSR performance benchmarking. From time to time, depending on availability and reliability of data, other benchmarking data sources may be used. The Company's policy is to position FAR around the median of direct industry peers. As a result of a benchmarking exercise, in March 2019 three KMP were given increases to their FAR. In addition to the annual grant of performance rights made to the Managing Director and CEO along with all other Executives (the KMP LTI), Shareholders have approved a further issue of performance rights to the Managing Director and CEO specifically targeting the Company's strategic objectives and incentivising the Managing Director and CEO to achieve long-term strategic goals on the basis that Shareholders have received exceptional absolute returns (the CEO LTI). Further details of the CEO LTI are included below. The chart below summarises the Managing Director and CEO's and other Executives' remuneration mix for FAR, STI and LTI at maximum. The current pay mix is considered appropriate for Resolute based on the Company's current phase of growth.
(image available in full report at rml.com.au)
The pay mix for the Managing Director and CEO includes the KMP LTI but does not include the CEO LTI granted to Mr Welborn during the year. To achieve maximum remuneration opportunity, Executives are required to significantly perform above and beyond normal expectations. If achieved, the outcome is anticipated to result in a substantial improvement in key strategic outcomes, operational or financial results, and/or the overall performance of the Company. While the Company does not have a formal share ownership policy for Executives, all KMP are encouraged to hold shares in the Company and are incentivised to accumulate equity through the participation in LTI. | ||
Fixed annual remuneration | ||||||||||||||||||||||||
What is included in FAR? | FAR includes base salary and superannuation contributions. For the purposes of the Acting Chief Operating Officer's short term incentive plan calculation, FAR includes a higher duties allowance. | |||||||||||||||||||||||
How is FAR reviewed and approved? | FAR is reviewed annually by the Remuneration Committee following consideration of industry benchmarking. FAR increases were made as follows:
In March 2019, John Welborn was granted a 13% increase in FAR. The increase was made after several years of nil or minor increases and recognised the need to bring the Managing Director and CEO's FAR in line with the benchmarking data for industry peers. | |||||||||||||||||||||||
Short Term Incentive | ||||||||||||||||||||||||
What is the value of the STI award maximum opportunity? | The Managing Director and CEO and Executives have a maximum opportunity (if all the Stretch performance hurdles are met for each KPI and individual performance is achieved at a Stretch level) of 112.5% of FAR. A target STI opportunity of 50% of FAR aligns with industry benchmarking. | |||||||||||||||||||||||
What are the performance criteria and how do they align with business performance? | The STI payable is based on performance against corporate and individual key performance indicators (KPIs) set at the beginning of the performance period. KPIs require the achievement of strategic, operational or financial measures and are linked to the drivers of business performance. · | |||||||||||||||||||||||
What are the performance criteria and how do they align with business performance? (continued)
| Corporate KPIs: Safety Improved safety performance (10%) - measured by: · a lag indicator in the form of a specified reduction in the Total Recordable Injury Frequency Rate in comparison to prior years (5%); and · specified lead indicators designed to be proactive and influence future events with measures being put in place to prevent incidents and injury. As part of this process, a Safety Action Performance list is prepared each year outlining a set of actions and deliverables (5%). Operational The achievement of defined Targets relative to budget relating to: · operating cash flow (30%); · gold poured (30%); and · cost per tonne milled (30%). The targets with regard to the STI outcomes are documented below (refer to section 3d Executive Remuneration Outcomes). | Personal KPIs: A set of personal performance metrics designed to drive optimum operational performance as specifically related to each Executive's portfolio. The personal metrics are set annually and are directly linked to the Resolute strategic plan which drives each Executive's annual business plan. Personal performance acts as a positive or negative multiplier to the outcome of the Corporate KPIs. See below for an example of how the Managing Director and CEO's STI award is calculated. | ||||||||||||||||||||||
These measures have been selected as they can be reliably measured, are key drivers of value for Shareholders and encourage behaviours in line with the Company's core values and risk appetite. | ||||||||||||||||||||||||
How are STI awards determined? | For each KPI there are defined "Threshold", "Target" and "Stretch" measures which are capable of objective assessment. Corporate KPIs are assessed as follows on an individual KPI basis: · Below Threshold = $nil payment · Threshold performance = 25% of KPI opportunity · Target Performance = 100% of KPI opportunity · Stretch performance = 150% of KPI opportunity Pro-rata payment applies on a straight-line basis between "Threshold" and "Target" and between "Target" to "Stretch" performance. Personal KPIs are assessed as follows: · Below Threshold = $nil payment · Threshold performance = 50% of total Corporate KPI outcome · Target Performance = 100% of total Corporate KPI outcome · Stretch performance = 150% of total Corporate KPI outcome | |||||||||||||||||||||||
How are STI awards determined? (continued) | Pro-rata payment applies on a straight-line basis between "Threshold" and "Target" and between "Target" to "Stretch" Performance. Target performance represents challenging levels of performance. Stretch performance requires significant performance above and beyond normal expectations and if achieved is anticipated to result in a substantial improvement in key strategic outcomes, operational or financial results, and/or the overall performance of the Company. As a minimum, a threshold performance outcome must be achieved for both the Corporate KPIs and the Personal KPIs before a STI award is triggered. | |||||||||||||||||||||||
STI award example | The example below is based upon the Managing Director and CEO's FAR, indicating possible payments based upon the range of corporate performance outcomes and personal KPI achievement.
Personal KPI Achievement
(image available in full report at rml.com.au)
The maximum STI award opportunity of FAR is calculated as follows: (a) $800,000 is Managing Director and CEO's FAR (b) $900,000 is maximum KPI outcome (150% of Corporate KPI outcome) Therefore, the maximum award opportunity of FAR for the Managing Director and CEO is capped at 112.5% ((b)/(a)*100 = 112.5%). | |||||||||||||||||||||||
Is the STI award subject to deferral provisions? | The actual STI payment is made approximately three months after the completion of the performance period. The Remuneration Committee has determined that a formal deferral policy is not appropriate at this time for KMP, given that a significant portion of the Managing Director and CEO's and other Executives' total remuneration opportunity is in the form of equity and subject to risk. In addition, the Managing Director and CEO holds a significant number of shares and other Executives have been granted a significant number of Performance Rights as part of the Resolute LTIP, ensuring close alignment with Shareholders. | |||||||||||||||||||||||
Is there a malus or clawback policy? | While there is no formal malus/clawback policy, the Board has ultimate discretion to adjust the STI outcomes upwards or downwards (including to zero), in exceptional circumstances, where the STI generated outcomes inconsistent with the Company's performance or resulted in misalignment with Shareholders (e.g. fatality, financial misstatement, misconduct, reputational damage, etc.). | |||||||||||||||||||||||
What happens to STI awards if there is a termination of employment? | Subject to overarching Board discretion, to be eligible for any payment under the STI, the participant must be employed by the Company at the earlier of the time of payment and three months after the performance period in which the STI is tested. | |||||||||||||||||||||||
What happens to STI awards if there is a change of control event? | On the occurrence of a change of control event, the Board will determine, in its sole and absolute discretion, the manner in which STI awards will be dealt with. | |||||||||||||||||||||||
Long Term Incentive | ||||||||||||||||||||||||
How often are LTI grants made and what is the maximum LTI quantum? | At the Board's discretion, Executives receive an annual grant of Performance Rights and the LTI forms a key component of the Executive's Total Annual Remuneration. The LTI face value that Executives are entitled to receive is set at a maximum percentage of their FAR, being 100% of FAR for the Managing Director and CEO and 65% of FAR for the other Executives. | |||||||||||||||||||||||
What are the performance criteria for the LTI?
| Performance conditions have been selected that reward Executives for creating Shareholder value as determined via the change in the Company's share price (Relative Total Shareholder Return) and via the Ore Reserves Replacement metric over a 3 year period. Performance Rights will vest subject to meeting service and performance conditions as defined below: | |||||||||||||||||||||||
Relative Total Shareholder Return ("rTSR") - 75% | Ore Reserves Replacement metric - 25% | |||||||||||||||||||||||
The rTSR measures the combined return from change in share price and dividends, against 16 ASX or TSX listed gold production companies of a similar size which for 2019 were:
Resolute's TSR is calculated to determine what percentile in the peer group it relates to and this percentile determines how many Performance Rights vest. | The Ore Reserves Replacement metric measures the change in Resolute's Reserves at the end of the performance period as compared to the commencement of the performance period, net of mining depletion. Resolute's overall change in Ore Reserves as at the end of the performance period will determine how many Performance Rights will vest. The Board believes that maintaining reserves for a producing gold miner is a significant achievement requiring effort, strategic planning, and sound management. The achievement of maintaining reserves would enable a mining company to continue production indefinitely and, in a commodity as scarce as gold, should not be considered the ordinary course of business. | |||||||||||||||||||||||
What is the objective of the performance hurdle and target? | One of Resolute's goals is to manage achievements against comparators and outperform our peers to ensure sustainable growth to our share price above the market.
| Maintaining the Company's Ore Reserves is essential for the business to continue. A sustainable increase in Ore Reserves will have a direct link with Shareholder value. The Ore Reserves Replacement metric is aimed at directing the Executives' focus on a long term goal of ensuring the Company's gold inventory is robust and continues growing. | ||||||||||||||||||||||
What is the rationale for the chosen metrics? | The rTSR metric provides the closest alignment between the Company's performance and Shareholders' interests and reflects the creation of Shareholder value above peers. The Board acknowledges that rTSR may result in vesting under negative absolute TSR ("aTSR"). However, the Board has absolute discretion to amend the vesting outcomes both downwards and upwards, should the conditions of the plan result in an inappropriate vesting. The Board will limit this discretion to extraordinary circumstances. rTSR is considered the most relevant performance metric for KMP LTI purposes. For this reason, the Board has allocated 75% of the KMP LTI vesting performance metric to this measure.
| Sustainable growth in Ore Reserves ensures the growth in the Company's market value. Maintaining the Company's Ore Reserves enables the business to be sustainable which is a challenge when mining a scarce commodity such as gold. Reserves are the most stringent and difficult to estimate of mineralisation. Measurement of a Company's reserves is one of the most available and accurate metrics to establish the Company's value, growth prospects, health, and track record at any point in time. While rTSR is considered the most relevant performance metric for KMP LTI purposes, the Board believes a reserves metric provides good balance. For this reason, the Board has allocated 25% of the KMP LTI to the Ore Reserves Replacement metric. | ||||||||||||||||||||||
How is the performance period determined? | Grants under the LTI need to serve a number of different purposes: · act as a key retention tool; and · focus on future Shareholder value generation. Therefore, LTI awards have a three year performance period and provide a structure that is focused on long term sustainable Shareholder value generation. | |||||||||||||||||||||||
How is vesting determined? |
| |||||||||||||||||||||||
Is there an opportunity to re-test the performance hurdles? | Performance is tested only once, at the end of the performance period. No re-testing applies to unvested awards. | |||||||||||||||||||||||
Do dividends vest on unvested awards? | There are no dividends attached to unvested Performance Rights. | |||||||||||||||||||||||
Is there a malus and clawback policy? | While there is no formal malus/clawback policy, the Board has ultimate discretion to adjust LTI outcomes upwards or downwards (including to zero), in exceptional circumstances, where the LTIP generated outcomes inconsistent with the Company's performance or resulted in misalignment with Shareholders (e.g. financial misstatement, misconduct, reputational damage, etc.). | |||||||||||||||||||||||
What happens to LTI awards if there is a termination of employment? | Vested but unexercised Performance Rights remain on foot unless Board discretion is exercised in situations such as misconduct. Unvested Performance Rights will be forfeited unless Board discretion is exercised in circumstances such as death, retirement due to ill health and redundancy. | |||||||||||||||||||||||
What happens to LTI awards if there is a change of control? | On the occurrence of a change of control event, the Board will determine, in its sole and absolute discretion, the manner in which all unvested and vested rights will be dealt with. | |||||||||||||||||||||||
CEO LTI Performance Rights | ||||||||||||||||||||||||
What is the rationale for the CEO LTI? | From time to time, the Board may allocate Performance Rights to the Managing Director and CEO to provide further alignment with Shareholders and strengthen the retention mechanism. The Managing Director and CEO has expressed a strong desire to align his interests with Shareholders and sought to build and maintain a meaningful shareholding in the Company over time. These objectives have been carefully considered and balanced by the Board in developing a structured approach to CEO LTI grants with focus on long-term value creation that motivates exceptional performance, provides a retention incentive, and allows for regular CEO performance reviews. During the year, Mr Welborn was granted 3,000,000 Performance Rights following Shareholder approval in November 2019, subject to the conditions described below. The Board has taken considerable effort to ensure that Performance Rights do not vest in circumstances where Shareholders have not been rewarded with a growth in value or in circumstances where CEO performance does not warrant the vesting of Performance Rights. | |||||||||||||||||||||||
How many awards were granted? | The Managing Director and CEO was granted 3,000,000 Performance Rights which will vest in three equal tranches. No other Executive participates in the CEO LTI. | |||||||||||||||||||||||
What are the performance metrics for this award? | Absolute TSR ("aTSR") - 50% | Strategic Objectives - 50% | ||||||||||||||||||||||
The aTSR metric measures the cumulative growth in Resolute's share price over the performance period (aTSR). Resolute's aTSR will be based on the percentage by which Resolute's 30-day volume weighted average share price (VWAP) on the ASX at the close of trade on the relevant vesting date (plus the value of any dividends paid during the performance period) has increased over Resolute's 30-day VWAP at the commencement date of the performance period. The aTSR Metric will be subject to a condition that the rTSR Metric (assessed as per the KMP LTI Performance Rights measure) results in a result of at or above the 33rd percentile.
| The strategic objectives metric measures the Board's assessment of the performance of the CEO in ensuring achievement by the Company of key strategic objectives over the relevant performance period (Strategic Objectives Metric). The achievement of strategic objectives will be determined by the Board by referencing Resolute's Strategic Plan and Life-of-Mine plans and budgets for the Company's operating assets. Importantly, and in addition, will be assessment of the success of new business opportunities undertaken by the Company over the relevant period that extend the Company's resource and production base and add Shareholder value. The successful achievement of the Strategic Objectives Metric is not the ordinary course of business but requires outstanding performance by the CEO to deliver Board approved strategic targets, development plans, value creative acquisitions, positive divestments, technology adoption, and industry partnerships that substantially increase and/or improve the Company's value and enhance longer-term sustainability. | |||||||||||||||||||||||
What is the objective of the performance hurdle and target? | Absolute TSR combines Executives' efforts in all business areas and incentivises them to focus on the long-term value creation culminating in a continuous growth in share price. The performance periods of 2.5, 3.5 and 4.5 years ensure that Performance Rights subject to this vesting condition reflect long-term value creation, as opposed to short-term share price fluctuations. | The Strategic Objective Metric is intended to reward achievement of specific strategic long term objectives of the Company which are aligned with Company strategy to create sustainable Shareholder wealth. | ||||||||||||||||||||||
Rationale | Absolute TSR is a direct measure of the Company's share price and value growth. While it may be affected by the market forces, the Board takes these into consideration when setting the targets. The Board has determined that aTSR stretch target constitutes a highly challenging target, achievement of which will significantly benefit Shareholders. The Board has also reviewed similar type CEO incentive packages on the market and concluded that the aTSR stretch target of 20% exceeds the Company's peers. In addition, the aTSR metric will not be satisfied unless the rTSR Metric (assessed as per the KMP LTI Performance Rights measure) results in a result of at or above the 33rd percentile. | The Board believes it is appropriate to balance the hard measure of aTSR with a more qualitative assessment of CEO performance in preserving and creating value for Shareholders measured by assessment against clearly defined Strategic Objectives Metrics. There are a range of factors beyond the total control of the CEO which may positively or negatively affect aTSR, such as gold price or exchange rates or geopolitical risk. The inclusion of a Strategic Objectives Metric balances the aTSR Metric and allows the Board to assess how the CEO has managed the business with reference to clearly defined objectives. | ||||||||||||||||||||||
Vesting conditions |
| Tranche 1: The successful achievement of Board approved strategic targets, development plans, value creative acquisitions, positive divestments, technology adoption, and industry partnerships that substantially increase and/or improve the Company's value and enhance longer-term sustainability. Elements for consideration of the Tranche 1 vesting are continued asset portfolio optimisation through both acquisition and divestment, successful reduction of AISC across all operations, value optimisation from Syama and the investments made and LOM extension across the portfolio. Tranche 2: The successful achievement of Board approved strategic targets, development plans, value creative acquisitions, positive divestments, technology adoption, and industry partnerships that substantially increase and/or improve the Company's value and enhance longer-term sustainability. Specific strategic objectives for Tranche 2 will be developed and more detailed elements for considerations for this tranche will be outlined in the Remuneration Report issued immediately prior to the Tranche 2 vesting date. Tranche 3: The successful achievement of Board approved strategic targets, development plans, value creative acquisitions, positive divestments, technology adoption, and industry partnerships that substantially increase and/or improve the Company's value and enhance longer-term sustainability. Specific strategic objectives for Tranche 3 will be developed and more detailed elements for considerations for this tranche will be outlined in the Remuneration Report issued immediately prior to the Tranche 3 vesting date. | ||||||||||||||||||||||
Performance Period | Tranche 1: 33.3%: 2.5 years (1 January 2019 - 30 June 2021) | |||||||||||||||||||||||
Tranche 2: 33.3%: 3.5 years (1 January 2019 - 30 June 2022) | ||||||||||||||||||||||||
Tranche 3: 33.4%: 4.5 years (1 January 2019 - 30 June 2023) | ||||||||||||||||||||||||
Re-testing | None | |||||||||||||||||||||||
Face value (as at 1 January 2019) | Tranche 1: $1,145,000 | |||||||||||||||||||||||
Tranche 2: $1,145,000 | ||||||||||||||||||||||||
Tranche 3: $1,145,000 | ||||||||||||||||||||||||
Fair value | Tranche 1: $720,000 | |||||||||||||||||||||||
Tranche 2: $710,000 | ||||||||||||||||||||||||
Tranche 3: $700,000 | ||||||||||||||||||||||||
How often are CEO LTI grants made? | The Board will evaluate in 2022 (for performance periods ending in 2024, 2025 and 2026) whether a further issue of CEO LTI grants is desirable at that time, having regard to the CEO's performance, the Company's business strategy and objectives, market conditions, and Company circumstances with regard to CEO incentive and retention. These factors were considered at the time of the CEO LTI grants in 2016 and 2019. | |||||||||||||||||||||||
Notes | The Board acknowledges that aTSR is subject to market volatility and may therefore unfairly penalise or reward the CEO as a result of market forces. At the same time, aTSR provides direct alignment with Shareholders given that the CEO will "share the pains and gains" together with Shareholders. The Board is satisfied that alongside the other three vesting conditions, the performance of the Company is assessed in a holistic manner and the potential negative consequences of the aTSR are partially mitigated also by its limited weighting on the total potential vesting. The Board also has absolute discretion to amend the vesting outcomes both downwards and upwards, should the conditions of the plan result in an inappropriate vesting. The Board will limit this discretion to extraordinary circumstances. | |||||||||||||||||||||||
3d. Executive Remuneration outcomes
Company Performance
The table below shows the performance of the Consolidated Entity over the last 5 years:
31 December 2019 | 6 months ended 31 December 2018 | 30 June 2018 | 30 June 2017 | (Restated) 30 June 2016 | |||
Net (loss)/profit after tax | $'000 | (112,866) | (5,324) | 77,837 | 166,096 | 200,732 | |
Basic (loss)/earnings per share | cents/share | (11.98) | (0.44) | 8.85 | 19.05 | 26.79 | |
KMP remuneration disclosures
Table 1 below shows the remuneration expense recognised for each KMP for the twelve month period 1 January 2019 to 31 December 2019. Table 2 below shows the remuneration expense recognised for each KMP for the six month period 1 July 2018 to 31 December 2018. The actual remuneration received by KMP for the year is set out in Table 3. The actual remuneration includes equity grants where the KMP received control of the shares in the period 1 January 2019 to 31 December 2019. This differs from the remuneration disclosures in Table 1. For example, Table 1 discloses the value of LTI grants which may or may not vest in future years, whereas Table 3 discloses the value of LTI grants from previous years which have vested during the year.
Table 1 - Statutory KMP remuneration for the year ended 31 December 2019
SHORT TERM BENEFITS | POST EMPLOYMENT BENEFITS | LONG TERM BENEFITS | SHARE BASED PAYMENTS | PERFORMANCE RELATED | |||||||
Base Remuneration | Non Monetary Benefits (i) | Short Term Incentive (ii) | Annual Leave Expense | Superannuation | Termination (vi) | Long Service Leave Expense | Performance Rights | Total | Short Term Incentive, Options and Performance Rights | Options and Performance Rights | |
$ | $ | $ | $ | $ | $ | $ | $ | $ | % | % | |
J. Welborn | 747,244 | 5,070 | 94,816 | 71,732 | 25,000 | - | 28,306 | 1,425,504 | 2,397,672 | 63 | 59 |
P. Beilby(iii) | 104,002 | 1,268 | - | 8,872 | 6,250 | - | - | 32,902 | 153,294 | 21 | 21 |
D. Kelly(iv) | 341,152 | 6,004 | 44,199 | 18,208 | 24,266 | - | 9,112 | 198,978 | 641,919 | 38 | 31 |
L. de Bruin(v) | 471,687 | 5,070 | 41,719 | 59,417 | 37,500 | 103,750 | 13,142 | 149,601 | 881,886 | 22 | 17 |
A. Stanton | 287,710 | 5,070 | 44,800 | 22,420 | 20,768 | - | 8,393 | 122,632 | 511,793 | 33 | 24 |
Total | 1,951,795 | 22,482 | 225,534 | 180,649 | 113,784 | 103,750 | 58,953 | 1,929,617 | 4,586,564 | ||
(i) Non-monetary benefits include, where applicable, the cost to the Company of providing fringe benefits, the fringe benefits tax on those benefits and all other benefits received by the Executive.
(ii) The STI for the year ended 31 December 2019 will be paid in cash in March 2020.
(iii) Mr P. Beilby retired effective 31 March 2019.
(iv) Mr D. Kelly appointed effective 1 April 2019.
(v) Ms L. de Bruin resigned as Chief Financial Officer effective 13 December 2019.
(vi) Ms L. de Bruin received a payment in lieu of notice.
Table 2 - Statutory KMP remuneration for the six month period ended 31 December 2018
SHORT TERM BENEFITS | POST EMPLOY-MENT BENEFITS | LONG TERM BENEFITS | SHARE BASED PAYMENTS | PERFORMANCE RELATED | ||||||
Base Remuneration | Non Monetary Benefits (i) | Short Term Incentive (ii) | Annual Leave Expense | Superannuation | Long Service Leave Expense | Performance Rights | Total | Short Term Incentive, Options and Performance Rights | Options and Performance Rights | |
$ | $ | $ | $ | $ | $ | $ | $ | % | % | |
J. Welborn | 340,000 | 5,070 | 121,918 | 27,338 | 12,500 | 8,878 | 525,514 | 1,041,218 | 62 | 50 |
P. Beilby | 177,604 | 5,070 | 64,906 | 18,162 | 12,500 | 5,553 | 97,991 | 381,786 | 43 | 26 |
L. de Bruin | 180,288 | 5,070 | 76,532 | 15,715 | 12,500 | 5,038 | 73,511 | 368,654 | 41 | 20 |
A. Stanton | 128,008 | 7,347 | 57,491 | 11,880 | 10,266 | 3,796 | 33,658 | 252,446 | 36 | 13 |
Total | 825,900 | 22,557 | 320,847 | 73,095 | 47,766 | 23,265 | 730,674 | 2,044,104 | ||
(i) Non-monetary benefits include, where applicable, the cost to the Company of providing fringe benefits, the fringe benefits tax on those benefits and all other benefits received by the Executive.
(ii) The Short Term Incentives for the six months ended 31 December 2018 were paid in cash in March 2019.
Table 3 - Actual KMP remuneration paid for the year ended 31 December 2019
The following table shows the nominal remuneration value realised by the individual and includes fixed remuneration, any cash incentives paid and the nominal value of equity at the time the share rights vest or shares are awarded. We believe this information is helpful to assist shareholders in understanding the actual pay and benefits received by KMPs from various components of their remuneration.
The following table is a voluntary disclosure and is not prepared in accordance with Australian Accounting Standards.
Fixed Remuneration (i) | Short Term Incentives (ii) | Nominal Value of 2016 LTIP Vested Rights (iii) | TOTAL | |
$ | $ | $ | $ | |
J. Welborn | 784,167 | 121,918 | 412,610 | 1,318,695 |
P. Beilby | 207,975 | 64,906 | 69,371 | 342,252 |
D. Kelly | 372,927 | 38,462 | 74,301 | 485,690 |
L. de Bruin | 559,995 | 76,532 | 62,920 | 699,447 |
A. Stanton (iv) | 312,816 | 57,491 | - | 370,307 |
Total | 2,237,880 | 359,309 | 619,202 | 3,216,391 |
(i) Fixed Remuneration includes cash salary, paid leave and superannuation.
(ii) Short Term Incentives relate to Short Term Incentives earned for the 6 months period ended 31 December 2018 paid in March 2019.
(iii) 2016 LTIP vested rights awarded have a nominal value based on the 10 day VWAP up to and including 30 June 2019.
(iv) Ms A. Stanton did not participate in the 2016 LTIP.
STI outcomes
Performance Measure | Performance Area Weighting | Actual Performance Outcome | Commentary |
Company Operating Cash Flow ($132.411m) | 30% | $11.157m | Not Achieved |
Cash Operating Cost Per Tonne Milled ($54) | 30% | $66 | Not Achieved |
Production Target (Gold Poured) (330,000oz) | 30% | 297,544oz | Partially Achieved |
Total Recordable Injury Frequency Rate (2.28) | 5% | 1.99 | Achieved |
Safety Action List Performance (3) | 5% | 2.7 | Partially Achieved |
LTI outcomes
The table below displays the KMP LTI Performance Rights and the CEO LTI Performance Rights approved by Shareholders:
(image available in full report at rml.com.au)
The following table provides information regarding the performance criteria and vesting of the CEO LTI grant in the 2016 financial year, to demonstrate the Company's track record and ability to set challenging targets.
Financial Year 2016CEO LTI | Target | Achievement and Performance Rights vesting |
Tranche A (20%) - Ravenswood 400,000 Performance Rights
Vesting: 30 June 2018 | Objective: Secure Shareholder value for Ravenswood. Board endorsement of either a long-term development plan for Ravenswood, or an alternative strategic proposal. The following are elements for consideration: • Board approval of a Ravenswood Extension Project Plan during the 2017 financial year - Completion of relevant studies - Plan to include standard project components detail - Component detail will include Buck Reef West and/or Sarsfield in production, metrics to be defined and approved
| The target of Tranche A was set for Mr Welborn in 2016 at a period of great uncertainty for the Ravenswood Gold Mine. Previous to Mr Welborn's appointment as CEO, Ravenswood had been scheduled for mine closure. The Board assessed vesting as at 30 June 2018 based on CEO performance against the defined target objectives. Mr Welborn had championed the concept of a return to open pit mining at Ravenswood and directed the completion of a Feasibility Study for the Ravenswood Expansion Project (REP). The study was approved by the Board and included mining at Sarsfield and Buck Reef West as per approved and defined metrics. Mr Welborn directed a clear path forward for a long life, low risk, low cost development plan for long-term production at Ravenswood. Key elements of performance have included: • Production continuing beyond budgeted expectations at the Mt Wright Underground Mine; |
Financial Year 2016CEO LTI | Target | Achievement and Performance Rights vesting |
Tranche A (20%) - Ravenswood 400,000 Performance Rights
Vesting: 30 June 2018 | • Board approval of an alternative strategy to deliver appropriate Shareholder value • Maintaining production performance as budgeted
| • The REP being granted Prescribed Project Status by the Queensland Government; • Investigation and inclusion of beneficiation technology to enhance outcomes; • All key REP approvals being received on time and on budget; • All relevant REP studies being completed; and • All REP project component details having been defined and progressed at the Board's satisfaction. On the basis that the CEO had demonstrably secured Shareholder value for Ravenswood by developing a long-term development plan for the asset that had been fully endorsed by the Board, the Board resolved that Tranche A of the 2016 financial year CEO LTI grant vested in full. |
Tranche B (30%) - Syama 600,000 Performance Rights
Vesting: 30 June 2019 | Objective: To ensure Shareholder value for Syama is realized and protected. The successful delivery of the Syama Underground Expansion. The following are elements for consideration: • Reference is to relevant original Budget and Capital approvals as well as the Syama Underground Extension Definitive Feasibility Study - Subject to Board approved change to take account of optimization and/or approved changes to mining or processing methods • Full production by Q2 Financial Year 2019 • Management of government relations | The Board assessed the Tranche B vesting outcome as at 30 June 2019. The measurement of whether Shareholder value for Syama has been realised and protected was assessed based on operating performance and the development status of the Syama Underground Mine as at end Q2 Financial Year 2019. Elements that were considered included: • Status of government relations; • Performance against budget; • Development against DFS plan; and • Timing of full nameplate production, including automation. The Board (other than Mr Welborn) unanimously agreed that a vesting outcome of 200,000 Performance Rights was justified and appropriate based on the performance outcome relating to delivery of the Syama Underground Expansion. |
Financial Year 2016CEO LTI | Target | Achievement and Performance Rights vesting |
Tranche C (50%) - Production & Sustainability 1,000,000 Performance Rights
Vesting: 30 June 2020 | Objective: To place the Company on a clear path to a substantial and sustainable increase in annual gold production with reduced risk though further diversification of production centres. The successful achievement of Board approved developments, acquisitions, divestments and partnerships that substantially increase the Company's mineable reserves and enhance longer-term sustainability. The following are elements for consideration: • the Company's gold production ambition of 450k oz or more from 3 operations by the 2020 financial year; • an increase in the Company's gold resources per share; and • optimum production achieved from existing owned assets. | The Board has made the CEO aware that achievement of the Tranche C vesting conditions would require gold production of 450k oz or more based on optimum production from existing assets and/or the development or acquisition of an alternative third producing asset. The Board monitors CEO performance metrics against strategic goals which include monitoring the Company's gold resources per share. The Board will consider the increase in the Company's mineable reserves and assess any relevant achievement of developments, acquisitions, divestments and partnerships that substantially enhance Shareholder value. The Tranche C primary performance objective is the substantial and sustainable increase in annual gold production with reduced risk though further diversification of production centres. |
4. Non-Executive Director Remuneration Arrangements and Outcomes
Objective
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain Directors of the highest calibre, whilst incurring a cost which is acceptable to Shareholders.
Structure
The Company's constitution and the ASX Listing Rules specify that the aggregate remuneration of NEDs shall be determined from time to time by a general meeting. An amount not exceeding the amount determined is then divided between the Directors as agreed. The latest determination was at the Annual General Meeting held on 29 November 2016 when the Shareholders approved an aggregate remuneration of $1,000,000 per year.
An independent review of NED fees was completed in 2019. Following this review, from 1 March 2019, the Chairman's fee increased to $180,000 from $175,000 and NED fees increased from $90,000 to $100,000. In addition, the Chair of the Audit and Risk Committee receives a Committee Chair fee of $15,000 and the Chair of the Remuneration Committee receives a Committee Chair fee of $10,000. Members of Committees do not receive a separate fee.
The amount of aggregate remuneration sought to be approved by Shareholders and the manner in which it is apportioned amongst Directors is reviewed annually. The Board considers fees paid to NEDs of comparable companies when undertaking the annual review process. Each NED receives a fee for being a Director of the Company. The fee size is commensurate with the workload and responsibilities undertaken. NEDs do not participate in any incentive programs.
Position | Current Annual Fee |
Chair of Board | $180,000 |
Non-Executive Director | $100,000 |
Audit and Risk Committee Chair | $15,000* |
Remuneration Committee Chair | $10,000* |
* Payable in addition to the annual NED fee.
Non-Executive Director remuneration for the twelve month period ending 31 December 2019
SHORT TERM BENEFITS | POST EMPLOYMENT BENEFITS | TOTAL | ||
Remuneration | Non-Monetary Benefits | Superannuation | ||
$ | $ | $ | $ | |
M. Botha | 179,167 | - | - | 179,167 |
Y. Broughton | 110,833 | - | - | 110,833 |
M. Potts | 98,333 | - | - | 98,333 |
S. Shugg | 89,802 | - | 8,531 | 98,333 |
P. Sullivan | 87,543 | 9,869 | 9,254 | 106,666 |
Total | 565,678 | 9,869 | 17,785 | 593,332 |
Non-Executive Director remuneration for the six month period ended 31 December 2018
SHORT TERM BENEFITS | POST EMPLOYMENT BENEFITS | TOTAL | ||
Remuneration | Non-Monetary Benefits | Superannuation | ||
$ | $ | $ | $ | |
M. Botha | 87,500 | - | - | 87,500 |
Y. Broughton | 45,000 | - | - | 45,000 |
M. Potts | 45,000 | - | - | 45,000 |
H. Price | 20,447 | - | 8,217 | 28,664 |
S. Shugg | 25,952 | - | - | 25,952 |
P. Sullivan | 36,161 | 4,935 | 3,904 | 45,000 |
Total | 260,060 | 4,935 | 12,121 | 277,116 |
5. Additional Disclosures
Executive Employment Contracts
Remuneration arrangements for KMP are formalised in employment agreements. The following table outlines the details of contracts with key management personnel:
Name | Title | Term of Agreement | Notice Period by Executive | Notice Period by Company | Termination Benefit¹ |
John Welborn | Managing Director and Chief Executive Officer | Open | 6 months | 12 months | Redundancy as per NES |
Peter Beilby(i) | Chief Operating Officer | Open | 3 months | 6 months | Redundancy as per NES |
David Kelly(ii) | Acting Chief Operating Officer | Open | 3 months | 3 months | Redundancy as per NES |
Lee-Anne de Bruin(iii) | Chief Financial Officer | Open | 3 months | 3 months | Redundancy as per NES |
Amber Stanton | General Counsel and Company Secretary | Open | 3 months | 3 months | Redundancy as per NES |
¹ NES is the National Employment Standards.
(i) Retired effective 31 March 2019.
(ii) Appointed effective 1 April 2019.
(iii) Resigned as Chief Financial Officer effective 13 December 2019.
No options were held by KMP during the period.
Details of Performance Rights holdings of KMP are as follows:
Balance at the start of the period | Granted during the period as compensation | Lapsed during the period | Vested during the period | Balance at the end of the period | ||||||||
Number | Issue date | Fair value of performance rights at grant date | Total Fair value of performance rights at grant date | Vesting period (years) | Vesting date | Expiry of performance rights | Exercise price of performance rights granted during the period | |||||
$ | $ | $ | ||||||||||
Directors | ||||||||||||
J. Welborn | 3,029,059 | 698,690 | 21 May 2019 | 0.78 | 544,978 | 3 | 31 Dec 2021 | 1 Jan 2026 | nil | (823,000) | (341,000) | 5,563,749 |
1,000,000 | 21 Nov 2019 | 0.72 | 720,000 | 2.5 | 30 Jun 2021 | 1 Jan 2026 | nil | |||||
1,000,000 | 21 Nov 2019 | 0.71 | 710,000 | 3.5 | 30 Jun 2022 | 1 Jan 2026 | nil | |||||
1,000,000 | 21 Nov 2019 | 0.70 | 700,000 | 4.5 | 30 Jun 2023 | 1 Jan 2026 | nil | |||||
Other key management personnel | ||||||||||||
P. Beilby | 581,062 | - | - | - | - | - | - | - | - | (523,731) | (57,331) | - |
D. Kelly (i) | 435,106 | 134,867 | 21 May 2019 | 0.93 | 125,426 | 3 | 31 Dec 2021 | 1 Jan 2026 | nil | (184,218) | (61,406) | 324,349 |
L. de Bruin | 527,029 | 249,782 | 21 May 2019 | 0.93 | 232,297 | 3 | 31 Dec 2021 | 1 Jan 2026 | nil | (547,682) | (52,000) | 177,129 |
A. Stanton | 239,395 | 178,821 | 21 May 2019 | 0.93 | 166,304 | 3 | 31 Dec 2021 | 1 Jan 2026 | nil | - | - | 418,216 |
(i) These were the number of performance rights held by Mr D. Kelly when he was appointed on 1 April 2019.
(ii) Performance rights vest in accordance with the Resolute Mining Limited Remuneration Policy and Equity Incentive Plan which outline the key performance indicators that need to be satisfied. The percentage of Performance Rights granted during the year that also vested during the year is nil.
Details of shareholdings of KMP are as follows:
Balance at the start of the year | Received during the year on the vesting of performance rights | Purchased on market during the year | Other changes during the year | Shares sold on market during the year | Balance at the end of the year | ||||
Directors | |||||||||
M. Botha | - | - | - | - | - | - | |||
J. Welborn | 4,500,000 | 341,000 | 50,000 | - | (1,891,000) | 3,000,000 | |||
Y. Broughton | - | - | - | - | - | - | |||
M. Potts | 26,825 | - | - | - | - | 26,825 | |||
S. Shugg | - | - | - | - | - | - | |||
P. Sullivan | 2,840,674 | - | - | - | (500,000) | 2,340,674 | |||
Other key management personnel | |||||||||
P. Beilby (i) | 980,229 | 57,331 | - | (1,037,560) | - | - | |||
D. Kelly (ii) | 20,000 | 61,406 | - | - | - | 81,406 | |||
L. de Bruin | - | 52,000 | - | - | (52,000) | - | |||
(i) These were the number of shares held by Mr P. Beilby when he retired on 31 March 2019.
(ii) These were the number of shares held by Mr D. Kelly when he was appointed on 1 April 2019.
Every Director is encouraged to hold shares in the Company. Following completion of the Company's equity raising announced on 21 January 2020, all Directors will hold shares in the Company, subject to Shareholder approval. The Board considered a share ownership requirement policy for Directors, however, is not proposing to introduce a formal requirement due to the current tenure of Directors and to ensure that diversity is one of the priorities for succession planning without imposing limitations on any potential candidate. The Board will continue reviewing this policy on an ongoing basis to ensure it meets the requirements of the Company and its stakeholders.
6. Loans to Key Management Personnel and their Related Parties
There were no loans to KMP during the year ended 31 December 2019.
This is the end of the audited information.
Performance Rights
Outstanding performance rights at the date of this report are as follows:
Grant date | Vesting date | Exercise price | Number on issue |
29/11/16 | 30/06/20 | - | 1,000,000 |
17/10/17 | 30/06/20 | - | 795,382 |
28/11/17 | 30/06/20 | - | 587,500 |
07/03/18 | 30/06/20 | - | 319,571 |
26/10/18 | 30/06/21 | - | 784,916 |
21/05/19 | 31/12/21 | - | 1,766,003 |
21/11/19 | 30/06/21 | - | 1,000,000 |
21/11/19 | 30/06/22 | - | 1,000,000 |
21/11/19 | 30/06/23 | - | 1,000,000 |
8,253,372 |
Indemnification and Insurance of Directors and Officers
Resolute maintains an insurance policy for its Directors and officers against certain liabilities arising as a result of work performed in the capacity as Directors and officers. The company has paid an insurance premium for the policy. The contract of insurance prohibits disclosure of the amount of the premium and the nature of the liabilities insured.
Indemnification of Auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year.
Auditor Independence
Refer to page 95 for the Auditor's Independence Declaration to the Directors of Resolute Mining Limited.
Extension of Lead Audit Partner
On 27 June 2019, the Board granted approval pursuant to section 324DAC of the Corporations Act 2001 (Cth), for Mr Gavin Buckingham of Ernst & Young to play a significant role in the audit of the Company for an additional one financial year through to the financial year ending 31 December 2020.
The Board considered the matters set out in section 324DAB(3) of the Act and was satisfied that the approval:
(i) was consistent with maintaining the quality of the audit provided to the Company; and
(ii) would not give rise to a conflict of interest situation.
Reasons supporting this decision include:
· the benefits associated with the continued retention of knowledge regarding key audit matters;
· the Board being satisfied with the quality of Ernst & Young and Mr Buckingham's work as auditor; and
· the Company's on-going governance processes to ensure the independence of the auditor is maintained.
Directors' Meetings
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of meetings attended by each Director were as follows:
Full Board | Audit & Risk | Remuneration | Nomination | |
M. Botha | 20 | 6 | 4 | 2 |
P. Sullivan | 20 | 6 | 4 | 2 |
J. Welborn | 20 | n/a | n/a | n/a |
M. Potts | 20 | 6 | 4 | 2 |
Y. Broughton | 20 | 6 | 4 | 2 |
S. Shugg | 20 | 6 | 4 | 2 |
Number of meetings held | 20 | 6 | 4 | 2 |
The details of the functions of the other committees of the Board are presented in the Corporate Governance Statement.
Rounding
Resolute is a Company of the kind specified in Australian Securities and Investments Commission Corporations (Rounding in Financial Directors' Reports) Instrument 2016/191. In accordance with that class order, amounts in the financial report and the Directors' Report have been rounded to the nearest thousand dollars unless specifically stated to be otherwise.
Non-Audit Services
Non-audit services have not been provided by the entity's auditor, Ernst & Young for the year ended 31 December 2019. The Directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The nature and scope of each type of non-audit service provided means that auditor independence was not compromised.
Ernst & Young Australia received or are due to receive nil for non-audit services in the year ended 31 December 2019 (six months ended 31 December 2018: $nil).
Signed in accordance with a resolution of the Directors.
[ELECTRONICALLY SIGNED]
J.P. Welborn
Managing Director and CEO
Perth, Western Australia27 March 2020
Consolidated Statement of Comprehensive Income
Note | 12 months to 31 December 2019 | 6 months to 31 December 2018 | |
$'000 | $'000 | ||
Continuing operations | |||
Revenue from contracts with customers for gold and silver sales | A.1 | 656,392 | 152,270 |
Costs of production relating to gold sales | A.1 | (423,149) | (103,762) |
Gross profit before depreciation, amortisation and other operating costs | 233,243 | 48,508 | |
Depreciation and amortisation relating to gold sales | A.1 | (108,981) | (9,487) |
Other operating costs relating to gold sales | A.1 | (63,559) | (15,210) |
Gross profit from continuing operations | 60,703 | 23,811 | |
Interest income | A.1 | 679 679 | 329 |
Other income | A.1 | 111 | 13 |
Exploration, business development and impairment of investments in associates | A.1 | (20,566) | (1,917) |
Administration and other corporate expenses | A.1 | (17,538) | (6,282) |
Share based payments expense | A.1 | (2,453) | (1,346) |
Treasury - realised (losses)/gains | A.1 | (2,980) | 213 |
Fair value movements and unrealised treasury transactions | A.1 | 4,628 | (13,190) |
Share of associates' losses | A.1/ E.6 | (1,391) | (476) |
Depreciation of non-mine site assets | A.1 | (776) | (47) |
Finance costs | A.1 | (45,542) | (4,786) |
Other expenses | A.1 | (881) | - |
Indirect tax expense | A.1/D.66 | (57,937) | - |
Loss before tax from continuing operations | (83,943) | (3,684) | |
Tax (expense)/benefit | A.1/A.4 | (24,947) | 1,835 |
Loss for the year/period from continuing operations | (108,890) | (1,849) | |
Discontinued operations | |||
Loss for the year/period from discontinued operations (1) | E.2 | (3,976) | (3,475) |
Loss for the year/period | (112,866) | (5,324) | |
Loss attributable to: | |||
Members of the parent | (97,821) | (3,302) | |
Non-controlling interest | E.7 | (15,045) | (2,022) |
(112,866) | (5,324) | ||
Loss for the year/period (brought forward) | (112,866) | (5,324) | |
Other comprehensive income/(loss) | |||
Items that may be reclassified subsequently to profit or loss | |||
Exchange differences on translation of foreign operations: | |||
- Members of the parent | 2,606 | 3,460 | |
Items that may not be reclassified subsequently to profit or loss | |||
Exchange differences on translation of foreign operations: | |||
- Non-controlling interest | 404 | (246) | |
Changes in the fair value/realisation of financial assets at fair value through other comprehensive income, net of tax | (10,780) | (7,061) | |
Other comprehensive loss for the year/period, net of tax | (7,770) | (3,847) | |
Total comprehensive loss for the year/period | (120,636) | (9,171) | |
Total comprehensive loss attributable to: | |||
Members of the parent | (105,995) | (6,903) | |
Non-controlling interest | (14,641) | (2,268) | |
(120,636) | (9,171) | ||
Loss per share for net loss attributable for continuing operations to the ordinary equity holders of the parent: | |||
Basic loss per share | A.3 | (11.98) cents | (0.44) cents |
Diluted loss per share | A.3 | (11.98) cents | (0.44) cents |
(1) Discontinued operations relates to the Group's Ravenswood gold mine
The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.
Consolidated Statement of Financial Position
Note | As at 31 December 2019 | As at 31 December 2018 | |
$'000 | $'000 | ||
Current assets | |||
Cash | C.1 | 124,495 | 38,717 |
Other financial assets - restricted cash | D.3 | 3,915 | 3,890 |
Receivables | D.1 | 70,890 | 56,822 |
Inventories | D.2 | 189,898 | 178,623 |
Financial assets at fair value through other comprehensive income | D.3 | 18,116 | 28,324 |
Assets held for sale | E.2 | 95,022 | - |
Prepayments and other assets | 8,031 | 8,296 | |
Current tax asset | 21,588 | 17,561 | |
Total current assets | 531,955 | 332,233 | |
Non current assets | |||
Prepayments | D.4 | - | 3,609 |
Inventories | D.2 | 63,197 | - |
Investments in associates | E.6 | 6,151 | 9,583 |
Deferred tax assets | A.4 | 27,786 | 19,261 |
Other financial assets | D.3 | - | 32 |
Exploration and evaluation | B.2 | 82,418 | 62,904 |
Development | B.1 | 774,229 | 405,382 |
Property, plant and equipment | B.1 | 441,708 | 288,481 |
Right of use assets | D.7 | 58,149 | - |
Total non current assets | 1,453,638 | 789,252 | |
Total assets | 1,985,593 | 1,121,485 | |
Current liabilities | |||
Payables | D.5 | 148,503 | 119,982 |
Financial derivative liabilities | D.8 | 4,553 | - |
Interest bearing liabilities | C.2 | 340,269 | 68,513 |
Provisions | D.6 | 69,811 | 23,259 |
Current tax liabilities | 30,127 | - | |
Lease liabilities | D.7 | 22,074 | - |
Liabilities associated with the assets held for sale | E.2 | 56,315 | - |
Total current liabilities | 671,652 | 211,754 | |
Non current liabilities | |||
Interest bearing liabilities | C.2 | 267,216 | 138,711 |
Provisions | D.6 | 93,586 | 70,321 |
Financial derivative liabilities | D.8 | 12,840 | - |
Deferred tax liabilities | A.4 | 13,219 | - |
Lease liabilities | D.7 | 37,139 | - |
Total non current liabilities | 424,000 | 209,032 | |
Total liabilities | 1,095,652 | 420,786 | |
Net assets | 889,941 | 700,699 | |
Equity attributable to equity holders of the parent | |||
Contributed equity | C.4 | 829,021 | 559,809 |
Reserves | 29,306 | 34,956 | |
Retained earnings | 17,795 | 115,616 | |
Total equity attributable to equity holders of the parent | 876,122 | 710,381 | |
Non-controlling interest | E.7 | 13,819 | (9,682) |
Total equity | 889,941 | 700,699 |
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
Contributed equity | Net unrealised gain/(loss) reserve | Convertible notes/ Share options equity reserve | Non-controlling interests reserve | Employee equity benefits reserve | Foreign currency translation reserve | Retained earnings/ (accumulated losses) | Non-controlling interest | Total | |
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | |
At 1 January 2019 | 559,809 | (7,837) | 6,371 | (934) | 18,122 | 19,234 | 115,616 | (9,682) | 700,699 |
Loss for the year | - | - | - | - | - | - | (97,821) | (15,045) | (112,866) |
Other comprehensive (loss)/income, net of tax | - | (10,780) | - | - | - | 2,606 | - | 404 | (7,770) |
Total comprehensive (loss)/income for the year, net of tax | - | (10,780) | - | - | - | 2,606 | (97,821) | (14,641) | (120,636) |
Shares issued | 269,212 | - | - | - | - | - | - | - | 269,212 |
Share based payments expense | - | - | - | - | 2,524 | - | - | - | 2,524 |
Acquisition of non-controlling interest | - | - | - | - | - | - | - | 38,142 | 38,142 |
At 31 December 2019 | 829,021 | (18,617) | 6,371 | (934) | 20,646 | 21,840 | 17,795 | 13,819 | 889,941 |
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity (continued)
Contributed equity | Net unrealised gain/(loss) reserve | Convertible notes/ Share options equity reserve | Non-controlling interests reserve | Employee equity benefits reserve | Foreign currency translation reserve | Retained earnings/ (accumulated losses) | Non-controlling interest | Total | |
$'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | $'000 | |
At 1 July 2018 | 544,972 | (776) | 6,371 | (934) | 16,576 | 15,774 | 134,073 | (7,414) | 708,642 |
Loss for the period | - | - | - | - | - | - | (3,302) | (2,022) | (5,324) |
Other comprehensive (loss)/income, net of tax | - | (7,061) | - | - | - | 3,460 | - | (246) | (3,847) |
Total comprehensive (loss)/income for the period, net of tax | - | (7,061) | - | - | - | 3,460 | (3,302) | (2,268) | (9,171) |
Shares issued | 14,837 | - | - | - | - | - | - | - | 14,837 |
Dividends paid | - | - | - | - | - | - | (15,155) | - | (15,155) |
Share based payments expense | - | - | - | - | 1,546 | - | - | - | 1,546 |
At 31 December 2018 | 559,809 | (7,837) | 6,371 | (934) | 18,122 | 19,234 | 115,616 | (9,682) | 700,699 |
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Consolidated Cash Flow Statement
Note | 12 months to 31 December 2019 | 6 months to31 December 2018 | |
$'000 | $'000 | ||
Cash flows from operating activities | |||
Receipts from customers | 759,219 | 222,738 | |
Payments to suppliers, employees and others | (593,731) | (181,435) | |
Exploration expenditure | (3,546) | (2,924) | |
Interest paid | (37,247) | (4,926) | |
Interest received | 668 | 396 | |
Income tax paid | (5,437) | - | |
Net cash flows from operating activities | C.1 | 119,926 | 33,849 |
Cash flows used in investing activities | |||
Payments for property, plant & equipment | (94,693) | (82,444) | |
Payments for development activities | (96,872) | (92,533) | |
Payments for evaluation activities | (14,181) | (6,898) | |
Payments for other financial assets | (249) | (848) | |
Repayment of loan from unrelated parties | 2,997 | 2,230 | |
Other investing activities | (1,075) | (209) | |
Payment for acquisition of subsidiaries (net of cash acquired) | E.1 | (93,926) | - |
Loans to associates | - | (750) | |
Proceeds from sale of financial assets at fair value through other comprehensive income | - | 417 | |
Net cash flows used in investing activities | (297,999) | (181,035) | |
Cash flows from financing activities | |||
Repayment of borrowings | (23,526) | - | |
Dividend paid | - | (15,155) | |
Proceeds from finance facilities | 314,066 | 136,732 | |
Repayment of lease liability | (13,277) | - | |
Net cash flows from financing activities | 277,263 | 121,577 | |
Net increase/(decrease) in cash and cash equivalents | 99,190 | (25,609) | |
Cash and cash equivalents at the beginning of the period | (28,581) | (4,837) | |
Exchange rate adjustment | (1,824) | 1,865 | |
Cash and cash equivalents at the end of the period | 68,785 | (28,581) | |
Cash and cash equivalents comprise the following: | |||
Cash at bank and on hand | C.1 | 124,495 | 38,717 |
Bank overdraft | C.1 | (55,710) | (67,298) |
68,785 | (28,581) |
The above consolidated cash flow statement should be read in conjunction with the accompanying notes.