Annual Report 2020

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# Annual Report 2020

Source: https://www.emeraldresources.com.au/wp-content/uploads/2023/09/2020-09-25-FR-Annual-Report-2020.pdf
Published: 2020-06-30T00:00:00+00:00
Fetched: 2026-05-12T14:52:41.12+00:00
Source artifact: e5323424-28a5-40be-8f2a-b81784d9d22c
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## Content

# Annual Report 2020
ABN 72 009 795 046
Annual Report
2020
Contents
CORPORATE DIRECTORY ..............................................................................................................................................................2
CHAIRMAN’S LETTER ...................................................................................................................................................................3
DIRECTORS’ REPORT ....................................................................................................................................................................5
SUSTAINABILITY REPORT ...........................................................................................................................................................42
CORPORATE GOVERNANCE STATEMENT ...................................................................................................................................48
AUDITOR’S INDEPENDENCE DECLARATION ................................................................................................................................61
FINANCIAL STATEMENTS ...........................................................................................................................................................62
DIRECTOR’S DECLARATION ........................................................................................................................................................91
INDEPENDENT AUDITOR’S REPORT ............................................................................................................................................92
ADDITIONAL SHAREHOLDER INFORMATION ..............................................................................................................................96
ANNUAL MINERAL RESOURCE & ORE RESERVE STATEMENT ......................................................................................................98
SCHEDULE OF MINERAL TENEMENTS ....................................................................................................................................... 100
Emerald Resources NL | 1
_____________________________________________________________________________________________________________________________
CORPORATE DIRECTORY
Non-Executive Chairman
Simon Lee AO
Managing Director
Morgan Hart
Executive Director
Michael Evans
Non-Executive Directors
Ross Stanley
Mark Clements
Company Secretary
Mark Clements
Principal & Registered Office
1110 Hay Street
West Perth WA 6005
Telephone: +61 8 9286 6300
Facsimile: +61 8 6243 0032
Share Registry
Automic Group
Level 2, 267 St Georges Terrace
PERTH WA 6000
Telephone: 1300 288 664
Auditors
HLB Mann Judd
Level 4, 130 Stirling Street
PERTH WA 6000
Bankers
National Australia Bank
50 St Georges Terrace
PERTH WA 6000
Macquarie Bank Limited
Level 23, 240 St Georges Terrace
PERTH WA 6000
Solicitors
Steinepreis Paganin
16 Milligan Street
PERTH WA 6000
Norton Rose Fulbright
108 St Georges Terrace
PERTH WA 6000
Securities Exchange Listing
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
Code: EMR
Website Address
www.emeraldresources.com.au
Emerald Resources NL | 2
_____________________________________________________________________________________________________________________________
CHAIRMAN’S LETTER
Dear Fellow Shareholders
Since my last letter to you the Company has achieved a number of noteworthy milestones along our path to become
the first modern large-scale Cambodian gold producer. These achievements are a reflection of the significant time and
efforts of our experienced and dedicated management team and staff in Australia and Cambodia, in conjunction with
trusted contractors whom we have successfully worked with in various projects over the years.
Whilst we have achieved much during the year, our executive team led by Managing Director, Morgan Hart and
Executive Director, Mick Evans remain categorically focused on meeting our target of commissioning and first gold
production from the Okvau gold mine in Q2 2021.
During the year, we were pleased to announce that we had received approval from the Cambodian Council of
Ministers for the execution of a Mineral Investment Agreement (“MIA”) for the Okvau Gold Project. The approval of a
direct agreement with the Cambodian Government for the development of the Okvau Gold Project is a significant
milestone for Emerald and the people of Cambodia as it is the first time this has been implemented for a large scale
mining project.
Our goal this year was to finalise project funding for plant construction and mine development. The execution of the
MIA provided clarity and stability of the fiscal regime for the development and operations of the Okvau Gold Project
and provided a level of comfort for shareholders and other stakeholders. This led to the significant show of support
from globally recognised institutional shareholders in our $75M equity placement which demonstrated the robust
nature of the Okvau Gold Project and the support for the Company’s strategy of becoming the first modern large-scale
Cambodian gold producer.
The execution of the MIA also allowed for us to commence importation of major capital items for the development of
the Okvau Gold Project through multinational technology and service company, Outotec, who we have worked closely
with on previous development projects.
As at the date of this report we are working with another trusted contractor, MACA Mining, to supply earthmoving
equipment and conduct contract mining services at the Okvau Gold Project. Having such an experienced operator
work alongside our team gives us great confidence as we progress along the development timeline and into
operations.
Another trusted strategic partner in this process is the Sprott Group. The execution of the US$60M Okvau Debt Facility
reflects the culmination of a thorough and collaborative process by the teams at both Emerald and Sprott. The strong
development credentials of the Emerald team combined with the financial strength of the respected Sprott Group has
resulted in the Company being fully funded for the development of the Okvau Gold Project.
I’d also like to thank the Cambodian Ministry of Mines and Energy and its Minister H.E. Suy Sem for their transparent
and collaborative efforts, conducted in a professional manner to fully licence the Okvau Gold Project for development.
With the MIA in place and a clear path for financing, we look forward to achieving our goal of becoming the first
modern large-scale Cambodian gold producer in Q2 2021.
At Emerald, our focus is on sustainable development and to demonstrate the Company’s commitment to the
environment and local communities which may be affected by our operations. We have supported several community
and environmental based initiatives including tree planting programs and funds for water wells to improve access to
water for remote villages. These contributions to the health and wellness of local communities will evolve as we
continue to develop our friendships and partnerships with the local community and stakeholders.
Emerald recognises the importance of its people in building a strong and successful organisation, particularly in
developing a new operation. To achieve this, we have focused on developing the right culture across the organisation,
which is strongly based on a Board, executive team and key staff who demonstrate the right attributes, qualities and
share a strong belief of the benefits of our engagement and development in Cambodia for our employees and the
Cambodian people in general.
Our people have a proven history of developing projects successfully, quickly and cost effectively. They are a team of
highly competent professionals who have overseen the successful development of gold projects in developing
countries.
Emerald Resources NL | 3
_____________________________________________________________________________________________________________________________
We pride ourselves on placing the highest priority on the health and wellbeing of our people, contractors and
stakeholders. Our teams in Perth and Cambodia have implemented suitable protocols to minimise the potential
transmission of COVID-19 and strict adherence to Government directives. I am pleased to report that the Company has
created a workplace that is free from serious injuries while advancing construction activities.
I also congratulate our experienced management team for their ongoing effort to critically examine and pursue
improvements in all aspects of the high-grade, low cost, compelling development economics of the 1.14Moz at 2.0g/t
gold Okvau Gold Project and continue to expand our regional footprint in Cambodia to present significant exploration
upside. We are excited about the potential for substantial increases in resources and reserves at and around Okvau and
we have similar hopes for discovering further economic resources in the Company’s large exploration licences in the
wider region.
On behalf of the Board, I would like to welcome our newest shareholders to our register and thank them for their belief
in our strategy. Notably, we are extremely proud of the efforts of our staff in Perth and the standard our dedicated
team are setting in country. I very much look forward to reporting back to you this time next year on the success of our
vision to deliver our first producing gold project.
Yours faithfully
Simon Lee AO
Chairman
Emerald Resources NL | 4
_____________________________________________________________________________________________________________________________
DIRECTORS’ REPORT
The Directors of Emerald Resources NL (‘Emerald’ or ‘the Company’) submit herewith the consolidated financial
statements of the Company and its controlled entities (‘consolidated entity’ or ‘Group’) for the year ended 30 June
2020 in order to comply with the provisions of the Corporations Act 2001.
Directors
The following persons were Directors of Emerald during the whole of the financial year and up to the date of this
report, unless otherwise stated:
Simon Lee AO Non-Executive Chairman
Morgan Hart Managing Director
Michael Evans Executive Director
Ross Stanley Non-Executive Director
Mark Clements Non-Executive Director Appointed: 12 June 2020
Ross Williams Non-Executive Director Resigned: 12 June 2020
Principal Activities
The principal activity of the consolidated entity during the financial year was the development of the Company’s 100%
owned Okvau Gold Project and mineral exploration and evaluation activities at its exploration assets, primarily in
Cambodia. Given the successful licencing and financing of the Okvau Gold Project during the year, the focus of the
consolidated entity’s principal activities during the financial year changed to development activities at the Okvau Gold
Project.
Operating Results
The loss attributable to owners of the Company after providing for income tax amounted to $11,471,000 (2019:
$8,860,000).
Dividends Paid or Recommended
The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a
dividend to the date of this report.
Financial Position
The consolidated entity has $136,175,000 in cash and cash equivalents as at 30 June 2020 (2019: $17,521,000) which
includes the full draw down of the US$60 million Sprott facility. The completion of the Definitive Feasibility Study
(‘DFS’) in May 2017 and as subsequently updated in November 2019, confirmed the Okvau Gold Project in Cambodia
as a robust and compelling project. During the current year, Emerald finalised all licencing requirements, including a
Mineral Investment Agree

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