Half Year Report 2021

Extracted Document Text

This is a readable excerpt of the EGM normalized Markdown text. It helps search engines and researchers understand PDF, filing, or company-document content while the original source remains authoritative.

# Half Year Report 2021

Source: https://www.emeraldresources.com.au/wp-content/uploads/2023/09/2022-16-Mar-Interim-Report-31-December-2021.pdf
Published: 2022-03-16T00:00:00+00:00
Fetched: 2026-05-12T14:52:59.853+00:00
Source artifact: f0a56c95-7ce0-4b2a-9fec-66f9a34b8e80
Normalizer input: text

## Content

# Half Year Report 2021
ABN 72 009 795 046
Interim Report
31 December 2021
HALF-YEAR REPORT
31 DECEMBER 2021
Contents
Corporate Directory 3
Auditor’s Independence Declaration 4
Directors’ Report 5
Interim Financial Statements 21
Directors’ Declaration 36
Independent Auditor’s Review Report 37
Emerald Resources NL | 2
CORPORATE DIRECTORY
Non-Executive Chairman
Simon Lee AO
Managing Director
Morgan Hart
Executive Director
Michael Evans
Non-Executive Directors
Ross Stanley
Billie Jean Slott
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 5, 191 St Georges Terrace
PERTH WA 6000
Telephone: 1300 288 664
Auditors
HLB Mann Judd (WA Partnership)
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 | 3
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the review of the consolidated financial report of Emerald Resources NL for the
half-year ended 31 December 2021, I declare that to the best of my knowledge and belief, there
have been no contraventions of:
a) the auditor independence requirements of the Corporations Act 2001 in relation to the review;
and
b) any applicable code of professional conduct in relation to the review.
Perth, Western Australia L Di Giallonardo
16 March 2022 Partner
Emerald Resources NL | 4
DIRECTORS’ REPORT
Your directors present their report on the consolidated entity (or ‘Group’) consisting of Emerald Resources NL (‘Emerald’
or the ‘Company’) and the entities it controlled at the end of, or during, the half-year ended 31 December 2021.
Directors
The following persons were directors of Emerald during the half-year and up to the date of this interim report unless
otherwise stated:
Simon Lee AO Non-Executive Chairman
Morgan Hart Managing Director
Michael Evans Executive Director
Mark Clements Non-Executive Director
Billie Jean Slott Non-Executive Director (appointed 5 October 2021)
Ross Stanley Non-Executive Director
Review of Operations
Operating Result
During the half-year the Company recorded a profit after tax of $11.876m (31 December 2020: loss of $(8.083m)). This
included a fair value loss on the embedded derivative of $(7.040m) (31 December 2020: gain of $3.724m) finance costs of
$8.263m (31 December 2020: $0.074m) and a net foreign exchange gain of $2.046m (31 December 2020: loss of
$(7.662m)). The Group’s net asset position improved from $105m at 30 June 2021 to $141m as at 31 December 2021.
Okvau production statistics summary
A summary of production statistics for Okvau since full commercial production was achieved in September 2021 is
contained in the following table.
Table 1 | Okvau Production Statistics
4 months to
31 December
2021
OP mining
Total movement BCM ‘000 1,963
Strip ratio w:o 3.86
Ore mined kt 1,465
Mined grade g/t 1.54
Contained gold oz 72,719
Processing
Ore milled kt 750
Head grade g/t 2.07
Recovery % 73.4
Gold produced oz 36,626
Gold poured oz 33,326
Gold sold oz 29,000
Cambodian Gold Projects
Overview
Emerald is a developer and explorer of gold projects. In particular, Emerald has been focused on the development and
commissioning of its most advanced project, the Okvau Gold Mine in Cambodia which saw first production in June 2021
and a steady state of production in September 2021. Since production commenced in June 2021, Emerald has now
poured over 60,000 ounces of gold from its operations.
Emerald also hold a number of other projects in Cambodia which are made up of a combination of granted mining
licences (100% owned by Emerald), and interests in joint venture agreements. Together, Emerald’s interest in its
Cambodian Projects covers a combined area of 1,239km2.
Okvau Gold Mine
The Okvau Gold Mine is the most advanced of Emerald’s projects. The Okvau Gold Mine is located approximately 275km
north-east of Cambodia’s capital city of Phnom Penh in the province of Mondulkiri (refer Figures 1 and 2). The town of
Kratie is located on the Mekong River approximately 90km to the west and the capital of Mondulkiri, Saen Monourom is
located approximately 60km to the south-east.
Emerald Resources NL | 5
DIRECTORS’ REPORT
Review of Operations (continued)
The consolidated entity successfully completed the development of Emerald’s 100% owned Okvau Gold Mine in the June
2021 financial year. This culminated in its maiden gold pour after successfully commissioning the processing plant and
gold room as announced on 26 June 2021. During the current period, commissioning activities continued on the sulphide
float regrind circuit which was successfully completed in July 2021. This marked the practical completion of the Okvau
Gold Mine commissioning process and commencement of normal run of mine operations.
Following the successful commissioning of the processing plant and commencement of production, Emerald has now
poured over 2,000kgs of gold bullion from its operations with a total of approximately US$111 million of gold doré to the
date of this report.
Figure 1 | Cambodian Gold Project | Location Figure 2 | Cambodian Gold Project | Exploration Licence Areas
Okvau Gold Mine
Operating Overview
Following commissioning activities and achieving a steady state of production in September 2021, the Okvau Gold Mine
achieved guidance producing 26,395 ounces for the December 2021 quarter. All-In Sustaining Costs (‘AISC’) for this
period was also within guidance at $740 per ounce. With the positive reconciliation and additional throughput as
highlighted below, the operation is expected to achieve an annualised AISC per ounce of US$720 to US$780/oz for the
remainder of the financial year.
Okvau Gold Mining Activity
Mining operations during the period continued advancing the Stage 1 Pit design, targeting fresh sulphide ore. Lesser
mining of waste from Stage 2 and Stage 3 allowed for the required ancillary infrastructure to be constructed during the
dry season at Okvau. Mining continues to remain marginally ahead of schedule and in line with milling requirements.
Actual fresh sulphide ore mined to date of 1,687kt @ 1.66g/t for 90,158oz (lower cut 0.5g/t), reconciles positively
against reserve (+21%) against 1,169kt @ 1.97g/t for 74,569oz (lower cut 0.625g/t).
The positive reconciliation has continued to allow the Company the flexibility of preferentially milling the highest-grade
ore zones whilst still building a substantial +1g/t stockpile (+556kt). Total surveyed movement for the quarter was
2,904,208 BCM of ore and waste against a scheduled 2,700,000 BCM with 2,419,450 BCMs blasted.
Emerald Resources NL | 6
DIRECTORS’ REPORT
Review of Operations (continued)
Figure 3 | Okvau Gold Mine Open Pit
Processing
Since achieving practical completion and reaching a steady state of production in September 2021, the process plant has
run consistently above nameplate of 2.0Mtpa and is now achieving a throughput rate +10% above DFS target. A
summary of throughput and mill availability since reaching a steady state of production is as follows:
Table 2 | Okvau Processing Statistics
Sep 2021 Oct 2021 Nov 2021 Dec 2021
Ore milled annualised 2,199,000t 2,242,000t 2,204,000t 2,327,000t
(DFS: 2.0Mtpa)
Milling rate (DFS: 250tph) 266tph 266tph 264tph 273tph
Availability (DFS: 91.3%o) 94.2% 96.2% 95.3% 97.3%
Sulphide ore gold recoveries were compromised during the second half of the period, in particular milling during October
and November achieved lower than budgeted gold recoveries attributed to elevated organic carbon in circuit emanating
from the early reclamation of processing water from the tailings dam and grind size compromises related to
transportation delays on critical spares and wear parts for the processing plants fine grind HIG mill. In both cases, organic
carbon and critical spares supply issues were resolved late in November with strong December production (continuing
subsequent to period end).
The strong December production and recoveries enabling the Company to meet production and cash cost forecasts for
the December 2021 quarter. The organic carbon issue has been resolved in the process plant with modifications to the
carbon regeneration and operating parameters, changes to the specification of HIG mill liners and advanced supply of
inventory which has resolved the compromised fine grind circuit performance in December 2021.
Gold Production
Gold production since commissioning on oxide ore in June 2021 (inclusive of gold in circuit) is 49,406 ounces to the end
of the period. This includes production for the December 2021 quarter of 26,395 ounces, which compares well and
confirms the suitability of all plant for +100,000 ounce per annum gold production. Gold poured during the period
totalled 41,173 ounces.
During the period, shipments totalling 35,923 ounces of gold have been received by the refinery with outturns received.
Nineteen of the twenty shipments have been sold during the period at an average price of US$1,786 per ounce. A further
6,117 ounces of gold doré has been poured ahead of refinery outturn.
Emerald Resources NL | 7
DIRECTORS’ REPORT
Review of Operations (continued)
Operating Physicals
A summary of operating physicals since reaching a steady state of production is as follows:
Table 3 | Okvau Operating Physicals
Sep 2021 Oct 2021 Nov 2021 Dec 2021
Ore mined (‘000 BCM) 137 113 115 124
Waste mined (‘000 BCM) 267 412 390 405
Stripping ratio (waste:ore) 1.96 3.65 3.41 3.28
Ore mined (‘000 t) 376 322 399 434
Ore milled (‘000 t) 181 190 181 197
Head grade (g/t) 2.16 1.97 1.64 2.48
Recovery (%) 81.7% 66.4% 60.1% 80.4%
Gold production (oz) 10,231 8,009 5,736 12,650
Operational Outlook
Gold production guidance at the Okvau Gold Mine remains in line with the DFS of 100,000oz to 110,000oz on an
annualised basis. Production guidance for the remainder of FY2022 remains in line with DFS forecasts at 25-30,000/oz per
quarter and cash costs of US$720 – US$780/oz.
Okvau Gold Mine Mineral Resources and Reserves Estimates
Table 4 | Okvau Mineral Resource Estimate – March 2021
Okvau March 2021 Mineral Resource Estimate
Indicated Resources Inferred Resources Total Resources
Cut-off Tonnage Grade Contained Tonnage Grade Contained Tonnage Grade Contained
(Au g/t) (Mt) (g/t Au) Au (Koz) (Mt) (g/t Au) Au (Koz) (Mt) (g/t Au) Au (Koz)
0.70 15.11 2.08 1,008 2.57 1.61 133 17.68 2.01 1,141
The DFS delivered a maiden Ore Reserve (Probable) estimate of 14.26Mt @ 1.98g/t Au for 907,000 ounces gold (refer Table
5).
Table 5 | Okvau Ore Reserve Estimate - March 2021
Okvau March 2021 Ore Reserve Estimate
Tonnage Grade Contained
(Mt) (g/t Au) Au (Koz)
Probable Ore Reserve 14.26Mt 1.98g/t Au 907koz
Okvau Gold Project | Resource Growth
The DFS for the Okvau Gold Project only considered an open pit mining operation. The Okvau Deposit remains ‘open’ at
depth with high grade shoots providing longer term underground potential. High grade resources have been defined
immediately below the floor of the final pit design (refer Figure 4).
Emerald Resources NL | 8
DIRECTORS’ REPORT
Review of Operations (continued)
Figure 4 | Okvau Resource Growth | Depth Extensions
Some of the highest grade
intersections sit beneath the open pit
floor. Deep diamond core holes have
been drilled to test for strike and
down dip continuity of h

[Excerpt trimmed for readability. Open the original source for the complete filing or document.]