FORM 2B LISTING APPLICATION
TEMPUS RESOURCES LTD
The information herein is being used by Tempus Resources Ltd (ACN 625 645 338) ("Tempus" or the "Company") in connection with its initial application for listing on the TSX Venture Exchange. Tempus has applied to list its ordinary shares on the TSX Venture Exchange.
December 3, 2020
No securities regulatory authority or the TSX Venture Exchange has expressed an opinion about the securities which are the subject of this application. TABLE OF CONTENTS Item 2 Glossary and Advisories 3 Item 3 Summary of the Listing Application 8 Item 4 Corporate Structure 11 Item 5 Description of the Business 12 Item 6 Financings 21 Item 7 Dividends & Other Distributions 22 Item 8 Management's Discussion and Analysis 22 Item 9 Disclosure of Outstanding Security Data on Fully Diluted Basis 23 Item 10 Description of Securities to be Listed 24 Item 11 Consolidated Capitalization 26 Item 12 Stock Option Plan 27 Item 13 Prior Sales 29 Item 14 Escrowed Securities & Securities Subject to Restriction on Transfer 31 Item 15 Principal Securityholders 31 Item 16 Directors & Executive Officers 31 Item 17 Executive Compensation 37 Item 18 Indebtedness of Directors and Executive Officers 45 Item 19 Audit Committees and Corporate Governance 45 Item 20 Agent, Sponsor or Advisor 53 Item 21 Risk Factors 53 Item 22 Promoters 57 Item 23 Legal Proceedings and Regulatory Actions 57 Item 24 Interests of Management and Others in Material Transactions 58 Item 25 Investor Relations Arrangements 58 Item 26 Auditors, Transfer Agents and Registrars 58 Item 27 Material Contracts 58 Item 28 Experts 59 Item 29 Other Material Facts 59 Item 30 Additional Information – Mining or Oil and Gas Applicants 60 Item 31 Exemptions 60 Item 32 Financial Statement Disclosure for Issuers 60 Item 33 Significant Acquisitions 60 Item 34 Certificates 61
APPENDIXES
Appendix "A" Form 2B Personal Information Collection Policy Appendix "B" Management's Discussion and Analysis Addendum Appendix "C" Financial Statements of Tempus Appendix "D" Stock Option Plan Appendix "E" Technical Report Appendix "F" Audit Committee Charter Appendix "G" Board Mandate
Page 2 of 69 Item 2 Glossary and Advisories
Glossary
Unless otherwise indicated or the context otherwise indicates, the following definitions are used in this Listing Application. In the event of a conflict between a term defined in this Glossary and a term defined in the Corporate Finance Manual of the TSXV, the TSXV will govern. affiliate means, with respect to any person, any other person who directly or indirectly controls, is controlled by, or is under direct or indirect common control with, such person, and includes any person in like relation to an affiliate. A person will be deemed to "control" another person if such person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other person, whether through the ownership of voting securities, by contract or otherwise; and the term "controlled" will have a similar meaning. associate has the meaning given to such term in the Corporate Finance Manual of the TSXV.
ASX ASX Limited ACN 008 624 691 or the Australian Securities Exchange, as appropriate.
Australia Corporations Act Australia Corporations Act 2001 (Cth) as amended from time to time.
Blackdome-Elizabeth Project Tempus' 100% beneficial and registered interest in the Blackdome- or the Project Elizabeth gold project in British Columbia, Canada.
CEO chief executive officer.
CFO chief financial officer.
Claypan Dam Project Tempus' 90% beneficial and registered interest in the Claypan Dam project located in the Grawler Craston, South Australia, Australia.
Consultant has the meaning ascribed thereto in the policies of the TSXV.
Environmental Laws all applicable federal, provincial, state, local and foreign Laws, imposing liability or standards of conduct for, or relating to, the regulation of activities, materials, substances or wastes in connection with, or for, or to, the protection of human health, safety, the environment or natural resources (including ambient air, surface water, groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic species and vegetation).
Fiscal Year the 12 month period of Tempus ending on June 30 of each calendar year or such other date as Tempus may determine.
Page 3 of 69 Governmental Entity means any:
(a) multinational, federal, provincial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau or agency, domestic or foreign;
(b) subdivision, agent, commission, board or authority of any of the foregoing;
(c) quasi-governmental or private body, including any tribunal, commission, regulatory agency or self-regulatory organization, exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing; or
(d) stock exchange, including the TSXV and the ASX.
IFRS International Financial Reporting Standards as issued by the International Accounting Standards Board.
Insider has the meaning ascribed thereto in the policies of the TSXV.
Investor Relations Activities has the meaning given to it in TSXV Policy 1.1 – Interpretation.
Law or Laws all laws (including common law), by-laws, statutes, rules, regulations, principles of law and equity, orders, rulings, ordinances, judgements, injunctions, determinations, awards, decrees or other requirements, whether domestic or foreign, and the terms and conditions of any grant of approval, permission, authority or licence of any Governmental Entity or self-regulatory authority (including the TSXV Corporate Finance Policies, if applicable, and the rules and policies of the ASX), and the term "applicable" with respect to such Laws and in a context that refers to one or more parties, means such Laws as are applicable to such party or its business, undertaking, property or securities and emanate from a person having jurisdiction over the party or parties or its or their business, undertaking, property or securities.
Listing the listing of the Tempus Shares on the TSXV as contemplated by this Listing Application.
Listing Rules means the listing rules applicable to the ASX.
MD&A management's discussion and analysis.
Mineral Creek Project Tempus' 100% beneficial and registered interest in the Mineral Creek gold project on Vancouver Island, British Columbia, Canada, which is comprised of 42 contiguous mineral claims totaling 9,877.29 hectares.
Montejinni Project Tempus' 90% beneficial and registered interest in the Montejinni copper project located near Top Springs, in the Northern Territory, Australia.
Named Executive Officers CEO, CFO and the three most highly compensated officers, other than the CEO or CFO.
Page 4 of 69 New Option Plan the stock option plan of Tempus, attached hereto as Appendix "D".
NI 43-101 National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
NI 52-110 National Instrument 52-110 – Audit Committees.
NI 58-101 National Instrument 58-101 – Disclosure of Corporate Governance Practices.
NSR net smelter return.
Option Plan means the previous Tempus employee incentive option plan.
Outstanding Securities at the time of any Tempus Share issuance or Tempus Option grant means, the aggregate number of Tempus Shares that are outstanding immediately prior to the issuance or grant in question on a non-diluted basis, or such other number as may be determined under the applicable rules and regulations of all regulatory authorities to which the Company may be subject, including the TSXV, ASX or such other stock exchange as the Tempus Shares may be listed for trading.
Person a company or individual.
Qualified Person has the meaning ascribed to such term in NI 43-101.
Security Based means (i) stock option plans for the benefit of employees, Insiders, Compensation Consultants or any one of such groups; (ii) individual stock options Arrangements granted to employees, Consultants or Insiders if not granted pursuant to a plan previously approved by the Company's shareholders; (iii) stock purchase plans where the Company provides financial assistance or where the Company matches the whole or a portion of the securities being purchased; (iv) stock appreciation rights involving issuances by the Company of securities from treasury; (v) any other compensation or incentive mechanism involving the issuance or potential issuances of securities of the Company; and (vi) security purchases from treasury by an employee, Insider or Consultant which is financially assisted by the Company by any means whatsoever.
SEDAR System for Electronic Analysis and Retrieval.
Sponsor has the meaning given to such term in the Corporate Finance Manual of the TSXV.
Subsidiary means a specified body corporate in which another body corporate and/or its affiliates hold, either directly or indirectly, more than 50% of the outstanding shares in the first mentioned specified body corporate, and as a result of that holding, is or are entitled to elect at least a majority in number of the board of directors thereof (whether or not shares of any other class or classes will or might be entitled to vote upon the happening of any event or contingency) and the first mentioned specified body corporate will include any body corporate, partnership, joint venture or other entity over which such other body corporate exercises direction or control or which is in a like relation to a
Page 5 of 69 Subsidiary.
Technical Report the NI 43-101 technical report on the Blackdome-Elizabeth Project entitled "NI 43-101 Technical Report" with an effective date of September 9, 2020 and a release date of October 9, 2020 prepared by Garth Kirkham, P. Geo, Kirkham Geosystems Ltd.
Tempus or the Company Tempus Resources Ltd, a company incorporated under the Australia Corporations Act.
Tempus Board or the Board the board of directors of Tempus.
Tempus Business the business of Tempus, being the acquisition, exploration, development and advancement of quality, high-grade gold projects located in Canada, Ecuador and Australia.
Tempus Optionholders the holders of Tempus Options.
Tempus Options the incentive stock options of Tempus, exercisable to purchase Tempus Shares.
Tempus Performance Rights the performance rights of Tempus, which upon vesting are convertible into Tempus Shares.
Tempus Shareholders the holders of the Tempus Shares.
Tempus Shares the ordinary shares in the capital of Tempus.
TSXV TSX Venture Exchange.
Vesting Conditions means, in respect of a Tempus Option, any condition which must be satisfied (unless waived by the Board in accordance with the New Option Plan) before that Tempus Option can be exercised or any other specified restriction on exercise of that Tempus Option.
Zamora Project Tempus' 100% beneficial and registered interest in the Zamora projects in southern Ecuador.
Information Incorporated by Reference
The Technical Report, as filed on SEDAR and found at http://www.sedar.com, is incorporated by reference into this Listing Application.
Cautionary Statement Regarding Forward Looking Information
This Listing Application contains forward-looking statements. All statements other than statements of historical fact contained in this Listing Application are forward-looking statements, including but not limited to operational information, future exploration and development plans and anticipated future production and resources. Forward-looking statements in this Listing Application include, but are not limited to, those relating to the Listing of the Tempus Shares on the TSXV, exploration and development plans, availability of capital and other statements that are not historical facts. These statements are based upon certain material factors, assumptions and analyses that were applied in drawing a conclusion or making a forecast or projection, including Tempus' management's experience and perceptions of historical trends, current conditions and expected future developments, as well as other factors that are believed to be reasonable in the circumstances. Forward-looking statements are provided for the purpose of presenting
Page 6 of 69 information about management's current expectations and plans relating to the future and readers are cautioned that such statements may not be appropriate for other purposes. These statements may include, without limitation, statements regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of the Parties. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "pro forma", "expects", "anticipates", "plans", "believes", "estimates", "intends", "targets", "projects", "forecasts", "seeks", "likely" or negative versions thereof and other similar expressions, or future or conditional verbs such as "may", "will", "should", "would" and "could".
By its nature, this information is subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct and that objectives, strategic goals and priorities will not be achieved. A variety of material factors, many of which are beyond Tempus' control, could affect operations, business, financial condition, performance and results of Tempus that may be expressed or implied by such forward-looking statements and could cause actual results to differ materially from current expectations of estimated or anticipated events or results. These factors include, but are not limited to the following: (i) general economic, industry and market segment conditions; (ii) changes in applicable environmental, taxation and other laws and regulations, as well as how such laws and regulations are interpreted and enforced; (iii) changes in operating risks, including fluctuations in commodity prices, and pricing environments; (iv) increased competition; (v) stock market volatility; (vi) ability to obtain additional financing; (vii) industry consolidation; (viii) the execution of strategic growth plans; (ix) the ability of Tempus to develop and grow; (x) geopolitical risks; and (xi) management's success in anticipating and managing the foregoing factors, as well as the risks described under the heading "Risk Factors" in this Listing Application, the Appendices and in the documents incorporated by reference. In making these statements, Tempus has made assumptions with respect to expected cash provided by continuing operations, future capital expenditures, including the amount and nature thereof, trends and developments in the mining industry, business strategy and outlook, expansion and growth of business and operations, accounting policies, credit risks, anticipated acquisitions, opportunities available to or pursued by Tempus, and other matters.
The reader is cautioned that the foregoing list of factors is not exhaustive of the factors that may affect forward-looking statements. The reader is also cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on forward-looking statements. Although the forward-looking statements contained in this Listing Application are based upon what management of Tempus currently believes to be reasonable assumptions, actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits will be derived therefrom. These forward-looking statements are made as of the date of this Listing Application and, other than as specifically required by law, Tempus does not assume any obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise.
Market Data
Market data and industry forecasts used in this Listing Application were obtained from various publicly available sources. Although Tempus believes that these independent sources are generally reliable, the accuracy and completeness of such information is not guaranteed and has not been independently verified.
Currency Presentation
In this Listing Application, dollar amounts are expressed in Australian dollars unless otherwise stated.
Page 7 of 69 References to "C$" are to Canadian dollars. References to "$" or "A$" are to Australian dollars. The following table sets forth: (i) the rates of exchange for Australian dollars, expressed in Canadian dollars, in effect at the end of each of the periods indicated; (ii) the average of exchange rates in effect during such periods; and (iii) the high and low exchange rates during each such periods, in each case based on the rate of exchange in effect during each such periods, in each case based on the rate of exchange in effect on each trading day as reported by the Bank of Canada on its website (the "Bank of Canada daily exchange rate").
Three Months Ended September 30 Year Ended June 30 2020 2020 2019 2018 Rate at end of Period 0.9545 0.9382 0.9177 0.9968 Average Rate during Period 0.9528 0.9004 0.9468 0.9843 High 0.9642 0.9395 0.9790 1.0207 Low 0.9407 0.8374 0.9132 0.9591
On November 30, 2020, the exchange rate for one Australian dollar expressed in Canadian dollars was C$0.9544, based on the Bank of Canada daily exchange rate.
Financial Information
Unless otherwise indicated, all financial information referred to in this Listing Application was prepared in accordance with IFRS.
Conversions
The following table sets forth certain standard conversions from Standard Imperial units to the International System of Units (or metric units).
To Convert From To Multiply By Feet Metres 0.305 Metres Feet 3.281 Miles Kilometres 1.609 Kilometres Miles 0.621 Acres Hectares ("ha") 0.405 Hectares Acres 2.471 Grams Ounces (troy) 0.032 Ounces (troy) Grams 31.103 Tonnes Short tons 1.102 Short tons Tonnes 0.907 Grams per tonne Ounces (troy) per ton 0.029 Ounces (troy) per ton Grams per tonne 34.438
Item 3 Summary of the Listing Application
The following is a summary of information relating to Tempus, its business and operations, which should be read together with the more detailed information and financial data and statements contained or referred to elsewhere in this Listing Application or the Technical Report. The information contained in this Listing Application, unless otherwise indicated, is given as at December 3, 2020.
All capitalized terms used in this Listing Application and not defined herein have the meaning ascribed to such terms in Item 2 – Glossary of Terms or elsewhere in this Listing Application. Unless otherwise indicated herein, references to "C$" or "Canadian dollars" are to Canadian dollars and references to "A$" are to Australian dollars.
Page 8 of 69 The Business of Tempus
Tempus is an exploration company, established with the purpose of exploring and developing copper, gold and other mineral opportunities. Tempus' head and registered office address is Level 2, 22 Mount Street, Perth, WA 6000, Australia. The Company was listed on the ASX on 15 August 2018.
The Company was incorporated as an unlisted public company limited by shares on April 18, 2018 for the primary purpose of acquiring a 90% interest in Montejinni Resources Pty Ltd., which is the registered holder of the Montejinni Project in the Northern Territory of Australia and the Claypan Dam Project in South Australia. The Company acquired the interests in the Montejinni Project and Claypan Dam Project on3 August 2018.
On 16 October 2019, the Company completed the acquisition of 100% of the shares in Condor Gold S.A. and Miningsourse S.A., which holds the interest in the Zamora Project in southern Ecuador.
On 15 November 2019, the Company completed the acquisition of 100% of the shares in Sona Resources Corp. ("Sona"), which holds the interest in the Blackdome-Elizabeth Project, in British Columbia, Canada, after successful completion of due diligence. As part of the acquisition of Sona, the Company acquired a number of additional mineral licences located on Vancouver Island, British Columbia, which are collectively known as the Mineral Creek Project.
As a result of the above-noted acquisitions, Tempus has five subsidiaries: Montejinni Resources Pty Ltd, Sona Resources Corp, No. 75 Corporate Ventures Ltd, Condor Gold S.A. and Miningsources S.A.
Tempus' only material mineral property is the Blackdome-Elizabeth Project. The Technical Report, which complies with NI 43-101, has been filed on Tempus' SEDAR profile at www.sedar.com.
See Item 5 – Description of the Business.
Listing
Tempus is seeking to list the Tempus Shares on the TSXV. Tempus' authorized share capital consists of an unlimited number of Tempus Shares, of which, as of the date of this Listing Application, 79,512,542 Tempus Shares are issued and outstanding. See Item 9 – Disclosure of Outstanding Security Data on a Fully Diluted Basis and Item 10 – Description of Securities to be Listed.
Management and Directors of Tempus
Name Position Alexander Molyneux Director, Chairman Brendan Borg Managing Director, CEO Melanie Ross Director, Corporate Secretary, CFO Rodrigo Izurieta Chief Operating Officer (Latin America) Jason Bahnsen President Gary Artmont Director Anthony Cina Director Tom Peregoodoff Director
In connection with the application of Tempus to list the Tempus Shares for trading on the TSXV, Tempus will, at its next annual general meeting of shareholders, seek approval from shareholders to amend Tempus' constitution so as to require the re-election of each director annually, rather than staggered re- election of directors as the constitution currently provides. See Item 16 – Directors and Executive Officers.
Mineral Projects
Refer to Item 5 – Description of the Business for descriptions of Tempus' mineral projects and properties.
Page 9 of 69 Risk Factors
The securities of Tempus are subject to significant risk factors. Tempus is a mineral exploration and development company. This industry is capital intensive, highly speculative, and is subject to fluctuations in commodity prices, market sentiment and exchange rates for currency, inflation and other risks (See Item 21 – Risk Factors).
Share Information
The following table provides further details regarding capitalization of Tempus as of the date of this Listing Application:
Amount Authorized or As at the date of this to be Authorized Listing Application Tempus Shares unlimited 79,512,542 Tempus Performance Rights 3,426,000 3,426,000 Tempus Options(1) 7,953,826 7,953,826 Note: (1) Subject to any regulatory and shareholder approvals required, Tempus plans to issue 2,928,000 Tempus Options with a strike price of A$0.31 and a term of five years from issue date to certain persons who previously held a total of 1,264,000 Tempus Performance Rights that were cancelled in connection with satisfaction of TSXV listing requirements.
See Item 9 – Disclosure of Outstanding Security Data on a Fully Diluted Basis.
Summary Financial Information
The following is a summary of certain financial information as at and for the year ended June 30, 2020 and 2019, and as at and for the three months ended September 30, 2020. The information should be read in conjunction with the financial statements of Tempus attached as Appendix "C" to this Listing Application.
For the three months For the year ended September 30, For the year ended ended June 30, 2020 June 30, 2020 2019 Consolidated Statement of Unaudited Audited Audited Comprehensive Income (A$) (A$) (A$) Loss before income tax (295,075) (2,693,918) (852,569) Other comprehensive income (106,047) (170,626) - Total comprehensive loss (401,122) (2,693,918) (852,569) Loss per share attributable to the (0.40) (6.38) (2.49) Tempus Shareholders (Basic loss per share)
As at September 30, As at June 30, 2020 As at June 30, 2020 2019 Consolidated Statement of Changes Unaudited Audited Audited in Equity (A$) (A$) (A$) Issued Capital 11,796,524 9,044,007 4,726,886 Accumulated Losses (4,019,818) (3,725,121) (1,058,249) Share based payment reserve 1,025,661 1,130,822 542,144 Foreign currency reserve (276,673) (170,626) - Non-controlling interests (26,043) (25,665) 1,381 Total equity 8,499,651 6,253,417 4,212,162
Page 10 of 69 As at September 30, As at June 30, 2020 As at June 30, 2020 2019 Unaudited Audited Audited Consolidated Balance Sheet (A$) (A$) (A$) Total current assets 4,150,489 3,700,986 4,161,303 Total non-current assets 7,523,462 5,869,552 254,886 Total current liabilities 581,302 635,598 204,027 Total non-current liabilities 2,592,998 2,681,523 - Total equity 8,499,651 6,253,417 4,212,162
See Item 32 – Financial Statement Disclosure for Issuers.
Item 4 Corporate Structure
Name, address and incorporation
Tempus was incorporated under the Corporations Act 2001 in Australia on 18 April 2018 as a public company limited by shares. Tempus was listed on the Australian Securities Exchange on 15 August 2020. Tempus is governed by the Corporations Act 2001 in Australia.
Tempus' head office and registered office is located at Level 2, 22 Mount Street, Perth, WA 6000, Australia. The Company's contact particulars are as follows: Telephone: +61 8 6188 8181; Fax: +61 8 6188 8182. Tempus has appointed DLA Piper (Canada) LLP at 2800, 666 Burrard Street, Vancouver, British Columbia V6C 2Z7 as its agent for service of process. The corporate website for Tempus is https://www.tempusresources.com.au/.
Intercorporate Relationships
As a result of the above-noted acquisitions, Tempus has five subsidiaries: Montejinni Resources Pty Ltd, Sona Resources Corp, No. 75 Corporate Ventures Ltd, Condor Gold S.A. and Miningsources S.A.
Page 11 of 69 Item 5 Description of the Business
General Development of the Business
The Company is headquartered in Perth, Australia. The Tempus Shares are listed and posted for trading on the ASX under the symbol "TMR". Tempus is currently engaged in mineral exploration in Canada and Ecuador, focused on gold projects.
The flagship asset of the Company is the Blackdome-Elizabeth Project located in southern British Columbia, Canada (approximately 200 km north of Vancouver, British Columbia, Canada). The Blackdome-Elizabeth Project includes the permitted historically producing Blackdome Gold Mine, mill, and a tailings storage facility. The Company plans to conduct an updated resource estimate and preliminary economic assessment (PEA) on the project during 2021. This will provide the foundation for further feasibility study work leading to the potential development and the start of production from the project. The Company is working to obtain required permitting and engage in community consultation programs in support of the study and resource expansion work programs.
The Company also has a 100% interest in the Zamora Project, assets providing high-quality early-stage gold exploration prospects in southern Ecuador. Exploration on this project has commenced, with results from recent geochemical sampling program currently being integrated with project-wide airborne geophysical survey. The Company has received permitted to commence drilling, which it anticipates commencing in Q4 2020.
Competitive Conditions
The mineral exploration business is an intensely competitive business. Tempus competes with numerous companies and individuals in the search for, and the acquisition of, mineral licenses, permits and other mineral interests, as well as for the acquisition of equipment and the recruitment and retention of qualified personnel. The ability of Tempus to acquire mineral properties in the future will depend not only on its ability to develop its present properties, but also on its ability to select and acquire suitable prospects for mineral exploration.
Cycles
Tempus' business can be cyclical. The exploration and development is dependent on access to areas where production is to be conducted. Seasonal weather variations can affect access in certain circumstances.
Specialized Skill and Knowledge
All aspects of Tempus' business require specialized skills and knowledge. Such skills and knowledge include the areas of geology, engineering, environmental, drilling, logistical planning and implementation of exploration and development programs, treasury, accounting and legal. The Company has been successful to date identifying and retaining employees and contractors with such skills and knowledge.
Sourcing, Pricing and Availability of Raw Materials
Tempus currently sources appropriately qualified and experienced contractors to support its exploration activities, as well as geological staff, additional technical staff, contractors, drilling contractors, camp staff, and equipment, such as vehicles.
It is anticipated that all material contracts and agreements will be awarded based on the following process: (i) preparation of technical and administrative basis; (ii) tender; (iii) evaluation; and (iv) assignment of the contract. At present, there are no major contracts under negotiation and no changes to existing contracts that could materially affect Tempus' business are expected for Fiscal Year 2021.
Page 12 of 69 Economic Dependence
Tempus' business is largely dependent on the Blackdome-Elizabeth Project, its material property. Tempus does have other projects which may help to offset a small portion of the risks associated with the Blackdome-Elizabeth Project.
Environmental Protection
Tempus' operations are subject to environmental regulations (including regular environmental impact assessments and permitting) in the jurisdictions in which it operates. Such regulations cover a wide variety of matters including, without limitation, the prevention of waste, pollution, and protection of the environment, labour regulations, and worker safety. Under such regulations, there are clean-up costs and liabilities for toxic or hazardous substances which may exist on or under Tempus' properties or which may be produced as a result of Tempus' operations. Environmental legislation and legislation relating to exploration and production of natural resources are likely to evolve in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their directors and employees. Such stricter standards could impact Tempus' costs and have an adverse effect on results of operations. Although Tempus believes that it will be in material compliance with current applicable environmental regulations no assurance can be given that environmental laws will not result in a curtailment of production or a material increase in the costs of production, development or exploration activities or otherwise adversely affect Tempus' financial condition, results of operations or prospects.
Employees
As of the date of this Listing Application, Tempus has 7 full-time employees and 1 part-time employees.
Foreign Operations
Tempus has operations in Australia, Ecuador and Canada, and as a result Tempus is subject to political, economic and other uncertainties, including, but not limited to, changes in regulatory regimes or the personnel administering them, currency fluctuations, exchange controls, and tax increases. The Company's operations may also be adversely affected by laws and policies affecting foreign trade, taxation and investment. In the event of a dispute arising in connection with the Company's operations in the countries in which it operates, the Company may be subject to the exclusive jurisdiction of courts outside of Australia or be unable to enforce judgments in various jurisdictions. The Company may also be hindered or prevented from enforcing its rights with respect to a governmental instrumentality because of the doctrine of sovereign immunity. Accordingly, the Company's exploration, development and production activities could be substantially affected by factors beyond the Company's control, any of which could have a material adverse effect on the Company's business, financial condition, results of operations, and the value of the Tempus Shares. See Item 21 – Risk Factors.
Three Year History
The following describes the development of Tempus' business and major transactions and events of the last three completed financial years, and activities that have or are expected to occur in the current financial year. The agreements referred to under Item 5 – Description of Business – Three Year History were all arm's length transactions unless otherwise noted.
The Company was incorporated on 18 April 2018 as an unlisted public company limited by shares for the primary purpose of acquiring a 90% interest in Montejinni Resources Pty Ltd., which is the registered holder of the Montejinni Project in the Northern Territory of Australia and the Claypan Dam Project in South Australia. The Company acquired the interests in the Montejinni Project and Claypan Dam Project on 3 August 2018.
Page 13 of 69 On 19 August 2019, the Company entered into a binding heads of agreement for the acquisition of Blackdome-Elizabeth Project in British Columbia, Canada. The Company completed the acquisition of 100% of the shares in Sona, which holds the interest in the Blackdome-Elizabeth Project. As part of the acquisition of Sona, the Company acquired a number of additional mineral licences located on Vancouver Island, British Columbia, which are collectively known as the Mineral Creek Project.
On 19 August 2019, the Company held a general meeting of Tempus Shareholders. At this meeting, shareholder approval was obtained for the acquisition of the Zamora Projects in Ecuador. Shareholder approval was also obtained for the issuance of 1,150,000 Tempus Performance Rights to existing directors of Tempus, 100,000 Tempus Performance Rights to the Company's exploration manager and, subject to the successful completion of the acquisition of the Zamora Projects, 4,000,000 Tempus Performance Rights to Rodrigo Izurieta and 500,000 Tempus Performance Rights to Gary Artmont. The 1,150,000 Tempus Performance Rights were issued to the directors on 18 September 2019.
Brendan Borg was appointed Managing Director effective from 19 August 2019.
On 18 October 2019, the Company completed the acquisition of 100% of the shares in Condor Gold S.A. and Miningsources S.A., which holds the interest in the Zamora Project in southern Ecuador.
Mr. Gary Artmont was appointed as a non-executive director of the Board, effective 14 October 2019. Mr. Rodrigo Izurieta was appointed as Chief Operating Officer, Latin America, effective 1 May 2019.
On 4 May 2020, the Company announced a private placement financing in the aggregate amount of A$4,000,000 (the "2020 Financing"). The 2020 Financing was completed in two tranches, with the second tranche closing on 25 June 2020. A portion of the Tempus Shares issued under the second tranche of the 2020 Financing were issued as "flow-through shares" within the meaning of the Income Tax Act (Canada). Aesir Capital Pty Ltd ("Aesir") and Clarus Securities Inc. ("Clarus") acted as joint-lead managers to the 2020 Financing. As part of their fees, Aesir was granted 3,000,000 Tempus Options with an exercise price of A$0.15, with an expiry date of three years from issue, and Clarus was granted 338,953 Tempus Options with an exercise price of A$0.135 and 514,873 Tempus Options with an exercise price of A$0.185, all expiring two years from date of issue.
The Company relinquished the Montejinni Project and allowed the Claypan Dam Project license to lapse during the fourth quarter of 2020, given the shift in focus to the Company's projects in Canada and Ecuador.
On 28 August 2020, 8,064,517 fully paid Tempus Shares were issued as part of a A$2,500,000 private placement and 567,742 fully paid Tempus Shares were issued in consideration of part of the capital raising fees.
Mr. Jason Bahnsen was appointed as the Company's President effective 1 September 2020. Mr. Tom Peregoodoff and Mr. Anthony Cina were appointed as a non-executive directors of Tempus effective 1 November 2020.
On 30 November 2020, the Company held a general meeting of Tempus Shareholders. At this meeting, shareholder approval was obtained for: (i) the adoption of Tempus' remuneration report, (ii) increase in total aggregate remuneration for non-executive Directors, (iii) re-election of Mr. Alexander Molyneux as a director of the Company, (iv) ratification of prior issuances of Tempus Shares, Tempus Options and Tempus Performance Rights, (v) issuances of options to related parties, (vi) approval of 7.1a Mandate, (vii) replacement of constitution, and (viii) adoption of New Option Plan.
On 30 November 2020, Tempus announced that, in order to meet TSXV listing requirements, Tempus and certain holders of Tempus Performance Rights agreed to the cancellation of 1,264,000 Tempus Performance Rights. Subject to any regulatory and shareholder approvals required, the Company will
Page 14 of 69 issue 2,928,000 Tempus Options with a strike price of A$0.31 and a term of five years from issue date to those Tempus Performance Rights holders in lieu of the cancellation.
Changes Expected to Occur in Current Financial Year
Tempus has an active work program planned to be carried out over a range of its assets in the coming year. Mostly these programs will be designed to appraise existing projects with the intent of converting the resource potential of those projects to reserves.
Material Mineral Projects
Unless otherwise stated, the information, tables and figures that follow relating to the Blackdome- Elizabeth Project has been derived from the Technical Report. The Technical Report may be reviewed on SEDAR under Tempus' issuer profile at www.sedar.com. The Technical Report was prepared by Garth Kirkham of Kirkham Geosystems Ltd. The following individuals served as Qualified Persons as defined in NI 43-101: Garth Kirkham, P.Geo.
The Technical Report was prepared using Mineral Resources and Mineral Reserves definitions set out in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves (May 10, 2014) (the "CIM Definition Standards").
Portions of the following information are based on assumptions, qualifications and procedures which are not fully described herein. Reference should be made to the full text of the Technical Report. The following extract does not purport to be a complete summary of the Blackdome-Elizabeth Project, is subject to all the assumptions, qualifications and procedures set out in the Technical Report and is qualified in its entirety with reference to the full text of the Technical Report. Readers should read this summary in conjunction with the complete Technical Report. For the purposes of this extract: (a) capitalized terms have the meanings given to them in the Technical Report; and (b) references to "C$" are to Canadian dollars.
The information contained in this Executive Summary of the Technical Report is dated as of September 9, 2020.
Executive Summary of the Technical Report
Introduction
Tempus is a mineral exploration and resource development company based in Perth, Australia.
On November 18, 2019, Tempus acquired the Sona which owns the Blackdome-Elizabeth Project from Skeena Resources Ltd. ("Skeena"), who had owned the Project from June 2016. The Project comprises two separate zones, Blackdome Gold Mine and Elizabeth Gold Deposit, and both are past-producing gold properties. Tempus is in the process of implementing a multi-stage, multi-year plan to systematically explore and develop the historical Blackdome-Elizabeth mining camps.
Tempus retained Garth Kirkham, P. Geo. of Kirkham Geosystems Ltd. ("Kirkham Geosystems") to produce a technical report (the Technical Report) for the Project in compliance with the disclosure and reporting requirements set forth in NI 43-101.
Garth Kirkham, P. Geo. (the "Author") is responsible for all sections of the Technical Report and is also responsible for compiling all aspects of the Technical Report. By virtue of his education and relevant work experience, Mr. Kirkham is an independent Qualified Person (QP) as defined by NI 43-101. The Technical Report is based on information known to the Author as of September 9, 2020.
Page 15 of 69 In preparation of this Technical Report, Kirkham Geosystems visited the properties, interviewed staff, and examined the underground mine workings. The Author also reviewed the following:
historical survey measurements of mine excavations and drill holes; historical QA/QC data pertaining to drill core and underground sample assays; published maps and reports to verify the geological setting; digital database; historical mineral resource estimates for the various veins; and technical reports prepared on the Project for previous owners.
Verification measures confirmed the location, extent, legal status, and general nature of the Project. The Author did not collect independent samples to verify assay results.
The Author visited the Project between August 4 and 6, 2020. for the purpose of fulfilling the site visit obligations in preparation of the Technical Report. During this visit, the Author inspected the camp, accommodations, core-logging and core-storage facilities, offices, outcrops, core-receiving area, and the core-sawing station.
Property Description, Location and Access
The Project contains the Blackdome Gold Mine and the Elizabeth Gold Deposit. It is located about 250 km northeast of Vancouver, British Columbia, Canada and is easily accessible from Vancouver by highway and all-weather government-maintained roads. Williams Lake Airport, 120 km north of the Project, provides daily scheduled flights to and from Vancouver.
The Blackdome and Elizabeth properties are approximately 30 km apart, connected by a corridor of claims that form a contiguous claim block. The Project also include an unfinished, 70 km haulage road that links the two properties.
The Project encompasses approximately 300 sq. km of contiguous mineral cell claims, Crown-granted mineral claims, and mining leases.
The Blackdome property is located approximately 240 km northeast of Vancouver, British Columbia and 67 km west-northwest of Clinton, British Columbia. The property is located at UTM Zone 10 (NAD83): 535,400E, 5,685,700N or 51° 19.2' North, 122° 30' West. It is shown as "Blackdome Gold Mine" on Figure 1-1.
The Elizabeth property is located approximately 210 km northeast of Vancouver, British Columbia 35 km northeast of Goldbridge, British Columbia and 60 km northwest of Lillooet, British Columbia. The property is located at UTM Zone 10 (NAD83): 531,790E, 5,653,730N or 51º 02' North, 122º 32' West. It is shown as "Elizabeth Gold Deposit" on Figure 1-1.
Page 16 of 69 Figure 1-1: Location of Blackdome-Elizabeth Gold Project
Source: Tempus 2020
Tenure
The Project consists of legal mineral properties registered under and subject to the Mineral Tenure Act and Mineral Land Tax Act of the Province of British Columbia. The Project comprises the following contiguous mining claims:
Page 17 of 69 14 Crown-granted mineral claims; 73 mineral cell claims; 2 mining leases.
Tempus owns 100% of the Blackdome-Elizabeth Gold Project with the exception of four Crown-granted mineral claims and one mineral claim on the Elizabeth property. The four Crown-granted mineral claims are owned by David White and Thomas Illidge. The mineral claim #511626 (formerly, Blue 1 to 4 claims) is owned by Thomas Illidge and subject to an earned-in agreement.
Permits
The Blackdome and Elizabeth properties are currently in the exploration phase with activities on site limited to drilling, sampling, and geological mapping. Based on the information the Author has reviewed, Tempus appears to be in compliance with all current permitting requirements.
The Project has in place all necessary permits to operate and explore on the Blackdome property. A Notice of Work has been submitted for the Elizabeth property and the Company is currently waiting to receive the MX permit. Completion of a final draft of the Interim Closure and Reclamation Plan is required by December 31, 2020. Tempus has applied for an extension, and, although the Company has had conversations with the regulators, it does not have an extension of this compliance date in writing.
First Nations and Community Impact
The Blackdome and Elizabeth projects lie within the traditional territories of the Secwepemc (Shuswap), St'at'imc and Tsilhqot'in First Nations. Immediately after finalizing the acquisition of the Blackdome- Elizabeth Gold Project from Skeena, Tempus reached out to all the First Nations, communities, councils, and settlements involved in the affected areas. Negotiations and agreements are in place and on-going. Current relations are open and positive, and there is no reason to believe that will change in the foreseeable future.
Infrastructure
The infrastructure at the Blackdome mine is well developed. The site includes offices, mill infrastructure, underground workshop, mine dry, core logging and storage, bunkhouse, kitchen, ambulance, including with fuel storage. The site has a well-developed and well-maintained road network along with a high- speed Wi-Fi network and Internet capabilities. The mine and a 300 ton-per-day process plant operated from 1986 to 1991; it is currently on care and maintenance. In addition, the site has a fully permitted tailings storage facility (TSF).
The infrastructure at the Elizabeth Project includes an upgraded and refurbished camp with a 30-person capacity, including an Atco bunkhouse, commercial kitchen facilities, technical and administration offices, core storage, core-logging and -cutting facilities, fuel storage and first aid facilities, including an ambulance. The site has a well-developed and well-maintained road network along with a high-speed Wi- Fi network and Internet capabilities.
History
Extensive exploration work has been completed throughout the properties for many years. Current exploration activities are focused on expanding existing vein structures along with identifying new veins. As with many historical projects, there is potential for gains through the mining of historical data and records.
Page 18 of 69 Drilling
Drilling and sampling have commenced; however, assay results are pending as at the effective date of the Technical Report.
Geology Setting and Mineralization
The Blackdome deposit is a low-sulphidation epithermal Au-Ag-bearing system characterized by low- temperature deposition of quartz veining, clay alteration, bleaching and silicification. The mineralization occurs as relatively high-grade small shoots located along fault zones, often in proximity to branches or in zones of steepening of the host structures. Mineralization consists of fine- to medium-grained disseminated and fracture-filling electrum and Ag sulphide with minor Ag sulphosalts in a gangue of quartz, adularia, pyrite, and carbonate.
The Elizabeth deposit is underlain by Late Paleozoic ultramafic rocks (altered to listwanite) intruded by Cretaceous stocks and dykes. Gold occurs in a low-sulphidation quartz vein system, mainly hosted by porphyritic feldspar intrusions. Gold content is highly variable and nuggety as coarse gold is common. Vein alteration is associated with arsenic, copper, and molybdenum.
Conclusions, Risks and Opportunities
Tempus is in the process of implementing a multi-stage, multi-year plan to systematically explore and develop the historical Blackdome-Elizabeth mining camps. The Author's interpretations and conclusions by area are as follows with Key Risks and Opportunities found in Table 1.1.
Table 1.1: Key Project Risks and Opportunities
Project Economic Comment Risk Opportunity Element Risk Level A significant amount of historical data remains to Issues with existing be analyzed and Potential discovery of new data may be discovered Database Medium digitized. The database veins. Expansion of existing which will cause should be continually veins. uncertainty. reviewed and renewed to ensure data quality. The historical data will be If data cannot be The more historical data that key to any future plans to validated and verified, can be validated and utilized, Database Medium estimate current then significant drilling the less confirmation drilling will resources for and exploration will be be required. Blackdome-Elizabeth. required. Exploration has There is no guarantee continued to result in that exploration and An intelligent, systematic discovery and expansion Exploration Medium discovery will result in program will be successful in of potential mineral an economically viable uncovering new discoveries. resources in a historical operation. mining camp. It has been proven that historical projects benefit greatly There is no guarantee Much of the exploration from the employment of current new techniques and Exploration Medium data and results are state-of-the-art techniques and data will result in historical and not current. methods. This premise is discovery. particularly true in the region and vicinity.
Page 19 of 69 Project Economic Comment Risk Opportunity Element Risk Level Vein solids do not honor Could cause differences Would be easier to validate and Geology Low drill hole and composite in volumes. verify for audit purposes. data precisely. Further work may The geology of the area disprove previous An increased understanding is well known and models and therefore and derivation of alterative Geology Medium documented, supported result in condemnation theories may result in further by extensive data, of targets and potential discovery and significant analysis, and study. negative economic expansion for the Project. outcomes. Within this historical mining There is no guarantee Exploration has camp, it is feasible that addition that exploration and continued to result in discovery is likely and that an Resources Medium discovery will result in discovery in a historical intelligent, systematic program an economically viable mining camp. will be successful in uncovering operation. new discoveries. Level of detail related to Uncertainty could arise First Nations and local should issues be Increased certainty of project First Nations Medium community relationships, encountered or are not success and social license. negotiations, and known. agreements. Create synergies with operating mines in close proximity and Creating partnership with reduce costs. In addition, there Company neighboring concession May limit exploration is the potential for underground Conflict/ Low holders. Also partnering programs and access. exploration and activities that Synergies with organizations in the will require Mine Rescue region. personnel which exist at other mines in the region. Lower gold price will Gold prices are currently change size and grade Higher gold price will change highly volatile, and there Gold Price Low of the potential targets size and grade of the potential is a great deal of market and create opportunity targets. uncertainty. for growth. Travel and safety is a concern; visiting site Inability to travel and could be problematic. Opportunity to employ in- perform work programs COVID-19 Medium Work performed would country resources and to advance the need to be done by local personnel. properties. companies as much as possible. Stopes, mined out areas, drifts and development Any exclusions would Could result in the discovery of Mined-out Medium have been digitized and reduce the volumes and panels that were previously Areas modelled so that the tonnages. uneconomic to be re-evaluated. volumes are extracted.
Recommendations
To further evaluate the potential of the Blackdome-Elizabeth Project, the following work program is recommended:
Page 20 of 69 Explore for significant new views with an aggregate of 11,000 m of diamond drilling completed over two phases as per below. Phase 2 will be contingent on the success of Phase 1 and expand upon results achieved during the Phase 1 exploration program. Note that approximately C$1,000,000 has been expended on the Project on drilling and related activities as at the effective date. o Phase 1 — 4,000 m of diamond drilling to end April 2021 o Phase 2 — 7,000 m of diamond drilling Continue with the historical data compilation along with QA/QC of the master database. Explore using mapping and surface sampling. Acquire and analyze external data sources from other companies and government sources. Continue with environmental work and baseline studies. Continue with First Nations and community consultations. Check sampling to validate and verify historical data. Rehabilitate the underground workings in a safe and cost-effective manner that can be practically performed and permitted. Ensure all permits are up-to-date and in compliance.
A budget of C$3,089,350 is estimated to complete the aforementioned work and is presented in Table 1.2.
Table 1.2: Budget for Proposed 2-Phase Work Program
# of Description Unit $/Unit Total $ Units Phase 1 Drilling (Remaining) Meter 4,000 200 800,000 Data compilation, Model update including QA/QC Hour 450 250 112,500 Environment and Permitting Month 6 13,000 78,000 Reporting Hour 200 200 40,000 Sub total for Phase 1 — to end April 2021 1,030,500 Phase 2 Drilling Commencement Meter 7,000 200 1,400,000 Environment and Permitting Month 6 13,000 78,000 Sub total for Phase 2 1,478,000 G&A - Mine Maintenance 300,000 Contingency 280,850 Total 3,089,350 Source: Kirkham, 2020
Item 6 Financings
Financings and Available Funds
Tempus has completed two financings in the past 6 months, consisting of A$4,000,000 in June, 2020 and A$2,500,000 in August, 2020. As of June 30, 2020, Tempus had approximately A$3,559,000 in cash and no debt. The A$2,500,000 financing referred to above was completed subsequent to June 30, 2020.
Page 21 of 69 Use of Proceeds
As of September 30, 2020, the aggregate funds available to the Company are estimated to be approximately A$3,500,000. The following table represents the principal purposes for which funds will be used by the Company over the 12 months subsequent to Listing:
Anticipated amount Purpose (A$) Fees payable in connection with the Listing 200,000 Completion of the remaining Phase 1 program at Blackdome-Elizabeth Project 1,031,000 Cash payment under Option Agreement 500,000 Ecuadorian projects 100,000 General and administrative costs for the next 12 months (including legal, 960,000 accounting and other professional fees) Unallocated working capital 709,000 Total 3,500,000
Due to the nature of mineral exploration activities, budgets are regularly reviewed in light of the success of the expenditures and other opportunities which may become available to Tempus. Accordingly, while Tempus anticipates that it will spend the funds available to it as stated herein, there may be circumstances where, for sound business reasons, a reallocation of funds may be required.
Business Objectives and Milestones
Tempus' intended primary business objective and milestone following the Listing is to continue its multi- stage, multi-year plan to systematically explore and develop the historical Blackdome-Elizabeth mining camps, and implement the work plan, as further described under "Material Mineral Projects", above. Tempus intends to implement the work plan based upon the recommendations of the Author in the Technical Report. The current work plan will span over two phases and the proposed budget for the work plan is set out above. See "Material Mineral Projects – Recommendations".
The Company intends to spend a significant portion of the funds available to it for the Property. There may be circumstances however, where, for sound business reasons, a reallocation of funds may be necessary.
Item 7 Dividends & Other Distributions
Tempus has not paid a dividend on its ordinary shares during any of its three most recently completed financial years, or during its current financial year. Tempus does not currently anticipate paying any dividends in the near term, and any decision to pay dividends on the Tempus Shares will be made by the Board on the basis of the corporation's earnings, financial requirements and other conditions existing at such future time.
Item 8 Management's Discussion and Analysis
Refer to the Tempus Annual Report for the year ended 30 June 2020 together with the addendums attached as Appendix "B" to this Listing Application for the management's discussion and analysis disclosure for the most recent annual financial statements of Tempus. In addition, refer to the management's discussion and analysis for the interim period ended 30 September 2020 attached as Appendix "B" to this Listing Application.
Page 22 of 69 Item 9 Disclosure of Outstanding Security Data on Fully Diluted Basis
The following sets out the number and percentage of Tempus Shares outstanding as of the date hereof, on a fully-diluted basis:
Percentage of Number of Total (Fully Share Capitalization Tempus Shares Diluted) Tempus Shares 79,512,542 87.48% Tempus Shares reserved pursuant to Tempus Performance Rights 3,426,000 3.77% Tempus Shares reserved pursuant to Tempus Options(1)(2) 7,953,826 8.75% Total 90,892,368 100.00% Note: (1) As at the date of this Listing Application, all Tempus Options have vested. (2) Subject to any regulatory and shareholder approvals required, Tempus plans to issue 2,928,000 Tempus Options with a strike price of A$0.31 and a term of five years from issue date to certain persons who previously held a total of 1,264,000 Tempus Performance Rights that were cancelled in connection with satisfaction of TSXV listing requirements.
Tempus Options
As of the date of this Listing Application, Tempus has granted 7,953,826 incentive stock options under the Option Plan. Each Tempus Option is exercisable to purchase one Tempus Share at a weighted average exercise price of A$0.205. The Tempus Options were granted as follows:
4,000,000 granted with an exercise price of A$0.25 having an expiry of August 3, 2022; 3,000,000 granted with an exercise price of A$0.15 having an expiry of June 25, 2023; 338,953 granted with an exercise price of A$0.135 having an expiry of June 25, 2022; 514,873 granted with an exercise price of A$0.185 having an expiry of June 25, 2022; 100,000 granted with an exercise price of A$0.37 having an expiry of September 10, 2023.
As of the date hereof, all outstanding Tempus Options have vested.
Subject to any regulatory and shareholder approvals required, Tempus plans to issue 2,928,000 Tempus Options with a strike price of A$0.31 and a term of five years from issue date to certain persons who previously held a total of 1,264,000 Tempus Performance Rights that were cancelled in connection with satisfaction of TSXV listing requirements.
On 30 November 2020, Tempus shareholders approved the adoption of the New Option Plan, which is in compliance with the rules of the TSXV and the ASX. See Item 12 – Stock Option Plan.
Tempus Performance Rights
As of the date of this Listing Application, Tempus has granted a total of 3,426,000 Tempus Performance Rights. The terms and conditions of each grant of performance rights affecting remuneration of directors and management in this financial year or future reporting years are as follows:
Grant Date Fair Value per Performance Right Grant Date (A$) Expiry Date Vesting Date Note 19 Aug 2019 0.14 18 Sept 2021 1 19 Aug 2019 0.14 18 Sept 2021 2 18 Oct 2019 0.16 25 Oct 2021 3 18 Oct 2019 0.16 25 Oct 2021 4
Page 23 of 69 Grant Date Fair Value per Performance Right Grant Date (A$) Expiry Date Vesting Date Note 18 Oct 2019 0.0921 25 Oct 2021 5 10 Sept 2020 0.325 10 Sept 2022 6 10 Sept 2020 0.325 10 Sept 2022 7
Notes: (1) Upon completion of a Mineral Resource estimate (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) equivalent to 500,000 Oz at a minimum grade of 1g/tonne Au on any mineral deposit that is validly owned by Tempus or its subsidiaries at the time of completion. (2) Upon completion of a Scoping Study (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) on any mineral deposit that is validly owned by Tempus or its subsidiaries at the time of completion. (3) Upon any of the following occurring: (a) acquisition of a company with its main focus being on mining and/or mineral exploration in Latin America; (b) acquisition of one or more mineral exploration or exploitation licences in Latin America from a third party; or (c) direct issuance to Tempus or its subsidiaries of a mineral exploration or exploration licence by the relevant cadastre authorities in Latin America, where such above occurrence is approved by the Tempus Board. (4) Upon completion of a Mineral Resource estimate (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) equivalent to 500,000 Oz at a minimum grade of 1g/tonne Au on any mineral deposit in Latin America that is validly owned by Tempus or its subsidiaries at the time of completion. (5) Upon completion of a Scoping Study (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) on any mineral deposit in Latin America that is validly owned by Tempus or its subsidiaries at the time of completion. (6) Upon completion of a Mineral Resource estimate (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) equivalent to 500,000 Oz at a minimum grade of 1g/tonne Au on any mineral deposit in Canada that is validly owned by the Company or its Related Bodies Corporate within 2 years from the date of issue. (7) Upon completion of an economic prefeasibility study or higher in relation any project in Canada that is validly owned by the Company or its Related Bodies Corporate within 2 years from the date of issue.
Item 10 Description of Securities to be Listed
Tempus is applying to list the Tempus Shares for trading on the TSXV. The following is a summary of the rights, privileges, restrictions and conditions which are attached to the Tempus Shares. This summary is not exhaustive and does not constitute a definitive statement of the rights and liabilities of shareholders. To obtain such a statement, persons should seek independent legal advice.
Full details of the rights attaching to the Tempus Shares are set out in the Company's constitution, a copy of which is available for inspection at the Company's registered office during normal business hours.
Tempus Shares
Tempus is authorized to issue an unlimited number of Tempus Shares, of which there are 79,512,542 issued and outstanding as of the date hereof.
General meetings
Holders of Tempus Shares are entitled to be present in person, or by proxy, attorney or representative to attend and vote at general meetings of the Company. Shareholders may requisition meetings in accordance with Section 249D of the Australia Corporations Act and the constitution of the Company.
Voting rights
Subject to any rights or restrictions for the time being attached to any class or classes of shares, at general meetings of shareholders or classes of shareholders:
Page 24 of 69 (i) each shareholder entitled to vote may vote in person or by proxy, attorney or representative;
(ii) on a show of hands, every person present who is a shareholder or a proxy, attorney or representative of a shareholder has one vote; and
(iii) on a poll, every person present who is a shareholder or a proxy, attorney or representative of a shareholder shall, in respect of each fully paid share held by him, or in respect of which he is appointed a proxy, attorney or representative, have one vote for the share, but in respect of partly paid shares shall have such number of votes as bears the same proportion to the total of such shares registered in the shareholder's name as the amount paid (not credited) bears to the total amounts paid and payable (excluding amounts credited). The Company has undertaken to the TSXV that it will not issue partly paid shares.
Dividend rights
Subject to and in accordance with the Australia Corporations Act, the Listing Rules, the rights of any preference Tempus Shareholders and to the rights of the holders of any shares created or raised under any special arrangement as to dividend, the Tempus Board may from time to time decide to pay a dividend to the Tempus Shareholders entitled to the dividend which shall be payable on all Tempus Shares according to the proportion that the amount paid (not credited) is of the total amounts paid and payable (excluding amounts credited) in respect of such Tempus Shares. The Tempus Board may rescind a decision to pay a dividend if they decide, before the payment date, that the Company’s financial position no longer justifies the payment.
Winding-up
If Tempus is wound up, the liquidator may, with the authority of a special resolution, divide among the Tempus Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set a value as the liquidator considers fair upon any property to be so decided, and may determine how the division is to be carried out as between the Tempus Shareholders or different classes of Tempus Shareholders. No member is obliged to accept any Tempus Shares, securities or other assets in respect of which there is any liability. The liquidator may, with the authority of a special resolution, vest the whole or any part of any property in trustees upon such trusts for the benefit of the contributories as the liquidator thinks fit, but so that no Tempus Shareholder is compelled to accept any Tempus Shares or other securities in respect of which there is any liability.
Transfer of Shares
Generally, Tempus Shares are freely transferable, subject to formal requirements, the registration of the transfer not resulting in a contravention of or failure to observe the provisions of the Company's constitution or the Listing Rules.
Changes to Capital Structure
The Company may by ordinary resolution and subject to the Australia Corporations Act and the Listing Rules:
(a) issue new Tempus Shares of such amount specified in the resolution;
(b) consolidate and divide all or any of its Tempus Shares into Tempus Shares of larger amount than its existing Tempus Shares;
Page 25 of 69 (c) subject to the Listing Rules, sub-divide all or any of its Tempus Shares into Tempus Shares of smaller amount, but so that in the sub-division the proportion between the amount paid and the amount (if any) unpaid on each such Tempus Share of a smaller amount remains the same; and
(d) cancel Tempus Shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person or have been forfeited and, subject to the Corporations Act, reduce the amount of its share capital by the amount of the Tempus Shares so cancelled, and the Tempus Board may take such action as it think fit to give effect to any resolution altering the Company’s share capital.
Variation of Rights
The rights and privileges attaching to a class of shares can be altered with the approval of a resolution passed at a separate general meeting of that class by a three quarters majority of the members of that class present and voting.
Item 11 Consolidated Capitalization
There has been no material change in the share and loan capital of Tempus, on a consolidated basis, since the date of Tempus' financial statements for its most recently completed financial period to June 30, 2020 included in the Listing Application, except for the following:
(a) on 3 July 2020, (i) 200,000 Tempus Options with an exercise price of A$0.20 were exercised and converted into 200,000 fully paid Tempus Shares; and (ii) 550,000 fully paid Tempus Shares were issued upon conversion of Tempus Performance Rights;
(b) on 28 August 2020, 8,064,517 fully paid Tempus Shares were issued as part of a A$2,500,000 private placement and 567,742 fully paid Tempus Shares were issued in consideration of part of the capital raising fees; and
(c) on 10 September 2020, (i) 350,000 fully paid Tempus Shares were issued in consideration for services; (ii) 100,000 unlisted Tempus Options were issued, with an exercise price of A$0.37 expiring 10 September 2023; and (iii) 300,000 Tempus Performance Rights were issued upon appointment of a new employee.
The following table sets forth the consolidated capitalization of Tempus as at June 30, 2020.
Amount As at June 30, 2020 Description of Securities Authorized (A$) Loan facility - - Tempus Shares Unlimited 79,512,542 Tempus Performance Rights Unlimited 3,426,000 Tempus Options(1) Unlimited 7,953,826 Total - 90,892,368 Note: (1) Subject to any regulatory and shareholder approvals required, Tempus plans to issue 2,928,000 Tempus Options with a strike price of A$0.31 and a term of five years from issue date to certain persons who previously held a total of 1,264,000 Tempus Performance Rights that were cancelled in connection with satisfaction of TSXV listing requirements.
Page 26 of 69 Item 12 Stock Option Plan
The following tables set out information about the Tempus Options outstanding to purchase Tempus Shares, as of the date of this Listing Application, for executive officers, directors, employees, consultants, and other persons or companies.
Exercise Designation of Number of Price Securities under Option Holder Options (A$) Option Grant Date(s) Expiry Dates Consultant 4,000,000 0.25 Tempus Shares 3 August 2018 3 August 2022 Other 1,500,000 0.15 Tempus Shares 25 June 2020 25 June 2023 Consultant 1,500,000 0.15 Tempus Shares 25 June 2020 25 June 2023 Other 338,953 0.135 Tempus Shares 25 June 2020 25 June 2022 Other 514,873 0.185 Tempus Shares 25 June 2020 25 June 2022 Employee 100,000 0.37 Tempus Shares 10 September 2020 10 September 2023
On 30 November 2020, the Tempus Shareholders approved the adoption of the New Option Plan, in the form attached to this Listing Application as Appendix "D". The New Option Plan will require the approval of the ASX and the TSXV prior to its implementation. The following summary of the Stock Option Plan is qualified in its entirety by the full text of the proposed Stock Option Plan attached hereto as Appendix "D".
On 30 November 2020, Tempus announced that, in order to meet TSXV listing requirements, Tempus and certain holders of Tempus Performance Rights agreed to the cancellation of 1,264,000 Tempus Performance Rights. Subject to any regulatory and shareholder approvals required, the Company will issue 2,928,000 Tempus Options with a strike price of A$0.31 and a term of five years from issue date to those Tempus Performance Rights holders in lieu of the cancellation.
Summary of New Option Plan
The New Option Plan authorizes the Tempus Board to issue stock options to certain Eligible Participants (as such term is defined in the New Option Plan). The purpose of the New Option Plan is to assist in the reward, retention and motivation of Eligible Participants, to link the reward of Eligible Participants to performance and creation of Tempus Shareholder value, to align the interests of Eligible Participants more closely with the interests of Tempus Shareholders by providing an opportunity for Eligible Participants to receive Tempus Shares, to provide Eligible Participants with the opportunity to share in any future growth in value of Tempus, and to provide greater incentive for Eligible Participants to focus on the Tempus’s longer term goals.
Administration
The New Option Plan will be administered by the Tempus Board, which may, subject to applicable law, delegate its powers to administer the New Option Plan to any one or more persons. Tempus Options may be granted at the discretion of the Tempus Board, subject to the limits set out in the New Option Plan and additional terms and conditions determined by the Tempus Board.
Option Exercise Price
Subject to the ASX Listing Rules and the TSXV, Tempus Options granted under the New Option Plan will be determined by the Tempus Board. Where the ASX Listing Rules or the TSXV policies specify or require a minimum price, the Option Exercise Price in respect of a Tempus Option must not be less than any price specified in the ASX Listing Rules and the Discounted Market Price (as such term is defined in the policies of the TSXV), or any other minimum price specified in the polices of the TSXV from time to time.
Page 27 of 69 Number of Tempus Options
The number of Tempus Options to be offered to an Eligible Participant from time to time is at the discretion of the Tempus Board, in accordance with the applicable law and ASX Listing Rules. Tempus Shares listed on the TSXV are subject to the following:
1. no one participant shall be granted an option which exceeds the maximum number, if any, permitted by the policies of the TSXV or the ASX Listing Rules;
2. the number of Tempus Shares reserved for issuance on exercise of Tempus Options granted to any one participant pursuant to all Security Based Compensation Arrangements in a 12-month period shall not exceed 5% of the Outstanding Securities, unless the Company has obtained disinterested Shareholder approval in respect of such grant and meets applicable TSXV requirements;
3. the aggregate number of Tempus Options granted to Insiders of the Company, within any one year period, and granted to Insiders of the Company, at any time, under the New Option Plan, together with all other Security Based Compensation Arrangements, shall not exceed 10% of the number of Outstanding Securities;
4. the aggregate number of Tempus Shares reserved for issuance to all persons employed to provide Investor Relations Activities (as such term is defined in the policies of the TSXV) in a 12-month period shall not exceed 2% of the number of Outstanding Securities (Tempus Options granted to persons performing Investor Relations Activities shall contain vesting provisions such that vesting occurs over at least 12 months with no more than 1/4 of the Tempus Options vesting in any three-month period); and
5. the aggregate number of Tempus Shares reserved for issuance to any one Consultant (as such term is defined in the policies of the TSXV) in a 12-month period shall not exceed 2% of the number of Outstanding Securities.
Where Tempus Shares are listed on the TSXV, the aggregate number of Tempus Shares reserved for issuance under the New Option Plan and to be received on exercise of all Tempus Options offered under this New Option Plan (together with any other Securities Based Compensation Arrangement of the Company in effect from time to time) shall not exceed 10% of the Tempus Shares on issue from time to time on a non-diluted basis. This New Option Plan is a rolling plan.
Expiry Date
If the Company is listed on the TSXV, the Expiry Date of any Tempus Option may not exceed 10 years from the grant date, subject to any applicable extension in respect of a blackout period.
Vesting and Exercise of Tempus Options
Tempus Options granted under the New Option Plan will not vest and be exercisable unless the Vesting Conditions (if any) attaching to that Tempus Option have been satisfied and the Tempus Board has notified the participant of that fact. The Tempus Board must notify a participant in writing within 10 business days of becoming aware that any Vesting Conditions attaching to a Tempus Option have been satisfied. The Vesting Conditions are deemed to be automatically waived where a Change of Control (as defined in the New Option Plan) is occurring. Through written notice to the participant, the Tempus Board may waive any of the Vesting Conditions where: (a) there are Special Circumstances (as defined in the New Option Plan) arising in relation to a Relevant Person (as defined in the New Option Plan) in respect of those Tempus Options; or (b) the Company passes a resolution for voluntary winding up, or an order is made for the compulsory winding up of the Company.
Page 28 of 69 Where the Vesting Conditions are waived, a participant may, subject to the terms of any Offer, exercise any vested Tempus Option at any time after the Tempus Board notifies that the Tempus Option has vested and before it lapses. In order to do this, the participant must provide the Company with the certificate for the Tempus Options, a notice specifying the number of Tempus Options which are exercised, and provide payment to the Company (as applicable).
Tempus Options may be exercised in one or more parcels of any size, provided that the number of Tempus Shares issued upon exercise of the number of Tempus Options in any parcel is not less than a Marketable Parcel (as defined in the ASX Listing Rules).
Lapse of Tempus Options
Generally, a Tempus Option will lapse upon the earlier occurrence of the following: (a) an unauthorised dealing in, or hedging of, the Tempus Option; (b) where a Vesting Condition in relation to the Tempus Option is not satisfied by the due date, or becomes incapable of satisfaction; (c) in respect of unvested Tempus Options, a Relevant Person ceases to be an Eligible Participant; (d) in respect of vested Tempus Options, a Relevant Person ceases to be an Eligible Participant and the Tempus Option granted in respect of that Relevant Person is not exercised within 1 month (or at such later date as determined by the Tempus Board, provided that if the Tempus Shares are listed on the TSXV, such later date shall not exceed 12 months) of the date the Relevant Person ceases to be an Eligible Participant; (e) the Tempus Board deems that a Tempus Option lapses due to fraud, dishonesty or other improper behaviour of the holder/Eligible Participant; (f) in respect of vested Tempus Options, the Company undergoes a Change of Control (as defined in the New Option Plan) or a winding up resolution or order is made, and the Tempus Option does not vest in accordance with an exception to the Vesting Conditions; and (f) the expiry date of the Tempus Option.
Overriding Restrictions on Issue and Exercise
No Tempus Option may offered, granted or exercised and no Tempus Share may be issued pursuant to the New Option Plan if in doing so would contravene the Australia Corporations Act, the ASX Listing Rules, the policies of the TSXV, any other applicable law or would contravene the local laws and customs of an Eligible Participant’s country or residence or where it is the opinion of the Tempus Board that it would require impractical actions to comply with those local laws or customs.
Amendment or Termination of the New Option Plan
Except as restricted by the foregoing or the Australia Corporations Act and the ASX Listing Rules, the Tempus Board may, by resolution, amend or terminate the New Option Plan at any time without Tempus Shareholder approval provided that any amendment to the New Option Plan that requires approval of any stock exchange on which the Tempus Shares are listed for trading may not be made without approval of such stock exchange. Termination of the New Option Plan does not affect the rights or obligations of a participant or the Company which occurred under the New Option Plan prior to the date of termination. The provisions of the New Option Plan relating to a participant’s Tempus Options survive termination of the New Option Plan until fully satisfied and discharged.
Item 13 Prior Sales
The following table sets forth the issuance of Tempus Shares, and securities that are exchangeable into Tempus Shares, during the 12 months prior to the date of this Listing Application:
Price per Aggregate Number of Security Issue Price Nature of Consideration Date of Issuance Type of Security Securities (A$) (A$) Received December 16, 2019(3) Tempus Shares 400,000 0.16 64,000 N/A December 16, 2019(4) Tempus Shares 230,000 0.14 32,200 N/A
Page 29 of 69 Price per Aggregate Number of Security Issue Price Nature of Consideration Date of Issuance Type of Security Securities (A$) (A$) Received December 24, Tempus Shares 1,000,000 0.16 160,000 N/A 2019(10) May 4, 2020(6) Tempus Shares 7,739,843 0.13 1,006,180 Cash June 25, 2020(6) Tempus Shares 2,307,700 0.13 300,001 Cash June 25, 2020(6) Tempus Shares(7) 5,649,217 0.135 762,644 Cash June 25, 2020(6) Tempus Shares(7) 10,473,108 0.185 1,937,525 Cash June 25, 2020(8) Tempus Options 3,000,000 0.15 N/A N/A June 25, 2020(8) Tempus Options 338,953 0.135 N/A N/A June 25, 2020(8) Tempus Options 514,873 0.185 N/A N/A July 3, 2020(5) Tempus Shares 200,000 0.20 40,000 Cash July 3, 2020(3) Tempus Shares 550,000 0.20 110,000 N/A August 28, 2020(6) Tempus Shares 8,064,517 0.31 2,500,000 Cash August 28, 2020(8) Tempus Shares 567,742 0.31 176,000 N/A Sept 10, 2020(3) Tempus Shares 350,000 0.35 122,500 N/A Sept 10, 2020(3) Tempus Options 100,000 0.37 N/A N/A Sept 10, 2020(9) Tempus 300,000 N/A N/A N/A Performance Rights Notes: (1) Issued as consideration in connection with the acquisition of Condor Gold S.A. and Miningsources S.A. (2) Issuance in consideration of acquisition finder's fee payment. (3) Issued in consideration for services. (4) Issued upon conversion of Tempus Performance Rights. (5) Issued upon exercise of Tempus Options. (6) Issued under a private placement financing. (7) Issued as "flow-through shares" under the Income Tax Act (Canada). (8) Issued as consideration to agents in connection a private placement financing. (9) Issued upon appointment of new employee. (10) Issued pursuant to the Option Agreement (as defined below).
Trading Price and Volume
The Tempus Shares trade on the ASX under the symbol "TMR". The following table sets forth the price ranges and volumes traded on the ASX on a monthly basis for each month of the most recently completed financial year, as well as the most recently completed months in the current financial year:
2019 High (AUD) Low (AUD) Volume January 0.26 0.205 768,821 February 0.26 0.21 1,184,046 March 0.26 0.225 701,884 April 0.25 0.21 924,095 May 0.215 0.15 3,413,171 June 0.19 0.16 1,269,990 July 0.17 0.14 776,849 August 0.25 0.14 7,503,516 September 0.21 0.15 5,763,685 October 0.18 0.155 1,525,513 November 0.20 0.155 2,372,153 December 0.23 0.155 4,639,073
2020 January 0.29 0.17 9,448,642 February 0.27 0.175 4,852,684 March 0.195 0.096 2,788,811 April 0.22 0.105 5,169,187 May 0.26 0.165 12,544,349
Page 30 of 69 High (AUD) Low (AUD) Volume June 0.35 0.195 9,777,750 July 0.43 0.32 13,805,909 August 0.39 0.305 11,020,015 September 0.375 0.20 9,225,897 October 0.23 0.177 6,939,844 November 0.275 0.19 10,653,193 December(1) 0.28 0.24 4,165,988
Note: (1) From December 1, 2020 to December 2, 2020.
Item 14 Escrowed Securities & Securities Subject to Restriction on Transfer
As of the date of this Listing Application, there are 400,000 Tempus Shares that are subject to voluntary escrow due to expire on 16 December 2020 and 175,000 Tempus Shares that are subject to voluntary escrow due to expire on 31 December 2020.
Item 15 Principal Securityholders
As of the date hereof, to the knowledge of the directors and officers of Tempus, no person beneficially owns, directly or indirectly, or exercise control or direction, directly or indirectly, over, more than 10% of the issued Tempus Shares.
Item 16 Directors & Executive Officers
Name, Occupation and Security Holdings
The following table sets out, for each of Tempus' directors and executive officers, the individual's name, municipality of residence, position(s) at Tempus, principal occupation during the five preceding years, and if a director, the month and year in which such individual became a director. The directors of Tempus will be elected annually and the term of office of each director will expire at the time of the next annual meeting of Tempus Shareholders or until his or her successor is elected or appointed.
Page 31 of 69 Number and Date of Percentage of Appointment Tempus Shares Name, Municipality of or Election Beneficially Residence and as Director/ Owned Upon Position with Tempus Officer Principal Occupation (past five years) Listing(1) Alexander Molyneux 18 April 2018 From 18 April 2018 to 1 April 2019, Mr. Molyneux was 1,500,000 Taipei City, Taiwan the Executive Chairman. On 1 April 2019, his role (1%) changed to Non-Executive Chairman. Mr. Molyneux Non-Executive currently serves as Co-Founder and Chairing Member Chairman of Azarga Resources Group (2012 – present), Non- Executive Chairman of Azarga Metals Group (2012 – present) and Non-Executive Chairman of Argosy Minerals Ltd (ASX: AGY) (2016 – present). He was previously Executive Chairman of Azarga Uranium Corp (TSX: AZZ) and its predecessor companies (2012 – 2015), Non-Executive Director of Goldrock Mines Corp (TSXV:GRM) (2012 – 2016), CEO of Paladin Energy Limited (ASX:PDN) (2015 – 2018) and CEO of SouthGobi Resources Limited (Ivanhoe Mines Group) (TSX:SGQ / HKEX:1878) (2009 – 2012). Mr Molyneux currently serves as CEO of Galena Mining Ltd (ASX: G1A) (2018 – present) and Non-Executive Director of Comet Resources Ltd (ASX: CRL) (2019 – present). Brendan Borg 18 April 2018 Mr. Borg was a Non-Executive Director of the 2,300,000 Melbourne, Australia Company from 18 April 2018 to 1 April 2019. From 1 (2.9%) April 2019 Mr. Borg's role changed to Executive Managing Director, Director. On 19 August 2019, he was appointed CEO Managing Director. Mr. Borg is currently a Non- Executive Director of Celsius Resources Limited (ASX:CLA) and Firefinch Lithium Limited (ASX:FFX). He is also a Director of geological consultancy Borg Geoscience Pty Ltd. Melanie Ross 18 April 2018 Ms. Ross is currently a Director of a corporate advisory 360,000 Perth, Australia company based in Perth that provides corporate and (0.5%) other advisory services to public listed companies. She Non-Executive is the Company Secretary for Celsius Resources Ltd Director, Company (ASX: CLA), Great Boulder Resources Ltd (ASX: GBR) Secretary, CFO and Ragusa Minerals Ltd (ASX: RAS). Gary Artmont(2) 14 October Mr. Artmont has been associated with Tempus's Rio 400,000 Ontario, Canada 2019 Zarza and Valle del Tigre properties since 2007, (0.5%) serving as a consultant to Ecometals Limited, the Non-Executive Director previous owners of the properties. Tom Peregoodoff(2) 1 November Currently CEO of TF Massif Technologies, Ltd., an Nil Vancouver, British 2020 electronics company. Formerly President and CEO of (Nil%) Columbia, Canada Kaizen Discovery Inc., an exploration company, from January 2017 through November 2019, and President Non-Executive Director and CEO of Peregrine Diamonds Ltd. from February 2015 through September 2018. Prior to joining Peregrine he spent 18 years with BHP Billiton, with his last role as Vice President of Early Stage Exploration he had global responsibility for early stage exploration activities. He is a current director of Toronto Stock Exchange listed Mountain Province Diamonds Inc. (TSX: MPVD).
Page 32 of 69 Number and Date of Percentage of Appointment Tempus Shares Name, Municipality of or Election Beneficially Residence and as Director/ Owned Upon Position with Tempus Officer Principal Occupation (past five years) Listing(1) Anthony Cina(2) 1 November Chairman of TSX Venture Exchange listed Itafos, a US Nil Woodbridge, Ontario, 2020 and Brazilian focused vertically integrated phosphate Nil% Canada miner and fertilizer producer. Prior thereto, Mr. Cina served in several senior executive roles with mining Non-Executive Director companies, most recently as Senior Vice President, Business Administration at Yamana Gold Inc. from January 2014 to April 2018. Prior thereto, he was Chief Financial Officer of Itafos.
Rodrigo Izurieta 1 May 2019 Currently COO of Tempus. Formerly, Finance 4,246,208 Quito, Ecuador Director/Country Manager of Ecometals Limited, a (5.3%) junior mineral exploration company with gold projects Chief Operating Officer in Ecuador and Brazil, from January 2008 through May (Latin America) 2019. Jason Bahnsen 1 Sept 2020 Currently President of Tempus. Mr. Bahnsen is also 115,114 Duncan, British CEO of Northern Lights Resources Corp., a CSE listed (0.14%) Columbia, Canada mineral exploration company focused on projects in the USA. Previously, CEO of TSX listed Strata President Minerals (now Revival Gold). Prior to that, Mr. Bahnsen had a career in investment banking and mine operations. Notes: (1) Based on 79,512,542 Tempus Shares issued and outstanding as of the date of this Listing Application and information furnished to the Company by the above individuals. (2) Member of the Audit and Risk Committee.
At the annual general meeting in every subsequent year, one-third of the directors for the time being, or, if their number is not a multiple of 3, then the number nearest one-third (rounded upwards in case of doubt), shall retire from office, provided always that no director except a managing director shall hold office for a period in excess of 3 years, or until the third annual general meeting following his or her appointment, whichever is the longer, without submitting himself for re-election. The directors to retire at an annual general meeting other than the first annual general meeting are those who have been longest in office since their last election, but, as between persons who became directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by drawing lots. A retiring director is eligible for re-election. An election of directors shall take place each year.
In connection with the application of Tempus to list the Tempus Shares for trading on the TSXV, Tempus will, at its next annual general meeting of shareholders, seek approval from shareholders to cease electing directors in accordance with the above-noted procedure and replace it with a protocol that would require each director of Tempus to stand for election annually at the annual general meeting of shareholders.
As at the date of this Listing Application, all of the directors and officers, as a group, beneficially own, directly or indirectly, or exercise control or direction over 8,921,322 Tempus Shares, representing approximately 11.2% of the issued and outstanding Tempus Shares.
Biographies of Directors and Executive Officers
Set forth below is a description of the background of the directors and officers of Tempus, including a description of each individual's principal occupation(s) within the past five years. None of Tempus'
Page 33 of 69 directors or officers are independent contractors of Tempus, and none of Tempus' directors or officers have entered into a non-competition or non-disclosure agreement with Tempus.
Alexander Molyneux, Non-Executive Director, Chairman
Mr. Molyneux (age: 45) is an experienced mining industry executive. He is Co-Founder and Chairing Member of Azarga Resources Group (2012 – present). Mr. Molyneux currently serves as Non-Executive Chairman of Azarga Metals Group (2012 – present), Non-Executive Chairman of Argosy Minerals Ltd (ASX: AGY) (2016 – present), Managing Director of Galena Mining Ltd (ASX: G1A) (2018 to present) and Non- Executive Director of Comet Resources Ltd (ASX: CRL) (2019 to present). He was previously Executive Chairman of Azarga Uranium Corp (TSX: AZZ) and its predecessor companies (2012 – 2015), Non- Executive Director of Goldrock Mines Corp (TSXV:GRM) (2012 – 2016), CEO of Paladin Energy Limited (ASX:PDN) (2015 – 2018), and CEO of SouthGobi Resources Limited (Ivanhoe Mines Group) (TSX:SGQ / HKEX:1878) (2009 – 2012). Prior to joining SouthGobi, Mr. Molyneux was Managing Director, Head of Metals and Mining Investment Banking, Asia Pacific, with Citigroup. In his position as a specialist resources investment banker he spent approximately 10 years providing advice and investment banking services to natural resources corporations. Mr. Molyneux holds a BEcon (Monash University) and a Grad. Dip. Min ExplGeoSc (Curtin University).
Brendan Borg, Managing Director & CEO
Mr. Borg (age: 45) is a consultant geologist who has specialized in the "battery materials" sector including lithium, graphite and cobalt mineralisation, participating in numerous successful projects, in an investment and/or operational capacity. Mr. Borg has more than 20 years' experience gained working in management, operational and project development roles in the exploration and mining industries, with companies including Rio Tinto Iron Ore, Magnis Resources Limited, Iron-Clad Mining Limited, Lithex Resources Limited and Sibelco Australia Limited. Mr. Borg is currently a Non-Executive Director of Celsius Resources Limited (ASX:CLA) (2017 to present) and Firefinch Lithium Limited (ASX:FFX) (2018 to present). He is also a Director of geo-logical consultancy Borg Geoscience Pty Ltd.
Mr. Borg holds a Master of Science in Hydrogeology and Groundwater Management (University of Technology Sydney), a Bachelor of Science in Geology/Environmental Science (Monash University) and is a member of AusIMM and the IAH.
Melanie Ross, Non-Executive Director, Company Secretary & CFO
Ms. Ross (age: 43) is an accounting and corporate governance professional with over 18 years' experience in financial accounting and analysis, audit, business and corporate advisory services in public practice, commerce and state government. Ms. Ross is currently a Director of a corporate advisory company based in Perth that provides corporate and other advisory services to public listed companies. She is the Company Secretary for Celsius Resources Ltd (ASX: CLA), Great Boulder Resources Ltd (ASX: GBR), and Ragusa Minerals Ltd (ASX: RAS).
Ms. Ross has a Bachelor of Commerce (Curtin University) and is a member of the Institute of Chartered Accountants in Australia and New Zealand and an associate member of the Governance Institute of Australia.
Gary Artmont, Non-Executive Director
Mr. Artmont (age: 70) is a senior exploration geologist with 40+ years of international experience from grass-roots to project feasibility studies, in regions including Canada, USA, Mexico, South America, Indonesia, Africa, Russia, China and Mongolia. Mr. Artmont is a recognized expert in epithermal gold mineralisation, and has held senior positions with Rio Tinto, Kennecott Australia, Freeport McMoran Indonesia, Union Carbide, Norilsk Nickel and Ivanhoe Mines. Mr. Artmont has been associated with Tempus' Rio Zarza and Valle del Tigre properties since 2007, serving as a consultant to Ecometals
Page 34 of 69 Limited, the previous owners of the properties. Mr. Artmont holds a BSc Hon Earth Science (University of Waterloo).
Tom Peregoodoff, Non-Executive Director
Mr. Peregoodoff (age: 57) has over 30 years of mineral industry exploration, evaluation and development experience. As President and CEO of Peregrine Diamonds Ltd. he led the development of the Chidliak diamond project until the eventual sale of Peregrine to Debeers in 2018. Prior to joining Peregrine he spent 18 years with BHP, with his last role as Vice President of Early Stage Exploration he had global responsibility for early stage exploration activities. Mr. Peregoodff has extensive global operations and business development experience. He is a past director of Island Pacific School, and is a current director of Toronto Stock Exchange listed Mountain Province Diamonds Inc. (TSX: MPVD).
Mr. Peregoodoff holds a BSc. in Geophysics from the University of Calgary and resides in Vancouver.
Anthony Cina, Non-Executive Director
Mr. Cina (age: 56) has over 30 years of experience in accounting, finance and tax-related matters and has extensive experience in the mining industry. Mr. Cina is a corporate director and board advisor and has served for various mining and technology-related public and private companies, including currently serving as Chairman of TSX Venture Exchange listed Itafos, a US and Brazilian focused vertically integrated phosphate miner and fertilizer producer. Prior to these roles, Mr. Cina served in several senior executive roles with mining companies, most recently as Senior Vice President, Business Administration at Yamana Gold Inc. Prior thereto, he was Chief Financial Officer of Itafos.
Mr. Cina is a Chartered Accountant and Chartered Professional Accountant and has received the ICD.D designation from the Institute of Corporate Directors. Mr. Cina holds a Bachelor of Commerce degree from the University of Toronto.
Jason Bahnsen, President
Mr. Bahsen (age: 58) is a Canadian / Australian mining engineer with over 30 years of experience in natural resources finance and operations. He began his career in mine development, working for underground mine contracting companies in Canada, Indonesia and Australia. He has held production roles at several gold mine operations in capacities as mine planning engineer, project engineer and shift boss. Following several years working with Rio Tinto in Australia where Mr. Bahnsen was involved in mine feasibility study work and business development roles, he moved into investment banking. Mr. Bahnsen spent approximately 10 years working as a resource banker working with firms including Deutsche Bank, Macquarie Bank, and Fox Davies Capital on major international resource acquisition and equity market transactions. Following a successful career in banking, Mr. Bahnsen became involved in resource company development and has held CEO roles for several private and listed resource exploration and development companies.
Mr. Bahnsen holds a BSc Mining Engineering, Mining and Mineral Engineering from Queen’s University and an MBA from University of New England.
Rodrigo Izurieta, Chief Operating Officer
Mr. Izurieta (age: 47) is an economist and business manager with 20+ years' experience. He has over 10 years' experience in the mining industry and previously served as President and Board Member for the Chamber of Mines of Ecuador. He was a partner and owner of CTC, a boutique consulting firm specializing in finance and economics, advising multilateral organizations, banks and multinational corporations. He also served as Director of Finance and Strategy at EFH Corp, a family owned holding company with investments in manufacturing, real estate and agriculture. He also worked for Andersen in
Page 35 of 69 their Corporate Finance consulting division and for Banco Santander in their New York Economic Research department.
Mr. Izurieta was a Fulbright Scholar and obtained a Master's degree in Economics at NYU, New York.
Other Reporting Issuer Experience
The following table sets out the experience of each director/officer of Tempus as a director or officer of another reporting issuer during the past 5 years:
Name of Name and Jurisdiction Trading Name of Reporting Issuer Market Position From To Alexander Molyneux Argosy Minerals Limited ASX Non-Executive Chairman 15 August 2016 Present Galena Mining Ltd. ASX Managing Director 1 September 2018 Present Comet Resources Ltd ASX Non-Executive Director 15 February 2019 Present Brendan Borg Celsius Resources Ltd. ASX Non-Executive Director 18 April 2017 Present Firefinch Lithium Limited ASX Non-Executive Director 15 November 2018 Present Melanie Ross Celsius Resources Ltd ASX Corporate Secretary 22 November 2017 Present Great Boulder ASX Corporate Secretary 28 March 2018 Present Resources Ltd Ragusa Minerals Ltd ASX Corporate Secretary 1 October 2020 Present Gary Artmont - - - - - Tom Peregoodoff Mountain Province TSX Non-Executive Director 13 June 2019 Present Diamonds Inc. Anthony Cina Itafos TSXV Non-Executive Director 21 April 2015 Present Rodrigo Izurieta - - - - - Jason Bahnsen Northern Lights CSE CEO, Director 14 November 2017 Present Resources Corp.
Cease Trade Orders, Penalties, Sanctions or Bankruptcies
Cease Trade Orders
No director or executive officer of Tempus is, or within ten years prior to the date hereof has been, a director, CEO or CFO of any company (including Tempus) that, (i) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued while the director or executive officer was acting in the capacity as director, CEO or CFO; or (ii) was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued after the director or executive officer ceased to be a director, CEO or CFO and which resulted from an event that occurred while that person was acting in the capacity as director, CEO or CFO.
Bankruptcies
No director or executive officer of Tempus, or shareholder holding a sufficient number of securities of Tempus to affect materially control of Tempus, (i) is, or within ten years prior to the date hereof has been, a director or executive officer of any company (including Tempus) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets, or (ii) has, within ten years prior to the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted
Page 36 of 69 any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.
Penalties or Sanctions
No director or executive officer of Tempus, or shareholder holding a sufficient number of securities of Tempus to affect materially the control of Tempus, has been subject to (i) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or (ii) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.
The foregoing, not being within the knowledge of Tempus, has been furnished by the respective directors, executive officers and shareholders of Tempus.
Conflicts of Interest
Certain directors of Tempus are directors of, or may become associated with, other natural resource companies that acquire interests in oil and gas properties. Such associations may give rise to conflicts of interest from time to time. Such a conflict poses the risk that Tempus may enter into a transaction on terms which place Tempus in a worse position than if no conflict existed. The officers and directors of Tempus are required by law to act honestly and in good faith with a view to the best interests of Tempus and its shareholders and to disclose any interest which they may have in any project or opportunity of Tempus, but each officer or director has the identical obligation to other companies for which such officer or director serves as an officer or director.
Item 17 Executive Compensation
Compensation Discussion and Analysis
Executive Compensation Principles
The Company's aim is to secure and retain experienced and motivated directors and executives who possess the appropriate skills and expertise to enable the Company to achieve its objectives. The Company furthermore seeks to ensure a clear relationship between directors' and executive officers' performance, the role they perform and the remuneration received.
In relation to the payment of bonuses, the issue of securities and other incentive payments, discretion is exercised by the Board having regard to both the Company's performance and the performance of the executive or director concerned, including the "Named Executive Officers" who are identified in the "Summary Compensation Table" below.
The Board recognises that Tempus operates in a global environment. To prosper in this environment we must attract, motivate and retain key executive staff.
Consistent with attracting and retaining talented executives, the Board endorses the use of incentive and bonus payments. The Board will continue to seek external advice to ensure reasonableness in remuneration scale and structure, and to compare the company's position with the external market. The impact and high cost of replacing senior employees and the competition for talented executives requires the committee to reward key employees when they deliver consistently high performance.
Page 37 of 69 The remuneration policy has been tailored to increase the direct positive relationship between shareholder's investment objectives and director's and executive's performance. Currently, directors and executives are encouraged to hold shares in the Company to ensure the alignment of personal and shareholder interests. The Company provides performance based remuneration via their Option Plan.
Compensation Program
The Company's executive compensation program is comprised of the following components: (a) base salary; and (b) long-term incentive compensation comprised of Tempus Options. In certain cases, executives are also awarded short term incentive compensation comprised of discretionary bonuses paid on achieving specific objectives which are recognized as materially contributing to the Company's objectives. The quantum of the bonus will be relative to the materiality of the objective achieved.
The compensation structures explained below are designed to attract suitably qualified candidates, reward the achievement of strategic objectives and achieve the broader outcome of creation of value for shareholders. The compensation structures take into account:
the capability and experience of the executives; the executives ability to control the relevant segment(s') performance; The Company's performance including earnings, share price, shareholder return; and the amount of incentives within each executive's compensation.
Compensation packages include fixed compensation and short and long-term performance-based incentives.
Compensation Review Process
In determining competitive remuneration rates, the Board seeks independent advice on local and international trends among comparative companies and industry generally. It examines terms and conditions for employee incentive schemes benefit plans and share plans. Independent advice may be obtained to confirm that executive remuneration is in line with market practice and is reasonable in the context of peer-group executive reward practices. The companies reviewed operate in a similar business environment and generally will be of similar size, scope and complexity.
The directors also review the current performance of the executive concerned and the expectations and responsibility associated with the role.
In arriving at base salaries and the grant of Tempus Options for executives of the Company (other than the CEO) the CEO of the Company makes recommendations to the Board. The Board reviews the recommendations and may request additional information before deciding whether to accept the recommendations or make any changes.
The Board determines the level of compensation of the CEO through consultation between the independent directors. Consultation between the CEO and the independent directors is customary during this process. In the case of the grant of Tempus Options, the Board in consultation with the CEO, decides whether it is appropriate Tempus Options are awarded, and if so, the number of Tempus Options to be granted. In the case of whether to award Tempus Options to the CEO, the other members of the Board will consider the appropriateness of the proposed grant in relation to the overall compensation package.
All executive officers are eligible to receive a discretionary bonus. The decision whether to issue a bonus and its size rests with the Board usually after receiving a recommendation from the CEO. In determining if a bonus is to be paid and its size, the Board will take into consideration matters such as: (i) achievement of material objectives; (ii) the executive's contribution to achieving a particular objective; (iii) the overall performance of the executive concerned; (iv) growth in corporate asset value and cash flows and (v) share price performance.
Page 38 of 69 Elements of the Executive Compensation Program
Each element of the Company's executive compensation program is described in more detail below.
Base Salaries
The base salary component is intended to provide a fixed level of competitive pay that reflects each executive's primary duties and responsibilities. It also provides a foundation upon which performance- based incentive compensation elements are assessed and established. In setting base compensation levels for executives, consideration is given to objective factors such as level of responsibility, experience and expertise as well as subjective factors such as leadership.
Short Term Incentive Compensation – Discretionary Cash Bonuses
In addition to base salaries, the Company may award discretionary cash bonuses to executives of the Company, as well as other consultants. There is no formal bonus plan and the amount of any bonus paid is not set in relation to any formula or specific criteria but is a result of a subjective determination based on, in the case of non-executives, their contribution in adding value and reducing costs and the contribution to overall corporate objectives. In the case of executives, including the CEO, bonuses are discretionary and while no specific bonus targets have been set, criterion such as the achievement of objectives and the individual's contribution, share price performance and growth in cash flows and asset values are considered. No maximum bonus has been established for any executives.
Long Term Incentive Compensation – Stock Options
The Company adopted an employee incentive option plan (the "Option Plan") to provide ongoing incentives to directors, executives and employees of the Company. The objective of the Option Plan is to provide the Company with a remuneration mechanism, through the issue of securities in the capital of the Company, to motivate and reward the performance of the directors and employees in achieving specified performance milestones within a specified performance period. The Board will ensure that the performance milestones attached to the securities issued pursuant to the Option Plan are aligned with the successful growth of the Company's business activities.
The directors and employees of the Company have been, and will continue to be, instrumental in the growth of the Company. The directors consider that the ESOP is an appropriate method to: (a) reward directors and employees for their past performance; (b) provide long term incentives for participation in the Company's future growth; (c) motivate directors and generate loyalty from senior employees; and (d) assist to retain the services of valuable directors and employees.
Options under the Option Plan can be granted to directors, executives, employees, consultants and other service providers of the Company and are intended to align such individual's and shareholder interests by attempting to create a direct link between compensation and shareholder return. Participation in the Option Plan rewards overall corporate performance, as measured through the price of the Tempus Shares. In addition, the Option Plan enables executives to develop and maintain an ownership position in the Company.
Incentive options have been issued to non-executive directors, certain key executives and consultants of the Company. The ability to exercise the options is conditional upon the future performance of the Company and its reflection in the performance of the share price. Tempus currently has no policy concerning recipients entering into other arrangements that limit their exposure to losses that would result from share price decreases. See Item 12 – Stock Option Plan for further information on Tempus' Option Plan.
Page 39 of 69 Summary
The Company's compensation policies have allowed the Company to attract and retain a team of motivated professionals and support staff working towards the common goal of enhancing shareholder value. The Board will continue to review compensation policies to ensure that they are competitive within the Company's industry and consistent with the Company's performance.
Summary Compensation Table
The following table sets forth information concerning the compensation paid to the CEO and CFO of Tempus, and the three most highly compensated officers other than the CEO and CFO (each a "Named Executive Officer" or "NEO" and collectively, the "Named Executive Officers" or "NEOs"). Summary Compensation Table
Non-Equity Incentive Plan Compensation (A$)
Year Share- Option- Long- Ended Based Based Annual Term Pension All Other Total Name and Principal June Salary Awards Awards Incentive Incentive Value Compensation Compensation Position 30 (A$) (A$)(1) (A$)(2) Plans Plans (A$) (A$) (A$) Brendan Borg(3) 2020 224,193 38,190 - - - - - 262,383 Managing Director/CEO 2019 40,500 ------40,500 2018 7,290 ------7,290 Melanie Ross(4) 2020 36,000 11,457 - - - - - 47,457 Corporate Secretary/CFO 2019 36,000 ------36,000 2018 7,290 ------7,290 Rodrigo Izurieta 2020 302,762 136,880 - - - - - 439,642 Chief Operating Officer (Latin 2019 44,616 ------44,616 America) 2018 ------Notes: (1) "Share-Based Award" means an award under an equity incentive plan of equity-based instruments that do not have option-like features, including, for greater certainty, Tempus Shares, restricted shares, restricted share units, deferred share units, phantom shares, phantom share units, common share equivalent units and stock, and Tempus Performance Rights. (2) "Option-Based Award" means an award under an equity incentive plan of options, including, for greater certainty, share options, share appreciation rights and similar instruments that have option-like features. (3) Mr. Borg became the Managing Director on August 19, 2019. Mr. Borg received A$40,500 and A$7,290 in 2019 and 2018, respectively, as compensation for serving as a director of the Company, which was paid to Borg Geoscience Pty Ltd., an entity related to Mr. Borg. These amounts are included in the table above. (4) Ms. Ross' compensation is payable to Consilium Corporate Pty Ltd., a company with which Ms Ross is a shareholder and director, relating to Melanie Ross' director's fees. Ms. Ross received A$36,000 and A$7,290 in 2019 and 2018, respectively, as compensation for serving as a director of the Company, which was paid to Consilium Corporate Pty Ltd., an entity related to Ms. Ross. These amounts are included in the table above.
Mr. Borg has executed an employment agreement providing for an annual base salary (excluding general sales tax) of A$250,000. Ms. Ross has executed an employment agreement providing for an annual base salary (excluding general sales tax) of A$36,000. Mr. Izurieta has executed an employment agreement providing for an annual base salary (excluding general sales tax) of US$195,000. Mr. Bahnsen, who was appointed as President on 1 September 2020, has executed an employment agreement providing for an annual base salary (excluding general sales tax) of C$200,000.
For information with respect to compensation amounts payable to the Named Executive Officers in the event of a termination or a change of control, please see the discussion at "Termination and Change of Control Benefits" below.
Page 40 of 69 Incentive Plan Awards
Outstanding Share-Based Awards and Option-Based Awards
The Company has an Option Plan that was previously adopted by the Board. The Company obtained shareholder approval of the New Option Plan at the annual meeting of Tempus Shareholders held on 30 November 2020. The significant terms of the New Option Plan are disclosed in Item 12 – Stock Option Plan.
The following table sets forth for each Named Executive Officer all awards outstanding at the end of the year ended June 30, 2020, including awards granted before the most recently completed financial year.
Option-Based Awards Share-Based Awards
Market or Market or Number of Payout Value of payout value of Securities Value of Number of Share-Based vested share- Underlying Option Unexercised Shares or Units Awards that based awards Unexercised Exercise in-the-money of Shares that have not not paid out or Options Price Option Expiration Option(1) have not vested vested(2) distributed Name and Title (#) (A$) Date (A$) (#) (A$) (A$)
Brendan Borg - - - - 300,000 35,040 - Managing Director/CEO
Melanie Ross - - - - 90,000 10,512 - Corporate Secretary/CFO
Rodrigo Izurieta - - - - 3,200,000 457,680 - Chief Operating Officer (Latin America) Notes: (1) Unexercised "in-the-money" options refer to the options in respect of which the market value of the underlying securities as at the financial year end exceeds the exercise or base price of the option. (2) Reflects the aggregate grant date fair value of the Tempus Performance Rights.
See "Compensation Discussion and Analysis" in this section for discussion of the process that the Company uses in the grant of Options.
Incentive Plan Awards – Value Vested or Earned During the Year
The following table sets forth for each Named Executive Officer, the value of option-based awards which vested during the year ended June 30, 2020. No non-equity incentive plan compensation was earned during the year ended June 30, 2020 by the Named Executive Officers and the Company does not have any outstanding share based awards.
Page 41 of 69 Option-Based Awards – Non-equity incentive plan Value vested during the Share-based awards – Value compensation – Value year vested during the year earned during the year Name and Title (A$) (A$)(1) (A$) Brendan Borg, Managing - 28,000 - Director/CEO Melanie Ross, Corporate - 8,400 - Secretary/CFO Rodrigo Izurieta - 128,000 - Chief Operating Officer (Latin America) Note: (1) Reflects the aggregate grant date fair value of the Tempus Performance Rights.
Pension Plan Benefits
The Company does not have a pension plan or similar benefit program. As an Australian domiciled entity, Tempus makes mandatory superannuation contributions on behalf of all employees on each component of the total remuneration package that is subject to Australian superannuation guarantee legislation. As at the most recently completed fiscal year, the legislated minimum employer contribution rate was 9.5% of eligible compensation. Further, in accordance with Australian superannuation guarantee legislation, Tempus will also contribute on behalf of an employee the amount of such eligible compensation that the employee may voluntarily direct to superannuation rather than receive when so entitled. All superannuation contributions are made to the superannuation fund elected by each employee.
Termination and Change of Control Benefits
The Company is not a party to any contract, agreement, plan or arrangement that provides for payments to a Named Executive Officer at, following or in connection with any termination (whether voluntary, involuntary or constructive), resignation, retirement, a change in control of the Company, its subsidiaries or affiliates or a change in a Named Executive Officer's responsibilities, other than as disclosed herein.
Each member of the Company's key management personnel are employed on open-ended employment contracts between the individual person and the company. Non-executive directors have entered into a service agreement with the company in the form of a letter of appointment.
Term of Annual Base Salary Key Management Personnel Agreement (excludes GST) Termination Benefit Alexander Molyneux No fixed term A$72,000 3 months Non-Executive Chairman
Brendan Borg No fixed term A$250,000 3 months Managing Director, CEO
Melanie Ross No fixed term A$36,000 Nil Company Secretary, Non-Executive Director, CFO
Gary Artmonth No fixed term A$36,000 Nil Non-Executive Director
Tom Peregoodoff No fixed term C$36,000 Nil Non-Executive Director
Anthony Cina No fixed term C$48,000 Nil Non-Executive Director
Page 42 of 69 Rodrigo Izurieta No fixed term US$195,000 3 months Chief Operating Officer (Latin America)
Jason Bahnsen No fixed term C$200,000 3 months President
Director Compensation
The Company currently has six directors, two of whom, Brendan Borg and Melanie Ross, are also Named Executive Officers. For a description of the compensation paid to the Named Executive Officers who also acted as directors of the Company, see "Statement of Executive Compensation". For the year ended June 30, 2020, the non-executive directors include Alexander Molyneux and Gary Artmont. Messrs. Tom Peregoodoff and Anthony Cina were appointed to the Board on 1 November 2020.
The total maximum remuneration of non-executive directors is initially set in the Company's constitution and subsequent variation is by ordinary resolution of shareholders if the Company at a general meeting in accordance with the Company's constitution, the Australia Corporations Act and the Listing Rules, as applicable. The determination of non-executive directors' remuneration within that maximum will be made by the Board having regard to the inputs and value to the company of the respective contributions by each non-executive director. The current amount has been set at an amount not to exceed A$350,000 per annum. The Board determines actual payments to directors and reviews their remuneration annually based on independent external advice with regard to market practice, relativities, and the duties and accountabilities of directors. A review of directors' remuneration is conducted annually to benchmark overall remuneration including retirement benefits. There were no use of external consultants for remuneration advice for the period ended 30 June 2020.
Directors' Summary Compensation Table
The following table sets forth for the year ended June 30, 2020, information concerning the compensation paid to the directors other than directors who are also Named Executive Officers.
Share- Option- Non-Equity Fees Based Based Incentive Plan Pension All Other Earned Awards Awards Compensation Value Compensation Total Name (A$) (A$)(1) (A$)(2) (A$) (A$) (A$) (A$) Alexander 54,000 38,190 - - - - 92,190 Molyneux Gary Artmont 25,742 20,305 - - - - 46,047 Notes: (1) "Share-Based Award" means an award under an equity incentive plan of equity-based instruments that do not have option-like features, including, for greater certainty, Tempus Shares, restricted shares, restricted share units, deferred share units, phantom shares, phantom share units, common share equivalent units and stock, and Tempus Performance Rights. (2) "Option-Based Award" means an award under an equity incentive plan of options, including, for greater certainty, share options, share appreciation rights and similar instruments that have option-like features.
Non-executive directors are entitled to an annual base fee of A$36,000, with the Chairman of the board receiving a base fee of A$72,000. There is no other compensation paid to non-executive directors for their services as members of committees of the Company. There are no attendance fees, as directors are expected to attend all meetings the Board. Tempus Option and Tempus Performance Rights grants are awarded on a case by case basis as approved by the Board.
Page 43 of 69 Directors' Outstanding Share-Based Awards and Option-Based Awards
The following table sets forth, for each person who was a director of the Company during the last completed financial year of the Company, other than directors who are also Named Executive Officers, all awards outstanding at the end of the year ended June 30, 2020, including awards granted before the most recently completed financial year.
Option-Based Awards Share-Based Awards Market or Payout Market or Value of payout Value of Number of Share- value of Number of Unexercis Shares or Based vested Securities ed in-the- Units of Awards share-based Underlying Option money Shares that that have awards not Unexercised Exercise Option(1) have not not paid out or Options Price Option Expiration vested vested(2) distributed Name (#) (A$) Date (A$) (#) (A$) (A$) Alexander - - - - 300,000 102,000 - Molyneux Gary Artmont - - - - 400,000 136,000 - Notes: (1) Unexercised "in-the-money" options refer to the options in respect of which the market value of the underlying securities as at the financial year end exceeds the exercise or base price of the option. (2) Reflects the aggregate grant date fair value of the Tempus Performance Rights.
Directors' Incentive Plan Awards – Value Vested or Earned During the Year
The following table sets forth for each person who was a director of the Company during the last completed financial year of the Company, other than directors who are also Named Executive Officers, the value of option-based awards which vested during the year ended June 30, 2020. No non-equity incentive plan compensation was earned during the year ended June 30, 2020 by the directors and the Company does not have any outstanding share based awards.
Option-Based Awards – Non-equity incentive plan Value vested during the Share-based awards – Value compensation – Value year vested during the year(1) earned during the year Name and Title (A$) (A$) (A$) Alexander Molyneux - 28,000 -
Gary Artmont - 16,000 -
Note: (1) Reflects the aggregate grant date fair value of the Tempus Performance Rights.
Indemnity and Insurance
The Company has indemnified the directors and Named Executive Officers for costs incurred, in their capacity as a director or Named Executive Officers, for which they may be held personally liable, except where there is a lack of good faith. During the financial year ended June 30, 2020, the Company paid a premium in respect of a contract to insure the Company's directors and Named Executive Officers against a liability to the extent permitted by the Australia Corporations Act. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Page 44 of 69 Item 18 Indebtedness of Directors and Executive Officers
None of the directors, officers, employees, former directors, former officers or former employees of the Company or any of its subsidiaries, and none of their respective associates, is or has within 30 days before the date of this Listing Application or at any time since the beginning of the most recently completed financial year been indebted to the Company or any of its subsidiaries, or another entity whose indebtedness is the subject of a guarantee, support agreement, letter of credit or other similar agreement or understanding provided by the Company or any of its subsidiaries.
Item 19 Audit Committees and Corporate Governance
Audit Committee
The Audit and Risk Committee (the "Audit Committee") is a committee of the Board which assists the Board in monitoring and reviewing any matters of significance affecting financial reporting and compliance. The Audit Committee is also responsible for managing the relationship between the Company and the external auditor.
Pursuant to NI 52-110, the Company is required to disclose certain information with respect to its Audit Committee, as summarized below.
Audit Committee Charter
The Company must, pursuant to NI 52-110, have a written charter which sets out the duties and responsibilities of its Audit Committee. The Audit Committee charter is attached hereto as Appendix "F".
Audit Committee Composition
The following are the members of the Audit Committee as at the date hereof:
Gary Artmont Independent(2) Financially literate(2) Tom Peregoodoff Independent(2) Financially literate(2) Anthony Cina Independent(2) Financially literate(2) Notes: (1) Anthony Cina is Chairman. (2) As defined by NI 52-110.
Relevant Education and Experience
See the summaries of experience and education under Item 16 – Directors and Executive Officers for each of the members of the Audit Committee.
Reliance on Certain Exemptions
At no time since the commencement of the Company's most recently completed financial year has the Company relied on: (a) the exemption in section 2.4 of NI 52-110 (De Minimis Non-audit Services); (b) the exemption in section 3.2 of NI 52-110 (Initial Public Offerings); (c) the exemption in section 3.4 of NI 52- 110 (Events Outside Control of Members); (d) the exemption in section 3.5 of NI 52-110 (Death, Disability or Resignation of Audit Committee Members); or (e) an exemption from NI 52-110, in whole or in part, granted under Part 8 of NI 52-110.
Page 45 of 69 Reliance on the Exemption in Subsection 3.3(2) or Section 3.6
At no time since the commencement of the Company's most recently completed financial year has the Company relied on the exemption in subsection 3.3(2) of NI 52-110 (Controlled Companies), or the exemption in section 3.6 of NI 52-110 (Temporary Exemption for Limited and Exceptional Circumstances).
Reliance on Section 3.8
At no time since the commencement of the Company's most recently completed financial year has the Company relied section 3.8 of NI 52-110 (Acquisition of Financial Literacy).
Audit Committee Oversight
The Audit Committee was appointed on 1 Novemer, 2020. At no time since the commencement of the Company's most recently completed financial year was a recommendation of the Audit Committee to nominate or compensate an external auditor not adopted by the Board.
Pre-Approval Policies and Procedures
The Audit Committee had adopted specific policies and procedures for the engagement of non-audit services as described in the Audit Committee charter is attached hereto as Appendix "F".
External Auditor Service Fees
The aggregate fees billed by the Company's external auditors in each of the last two (2) Fiscal Years for audit and other fees are as follows:
Financial Year Ending June 30 Audit Fees (1) Audit Related Fees(2) Tax Fees(3) All Other Fees(4) 2020 A$46,000 - A$19,600 -
2019 A$25,000 - - - Notes: (1) Audit fees include fees necessary to perform the annual audit and half year reviews of the Company's consolidated financial statements. Audit fees include fees for review of tax provisions and for accounting consultations on matters reflected in the financial statements. Audit fees also include audit or other attest services required by legislation or regulation, such as comfort letters, consents, reviews of securities filings and statutory audits. (2) Audit-related fees include services that are traditionally performed by the auditor. These audit-related services include employee benefit audits, due diligence assistance, accounting consultations on proposed transactions, internal control reviews and audit or attest services not required by legislation or regulation. (3) Tax fees include fees for all tax services other than those included in audit fees and audit-related fees. This category includes fees for tax compliance, tax planning and tax advice. (4) All other fees include fees for products and services provided by the Auditor, other than the services reported above.
Corporate Governance
Corporate governance refers to the way the business and affairs of a reporting issuer are managed and relates to the activities of the Board, the members of whom are elected by and are accountable to the shareholders. Corporate governance takes into account the role of the individual members of management who are appointed by the Board and who are charged with the day to day management of the Company. The Board is committed to sound corporate governance practices that are both in the interest of its shareholders and contribute to effective and efficient decision-making.
Page 46 of 69 The TSXV mandates disclosure of corporate governance practices in this Listing Application in accordance NI 58-101 and Form 58-101F1 – Corporate Governance Disclosure ("Form 58-101F1"). Set out below is a description of the Company's current corporate governance practices, relative to the Form 58-101F1 requirements.
1. Board of Directors
(a) Disclose the identity of directors who are independent.
The Board has determined that the following three (3) directors of the Company are independent: Gary Artmont, Tom Peregoodoff and Anthony Cina.
(b) Disclose the identity of directors who are not independent, and describe the basis for that determination.
The Board has determined that Brendan Borg is not considered to be independent as he is the Managing Director and CEO of the Company, Melanie Ross is not considered to be independent as she is the Corporate Secretary and CFO of the Company, and Alexander Molyneux is not considered to be independent as he acted as Executive Chairman of the Company within the last three years.
(c) Disclose whether or not a majority of directors are independent. If a majority of directors are not independent, describe what the board of directors (the board) does to facilitate its exercise of independent judgement in carrying out its responsibilities.
Three of the six directors are independent.
(d) If a director is presently a director of any other issuer that is a reporting issuer (or the equivalent) in a jurisdiction or a foreign jurisdiction, identify both the director and the other issuer.
Name Other Reporting Issuers Alexander Molyneux Argosy Minerals Limited (ASX) Galena Mining Ltd. (ASX) Comet Resources Ltd (ASX) Brendan Borg Celsius Resources Ltd. (ASX) Firefinch Lithium Limited (ASX) Melanie Ross Celsius Resources Ltd (ASX) Great Boulder Resources Ltd (ASX) Ragusa Minerals Ltd (ASX) Gary Artmont - Tom Peregoodoff Mountain Province Diamonds Inc. (TSX) Anthony Cina Itafos (TSXV)
(e) Disclose whether or not the independent directors hold regularly scheduled meetings at which non-independent directors and members of management are not in attendance. If the independent directors hold such meetings, disclose the number of meetings held since the beginning of the issuer's most recently completed financial year. If the independent directors do not hold such meetings, describe what the board does to facilitate open and candid discussion among its independent directors.
Upon Listing on the TSXV, at the end of or during each meeting of the Board, the members of management of the Company and the non-independent directors of the Company who are present at such meeting will leave the meeting in order for the independent directors to meet. In addition, other meetings of the independent directors may be held from time to time if required.
Page 47 of 69 (f) Disclose whether or not the chair of the board is an independent director. If the board has a chair or lead director who is an independent director, disclose the identity of the independent chair or lead director, and describe his or her role and responsibilities. If the board has neither a chair that is independent nor a lead director that is independent, describe what the board does to provide leadership for its independent directors.
Alexander Molyneux is the current Non-Executive Chairman of the Board. The Chairman presides at all meetings of the Board and, unless otherwise determined and at all meetings of shareholders. Among other things, the Chairman is to endeavor to fulfill his Board responsibilities in a manner that will ensure that the Board is able to function independently of management and is to consider, and allow for, when appropriate, a meeting of independent directors, so that Board meetings can take place without management being present. The Chairman is also to endeavor to ensure that reasonable procedures are in place to allow directors to engage outside advisors at the expense of the Company in appropriate circumstances.
(g) Disclose the attendance record of each director for all board meetings held since the beginning of the issuer's most recently completed financial year.
The attendance record of each of the directors of the Company for meetings and committee meetings held from July 1, 2019 until June 30, 2020 was as follows:
Audit Committee Board Meetings Meetings Name Attended / Held Attended / Held(2) Alexander Molyneux 3/3 Nil Brendan Borg 3/3 Nil Melanie Ross 3/3 Nil (1) Gary Artmont 2/2 Nil
Notes: (1) Gary Artmont was appointed to the Board effective 14 October 2019. (2) The Audit Committee was constituted on 1 November, 2020.
2. Board Mandate – Disclose the text of the board's written mandate. If the board does not have a written mandate, describe how the board delineates its role and responsibilities.
The mandate of the Board is attached hereto as Appendix "G".
3. Position Descriptions
(a) Disclose whether or not the board has developed written position descriptions for the chair and the chair of each board committee. If the board has not developed written position descriptions for the chair and/or the chair of each board committee, briefly describe how the board delineates the role and responsibilities of each such position.
The Chairman's role and responsibilities are governed under the Charter of the Board.
The Company has no written description for its Audit Committee chair position; however, the Company has a mandate for the Audit Committee and the roles and responsibilities of the committee chair position are implied therein.
Page 48 of 69 (b) Disclose whether or not the board and CEO have developed a written position description for the CEO. If the board and CEO have not developed such a position description, briefly describe how the board delineates the role and responsibilities of the CEO.
The Company has not prepared a formal written position description for the CEO's role. However, the current agreement with the CEO identifies that his duties are to be consistent with that expected of a CEO of an ASX listed company and as assigned or vested to him by the Board.
4. Orientation and Continuing Education
(a) Briefly describe what measures the board takes to orient new directors regarding (i) the role of the board, its committees and its directors, and (ii) the nature and operation of the issuer's business.
The Company Secretary currently completes the induction of new directors. No formal education program currently exists for the orientation of new directors and existing directors. While the Company does not currently have a formal orientation and education program for new recruits to the Board, the Company has historically provided such orientation and education on an informal basis. As new directors have joined the Board, management has provided these individuals with corporate policies, historical information about the Company, as well as information on the Company's performance and its strategic plan with an outline of the general duties and responsibilities entailed in carrying out their duties.
The Board believes that these procedures have proved to be a practical and effective approach in light of the Company's particular circumstances, including the size of the Company and the experience and expertise of the members of the Board.
(b) Briefly describe what measures, if any, the board takes to provide continuing education for its directors. If the board does not provide continuing education, describe how the board ensures that its directors maintain the skill and knowledge necessary to meet their obligations as directors.
Directors are given access, and encouraged, to participate in continuing education opportunities to update and enhance their skills and knowledge.
5. Ethical Business Conduct
(a) Disclose whether or not the board has adopted a written code for the directors, officers and employees. If the board has adopted a written code.
The Company has adopted a Corporate Code of Conduct for directors, officers and employees (the "Code").
(i) Disclose how a person or company may obtain a copy of the code.
Each director, officer and employee of the Company has been provided with a copy of the Code and a copy of the Code may be obtained from Melanie Ross, the Company Secretary, at +61 8 6188 8181.
(ii) Describe how the board monitors compliance with its code, or if the board does not monitor compliance, explain whether and how the board satisfies itself regarding compliance with its code.
Page 49 of 69 The Board monitors compliance with the Code by requiring that each of the employees and consultants of the Company affirm on an annual basis his or her agreement to abide by the Code, his or her ethical conduct during the year and disclosure with respect to any conflicts of interest. In addition, management is required to provide reports on compliance with the Code to the Board on a regular basis.
(iii) Provide a cross-reference to any material change report filed since the beginning of the issuer's most recently completed financial year that pertains to any conduct of a director or executive officer that constitutes a departure from the code.
There have been no material change reports filed since the beginning of the Company's most recently completed financial year that pertains to any conduct of a director or executive officer that constitutes a departure from the Code.
(b) Describe any steps the board takes to ensure directors exercise independent judgement in considering transactions and agreements in respect of which a director or executive officer has a material interest.
Directors who are a party to, or are a director or an officer of a person which is a party to, a material contract or material transaction or a proposed material contract or proposed material transaction are required to disclose the nature and extent of their interest and not to vote on any resolution to approve the contract or transaction. In addition, in certain cases, an independent committee of the Board may be formed to deliberate on such matters in the absence of the interested party.
(c) Describe any other steps the board takes to encourage and promote a culture of ethical business conduct.
The Board in its dealings with the CEO, CFO and other consultants working for the Company encourages openness and transparency to foster a work environment that meets the standards set down in the Code of Conduct.
6. Nomination of Directors
(a) Describe the process by which the board identifies new candidates for board nomination.
The Board has not appointed a nominating committee. The Board determines new nominees to the Board although no formal process has been adopted. The nominees are generally the result of recruitment efforts by the Board members including both formal and informal discussions among the Board members and officers. It is anticipated that new candidates will be identified having regard to: (i) the competence and skills that the Board considers to be necessary for the Board, as a whole, to possess; (ii) the competence and skills that the Board considers each existing director to possess; (iii) the competencies and skills that each new nominee will bring to the boardroom; and (iv) whether or not each new nominee can devote sufficient time and resources to his or her duties as a member of the Board.
(b) Disclose whether or not the board has a nominating committee composed entirely of independent directors. If the board does not have a nominating committee composed entirely of independent directors, describe what steps the board takes to encourage an objective nomination process.
The Board has not appointed a nominating committee. The Board as a whole is responsible for selecting nominees for election to the Board. The Board intends to periodically review the objectivity of the nomination process.
Page 50 of 69 (c) If the board has a nominating committee, describe the responsibilities, powers and operation of the nominating committee.
Not applicable as per above.
7. Compensation
(a) Describe the process by which the board determines the compensation for the issuer's directors and officers.
See Item 17 – Executive Compensation.
(b) Disclose whether or not the board has a compensation committee composed entirely of independent directors. If the board does not have a compensation committee composed entirely of independent directors, describe what steps the board takes to ensure an objective process for determining such compensation.
The Board has not appointed a compensation committee; rather, management of the Company is responsible for making recommendations to the Board with respect to compensation for the directors and the CEO. The Board has the ability to adjust and approve such compensation.
Market comparisons, as well as evaluation of similar positions in different industries in the same geography, along with individuals experience and the diversity such individual brings to the Company, are the criteria used in determining compensation.
(c) If the board has a compensation committee, describe the responsibilities, powers and operation of the compensation committee.
Not applicable as per above.
8. Other Board Committees – If the Board has standing committees other than the audit, compensation and nominating committees, identify the committees and describe their function.
The Board does not currently have any committees other than the Audit Committee.
9. Assessments – Disclose whether or not the board, its committees and individual directors are regularly assessed with respect to their effectiveness and contribution. If assessments are regularly conducted, describe the process used for the assessments. If assessments are not regularly conducted, describe how the board satisfies itself that the board, its committees, and its individual directors are performing effectively.
As a result of the Company's size, its stage of development and the limited number of individuals on the Board, the Board considers a formal assessment process to be inappropriate at this time.
The criteria involved in evaluating the Board's performance are outlined in the Board's charter. The effectiveness of the Board is determined by how well it performs as measured against certain responsibilities and roles which include: reviewing outcomes of corporate decisions and strategies to ensure valuable lessons are identified and absorbed for future decisions; challenging and contributing to the development of corporate strategy; regular attendance at Board meetings; monitoring and maintaining the Company's compliance with governance policies such as continuous disclosure, securities trading and the code of conduct; reviewing and ratifying the systems of internal compliance and control to determine the integrity and effectiveness of the systems; approving and monitoring major capital expenditure, capital management and acquisitions and divestitures; and approving and monitoring the financial budget. It is expected that all directors attend Board meetings and make
Page 51 of 69 meaningful, constructive contributions to protect the interests of all shareholders and grow the value of the Company.
10. Director Term Limits and Other Mechanisms of Board Renewal.
The Board does not believe that fixed term limits or mandatory retirement ages are in the best interest of the Company. Therefore, it has not specifically adopted term limits or other mechanisms for Board renewal.
However, when considering nominees for the Board, the Board reviews the skills and experience of the current directors with the objective of recommending a group of directors that can best perpetuate the Company's success and represent shareholder interests through the exercise of sound judgment and the application of its diversity of experience. The Board also considers both the term of service and age of individual directors, the average term of the Board as a whole and turnover of directors over the prior years when proposing nominees for election of the directors of the Company.
11. Policies Regarding the Representation of Women on the Board.
The Company has implemented a Diversity Policy, containing objectives relating to achieving a diverse and skilled workforce. The Diversity Policy outlines the Board's commitment to workplace diversity and support of representation of women at the senior level of the Company and on the Board, where appropriate.
The Board is responsible for developing measurable objectives and strategies to meet the objectives of the Diversity Policy ("Measurable Objectives") and monitoring the progress of the Measurable Objectives through the monitoring, evaluation and reporting mechanisms listed below. The Board shall annually assess any Measurable Objectives (if any), and the Company's progress towards achieving them. The Board may also set Measurable Objectives for achieving gender diversity and monitor their achievement.
12. Consideration of the Representation of Women in the Director Identification and Selection Process.
Pursuant to the Diversity Policy, diversity (including the representation of women on the Board and the executive officer positions) is a factor considered in determining the optimum composition of the Board. In accordance with the Diversity Policy, the Board will consider conducting all Board appointment processes in a manner that promotes gender diversity, including establishing a structured approach for identifying a pool of candidates, using external experts where necessary.
13. Consideration Given to the Representation of Women in Executive Officer Appointments.
The Board encourages the consideration of women who have the necessary skills, knowledge, experience and character when considering new potential candidates for executive officer positions.
14. Issuer's Targets Regarding the Representation of Women on the Board and in Executive Officer Positions.
The Company has not imposed quotas or targets regarding the representation of women on the Board and in executive officer positions. However, the Board does understand and appreciate the importance of gender equality and diversification and is committed to strengthening diversity when recruiting for a Board appointment or executive officer position.
15. Number of Women on the Board and in Executive Officer Positions.
One of the directors of of the Company is a woman, representing 17% of the Board, and one of the executive officers is a woman, representing 33%.
Page 52 of 69 Item 20 Agent, Sponsor or Advisor
Tempus has applied for and received a waiver from the sponsorship requirement in connection with its application for listing of the Tempus Shares on the TSXV.
Item 21 Risk Factors
Any investment in Tempus' securities is subject to a number of risks. Any prospective investor should carefully consider the following risk factors and all of the other information contained in this Listing Application before purchasing any of Tempus' securities. If any event arising from these risks occurs, the Company's assets, liabilities, business, prospects, financial condition, results of operations and/or cash flows could be adversely affected. Additional risks and uncertainties not currently known to the Company, or that are currently considered immaterial, may also materially and adversely affect the Company's business operations.
Risk Inherent in the Mining and Metals Business
Mining exploration and operations generally involve a high degree of risk. The exploration for and development of mineral deposits involves significant risks which even a combination of careful evaluation, experience and knowledge many not eliminate. Development of Tempus' mineral properties will only follow upon obtaining satisfactory exploration results. Few properties that are explored are ultimately developed into producing mines. Mineral properties are often non-productive for reasons that cannot be anticipated in advance. The economics of developing mineral properties is affected by many factors including the cost of operations; variations in the grade of ore mined; fluctuations in metal markets; costs of processing equipment; availability of labour; any delays inherent in obtaining government and or community approvals, or in the completion of development or construction activities; and such other factors as government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, allowable production, importing and exporting of minerals and environmental protection. Most exploration projects do not result in the discovery of commercially mineable deposits of ore. Title claims can impact the exploration, development, operation and sale of any natural resource project. Any such eventuality could have a material adverse effect on Tempus. There can be no assurance that Tempus' mineral exploration and development activities will result in any discoveries of commercially viable bodies or ore.
Commodity Prices
The price of the Tempus Shares and Tempus' financial results, exploration and development activities have been, or may in the future be, adversely affected by declines in metal prices. Metal prices fluctuate widely and are affected by numerous factors beyond Tempus' control. Tempus' value and future revenue, if any, are in large part derived from such commodity prices or the mining and sale of metal ores or interests related therein. The effect of these factors on the price of precious and base metals, and therefore the economic viability of any of Tempus' exploration projects, cannot be accurately predicted.
Dependence on Principal Projects
The operations of the Company are currently dependent upon the Blackdome-Elizabeth Gold Project and the Zamora Projects. These projects may not become commercially viable, which would have a material adverse effect on the Company’s potential mineral resource production, profitability, financial performance and results of operation.
Financing Risks
Tempus has no history of earnings and no source of operating cash flow and, due to the nature of its business; there can be no assurance that Tempus will be profitable. Tempus has paid no dividends on its shares since incorporation and does not anticipate doing so in the foreseeable future. The only present
Page 53 of 69 source of funds available to Tempus is through the sale of its equity shares. Even if the results of exploration are encouraging, Tempus may not have sufficient funds to conduct the further exploration that may be necessary to determine whether or not a commercially mineable deposit exists. While Tempus may generate additional working capital through further equity offerings or through the sale or possible syndication of its properties, there is no assurance that any such funds will be available. If available, future equity financings may result in substantial dilution to purchasers.
Share Price Fluctuations
In recent years, the securities markets have experienced a high level of price and volume volatility, and the market price of securities of many companies, particularly those considered exploration-stage, have experienced wide fluctuations in price which have not necessarily been related to the underlying asset values or prospects of such companies. Price fluctuations likely will continue to occur in the future.
Operating Hazards and Other Uncertainties
The Company’s business operations are subject to risks and hazards inherent in the mining industry. The exploration for and the development of mineral deposits involves significant risks, including: environmental hazards; discharge of pollutants or hazardous chemicals; industrial accidents; labour disputes and shortages; supply and shipping problems and delays; shortage of equipment and contractor availability; unusual or unexpected geological or operating conditions; fire; changes in the regulatory environment; and natural phenomena such as inclement weather conditions, floods and earthquakes. These or other occurrences could result in damage to, or destruction of, mineral properties, personal injury or death, environmental damage, delays in mining, monetary losses and possible legal liability. The Company could also incur liabilities as a result of pollution and other casualties all of which could be very costly and could have a material adverse effect on the Company’s financial position and results of operations.
Litigation
The Company may be subject to litigation arising in the normal course of business and may be involved in legal disputes or matters with other parties, including governments and their agencies, regulators and members of the Company’s own workforce, which may result in litigation. The causes of potential litigation cannot be known and may arise from, among other things, business activities, employment matters, including compensation issues, environmental, health and safety laws and regulations, tax matters, volatility in the Company’s stock price, failure to comply with disclosure obligations or labour disruptions at its mine sites. Regulatory and government agencies may initiate investigations relating to the enforcement of applicable laws or regulations and the Company may incur expenses in defending them and be subject to fines or penalties in case of any violation, and could face damage to its reputation in the case of recurring workplace incidents resulting in an injury or fatality for which the Company is found responsible. The results and costs of litigation and investigations cannot be predicted with certainty. If the Company is unable to resolve disputes or matters that arise favourably, this may have a material adverse impact on the Company’s financial performance, cash flows and results of operations.
Taxes and Tax Audits
The Company is partly financed by the issuance of flow-through shares. There is no guarantee that the funds spent by the Company will qualify as Canadian exploration expenses, even if the Company has committed to take all the necessary measures for this purpose. Refusals of certain expenses by tax authorities could have negative tax consequences for investors or the Company. In such an event, the Company will indemnify each flow-through share subscriber for the additional taxes payable by such subscriber as a result of the Company’s failure to renounce the qualifying expenditures as agreed.
The Company is subject to routine tax audits by various tax authorities. Tax audits may result in additional tax, interest and penalties, which would negatively affect the Company’s financial condition and operating
Page 54 of 69 results. Changes in tax rules and regulations or in the interpretation of tax rules and regulations by the courts or the tax authorities may also have a substantial negative impact on the Company’s business.
Conflicts of Interest
Some of the directors and officers of the Company are engaged as directors or officers of other corporations involved in the exploration and development of mineral resources. Such engagement could result in conflicts of interest. Any decision taken by these directors and officers and involving the Company will be in conformity with their duties and obligations to act fairly and in good faith with the Company and these other corporations. Moreover, these directors and officers will declare their interests and abstain from voting on any issue which could give rise to a conflict of interest.
Shareholder Activism
There has been increased shareholder activism in the mining industry. Should an activist shareholder engage with the Company, it could cause disruption to its strategy, operations and leadership organization, resulting in a material unfavourable impact on the financial performance and longer-term value creation strategy of the Company.
Foreign Operation Risk
Tempus has mineral interests in Australia, Canada and Ecuador. Any changes in regulation or shift in the political attitudes in these countries are beyond Tempus' control and may adversely affect its business and perception of same within the market environment and could have an adverse impact on Tempus' valuation or the price of Tempus Shares.
Currency Exchange Rate Fluctuations
Currency exchange rates may impact the cost of exploring Tempus' projects. Tempus' financings are usually in Australian dollars and its exploration costs have been incurred primarily in Australian dollars and Canadian dollars. Fluctuations in the exchange rates between these currencies may impact Tempus' exploration activities and financial results, and there is no assurance that such fluctuations, if any, will not adversely affect Tempus' operations.
Environmental Protection and Permitting
All phases of Tempus' operations are subject to environmental protection regulation in the various jurisdictions in which it operates. Environmental protection legislation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors, and employees. There is no assurance that future changes in environmental protection regulations, if any, will not adversely affect Tempus' operations.
Decommissioning and Site Rehabilitation Costs
The costs of performing the decommissioning and reclamation must be funded by the Company’s operations. These costs can be significant and are subject to change. The Company cannot predict what level of decommissioning and reclamation may be required in the future by regulators. If the Company is required to comply with significant additional regulations or if the actual cost of future decommissioning and reclamation is significantly higher than current estimates, this could have an adverse impact on the Company’s future cash flows, earnings, results of operations and financial condition.
Page 55 of 69 Indigenous Rights
The Company may operate and explore on properties which are subject to Indigenous traditional land use. In such circumstances, the Company, under local laws and regulations, is committed to consult with the First Nations group about any impact of its potential rights or claims, and traditional land use. This may potentially cause delays in making decisions or project operations. Further, there is no assurance of favourable outcomes of these consultations. The Company may have to face potential adverse consequences such as significant expenses on account of lawsuits and loss of reputation.
Community Relations
The Company’s relationships with the communities in which it operates and other stakeholders are critical to ensure the future success of its existing operations and the construction and development of its projects. There is an increasing level of public concern relating to the perceived effect of exploration activities on the environment and on communities impacted by such activities. Publicity adverse to the Company, its operations or extractive industries generally, could have an adverse effect on the Company and may impact relationships with the communities in which Tempus operates and other stakeholders. While the Company is committed to operating in a socially responsible manner, there can be no assurance that its efforts in this respect will mitigate this potential risk. Further, damage to the Company’s reputation can be the result of the perceived or actual occurrence of any number of events, and could include any negative publicity, whether true or not. The increased usage of social media and other web- based tools used to generate, publish and discuss user-generated content and to connect with other users has made it increasingly easy for individuals and groups to communicate and share opinions and views in regards to the Company and its activities, whether true or not. While the Company strives to uphold and maintain a positive image and reputation, the Company does not ultimately have control over how it is perceived by others. Reputation loss may lead to increased challenges in developing, maintaining community relations and advancing its projects and decreased investor confidence, all of which may have a material adverse impact on the financial performance and growth of the Company.
Uninsurable Risks
In the course of exploration, development and production of mineral properties, certain risks, and in particular, unexpected or unusual geological operating conditions including rock bursts, cave-ins, fires, flooding and earthquakes may occur. It is not always possible to fully insure against such risks and Tempus may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the securities of Tempus.
Acquisition
Tempus uses its best judgment to acquire mining properties for exploration and development. In pursuit of such opportunities, Tempus may fail to select appropriate acquisition candidates or negotiate acceptable agreements, including arrangements to finance such acquisitions and development, or integrate such opportunity and their personnel with Tempus. Tempus cannot guarantee that it can complete any acquisition that it pursues or is currently pursuing, on favorable terms, or that any acquisition will ultimately benefit Tempus.
Permits and Licenses; Surface Rights and Access
The operations of Tempus may require licenses and permits from various governmental authorities as well as rights of access for the purpose of carrying on mineral exploration activities. There can be no assurance that Tempus will be able to obtain all necessary licenses, permits and rights that may be required to carry out exploration, development and mining operations at its projects. Inability to obtain such licenses, permits and rights could have an adverse impact on the Company’s future cash flows, earnings, results of operations and financial condition.
Page 56 of 69 Reliance on Key Personnel
The nature of the business of Tempus, the ability of Tempus to continue its exploration and development activities and to thereby develop a competitive edge in the marketplace depends, in a large part, on the ability of Tempus to attract and maintain qualified key management personnel. Competition for such personnel is intense, and there can be no assurance that Tempus will be able to attract and retain such personnel. The development of Tempus now and in the future, will depend on the efforts of key management figures, the loss of whom could have a material adverse effect on Tempus. Tempus does not currently maintain key-man life insurance on any of the key management employees.
Competition
The mining industry is intensely competitive in all of its phases, and Tempus competes with many companies possessing greater financial resources and technical facilities. Competition in the mining business could adversely affect Tempus' ability to acquire suitable properties or prospects for mineral exploration or development or to attract and retain suitably qualified and experienced people to develop corporate growth strategies and to efficiently execute corporate plans.
Dilution
Tempus has outstanding Tempus Options and Tempus Performance Rights as detailed in the most recent financial statements for the year ended June 30, 2020. Should these securities be exercised or vest, the holders have the right to purchase additional Tempus Shares, in accordance with these securities' terms. During the life of these securities, the holders have the opportunity to profit from a rise in the market price of the Tempus Shares, possibly resulting in the dilution of existing securities.
Land Title
Any of Tempus' properties may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by undetected defects. Tempus has no knowledge of any material defect in the title of any of the properties in which Tempus has or may acquire an interest.
Amending Constitution Regarding Staggered Election of Directors
As a condition to Listing on the TSXV, Tempus and its directors have agreed to hold a shareholder meeting in order to amend Tempus' constitution so as to require the re-election of each director annually, rather than staggered re-election of directors as the constitution currently provides. In the event the shareholders of the Company do not approve the amendment of the provisions that provide for staggered re-election of directors, the Tempus Shares may be delisted from the TSXV (at the sole discretion of the TSXV).
Item 22 Promoters
There is no person or company that has been, within the two most recently completed financial years or during the current financial year, a promoter of Tempus or any Subsidiary of Tempus, as such term is defined in the Securities Act (British Columbia).
Item 23 Legal Proceedings and Regulatory Actions
Regulatory Actions
There have been (i) no penalties or sanctions imposed against Tempus by a court relating to securities legislation or by a securities regulatory authority; (ii) no other penalties or sanctions imposed by a court or
Page 57 of 69 regulatory body against Tempus; and (iii) no settlement agreements Tempus entered into with a court relating to securities legislation or with a securities regulatory authority.
Legal Proceedings
There are no material legal proceedings to which Tempus is a party or in respect of which any of the assets of Tempus are subject, which is or will be material to Tempus and Tempus is not aware of any such proceedings that are contemplated.
Item 24 Interests of Management and Others in Material Transactions
Except as disclosed in this Listing Application, none of the directors or executive officers of Tempus or any person or company that is the direct or indirect owner of, or who exercises control or direction of, more than 10% of any class or series of Tempus' outstanding voting securities, or any associate or affiliate of any of the foregoing persons or companies, has or has had any material interest, direct or indirect, in any past transaction or any proposed transaction that has materially affected or will materially affect Tempus.
Item 25 Investor Relations Arrangements
Tempus has not engaged any party to provide promotional or investor relations services to the Company.
Item 26 Auditors, Transfer Agents and Registrars
Auditors
The auditors of Tempus are RSM Australia Partners at their offices located at Level 32 Exchange Tower, 2 The Esplanade, Perth, WA 6000, Australia.
Transfer Agent and Registrar
Automic Registry Services at its offices at Level 2, 267 St Georges Terrace, Perth, WA 6000, Australia, will be the Australian registrar and transfer agent for the Tempus Shares.
TSX Trust Company at its offices at 650 West Georgia Street, Suite 2700, Vancouver, BC, Canada V6B 4N9, will be the Canadian registrar and transfer agent for the Tempus Shares.
Item 27 Material Contracts
Except for contracts entered into in the ordinary course of business, the only contracts that materially affect Tempus or to which it will become a party on or prior to the Effective Date, that can reasonably be regarded as material to a proposed investor in the Tempus Shares, other than contracts entered into in the ordinary course of business, are as set out below.
Tempus entered into an Option Agreement dated 15 December 2019 with Thomas James Illidge and David Davis White (the "Option Agreement"). Pursuant to the Option Agreement, Thomas James Illidge and David Davis White (together, the "Optionors") granted an exclusive option (the "Option") to Tempus to acquire a 100% interest in and to the Elizabeth mineral claim and crown grants (the "Property"), subject to a royalty, by performing work upon the Property, making cash payments to the Optionors and completing share issuances to the Optionors. Pursuant to the terms of the Option Agreement, Tempus has issued 1,000,000 Tempus Shares to the Optionors and paid A$15,000.
The Option Agreement will terminate if Tempus fails to do any of the following (collectively, the "Conditions Precedent"): (i) by no later than 31 December 2020: (A) make minimum expenditures of
Page 58 of 69 $1,000,000 on the Elizabeth Gold Project (the "Work Program"), which Work Program will be prepared in consultation with Thomas Illidge; and (B) complete a buy-out of one percentage point of the Elizabeth Net Smelter Return Royalty as defined in Section 10.1 of the Option Agreement by paying: (I) $500,000 in cash as directed by the Optionors; and (II) $500,000 in cash or Tempus Shares at Tempus' option, as directed by the Optionors (the price of Tempus Shares will be based on the 20-day volume weighted average price up to and including the date prior to issuance); (ii) in the event that there is a change to the capital structure of Tempus, such proportionate adjustments must be made by Tempus with respect to the number of Tempus Shares to be issued to the Optionors; and (iii) Tempus shall retain Thomas Illidge as an advisor to Tempus for the purposes of the advancing of the work program for a minimum term of twelve (12) months, which may be extended for a further twelve (12) months on mutual agreement, at a contractor rate of $5,000 per month plus expenses that have been agreed to in writing, prior to expenditure, between Thomas Illidge and Tempus.
Tempus may, at any time after satisfaction of the Conditions Precedent, exercise the Option by delivering a notice to the Optionors. If and when the Option is exercised, a 100% right, title and interest in the Elizabeth Gold Project will vest in Tempus.
Either party may terminate the Option Agreement as follows: (i) Tempus may at any time terminate the Option Agreement by giving no less than 30 days’ written notice to the Optionors; (ii) the Optionors may terminate the Option Agreement by giving Tempus written notice if at any time during the option period; and (iii) Tempus fails to perform one of its obligations under the Option Agreement or commits a breach of the Option Agreement. The Option Agreement otherwise contains terms, conditions and restrictions which are customary for an agreement of its nature including confidentiality provisions.
A copy of the Option Agreement has been filed and is available for inspection on SEDAR.
Item 28 Experts
There is no person or corporation who is named as having prepared or certified a report, valuation, statement or opinion in this Listing Application and whose profession or business gives authority to the report, valuation, statement or opinion made by the person or corporation, other than Kirkham Geosystems Ltd., the Company's independent engineering evaluators and RSM Australia Partners, the Company's auditors.
As at the date of hereof, the principal engineering evaluators of Kirkham Geosystems Ltd., as a group, beneficially own, directly or indirectly, less than 1% of the outstanding Tempus Shares. As at the date hereof, the directors and staff of RSM Australia Partners, the external auditors of the Tempus, did not beneficially own any of the outstanding Tempus Shares and have complied with the independence requirements of the Australia Corporations Act and Accounting Professional and Ethical Standards Board Statement APES 110 Code of Ethics for Professional Accountants.
Legal Counsel
Certain legal matters relating to the Listing are to be passed upon by DLA Piper (Canada) LLP, on behalf of Tempus. As at the date of this Listing Application, the partners and associates of DLA Piper (Canada) LLP will hold less than one percent of the Tempus Shares on the Effective Date. To the knowledge of Tempus, none of the aforementioned firms or persons in this Experts section, nor any director, officers or employees of such firms, is currently expected to be elected, appointed or employed as a director, officer or employee of Tempus or any of Tempus' associates or affiliates.
Item 29 Other Material Facts
There are no other material facts in respect of the securities to be listed that are not disclosed in this Listing Application, or the documents incorporated herein by reference.
Page 59 of 69 Item 30 Additional Information – Mining or Oil and Gas Applicants
There is no additional information to be included under this Item.
Item 31 Exemptions
Other than as set forth below, no exemption from a securities regulator or securities regulatory authority has been received by Tempus within the 12 months preceding the date of this Listing Application. Tempus received an exemption from the TSXV related to the implications of Policy 5.4 Escrow, Vendor Considerations and Resale Restrictions.
Item 32 Financial Statement Disclosure for Issuers
The Company's audited consolidated financial statements as at and for the financial years ended June 30, 2020 and 2019, and the unaudited interim consolidated financial statements as at and for the three months ended September 30, 2020 and 2019, are included as Appendix "C" hereto.
Item 33 Significant Acquisitions
Tempus has made no significant acquisitions since June 30, 2020, the date of Tempus' most recently completed financial year.
Page 60 of 69 Item 34 Certificates
Certificate of Applicant
Each of the undersigned hereby certifies that the foregoing constitutes full, true and plain disclosure of all information required to be disclosed under each item of this Application and of any material fact not otherwise required to be disclosed under an item of this Application.
Dated: December 3, 2020
TEMPUS RESOURCES LTD
signed “Brendan Borg” signed “Melanie Ross” Brendan Borg Melanie Ross CEO CFO
ON BEHALF OF THE BOARD OF DIRECTORS
signed “Alexander Molyneux” signed “Gary Artmont” Alexander Molyneux Gary Artmont Director Director
signed “Tom Peregoodoff” signed “Anthony Cina” Tom Peregoodoff Anthony Cina Director Director
Page 61 of 69 Acknowledgement – Personal Information
"Personal Information" means any information about an identifiable individual.
The Applicant hereby represents and warrants that it has obtained all consents required under applicable law for the collection, use and disclosure by the TSXV of the Personal Information contained in or submitted pursuant to this Application for the purposes described in Appendix "A" to this Application.
Dated: December 3, 2020
TEMPUS RESOURCES LTD
signed “Brendan Borg” Brendan Borg CEO
Page 62 of 69 APPENDIX "A"
FORM 2B PERSONAL INFORMATION COLLECTION POLICY
Collection, Use and Disclosure
TSX Venture Exchange Inc. and its affiliates, authorized agents, subsidiaries and divisions, including TSX Venture Exchange and Toronto Stock Exchange, (collectively referred to as the "Exchange") collect the information contained in or submitted pursuant to Form 2B (which may include personal, confidential, non-public or other information) and use it for the following purposes:
to conduct background checks, to verify the Personal Information that has been provided about each individual, to consider the suitability of the individual to act as an officer, director, insider, promoter, investor relations provider or, as applicable, an employee or consultant, of the Applicant, to consider the eligibility of the Applicant to list on the Exchange, to provide disclosure to market participants as to the security holdings of directors, officers, other insiders and promoters of the Applicant, or its associates or affiliates, including information as to such individuals' involvement with any other reporting issuers to detect and prevent fraud, and to perform other investigations as required by and to ensure compliance with all applicable rules, policies, rulings and regulations of the Exchange, securities legislation and other legal and regulatory requirements governing the conduct and protection of the capital markets in Canada.
Personal Information the Exchange collects may also be disclosed:
(a) to securities regulators and regulatory authorities in Canada or elsewhere, investigative, law enforcement or self-regulatory organizations, and each of their subsidiaries, affiliates, regulators and authorized agents, for the purposes described above, and these agencies and organizations may use the information in their own investigations;
(b) on the Exchange's website or through printed materials published by or pursuant to the directions of the Exchange for the purposes described above; and
(c) as otherwise permitted or required by law.
The Exchange may from time to time use third parties to process information or provide other administrative services. In this regard, the Exchange may share the information with such third party service providers for the purposes described above.
Questions
If you have any questions or enquiries regarding the policy outlined above or about our privacy practices, please send a written request to: Chief Privacy Officer, TMX Group, The Exchange Tower, 130 King Street West, Toronto, Ontario, M5X 1J2.
Page 63 of 69 APPENDIX "B" MANAGEMENT'S DISCUSSION AND ANALYSIS ADDENDUM
Attached.
Page 64 of 69 FINAL
TEMPUS RESOURCES LTD MANAGEMENT'S DISCUSSION & ANALYSIS For the three months ended September 30, 2020 (Expressed in Australian dollars)
Dated: December 3, 2020
INTRODUCTION
For the three months ended September 30, 2020. For purposes of this discussion, "Tempus" "we," or the "Company" refers to Tempus Resources Ltd and its subsidiaries: Montejinni Resources Pty Ltd, Sona Resources Corp, No. 75 Corporate Ventures Ltd., Condor Gold S.A. and Miningsources S.A.
This management's discussion and analysis of financial condition and results of operations ("MD&A") is provided as of December 3, 2020, and should be read together with the Company's Unaudited Condensed Consolidated Interim Financial Statements and the accompanying notes for the three months ended September 30, 2020, and the audited Consolidated Financial Statements and the accompanying notes for the years ended June 30, 2020 and 2019. The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and Interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC") and in accordance with Australian Accounting Standards (AASBs) (AASB 134 Interim Financial Reporting) adopted by the Australian Accounting Standards Board (AASB). All dollar amounts included therein and in this MD&A are expressed in Australian dollars except where noted.
Additional information relating to the Company can be found on SEDAR at www.sedar.com.
This discussion contains forward-looking statements that involve risks and uncertainties. Such information, although considered to be reasonable by the Company's management at the time of preparation, may prove to be inaccurate and actual results may differ materially from those anticipated in the statements made.
FORWARD LOOKING STATEMENTS
This MD&A contains "forward-looking information" and "forward-looking statements" (collectively, "forward- looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this MD&A. Any statement that involves discussion with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often, but not always using phrases such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements.
Forward-looking statements relate, but are not limited, to: focus of the Company; future operations; future exploration prospects; the completion and timing of future development studies; future growth potential of the Company's projects and future development plans; statements regarding planned exploration and development programs and expenditures, including anticipated commercial production on the Company's properties; proposed exploration plans and expected results of exploration from the Company's projects; Tempus' ability to obtain licenses, permits and regulatory approvals required to implement expected future exploration plans; changes in commodity prices and exchange rates; currency and interest rate fluctuations; and impact of Covid-19 on the timing of exploration work and development studies.
Forward-looking statements are necessarily based upon a number of factors and assumptions that, if untrue, could cause actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such statements. Forward-looking FINAL statements are based upon a number of estimates and assumptions that, while considered reasonable by the Company at this time, are inherently subject to significant business, economic and competitive uncertainties and contingencies that may cause the Company's actual financial results, performance, or achievements to be materially different from those expressed or implied herein. Some of the material factors or assumptions used to develop forward-looking statements include, without limitation, the future price of commodities, anticipated costs and the Company's ability to fund its programs, the Company's ability to carry on exploration and development activities, the timing and results of drilling programs, the discovery of additional mineral resources on the Company's mineral properties, the timely receipt of required approvals and permits, including those approvals and permits required for successful project permitting, construction and operation of projects, the costs of operating and exploration expenditures, the Company's ability to operate in a safe, efficient and effective manner, the Company's ability to obtain financing as and when required and on reasonable terms; and the impact of Covid-19.
Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors that could cause actual events or results to differ from those expressed or implied. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Certain important factors that could cause actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others: (i) access to additional capital; (ii) uncertainty and variations in the estimation of resources; (iii) health, safety and environmental risks; (iv) success of exploration, development and operations activities; (v) delays in obtaining or failure to obtain governmental permits, or non-compliance with permits; (vi) delays in getting access from surface rights owners; (vii) the fluctuating price of commodities; (viii) assessments by taxation authorities; (ix) uncertainties related to title to mineral properties; (x) the Company's ability to identify, complete and successfully integrate acquisitions; (xi) volatility in the market price of the Company's securities; (xii) start-up risks; (xiii) general operating risks; (xiv) dependence on third parties; (xv) changes in government regulation; (xvi) the effects of competition; (xvii) dependence on senior management; (xviii) impact of Canadian, Ecuadorian and Australian economic conditions; and (xix) fluctuations in currency exchange rates and interest rates.
This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements. Although the Company believes its expectations are based upon reasonable assumptions and have attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. See the section entitled "RISKS AND UNCERTAINTIES" below for additional risk factors that could cause results to differ materially from forward- looking statements.
Investors are cautioned not to put undue reliance on forward-looking statements. The forward looking- statements contained herein are made as of the date of this MD&A and, accordingly, are subject to change after such date. The Company disclaims any intent or obligation to update publicly or otherwise revise any forward-looking statements or the foregoing list of assumptions or factors, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. Investors are urged to read the Company's filings with Canadian securities regulatory agencies, which can be viewed online under the Company's profile on SEDAR at www.sedar.com, and the Company's releases lodged with the Australian Securities Exchange ("ASX"), which can be viewed online under the Company's profile at https://www.asx.com.au/.
DESCRIPTION OF BUSINESS
Tempus is an exploration company, established with the purpose of exploring and developing copper, gold and other mineral opportunities. Tempus' head and registered office address is Level 2, 22 Mount Street, Perth, WA 6000, Australia. The Company was listed on the ASX on 15 August 2018.
The Company was incorporated as an unlisted public company limited by shares on April 18, 2018 for the primary purpose of acquiring a 90% interest in Montejinni Resources Pty Ltd., which is the registered holder of the Montejinni Project in the Northern Territory of Australia and the Claypan Dam Project in South FINAL
Australia. The Company acquired the interests in the Montejinni Project and Claypan Dam Project on3 August 2018.
On 16 October 2019, the Company completed the acquisition of 100% of the shares in Condor Gold S.A. and Miningsourse S.A., which holds the interest in the Zamora Project in southern Ecuador.
On 15 November 2019, the Company completed the acquisition of 100% of the shares in Sona Resources Corp. ("Sona"), which holds the interest in the Blackdome-Elizabeth Project, in British Columbia, Canada, after successful completion of due diligence. As part of the acquisition of Sona, the Company acquired a number of additional mineral licences located on Vancouver Island, British Columbia, which are collectively known as the Mineral Creek Project.
Tempus' only material mineral property is the Blackdome-Elizabeth Project.
OVERALL PERFORMANCE
On November 26, 2020, the Company's common shares (the "Shares") were granted conditional approval to be admitted to official quotation on the TSX Venture Exchange (the "TSXV") under the symbol "TMRR". The Shares of the Company are anticipated to be admitted to official quotation on December 8, 2020.
The Company's operating segments include mineral exploration in Canada and Ecuador.
During the quarter the Company completed a $2,500,000 capital raising, and commenced drilling at its Blackdome exploration project in Canada.
Further details on the activities and results from the September 30, 2020 are outlined below.
DISCUSSION OF OPERATIONS
BLACKDOME-ELIZABETH GOLD PROJECT (BRITISH COLUMBIA, CANADA – 100%)
During the quarter, drilling commenced at Blackdome, being the first new drilling that has been undertaken on the high grade, past producing Blackdome-Elizabeth Gold Project since 2011.
Drilling at the Blackdome sector of the Project has now been completed, with a total of 26 holes (5,087 metres) completed at the Giant, Redbird, No.17, No.19, New and the No.3 veins (Figure 1/Table 1). The No.3 Vein, formerly referred to as part of the No.1/No.2 Vein, is a key part of the historical Mineral Resource at Blackdome.
In addition to samples from the new Tempus drilling being submitted to the laboratory, 43 samples from available historical drilling have been submitted to the laboratory. These samples are from both previously sampled zones, and previously unsampled zones considered prospective for gold mineralisation based on geological observations. Historically, duplicate analysis on samples from Blackdome have shown very high variability, so Tempus considers it prudent to conduct duplicate analysis on both the historical and new samples before releasing the full set of results. Final batches of samples were dispatched subsequent to the end of the quarter, with all results expected to be reported in mid-November, 2020.
Subsequent to quarter-end, the drill rig moved to the Elizabeth sector of the Project, where a planned 6,000 metres of diamond drilling has commenced.
The drilling program will focus on verification and extension (along strike and at depth) to the historical National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") Mineral Resources at Elizabeth (Figure 1) and, upon completion, will allow the Company to prepare updated JORC 2012 and NI 43-101 compliant estimates, expected to be published in March, 2021, once all data has been received and modelled. The Elizabeth sector of the Blackdome-Elizabeth Project hosts an historic NI 43-101 Inferred FINAL
Mineral Resource of 522,843 tonnes grading 12.26 g/t gold, for 206,139 ounces of contained gold. (Refer to ASX Announcement of 19 August, 2019 for further details). (Figure 2).
Results from the initial 5 drillholes at the Giant Vein target at Blackdome were reported during the quarter, with significant intersections including:
18 m @ 1.23 g/t gold and 3.09 g/t silver, from 121 m, including
8 m @ 1.99 g/t gold and 4.21 g/t silver from 131 m, including
1 m @ 5.20 g/t gold and 11 g/t silver, from 137 m (BD-20-04)
2 m @ 2.56 g/t gold and 4.73 g/t silver, from 143 m (BD-20-05)
3 m @ 1.89 g/t gold and 1.82 g/t silver, from 139 m, including
1 m @ 3.09 g/t gold and 2.37 g/t silver, from 139 m (BD-20-02)
2 m @ 1.93 g/t gold and 3.95 g/t silver, from 49 m (BD-20-02)
1 m @ 1.45 g/t gold and 4.07 g/t silver, from 134 m (BD-20-02)
1 m @ 1.88 g/t gold and 4.73 g/t silver, from 143 m (BD-20-05)
The results were in line with expectations for that target and indicate continuity of mineralisation along strike as well as a wider zone of mineralisation on both the hanging wall and footwall of the Giant Vein. The results are similar to historical drilling on the Giant Vein and adds to the extensive body of data available for the Giant Vein, one of the key unmined areas at Blackdome, where mineralisation extends to surface
The Company executed an Exploration Agreement with the Bridge River Indian Band (Xwísten) with respect to the Elizabeth portion of the Project during the quarter. The agreement pertains to Tempus’s exploration activities which may include, without limitation, the following activities within the Project: claim staking, bedrock sampling, ground surveys within control grids (cut lines) including geological mapping and geophysical/geochemical surveys, airborne geophysical surveys, limited overburden stripping and trenching, bulk sampling and drilling related exploration activities, until a positive Bankable Feasibility stage is reached.
The Company expects a steady stream of results from the Blackdome-Elizabeth Project to be reported from mid-November and from December (Elizabeth), culminating in updated JORC and NI 43-101 compliant Mineral Resources for the Project. The updated Mineral Resource estimates will form the basis of further evaluation and feasibility studies to be commenced in early 2021, with the ultimate aim of recommencing production at Blackdome in 2022. FINAL
Figure 1 – Blackdome Drilling Location Map FINAL
Figure 2 - Planned exploration at Elizabeth FINAL
Table 1: Drillhole Collar Data - Blackdome
UTM Easting UTM Northing Elevation Azimuth Hole Hole ID Target Dip (NAD83 (NAD83 Z10) (m) (grid) Depth (m) Z10)
BD-20-01 Giant Vein 535496 5687609 2070 115.1 -65 249 BD-20-02 Giant Vein 535496 5687609 2070 132 -50 195 BD-20-03 Giant Vein 535496 5687609 2070 129.2 -60 216 BD-20-04 Giant Vein 535585 5687683 2062 134.7 -50 162 BD-20-05 Giant Vein 535585 5687683 2062 120.8 -50 168 BD-20-06 No. 17 Vein 536330 5687321 2030 137 -60 171 BD-20-07 No.17 Vein 536330 5687321 2030 124.8 -60 174 Redbird BD-20-08 535876 5687264 2110 138 -55 222 Vein Redbird BD-20-09 535876 5687264 2057 125 -60 228 Vein BD-20-10 Giant Vein 535367 5687259 2090 303 -45 171 BD-20-11 Giant Vein 535367 5687259 2090 304 -57 202.5 BD-20-12 Giant Vein 535367 5687256 2090 284.5 -45 240 BD-20-13 Giant Vein 535470 5687578 2075 130.3 -62 213 Redbird BD-20-14 536033.9 5687386 2055 131 -45 183 Vein Redbird BD-20-15 536033.9 5687386 2055 155 -47 178 Vein BD-20-16 No.19 Vein 534644 5684172 2025 130 -45 309 BD-20-17 New Vein 534896 5683965 2020 125 -45 210 BD-20-18 New Vein 534896 5683965 2020 138 -44 183 BD-20-19 New Vein 534788 5683879 2040 127.6 -43 186 BD-20-20 No.19 Vein 534644 5684172 2025 126.3 -42 146 BD-20-21 No.3 Vein 535686.6 5686361 2113 201 -60 153.7 BD-20-22 No.3 Vein 535686.6 5686361 2113 204 -70 109.5 BD-20-23 No.3 Vein 535702 5686418 2145 219 -60 101.8 BD-20-24 No.3 Vein 535702 5686418 2145 183 -70 102.3 BD-20-25 No.3 Vein 535743 5686533 2178 123 -48 133.4 BD-20-26 No.3 Vein 535743 5686533 2178 153 -68.5 133.6 FINAL
MINERAL CREEK GOLD PROJECT (BRITISH COLUMBIA, CANADA – 100%)
The Company’s primary focus in British Columbia, Canada, is on the Blackdome-Elizabeth Gold Project. However, given the outcomes of the review of Mineral Creek conducted earlier this year, and the presence of significant high grade gold intercepts (Figure 3), the Company is currently actively investigating opportunities to advance the Project.
Figure 3 – Significant Intercepts – Linda, Ember and 1050 Zones FINAL
ZAMORA PROJECTS (ECUADOR – 100%)
The Company is planning to further advance it’s Rio Zarza property during 2021.
Recent work by Tempus has advanced the geological, geophysical and geochemical understanding of the Project and has generated compelling targets for drilling. A significant resistivity anomaly, in which the Fruta del Norte deposit is hosted, extends to the west and below the current extent of drilling at Rio Zarza (Figure 4). The geophysical anomaly is supported by anomalous gold and silver at the base of the deepest historical hole, near the top of the geophysical anomaly (Figure 9).
Figure 4 – Resistivity with past drilling and relationship to Fruta del Norte
Community engagement in the Valle del Tigre II concession area continued during the quarter, with active engagement with community groups progressing. Field exploration is expected to commence during the current quarter, consisting of a detailed geochemical sampling program, the results of which will be integrated with the recently completed airborne geophysical survey, to generate drill targets. FINAL
CORPORATE
The Company held approximately $3.8 million in cash reserves at the end of the quarter. During the quarter, the Company completed a $2.5 million capital raising at $0.31 per share, that was managed by Petra Capital Pty Ltd. The Placement was strongly supported by new and existing institutional and sophisticated investors.
Given the Company’s focus on projects in Canada and Ecuador, the planned listing on the TSXV in Canada is being rapidly progressed. A full listing application and an NI 43-101 Technical Report have been submitted, and Tempus is targeting listing in the current quarter. Concurrently, the Company is expecting to list on the OTC in the United States.
As part of the planned North American listings, the Company has moved to bolster its Board and Management, providing an increased Canadian presence, and to provide the necessary independent Non- Executive directors required for compliance with TSXV requirements.
During the quarter, the Company appointed Mr. Jason Bahnsen as President.
Mr. Bahnsen is a Canadian / Australian mining engineer with over 30 years of experience in natural resources finance and operations.
Jason’s career has spanned a broad range of roles in the resources industry. He began his career in mine development, working for underground mine contracting companies in Canada, Indonesia and Australia. He has held production roles at several gold mine operations in capacities as mine planning engineer, project engineer and shift boss. Following several years working with Rio Tinto in Australia where Jason was involved in mine feasibility study work and business development roles, he moved into investment banking. Jason spent approximately 10 years working as a resource banker working with firms including Deutsche Bank, Macquarie Bank, and Fox Davies Capital on major international resource acquisition and equity market transactions. Following a successful career in banking, Jason became involved in resource company development and has held CEO roles for several private and listed resource exploration and development companies.
Subsequent to the end of the quarter, and effective from November 1, 2020, the Company appointed Mr. Tom Peregoodoff and Mr. Anthony Cina as Non-Executive Directors.
Mr. Peregoodoff has over 30 years of mineral industry exploration, evaluation and development experience. As President and CEO of Peregrine Diamonds Ltd he led the development of the Chidliak diamond project until the eventual sale of Peregrine to Debeers in 2018. Prior to joining Peregrine he spent 18 years with BHP, with his last role as Vice President of Early Stage Exploration he had global responsibility for early stage exploration activities. Mr. Peregoodoff has extensive global operations and business development experience. He is a past director of Island Pacific School, and is a current director of Toronto Stock Exchange listed Mountain Province Diamonds Inc. (TSX: MPVD). Mr. Peregoodoff holds a BSc. in Geophysics from the University of Calgary and resides in Vancouver.
Mr. Cina has over 30 years of experience in accounting, finance and tax-related matters and has extensive experience in the mining industry. Mr. Cina is a corporate director and board advisor and has served for various mining and technology-related public and private companies, including currently serving as Chairman of TSXV listed Itafos, a US and Brazilian focused vertically integrated phosphate miner and fertilizer producer. Prior to these roles, Mr. Cina served in several senior executive roles with mining companies, most recently as Senior Vice President, Business Administration at Yamana Gold Inc. ("Yamana"). Prior to joining Yamana, he was Chief Financial Officer of Itafos. Mr. Cina is a Chartered Accountant and Chartered Professional Accountant and has received the ICD.D designation from the Institute of Corporate Directors. Mr. Cina holds a Bachelor of Commerce degree from the University of Toronto. FINAL
SUMMARY OF QUARTERLY RESULTS
Statement of Profit or Loss and Other Comprehensive September 30, September 30, Income 2020 quarter 2019 quarter Revenue 478 12,760 Loss for the period (295,075) (497,131) Loss attributable to members of the parent (294,697) (497,131) Loss per share (basic and diluted) (0.40) (1.36)
September 30, Statement of Financial Position June 30, 2020 2020
Total assets 11,673,951 9,570,538 Total non-current financial liabilities - - Total liabilities 3,174,300 3,317,121
September 30, September 30, Statement of Cash Flows 2020 quarter 2019 quarter
Net cash outflow from operating activities (2,122,410) (769,950) Net cash outflow from investing activities 1 - Net cash outflow from financing activities 2,395837 -
Three Months Ended September 30, 2020
During the three months ended September 30, 2020, the group incurred a net loss of $295,075 (2019: $497,131), with the following major items:
- Legal and other professional fees of $92,726 (2019: $41,087) includes legal advice on TSXV listing and other counsel and accounting and company secretarial expenses for the three month period.
- Employment costs of $62,750 (2019: $59,193) being amounts paid to the Board of Directors.
- Other expenses of $56,487 (2019: $15,488) including corporate advisory and other consulting fees and insurance expenses.
- Regulatory fees of $32,410 (2019: $21,315) including ASX listing fees and annual audit fees.
- Share based payments (non cash) expense of $29,868 (2019: $23,477) was the fair value of the performance rights and options expensed over their vesting periods.
During the quarter the Company commenced drilling activities at its Blackdome sector of the Blackdome- Elizabeth Gold Project, located in British Columbia, Canada. This exploration activity has contributed to an increase of $1,657,863 to its exploration and evaluation assets in the Statement of Financial Position.
Due to the $2,500,000 capital raising that occurred during the September quarter, this offset the decrease in cash from exploration activity spend and resulted in a net increase of $245,391. FINAL
Quarterly Cash Flow Comparison
Three month Three month Three month Three month period ended period ended period ended period ended Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 $’000 $’000 $’000 $’000
Cash and cash equivalents at 3,559 718 1,769 3,344 beginning of period Net cash from / (used in) (2,122) (758) (811) (990) operating activities Net cash from / (used in) - - - (580) investing activities Net cash from / (used in) 2,396 3,607 (2) (5) financing activities Effect of movement in (28) (8) 13 - exchange rates on cash held Cash and cash equivalents at 3,805 3,559 718 1,769 end of period
Three month Three month Three month Three month period ended period ended period ended period ended Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 $’000 $’000 $’000 $’000
Cash and cash equivalents at 4,114 4,335 4,612 4,716 beginning of period Net cash from / (used in) (770) (221) (277) (104) operating activities Net cash from / (used in) - - - - investing activities Net cash from / (used in) - - - - financing activities Effect of movement in - - - - exchange rates on cash held Cash and cash equivalents at 3,344 4,114 4,335 4,612 end of period
Where necessary prior quarterly periods have been adjusted to reflect the Company’s allocation of cash flows between operating and investing activities following updated requirements for quarterly reporting to the ASX, which was provided to that securities exchange concurrently with this report. This aligns the historical cashflows represented above with the updated requirements of the quarterly reporting provided to the ASX for the current quarter ended September 30, 2020.
The Company is anticipated to become a “reporting issuer” in Canada on December 8, 2020, when its securities are anticipated to be listed on the TSXV. Prior to listing on the TSXV, the Company was not subject to Canadian continuous disclosure requirements and the Company was entitled to comply with Canadian continuous disclosure requirements by filing the materials it was required to file in Australia. FINAL
Under applicable Australian law and the requirements of the ASX, the Company is not required to and has not historically produced financial statements for the first and third quarters of each fiscal year. Full financial statements are only produced half-yearly and annually. On a quarterly basis, certain cash flow information is publicly reported by the Company to the ASX. For the foregoing reasons, the Company does not have historical financial statements that would allow it to provide quarterly financial disclosure derived from the Company’s financial statements as called for by Canadian Form 51-102F1 – Management’s Discussion & Analysis. In lieu of such disclosure, the Company is voluntarily providing quarterly financial information derived from its quarterly cash flow reporting to the ASX and 6-month financial information for the relevant two-year period derived from its published financial statements.
LIQUIDITY & CAPITAL RESOURCES
Sept 2020 Sept 2019 $ $
Cash and cash equivalents 3,804,753 3,344,416 Working capital 3,569,187 3,339,145 Net cash used in operating activities (2,122,410) (769,950) Net cash used in financing activities 2,395,837 -
The Company has financed its operations to date through the issuance of fully paid ordinary shares, either through capital raisings in Australia or flow-through share capital raisings in Canada. The Company will continue to seek capital through various means including the issuance of equity in both Australia and Canada.
During the quarter the Company completed a $2,500,000 Australian placement through the issue of 8,064,517 fully paid ordinary shares at an issue price of $0.31 per share.
The financial statements have been prepared on a going concern basis which assumes that the Company will be able realise its assets and discharge its liabilities in the normal course of business for the foreseeable future. The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to commence profitable operations in the future.
As the Company’s main project is gold based, the fluctuation of the gold price may have an impact on the Company’s share price and therefore may impact the Company’s future scale and detail of capital raisings.
Payments Due by Period Contractual Less than 1 Obligations Total C$ year 1 - 3 years 4 - 5 years After 5 years Purchase 13,385 7,301 6,084 - - Obligations1 Total 13,385 7,301 6,084 - - Contractual Obligations FINAL
Exploration and Evaluation September September 30, 2020 30, 2019 $ $ The company has tenement rental and expenditure commitments payable of: - Not later than 12 months 2,083,715 73,700 - Between 12 months and 5 years 811,869 58,030 - More than 5 years 1,231,092 - 4,126,676 131,730
The Company expects to use cash on hand, or other financing, to satisfy its commitments as they become due.
OFF-BALANCE SHEET ARRANGEMENTS
The Company does not have any off-balance sheet arrangements.
TRANSACTIONS BETWEEN RELATED PARTIES
During the quarter, there were payments made to Borg Geoscience Pty Ltd, a company with which Mr Borg is a shareholder and director. The payments were for the provision of director fees and amounts paid or payable were $62,500 (Sept 2019: $36,693).
During the quarter, there were payments made to Consilium Corporate Pty Ltd, a company with which Ms Ross is a shareholder and director. The payments were for the provision of director fees and amounts paid or payable were $9,000 (Sept 2019: $9,000).
Consilium Corporate Pty Ltd, a company with which Ms Ross is a shareholder and director, is also engaged to perform Company Secretarial and Accounting duties at a rate of $9,000 per month (excluding GST). During the quarter $27,000 was paid or payable under this agreement (Sept 2019: $15,000).
PROPOSED TRANSACTIONS
There are no proposed transactions.
SIGNIFICANT ACCOUNTING POLICIES, CRITICAL JUDGEMENTS AND ESTIMATES
Critical Accounting Estimates
The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Estimates are reviewed on an ongoing basis based on historical experience and other factors considered relevant under the circumstances. Revisions to estimates on the resulting effects of carrying amounts of the Company’s assets and liabilities are accounted for prospectively.
All of the Company’s significant accounting policies and estimates are included in Note 1 of its audited consolidated financial statements for the year ended June 30, 2020.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all the new or amended Accounting Standards and Interpretations issued by the International Accounting Standards Board ('IASB') that are mandatory for the current reporting FINAL period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS
The Company’s financial liabilities, accounts payable and accrued liabilities, and other payables, are measured at amortized cost. Its financial assets, cash and interest receivables, are also measured at cost. The Company’s carrying values of these items approximate their fair value due to the relatively short periods to maturity of the instruments.
The Company considers its capital to be the components of shareholders’ equity. The Company’s objective when managing capital is to maintain adequate levels of funding to support the development of its business and maintain the necessary corporate and administrative functions to facilitate these activities. This is done primarily through equity financing. Future financings are dependent on market conditions and there can be no assurance the Company will be able to raise funds in the future. The Company invests all capital that is surplus to its immediate operational needs in short-term, highly liquid, high-grade financial instruments. There were no changes to the Company’s approach to capital management during the year. The Company is not subject to externally imposed capital requirements. The Company has sufficient working capital to meet its projected minimum financial obligations for the next 12 months.
OUTSTANDING SHARE DATA
The following table summarizes the Company's outstanding share data as of the date of this MD&A:
Number of shares issued or issuable Common shares 79,512,542 Stock options 7,953,826 Performance Rights 4,690,000
FINANCIAL INSTRUMENTS AND RISKS
The consolidated entity’s principal financial instruments comprise cash and short-term deposits. The consolidated entity has various other financial assets and liabilities such as other receivables and payables, which arise directly from its operations.
The consolidated entity’s activities expose it to a variety of financial risks, including, credit risk, liquidity risk, foreign exchange rate risk and cash flow interest rate risk. The consolidated entity is not exposed to price risk.
Risk management is carried out by the Board of Directors of the Company, who evaluates and agrees upon risk management and objectives.
(a) Interest Rate Risk
The consolidated entity is not materially exposed to interest rate risk.
(b) Credit risk
The consolidated entity does not have any significant concentrations of credit risk. Credit risk is managed by the Board of Directors and arises from cash and cash equivalents as well as credit exposure including outstanding receivables.
All cash balances held in Australia, Canada and Ecuador are held at internationally recognized institutions. FINAL
The maximum exposure to credit risk at reporting date is the carrying amount of the financial assets disclosed within the financial report.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about default rates.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash balances and access to equity funding.
The consolidated entity’s exposure to the risk of changes in market interest rates relate primarily to cash assets.
The directors monitor the cash-burn rate of the consolidated entity on an on-going basis against budget and the maturity profiles of financial assets and liabilities to manage its liquidity risk.
The financial liabilities the consolidated entity had at reporting date were other payables incurred in the normal course of the business. These were non-interest bearing and were due within the normal 30-60 days terms of creditor payments.
Maturity analysis for financial liabilities
Financial liabilities of the consolidated entity comprise trade and other payables. As at 30 September 2020 all financial liabilities are contractually maturing within 60 days.
(d) Foreign currency risk
Foreign exchange risks arise when future commercial transactions and recognised financial assets and financial liabilities are denominated in a currency that is not the entity’s functional currency.
The consolidated entity is primarily exposed to the fluctuations in the Canadian and US dollar, as the consolidated entity holds cash in Canadian and US dollars and much of the consolidated entity’s exploration costs and contracts are denominated in Canadian and US dollars.
The consolidated entity aims to reduce and manage its foreign exchange risk by holding the majority of its funds in its Canadian and US dollar accounts so that the exchange rate is crystallised early and future fluctuations in rates for settlement of Canadian and US dollar denominated payables are avoided. As the consolidated entity’s operations develop and expand, the consolidated entity will develop and implement a more sophisticated foreign exchange risk strategy, which will include the use of Forward Exchange Contracts and sophisticated treasury products.
The carrying amount of the consolidated entity’s foreign currency denominated financial assets and financial liabilities at the reporting date were as follows:
Consolidated Consolidated Financial Assets Financial Liabilities Sept 2020 June 2020 Sept 2020 June 2020 $ $ $ $
US dollars 107,220 84,610 158,627 193,759 Canadian dollars 1,256,419 2,709,719 280,343 285,144 1,363,639 2,794,329 438,970 478,903 FINAL
The consolidated entity had net financial assets in foreign currencies of $924,669 (financial assets of $1,363,639 less financials liabilities of $438,970) as at 30 September 2020 (30 June 2020: net financial assets of $2,315,426 (financial assets of $2,794,329 less financial liabilities of $478,903)). Based on this exposure, had the Australian dollar weakened / strengthened by 5% (30 June 2020: weakened / strengthened by 5%) against these foreign currencies with all other variables held constant, the consolidated entity’s profit before tax for the year would have been $46,233 lower / higher (30 June 2020: $115,771 lower / higher) and equity would have been $46,233 lower / higher (30 June 2020: $115,771 lower / higher). The percentage change is the expected overall volatility of the significant currencies, which is based on management’s assessment of reasonable possible fluctuations taking into consideration movements over the last 6 months each year and the spot rate at each reporting date. The actual foreign exchange loss for the quarter ended 30 September 2020 was $2,171 (30 September 2019: nil).
(e) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. All financial assets and financial liabilities of the consolidated entity at the reporting date are recorded at amounts approximating their carrying amount.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature.
DISCLOSURE CONTROLS AND PROCEDURES
The Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") are responsible for designing internal controls over financial reporting in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external purposes in accordance with IFRS. The design of the Company's internal control over financial reporting was assessed as of the date of this MD&A.
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS
Information provided in this report, including the financial statements, is the responsibility of management. In the preparation of these statements, estimates are sometimes necessary to make a determination of future value for certain assets or liabilities. Management believes such estimates have been based on careful judgments and have been properly reflected in the accompanying financial statements. Management maintains a system of internal controls to provide reasonable assurances that the Company's assets are safeguarded and to facilitate the preparation of relevant and timely information.
RISKS AND UNCERTAINTIES
Natural resources exploration, development, production and processing involve a number of business risks, some of which are beyond the Company's control. The risks and uncertainties described below are not exhaustive. Additional risks not presently known or currently deemed immaterial may also impair the Company's business operation. If any of the events described in the following risks actually occur, overall business, operating results and the financial condition of the Company could be materially adversely affected.
Risk Inherent in the Mining and Metals Business
Mining exploration and operations generally involve a high degree of risk. The exploration for and development of mineral deposits involves significant risks which even a combination of careful evaluation, experience and knowledge many not eliminate. Development of Tempus' mineral properties will only follow upon obtaining satisfactory exploration results. Few properties that are explored are ultimately developed into producing mines. Mineral properties are often non-productive for reasons that cannot be anticipated in advance. The economics of developing mineral properties is affected by many factors including the cost of FINAL operations; variations in the grade of ore mined; fluctuations in metal markets; costs of processing equipment; availability of labour; any delays inherent in obtaining government and or community approvals, or in the completion of development or construction activities; and such other factors as government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, allowable production, importing and exporting of minerals and environmental protection. Most exploration projects do not result in the discovery of commercially mineable deposits of ore. Title claims can impact the exploration, development, operation and sale of any natural resource project. Any such eventuality could have a material adverse effect on Tempus. There can be no assurance that Tempus' mineral exploration and development activities will result in any discoveries of commercially viable bodies or ore.
Commodity Prices
The price of the Tempus Shares and Tempus' financial results, exploration and development activities have been, or may in the future be, adversely affected by declines in metal prices. Metal prices fluctuate widely and are affected by numerous factors beyond Tempus' control. Tempus' value and future revenue, if any, are in large part derived from such commodity prices or the mining and sale of metal ores or interests related therein. The effect of these factors on the price of precious and base metals, and therefore the economic viability of any of Tempus' exploration projects, cannot be accurately predicted.
Dependence on Principal Projects
The operations of the Company are currently dependent upon the Blackdome-Elizabeth Gold Project and the Zamora Projects. These projects may not become commercially viable, which would have a material adverse effect on the Company’s potential mineral resource production, profitability, financial performance and results of operation.
Financing Risks
Tempus has no history of earnings and no source of operating cash flow and, due to the nature of its business; there can be no assurance that Tempus will be profitable. Tempus has paid no dividends on its shares since incorporation and does not anticipate doing so in the foreseeable future. The only present source of funds available to Tempus is through the sale of its equity shares. Even if the results of exploration are encouraging, Tempus may not have sufficient funds to conduct the further exploration that may be necessary to determine whether or not a commercially mineable deposit exists. While Tempus may generate additional working capital through further equity offerings or through the sale or possible syndication of its properties, there is no assurance that any such funds will be available. If available, future equity financings may result in substantial dilution to purchasers.
Share Price Fluctuations
In recent years, the securities markets have experienced a high level of price and volume volatility, and the market price of securities of many companies, particularly those considered exploration-stage, have experienced wide fluctuations in price which have not necessarily been related to the underlying asset values or prospects of such companies. Price fluctuations likely will continue to occur in the future.
Operating Hazards and Other Uncertainties
The Company’s business operations are subject to risks and hazards inherent in the mining industry. The exploration for and the development of mineral deposits involves significant risks, including: environmental hazards; discharge of pollutants or hazardous chemicals; industrial accidents; labour disputes and shortages; supply and shipping problems and delays; shortage of equipment and contractor availability; unusual or unexpected geological or operating conditions; fire; changes in the regulatory environment; and natural phenomena such as inclement weather conditions, floods and earthquakes. These or other occurrences could result in damage to, or destruction of, mineral properties, personal injury or death, environmental damage, delays in mining, monetary losses and possible legal liability. The Company could FINAL also incur liabilities as a result of pollution and other casualties all of which could be very costly and could have a material adverse effect on the Company’s financial position and results of operations.
Litigation
The Company may be subject to litigation arising in the normal course of business and may be involved in legal disputes or matters with other parties, including governments and their agencies, regulators and members of the Company’s own workforce, which may result in litigation. The causes of potential litigation cannot be known and may arise from, among other things, business activities, employment matters, including compensation issues, environmental, health and safety laws and regulations, tax matters, volatility in the Company’s stock price, failure to comply with disclosure obligations or labour disruptions at its mine sites. Regulatory and government agencies may initiate investigations relating to the enforcement of applicable laws or regulations and the Company may incur expenses in defending them and be subject to fines or penalties in case of any violation, and could face damage to its reputation in the case of recurring workplace incidents resulting in an injury or fatality for which the Company is found responsible. The results and costs of litigation and investigations cannot be predicted with certainty. If the Company is unable to resolve disputes or matters that arise favourably, this may have a material adverse impact on the Company’s financial performance, cash flows and results of operations.
Taxes and Tax Audits
The Company is partly financed by the issuance of flow-through shares. There is no guarantee that the funds spent by the Company will qualify as Canadian exploration expenses, even if the Company has committed to take all the necessary measures for this purpose. Refusals of certain expenses by tax authorities could have negative tax consequences for investors or the Company. In such an event, the Company will indemnify each flow-through share subscriber for the additional taxes payable by such subscriber as a result of the Company’s failure to renounce the qualifying expenditures as agreed.
The Company is subject to routine tax audits by various tax authorities. Tax audits may result in additional tax, interest and penalties, which would negatively affect the Company’s financial condition and operating results. Changes in tax rules and regulations or in the interpretation of tax rules and regulations by the courts or the tax authorities may also have a substantial negative impact on the Company’s business.
Conflicts of Interest
Some of the directors and officers of the Company are engaged as directors or officers of other corporations involved in the exploration and development of mineral resources. Such engagement could result in conflicts of interest. Any decision taken by these directors and officers and involving the Company will be in conformity with their duties and obligations to act fairly and in good faith with the Company and these other corporations. Moreover, these directors and officers will declare their interests and abstain from voting on any issue which could give rise to a conflict of interest.
Shareholder Activism
There has been increased shareholder activism in the mining industry. Should an activist shareholder engage with the Company, it could cause disruption to its strategy, operations and leadership organization, resulting in a material unfavourable impact on the financial performance and longer-term value creation strategy of the Company.
Foreign Operation Risk
Tempus has mineral interests in Australia, Canada and Ecuador. Any changes in regulation or shift in the political attitudes in these countries are beyond Tempus' control and may adversely affect its business and perception of same within the market environment and could have an adverse impact on Tempus' valuation or the price of Tempus Shares. FINAL
Currency Exchange Rate Fluctuations
Currency exchange rates may impact the cost of exploring Tempus' projects. Tempus' financings are usually in Australian dollars and its exploration costs have been incurred primarily in Australian dollars and Canadian dollars. Fluctuations in the exchange rates between these currencies may impact Tempus' exploration activities and financial results, and there is no assurance that such fluctuations, if any, will not adversely affect Tempus' operations.
Environmental Protection and Permitting
All phases of Tempus' operations are subject to environmental protection regulation in the various jurisdictions in which it operates. Environmental protection legislation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors, and employees. There is no assurance that future changes in environmental protection regulations, if any, will not adversely affect Tempus' operations.
Decommissioning and Site Rehabilitation Costs
The costs of performing the decommissioning and reclamation must be funded by the Company’s operations. These costs can be significant and are subject to change. The Company cannot predict what level of decommissioning and reclamation may be required in the future by regulators. If the Company is required to comply with significant additional regulations or if the actual cost of future decommissioning and reclamation is significantly higher than current estimates, this could have an adverse impact on the Company’s future cash flows, earnings, results of operations and financial condition.
Indigenous Rights
The Company may operate and explore on properties which are subject to Indigenous traditional land use. In such circumstances, the Company, under local laws and regulations, is committed to consult with the First Nations group about any impact of its potential rights or claims, and traditional land use. This may potentially cause delays in making decisions or project operations. Further, there is no assurance of favourable outcomes of these consultations. The Company may have to face potential adverse consequences such as significant expenses on account of lawsuits and loss of reputation.
Community Relations
The Company’s relationships with the communities in which it operates and other stakeholders are critical to ensure the future success of its existing operations and the construction and development of its projects. There is an increasing level of public concern relating to the perceived effect of exploration activities on the environment and on communities impacted by such activities. Publicity adverse to the Company, its operations or extractive industries generally, could have an adverse effect on the Company and may impact relationships with the communities in which Tempus operates and other stakeholders. While the Company is committed to operating in a socially responsible manner, there can be no assurance that its efforts in this respect will mitigate this potential risk. Further, damage to the Company’s reputation can be the result of the perceived or actual occurrence of any number of events, and could include any negative publicity, whether true or not. The increased usage of social media and other web-based tools used to generate, publish and discuss user-generated content and to connect with other users has made it increasingly easy for individuals and groups to communicate and share opinions and views in regards to the Company and its activities, whether true or not. While the Company strives to uphold and maintain a positive image and reputation, the Company does not ultimately have control over how it is perceived by others. Reputation loss may lead to increased challenges in developing, maintaining community relations and advancing its projects and decreased investor confidence, all of which may have a material adverse impact on the financial performance and growth of the Company. FINAL
Uninsurable Risks
In the course of exploration, development and production of mineral properties, certain risks, and in particular, unexpected or unusual geological operating conditions including rock bursts, cave-ins, fires, flooding and earthquakes may occur. It is not always possible to fully insure against such risks and Tempus may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the securities of Tempus.
Acquisition
Tempus uses its best judgment to acquire mining properties for exploration and development. In pursuit of such opportunities, Tempus may fail to select appropriate acquisition candidates or negotiate acceptable agreements, including arrangements to finance such acquisitions and development, or integrate such opportunity and their personnel with Tempus. Tempus cannot guarantee that it can complete any acquisition that it pursues or is currently pursuing, on favorable terms, or that any acquisition will ultimately benefit Tempus.
Permits and Licenses; Surface Rights and Access
The operations of Tempus may require licenses and permits from various governmental authorities as well as rights of access for the purpose of carrying on mineral exploration activities. There can be no assurance that Tempus will be able to obtain all necessary licenses, permits and rights that may be required to carry out exploration, development and mining operations at its projects. Inability to obtain such licenses, permits and rights could have an adverse impact on the Company’s future cash flows, earnings, results of operations and financial condition.
Reliance on Key Personnel
The nature of the business of Tempus, the ability of Tempus to continue its exploration and development activities and to thereby develop a competitive edge in the marketplace depends, in a large part, on the ability of Tempus to attract and maintain qualified key management personnel. Competition for such personnel is intense, and there can be no assurance that Tempus will be able to attract and retain such personnel. The development of Tempus now and in the future, will depend on the efforts of key management figures, the loss of whom could have a material adverse effect on Tempus. Tempus does not currently maintain key-man life insurance on any of the key management employees.
Competition
The mining industry is intensely competitive in all of its phases, and Tempus competes with many companies possessing greater financial resources and technical facilities. Competition in the mining business could adversely affect Tempus' ability to acquire suitable properties or prospects for mineral exploration or development or to attract and retain suitably qualified and experienced people to develop corporate growth strategies and to efficiently execute corporate plans.
Dilution
Tempus has outstanding Tempus Options and Tempus Performance Rights as detailed in the most recent financial statements for the year ended June 30, 2020. Should these securities be exercised or vest, the holders have the right to purchase additional Tempus Shares, in accordance with these securities' terms. During the life of these securities, the holders have the opportunity to profit from a rise in the market price of the Tempus Shares, possibly resulting in the dilution of existing securities. FINAL
Land Title
Any of Tempus' properties may be subject to prior unregistered agreements or transfers or native land claims and title may be affected by undetected defects. Tempus has no knowledge of any material defect in the title of any of the properties in which Tempus has or may acquire an interest.
Amending Constitution Regarding Staggered Election of Directors
As a condition to Listing on the TSXV, Tempus and its directors have agreed to hold a shareholder meeting in order to amend Tempus' constitution so as to require the re-election of each director annually, rather than staggered re-election of directors as the constitution currently provides. In the event the shareholders of the Company do not approve the amendment of the provisions that provide for staggered re-election of directors, the Tempus Shares may be delisted from the TSXV (at the sole discretion of the TSXV).
ADDITIONAL INFORMATION
Additional information about the Company is available on the Company's website, https://www.tempusresources.com.au/ and on SEDAR at http://www.sedar.com.
BOARD APPROVAL
The Board of Directors of the Company has approved this MD&A. ABN 70 625 645 338
TEMPUS RESOURCES LIMITED ANNUAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
1 CONTENTS
Corporate Directory 3 Directors’ Report 4 Corporate Governance Statement 30 Consolidated Statement of Profit or Loss and Other Comprehensive 35 Income Consolidated Statement of Financial Position 36 Consolidated Statement of Changes in Equity 37 Consolidated Statement of Cash Flows 38 Notes to the Financial Statements 39 Directors’ Declaration 60 Auditor’s Independence Declaration 61 Independent Auditor’s Report 62 Additional Information 66
2 CORPORATE DIRECTORY
DIRECTORS Mr Alexander Molyneux Non-Executive Chairman Mr Brendan Borg Managing Director Mr Gary Artmont Non-Executive Director Ms Melanie Ross Non-Executive Director
COMPANY SECRETARY Ms Melanie Ross
REGISTERED OFFICE & CONTACTS Level 2 22 Mount Street PERTH WA 6000 Ph: +61 8 6188 8181 Fax: +61 8 6188 8182 Web: www.tempusresources.com.au Stock Exchange Listing - ASX Code: TMR ABN: 70 625 645 338
SOLICITORS Steinepreis Paganin Level 4 The Read Buildings 16 Milligan Street PERTH WA 6000 Ph: +61 8 9321 4000 Fax: +61 8 9321 4333
AUDITORS RSM Australia Partners Level 32 Exchange Tower 2 The Esplanade PERTH WA 6000 Ph: +61 8 9261 9100 Fax: +61 8 9261 9101
SHARE REGISTRY Automic Registry Services Level 2 267 St Georges Terrace PERTH WA 6000 Telephone: +61 8 9324 2099
3
DIRECTORS’ REPORT
Your directors present their report, together with the financial statements of the consolidated entity (referred to hereafter as the “Group” or “consolidated entity”), consisting of Tempus Resources Limited (referred to hereafter as the “Company”) and the entities it controlled at the end of, or during, the year ended 30 June 2020.
DIRECTORS
The following persons were directors of Tempus Resources Limited during the whole of the financial year and up to the date of this report, unless otherwise stated.
NAME OF PERSON POSITION
Mr Alexander Molyneux Non-Executive Chairman Mr Brendan Borg Managing Director Mr Gary Artmont Non-Executive Director (appointed 14 October 2019) Ms Melanie Ross Non-Executive Director
COMPANY SECRETARY
Ms Melanie Ross held the position of company secretary during and at the end of the financial year.
OPERATING RESULTS
The loss of the Group amounted to $2,693,918 (2019: $852,569) after providing for income tax.
DIVIDENDS
No dividends were paid or declared since the start of the financial year. No dividend has been recommended.
PRINCIPAL ACTIVITIES
During the financial year, the principal activities of the Group consisted of mineral exploration.
4 DIRECTORS’ REPORT
REVIEW OF OPERATIONS
Canada
Blackdome-Elizabeth Gold Project (British Columbia, Canada – 100%)
During the year, the Company acquired 100% of the shares in Sona Resources Corp (“Sona”), which holds the Blackdome-Elizabeth Gold Project.
The Blackdome-Elizabeth Gold Project consists of two separate mineralisation styles:
Elizabeth Zone – Located approximately 200 km north of Vancouver and 35 km northeast of the past producing Bralorne Gold Mine, which produced 4.2 million ounces of gold at a grade of 17.7 g/t largely between 1928 and 1971. The auriferous quartz vein mineralization at the Elizabeth Zone in analogous to that found at the Bralorne Gold Mine. An historic Inferred Mineral Resource estimate, completed by SRK (2009), reported 206,000 oz of gold at 12.26 g/t. Drilling to date has focused on shallow mineralisation from two quartz veins (to approximately 200 m below surface). The nearby Bralorne Gold mine reached 2,000 m below surface along multiple quartz veins.
Blackdome Zone – Located approximately 30 km north of the Elizabeth Zone, Blackdome previously produced 225,000 oz of gold at a grade of 20 g/t. An historic NI43-101 resource estimate completed by SRK (2010) reported 52,600 oz of gold at 11.29 g/t Indicated and 25,900 oz of gold at 8.79 g/t Inferred. The Blackdome Zone mineralization is consistent with low-sulphidation, structurally controlled, epithermal gold mineralisation. Assets at Blackdome Gold Mine remain permitted. The Blackdome tailings facility and mill have been under care and maintenance but remain in good standing for future production.
Mineral Resources
The Project hosts Indicated and Inferred Mineral Resources declared under Canadian NI43-101, which is a “qualifying foreign resource estimate” as defined in the ASX Listing Rules. The estimates were completed by SRK Consulting and Micon International in 2009 and 2010. These resources have not been reported in accordance with the JORC Code, and a Competent Person has not yet done sufficient work to classify these foreign estimates in accordance with the JORC Code.
Table 1 – Elizabeth Zone Gold Mineral Resource Estimate
Elizabeth Mineral Resource Estimate (SRK, 2009)* Domain Quantity (tonnes) Gold Grade(g/t) Gold Metal (ounces) Inferred Mineral Resources Southwest 328,280 13.63 143,900 West 194,563 9.95 62,239 Total Inferred 522,843 12.26 206,139 *Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate. Reported at a cut-off grade of 5.0 grams of gold per tonne assuming underground mining scenario, a gold price of US$1,000 per ounce and 100 percent metallurgical recovery.
Table 2 – Blackdome Zone Gold-Silver Mineral Resource Estimate
Blackdome Mineral Resource Estimate (SRK, 2010)* Category Quantity (Tonnes) Grade Metal Gold (g/t) Silver (g/t) Gold (ounces) Silver (Ounces) Indicated 144,500 11.29 50.01 52,600 232,300 Inferred 90,600 8.79 18.61 25,900 54,400 *Mineral resources are not mineral reserves and do not have demonstrated economic viability. All figures are rounded to reflect the relative accuracy of the estimate. Reported at a cut-off grade of 5.0 grams of gold per tonne assuming underground mining scenario, a gold price of US$1,000 per ounce and 100 percent metallurgical recovery. Modelled mined out areas removed. 5 DIRECTORS’ REPORT
Table 3 – Blackdome Tailings Gold Mineral Resource Estimate
Blackdome Tailings Mineral Resource Estimate (Micon, 2010) Category Cutoff Tonnage (t) Grade (g/t Au) Gold (ounces) Inferred 0.5 298,389 1.47 14,145
The foreign estimates outlined above are considered relevant and material to the acquisition by Tempus. It is noted that new drilling data collected in 2010 and 2011, after the publication of these estimates, will be included in an updated JORC compliant Resource Estimate as the Company progresses the Project. However, it is uncertain that following evaluation and/or exploration work that the foreign estimates will be able to be reported as Mineral Resources in accordance with the JORC Code.
Tempus commenced exploration on the Project during the year, with a planned 8,500 metre program commencing shortly after the end of the year. The drilling program that has now commenced at Blackdome-Elizabeth is the first drilling that has been undertaken on the high grade, past producing project since 2011.
The planned program commenced at Blackdome, consisting of an initial 2,500 metres of diamond drilling, focussed on verifying and expanding upon the existing high-grade historical NI43-101 Mineral Resource. The program at Blackdome also includes trenching and drilling over significant gold in soil anomalies to the northeast of the known Blackdome mineralisation, and resource definition drilling on a new mineralised vein discovered in the last drilling program at the Project (Figure 1).
The originally planned 2,500 metre program for Blackdome has been expanded, and is expected to comprise approximately 4,500 metres.
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Figure 1 – Blackdome Drilling Progress
Upon completion of the program at Blackdome, the drilling equipment will then move to the Elizabeth sector of the Project, where an initial 6,000 metres of diamond drilling is planned, again focussed on verifying and expanding upon the existing high grade historical NI43-101 Mineral Resource. Extensions to the known mineralisation at Elizabeth are being targeted along strike (Figure 2), supported by gold in soil anomalies, as well as at depth, seeking a similar extensive mesothermal vein hosted gold system to that seen at the nearby prolific Bralorne Gold Camp, which historically produced approximately 4.2 million high grade ounces.
7 DIRECTORS’ REPORT
Figure 2 – Planned exploration at Elizabeth
Additionally, the significant new gold in soil anomaly discovered in late 2019, located approximately 2.5 km east of Elizabeth (Figure 3), will be explored by trenching and drilling for the first time. (refer to ASX announcement dated 8 January, 2020)
Figure 3 – Gold in soil anomaly east of Elizabeth
Site Infrastructure
The Blackdome Mine site includes a 300 tonnes per day permitted mill and tailings facility (Figure 4). A 25-man exploration camp is located at the Elizabeth Deposit, and existing development plans for the project include construction of 4 km of new haul road, and upgrade of 35 km of existing road, to link the Elizabeth Deposit to the Blackdome Mine. The project is located in close proximity to major highways and airfields. 8 DIRECTORS’ REPORT
Figure 4 – Blackdome Mill
Mineral Creek Gold Project (British Columbia, Canada – 100%)
As part of the acquisition of the Sona Resources, the holder of the Blackdome-Elizabeth Project in late 2019, a number of additional mineral licences were acquired located on Vancouver Island, British Columbia, which are collectively known as the Mineral Creek Project. (Figure 5) A review of historical drillhole data from the Project was completed during the Quarter (refer ASX announcement dated 20 April, 2020), revealing high grade gold intercepts including:
7.20 m @ 159.03 g/t gold, from 63.80 m (BTT-L54) o Including 4.50 m @ 253.6 g/t gold from 64.30 m 1.65 m @ 215.55 g/t gold, from 26.00 m (BTT-L58) 4.40 m @ 75.25 g/t gold, from 75.05 m (MC2009-E57) 0.80 m @ 244.00 g/t gold, from 42.10 m (BTT-1053) 5.30 m @ 34.12 g/t gold, from 71.50 m (BTT-1058) 1.10 m @ 152.66 g/t gold, from 21.30 m (BTT-L14) 2.70 m @ 45.48 g/t gold, from 13.50 m (BTT-L3) 0.90 m @ 130.97 g/t gold, from 14.60 m (BTT-L43) 1.80 m @ 61.57 g/t gold, from 24.50 m (BTT-L56) 2.95 m @ 26.30 g/t gold, from 31.40 m and 1.65 m @ 15.34 g/t gold, from 82.45 m (MC2009-E53) 1.00 m @ 74.50 g/t gold, from 82.40 m (BTT-1059) 5.30 m @ 13.08 g/t gold, from 92.00 m (MC2009-E39) 2.30 m @ 29.18 g/t gold, from 87.90 m (MC2009-E60) 2.70 m @ 22.66 g/t gold, from 15.40 m (BTT-L10) 3.60 m @ 14.33 g/t gold, from 98.80 m (MC2009-E06) 0.90 m @ 54.77 g/t gold, from 38.90 m (BTT-L17) 0.70 m @ 71.51 g/t gold, from 14.80 m (BTT-L2) 7.05 m @ 5.82 g/t gold, from 54.25 m (BTT-1052) 2.80 m @ 14.44 g/t gold, from 38.40 m (BTT-L25) 1.40 m @ 20.05 g/t gold, from 72.90 m (BTT-1052) 9 DIRECTORS’ REPORT
Mineral Creek has a long history of gold mining, dating back to the late 1800’s where placer gold was mined from Mineral Creek and China Creek. And from several adits along the Mineral Creek Fault Zone, where gold was mined from high- grade gold-quartz veins.
The property was explored extensively during two separate time periods; during the 1980’s approximately 50,000 m of diamond drilling was completed on the property (this data has been compiled but not reported here given lower reliability and would need further field validation). Drilling in the 1980’s focused on the Volcanic Hosted Massive Sulphide (VMS) and gold mineralization potential; and the 2000’s where a total of 216 diamond drillholes (37,503.6 m) was completed on the property identifying 6 gold zones between 2005-2010 (Linda, Ember, 1050, 900, Gap and Big Southeaster) (Figure 8). High grade results were returned at the Linda (up to 7.20 m @ 159.03 g/t Au), Ember (up to 4.40 m @ 75.25 g/t Au) and 1050 (up to 0.8 m @ 244.00 g/t) zones. Full details of the significant intercepts and all drill collars are presented in the announcement dated 20 April, 2020.
The Project’s predominant geological structure is the north-south trending Mineral Creek Fault Zone that hosts the Mineral Creek Gold Zone. Within this zone, there are several narrow quartz vein splays off the Mineral Creek Fault that have returned bonanza-grade gold assay values. Many of these splays remain underexplored with significant strike potential. The Mineral Creek gold mineralization is hosted in the Duck Lake formation within the Devonian Sicker Group which is the host of the Myra Falls zinc-copper-gold (lead-silver) mine, 80 km along strike to the northwest.
The Company’s primary focus in British Columbia, Canada, is on the Blackdome-Elizabeth Gold Project. However, given the outcomes of this review, the Company plans to allocate further resources to advancing the Mineral Creek Project. Compilation of a consolidated database is in progress, which will be used to generate mineralisation models to assist in planning of new drilling programs. An NI43-101 Technical Report consolidating all previous information is planned for the period ahead, to assist in determining the way forward with the Project.
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Figure 5 – Mineral Creek Prospect Map
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Figure 6 – Significant Intercepts – Linda, Ember and 1050 Zones
12 DIRECTORS’ REPORT
Ecuador
During the year, Tempus acquired two Ecuadorian companies, Condor Gold S.A. and MiningSources S.A. (together the “Ecuador Companies”). Together, the Ecuador Companies own three mineral exploration concessions (the “Zamora Projects”) adjacent to and within the same district as the world class Fruta del Norte gold project, currently under development by Lundin Gold (TSX: LUG) (Figure 7) The transaction completed in October, 2019.
The Zamora Projects provide high quality early stage gold exploration prospects in Ecuador. The 1,000 hectare combined concession package hosting the Rio Zarza Project is located adjacent to the Fruta del Norte gold project, discovered approximately 13 years ago and now under development, hosting an NI43-101 Indicated Mineral Resource of 23.8 million tonnes at 9.61 g/t gold and a further Inferred Mineral Resource of 11.6 million tonnes at 5.69 g/t gold (9.48 million ounces total). (Reference: Lundin Gold Technical Report, 2015) Rio Zarza’s eastern boundary is 850 m west of the Fruta del Norte deposit and exhibits strikingly similar geological, structural and alteration characteristics. The 2,195 hectare concession hosting the Valle del Tigre Project is situated to the north of Fruta del Norte and contains repeats of the subparralel rift faults that control the Fruta del Norte deposit.
Ecuador has, in recent times, become one of the most sought-after exploration jurisdictions for gold and base metals. Companies such as BHP, Rio Tinto, Fortescue Metals Group, Newcrest, and Solgold have made significant advances in the country in the past three to five years. Ecuador received the “Best Country” award at Mines and Money London in 2017.
The Zamora-Chinchipe Province in the south east of Ecuador, bordering with Peru, where the Zamora Projects are located is considered some of the most prospective ground in the country. Since the initial discovery of Fruta del Norte in 2006, it has grown into one of the world’s most valuable gold discoveries of the last 15 years.
Figure 7 – Zamora Projects Location
13 DIRECTORS’ REPORT
Rio Zarza
Rio Zarza comprises two concessions covering approximately 1,000 hectares, directly adjacent to the west of Fruta del Norte. These were originally granted prior to the discovery of Fruta del Norte. Exploration was carried out from 2008 until 2012 by Ecometals Limited, and included surface magnetics, induced polarization (IP), gravity surveying, soil/stream sediment sampling, mapping, and limited diamond drilling. Exploration delineated several targets with most of the work focused on targets situated in the eastern section of the property.
Limited previous drilling at Rio Zarza was undertaken prior to a new geological interpretation and was ineffectual in reaching target depth. Further, several coincident geochemical and geophysical anomalies remain largely untested.
Rio Zarza’s geochemistry, alteration and geology have been noted as being strikingly similar to Fruta del Norte, which is hosted by the Misahualli volcanics. Additional drilling was planned, vectoring from previous drill intersections that displayed low temperature alteration and anomalous As, Sb, Hg, Mn geochemistry. Under current geological interpretation, it is thought that the Misahualli volcanics have been dropped by step-faults to the west of Fruta del Norte and so the potential gold target located at Rio Zarza is at depths of 700-800 m (Figures 8 and 9).
The Company’s view as that the previous wide spaced drilling was unsuccessful for two reasons: (1) the majority of the holes never tested the upper part of the Misahualli volcanics; and (2) the favourable conjugate structures were not tested at the right orientation.
The favourable contact between the Suarez conglomerate/Misahualli volcanics was only encountered once during the drilling programs, failing to intersect mineralisation because the hole was located too far to the west near the Zamora Granodiorite complex manifested by high temperature propylitic alteration with pyrite. A number of targets remain untested in the eastern part of the property.
Low temperature, epithermal calcite-quartz veining has been recognised in the Zamora granodiorite and validates the potential to host gold-silver vein system. Mineralogical studies of the extensive alluvial gold mineralisation situated in the central and western areas, indicated the gold is sourced locally and is epithermal in nature. A large number of coincident geophysical and geochemical anomalies remain untested in over 70% of the concession area.
During the year, the Company received the much anticipated water permit for the Rio Zarza concession, the most advanced of the Company’s Zamora Projects, located in southern Ecuador. The permit allows the Company to use water for advanced exploration, including drilling, and allows for implementation of the Company’s initial drilling program at the prospect, located immediately adjacent to the world class Fruta del Norte gold mine, that has recently commenced production for Lundin Gold (TSX:LUG). Authorisation to source water from internal sources is pending and being processed.
The Company engaged Insight Geophysics Inc. to provide an assessment of the helicopter survey data, and if appropriate, to recommend targets for drill testing. A significant resistivity anomaly, in which the Fruta del Norte deposit is hosted, extends to the west and below the current extent of drilling at Rio Zarza (Figure 10). The shape of the anomaly is interpreted to most likely represent more than one body causing the “boot” shape in the image below (Figure 11).
Figure 8 – Rio Zarza and Fruta del Norte Surface Geology Map
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Figure 9 – Rio Zarza and Fruta del Norte Cross Section
Figure 10 – Resistivity with past drilling and relationship to Fruta del Norte
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Figure 11 – Possible models to explain resistivity anomaly
Most Likely Least Likely
New assays from previous drilling
Previously unreleased assays from the final three drill holes from the last drilling, in 2011, have now been received. The assays from the hole of primary interest, RZDDH-11-07, exhibit a zone anomalous in gold, silver, copper, manganese, lead and zinc over the final 19.1 metres of the hole. Two intervals of highly anomalous gold and silver have been identified within this broader 19.1 metre interval as follows:
Gold Silver Hole ID From (m) To (m) Length (m) (g/t) (g/t) RZDDH-11- 977.15 981.15 4.00 0.27 0.40 07 RZDDH-11- 987.85 989.15 1.30 0.21 9.11 07
Figures 12, 13 and 14 show the drill core from these anomalous zones. Of note is the apparent transition zone between the Suarez Formation and the underlying Misahualli Formation geological units, the latter being the unit in which Fruta del Norte gold mineralisation is hosted. This zone is highlighted by the hematite staining overprint evident in the core. Minor brecciation exists in zones throughout the bottom 19.1 metres which is anomalous in gold and other metals. A possible silica sinter horizon at 988.55 metres is considered significant in the context of style of mineralisation being sought.
Given that RZDDH-11-07 is a somewhat deeper hole (996.25 m) drilled on the property, and appears to have penetrated the top of the Misahualli Formation (which hosts Fruta del Norte), these results are considered to be significant in the context of the overall prospectivity of the Project. In combination with the results of the geophysical survey outlined above, the case for deep drill testing at Rio Zarza for Fruta del Norte style mineralisation is enhanced.
Next Steps
Based on the interpreted geophysical data and new assay information, three proposed new drill holes have been designed to explore the potential of a gold mineralised body underneath and beyond the current drilling at Rio Zarza. The first, and highest priority of these holes, will be a direct extension of drill hole RZDDH11-07, with a planned total depth of 1,375 m. The two additional holes are proposed to be along strike of, and/or deeper into the prospective interpreted geological unit, and will be adjusted based on the results of the first hole.
Drilling is planned for Q1, 2021, once current international travel restrictions are eased.
16 DIRECTORS’ REPORT
Figure 12 – RZDDH-11-07 Drill Core (958.16 m – 975.33 m)
Hematite staining
Figure 13 – RZDDH-11-07 Drill Core (975.33 m – 986.91 m)
Hematite staining
17 DIRECTORS’ REPORT
Figure 14 – RZDDH-11-07 Drill Core (986.91 m – 996.25 m)
Silica sinter? sinter?
Hematite staining staining
Community engagement in the Valle del Tigre II concession area continued during the year, with active engagement with community groups progressing. Field exploration is expected to commence in Q4, 2020, consisting of a detailed geochemical sampling program, the results of which will be integrated with the recently completed airborne geophysical survey, to generate drill targets.
Australia
Montejinni Project
The Montejinni Project, located near Top Springs in the Northern Territory has abundant anecdotal and physical evidence of copper rich float within the tenement location. Historical data has been collated and reviewed from previous site work undertaken between 1968 and 1997 by Renison Goldfields, Stockdale, Tipperary Land Corporation and Metals Exploration. The data has a directly northwest trending and likely structurally controlled 20 kilometre long geochemical copper anomaly which appears to be associated with a magnetic trend.
A 65 hole drilling program was completed during the year but given generally disappointing results, and the Company’s focus on Canada and Ecuador, the Montejinni project was relinquished during the year.
Claypan Dam Project
The Claypan Dam Project is located in the Gawler Craton of South Australia. It has the potential to host a variety of mineralisation styles including iron oxide copper gold (IOCG), nickel–copper, iron–titanium‐phosphate (FTP), rare earth elements and banded iron formation (BIF) ore deposits.
Given the Company’s focus on Canada and Ecuador, the Claypan Dam project was relinquished during the year.
18 DIRECTORS’ REPORT
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Tempus completed the acquisition of two Ecuadorian Companies, Condor Gold S.A. and Miningsources S.A., which are the holders of the Zamora Projects in Ecuador.
Tempus also completed the acquisition of Sona Resources Corp, a Canadian registered Company, which is the holder of the Blackdome-Elizabeth and Mineral Creek Gold Projects.
There were no other significant changes in the state of affairs of the Group during the financial year.
FINANCIAL POSITION
The net assets of the Group were $6,253,417 as at 30 June 2020 (2019: $4,212,162).
The Group’s net working capital, being current assets less current liabilities was net current assets of $3,065,388 as at 30 June 2020 (2019: $3,957,276).
EVENTS AFTER THE REPORTING PERIOD
On 3 July 2020, 200,000 options with an exercise price of $0.20 were exercised and converted into 200,000 fully paid ordinary shares, and 550,000 fully paid ordinary shares were issued as consideration for public relations services received.
On 28 August 2020, 8,064,517 fully paid ordinary shares were issued as part of a $2,500,000 placement and 567,742 fully paid ordinary shares were issued in consideration of part of the capital raising fees.
On 10 September 2020, 250,000 fully paid ordinary shares were issued as consideration for public relations services and 100,000 fully paid ordinary shares were issued under an Exploration Agreement. Additionally, 100,000 unlisted options, with an exercise price of $0.37 expiring 10 September 2023 were issued for consulting services and 300,000 performance rights were issued to Mr Jason Bahnsen as part of his appointment as President of Tempus Resources Ltd, under the terms and conditions of his Executive Agreement.
Whilst exploration activities have been able to continue, the impact of the Coronavirus (COVID-19) pandemic is ongoing. It is not practical to estimate the potential impact, positive or negative, after the reporting date. The situation is continually developing and is dependent on measures imposed by Australian, Canadian and Ecuadorian Governments, and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and economic stimulus that may be provided.
The directors are not aware of any other matters or circumstances that have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group the results of those operations, or the state of affairs of the Group in future financial years.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The directors believe, on reasonable grounds, that to include in this report particular information regarding likely developments in the operations of the Group and the expected results of those operations in future financial years would be speculative and likely to result in unreasonable prejudice to the Group. Accordingly, this information has not been included in this report.
19 DIRECTORS’ REPORT
ENVIRONMENTAL REGULATION
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
INFORMATION ON DIRECTORS
Mr Alexander Molyneux Non-Executive Chairman
Qualifications BEcon, Grad. Dip. MinExplGeoSc
Experience Mr Molyneux is an experienced mining industry executive. Mr Molyneux currently serves as CEO of Galena Mining Ltd (ASX: G1A) (2018 – present), Non-Executive Chairman of Azarga Metals Corp (TSXV: AZR) (2016 – present), Non-Executive Chairman of Argosy Minerals Ltd (ASX: AGY) (2016 – present), Non-Executive Director of Metalla Royalty & Streaming Ltd (TSXV: MTA) (2018 – present) and Non-Executive Director of Comet Resources Ltd (ASX: CRL) (2019 – present).
Mr Molyneux was CEO of Paladin Energy Limited (ASX: PDN) (2015 – 2018) one of the world’s largest uranium companies, where he optimized its operating business and completed a US$700M successful recapitalisation of the company and a re-listing on the ASX.
He was previously Executive Chairman of Azarga Uranium Corp (TSX: AZZ) and its predecessor companies (2012 – 2015), Non-Executive Director of Goldrock Mines Corp (TSXV:GRM) (2012 – 2016) and CEO of SouthGobi Resources Limited (Ivanhoe Mines Group) (TSX: SGQ / HKEX: 1878) (2009 – 2012). Prior to joining SouthGobi, Mr Molyneux was Managing Director, Head of Metals and Mining Investment Banking, Asia Pacific, with Citigroup. In his position as a specialist resources investment banker he spent approximately 10 years providing advice and investment banking services to natural resources corporations.
Interest in Shares 1,500,000 fully paid ordinary shares Interest in Performance Rights 300,000 performance rights
Directorships held in other Non-Executive Chairman of Argosy Minerals Ltd (since 15 August 2016) listed entities Managing Director of Galena Mining Ltd (since 1 September 2018) Non-Executive Director of Comet Resources Ltd (since 15 February 2019)
Mr Brendan Borg Managing Director
Qualifications BSc, MSc, MAusIMM
Experience Mr. Borg is a consultant geologist who has specialised in the “battery materials” sector including lithium, graphite and cobalt mineralisation, participating in numerous successful projects, in an investment and/or operational capacity. Mr. Borg has 20 years’ experience gained working in management, operational and project development roles in the Exploration and Mining industries, with companies including Rio Tinto Iron Ore, Magnis Resources Limited, IronClad Mining Limited, Lithex Resources Limited and Sibelco Australia Limited.
Mr Borg is currently a Non-Executive Director of Mali Lithium Limited (ASX:MLL) and Celsius Resources Ltd (ASX: CLA) and is a Director of geological consultancy Borg Geoscience Pty Ltd.
Interest in Shares 2,300,000 fully paid ordinary shares Interest in Performance Rights 300,000 performance rights
Directorships held in other Non-Executive Director of Celsius Resources Ltd (since 18 April 2017) listed entities Non-Executive Director of Mali Lithium Limited (since 15 November 2018) 20 DIRECTORS’ REPORT
Mr Gary Artmont Non-Executive Director
Qualifications BSc Hon Earth Science
Experience Mr. Artmont is a senior exploration geologist with 40+ years of international experience from grassroots to project feasibility studies, in regions including Canada, USA, Mexico, South America, Indonesia, Africa, Russia, China and Mongolia. Mr. Artmont is a recognised expert in epithermal gold mineralisation, and has held senior positions with Rio Tinto, Kennecott Australia, Freeport McMoran Indonesia, Union Carbide, Norilsk Nickel and Ivanhoe Mines. Mr. Artmont has been associated with Tempus’s Rio Zarza and Valle del Tigre properties since 2007, serving as a consultant to Ecometals Limited, the previous owners of the properties.
Interest in Shares 400,000 fully paid ordinary shares Interest in Performance Rights 400,000 performance rights
Directorships held in other Nil listed entities
Ms Melanie Ross Non-Executive Director and Company Secretary
Qualifications CA, AGIA ACG
Experience Ms Ross is an accounting and corporate governance professional with over 20 years’ experience in financial accounting and analysis, audit, business and corporate advisory services in public practice, commerce and state government. She has a Bachelor of Commerce and is a member of the Institute of Chartered Accountants in Australia and New Zealand and an associate member of the Governance Institute of Australia.
Ms Ross is currently a Director of a corporate advisory company based in Perth that provides corporate and other advisory services to public listed companies. She is the Company Secretary for Celsius Resources Ltd (ASX: CLA), and Great Boulder Resources Ltd (ASX: GBR).
Interest in Shares 360,000 fully paid ordinary shares Interest in Performance Rights 90,000 performance rights
Directorships held in other Nil listed entities
MEETING OF DIRECTORS
The number of meetings of the Company’s Board of Directors (“the Board”) held during the year ended 30 June 2020, and the number of meetings attended by each director were:
Name Number eligible to attend Number attended Alexander Molyneux 3 3 Brendan Borg 3 3 Gary Artmont 2 2 Melanie Ross 3 3
There were three directors meetings held during the financial year, however many board matters were dealt with via circular resolutions. The company does not have a formally constituted audit committee or remuneration committee as the board considers that the company’s size and type of operation do not warrant such committees.
21 DIRECTORS’ REPORT
REMUNERATION REPORT (Audited)
This report details the nature and amount of the remuneration for each key management personnel of Tempus Resources Limited for the year ended 30 June 2020.
The remuneration report is set out under the following headings:
A Principles used to determine the nature and amount of remuneration B Details of remuneration C Service agreements D Share based compensation E Shareholdings F Performance rights held G Related party disclosures
The information provided under headings A-G includes remuneration disclosures that are required under accounting Standard AASB 124 Related Party Disclosures. These disclosures have been transferred from the financial report and have been audited.
A. Principles used to determine the nature and amount of remuneration
In determining competitive remuneration rates, the Board, acting in its capacity as the remuneration committee, seeks independent advice on local and international trends among comparative companies and industry generally. It examines terms and conditions for employee incentive schemes benefit plans and share plans. Independent advice may be obtained to confirm that executive remuneration is in line with market practice and is reasonable in the context of Australian executive reward practices.
The Board recognises that Tempus Resources Limited operates in a global environment. To prosper in this environment we must attract, motivate and retain key executive staff.
Market Comparisons
Consistent with attracting and retaining talented executives, the Board endorses the use of incentive and bonus payments. The Board will continue to seek external advice to ensure reasonableness in remuneration scale and structure, and to compare the company’s position with the external market. The impact and high cost of replacing senior employees and the competition for talented executives requires the committee to reward key employees when they deliver consistently high performance.
Board Remuneration
The total maximum remuneration of non-executive Directors is initially set by the Constitution and subsequent variation is by ordinary resolution of Shareholders in general meeting in accordance with the Constitution, the Corporations Act 2001 and the ASX Listing Rules, as applicable. The determination of non-executive Directors’ remuneration within that maximum will be made by the Board having regard to the inputs and value to the company of the respective contributions by each non-executive Director. The current amount has been set at an amount not to exceed $350,000 per annum. The Board determines actual payments to directors and reviews their remuneration annually based on independent external advice with regard to market practice, relativities, and the duties and accountabilities of directors. A review of directors’ remuneration is conducted annually to benchmark overall remuneration including retirement benefits. There were no use of external consultants for remuneration advice for the period ended 30 June 2020.
22 DIRECTORS’ REPORT
Performance-based Remuneration
The company has adopted an employee incentive option plan (‘ESOP’ or ‘Option Plan’) to provide ongoing incentives to Directors, Executives and Employees of the company. The objective of the ESOP is to provide the company with a remuneration mechanism, through the issue of securities in the capital of the company, to motivate and reward the performance of the Directors and employees in achieving specified performance milestones within a specified performance period. The Board will ensure that the performance milestones attached to the securities issued pursuant to the ESOP are aligned with the successful growth of the company’s business activities.
The Directors and employees of the company have been, and will continue to be, instrumental in the growth of the company. The Directors consider that the ESOP is an appropriate method to:
(a) reward Directors and employees for their past performance;
(b) provide long term incentives for participation in the company’s future growth;
(c) motivate Directors and generate loyalty from senior employees; and
(d) assist to retain the services of valuable Directors and employees.
Group Performance, Shareholder Wealth and Directors and Executives Remuneration
The remuneration policy has been tailored to increase the direct positive relationship between shareholder’s investment objectives and director’s and executive’s performance. Currently, directors and executives are encouraged to hold shares in the company to ensure the alignment of personal and shareholder interests. The company provides performance based remuneration via their employee incentive option plan. No options have been issued under the ESOP.
B. Details of remuneration
Amounts of remuneration The remuneration for each key management personnel of the Group for the year was as follows:
2020
Key Post- Management Short-term Benefits employment Share based Personnel Benefits Payments Remunerati Cash on Cash, salary & profit Non-Cash Super- Performanc Performance Consisting Commissions Share Benefit Other annuation e Rights Options Total Related of Options
$ $ $ $ $ $ $ $ % %
Mr A Molyneux 54,000 - - - - 38,190 - 92,190 41 -
Mr B Borg (1) 224,193 - - - - 38,190 - 262,383 15 -
Mr G Artmont (2) 25,742 - - - - 20,305 46,047 44 -
Ms M Ross (3) 36,000 - - - - 11,457 - 47,457 24 -
339,935 - - - - 108,142 - 448,077 24 - (1) Payable to Borg Geoscience Pty Ltd, a company with which Mr Borg is a shareholder and director, relating to Brendan Borg’s director’s fees.
(2) Mr G Artmont was appointed as a director on 14 October 2019.
(3) Payable to Consilium Corporate Pty Ltd, a company with which Ms Ross is a shareholder and director, relating to Melanie Ross’ director’s fees.
23 DIRECTORS’ REPORT
2019
Key Post- Management Short-term Benefits employment Share based Personnel Benefits Payments Remunerati Cash on Cash, salary & profit Non-Cash Super- Performanc Performance Consisting Commissions Share Benefit Other annuation e Rights Options Total Related of Options
$ $ $ $ $ $ $ $ % %
Mr A Molyneux 51,750 ------51,750 - -
Mr B Borg (1) 40,500 ------40,500 - -
Ms M Ross (2) 36,000 ------36,000 - -
128,250 ------128,250 - - (1) Payable to Borg Geoscience Pty Ltd, a company with which Mr Borg is a shareholder and director, relating to Brendan Borg’s director’s fees. (2) Payable to Consilium Corporate Pty Ltd, a company with which Ms Ross is a shareholder and director, relating to Melanie Ross’ director’s fees.
C. Service agreements
Consilium Corporate Pty Ltd, a company with which Ms Ross is a shareholder and director, is also engaged to perform Company Secretarial and Accounting duties at a rate of $9,000 per month (excluding GST). The fee was increased from $5,000 to $9,000 effective from 1 March 2020. During the year ended 30 June 2020 $76,000 was paid or payable under this agreement.
No other key management personnel have or had service agreements for the year ended 30 June 2020, other than as disclosed below.
Employment Contracts of Key Management Personnel
Each member of the company’s key management personnel are engaged on open-ended service contracts between the individual person and the company. The Managing Director Mr Borg is employed as an executive as at the date of this report.
Non-Executive Directors have entered into a service agreement with the company in the form of a letter of appointment.
The below is as at the date of the financial report:
Key Management Appointment Term of Agreement Base Salary Termination Benefit Personnel (excludes GST) $ p.a. Alexander Molyneux Non-Executive Chairman No fixed term 54,000 3 months Brendan Borg Managing Director No fixed term 250,000 3 months Gary Artmont Non-Executive Director No fixed term 36,000 Nil Melanie Ross Non-Executive Director No fixed term 36,000 Nil
24 DIRECTORS’ REPORT
D. Share based compensation
Options There were no options granted to the directors during the year ended 30 June 2020 (2019: nil).
Shares There were no shares issued to the directors during the year ended 30 June 2020 (2019: nil).
Performance Rights The terms and conditions of each grant of performance rights affecting remuneration of directors in this financial year or future reporting years are as follows:
Series Grant date Grant date fair value per Expiry date Vesting date note right
Directors: Part 1 19 Aug 2019 $0.14 18 Sep 2021 1
Directors: Part 2 19 Aug 2019 $0.14 18 Sep 2021 2
Directors: Part 3 19 Aug 2019 $0.14 18 Sep 2021 3
Directors: Part 4 19 Aug 2019 $0.14 18 Sep 2021 4
Directors: Part 5 19 Aug 2019 $0.0704 18 Sep 2021 5
Latin America: Part 1 18 Oct 2019 $0.16 25 Oct 2021 6
Latin America: Part 2 18 Oct 2019 $0.16 25 Oct 2021 7
Latin America: Part 3 18 Oct 2019 $0.16 25 Oct 2021 8
Latin America: Part 4 18 Oct 2019 $0.16 25 Oct 2021 9 Latin America: Part 5 18 Oct 2019 $0.0921 25 Oct 2021 10
Director Performance Rights vesting dates 1. Upon completion of all permitting required to commence diamond drilling on any of the Tenements in Ecuador. 2. Upon any of the following occurring: a. Acquisition of a company with its main focus being on mining and/or mineral exploration; b. Acquisition of one or more mineral exploration or exploitation licences from a third party; or c. Direct issuance to Tempus or its subsidiaries of a mineral exploration or exploration licence. 3. Upon completion of a Mineral Resource estimate (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) equivalent to 500,000 Oz at a minimum grade of 1g/tonne Au on any mineral deposit that is validly owned by Tempus or its subsidiaries at the time of completion. 4. Upon completion of a Scoping Study (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) on any mineral deposit that is validly owned by Tempus or its subsidiaries at the time of completion. 5. If at any time the 20-business day volume weighted average price of Tempus shares as traded on the ASX equals or exceeds 45 cents.
Latin America Performance Rights vesting dates 6. Upon completion of all permitting required to commence diamond drilling on any of the Tenements in Ecuador. 7. Upon any of the following occurring: a. Acquisition of a company with its main focus being on mining and/or mineral exploration in Latin America; b. Acquisition of one or more mineral exploration or exploitation licences in Latin America from a third party; or c. Direct issuance to Tempus or its subsidiaries of a mineral exploration or exploration licence by the relevant cadastre authorities in Latin America, where such above occurrence is approved by the Tempus board. 8. Upon completion of a Mineral Resource estimate (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) equivalent to 500,000 Oz at a minimum grade of 1g/tonne Au on any mineral deposit in Latin America that is validly owned by Tempus or its subsidiaries at the time of completion. 9. Upon completion of a Scoping Study (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) on any mineral deposit in Latin America that is validly owned by Tempus or its subsidiaries at the time of completion. 10. If at any time the 20-business day volume weighted average price of Tempus shares as traded on the ASX equals or exceeds 44 cents.
25 DIRECTORS’ REPORT
Details of share-based payments granted as compensation to key management personnel during the financial year:
Name Series Number Number vested % of grant % of grant granted vested forfeited
Mr A Molyneux Directors: 20% each of part 1 through 5 500,000 200,000 40% Nil
Mr B Borg Directors: 20% each of part 1 through 5 500,000 200,000 40% Nil
Mr G Artmont (1) Latin America: 20% each of part 1 through 5 500,000 100,000 20% Nil
Ms M Ross Directors: 20% each of part 1 through 5 150,000 60,000 40% Nil
1,650,000 560,000 34% Nil
E. Shareholdings
The number of shares in the company held during the financial year by each director and other members of key management personnel of the company, including their personally related parties, is set out below:
30 June 2020 Balance at Granted as Purchased on- Conversion of Balance at end of beginning of the remuneration during market or as part of performance rights period period the period capital raising
Mr A Molyneux 1,300,000 - - 200,000 1,500,000
Mr B Borg 1,700,000 - 400,000 200,000 2,300,000
Mr G Artmont (1) - - 300,000 100,000 400,000
Ms M Ross 300,000 - - 60,000 360,000
3,300,000 - 700,000 560,000 4,560,000
(1) Mr Artmont was appointed on 14 October 2019.
F. Performance rights held
The number of performance rights in the company held during the financial year by each director and other members of key management personnel of the company, including their personally related parties, is set out below:
30 June 2020 Balance at Granted as Conversion to Other changes Balance at end of beginning of the remuneration during Shares during the period period period the period
Mr A Molyneux - 500,000 (200,000) - 300,000
Mr B Borg - 500,000 (200,000) - 300,000
Mr G Artmont (1) - 500,000 (100,000) - 400,000
Ms M Ross - 150,000 (60,000) - 90,000
- 1,650,000 (560,000) - 1,090,000
(1) Mr Artmont was appointed on 14 October 2019.
26 DIRECTORS’ REPORT
G. Related party disclosures
i. Payables owing to related parties
2020 2019 $ $ Alexander Molyneux – director’s fees 4,500 4,500 Borg Geoscience Pty Ltd – director’s fees (1) 20,833 5,436 Gary Artmont – director’s fees (2) 3,000 - Consilium Corporate Pty Ltd (3) 13,412 9,848 41,745 19,784 (1) Borg Geoscience Pty Ltd is an entity related to Brendan Borg. (2) Gary Artmont was appointed 14 October 2019. (3) Consilium Corporate Pty Ltd is an entity related to Melanie Ross. $3,300 was for director fees and $10,112 for company secretarial and accounting.
There are no other transactions with related parties during the year ended 30 June 2020.
This concludes the remuneration report, which has been audited.
OPTIONS AND RIGHTS OVER SHARES
Ordinary shares under option of Tempus Resources Limited at the date of this report are as follows:
Issue date Expiry date Exercise price Number under option 3 August 2018 3 August 2022 $0.25 4,000,000 25 June 2020 25 June 2023 $0.15 3,000,000 25 June 2020 25 June 2022 $0.135 338,953 25 June 2020 25 June 2022 $0.185 514,873 10 September 2020 10 September 2023 $0.37 100,000
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of the company or of any other body corporate.
Performance rights on issue at the date of this report are as follows:
Number of Issue date Expiry date Exercise price performance rights 18 September 2019 18 September 2021 Nil 690,000 25 October 2019 25 October 2021 Nil 3,700,000 10 September 2020 10 September 2022 Nil 300,000
SHARES ISSUED ON THE EXERCISE OF OPTIONS
On 3 July 2020, 200,000 options with an exercise price of $0.20 were exercised and converted into 200,000 fully paid ordinary shares.
There were no other ordinary shares of Tempus Resources Limited issued on the exercise of options during the year ended 30 June 2020 and up to the date of this report.
27 DIRECTORS’ REPORT
ADDITIONAL INFORMATION
The loss of the consolidated entity for the year ended 30 June 2020 is summarised below:
2020 2019 $ $
Other income 23,055 58,186 EBITDA (2,691,383) (852,569) EBIT (2,691,383) (852,569) Loss after income tax (2,693,918) (852,569)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2020 2019 $ $
Share price at financial year end ($) 0.34 0.18 Total dividends declared (cents per share) Nil Nil Basic loss per share (cents per share) (6.38) (2.49)
INDEMNITY AND INSURANCE OF OFFICERS
The company has indemnified the directors and executives of the company for the costs incurred, in their capacity as a director or executive, for which they may be held personally liable, except where there is a lack of good faith. During the financial year, the company paid a premium in respect of a contract to insure the directors and executives of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of liability and the amount of the premium.
INDEMNITY AND INSURANCE OF AUDITOR
The company has not, during or since the end of the financial year, indemnified or agreed to indemnity the auditor of the company or any related entity against a liability incurred by the auditor. During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company or any related entity.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.
28 DIRECTORS’ REPORT
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are outlined in Note 15 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor, is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.
The directors are of the opinion that the services as disclosed in Note 15 to the financial statements do not compromise the external auditor's independence requirements of the Corporations Act 2001 for the following reasons: all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF RSM AUSTRALIA PARTNERS
There are no officers of the company who are former partners of RSM Australia Partners.
AUDITORS’ INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is included within this financial report.
AUDITOR
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001. A copy of the auditor’s Independence declaration as required under section 307C of the Corporations Act 2001 is included within this financial report.
This directors’ report is signed in accordance with a resolution of directors made pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
Brendan Borg Managing Director
Date: 30 September 2020 Perth
29 CORPORATE GOVERNANCE STATEMENT
The Board has reviewed its current practices in light of the revised ASX Corporate Governance Principles and Recommendations with a view to making amendments where applicable after considering the Company’s size and the resources it has available. As the Company's activities develop in size, nature and scope, the size of the Board and the implementation of any additional formal corporate governance committees will be given further consideration.
The Board sets out below its “if not why not” report in relation to those matters of corporate governance where the Company’s practices depart from the Recommendations.
PRINCIPLE 1 – LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT Recommendation Tempus Resources Ltd Current Practice 1.1 A listed entity should disclose: Adopted (a) respective roles and responsibilities of its board and management; and The Directors have adopted a Board Charter, which outlines the (b) those matters expressly reserved to the board role of the Board. This is contained within their Corporate and those delegated to management Governance Plan document, a copy of which is available on the Company’s website – https://www.tempusresources.com.au/corporate-governance
Executive Service Agreements outline functions of the executive directors. Non-executive Director appointment letters outline the terms and conditions of non-executive director appointments. As the Company recruits additional management, the roles and responsibilities of these persons will be considered and documented. 1.2 A listed entity should: Adopted (a) undertake appropriate checks before appointing a person, or putting forward to security holders Material information in relation to a director up for re-election is a candidate for election as a director: and provided in the Notice of Meeting for each AGM including (b) provide security holders with all material background, other material directorships, term and the Board’s information in its possession relevant to a consideration of them as independent or non-independent decision on whether or not to elect or re-elect a director. director
1.3 A listed entity should have a written agreement with Adopted each director and senior executive setting out the terms of their appointment. All directors have a written agreement with the Company setting out the terms of their appointments.
1.4 The Company Secretary of a listed entity should be Adopted accountable directly to the board, through the chair, on all matters to do with the proper functioning of the The responsibilities of the Company Secretary are contained Board. within the Board Charter.
1.5 A listed entity should: Partially Adopted (a) Have a diversity Policy which includes requirements for Board/Committee to set The Company has adopted a Diversity Policy within its measurable objectives for achieving gender Corporate Governance Plan document. Although it contains diversity and assess them and achieving them objectives, they are general in nature and not considered annually measurable. There are no immediate plans to further develop (b) disclose that policy these objectives to include measurable objectives. (c) disclose at end of reporting period how objectives are being achieved via: The Company makes the following disclosures regarding the (i) respective proportions of men and women proportion of women employed in the organisation: on the board, in senior executive positions - Women on Board: 25% and across the whole organisation (including - Women in Senior Management: 17% how senior exec is defined); or - Women in whole organisation: 14% (ii) if entity is a ‘‘relevant employer” under the Workplace Gender Equality Act, the entities most recent “Gender Equality
1.6 A listed entity should: Adopted (a) have and disclose a process for periodically evaluating the performance of the Board, its The Company has a performance evaluation policy, as detailed committees and individual directors; and in Schedule 6 of its Corporate Governance Plan document (b) disclose, in relation to each reporting period, providing for an annual review on the board, directors and whether a performance evaluation was management. An evaluation has not taken place within the 30 CORPORATE GOVERNANCE STATEMENT
undertaken in the reporting period in financial period. accordance with that process.
1.7 A listed entity should: Adopted. (a) have and disclose a process for periodically evaluating the performance of its senior As detailed above, the Company has a performance evaluation executives; and policy, which include the performance of executives. An (b) disclose, in relation to each reporting period, evaluation did not take place this financial period. whether a performance evaluation was undertaken in the reporting period in accordance with that process.
PRINCIPLE 2 – STRUCTURE THE BOARD TO ADD VALUE Recommendation Tempus Resources Limited Current Practice 2.1 The board of a listed entity should: Not Adopted (a) Have a nomination committee which: (i) has at least three members, a majority of The Company does not have a separate nomination committee whom are independent directors; and and the full board will consider the matters and issues arising (ii) is chaired by a independent director; that would usually fall to the nomination committee in and disclose: accordance with the Nomination Committee Charter. The (i) the charter of the committee; Company has adopted a Nomination Committee Charter setting (ii) the members of the committee; and out the board process to raise the issues that would otherwise (iii) as at the end of each reporting period, the be considered by the Nomination Committee. The Board number of times the committee met through consider that at this stage, no efficiencies or other benefits would the period and the individual attendances of be gained by establishing a separate nomination committee. the members at those meetings; or (b) If it does not have a nomination committee The Nomination Committee Charter is detailed in Schedule 5 of disclose that fact and the processes it employs the Corporate Governance Plan document available on the to address board succession issue and to Company’s website ensure that the board has the appropriate https://www.tempusresources.com.au/corporate-governance balance of skills, knowledge experience, independence and diversity to enable it to discharge its duties and responsibilities effectively.
2.2 A listed entity should have and disclose a board Not Adopted skills matrix setting out the mix of skills and diversity that the board currently has or is looking to achieve The Company currently has a mixture of skills on the Board, in its membership. including technical, financial, business, management and leadership. There is a statement on Board Composition contained on the Corporate Governance page on the Company’s website https://www.tempusresources.com.au/corporate-governance. There are no immediate plans to develop and disclose a Board Skills Matrix.
2.3 A listed entity should disclose: Adopted. (a) the names of the directors considered by the board to be independent directors (a) Melanie Ross - Independent (b) if a director has an interest, position, association Gary Artmont - Independent or relationship as described in Box 2.3 (Factors (b) n/a relevant to assessing independence) but the (c) Melanie Ross - appointed 18 April 2018 – 29 months board is of the opinion that it doesn’t Gary Artmont – appointed 14 Oct 2019 – 11 months compromise the independence of the director, nature of the interest, position, association or relationship and an explanation as to why the board is of that opinion; and (c) the length of service of each director.
2.4 A majority of the Board of a listed entity should be Not Adopted. independent directors. Currently 50% of the board are considered independent directors as per box 2.3 of the ASX Corporate Governance Principles and Recommendations.
2.5 The Chair of a Board of a listed entity should be an Partially Adopted. independent director and, in particular, should not be the same person as the CEO of the entity. The Chairman is Mr Alexander Molyneux who is a Non- Executive Chairman and Mr Brendan Borg in the Managing Director, however Mr Alexander Molyneux was the Executive 31 CORPORATE GOVERNANCE STATEMENT
Chairman within the last three years, having ceased the Executive role on 1 April 2019.
2.6 A listed entity should have a program for inducting Adopted. new directors and provide appropriate professional development opportunities for directors to develop The Company Secretary currently completes the induction of and maintain the skills and knowledge needed to new directors. All Directors have access to professional perform their role as directors effectively. development opportunities to improve on their skills and knowledge to assist in their roles as directors.
PRINCIPLE 3 – PROMOTE ETHICAL AND RESPONSIBLE DECISION-MAKING Recommendation Tempus Resources Limited Current Practice 3.1 A listed entity should: Adopted. (a) Have a code of conduct for its directors, senior executives and employees; and Copy of Code of Conduct is contained within the Company’s (b) (b) disclose that code of conduct or a summary Corporate Governance Plan which is published on the of it. Company’s website and available at https://www.tempusresources.com.au/corporate-governance
PRINCIPLE 4 – SAFEGUARD INTEGRITY IN FINANCIAL REPORTING Recommendation Tempus Resources Limited Current Practice 4.1 The board of a listed entity should: Not Adopted
(a) have an audit committee which: The role of the audit committee is currently undertaken by the (i) has at least 3 members, all of whom are full board. The Company has adopted an Audit and Risk non-executive directors and a majority of Committee Charter which is published in the Company’s whom are independent directors; and Corporate Governance Plan and available on the Company’s (ii) is chaired by an independent director, who website is not the chair of the board; https://www.tempusresources.com.au/corporate-governance And disclose: (iii) the charter of the committee The Board follows the Audit and Risk Committee Charter which (iv) the relevant qualifications and experience provides for integrity of corporate reporting and the removal of of the member of the committee; and the external auditor and the rotation of the audit engagement (v) in relation to each reporting period, the partner. number of times the committee met throughout the period and the individual attendances of the member at those meetings; or (b) if it does not have an audit committee, disclose that fact and the processes it employs that independently verify and safeguard the integrity of its corporate reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner.
4.2 The board of a listed entity should, before it Adopted approves the entity’s financial statements for a financial period, receive from its CEO and CFO a declaration that, in their opinion, the financial records of the entity have been properly maintained and that the financial statements comply with the appropriate accounting standards and give a true and fair view of the financial position and performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.
4.3 A listed entity that has an AGM should ensure that Adopted its external auditor attends its AGM and is available to answer questions from security holders relevant to the audit
32 CORPORATE GOVERNANCE STATEMENT
PRINCIPLE 5 – MAKE TIMELY AND BALANCED DISCLOSURE Recommendation Tempus Resources Limited Current Practice 5.1 A listed entity should: Adopted.
(a) have a written policy for complying with its The Company has a Continuous Disclosure Policy which is continuous disclosure obligations under the published in the Company’s Corporate Governance Plan Listing Rules; and document which is available on the Company’s website. Refer (b) disclose that policy or a summary of it https://www.tempusresources.com.au/corporate-governance
PRINCIPLE 6 – RESPECT THE RIGHTS OF SHAREHOLDERS Recommendation Tempus Resources Limited Current Practice 6.1 A listed entity should provide information about itself Adopted and its governance to investors via its website. Refer to the Company’s Corporate Governance page on its website https://www.tempusresources.com.au/corporate-governance 6.2 A listed entity should design and implement an Adopted investor relations program to facilitate effective two- way communication with investors. The Company has a Shareholder Communication strategy which is contained in the Company’s Corporate Governance Plan document, which is published on its website – https://www.tempusresources.com.au/corporate-governance
6.3 A listed entity should disclose the policies and Adopted processes it has in place to facilitate and encourage participation at meetings of security holders. The Company encourages participation at General Meetings upon the dispatch of its Notice of Meeting and advises security holders that they may submit questions they would like to be asked at the meeting to the Board and to the Company’s auditors. 6.4 A listed entity should give security holders the option Adopted to receive communications from, and send communications to, the entity and its security registry electronically.
PRINCIPLE 7 – RECOGNISE AND MANAGE RISK Recommendation Tempus Resources Limited Current Practice 7.1 The board of a listed entity should: Not Adopted
(a) have a committee or committees to oversee The Company does not currently have a separate Risk risk, each of which: Committee. The role of the risk committee is undertaken by the (i) has at least three members, a majority of whole board. The Board follows the Audit and Risk Committee whom are independent directors; and Charter and the Risk Management plan as contained within the (ii) is chaired by an independent director, Corporate Governance Plan document as published on the And disclose: Company’s website (iii) the charter of the committee; https://www.tempusresources.com.au/corporate-governance (iv) the members of the committee; and (v) as at the end of each reporting period, the Within the “Risk Management Policy” section of the Corporate number of times the committee met Governance Plan, the Company undertakes regular risk throughout the period and the individual management reviews. attendances of the members at those meetings; or (b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework.
7.2 The board or a committee of the board should: Adopted.
(a) review the entity’s risk management framework The Board reviews risk on a regular basis with following policies at least annually to satisfy itself that it continues and procedures forming part of the Company’s Risk to be sound; and Management Framework: (b) disclose, in relation to each reporting period, Audit and Risk Committee Charter whether such a review has taken place. Risk Management Policy, as in Schedule 8 in the
33 CORPORATE GOVERNANCE STATEMENT
Corporate Governance document.
A review has not taken place in the reporting period.
7.3 A listed entity should disclose: Adopted
(a) if it has an internal audit function, how the The Company does not have a structured formalised internal function is structured and what role it performs; audit function, however historically the Board has reviewed the or internal control systems and risk management policies on an (b) if it does not have an internal audit function, that annual basis. fact and the processes it employs for evaluating and continually improving the effectiveness of Internal controls are reviewed on an annual basis. its risk management and internal control processes.
7.4 A listed entity should disclose whether it has any Not Adopted. material exposure to economic, environmental and social sustainability risks and, if it does, how it The Company does not have a sustainability policy. manages or intends to manage those risks.
- PRINCIPLE 8 – REMUNERATE FARILY AND RESPONSIBLY Recommendation Tempus Resources Limited Current Practice 8.1 The board of a listed entity should: Not Adopted.
(a) have a remuneration committee which: The Company does not have a Remuneration Committee. (i) has at least three members, a majority of whom are independent directors; and The role of the remuneration committee is currently undertaken (ii) is chaired by an independent director, by the full board. The Company has adopted a Remuneration and disclose: Committee Charter which is contained within the Company’s (iii) the charter of the committee; Corporate Governance Plan document and published on the (iv) the members of the committee; and Company’s website (v) as at the end of each reporting period, the https://www.tempusresources.com.au/corporate-governance number of times the committee met The Board follows the Remuneration Committee Charter which throughout the period and the individual provides for dealing with board remuneration issues. attendances of the members at those meetings; or (b) if it does not have a remuneration committee, disclose that fact and the processes it employs for setting the level and composition of remuneration for directors and senior executives and ensuring that such remuneration is appropriate and not excessive. 8.2 A listed entity should separately disclose its policies Adopted. and practices regarding the remuneration of non- executive directors and the remuneration of This information is contained within the Remuneration Report of executive directors and other senior executives. the Annual Report. Setting remuneration for executives is set out in the Remuneration Committee Charter.
8.3 A listed entity which has an equity-based Not Applicable remuneration scheme should:
(a) have a policy on whether participants are permitted to enter into transactions (whether through the use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and (b) disclose that policy or a summary of it.
Corporate Governance Statement dated 30 June 2020 Approved by the Board 30 September 2020
34 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020
Notes 2020 2019 $ $
Other income 3 23,055 58,186 Directors’ and employee benefits expense (264,935) (96,406) Legal and other professional fees (276,238) (207,201) Regulatory fees (109,050) (46,759) Advertising and marketing expenses (165,240) (59,293) Foreign exchange gain/(loss) 22,787 (1,083) Project evaluation (914,555) (400,235) Share based payments expense (337,815) - Finance costs (2,535) - Impairment expense 8 (407,063) - Other expenses (262,329) (99,778)
Loss before income tax (2,693,918) (852,569) Income tax expense 4 - - Loss for the year (2,693,918) (852,569)
Other comprehensive income Items that may be reclassified subsequently to profit or loss Foreign currency translation (170,626) -
Other comprehensive loss for the year, net of tax (170,626) -
Total comprehensive loss for the year (2,864,544) (852,569)
Loss for the year attributable to: - Owners of the Company (2,666,872) (852,503) - Non-controlling interests (27,046) (66) (2,693,918) (852,569)
Total comprehensive loss for the year attributable to: - Owners of the Company (2,837,498) (852,503) - Non-controlling interests (27,046) (66) (2,864,544) (852,569)
Loss per share - Basic loss per share (cents) 18 (c) (6.38) (2.49) - Diluted loss per share (cents) 18 (c) (6.38) (2.49)
The accompanying notes form part of this financial report.
35 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020
Notes 2020 2019 $ $ ASSETS Current assets Cash and cash equivalents 5 3,559,362 4,114,366 Trade and other receivables 6 93,980 17,400 Other assets 7 47,644 29,537 Total current assets 3,700,986 4,161,303
Non-current assets Exploration and evaluation 8 5,611,482 254,886 Other assets 7 258,070 - Total non-current assets 5,869,552 254,886
Total assets 9,570,538 4,416,189
LIABILITIES Current liabilities Trade and other payables 9 635,598 204,027 Total current liabilities 635,598 204,027
Non-current liabilities Provisions 10 2,681,523 - Total non-current liabilities 2,681,523 -
Total liabilities 3,317,121 204,027
Net assets 6,253,417 4,212,162
EQUITY Issued capital 11 (a) 9,044,007 4,726,886 Reserves 12 960,196 542,144 Accumulated losses (3,725,121) (1,058,249) Equity attributable to owners of the Company 6,279,082 4,210,781 Non-controlling interests (25,665) 1,381
Total equity 6,253,417 4,212,162
The accompanying notes form part of this financial report.
36 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020
Share based Foreign Non- Issued payment exchange Accumulated controlling Capital reserve reserve losses interests Total $ $ $ $ $ $
Balance at 1 July 2019 4,726,886 542,144 - (1,058,249) 1,381 4,212,162 Loss for the year - - - (2,666,872) (27,046) (2,693,918) Other comprehensive income - - (170,626) - - (170,626) Total comprehensive loss for the year - - (170,626) (2,666,872) (27,046) (2,864,544)
Issue of capital (net of costs) 4,317,121 - - - - 4,317,121 Share based payments - 588,678 - - - 588,678 Balance at 30 June 2020 9,044,007 1,130,822 (170,626) (3,725,121) (25,665) 6,253,417
Balance at 1 July 2018 446,001 - - (205,746) - 240,255 Loss for the year - - - (852,503) (66) (852,569) Other comprehensive income ------Total comprehensive loss for the year - - - (852,503) (66) (852,569)
Non-controlling interest arising on acquisition of Montejinni Pty Ltd - - - - 1,447 1,447 Issue of capital (net of costs) 4,280,885 - - - - 4,280,885 Share based payments - 542,144 - - - 542,144 Balance at 30 June 2019 4,726,886 542,144 - (1,058,249) 1,381 4,212,162
The accompanying notes form part of this financial report.
37 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020
Notes 2020 2019 $ $ Cash flows from operating activities Interest received 25,775 52,171 Payments to suppliers and employees (904,591) (617,544) Payments for exploration and evaluation (3,162,297) (399,175) Net cash outflow from operating activities 19 (4,041,113) (964,548)
Cash flows from investing activities Bonds paid (169,152) - Cash acquired on acquisition of subsidiaries 67,095 - Net cash outflow from investing activities (102,057) -
Cash flows from financing activities Proceeds from issue of shares 3,918,155 1,784,000 Share issue costs paid (323,810) (323,470) Net cash inflow from financing activities 3,594,345 1,460,530
Net (decrease) / increase in cash and cash equivalents (548,825) 495,982 Cash and cash equivalents at the beginning of the financial year 4,114,366 3,618,384 Effects of exchange rate changes on cash and cash equivalents (6,179) -
Cash and cash equivalents at the end of the financial year 5 3,559,362 4,114,366
The accompanying notes form part of this financial report.
38 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020
These consolidated financial statements and notes represent those of Tempus Resources Limited and its controlled entities (the “consolidated entity” or “Group”).
The financial statements were authorised for issue on 30 September 2020 by the directors of the company.
1. Summary of significant accounting policies
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with Corporations Act 2001, Australian Accounting Standards, Interpretations of the Australian Accounting Standards Board and International Financial Reporting Standards as issued by the International Accounting Standards Board. The consolidated entity is a for-profit entity for financial reporting purposes under Australian Accounting Standards. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. Except for cash flow information, these financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. a) Comparatives
When required by accounting standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. b) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Tempus Resources Limited at the end of the reporting year. A controlled entity is any entity over which Tempus Resources Limited has the power to govern the financial and operating policies so as to obtain benefits from the entity’s activities. Control will generally exist where the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.
Where controlled entities have entered or left the consolidated entity during the year, the financial performance of those entities are included only for the period of the year that they were controlled.
In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the consolidated entity have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown separately within the Equity section of the statement of financial position and statement of profit or loss and other comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date. c) Foreign currency translation
The financial statements are presented in Australian dollars, which is Tempus Resources Limited’s functional and presentation currency.
Foreign currency transactions Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
39 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
1. Summary of significant accounting policies (continued) c) Foreign currency translation (continued)
Foreign operations The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of. d) Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group’s normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group’s normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current. e) Parent entity
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in Note 21. f) Income tax
The income tax expense (revenue) for the period comprises current income tax expense (income) and deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting period. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.
40 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
1. Summary of significant accounting policies (continued) f) Income tax (continued)
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. g) Trade and other receivables
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost, using the effective interest method, less any allowances for expected credit losses. Trade and other receivables are generally due for settlement within 120 days.
Collectability of trade debtors is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful debts is raised when some doubt as to collection exists and in any event when the debt is more than 60 days overdue. h) Exploration and evaluation
Exploration and evaluation expenditures are written off as incurred, except when such costs are expected to be recouped through successful development and exploitation, or sale, of an area of interest. In addition, exploration assets recognised on acquisition of an entity are carried forward provided that exploration and/or evaluation activities in the area have not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in relation to the area are continuing.
The expenditure carried forward when recovery is expected represents an accumulation of direct net exploration and evaluation costs incurred by or on behalf of the consolidated entity and applicable indirect costs, in relation to separate areas of interest for which rights of tenure are current.
If it is established subsequently that economically recoverable reserves exist in a particular area of interest, resulting in the decision to develop a commercial mining operation, then in that year the accumulated expenditure attributable to that area, to the extent that it does not exceed the recoverable amount for the area concerned, will be transferred to mine development. As such it will be subsequently amortised against production from that area. Any excess of accumulated expenditure over recoverable amounts will be written off to the statement of profit or loss and other comprehensive income. i) Trade and other payables
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the consolidated entity during the reporting period which remain unpaid. Due to their short- term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 – 60 days of recognition.
41 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
1. Summary of significant accounting policies (continued) j) Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in provision resulting from the passage of time is recognised as a finance cost. k) Issued Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. l) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with short periods to maturity and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position. m) Other income
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial interest to the net carrying amount of the financial asset.
Other income is recognised when it is received or when the right to receive payment is established. n) Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred. o) Employee benefits
Equity-settled compensation
The consolidated entity operates equity-settled share based payment employee share and option schemes. The fair value of the equity to which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding increase to an equity account.
Share based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the good or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is shown in the option reserve.
The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using an appropriate valuation model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.
42 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
1. Summary of significant accounting policies (continued) p) Goods and services tax (“GST”)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. q) Earnings per share
(i) Basic earnings per share
Basic earnings per share is determined by dividing net profit after income tax attributable to members of the company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. r) Segment reporting
A business segment is identified for a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different to those of other business segments. A geographical segment is identified when products or services are provided within a particular economic environment subject to risks and returns that are different from those of segments operating in other economic environments. s) Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off.
Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income include equity investments which the Group intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.
Impairment of financial assets The Group recognises a loss of allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the Group’s assessment at the end of each reporting period as to whether the financial instrument’s credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain.
43 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
1. Summary of significant accounting policies (continued) s) Investments and other financial assets (continued)
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset’s lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset’s lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss allowance reduced the asset’s carrying value with a corresponding expense through profit or loss. t) Critical accounting judgments, estimates and assumptions
The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the consolidated entity.
There have been no judgements, apart from those involving estimation, in applying accounting policies that have a significant effect on the amounts recognised in these financial statements.
Following is a summary of the key assumptions concerning the future and other key sources of estimation at reporting date that have not been disclosed elsewhere in these financial statements.
Exploration and evaluation expenditure Exploration and evaluation costs have been capitalised on the basis that activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised.
Share based payment transactions The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
COVID-19 pandemic Judgement has been exercised in considering the impacts that the COVID-19 pandemic has had, or may have, on the Group based on known information. This consideration extends to the nature of the products and services offered, customers, supply chain, staffing and geographical regions in which the Group operates. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the Group unfavourably as at the reporting date or subsequently as a result of the COVID-19 pandemic.
Rehabilitation provision A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or mined. The Group’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. The Group recognises management’s best estimate for assets requirement obligations and site rehabilitations in the period in which they are incurred. Actual costs incurred in the future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of the provision.
44 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
1. Summary of significant accounting policies (continued) u) New, revised or amending Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian Accounting Standards Board that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity during the financial period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. v) New Accounting Standards and Interpretations not yet mandatory or early adopted
Accounting Standards issued by the AASB that are not yet mandatorily applicable to the consolidated entity, together with an assessment of the potential impact of such pronouncements on the consolidated entity when adopted in future periods, are discussed below:
Conceptual Framework for Financial Reporting (Conceptual Framework) The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new guidance on measurement that affects several Accounting Standards. Where the consolidated entity has relied on the existing framework in determining its accounting policies for transactions, events or conditions that are not otherwise dealt with under the Australian Accounting Standards, the consolidated entity may need to review such policies under the revised framework. At this time, the application of the Conceptual Framework is not expected to have a material impact on the consolidated entity's financial statements.
45 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
2. Segment information
The consolidated entity operates within three geographical segments within mineral exploration and extraction, being Australia, Canada and Ecuador. The segment information provided to the chief operating decision maker is as follows:
Exploration and Year ended 30 June 2020 corporate Exploration Exploration activities Activities Activities AUSTRALIA CANADA ECUADOR Consolidated $ $ $ $
Segment revenue 19,489 3,566 - 23,055 Total Revenue 23,055
Segment result before income tax (2,667,993) (25,925) - (2,693,918) Loss before income tax (2,693,918)
At 30 June 2020 Segment assets 907,432 6,810,801 1,852,305 9,570,538 Total Assets 9,570,538
Segment liabilities 384,226 2,761,760 171,135 3,317,121 Total Liabilities 3,317,121
Exploration and Exploration Year ended 30 June 2019 corporate Exploration Activities activities Activities ECUADOR AUSTRALIA CANADA Consolidated $ $ $ $
Segment revenue 58,186 - - 58,186 Total Revenue 58,186
Segment result before income (852,569) - - (852,569) tax Loss before income tax (852,569)
At 30 June 2019 Segment assets 4,416,189 - - 4,416,189 Total Assets 4,416,189
Segment liabilities 204,027 - - 204,027 Total Liabilities 204,027
46 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
Consolidated 2020 2019 $ $ 3. Other income Interest 23,055 58,186 23,055 58,186
4. Income tax expense
Loss before income tax expense (2,693,918) (852,569) Tax at the Australian tax rate of 30% (2019: 30%) (808,175) (255,771)
Amounts not deductible /(taxable) in calculating taxable income 515,480 166,644 Tax loss not recognised 275,475 136,981 Tax effect of exploration expenditure 35,364 (31,023) Tax effect of temporary differences (18,144) (16,831) Income tax expense - -
Potential tax benefit relating to unused tax losses for which no deferred tax asset has been recognised 11,593 54,432
The deferred tax asset attributable to carried forward income tax losses and temporary differences has not been recognised as an asset as the company has not commenced trading and the availability of future profits to recoup these losses is not considered probable at the date of this report.
5. Cash and cash equivalents
Cash at bank 3,559,362 4,114,366 3,559,362 4,114,366
6. Trade and other receivables
GST receivable 45,537 11,340 Withholding tax receivable 23,358 45 Interest receivable 1,556 6,015 Other 23,529 - 93,980 17,400
7. Other assets
Current Prepayments 44,872 18,773 Bond deposits 2,772 - Other - 10,764 47,644 29,537
Non-current Bond deposits 258,070 - 258,070 -
Bond deposits are held for mine sites until reclamation has been deemed satisfactorily completed by the chief inspector of mines and the permits can be closed.
47 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
Consolidated 2020 2019 $ $ 8. Exploration and evaluation A summary of the exploration and evaluation asset is as follows:
Opening balance 254,886 - Acquisitions during the year 1,3 3,266,911 151,476 Expenditure incurred during the year 1,574,236 103,410 Impairments (407,063) - Changes in rehabilitation 1,023,031 - Foreign exchange movements (100,519) - Closing balance 5,611,482 254,886
1 On 16 October 2019 the Company completed its 100% acquisition of Condor Gold S.A. and Miningsources S.A. by issuing 3,440,205 fully paid ordinary shares (escrowed to 25 October 2020), paying USD$100,000 (AUD$147,360) to the vendor and issuing 904,209 fully paid ordinary shares as a finder’s fees. 16 October 2019 $ Purchase Consideration Shares issued 696,066 Cash 147,360 843,426
Net Assets Acquired 2 Cash and cash equivalents 66,715 Trade and other receivables 23,101 Exploration and evaluation 889,178 Trade and other payables (135,568) 843,426
2 Management has determined that the acquisition of 100% interest in Condor Gold S.A. and Miningsources S.A does not meet the definition of a business within AASB 3 Business Combinations. This transaction has been accounted for as an asset acquisition.
3 On 15 November 2019 the Company completed its 100% acquisition of Sona Resources Corp and its subsidiary No. 75 Corporate Ventures Ltd by paying CAD$450,000 (AUD$499,833) to the vendor and issuing 1,000,000 fully paid ordinary shares to the optionholders. 15 November 2019 $ Purchase Consideration Cash 499,833 Shares issued 160,000 659,833
Net Assets Acquired 4 Cash and cash equivalents 380 Trade and other receivables 21,580 Other assets 116,522 Exploration and evaluation 2,377,733 Trade and other payables (127,343) Rehabilitation provision (1,729,039) 659,833
4 Management has determined that the acquisition of 100% interest in Sona Resources Corp and its subsidiary No. 75 Corporate Ventures Ltd does not meet the definition of a business within AASB 3 Business Combinations. This transaction has been accounted for as an asset acquisition.
48 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
Consolidated 2020 2019 $ $ 9. Trade and other payables
Trade creditors 467,648 142,769 Accrued expenses 101,958 61,258 Other payables 65,992 - 635,598 204,027
10. Provisions
Rehabilitation - Blackdome Opening balance - - Recognised on acquisition on 15 November 2019 (Note 8) 1,729,039 - Changes in rehabilitation estimate 1,023,031 - Foreign exchange movements (70,547) - 2,681,523 -
The provision represents the present value of estimated costs for future rehabilitation of land explored or mined by the Group at the end of the exploration or mining activity that can be measured sufficiently reliably. As disclosed in Note 22, rehabilitation costs associated with the closure, are contingent upon completion of the closure and reclamation plans required by the Ministry of Energy, Mines and Petroleum Resources in Canada, which cannot be measured with sufficient reliability at 30 June 2020, representing a contingent liability.
11. Issued capital
Ordinary shares – fully paid 9,044,007 4,726,886 a) Ordinary Shares Date No. of shares Issue price $ $ 2020 Opening balance 36,500,001 4,726,886 25 October 2019 – Acquisition of Condor Gold S.A. and Miningsources S.A. 3,446,205 0.16 551,393 25 October 2019 – Acquisition finder’s fee 904,209 0.16 144,673 16 December 2019 – Conversion of performance rights 230,000 0.14 32,200 16 December 2019 – Employee services 400,000 0.16 64,000 24 December 2019 – Shares issued under option agreement 1,000,000 0.16 160,000 7 May 2020 – Capital raising Tranche 1 7,739,843 0.13 1,006,180 25 June 2020 – Conversion of performance rights 230,000 0.14 32,200 25 June 2020 – Conversion of performance rights 900,000 0.16 144,000 25 June 2020 – Capital raising Tranche 2 at $0.13 2,307,700 0.13 300,001 25 June 2020 – Capital raising Tranche 2 at $0.135 5,649,217 0.135 762,644 25 June 2020 – Capital raising Tranche 2 at $0.185 10,473,108 0.185 1,937,525 Capital raising costs - (817,695) Closing balance 69,780,283 9,044,007
2019 Opening balance 11,000,001 446,001 3 August 2018 – IPO 25,000,000 0.20 5,000,000 3 August 2018 – Acquisition of Montejinni Resources Pty Ltd 500,000 0.20 100,000 Capital raising costs - (819,115) Closing balance 36,500,001 4,726,886
49 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
11. Issued capital (continued)
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll, each share is entitled to one vote.
b) Capital Management The objectives of management when managing capital is to safeguard the company’s ability to continue as a going concern, so that the company may continue to provide returns for shareholders and benefits for other stakeholders.
Due to the nature of the company’s activities, being mineral exploration, the company does not have ready access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the company’s capital risk management is the current working capital position against the requirements of the company to meet exploration programmes and corporate overheads. The company’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required. The working capital position of the company at 30 June 2020 is as follows:
Consolidated 2020 2019 $ $ Cash and cash equivalents 3,559,362 4,114,366 Trade and other receivables 93,980 17,400 Other current assets 47,644 29,537 Trade and other payables (635,598) (204,027) Working capital position 3,065,388 3,957,276
12. Reserves
Share based payments reserve 1,130,822 542,144 Foreign currency reserve (170,626) - 960,196 542,144
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to Australian dollars.
Reconciliation of share based payments reserve
Opening balance 542,144 - Options – recognised in exploration and evaluation - 25,029 Options – recognised in equity (share issue costs) 413,263 517,115 Performance Rights – recognised as an expense 273,815 - Shares – recognised as an expense 110,000 - Transfer to issued capital upon conversion of performance rights (208,400) - Closing balance 1,130,822 542,144
50 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
12. Reserves (continued)
Performance Rights
During the year, Tempus granted 5,750,000 performance rights, with a total fair value of $815,516. This figure represents the fair value at grant date before considering the best available estimates of the number of performance rights with non market-based vesting conditions that are expected to vest.
After taking into account the probabilities of vesting criteria being met and the expected vesting date, the value of performance rights expensed during the year was $273,815 with the remaining amount to be expensed over the vesting period. The expense realised in respect to performance rights is intended to reflect the best available estimate of the number of performance rights expected to vest.
The following performance rights issued during the period were valued using a Monte Carlo pricing model with the valuation model inputs used to determine the fair value at the grant date as follows:
Share price Expected Dividend Number of Value per Vesting Grant date Expiry date at grant date volatility yield PRs PR Total Value date note $ % % # $ $ 19/08/2019 18/09/2021 0.14 80 - 230,000 0.0704 16,192 5 18/10/2019 25/10/2021 0.16 80 - 900,000 0.0921 82,890 10 19/08/2019 25/10/2021 0.14 80 - 34,000 0.0704 2,394 13
The following performance rights issued during the period were valued based on the share price at grant date as they did not have market-based vesting conditions.
Share price at Vesting date Grant date Expiry date grant date Number of PRs Value per PR Total Value note $ # $ $ 19/08/2019 18/09/2021 0.14 230,000 0.14 32,200 1 19/08/2019 18/09/2021 0.14 230,000 0.14 32,200 2 19/08/2019 18/09/2021 0.14 230,000 0.14 32,200 3 19/08/2019 18/09/2021 0.14 230,000 0.14 32,200 4 18/10/2019 25/10/2021 0.16 900,000 0.16 144,000 6 18/10/2019 25/10/2021 0.16 900,000 0.16 144,000 7 18/10/2019 25/10/2021 0.16 900,000 0.16 144,000 8 18/10/2019 25/10/2021 0.16 900,000 0.16 144,000 9 19/08/2019 25/10/2021 0.14 33,000 0.14 4,620 11 19/08/2019 25/10/2021 0.14 33,000 0.14 4,620 12
Director Performance Rights vesting dates 1. Upon completion of all permitting required to commence diamond drilling on any of the Tenements in Ecuador. 2. Upon any of the following occurring: a. Acquisition of a company with its main focus being on mining and/or mineral exploration; b. Acquisition of one or more mineral exploration or exploitation licences from a third party; or c. Direct issuance to Tempus or its subsidiaries of a mineral exploration or exploration licence. 3. Upon completion of a Mineral Resource estimate (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) equivalent to 500,000 Oz at a minimum grade of 1g/tonne Au on any mineral deposit that is validly owned by Tempus or its subsidiaries at the time of completion. 4. Upon completion of a Scoping Study (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) on any mineral deposit that is validly owned by Tempus or its subsidiaries at the time of completion. 5. If at any time the 20-business day volume weighted average price of Tempus shares as traded on the ASX equals or exceeds 45 cents.
51 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
12. Reserves (continued)
Latin America Performance Rights vesting dates 6. Upon completion of all permitting required to commence diamond drilling on any of the Tenements in Ecuador. 7. Upon any of the following occurring: a. Acquisition of a company with its main focus being on mining and/or mineral exploration in Latin America; b. Acquisition of one or more mineral exploration or exploitation licences in Latin America from a third party; or c. Direct issuance to Tempus or its subsidiaries of a mineral exploration or exploration licence by the relevant cadastre authorities in Latin America, where such above occurrence is approved by the Tempus board. 8. Upon completion of a Mineral Resource estimate (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) equivalent to 500,000 Oz at a minimum grade of 1g/tonne Au on any mineral deposit in Latin America that is validly owned by Tempus or its subsidiaries at the time of completion. 9. Upon completion of a Scoping Study (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) on any mineral deposit in Latin America that is validly owned by Tempus or its subsidiaries at the time of completion. 10. If at any time the 20-business day volume weighted average price of Tempus shares as traded on the ASX equals or exceeds 44 cents.
Exploration Manager Performance Rights vesting dates 11. Upon completion of a Mineral Resource estimate (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) equivalent to 500,000 Oz at a minimum grade of 1g/tonne Au on any mineral deposit that is validly owned by Tempus or its subsidiaries at the time of completion. 12. Upon completion of a Scoping Study (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) on any mineral deposit that is validly owned by Tempus or its subsidiaries at the time of completion. 13. If at any time the 20-business day volume weighted average price of Tempus shares as traded on the ASX equals or exceeds 45 cents.
The vesting of all performance rights granted is also conditional upon the holder’s continued employment with the consolidated entity.
Options
Set out below is a summary of the movements in options on issue during the year:
Grant date Expiry date Exercise Balance at Granted Exercised Expired/ Balance at price $ the start of forfeited the end of the year the year 3/08/2018 3/08/2021 0.20 200,000 - - - 200,000 3/08/2018 3/08/2022 0.25 4,000,000 - - - 4,000,000 22/06/2020 25/06/2023 0.15 - 3,000,000 - - 3,000,000 22/06/2020 25/06/2022 0.135 - 338,953 - - 338,953 22/06/2020 25/06/2022 0.185 - 514,873 - - 514,873 4,200,000 3,853,826 - - 8,053,826
Weighted average exercise price 0.248 0.153 - - 0.203
Set out below are the options exercisable at the end of the financial year:
Grant date Expiry date Exercise price $ 2020 2019 # # 3 August 2018 3 August 2021 0.20 200,000 200,000 3 August 2018 3 August 2022 0.25 4,000,000 4,000,000 22 June 2020 25 June 2023 0.15 3,000,000 - 22 June 2020 25 June 2022 0.135 338,953 - 22 June 2020 25 June 2022 0.185 514,873 - 8,053,826 4,200,000
The weighted average remaining contractual life of options at the end of the financial year was 2.39 years (2019: 3.05 years).
52 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
12. Reserves (continued)
For the options issued during the financial year a Hoadley ESO2 valuation model was used with the valuation model inputs used to determine the fair value at the grant date as follows:
Share Value price at Exercise Expected Risk free Dividend Number of per Total Vesting Grant date Expiry date grant date price volatility rate yield Options Option Value terms $ $ % % % # $ $ 22/06/2020 25/06/2023 0.20 0.150 100% 0.26% - 3,000,000 0.1092 327,600 Immediately 22/06/2020 25/06/2022 0.20 0.135 100% 0.26% - 338,953 0.1066 36,132 Immediately 22/06/2020 25/06/2022 0.20 0.185 100% 0.26% - 514,873 0.0962 49,531 Immediately
13. Interests of Key Management Personnel (‘KMP’)
Refer to the remuneration report contained in the directors’ report for details of the remuneration paid or payable to each member of the company’s key management personnel for the period ended 30 June 2020.
The total remuneration paid and payable to KMP of the company during the period are as follows:
Consolidated 2020 2019 $ $ Short-term employee benefits 339,935 128,250 Post-employment benefits - - Share based payments 108,142 - 448,077 128,250
14. Related parties
a) Key management personnel
Disclosures relating to key management personnel are set out in the Remuneration Report in the Directors’ Report.
b) Other transactions and balances with related parties
Payables owing to related parties
Alexander Molyneux – director’s fees 4,500 4,500 Borg Geoscience Pty Ltd – director’s fees (1) 20,833 5,436 Gary Artmont – director’s fees 3,000 - Consilium Corporate Pty Ltd (2) 13,412 9,848 41,745 19,784
(1) Borg Geoscience Pty Ltd is an entity related to Brendan Borg. (2) Consilium Corporate Pty Ltd is an entity related to Melanie Ross. $3,300 was for director fees and $6,548 for company secretarial and accounting.
There are no other transactions with related parties during the year ended 30 June 2020.
15. Remuneration of auditors
RSM Australia Partners Audit and review of financial reports 46,000 25,000 Other – taxation services 16,600 - 62,600 25,000
53 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
16. Commitments for expenditure
Capital commitments There are no capital commitments contracted for at balance date.
Exploration and Evaluation The consolidated entity is required to maintain current rights of tenure to tenements, which require outlays of expenditure in future financial periods. Under certain circumstances these commitments are subject to the possibility of adjustment to the amount and/or timing of such obligations, however they are expected to be fulfilled in the normal course of operations.
Consolidated 2020 2019 $ $ The company has tenement rental and expenditure commitments payable of: - Not later than 12 months 2,118,981 73,700 - Between 12 months and 5 years 802,403 58,030 - More than 5 years 1,310,064 - 4,231,448 131,730
17. Events after the reporting period
On 3 July 2020, 200,000 options with an exercise price of $0.20 were exercised and converted into 200,000 fully paid ordinary shares, and 550,000 fully paid ordinary shares were issued as consideration for public relations services received.
On 28 August 2020, 8,064,517 fully paid ordinary shares were issued as part of a $2,500,000 placement and 567,742 fully paid ordinary shares were issued in consideration of part of the capital raising fees.
On 10 September 2020, 250,000 fully paid ordinary shares were issued as consideration for public relations services and 100,000 fully paid ordinary shares were issued under an Exploration Agreement. Additionally, 100,000 unlisted options, with an exercise price of $0.37 expiring 10 September 2023 were issued for consulting services and 300,000 performance rights were issued to Mr Jason Bahnsen as part of his appointment as President of Tempus Resources Ltd, under the terms and conditions of his Executive Agreement.
Whilst exploration activities have been able to continue, the impact of the Coronavirus (COVID-19) pandemic is ongoing. It is not practical to estimate the potential impact, positive or negative, after the reporting date. The situation is continually developing and is dependent on measures imposed by Australian, Canadian and Ecuadorian Governments, and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and economic stimulus that may be provided.
The directors are not aware of any other matters or circumstances that have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the company the results of those operations, or the state of affairs of the company in future financial years.
54 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
18. Loss per share Consolidated 2020 2019 $ $ a) Reconciliation of earnings to profit or loss: Loss after income tax (2,693,918) (852,569) Non-controlling interest 27,046 66 Loss after income tax attributable to the owners of Tempus Resources Limited (2,666,872) (852,503) used in calculating basic and diluted loss per share
# # b) Weighted average number of ordinary shares used in the calculation of basic and diluted loss per share 41,815,288 34,194,522
Cents Cents c) Basic and diluted loss per share (6.38) (2.49)
# # d) The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of ordinary shares for the purposes of diluted earnings per share Options – exercise price of $0.20 200,000 200,000 Options – exercise price of $0.25 4,000,000 4,000,000 Options – exercise price of $0.15 3,000,000 - Options – exercise price of $0.135 338,953 - Options – exercise price of $0.185 514,873 - Performance rights 4,390,000 - 12,443,826 4,200,000
19. Cash flow information
Consolidated 2020 2019 $ $ a) Reconciliation of loss after income tax to net cash outflow from operating activities Loss for the period (2,693,918) (852,569) Share based payments 447,815 - Foreign exchange (27,208) - Impairment 407,063 - Change in operating assets and liabilities: Trade and other receivables (45,411) (4,895) Other assets 435 (15,441) Exploration and evaluation (3,280,781) (128,410) Trade and other payables 127,861 36,767 Provisions 1,023,031 - Net cash outflow from operating activities (4,041,113) (964,548)
55 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
20. Financial Risk Management
The consolidated entity’s principal financial instruments comprise cash and short-term deposits. The consolidated entity has various other financial assets and liabilities such as other receivables and payables, which arise directly from its operations.
The consolidated entity’s activities expose it to a variety of financial risks, including, credit risk, liquidity risk, foreign exchange rate risk and cash flow interest rate risk. The consolidated entity is not exposed to price risk.
Risk management is carried out by the Board of Directors, who evaluates and agrees upon risk management and objectives.
(a) Interest Rate Risk
The consolidated entity is not materially exposed to interest rate risk.
(b) Credit risk
The consolidated entity does not have any significant concentrations of credit risk. Credit risk is managed by the Board of Directors and arises from cash and cash equivalents as well as credit exposure including outstanding receivables.
All cash balances held in Australia, Canada and Ecuador are held at internationally recognised institutions.
The maximum exposure to credit risk at reporting date is the carrying amount of the financial assets disclosed within the financial report.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about default rates.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash balances and access to equity funding.
The consolidated entity’s exposure to the risk of changes in market interest rates relate primarily to cash assets.
The directors monitor the cash-burn rate of the consolidated entity on an on-going basis against budget and the maturity profiles of financial assets and liabilities to manage its liquidity risk.
The financial liabilities the consolidated entity had at reporting date were other payables incurred in the normal course of the business. These were non-interest bearing and were due within the normal 30-60 days terms of creditor payments.
Maturity analysis for financial liabilities Financial liabilities of the consolidated entity comprise trade and other payables. As at 30 June 2020 all financial liabilities are contractually maturing within 60 days.
56 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
20. Financial Risk Management (continued)
(d) Foreign currency risk
Foreign exchange risks arise when future commercial transactions and recognised financial assets and financial liabilities are denominated in a currency that is not the entity’s functional currency.
The consolidated entity is primarily exposed to the fluctuations in the Canadian and US dollar, as the consolidated entity holds cash in Canadian and US dollars and much of the consolidated entity’s exploration costs and contracts are denominated in Canadian and US dollars.
The consolidated entity aims to reduce and manage its foreign exchange risk by holding the majority of its funds in its Canadian and US dollar accounts so that the exchange rate is crystallised early and future fluctuations in rates for settlement of Canadian and US dollar denominated payables are avoided. As the consolidated entity’s operations develop and expand, the consolidated entity will develop and implement a more sophisticated foreign exchange risk strategy, which will include the use of Forward Exchange Contracts and sophisticated treasury products.
The carrying amount of the consolidated entity’s foreign currency denominated financial assets and financial liabilities at the reporting date were as follows:
Consolidated Consolidated Financial Assets Financial Liabilities 2020 2019 2020 2019 $ $ $ $
US dollars 84,610 - 193,759 134,553 Canadian dollars 2,709,719 - 285,144 - 2,794,329 - 478,903 134,553
The consolidated entity had net financial assets in foreign currencies of $2,315,426 (financial assets of $2,794,329 less financials liabilities of $478,903) as at 30 June 2020 (2019: net financial liabilities of $134,553 (financial assets of nil less financial liabilities of $134,553)). Based on this exposure, had the Australian dollar weakened / strengthened by 5% (2019: weakened / strengthened by 5%) against these foreign currencies with all other variables held constant, the consolidated entity’s profit before tax for the year would have been $115,771 lower / higher (2019: $6,728 lower / higher) and equity would have been $115,771 lower / higher (2019: $6,728 lower / higher). The percentage change is the expected overall volatility of the significant currencies, which is based on management’s assessment of reasonable possible fluctuations taking into consideration movements over the last 6 months each year and the spot rate at each reporting date. The actual foreign exchange gain for the year ended 30 June 2020 was $22,787 (2019: loss of $1,083).
(e) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. All financial assets and financial liabilities of the consolidated entity at the reporting date are recorded at amounts approximating their carrying amount.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature.
57 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
21. Parent entity information
The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are the same as those applied in the consolidated financial statements except as set out below. Refer to Note 1 for a summary of the significant accounting policies of the Group.
Investments in subsidiaries Investments in subsidiaries are accounted for at costs less impairment.
Financial position Parent 2020 2019 $ $ Assets Current assets 907,432 4,161,303 Non-current assets 5,920,481 254,096 Total assets 6,827,913 4,415,399
Liabilities Current liabilities 384,223 204,026 Total liabilities 384,223 204,026
Equity Issued capital 9,044,007 4,726,886 Share based payment reserve 1,130,822 542,144 Accumulated losses (3,731,139) (1,057,657) Total equity 6,443,690 4,211,373
Financial performance
Loss for the period (2,673,482) (851,911) Other comprehensive income - - Total comprehensive loss (2,673,482) (851,911)
Contingent assets The parent entity had no contingent assets as at 30 June 2020 and 30 June 2019.
Contingent liabilities The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019.
Capital commitments The parent entity had no capital commitments as at 30 June 2020 and 30 June 2019.
Significant accounting policies The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in Note 1, except for the following: Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
58 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
21. Parent entity information (continued)
Interest in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries.
Percentage Owned (%) Country of 2020 2019 Class of Shares Name of entity Incorporation Montejinni Resources Pty Ltd1 Australia Ordinary 90% 90% Condor Gold S.A.2 Ecuador Ordinary 100% - Miningsources S.A.2 Ecuador Ordinary 100% - Sona Resources Corp2 Canada Ordinary 100% - No. 75 Corporate Ventures Ltd2 Canada Ordinary 100% -
1 Tempus holds 90% interest in Montejinni Resources Pty Ltd. The non-controlling interest holds 10% (2019: 10%) of the voting rights of Montejinni Resources Pty Ltd.
2 As disclosed in Note 8, Tempus Resources Limited acquired a 100% interest in Condor Gold S.A., Miningsources S.A., Sona Resources Corp and No. 75 Corporate Ventures Ltd during the year.
22. Contingent Assets and Liabilities
Contingent assets
The consolidated entity had no contingent assets as at 30 June 2020 and 30 June 2019.
Contingent liabilities
Tempus Resources Limited acquired a 100% interest in No. 75 Corporate Ventures Ltd during the year as disclosed in Note 8. No. 75 Corporate Ventures Ltd holds 100% interest in the rights over the Blackdome project in Canada. There is significant uncertainty as to what future liabilities will arise in relation to potential closure and rehabilitation costs, contingent on determination of costs through completion of the closure and reclamation plans required by the Ministry of Energy, Mines and Petroleum Resources in Canada. All known costs that currently can be reliably measured have been recognised in provisions as disclosed in Note 10. The outcome and costs resulting from the approved rehabilitation plan as required by the Ministry of Energy, Mines and Petroleum Resources, cannot be measured sufficiently at this time.
The consolidated entity had no other contingent liabilities as at 30 June 2020 and 30 June 2019.
23. Company Details
The registered office and principal place of business is: Level 2, 22 Mount Street Perth WA 6000 Telephone: 08 6188 8181 Facsimile: 08 6188 8182 Email: [email protected]
59 DIRECTORS’ DECLARATION
In the directors' opinion:
● the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
● the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as stated in Note 1 to the financial statements;
● the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30 June 2020 and of its performance for the year then ended; and
● there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
Brendan Borg Managing Director
Date: 30 September 2020 Perth
60 RSM Australia Partners Level 32, Exchange Tower 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111 www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Tempus Resources Limited for the year ended 30 June 2020, I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA TUTU PHONG Dated: 30 September 2020 Partner
THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation RSM Australia Partners Level 32, Exchange Tower 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111 www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TEMPUS RESOURCES LIMITED
Opinion
We have audited the financial report of Tempus Resources Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter How our audit addressed this matter Acquisition of exploration and evaluation assets Refer to Note 8 in the financial statements On 16 October 2019, the Group acquired 100% of the Our audit procedures included: issued capital of Condor Gold S.A and Miningsources S.A for a total consideration of $843,426 through the Reviewing the acquisition agreements to issue of fully paid ordinary shares and cash. understand the transaction, acquisition date and the related accounting considerations; On 15 November 2019, the Company acquired 100% Evaluating the management determination that of the issued capital of Sona Resources Corp. and No. the acquisitions did not meet the definition of a 75 Corporate Ventures Ltd for a total consideration of business within AASB 3 Business Combinations $659,833 through the issue of fully paid ordinary and therefore was an asset acquisition as shares and cash. opposed to a business combination; Assessing management’s determination of the Accounting for these acquisitions is a key audit acquisition date, fair value of consideration paid matter as it involves management judgements in and the fair value of the net assets acquired; and determining the acquisition date, the acquisition Reviewing the adequacy and accuracy of the accounting treatment, the fair value of net assets relevant disclosures in the financial statements. acquired and the fair value of the purchase consideration. Exploration and Evaluation Expenditure Refer to Note 8 in the financial statements At 30 June 2020, the Group has capitalised Our audit procedures included: exploration and evaluation expenditure with a carrying value of $5,611,482. Obtaining evidence that the Group has valid rights to explore in the specific area of interest; We determined this to be a key audit matter due to the Agreeing a sample of additions to supporting significant management judgments involved in documentation and ensuring the amounts are assessing the carrying value of the asset including: capital in nature and relate to the area of interest; For those tenements that were relinquished, Determination of whether expenditure can be evaluating management’s assessment of the associated with finding specific mineral resources impairment loss recognised for the year ended 30 and the basis on which that expenditure is June 2020; allocated to an area of interest; Assessing and evaluating management’s Determination of whether exploration activities assessment that no indicators of impairment have progressed to the stage at which the existed for those tenements where the Group has existence of an economically recoverable mineral current rights of tenure; reserve may be assessed; and Enquiring with management and reviewing Assessing whether any indicators of impairment budgets and other documentation as evidence are present and, if so, judgments applied to that active and significant operations in, or relation determine and quantify any impairment loss. to, the area of interest will be continued in the future; Through discussions with the management and reviewing relevant supporting documentation, assessing management’s determination that exploration and evaluation activities have not yet reached a stage where the existence or otherwise of economically recoverable reserves may be reasonably determined; and Assessing the appropriateness of the disclosures in the financial report. Rehabilitation provision Refer to Note 10 in the financial statements As at 30 June 2020, the Group had provisions of Our audit procedures included: $2,681,523 relating to the estimated future cost of rehabilitation and restoration of areas disturbed as a Obtaining an understanding of the process result of previous mining and exploration operations. involved in the determination of the rehabilitation liability; The provision for rehabilitation was considered a key Obtaining the calculations and verified the audit matter due to the materiality of the balance, the methodology used to determine the provision; significant judgements and estimation uncertainty Reviewing the key assumptions used in the involved in the quantification of the liability. calculations; and Assessing the competence and objectivity of the management experts used. Performance Rights Refer to Note 12 in the financial statements During the year, the Group issued 5,750,000 Our audit procedures included: Performance Rights. The fair value of performance rights granted during the year was $815,516. Reviewing the key terms and conditions of the performance rights issued; Management has performed the valuation of the Obtaining the valuation model prepared by performance rights granted using a valuation model, management and assessing whether the model since management was unable to reliably measure the was appropriate for valuing the performance rights fair value of the services received. issued during the year; Challenging the reasonableness of key We considered the valuation of these performance assumptions used by management in the model rights to be a key audit matter as it involved to calculate the fair value of the performance management’s judgement in determining various rights; and inputs used in the valuation model. Assessing the adequacy of the disclosures in the financial report.
Other Information
The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30 June 2020 but does not include the financial report and the auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of Tempus Resources Limited, for the year ended 30 June 2020, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
RSM AUSTRALIA PARTNERS
Perth, WA TUTU PHONG Dated: 30 September 2020 Partner ADDITIONAL INFORMATION
Additional information required by Australian Stock Exchange Ltd and not shown elsewhere in this report is as follows. The information is current as at 18 September 2020.
(a) Distribution of equity securities Analysis of numbers of equity security holders by size of holding:
Range Total Holders Units % of Issued Capital
1 – 1,000 21 4,826 0.01% 1,001 – 5,000 193 594,770 0.75% 5,001 – 10,000 117 973,080 1.22% 10,001 – 100,000 351 14,053,436 17.67% 100,001 – 9,999,999,999 126 63,886,430 80.35% Total 808 79,512,542 100.00% Unmarketable Parcels Minimum $500.00 parcel at $0.25 per unit is 53 holders with 52,324 shares.
(b) Twenty largest shareholders The names of the twenty largest holders of quoted ordinary shares are:
Rank Name Units % of Units
1 6,663,307 8.38% HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 2 5,319,840 6.69% CITICORP NOMINEES PTY LIMITED 3 4,246,205 5.34% RODRIGO ARTURO IZURIETA 4 CS FOURTH NOMINEES PTY LIMITED 1,843,627 2.32%
(c) Voting rights All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
66 ADDITIONAL INFORMATION
(d) Unlisted Securities The following options are on issue: 4,000,000 unlisted options with an exercise price of $0.25 expiring 3 August 2022 3,000,000 unlisted options with an exercise price of $0.15 expiring 25 June 2023 338,953 unlisted options with an exercise price of $0.135 expiring 25 June 2022 514,873 unlisted options with an exercise price of $0.185 expiring 25 June 2022 100,000 unlisted options with an exercise price of $0.37 expiring 10 September 2023
A total of 4,690,000 Performance Rights are on issue to directors, employees and consultants of the Company.
67 APPENDIX "C" FINANCIAL STATEMENTS
Attached.
Page 65 of 69 ABN 70 625 645 338
TEMPUS RESOURCES LIMITED CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2020
1
CONTENTS
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income 3 Condensed Consolidated Statement of Financial Position 4 Condensed Consolidated Statement of Changes in Equity 5 Condensed Consolidated Statement of Cash Flows 6 Notes to the Financial Statements 7 Directors’ Declaration 13 Independent Auditor’s Review Report 14
2 CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2020
Notes 30 September 30 September 2020 2019 $ $
Revenue 478 12,760 Directors’ and employee benefits expense (62,750) (59,193) Legal and other professional fees (92,726) (41,087) Regulatory fees (32,410) (21,315) Advertising and marketing expenses (15,499) - Project evaluation - (349,371) Share based payments 8(ii) (29,868) (23,477) Impairment expense (3,642) - Foreign exchange loss (2,171) - Other expenses (56,487) (15,448) Loss before income tax (295,075) (497,131) Income tax expense - - Loss for the period (295,075) (497,131)
Other comprehensive income/(loss) Items that may be reclassified subsequently to profit or loss Exchange differences on translating foreign operations (106,047) - Total other comprehensive income/(loss) (106,047) -
Total comprehensive loss for the period (401,122) (497,131)
Loss attributable to: Non-controlling interests (378) - Members of the parent (294,697) (497,131) (295,075) (497,131)
Total comprehensive loss attributable to: Non-controlling interests (378) - Members of the parent (400,744) (497,131) (401,122) (497,131)
Loss per share - Basic loss per share (cents) (0.40) (1.36) - Diluted loss per share (cents) (0.40) (1.36)
The accompanying notes form part of this interim financial report.
3 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2020
Notes 30 September 30 June 2020 2020 $ $ ASSETS Current assets Cash and cash equivalents 3,804,753 3,559,362 Trade and other receivables 174,037 93,980 Other assets 171,699 47,644 Total current assets 4,150,489 3,700,986
Non current assets Exploration and evaluation 5 7,269,345 5,611,482 Other assets 254,117 258,070 Total non current assets 7,523,462 5,869,552
Total assets 11,673,951 9,570,538
LIABILITIES Current liabilities Trade and other payables 581,302 635,598 Total current liabilities 581,302 635,598
Non current liabilities Provisions 6 2,592,998 2,681,523 Total non current liabilities 2,592,998 2,681,523
Total liabilities 3,174,300 3,317,121
Net assets 8,499,651 6,253,417
EQUITY Issued capital 7 11,796,524 9,044,007 Reserves 8 748,988 960,196 Accumulated losses (4,019,818) (3,725,121) Equity attributable to owners of the Company 8,525,694 6,279,082 Non-controlling interest (26,043) (25,665)
Total equity 8,499,651 6,253,417
The accompanying notes form part of this financial report.
4 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2020
Share based Foreign Non- Issued payment exchange Accumulated controlling Capital reserve reserve Losses interest Total
Balance at 1 July 2019 4,726,886 542,144 - (1,058,249) 1,381 4,212,162 Loss for the period - - - (497,131) - (497,131) Other comprehensive income ------Total comprehensive (loss) / income for the period - - - (497,131) - (497,131)
Issue of capital (net of costs) ------Share based payments - 23,477 - - - 23,477 Balance at 30 September 2019 4,726,886 565,621 - (1,555,380) 1,381 3,738,508
Balance at 1 July 2020 9,044,007 1,130,822 (170,626) (3,725,121) (25,665) 6,253,417 Loss for the period - - - (294,697) (378) (295,075) Other comprehensive income - - (106,047) - - (106,047) Total comprehensive (loss) / income for the period - - (106,047) (294,697) (378) (401,122)
Issue of capital (net of costs) 2,752,517 (135,029) - - - 2,617,488 Share based payments - 29,868 - - - 29,868 Balance at 30 September 2020 11,796,524 1,025,661 (276,673) (4,019,818) (26,043) 8,499,651
The accompanying notes form part of this financial report.
5 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2020
Notes 30 September 30 September 2020 2019 $ $ Cash flows from operating activities Interest received 510 13,201 Payments to suppliers and employees (235,421) (185,689) Payments for exploration and evaluation (1,887,498) (597,462) Net cash outflow from operating activities (2,122,409) (769,950)
Cash flows from financing activities Proceeds from issue of shares 2,500,000 - Proceeds from conversion of options 40,000 - Share issue costs paid (144,163) - Net cash inflow from financing activities 2,395,837 -
Net increase in cash held 273,428 (769,950) Cash at the beginning of the financial period 3,559,362 4,114,366 Effect of exchange rate changes on cash and cash equivalents (28,037) -
Cash at the end of the financial period 3,804,753 3,344,416
The accompanying notes form part of this financial report.
6 NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2020 (CONTINUED)
1. Corporate Information
These consolidated financial statements represent those of Tempus Resources Limited (the “Company”) and its controlled entities (the “consolidated entity” or “Group”) at the end of, or during the three months to 30 September 2020 and 30 September 2019. The financial statements are presented in Australian dollars, which is Tempus Resources Limited’s functional and presentation currency.
Tempus Resources Limited is a listed public company limited by shares, incorporated in Australia and with a registered office at Level 2, 22 Mount Street, Perth, Western Australia, 6000, Australia.
2. Principal Activities
The principal activity of the consolidated entity during the period was mineral exploration.
3. Basis of Preparation
Statement of Compliance
The interim report is a general purpose financial report that has been prepared in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting.
The interim financial report does not include full disclosures of the type normally included in an annual financial report and should be read in conjunction with the annual financial report for the period ended 30 June 2020.
The accounting policies and methods of computation adopted in the preparation of these interim financial statements are consistent with those adopted and disclosed in the Company’s 2020 annual financial report for the year ended 30 June 2020 and are consistent with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB).
New and Revised Accounting Standards and Interpretations
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the International Accounting Standards Board (IASB) that are mandatory for the current reporting period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
7 NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2020 (CONTINUED)
4. Segment Information
The consolidated entity operates within three geographical segments within mineral exploration and extraction being Australia, Canada and Ecuador. The segment information provided to the chief operating decision maker is as follows:
Exploration and Three month ended 30 corporate Exploration Exploration September 2020 activities Activities Activities AUSTRALIA CANADA ECUADOR Consolidated $ $ $
Segment revenue 137 341 - 478 Total revenue 478
Segment result before income tax (280,124) (14,951) - (295,075) Loss before income tax (295,075)
At 30 September 2020 Segment assets 2,812,901 6,888,100 1,972,950 11,673,951 Total assets 11,673,951
Segment liabilities 163,277 2,873,340 137,683 3,174,300 Total Liabilities 3,174,300
Exploration and Exploration Three month ended 30 corporate Exploration Activities September 2019 activities Activities ECUADOR AUSTRALIA CANADA Consolidated $ $ $
Segment revenue 12,760 - - 12,760 Total revenue 12,760
Segment result before income tax (497,131) - - (497,131) Loss before income tax (497,131)
At 30 June 2020 Segment assets 907,432 6,810,801 1,852,305 9,570,538 Total assets 9,570,538
Segment liabilities 384,226 2,761,760 171,135 3,317,121 Total Liabilities 3,317,121
8 NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2020 (CONTINUED)
30 September 30 June 2020 2020 1 $ $ 5. Exploration and evaluation A summary of the exploration and evaluation asset is as follows:
Opening balance 5,611,482 254,886 Acquisitions during the period - 3,266,911 Expenditure incurred during the period 1,816,749 1,574,236 Impairments (3,642) (407,063) Changes in rehabilitation (47,487) 1,023,031 Foreign exchange movements (107,757) (100,519) Closing balance 7,269,345 5,611,482
1 Relates to the 12 month period ending 30 June 2020.
30 September 30 June 2020 2020 $ $ 6. Provisions
Rehabilitation provision - Blackdome 2,592,998 2,681,523 2,592,998 2,681,523
A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or mined. The consolidated entity's mining and exploration activities are subject to various laws and regulations governing the protection of the environment. The consolidated entity recognises management's best estimate for assets retirement obligations and site rehabilitations in the period in which they are incurred. Actual costs incurred in the future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of this provision.
30 September 30 June 2020 2020 $ $ 7. Issued Capital
Ordinary shares – fully paid (i) 11,796,524 9,044,007 11,796,524 9,044,007
(i) Ordinary Shares
Issue price Date No. of shares $ $ At 1 July 2020: 69,780,283 9,044,007 − 3 July 2020 – Conversion of options 200,000 0.20 65,029 − 3 July 2020 – Public relations services 550,000 0.20 110,000 − 28 August 2020 – Capital raising 8,064,517 0.31 2,500,000 − 28 August 2020 – In lieu of capital raising fees 567,742 0.31 176,000 − 10 September 2020 - Public relations services 250,000 0.35 87,500 − 10 September 2020 – Shares issued under Exploration agreement 100,000 0.35 35,000 − Capital raising costs - (221,012) At 30 September 2020 79,512,542 11,796,524
9 NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2020 (CONTINUED)
30 September 30 June 2020 2020 8. Reserves $ $
Foreign currency reserve (i) (276,673) (170,626) Share based payments reserve (ii) 1,025,661 1,130,822 748,988 960,196
(i) Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to Australian dollars.
(ii) Share based payments reserve
Reconciliation of share based payments reserve
Opening balance 1 July 2020 1,130,822 − Performance Rights – recognised as an expense 18,258 − Options – recognised as an expense 11,610 − Transfer to issued capital upon issue of shares (135,029) Closing balance 30 September 2020 1,025,661
Performance Rights
During the period, the Company granted 300,000 performance rights, with a total fair value of $91,910. This figure represents the fair value at grant date before considering the best available estimates of the number of performance rights with non market-based vesting conditions that are expected to vest.
After taking into account the probabilities of vesting criteria being met and the expected vesting date, the value expensed in relation to these performance rights during the period was $3,361 with the remaining amount to be expensed over the vesting period. The expense realised in respect to performance rights is intended to reflect the best available estimate of the number of performance rights expected to vest. The remaining expense of $14,897 is in relation to performance rights granted in previous periods that are expensed over the vesting period.
The following performance rights issued during the period were valued using a Hoadley ESO5 pricing model with the valuation model inputs used to determine the fair value at the grant date as follows:
Share price Expected Dividend Number of Value per Vesting Grant date Expiry date at grant date volatility yield PRs PR Total Value date note $ % % # $ $ 28/08/2020 10/09/2022 0.325 94.74 - 100,000 0.2691 26,910 3
The following performance rights issued during the period were valued based on the share price at grant date as they did not have market-based vesting conditions.
Share price at Vesting date Grant date Expiry date grant date Number of PRs Value per PR Total Value note $ # $ $ 28/08/2020 10/09/2022 0.325 100,000 0.325 32,500 1 28/08/2020 10/09/2022 0.325 100,000 0.325 32,500 2
Vesting conditions: 1. Upon completion of a Mineral Resource estimate (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) equivalent to 500,000 Oz at a minimum grade of 1g/tonne Au on any mineral deposit in Canada that is validly owned by the Company or its Related Bodies Corporate. 2. Upon completion of an economic prefeasibility study or higher in relation to any project in Canada that is validly owned by the Company or its Related Bodies Corporate.
10 NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2020 (CONTINUED)
3. Upon the 20-business day volume weighted average price of Shares as traded on the ASX equals or exceeds $0.60.
Options
During the period, the Company granted 100,000 options, with a total fair value of $11,610.
For the options issued during the financial year a Hoadley ESO2 valuation model was used with the valuation model inputs used to determine the fair value at the grant date as follows:
Share Value price at Exercise Expected Risk free Dividend Number of per Total Vesting Grant date Expiry date grant date price volatility rate yield Options Option Value terms $ $ % % % # $ $ 7/07/2020 10/09/2023 0.37 0.37 96.27% 0.265% - 100,000 0.1161 11,610 Immediately
Options outstanding at reporting date:
Grant date Expiry date Exercise price $ 30 September 30 June 2020 2020
3 August 2018 3 August 2021 0.20 - 200,000 3 August 2018 3 August 2022 0.25 4,000,000 4,000,000 22 June 2020 25 June 2023 0.15 3,000,000 3,000,000 22 June 2020 25 June 2022 0.135 338,953 338,953 22 June 2020 25 June 2022 0.185 514,873 514,873 7 July 2020 10 September 2023 0.37 100,000 - 7,953,826 8,053,826
9. Events after the Reporting Date
Tom Peregoodoff and Anthony Cina were appointed as Non-Executive Directors effective from 1 November 2020.
On 30 November 2020, the Company received conditional approval to list on the Canadian TSX Venture Exchange (TSX-V). To meet TSX-V listing requirements, the Company will be required to cancel 1,264,000 performance rights. Subject to any regulatory and shareholder approvals required, the Company will issue 2,528,000 options with an exercise price of $0.31 and a term of five years from issue date to those performance rights holders in lieu of the cancellation.
Whilst exploration activities have been able to continue, the impact of the Coronavirus (COVID-19) pandemic is ongoing. It is not practical to estimate the potential impact, positive or negative, after the reporting date. The situation is continually developing and is dependent on measures imposed by Australian, Canadian and Ecuadorian Governments, and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and economic stimulus that may be provided.
The directors are not aware of any matters or circumstances that have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the consolidated entity the results of those operations, or the state of affairs of the consolidated entity in future financial years.
11 NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED 30 SEPTEMBER 2020 (CONTINUED)
10. Contingent Assets and Liabilities
Contingent assets
The consolidated entity had no contingent assets as at 30 September 2020 and 30 June 2020.
Contingent liabilities
The Company acquired a 100% interest in No. 75 Corporate Ventures Ltd during the prior year. No. 75 Corporate Ventures Ltd holds 100% interest in the rights over the Blackdome project in Canada. There is significant uncertainty as to what future liabilities will arise in relation to potential closure and rehabilitation costs, contingent on determination of costs through completion of the closure and reclamation plans required by the Ministry of Energy, Mines and Petroleum Resources in Canada. All known costs that currently can be reliably measured have been recognised in provisions as disclosed in Note 6. The outcome and costs resulting from the approved rehabilitation plan as required by the Ministry of Energy, Mines and Petroleum Resources, cannot be measured sufficiently at this time.
The consolidated entity had no other contingent liabilities as at 30 September 2020 and 30 June 2020.
12 DIRECTORS’ DECLARATION
In the directors' opinion:
● the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as stated in Note 3 to the financial statements;
● the attached financial statements and notes give a true and fair view of the company's financial position as at 30 September 2020 and of its performance for the period 1 July 2020 to 30 September 2020; and
● there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
On behalf of the directors
Brendan Borg Managing Director
Date: 3 December 2020
13 RSM Australia Partners Level 32, Exchange Tower 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111 www.rsm.com.au
INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF TEMPUS RESOURCES LIMITED
Report on the Interim Financial Report
We have reviewed the accompanying interim financial report of Tempus Resources Limited which comprises the statement of financial position as at 30 September 2020, the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the three month period ended on that date, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at period end or from time to time during the period.
Directors’ Responsibility for the Interim Financial Report
The directors of the company are responsible for the preparation of the interim financial report that gives a true and fair view in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and for such internal control as the directors determine is necessary to enable the preparation of the interim financial report that is free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express a conclusion on the interim financial report based on our review. We conducted our review in accordance with International Standard on Review Engagements ISRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the interim financial report is not in accordance with Accounting Standard IAS 34 Interim Financial Reporting IFRS including: giving a true and fair view of the consolidated entity’s financial position as at 30 September 2020 and its performance for the three month period ended on that date. As the auditor of Tempus Resources Limited, ISRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.
A review of an interim financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation Independence
In conducting our review, we have complied with the independence requirements of the International Code of Ethics for Professional Accountants (including International Independence Standards) and the ethical requirements of the International Ethics Standards Board for Accountants (IESBA Code).
Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the interim financial report of Tempus Resources Limited does not present fairly, in all material respects, the consolidated entity’s financial position as at 30 September 2020 and of its performance for the three month period ended on that date, in accordance with Accounting Standard IAS 34 Interim Financial Reporting.
RSM AUSTRALIA PARTNERS
Perth, WA TUTU PHONG Dated: 3 December 2020 Partner ABN 70 625 645 338
TEMPUS RESOURCES LIMITED ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020
CONTENTS
Consolidated Statement of Profit or Loss and Other Comprehensive 3 Income Consolidated Statement of Financial Position 4 Consolidated Statement of Changes in Equity 5 Consolidated Statement of Cash Flows 6 Notes to the Financial Statements 7 Directors’ Declaration 28 Independent Auditor’s Report 29
2 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2020
Notes 2020 2019 $ $
Other income 3 23,055 58,186 Directors’ and employee benefits expense (264,935) (96,406) Legal and other professional fees (276,238) (207,201) Regulatory fees (109,050) (46,759) Advertising and marketing expenses (165,240) (59,293) Foreign exchange gain/(loss) 22,787 (1,083) Project evaluation (914,555) (400,235) Share based payments expense (337,815) - Finance costs (2,535) - Impairment expense 8 (407,063) - Other expenses (262,329) (99,778)
Loss before income tax (2,693,918) (852,569) Income tax expense 4 - - Loss for the year (2,693,918) (852,569)
Other comprehensive income Items that may be reclassified subsequently to profit or loss Foreign currency translation (170,626) -
Other comprehensive loss for the year, net of tax (170,626) -
Total comprehensive loss for the year (2,864,544) (852,569)
Loss for the year attributable to: - Owners of the Company (2,666,872) (852,503) - Non-controlling interests (27,046) (66) (2,693,918) (852,569)
Total comprehensive loss for the year attributable to: - Owners of the Company (2,837,498) (852,503) - Non-controlling interests (27,046) (66) (2,864,544) (852,569)
Loss per share - Basic loss per share (cents) 18 (c) (6.38) (2.49) - Diluted loss per share (cents) 18 (c) (6.38) (2.49)
The accompanying notes form part of this financial report.
3 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020
Notes 2020 2019 $ $ ASSETS Current assets Cash and cash equivalents 5 3,559,362 4,114,366 Trade and other receivables 6 93,980 17,400 Other assets 7 47,644 29,537 Total current assets 3,700,986 4,161,303
Non-current assets Exploration and evaluation 8 5,611,482 254,886 Other assets 7 258,070 - Total non-current assets 5,869,552 254,886
Total assets 9,570,538 4,416,189
LIABILITIES Current liabilities Trade and other payables 9 635,598 204,027 Total current liabilities 635,598 204,027
Non-current liabilities Provisions 10 2,681,523 - Total non-current liabilities 2,681,523 -
Total liabilities 3,317,121 204,027
Net assets 6,253,417 4,212,162
EQUITY Issued capital 11 (a) 9,044,007 4,726,886 Reserves 12 960,196 542,144 Accumulated losses (3,725,121) (1,058,249) Equity attributable to owners of the Company 6,279,082 4,210,781 Non-controlling interests (25,665) 1,381
Total equity 6,253,417 4,212,162
The accompanying notes form part of this financial report.
4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020
Share based Foreign Non- Issued payment exchange Accumulated controlling Capital reserve reserve losses interests Total $ $ $ $ $ $
Balance at 1 July 2019 4,726,886 542,144 - (1,058,249) 1,381 4,212,162 Loss for the year - - - (2,666,872) (27,046) (2,693,918) Other comprehensive income - - (170,626) - - (170,626) Total comprehensive loss for the year - - (170,626) (2,666,872) (27,046) (2,864,544)
Issue of capital (net of costs) 4,317,121 - - - - 4,317,121 Share based payments - 588,678 - - - 588,678 Balance at 30 June 2020 9,044,007 1,130,822 (170,626) (3,725,121) (25,665) 6,253,417
Balance at 1 July 2018 446,001 - - (205,746) - 240,255 Loss for the year - - - (852,503) (66) (852,569) Other comprehensive income ------Total comprehensive loss for the year - - - (852,503) (66) (852,569)
Non-controlling interest arising on acquisition of Montejinni Pty Ltd - - - - 1,447 1,447 Issue of capital (net of costs) 4,280,885 - - - - 4,280,885 Share based payments - 542,144 - - - 542,144 Balance at 30 June 2019 4,726,886 542,144 - (1,058,249) 1,381 4,212,162
The accompanying notes form part of this financial report.
5 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020
Notes 2020 2019 $ $ Cash flows from operating activities Interest received 25,775 52,171 Payments to suppliers and employees (904,591) (617,544) Payments for exploration and evaluation (3,162,297) (399,175) Net cash outflow from operating activities 19 (4,041,113) (964,548)
Cash flows from investing activities Bonds paid (169,152) - Cash acquired on acquisition of subsidiaries 67,095 - Net cash outflow from investing activities (102,057) -
Cash flows from financing activities Proceeds from issue of shares 3,918,155 1,784,000 Share issue costs paid (323,810) (323,470) Net cash inflow from financing activities 3,594,345 1,460,530
Net (decrease) / increase in cash and cash equivalents (548,825) 495,982 Cash and cash equivalents at the beginning of the financial year 4,114,366 3,618,384 Effects of exchange rate changes on cash and cash equivalents (6,179) -
Cash and cash equivalents at the end of the financial year 5 3,559,362 4,114,366
The accompanying notes form part of this financial report.
6 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020
These consolidated financial statements and notes represent those of Tempus Resources Limited and its controlled entities (the “consolidated entity” or “Group”).
The financial statements were authorised for issue on 3 December 2020 by the directors of the company.
1. Summary of significant accounting policies
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. Except for cash flow information, these financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. a) Comparatives
When required by accounting standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. b) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Tempus Resources Limited at the end of the reporting year. A controlled entity is any entity over which Tempus Resources Limited has the power to govern the financial and operating policies so as to obtain benefits from the entity’s activities. Control will generally exist where the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.
Where controlled entities have entered or left the consolidated entity during the year, the financial performance of those entities are included only for the period of the year that they were controlled.
In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the consolidated entity have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown separately within the Equity section of the statement of financial position and statement of profit or loss and other comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date. c) Foreign currency translation
The financial statements are presented in Australian dollars, which is Tempus Resources Limited’s functional and presentation currency.
Foreign currency transactions Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
7 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
1. Summary of significant accounting policies (continued) c) Foreign currency translation (continued)
Foreign operations The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of. d) Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group’s normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group’s normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current. e) Parent entity
These financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in Note 21. f) Income tax
The income tax expense (revenue) for the period comprises current income tax expense (income) and deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses. Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting period. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.
8 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
1. Summary of significant accounting policies (continued) f) Income tax (continued)
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. g) Trade and other receivables
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost, using the effective interest method, less any allowances for expected credit losses. Trade and other receivables are generally due for settlement within 120 days.
Collectability of trade debtors is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful debts is raised when some doubt as to collection exists and in any event when the debt is more than 60 days overdue. h) Exploration and evaluation
Exploration and evaluation expenditures are written off as incurred, except when such costs are expected to be recouped through successful development and exploitation, or sale, of an area of interest. In addition, exploration assets recognised on acquisition of an entity are carried forward provided that exploration and/or evaluation activities in the area have not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in relation to the area are continuing.
The expenditure carried forward when recovery is expected represents an accumulation of direct net exploration and evaluation costs incurred by or on behalf of the consolidated entity and applicable indirect costs, in relation to separate areas of interest for which rights of tenure are current.
If it is established subsequently that economically recoverable reserves exist in a particular area of interest, resulting in the decision to develop a commercial mining operation, then in that year the accumulated expenditure attributable to that area, to the extent that it does not exceed the recoverable amount for the area concerned, will be transferred to mine development. As such it will be subsequently amortised against production from that area. Any excess of accumulated expenditure over recoverable amounts will be written off to the statement of profit or loss and other comprehensive income. i) Trade and other payables
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the consolidated entity during the reporting period which remain unpaid. Due to their short- term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 – 60 days of recognition.
9 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
1. Summary of significant accounting policies (continued) j) Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in provision resulting from the passage of time is recognised as a finance cost. k) Issued Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. l) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with short periods to maturity and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position. m) Other income
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial interest to the net carrying amount of the financial asset.
Other income is recognised when it is received or when the right to receive payment is established. n) Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred. o) Employee benefits
Equity-settled compensation
The consolidated entity operates equity-settled share based payment employee share and option schemes. The fair value of the equity to which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding increase to an equity account.
Share based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the good or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is shown in the option reserve.
The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using an appropriate valuation model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.
10 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
1. Summary of significant accounting policies (continued) p) Goods and services tax (“GST”)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. q) Earnings per share
(i) Basic earnings per share
Basic earnings per share is determined by dividing net profit after income tax attributable to members of the company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. r) Segment reporting
A business segment is identified for a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different to those of other business segments. A geographical segment is identified when products or services are provided within a particular economic environment subject to risks and returns that are different from those of segments operating in other economic environments. s) Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either amortised cost or fair value depending on their classification. Classification is determined based on both the business model within which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a financial asset, its carrying value is written off.
Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income include equity investments which the Group intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.
Impairment of financial assets The Group recognises a loss of allowance for expected credit losses on financial assets which are either measured at amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the Group’s assessment at the end of each reporting period as to whether the financial instrument’s credit risk has increased significantly since initial recognition, based on reasonable and supportable information that is available, without undue cost or effort to obtain.
11 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
1. Summary of significant accounting policies (continued) s) Investments and other financial assets (continued)
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss allowance is estimated. This represents a portion of the asset’s lifetime expected credit losses that is attributable to a default event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit risk has increased significantly, the loss allowance is based on the asset’s lifetime expected credit losses. The amount of expected credit loss recognised is measured on the basis of probability weighted present value of anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss allowance reduced the asset’s carrying value with a corresponding expense through profit or loss. t) Critical accounting judgments, estimates and assumptions
The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the consolidated entity.
There have been no judgements, apart from those involving estimation, in applying accounting policies that have a significant effect on the amounts recognised in these financial statements.
Following is a summary of the key assumptions concerning the future and other key sources of estimation at reporting date that have not been disclosed elsewhere in these financial statements.
Exploration and evaluation expenditure Exploration and evaluation costs have been capitalised on the basis that activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised.
Share based payment transactions The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
COVID-19 pandemic Judgement has been exercised in considering the impacts that the COVID-19 pandemic has had, or may have, on the Group based on known information. This consideration extends to the nature of the products and services offered, customers, supply chain, staffing and geographical regions in which the Group operates. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the Group unfavourably as at the reporting date or subsequently as a result of the COVID-19 pandemic.
Rehabilitation provision A provision has been made for the present value of anticipated costs for future rehabilitation of land explored or mined. The Group’s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. The Group recognises management’s best estimate for assets requirement obligations and site rehabilitations in the period in which they are incurred. Actual costs incurred in the future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates could affect the carrying amount of the provision.
12 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
1. Summary of significant accounting policies (continued) u) New, revised or amending Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the International Accounting Standards Board (IASB) that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity during the financial period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. v) New Accounting Standards and Interpretations not yet mandatory or early adopted
Accounting Standards issued by the IASB that are not yet mandatorily applicable to the consolidated entity, together with an assessment of the potential impact of such pronouncements on the consolidated entity when adopted in future periods, are discussed below:
Conceptual Framework for Financial Reporting (Conceptual Framework) The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new guidance on measurement that affects several Accounting Standards. Where the consolidated entity has relied on the existing framework in determining its accounting policies for transactions, events or conditions that are not otherwise dealt with under the International Accounting Standards, the consolidated entity may need to review such policies under the revised framework. At this time, the application of the Conceptual Framework is not expected to have a material impact on the consolidated entity's financial statements.
13 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
2. Segment information
The consolidated entity operates within three geographical segments within mineral exploration and extraction, being Australia, Canada and Ecuador. The segment information provided to the chief operating decision maker is as follows:
Exploration and Year ended 30 June 2020 corporate Exploration Exploration activities Activities Activities AUSTRALIA CANADA ECUADOR Consolidated $ $ $ $
Segment revenue 19,489 3,566 - 23,055 Total Revenue 23,055
Segment result before income tax (2,667,993) (25,925) - (2,693,918) Loss before income tax (2,693,918)
At 30 June 2020 Segment assets 907,432 6,810,801 1,852,305 9,570,538 Total Assets 9,570,538
Segment liabilities 384,226 2,761,760 171,135 3,317,121 Total Liabilities 3,317,121
Exploration and Exploration Year ended 30 June 2019 corporate Exploration Activities activities Activities ECUADOR AUSTRALIA CANADA Consolidated $ $ $ $
Segment revenue 58,186 - - 58,186 Total Revenue 58,186
Segment result before income (852,569) - - (852,569) tax Loss before income tax (852,569)
At 30 June 2019 Segment assets 4,416,189 - - 4,416,189 Total Assets 4,416,189
Segment liabilities 204,027 - - 204,027 Total Liabilities 204,027
14 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
Consolidated 2020 2019 $ $ 3. Other income Interest 23,055 58,186 23,055 58,186
4. Income tax expense
Loss before income tax expense (2,693,918) (852,569) Tax at the Australian tax rate of 30% (2019: 30%) (808,175) (255,771)
Amounts not deductible /(taxable) in calculating taxable income 515,480 166,644 Tax loss not recognised 275,475 136,981 Tax effect of exploration expenditure 35,364 (31,023) Tax effect of temporary differences (18,144) (16,831) Income tax expense - -
Potential tax benefit relating to unused tax losses for which no deferred tax asset has been recognised 11,593 54,432
The deferred tax asset attributable to carried forward income tax losses and temporary differences has not been recognised as an asset as the company has not commenced trading and the availability of future profits to recoup these losses is not considered probable at the date of this report.
5. Cash and cash equivalents
Cash at bank 3,559,362 4,114,366 3,559,362 4,114,366
6. Trade and other receivables
GST receivable 45,537 11,340 Withholding tax receivable 23,358 45 Interest receivable 1,556 6,015 Other 23,529 - 93,980 17,400
7. Other assets
Current Prepayments 44,872 18,773 Bond deposits 2,772 - Other - 10,764 47,644 29,537
Non-current Bond deposits 258,070 - 258,070 -
Bond deposits are held for mine sites until reclamation has been deemed satisfactorily completed by the chief inspector of mines and the permits can be closed.
15 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
Consolidated 2020 2019 $ $ 8. Exploration and evaluation A summary of the exploration and evaluation asset is as follows:
Opening balance 254,886 - Acquisitions during the year 1,3 3,266,911 151,476 Expenditure incurred during the year 1,574,236 103,410 Impairments (407,063) - Changes in rehabilitation 1,023,031 - Foreign exchange movements (100,519) - Closing balance 5,611,482 254,886
1 On 16 October 2019 the Company completed its 100% acquisition of Condor Gold S.A. and Miningsources S.A. by issuing 3,440,205 fully paid ordinary shares (escrowed to 25 October 2020), paying USD$100,000 (AUD$147,360) to the vendor and issuing 904,209 fully paid ordinary shares as a finder’s fees. 16 October 2019 $ Purchase Consideration Shares issued 696,066 Cash 147,360 843,426
Net Assets Acquired 2 Cash and cash equivalents 66,715 Trade and other receivables 23,101 Exploration and evaluation 889,178 Trade and other payables (135,568) 843,426
2 Management has determined that the acquisition of 100% interest in Condor Gold S.A. and Miningsources S.A does not meet the definition of a business within IFRS 3 Business Combinations. This transaction has been accounted for as an asset acquisition.
3 On 15 November 2019 the Company completed its 100% acquisition of Sona Resources Corp and its subsidiary No. 75 Corporate Ventures Ltd by paying CAD$450,000 (AUD$499,833) to the vendor and issuing 1,000,000 fully paid ordinary shares to the optionholders. 15 November 2019 $ Purchase Consideration Cash 499,833 Shares issued 160,000 659,833
Net Assets Acquired 4 Cash and cash equivalents 380 Trade and other receivables 21,580 Other assets 116,522 Exploration and evaluation 2,377,733 Trade and other payables (127,343) Rehabilitation provision (1,729,039) 659,833
4 Management has determined that the acquisition of 100% interest in Sona Resources Corp and its subsidiary No. 75 Corporate Ventures Ltd does not meet the definition of a business within IFRS 3 Business Combinations. This transaction has been accounted for as an asset acquisition.
16 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
Consolidated 2020 2019 $ $ 9. Trade and other payables
Trade creditors 467,648 142,769 Accrued expenses 101,958 61,258 Other payables 65,992 - 635,598 204,027
10. Provisions
Rehabilitation - Blackdome Opening balance - - Recognised on acquisition on 15 November 2019 (Note 8) 1,729,039 - Changes in rehabilitation estimate 1,023,031 - Foreign exchange movements (70,547) - 2,681,523 -
The provision represents the present value of estimated costs for future rehabilitation of land explored or mined by the Group at the end of the exploration or mining activity that can be measured sufficiently reliably. As disclosed in Note 22, rehabilitation costs associated with the closure, are contingent upon completion of the closure and reclamation plans required by the Ministry of Energy, Mines and Petroleum Resources in Canada, which cannot be measured with sufficient reliability at 30 June 2020, representing a contingent liability.
11. Issued capital
Ordinary shares – fully paid 9,044,007 4,726,886 a) Ordinary Shares Date No. of shares Issue price $ $ 2020 Opening balance 36,500,001 4,726,886 25 October 2019 – Acquisition of Condor Gold S.A. and Miningsources S.A. 3,446,205 0.16 551,393 25 October 2019 – Acquisition finder’s fee 904,209 0.16 144,673 16 December 2019 – Conversion of performance rights 230,000 0.14 32,200 16 December 2019 – Employee services 400,000 0.16 64,000 24 December 2019 – Shares issued under option agreement 1,000,000 0.16 160,000 7 May 2020 – Capital raising Tranche 1 7,739,843 0.13 1,006,180 25 June 2020 – Conversion of performance rights 230,000 0.14 32,200 25 June 2020 – Conversion of performance rights 900,000 0.16 144,000 25 June 2020 – Capital raising Tranche 2 at $0.13 2,307,700 0.13 300,001 25 June 2020 – Capital raising Tranche 2 at $0.135 5,649,217 0.135 762,644 25 June 2020 – Capital raising Tranche 2 at $0.185 10,473,108 0.185 1,937,525 Capital raising costs - (817,695) Closing balance 69,780,283 9,044,007
2019 Opening balance 11,000,001 446,001 3 August 2018 – IPO 25,000,000 0.20 5,000,000 3 August 2018 – Acquisition of Montejinni Resources Pty Ltd 500,000 0.20 100,000 Capital raising costs - (819,115) Closing balance 36,500,001 4,726,886
17 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
11. Issued capital (continued)
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll, each share is entitled to one vote.
b) Capital Management The objectives of management when managing capital is to safeguard the company’s ability to continue as a going concern, so that the company may continue to provide returns for shareholders and benefits for other stakeholders.
Due to the nature of the company’s activities, being mineral exploration, the company does not have ready access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the company’s capital risk management is the current working capital position against the requirements of the company to meet exploration programmes and corporate overheads. The company’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required. The working capital position of the company at 30 June 2020 is as follows:
Consolidated 2020 2019 $ $ Cash and cash equivalents 3,559,362 4,114,366 Trade and other receivables 93,980 17,400 Other current assets 47,644 29,537 Trade and other payables (635,598) (204,027) Working capital position 3,065,388 3,957,276
12. Reserves
Share based payments reserve 1,130,822 542,144 Foreign currency reserve (170,626) - 960,196 542,144
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign operations to Australian dollars.
Reconciliation of share based payments reserve
Opening balance 542,144 - Options – recognised in exploration and evaluation - 25,029 Options – recognised in equity (share issue costs) 413,263 517,115 Performance Rights – recognised as an expense 273,815 - Shares – recognised as an expense 110,000 - Transfer to issued capital upon conversion of performance rights (208,400) - Closing balance 1,130,822 542,144
18 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
12. Reserves (continued)
Performance Rights
During the year, Tempus granted 5,750,000 performance rights, with a total fair value of $815,516. This figure represents the fair value at grant date before considering the best available estimates of the number of performance rights with non market-based vesting conditions that are expected to vest.
After taking into account the probabilities of vesting criteria being met and the expected vesting date, the value of performance rights expensed during the year was $273,815 with the remaining amount to be expensed over the vesting period. The expense realised in respect to performance rights is intended to reflect the best available estimate of the number of performance rights expected to vest.
The following performance rights issued during the period were valued using a Monte Carlo pricing model with the valuation model inputs used to determine the fair value at the grant date as follows:
Share price Expected Dividend Number of Value per Vesting Grant date Expiry date at grant date volatility yield PRs PR Total Value date note $ % % # $ $ 19/08/2019 18/09/2021 0.14 80 - 230,000 0.0704 16,192 5 18/10/2019 25/10/2021 0.16 80 - 900,000 0.0921 82,890 10 19/08/2019 25/10/2021 0.14 80 - 34,000 0.0704 2,394 13
The following performance rights issued during the period were valued based on the share price at grant date as they did not have market-based vesting conditions.
Share price at Vesting date Grant date Expiry date grant date Number of PRs Value per PR Total Value note $ # $ $ 19/08/2019 18/09/2021 0.14 230,000 0.14 32,200 1 19/08/2019 18/09/2021 0.14 230,000 0.14 32,200 2 19/08/2019 18/09/2021 0.14 230,000 0.14 32,200 3 19/08/2019 18/09/2021 0.14 230,000 0.14 32,200 4 18/10/2019 25/10/2021 0.16 900,000 0.16 144,000 6 18/10/2019 25/10/2021 0.16 900,000 0.16 144,000 7 18/10/2019 25/10/2021 0.16 900,000 0.16 144,000 8 18/10/2019 25/10/2021 0.16 900,000 0.16 144,000 9 19/08/2019 25/10/2021 0.14 33,000 0.14 4,620 11 19/08/2019 25/10/2021 0.14 33,000 0.14 4,620 12
Director Performance Rights vesting dates 1. Upon completion of all permitting required to commence diamond drilling on any of the Tenements in Ecuador. 2. Upon any of the following occurring: a. Acquisition of a company with its main focus being on mining and/or mineral exploration; b. Acquisition of one or more mineral exploration or exploitation licences from a third party; or c. Direct issuance to Tempus or its subsidiaries of a mineral exploration or exploration licence. 3. Upon completion of a Mineral Resource estimate (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) equivalent to 500,000 Oz at a minimum grade of 1g/tonne Au on any mineral deposit that is validly owned by Tempus or its subsidiaries at the time of completion. 4. Upon completion of a Scoping Study (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) on any mineral deposit that is validly owned by Tempus or its subsidiaries at the time of completion. 5. If at any time the 20-business day volume weighted average price of Tempus shares as traded on the ASX equals or exceeds 45 cents.
19 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
12. Reserves (continued)
Latin America Performance Rights vesting dates 6. Upon completion of all permitting required to commence diamond drilling on any of the Tenements in Ecuador. 7. Upon any of the following occurring: a. Acquisition of a company with its main focus being on mining and/or mineral exploration in Latin America; b. Acquisition of one or more mineral exploration or exploitation licences in Latin America from a third party; or c. Direct issuance to Tempus or its subsidiaries of a mineral exploration or exploration licence by the relevant cadastre authorities in Latin America, where such above occurrence is approved by the Tempus board. 8. Upon completion of a Mineral Resource estimate (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) equivalent to 500,000 Oz at a minimum grade of 1g/tonne Au on any mineral deposit in Latin America that is validly owned by Tempus or its subsidiaries at the time of completion. 9. Upon completion of a Scoping Study (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) on any mineral deposit in Latin America that is validly owned by Tempus or its subsidiaries at the time of completion. 10. If at any time the 20-business day volume weighted average price of Tempus shares as traded on the ASX equals or exceeds 44 cents.
Exploration Manager Performance Rights vesting dates 11. Upon completion of a Mineral Resource estimate (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) equivalent to 500,000 Oz at a minimum grade of 1g/tonne Au on any mineral deposit that is validly owned by Tempus or its subsidiaries at the time of completion. 12. Upon completion of a Scoping Study (conforming to the JORC Code 2012 Edition or any such subsequent JORC Code) on any mineral deposit that is validly owned by Tempus or its subsidiaries at the time of completion. 13. If at any time the 20-business day volume weighted average price of Tempus shares as traded on the ASX equals or exceeds 45 cents.
The vesting of all performance rights granted is also conditional upon the holder’s continued employment with the consolidated entity.
Options
Set out below is a summary of the movements in options on issue during the year:
Grant date Expiry date Exercise Balance at Granted Exercised Expired/ Balance at price $ the start of forfeited the end of the year the year 3/08/2018 3/08/2021 0.20 200,000 - - - 200,000 3/08/2018 3/08/2022 0.25 4,000,000 - - - 4,000,000 22/06/2020 25/06/2023 0.15 - 3,000,000 - - 3,000,000 22/06/2020 25/06/2022 0.135 - 338,953 - - 338,953 22/06/2020 25/06/2022 0.185 - 514,873 - - 514,873 4,200,000 3,853,826 - - 8,053,826
Weighted average exercise price 0.248 0.153 - - 0.203
Set out below are the options exercisable at the end of the financial year:
Grant date Expiry date Exercise price $ 2020 2019 # # 3 August 2018 3 August 2021 0.20 200,000 200,000 3 August 2018 3 August 2022 0.25 4,000,000 4,000,000 22 June 2020 25 June 2023 0.15 3,000,000 - 22 June 2020 25 June 2022 0.135 338,953 - 22 June 2020 25 June 2022 0.185 514,873 - 8,053,826 4,200,000
The weighted average remaining contractual life of options at the end of the financial year was 2.39 years (2019: 3.05 years).
20 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
12. Reserves (continued)
For the options issued during the financial year a Hoadley ESO2 valuation model was used with the valuation model inputs used to determine the fair value at the grant date as follows:
Share Value price at Exercise Expected Risk free Dividend Number of per Total Vesting Grant date Expiry date grant date price volatility rate yield Options Option Value terms $ $ % % % # $ $ 22/06/2020 25/06/2023 0.20 0.150 100% 0.26% - 3,000,000 0.1092 327,600 Immediately 22/06/2020 25/06/2022 0.20 0.135 100% 0.26% - 338,953 0.1066 36,132 Immediately 22/06/2020 25/06/2022 0.20 0.185 100% 0.26% - 514,873 0.0962 49,531 Immediately
13. Interests of Key Management Personnel (‘KMP’)
The total remuneration paid and payable to KMP of the company during the period are as follows:
Consolidated 2020 2019 $ $ Short-term employee benefits 339,935 128,250 Post-employment benefits - - Share based payments 108,142 - 448,077 128,250
14. Related parties
a) Key management personnel (‘KMP’)
Refer to Note 13 for remuneration paid and payable to KMP.
b) Other transactions and balances with related parties
Payables owing to related parties
Alexander Molyneux – director’s fees 4,500 4,500 Borg Geoscience Pty Ltd – director’s fees (1) 20,833 5,436 Gary Artmont – director’s fees 3,000 - Consilium Corporate Pty Ltd (2) 13,412 9,848 41,745 19,784
(1) Borg Geoscience Pty Ltd is an entity related to Brendan Borg. (2) Consilium Corporate Pty Ltd is an entity related to Melanie Ross. $3,300 was for director fees and $6,548 for company secretarial and accounting.
There are no other transactions with related parties during the year ended 30 June 2020.
15. Remuneration of auditors
RSM Australia Partners Audit and review of financial reports 46,000 25,000 Other – taxation services 16,600 - 62,600 25,000
21 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
16. Commitments for expenditure
Capital commitments There are no capital commitments contracted for at balance date.
Exploration and Evaluation The consolidated entity is required to maintain current rights of tenure to tenements, which require outlays of expenditure in future financial periods. Under certain circumstances these commitments are subject to the possibility of adjustment to the amount and/or timing of such obligations, however they are expected to be fulfilled in the normal course of operations.
Consolidated 2020 2019 $ $ The company has tenement rental and expenditure commitments payable of: - Not later than 12 months 2,118,981 73,700 - Between 12 months and 5 years 802,403 58,030 - More than 5 years 1,310,064 - 4,231,448 131,730
17. Events after the reporting period
On 3 July 2020, 200,000 options with an exercise price of $0.20 were exercised and converted into 200,000 fully paid ordinary shares, and 550,000 fully paid ordinary shares were issued as consideration for public relations services received.
On 28 August 2020, 8,064,517 fully paid ordinary shares were issued as part of a $2,500,000 placement and 567,742 fully paid ordinary shares were issued in consideration of part of the capital raising fees.
On 10 September 2020, 250,000 fully paid ordinary shares were issued as consideration for public relations services and 100,000 fully paid ordinary shares were issued under an Exploration Agreement. Additionally, 100,000 unlisted options, with an exercise price of $0.37 expiring 10 September 2023 were issued for consulting services and 300,000 performance rights were issued to Mr Jason Bahnsen as part of his appointment as President of Tempus Resources Ltd, under the terms and conditions of his Executive Agreement.
Tom Peregoodoff and Anthony Cina were both appointed as Non-Executive Directors effective from 1 November 2020.
On 30 November 2020, the Company received conditional approval to list on the Canadian TSX Venture Exchange (TSX-V). To meet TSX-V listing requirements, the Company will be required to cancel 1,264,000 performance rights. Subject to any regulatory and shareholder approvals required, the Company will issue 2,528,000 options with an exercise price of $0.31 and a term of five years from issue date to those performance rights holders in lieu of the cancellation.
Whilst exploration activities have been able to continue, the impact of the Coronavirus (COVID-19) pandemic is ongoing. It is not practical to estimate the potential impact, positive or negative, after the reporting date. The situation is continually developing and is dependent on measures imposed by Australian, Canadian and Ecuadorian Governments, and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and economic stimulus that may be provided.
The directors are not aware of any other matters or circumstances that have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the company the results of those operations, or the state of affairs of the company in future financial years.
22 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
18. Loss per share Consolidated 2020 2019 $ $ a) Reconciliation of earnings to profit or loss: Loss after income tax (2,693,918) (852,569) Non-controlling interest 27,046 66 Loss after income tax attributable to the owners of Tempus Resources Limited (2,666,872) (852,503) used in calculating basic and diluted loss per share
# # b) Weighted average number of ordinary shares used in the calculation of basic and diluted loss per share 41,815,288 34,194,522
Cents Cents c) Basic and diluted loss per share (6.38) (2.49)
# # d) The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of ordinary shares for the purposes of diluted earnings per share Options – exercise price of $0.20 200,000 200,000 Options – exercise price of $0.25 4,000,000 4,000,000 Options – exercise price of $0.15 3,000,000 - Options – exercise price of $0.135 338,953 - Options – exercise price of $0.185 514,873 - Performance rights 4,390,000 - 12,443,826 4,200,000
19. Cash flow information
Consolidated 2020 2019 $ $ a) Reconciliation of loss after income tax to net cash outflow from operating activities Loss for the period (2,693,918) (852,569) Share based payments 447,815 - Foreign exchange (27,208) - Impairment 407,063 - Change in operating assets and liabilities: Trade and other receivables (45,411) (4,895) Other assets 435 (15,441) Exploration and evaluation (3,280,781) (128,410) Trade and other payables 127,861 36,767 Provisions 1,023,031 - Net cash outflow from operating activities (4,041,113) (964,548)
23 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
20. Financial Risk Management
The consolidated entity’s principal financial instruments comprise cash and short-term deposits. The consolidated entity has various other financial assets and liabilities such as other receivables and payables, which arise directly from its operations.
The consolidated entity’s activities expose it to a variety of financial risks, including, credit risk, liquidity risk, foreign exchange rate risk and cash flow interest rate risk. The consolidated entity is not exposed to price risk.
Risk management is carried out by the Board of Directors, who evaluates and agrees upon risk management and objectives.
(a) Interest Rate Risk
The consolidated entity is not materially exposed to interest rate risk.
(b) Credit risk
The consolidated entity does not have any significant concentrations of credit risk. Credit risk is managed by the Board of Directors and arises from cash and cash equivalents as well as credit exposure including outstanding receivables.
All cash balances held in Australia, Canada and Ecuador are held at internationally recognised institutions.
The maximum exposure to credit risk at reporting date is the carrying amount of the financial assets disclosed within the financial report.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about default rates.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash balances and access to equity funding.
The consolidated entity’s exposure to the risk of changes in market interest rates relate primarily to cash assets.
The directors monitor the cash-burn rate of the consolidated entity on an on-going basis against budget and the maturity profiles of financial assets and liabilities to manage its liquidity risk.
The financial liabilities the consolidated entity had at reporting date were other payables incurred in the normal course of the business. These were non-interest bearing and were due within the normal 30-60 days terms of creditor payments.
Maturity analysis for financial liabilities Financial liabilities of the consolidated entity comprise trade and other payables. As at 30 June 2020 all financial liabilities are contractually maturing within 60 days.
24 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
20. Financial Risk Management (continued)
(d) Foreign currency risk
Foreign exchange risks arise when future commercial transactions and recognised financial assets and financial liabilities are denominated in a currency that is not the entity’s functional currency.
The consolidated entity is primarily exposed to the fluctuations in the Canadian and US dollar, as the consolidated entity holds cash in Canadian and US dollars and much of the consolidated entity’s exploration costs and contracts are denominated in Canadian and US dollars.
The consolidated entity aims to reduce and manage its foreign exchange risk by holding the majority of its funds in its Canadian and US dollar accounts so that the exchange rate is crystallised early and future fluctuations in rates for settlement of Canadian and US dollar denominated payables are avoided. As the consolidated entity’s operations develop and expand, the consolidated entity will develop and implement a more sophisticated foreign exchange risk strategy, which will include the use of Forward Exchange Contracts and sophisticated treasury products.
The carrying amount of the consolidated entity’s foreign currency denominated financial assets and financial liabilities at the reporting date were as follows:
Consolidated Consolidated Financial Assets Financial Liabilities 2020 2019 2020 2019 $ $ $ $
US dollars 84,610 - 193,759 134,553 Canadian dollars 2,709,719 - 285,144 - 2,794,329 - 478,903 134,553
The consolidated entity had net financial assets in foreign currencies of $2,315,426 (financial assets of $2,794,329 less financials liabilities of $478,903) as at 30 June 2020 (2019: net financial liabilities of $134,553 (financial assets of nil less financial liabilities of $134,553)). Based on this exposure, had the Australian dollar weakened / strengthened by 5% (2019: weakened / strengthened by 5%) against these foreign currencies with all other variables held constant, the consolidated entity’s profit before tax for the year would have been $115,771 lower / higher (2019: $6,728 lower / higher) and equity would have been $115,771 lower / higher (2019: $6,728 lower / higher). The percentage change is the expected overall volatility of the significant currencies, which is based on management’s assessment of reasonable possible fluctuations taking into consideration movements over the last 6 months each year and the spot rate at each reporting date. The actual foreign exchange gain for the year ended 30 June 2020 was $22,787 (2019: loss of $1,083).
(e) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. All financial assets and financial liabilities of the consolidated entity at the reporting date are recorded at amounts approximating their carrying amount.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature.
25 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
21. Parent entity information
The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are the same as those applied in the consolidated financial statements except as set out below. Refer to Note 1 for a summary of the significant accounting policies of the Group.
Investments in subsidiaries Investments in subsidiaries are accounted for at costs less impairment.
Financial position Parent 2020 2019 $ $ Assets Current assets 907,432 4,161,303 Non-current assets 5,920,481 254,096 Total assets 6,827,913 4,415,399
Liabilities Current liabilities 384,223 204,026 Total liabilities 384,223 204,026
Equity Issued capital 9,044,007 4,726,886 Share based payment reserve 1,130,822 542,144 Accumulated losses (3,731,139) (1,057,657) Total equity 6,443,690 4,211,373
Financial performance
Loss for the period (2,673,482) (851,911) Other comprehensive income - - Total comprehensive loss (2,673,482) (851,911)
Contingent assets The parent entity had no contingent assets as at 30 June 2020 (30 June 2019: nil).
Contingent liabilities The parent entity had no contingent liabilities as at 30 June 2020 (30 June 2019: nil).
Capital commitments The parent entity had no capital commitments as at 30 June 2020 (30 June 2019: nil).
Significant accounting policies The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in Note 1, except for the following: Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
26 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2020 (continued)
21. Parent entity information (continued)
Interest in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries.
Percentage Owned (%) Country of 2020 2019 Class of Shares Name of entity Incorporation Montejinni Resources Pty Ltd1 Australia Ordinary 90% 90% Condor Gold S.A.2 Ecuador Ordinary 100% - Miningsources S.A.2 Ecuador Ordinary 100% - Sona Resources Corp2 Canada Ordinary 100% - No. 75 Corporate Ventures Ltd2 Canada Ordinary 100% -
1 Tempus holds 90% interest in Montejinni Resources Pty Ltd. The non-controlling interest holds 10% (2019: 10%) of the voting rights of Montejinni Resources Pty Ltd.
2 As disclosed in Note 8, Tempus Resources Limited acquired a 100% interest in Condor Gold S.A., Miningsources S.A., Sona Resources Corp and No. 75 Corporate Ventures Ltd during the year.
22. Contingent Assets and Liabilities
Contingent assets
The consolidated entity had no contingent assets as at 30 June 2020 (30 June 2019: nil).
Contingent liabilities
Tempus Resources Limited acquired a 100% interest in No. 75 Corporate Ventures Ltd during the year as disclosed in Note 8. No. 75 Corporate Ventures Ltd holds 100% interest in the rights over the Blackdome project in Canada. There is significant uncertainty as to what future liabilities will arise in relation to potential closure and rehabilitation costs, contingent on determination of costs through completion of the closure and reclamation plans required by the Ministry of Energy, Mines and Petroleum Resources in Canada. All known costs that currently can be reliably measured have been recognised in provisions as disclosed in Note 10. The outcome and costs resulting from the approved rehabilitation plan as required by the Ministry of Energy, Mines and Petroleum Resources, cannot be measured sufficiently at this time.
The consolidated entity had no other contingent liabilities as at 30 June 2020 and 30 June 2019.
23. Company Details
The registered office and principal place of business is: Level 2, 22 Mount Street Perth WA 6000 Telephone: 08 6188 8181 Facsimile: 08 6188 8182 Email: [email protected]
27 DIRECTORS’ DECLARATION
In the directors' opinion:
● the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as stated in Note 1 to the financial statements;
● the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2020 and of its performance for the year then ended; and
● there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
On behalf of the directors
Brendan Borg Managing Director
Date: 3 December 2020
28 RSM Australia Partners Level 32, Exchange Tower 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111 www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TEMPUS RESOURCES LIMITED
Opinion
We have audited the financial report of Tempus Resources Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 30 June 2020, and of its financial performance for the year then ended in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) and the ethical requirements of the International Ethics Standards Board for Accountants (IESBA Code) that are relevant to our audit of the financial report. We have also fulfilled our other ethical responsibilities in accordance with the IESBA Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter How our audit addressed this matter Acquisition of exploration and evaluation assets Refer to Note 8 in the financial statements On 16 October 2019, the Group acquired 100% of the Our audit procedures included: issued capital of Condor Gold S.A and Miningsources S.A for a total consideration of $843,426 through the Reviewing the acquisition agreements to issue of fully paid ordinary shares and cash. understand the transaction, acquisition date and the related accounting considerations; On 15 November 2019, the Company acquired 100% Evaluating the management determination that of the issued capital of Sona Resources Corp. and No. the acquisitions did not meet the definition of a 75 Corporate Ventures Ltd for a total consideration of business within IFRS 3 Business Combinations $659,833 through the issue of fully paid ordinary and therefore was an asset acquisition as shares and cash. opposed to a business combination; Assessing management’s determination of the Accounting for these acquisitions is a key audit acquisition date, fair value of consideration paid matter as it involves management judgements in and the fair value of the net assets acquired; and determining the acquisition date, the acquisition Reviewing the adequacy and accuracy of the accounting treatment, the fair value of net assets relevant disclosures in the financial statements. acquired and the fair value of the purchase consideration. Exploration and Evaluation Expenditure Refer to Note 8 in the financial statements At 30 June 2020, the Group has capitalised Our audit procedures included: exploration and evaluation expenditure with a carrying value of $5,611,482. Obtaining evidence that the Group has valid rights to explore in the specific area of interest; We determined this to be a key audit matter due to the Agreeing a sample of additions to supporting significant management judgments involved in documentation and ensuring the amounts are assessing the carrying value of the asset including: capital in nature and relate to the area of interest; For those tenements that were relinquished, Determination of whether expenditure can be evaluating management’s assessment of the associated with finding specific mineral resources impairment loss recognised for the year ended 30 and the basis on which that expenditure is June 2020; allocated to an area of interest; Assessing and evaluating management’s Determination of whether exploration activities assessment that no indicators of impairment have progressed to the stage at which the existed for those tenements where the Group has existence of an economically recoverable mineral current rights of tenure; reserve may be assessed; and Enquiring with management and reviewing Assessing whether any indicators of impairment budgets and other documentation as evidence are present and, if so, judgments applied to that active and significant operations in, or relation determine and quantify any impairment loss. to, the area of interest will be continued in the future; Through discussions with the management and reviewing relevant supporting documentation, assessing management’s determination that exploration and evaluation activities have not yet reached a stage where the existence or otherwise of economically recoverable reserves may be reasonably determined; and Assessing the appropriateness of the disclosures in the financial report. Rehabilitation provision Refer to Note 10 in the financial statements As at 30 June 2020, the Group had provisions of Our audit procedures included: $2,681,523 relating to the estimated future cost of rehabilitation and restoration of areas disturbed as a Obtaining an understanding of the process result of previous mining and exploration operations. involved in the determination of the rehabilitation liability; The provision for rehabilitation was considered a key Obtaining the calculations and verified the audit matter due to the materiality of the balance, the methodology used to determine the provision; significant judgements and estimation uncertainty Reviewing the key assumptions used in the involved in the quantification of the liability. calculations; and Assessing the competence and objectivity of the management experts used. Performance Rights Refer to Note 12 in the financial statements During the year, the Group issued 5,750,000 Our audit procedures included: Performance Rights. The fair value of performance rights granted during the year was $815,516. Reviewing the key terms and conditions of the performance rights issued; Management has performed the valuation of the Obtaining the valuation model prepared by performance rights granted using a valuation model, management and assessing whether the model since management was unable to reliably measure the was appropriate for valuing the performance rights fair value of the services received. issued during the year; Challenging the reasonableness of key We considered the valuation of these performance assumptions used by management in the model rights to be a key audit matter as it involved to calculate the fair value of the performance management’s judgement in determining various rights; and inputs used in the valuation model. Assessing the adequacy of the disclosures in the financial report.
Other Information
The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30 June 2020 but does not include the financial report and the auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with IFRS, and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
RSM AUSTRALIA PARTNERS
Perth, WA TUTU PHONG Dated: 3 December 2020 Partner TEMPUS RESOURCES LIMITED ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2019
CONTENTS
Consolidated Statement of Profit or Loss and Other Comprehensive 3 Income Consolidated Statement of Financial Position 4 Consolidated Statement of Changes in Equity 5 Consolidated Statement of Cash Flows 6 Notes to the Financial Statements 7 Directors’ Declaration 24 Independent Auditor’s Report 25
2 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2019
Notes 2019 2018 $ $
Other income 3 58,186 96 Directors’ and employee benefits expense (96,406) (21,870) Legal and other professional fees (207,201) (113,868) Regulatory fees (46,759) (65,093) Advertising and marketing expenses (59,293) - Foreign exchange loss (1,083) - Exploration and evaluation expenditure 8 (400,235) - Other expenses (99,778) (5,011)
Loss before income tax (852,569) (205,746) Income tax expense 4 - - Loss for the year (852,569) (205,746)
Other comprehensive income - -
Total comprehensive loss for the year (852,569) (205,746)
Loss for the year attributable to: - Owners of the Company (852,503) (205,746) - Non-controlling interests (66) - (852,569) (205,746)
Total comprehensive loss for the year attributable to: - Owners of the Company (852,503) (205,746) - Non-controlling interests (66) - (852,569) (205,746)
Loss per share - Basic loss per share (cents) 17 (2.49) (5.32) - Diluted loss per share (cents) 17 (2.49) (5.32)
The accompanying notes form part of this financial report.
3 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2019
Notes 2019 2018 $ $ ASSETS Current assets Cash and cash equivalents 5 4,114,366 3,618,384 Trade and other receivables 6 17,400 12,505 Other assets 7 29,537 14,096 Total current assets 4,161,303 3,644,985
Non-current assets Exploration and evaluation 8 254,886 - Total non-current assets 254,886 -
Total assets 4,416,189 3,644,985
LIABILITIES Current liabilities Trade and other payables 9 204,027 3,404,730 Total current liabilities 204,027 3,404,730
Total liabilities 204,027 3,404,730
Net assets 4,212,162 240,255
EQUITY Issued capital 10 4,726,886 446,001 Reserves 11 542,144 - Accumulated losses (1,058,249) (205,746) Equity attributable to owners of the Company 4,210,781 240,255 Non-controlling interests 1,381 -
Total equity 4,212,162 240,255
The accompanying notes form part of this financial report.
4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2019
Share based Non- Issued payment Accumulated controlling Capital reserve Losses interests Total $ $ $ $ $
Balance at 1 July 2018 446,001 - (205,746) - 240,255 Loss for the year - - (852,503) (66) (852,569) Other comprehensive income - - - - - Total comprehensive loss for the year - - (852,503) (66) (852,569)
Non-controlling interest arising on acquisition of Montejinni Pty Ltd (note 8) - - - 1,447 1,447 Issue of capital (net of costs) 4,280,885 - - - 4,280,885 Share based payments - 542,144 - - 542,144 Balance at 30 June 2019 4,726,886 542,144 (1,058,249) 1,381 4,212,162
Balance at 18 April 2018 - - - - - Loss for the period - - (205,746) - (205,746) Other comprehensive income - - - - - Total comprehensive loss for the period - - (205,746) - (205,746)
Issue of capital (net of costs) 446,001 - - - 446,001 Balance at 30 June 2018 446,001 - (205,746) - 240,255
The accompanying notes form part of this financial report.
5 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2019
Notes 2019 2018 $ $ Cash flows from operating activities Interest received 52,171 51 Payments to suppliers and employees (617,544) (67,668) Payments for exploration and evaluation (399,175) - Net cash outflow from operating activities 18 (964,548) (67,617)
Cash flows from financing activities Proceeds from issue of shares 1,784,000 470,001 Proceeds from share application monies received pending allotment - 3,216,000 Share issue costs paid (323,470) - Net cash inflow from financing activities 1,460,530 3,686,001
Net increase in cash and cash equivalents 495,982 3,618,384 Cash and cash equivalents at the beginning of the financial year 3,618,384 -
Cash and cash equivalents at the end of the financial year 5 4,114,366 3,618,384
The accompanying notes form part of this financial report.
6 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019
These consolidated financial statements and notes represent those of Tempus Resources Limited and its controlled entities (the “consolidated entity” or “Group”).
The financial statements were authorised for issue on 3 December 2020 by the directors of the company.
1. Summary of significant accounting policies
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. Except for cash flow information, these financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. a) Comparatives
The comparative period is that since incorporation on 18 April 2018 through to 30 June 2018. When required by accounting standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. b) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all entities controlled by Tempus Resources Limited at the end of the reporting year. A controlled entity is any entity over which Tempus Resources Limited has the power to govern the financial and operating policies so as to obtain benefits from the entity’s activities. Control will generally exist where the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.
Where controlled entities have entered or left the consolidated entity during the year, the financial performance of those entities are included only for the period of the year that they were controlled.
In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the consolidated entity have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown separately within the Equity section of the statement of financial position and statement of profit or loss and other comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date. c) Parent entity
These financial statements present the results of the consolidated entity only. Supplementary information about the parent entity is disclosed in Note 20. d) Income tax
The income tax expense (revenue) for the period comprises current income tax expense (income) and deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
7 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
1. Summary of significant accounting policies (continued) d) Income tax (continued)
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting period. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. e) Trade and other receivables
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost, using the effective interest method, less any allowances for expected credit losses. Trade and other receivables are generally due for settlement within 120 days.
Collectability of trade debtors is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful debts is raised when some doubt as to collection exists and in any event when the debt is more than 60 days overdue. f) Exploration and evaluation
Exploration and evaluation expenditures are written off as incurred, except when such costs are expected to be recouped through successful development and exploitation, or sale, of an area of interest. In addition, exploration assets recognised on acquisition of an entity are carried forward provided that exploration and/or evaluation activities in the area have not yet reached a stage that permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in relation to the area are continuing.
The expenditure carried forward when recovery is expected represents an accumulation of direct net exploration and evaluation costs incurred by or on behalf of the consolidated entity and applicable indirect costs, in relation to separate areas of interest for which rights of tenure are current.
8 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
1. Summary of significant accounting policies (continued) f) Exploration and evaluation (continued)
If it is established subsequently that economically recoverable reserves exist in a particular area of interest, resulting in the decision to develop a commercial mining operation, then in that year the accumulated expenditure attributable to that area, to the extent that it does not exceed the recoverable amount for the area concerned, will be transferred to mine development. As such it will be subsequently amortised against production from that area. Any excess of accumulated expenditure over recoverable amounts will be written off to the statement of profit or loss and other comprehensive income. g) Trade and other payables
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the consolidated entity during the reporting period which remain unpaid. Due to their short- term nature they are measured at amortised cost and are not discounted. The amounts are unsecured and are usually paid within 30 – 60 days of recognition. h) Issued Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. i) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with short periods to maturity and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position. j) Other Income
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial interest to the net carrying amount of the financial asset.
Other income is recognised when it is received or when the right to receive payment is established. k) Employee benefits
Equity-settled compensation
The consolidated entity operates equity-settled share based payment employee share and option schemes. The fair value of the equity to which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding increase to an equity account.
Share based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the good or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is shown in the option reserve.
The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using an appropriate valuation model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.
9 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
1. Summary of significant accounting policies (continued) l) Goods and services tax (“GST”)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows. m) Earnings per share
(i) Basic earnings per share
Basic earnings per share is determined by dividing net profit after income tax attributable to members of the company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. n) Segment reporting
A business segment is identified for a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different to those of other business segments. A geographical segment is identified when products or services are provided within a particular economic environment subject to risks and returns that are different from those of segments operating in other economic environments. o) Financial instruments
Financial assets and financial liabilities are recognised in the Group’s statement of financial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. Classification of financial assets All recognised financial assets are measured subsequently in their entirety in at either amortised cost or fair value, depending on the classification of the financial assets. Amortised cost: Debt instruments that meet the following conditions are measured subsequently at amortised cost: a. the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and b. The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding.
10 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
1. Summary of significant accounting policies (continued) o) Financial instruments (continued)
Fair value through other comprehensive income: Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI): a. The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and b. The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amounts outstanding. Fair value through profit or loss: By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL). Subsequent measurement of financial assets The measurement of classifications applicable to the Group are as follows: Amortised cost and effective interest method: The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. For financial assets other than purchased or originated credit‑impaired financial assets (i.e. assets that are credit‑impaired on initial recognition), the effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition. For purchased or originated credit‑impaired financial assets, a credit‑adjusted effective interest rate is calculated by discounting the estimated future cash flows, including expected credit losses, to the amortised cost of the debt instrument on initial recognition. The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before adjusting for any loss allowance. Interest income is recognised using the effective interest method for debt instruments measured subsequently at amortised cost and at FVTOCI. For financial assets other than purchased or originated credit‑impaired financial assets, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit‑impaired (see below). For financial assets that have subsequently become credit‑impaired, interest income is recognised by applying the effective interest rate to the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on the credit‑impaired financial instrument improves so that the financial asset is no longer credit‑impaired, interest income is recognised by applying the effective interest rate to the gross carrying amount of the financial asset. For purchased or originated credit‑impaired financial assets, the Group recognises interest income by applying the credit‑adjusted effective interest rate to the amortised cost of the financial asset from initial recognition. The calculation does not revert to the gross basis even if the credit risk of the financial asset subsequently improves so that the financial asset is no longer credit‑impaired.
Classification of financial liabilities All financial liabilities are measured at amortised cost using the effective interest method or at fair value through profit or loss. Financial liabilities are classified as at fair value through profit or loss when the financial liability is contingent consideration of an acquirer in a business combination, held for trading or is designated as at fair value through profit or loss. Subsequent measurement of financial liabilities The measurement of classifications applicable to the Group are as follows:
11 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
1. Summary of significant accounting policies (continued) o) Financial instruments (continued)
Amortised cost: The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transactions costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability. Impairment At the end of each reporting period, the consolidated entity assesses whether there is objective evidence that a financial instrument has been impaired. De-recognition Financial assets are de-recognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are de-recognised where the related obligations are either discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss. p) Critical accounting judgments, estimates and assumptions
The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the consolidated entity.
There have been no judgements, apart from those involving estimation, in applying accounting policies that have a significant effect on the amounts recognised in these financial statements.
Following is a summary of the key assumptions concerning the future and other key sources of estimation at reporting date that have not been disclosed elsewhere in these financial statements.
Exploration and evaluation expenditure Exploration and evaluation costs have been capitalised on the basis that activities in the area have not yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Key judgements are applied in considering costs to be capitalised which includes determining expenditures directly related to these activities and allocating overheads between those that are expensed and capitalised.
Share based payment transactions The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either the Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profit or loss and equity.
12 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
1. Summary of significant accounting policies (continued) q) New, revised or amending Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the International Accounting Standards Board (IASB) that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the consolidated entity during the financial period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. r) New Accounting Standards and Interpretations not yet mandatory or early adopted
Accounting Standards issued by the IASB that are not yet mandatorily applicable to the consolidated entity, together with an assessment of the potential impact of such pronouncements on the consolidated entity when adopted in future periods, are discussed below:
IFRS 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in IAS 17: Leases and related Interpretations. IFRS 16 introduces a single lessee accounting model that eliminates the requirement for leases to be classified as operating or finance leases.
The main changes introduced by the new Standard are as follows: - recognition of a right-of-use asset and liability for all leases (excluding short-term leases with less than 12 months of tenure and leases relating to low-value assets); - depreciation of right-of-use assets in line with IAS 16: Property, Plant and Equipment in profit or loss and unwinding of the liability in principal and interest components; - inclusion of variable lease payments that depend on an index or a rate in the initial measurement of the lease liability using the index or rate at the commencement date; - application of a practical expedient to permit a lessee to elect not to separate non-lease components and instead account for all components as a lease; and - inclusion of additional disclosure requirements.
The transitional provisions of IFRS 16 allow a lessee to either retrospectively apply the Standard to comparatives or recognise the cumulative effect of retrospective application as an adjustment to opening equity on the date of initial application. The consolidated entity will adopt this standard from 1 July 2019. The directors do not anticipate that the adoption of IFRS 16 will significantly impact the consolidated entity’s financial statements.
2. Segment information
The consolidated entity has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.
The consolidated entity operates as a single segment which is mineral exploration and in a single geographical location which is Australia.
13 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
Consolidated 2019 2018 $ $ 3. Other income Interest 58,186 96 58,186 96
Consolidated 2019 2018 $ $ 4. Income tax expense
Loss before income tax expense 852,569 205,746 Tax at the Australian tax rate of 30% 255,771 61,724
Amounts not deductible in calculating taxable income 166,644 - Tax loss not recognised 136,981 (61,724) Tax effect of exploration expenditure (31,023) - Tax effect of temporary differences (16,831) - Income tax expense - -
Potential tax benefit relating to unused tax losses for which no deferred tax asset has been recognised 54,432 61,724
The deferred tax asset attributable to carried forward income tax losses and temporary differences has not been recognised as an asset as the company has not commenced trading and the availability of future profits to recoup these losses is not considered probable at the date of this report.
Consolidated 2019 2018 $ $ 5. Cash and cash equivalents
Cash at bank 4,114,366 402,384 Restricted cash 1 - 3,216,000 4,114,366 3,618,384
1 Fund received pursuant to the IPO restricted for use until the company is admitted to the official list of the ASX.
Consolidated 2019 2018 $ $ 6. Trade and other receivables
GST receivable 11,340 12,460 Withholding tax receivable 45 45 Interest receivable 6,015 - 17,400 12,505
14 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
Consolidated 2019 2018 $ $ 7. Other assets
Prepayments 18,773 14,096 Other 10,764 - 29,537 14,096
8. Exploration and evaluation
A summary of the exploration and evaluation asset is as follows: Opening balance - - Acquisitions during the year 1 151,476 - Expenditure incurred during the year 103,410 - Closing balance 254,886 -
1 On 3 August 2018 the Company completed its acquisition of a 90% interest in Montejinni Resources Pty Ltd by issuing 500,000 fully paid ordinary shares (escrowed to 3 August 2019) and 200,000 options with an exercise price of $0.20, expiring 3 August 2021 (escrowed to 3 August 2019) and payment of $25,000 to the vendor. All loans provided by vendors to Montejinni Resources Pty Ltd were settled as part of the cash consideration, resulting in no remaining liabilities owed by Montejinni Resources Pty Ltd at acquisition.
3 August 2018 $ Purchase Consideration Shares issued 100,000 Options issued 25,029 Cash 25,000 150,029
Net Assets Acquired Exploration and evaluation 2 151,476 Less non-controlling interest (1,447) 150,029
2 Management has determined that the acquisition of 90% interest in Montejinni Resources Pty Ltd does not meet the definition of a business within IFRS 3 Business Combinations. This transaction has been accounted for as an asset acquisition.
During the year, Tempus entered into a Heads of Agreement for the acquisition of the Zamora Projects in Ecuador. All pre-acquisition exploration costs ($400,235) have been expensed in the statement of profit or loss and other comprehensive income. Under the Heads of Agreement, the Company has the right to acquire a 100% interest in Condor Gold S.A. and MiningSources S.A., who together hold 3 mineral exploration concessions. Consideration payable for the acquisition is USD 100,000 cash and 3,446,205 shares in the Company, escrowed for a 12 month period. The Heads of Agreement was subject to shareholder approval and completion of due diligence by the Company. As disclosed in Note 16, shareholder approval was obtained subsequent to year end.
15 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
Consolidated 2019 2018 $ $ 9. Trade and other payables
Trade creditors 142,769 73,450 Accrued expenses 61,258 115,280 Share application monies pending shares allotment - 3,216,000 204,027 3,404,730
10. Issued capital
Ordinary shares – fully paid 4,726,886 446,001 4,726,886 446,001 a) Ordinary Shares Date No. of shares Issue price $ $ 2019 Opening balance 11,000,001 446,001 3 August 2018 – IPO 25,000,000 0.20 5,000,000 3 August 2018 – Acquisition of Montejinni Resources Pty Ltd 500,000 0.20 100,000 Capital raising costs - (819,115) Closing balance 36,500,001 4,726,886
2018 Opening balance 18 April 2018 1 1.00 1 5 June 2018 7,000,000 0.01 70,000 5 June 2018 4,000,000 0.10 400,000 Capital raising costs - (24,000) Closing balance 11,000,001 446,001
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll, each share is entitled to one vote.
Restricted Shares As at 30 June 2019 8,050,000 ordinary shares were in escrow (2018: 8,650,000).
b) Capital Management The objectives of management when managing capital is to safeguard the company’s ability to continue as a going concern, so that the company may continue to provide returns for shareholders and benefits for other stakeholders.
Due to the nature of the company’s activities, being mineral exploration, the company does not have ready access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the company’s capital risk management is the current working capital position against the requirements of the company to meet exploration programmes and corporate overheads. The company’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required. The working capital position of the company at 30 June 2019 is as follows:
16 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
10. Issued capital (continued)
Consolidated 2019 2018 $ $
Cash and cash equivalents 4,114,366 3,618,384 Trade and other receivables 17,400 12,505 Other current assets 29,537 14,096 Trade and other payables (204,027) (3,404,730) Working capital position 3,957,276 240,255
11. Share based payment reserve
Recognised in exploration and evaluation (refer Note 8) 25,029 - Recognised in equity – share issue costs 517,115 - 542,144 -
Set out below are summaries of options granted during the year:
Grant date Expiry date Exercise Balance at Granted Exercised Expired/forfeited Balance at price $ the start of the end of the year the year 3/08/2018 3/08/2021 0.20 - 200,000 - - 200,000 3/08/2018 3/08/2022 0.25 - 4,000,000 - - 4,000,000 - 4,200,000 - - 4,200,000
Weighted average exercise price - 0.248 - - 0.248
Set out below are the options exercisable at the end of the financial year:
Consolidated Grant date Expiry date 2019 2018 # # 3 August 2018 3 August 2021 200,000 - 3 August 2018 3 August 2022 4,000,000 - 4,200,000 -
The weighted average remaining contractual life of options at the end of the financial year was 3.05 years (2018: nil).
For the options issued during the financial year a Black Scholes option pricing model was used with the valuation model inputs used to determine the fair value at the grant date as follows:
Share Value price at Exercise Expected Risk free Dividend Number of per Total Grant date Expiry date grant date price volatility rate yield Options Option Value Note $ $ % % % # $ $ 3/08/2018 3/08/2021 0.20 0.20 100 2.12% - 200,000 0.1251 25,029 1 3/08/2018 3/08/2022 0.20 0.25 100 2.12% - 4,000,000 0.1293 517,115 2
1. The options vested immediately upon issue. Any shares issued upon exercise are escrowed for a period of 12 months from the date of issue of the options. 2. The options vested immediately upon issue. Any shares issued upon exercise are escrowed for a period of 24 months from the date of issue of the options.
17 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
12. Interests of Key Management Personnel (‘KMP’)
The total remuneration paid and payable to KMP of the company during the period are as follows:
Consolidated 2019 2018 $ $ Short-term employee benefits 128,250 21,870 Post-employment benefits - - Share based payments - - 128,250 21,870
13. Related parties a) Key management personnel (‘KMP’)
Refer to Note 12 for remuneration paid and payable to KMP.
b) Other transactions and balances with related parties
Payables owing to related parties Consolidated 2019 2018 $ $
Alexander Molyneux – director’s fees 4,500 7,290 Borg Geoscience Pty Ltd – director’s fees (1) 5,436 7,290 Consilium Corporate Pty Ltd (2) 9,848 19,427 19,784 34,007
(1) Borg Geoscience Pty Ltd is an entity related to Brendan Borg. (2) Consilium Corporate Pty Ltd is an entity related to Melanie Ross. $3,300 was for director fees and $6,548 for company secretarial and accounting.
There are no other transactions with related parties during the year ended 30 June 2019.
14. Remuneration of auditors Consolidated 2019 2018 $ $
RSM Australia Partners Audit and review of financial reports 25,000 13,000
RSM Corporate Australia Pty Ltd Investigating Accountant’s Report - 9,500 25,000 22,500
18 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
15. Commitments for expenditure
Capital commitments There are no capital commitments contracted for at balance date.
Exploration and Evaluation The consolidated entity is required to maintain current rights of tenure to tenements, which require outlays of expenditure in future financial periods. Under certain circumstances these commitments are subject to the possibility of adjustment to the amount and/or timing of such obligations, however they are expected to be fulfilled in the normal course of operations. Consolidated 2019 2018 $ $ The company has tenement rental and expenditure commitments payable of: - Not later than 12 months 73,700 - - Between 12 months and 5 years 58,030 - 131,730 -
16. Events after the reporting period
On 9 May 2019, the company entered into a binding agreement to acquire two Ecuadorian companies, Condor Gold S.A. and MiningSources S.A. Together, these two companies own three mineral exploration concessions (the “Zamora Projects”). On 19 August 2019, the Company held a General Meeting. At this meeting, shareholder approval was obtained for the acquisition of the Zamora Projects in Ecuador. On 16 October 2019 the Company completed its 100% acquisition of Condor Gold S.A. and Miningsources S.A.. Cash consideration of USD$100,000 was paid to the vendor. 3,446,205 fully paid ordinary shares (escrowed to 25 October 2020) were issued to the vendor and 904,209 fully paid ordinary shares as a finder’s fees on 25 October 2019.
Brendan Borg was appointed Managing Director effective from 19 August 2019.
On 19 August 2019, the Company shareholder approval was obtained for the issue of 1,150,000 performance rights to existing Directors, 100,000 performance rights to the Company’s Exploration Manager and, subject to the successful completion of the acquisition of the Zamora Projects, 4,000,000 performance rights to Rodrigo Izurieta and 500,000 performance rights to Gary Artmont. The 1,150,000 performance rights were issued to the directors on 18 September 2019. The performance rights approved to be issued to Rodrigo Izurieta, Gary Artmont and the Company’s Exploration Manager were issued on 25 October 2019.
On 19 August 2019, the Company entered into a binding Heads of Agreement for the acquisition of Blackdome-Elizabeth Gold Project in Canada. On 15 November 2019 the Company completed its 100% acquisition of Sona Resources Corp and its subsidiary No. 75 Corporate Ventures Ltd. The Company paid CAD$450,000 to the vendor. A further 1,000,000 fully paid ordinary shares were issued to the optionholders on 24 December 2019.
Gary Artmont was appointed as a Non-Executive Director effective from 14 October 2019.
On 16 December 2019, 230,000 performance rights were converted to fully paid ordinary shares. 400,000 fully paid shares were also issued for employee services performed.
On 7 May 2020, the Company completed a capital raising to raise $1,006,180 before costs by issuing 7,739,843 fully paid ordinary shares at a price of $0.13 per share.
19 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
16. Events after the reporting period (continued)
On 25 June 2020, the Company completed a further capital raising to raise $3,000,170 before costs by issuing 2,307,700 fully paid ordinary shares at $0.13 per share, 5,649,217 fully paid ordinary shares at $0.135 per share and 10,473,108 fully paid ordinary shares at $0.185 per share. 1,130,000 fully paid ordinary shares were also issued on 25 June 2020 from the conversion of performance rights.
On 3 July 2020, 200,000 options with an exercise price of $0.20 were exercised and converted into 200,000 fully paid ordinary shares, and 550,000 fully paid ordinary shares were issued as consideration for public relations services received.
On 28 August 2020, 8,064,517 fully paid ordinary shares were issued as part of a $2,500,000 placement and 567,742 fully paid ordinary shares were issued in consideration of part of the capital raising fees.
On 10 September 2020, 250,000 fully paid ordinary shares were issued as consideration for public relations services and 100,000 fully paid ordinary shares were issued under an Exploration Agreement. Additionally, 100,000 unlisted options, with an exercise price of $0.37 expiring 10 September 2023 were issued for consulting services and 300,000 performance rights were issued to Mr Jason Bahnsen as part of his appointment as President of Tempus Resources Ltd, under the terms and conditions of his Executive Agreement.
Tom Peregoodoff and Anthony Cina were both appointed as Non-Executive Directors effective from 1 November 2020.
On 30 November 2020, the Company received conditional approval to list on the Canadian TSX Venture Exchange (TSX-V). To meet TSX-V listing requirements, the Company will be required to cancel 1,264,000 performance rights. Subject to any regulatory and shareholder approvals required, the Company will issue 2,528,000 options with an exercise price of $0.31 and a term of five years from issue date to those performance rights holders in lieu of the cancellation.
Whilst exploration activities have been able to continue, the impact of the Coronavirus (COVID-19) pandemic is ongoing. It is not practical to estimate the potential impact, positive or negative, after the reporting date. The situation is continually developing and is dependent on measures imposed by Australian, Canadian and Ecuadorian Governments, and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and economic stimulus that may be provided.
The directors are not aware of any other matters or circumstances that have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group the results of those operations, or the state of affairs of the Group in future financial years.
20 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
17. Loss per share Consolidated 2019 2018 $ $ a) Reconciliation of earnings to profit or loss: Loss attributable to owners of the Company (852,569) (205,746) Loss used to calculate basic and diluted loss per share (852,569) (205,746)
# # b) Weighted average number of ordinary shares used in the calculation of basic and diluted loss per share 34,194,522 3,864,866 c) The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of ordinary shares for the purposes of diluted earnings per share Options – exercise price of $0.20 200,000 - Options – exercise price of $0.25 4,000,000 - 4,200,000 -
Consolidated 2019 2018 $ $ 18. Cash flow information a) Reconciliation of loss after income tax to net cash outflow from operating activities Loss for the period (852,569) (205,746) Change in operating assets and liabilities: Trade and other receivables (4,895) (12,505) Other assets (15,441) (14,096) Exploration and evaluation (128,410) - Trade and other payables 36,767 164,730 Net cash outflow from operating activities (964,548) (67,617)
19. Financial Risk Management
The consolidated entity’s principal financial instruments comprise cash and short-term deposits. The consolidated entity has various other financial assets and liabilities such as other receivables and payables, which arise directly from its operations.
The consolidated entity’s activities expose it to a variety of financial risks, including, credit risk, liquidity risk, foreign exchange rate risk and cash flow interest rate risk. The consolidated entity is not exposed to price risk.
Risk management is carried out by the Board of Directors, who evaluates and agrees upon risk management and objectives.
(a) Interest Rate Risk
The consolidated entity is not materially exposed to interest rate risk.
(b) Credit risk
The consolidated entity does not have any significant concentrations of credit risk. Credit risk is managed by the Board of Directors and arises from cash and cash equivalents as well as credit exposure including outstanding receivables.
All cash balances held in Australia are held at internationally recognised institutions. 21 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
(b) Credit risk (continued)
The maximum exposure to credit risk at reporting date is the carrying amount of the financial assets disclosed within the financial report.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about default rates.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash balances and access to equity funding.
The consolidated entity’s exposure to the risk of changes in market interest rates relate primarily to cash assets.
The directors monitor the cash-burn rate of the consolidated entity on an on-going basis against budget and the maturity profiles of financial assets and liabilities to manage its liquidity risk.
The financial liabilities the consolidated entity had at reporting date were other payables incurred in the normal course of the business. These were non-interest bearing and were due within the normal 30-60 days terms of creditor payments.
Maturity analysis for financial liabilities Financial liabilities of the consolidated entity comprise trade and other payables. As at 30 June 2019 all financial liabilities are contractually maturing within 60 days.
(d) Foreign currency risk
Foreign exchange risks arise when future commercial transactions and recognised financial assets and financial liabilities are denominated in a currency that is not the entity’s functional currency.
As at 30 June 2019, the consolidated entity does not currently hold any funds in foreign currency bank accounts so the foreign currency risk is minimal.
(e) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. All financial assets and financial liabilities of the consolidated entity at the reporting date are recorded at amounts approximating their carrying amount.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature.
20. Parent entity information
The accounting policies of the parent entity, which have been applied in determining the financial information shown below, are the same as those applied in the consolidated financial statements except as set out below. Refer to note 1 for a summary of the significant accounting policies of the Group.
Investments in subsidiaries Investments in subsidiaries are accounted for at costs less impairment.
22 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2019 (continued)
20. Parent entity information (continued)
Financial position Consolidated 2019 2018 $ $ Assets Current assets 4,161,303 3,644,985 Non-current assets 254,096 - Total assets 4,415,399 3,644,985
Liabilities Current liabilities 204,026 3,404,730 Total liabilities 204,026 3,404,730
Equity Issued capital 4,726,886 446,001 Share based payment reserve 542,144 - Accumulated losses (1,057,657) (205,746) Total equity 4,211,373 240,255
Financial performance
Loss for the period 851,911 205,746 Other comprehensive income - - Total comprehensive loss 851,911 205,746 Interest in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiary with non- controlling interests (“NCI”) in accordance with the accounting policy described in Note 1:
Name Parent NCI ownership interest Montejinni Resources Pty Ltd1 90% 10%
As disclosed in Note 8, Tempus Resources Limited acquired a 90% interest in Montejinni Resources Pty Ltd during the year. The non-controlling interest hold 10% of the voting rights of Montejinni Resources Pty Ltd.
21. Contingent Assets and Liabilities
Contingent assets
The consolidated entity had no contingent assets as at 30 June 2019 (2018: nil).
Contingent liabilities
The consolidated entity had no contingent liabilities as at 30 June 2019 (2018: nil).
22. Company Details
The registered office and principal place of business is: Level 2, 22 Mount Street Perth WA 6000 Telephone: 08 6188 8181 Facsimile: 08 6188 8182 Email: [email protected]
23 DIRECTORS’ DECLARATION
In the directors' opinion:
● the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as stated in Note 1 to the financial statements;
● the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June 2019 and of its performance for the year then ended; and
● there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
On behalf of the directors
Brendan Borg Managing Director
Date: 3 December 2020
24 RSM Australia Partners Level 32, Exchange Tower 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111 www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TEMPUS RESOURCES LIMITED
Opinion
We have audited the financial report of Tempus Resources Limited (the Company), and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2019, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated financial position of the Group as at 30 June 2019, and of its financial performance for the year then ended in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) and the ethical requirements of the International Ethics Standards Board for Accountants (IESBA Code) that are relevant to our audit of the financial report. We have also fulfilled our other ethical responsibilities in accordance with the IESBA Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter How our audit addressed this matter Acquisition of Montejinni Resources Pty Ltd Refer to Note 8 in the financial statements During the year, the Company acquired a 90% interest Our audit procedures included: of Montejinni Resources Pty Ltd for the purchase consideration of $150,029 via the issue of 500,000 Reviewing the acquisition agreements to fully paid ordinary shares (escrowed to 3 August understand the transaction, acquisition date and 2019), 200,000 options with an exercise price of the related accounting considerations; $0.20, expiring 3 August 2021 (escrowed to 3 August Evaluating the management determination that 2019) and a cash payment of $25,000 to the vendor. the acquisition did not meet the definition of a business within IFRS 3 Business Combinations The accounting for this acquisition is considered to be and therefore was an asset acquisition as a key audit matter because it involved the exercise of opposed to a business combination; judgment in relation to: Assessing management’s determination of the fair value of the consideration paid, in particular, the Determining whether the transaction is a business value of the ordinary shares and options issued; combination or an asset acquisition, based on and whether the definition of a business in IFRS 3 Assessing the appropriateness of the disclosures Business Combinations was met; in the financial report in respect of the acquisition. Determining the fair value of the consideration paid, including the ordinary shares and options issued; and Determining the acquisition date.
Exploration and Evaluation Expenditure Refer to Note 8 in the financial statements At 30 June 2019, the Group has capitalised Our audit procedures included: exploration and evaluation expenditure with a carrying value of $254,886. Obtaining evidence that the Group has valid rights to explore in the specific area of interest; We determined this to be a key audit matter due to the Agreeing a sample of additions to capitalised significant management judgments involved in exploration and evaluation expenditure to assessing the carrying value of the asset including: supporting documentation and ensuring that the amounts were capital in nature and relate to the Determination of whether expenditure can be area of interest; associated with finding specific mineral resources Reviewing and enquiring with management the and the basis on which that expenditure is basis on which they have determined that the allocated to an area of interest; exploration and evaluation of mineral resources Determination of whether exploration activities has not yet reached the stage which permits a have progressed to the stage at which the reasonable assessment of the existence or existence of an economically recoverable mineral otherwise of economically recoverable reserves; reserve may be assessed; and Enquiring with management and reviewing Assessing whether any indicators of impairment budgets and other documentation as evidence are present and, if so, judgments applied to that active and significant operations in, or relation determine and quantify any impairment loss. to, the area of interest will be continued in the future; and Critically assessing and evaluating management’s assessment that no indicators of impairment existed at the reporting date. Other Information
The directors are responsible for the other information. The other information comprises the information included in the Group's annual report for the year ended 30 June 2019 but does not include the financial report and the auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with IFRS, and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
RSM AUSTRALIA PARTNERS
Perth, WA TUTU PHONG Dated: 3 December 2020 Partner
TEMPUS RESOURCES LIMITED ANNUAL FINANCIAL REPORT FOR THE PERIOD 18 APRIL 2018 TO 30 JUNE 2018
CONTENTS
Statement of Profit or Loss and Other Comprehensive Income 3 Statement of Financial Position 4 Statement of Changes in Equity 5 Statement of Cash Flows 6 Notes to the Financial Statements 7 Directors’ Declaration 20 Independent Auditor’s Report 21
2 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD 18 APRIL 2018 TO 30 JUNE 2018
Notes 2018 $
Revenue 3 96 Directors’ and employee benefits expense (21,870) Legal and other professional fees (113,868) Regulatory fees (65,093) Other expenses (5,011)
Loss before income tax (205,746) Income tax expense 4 - Loss for the period (205,746)
Other comprehensive income -
Total comprehensive loss for the period (205,746)
Loss per share - Basic loss per share (cents) 14 (5.32) - Diluted loss per share (cents) 14 (5.32)
The accompanying notes form part of this financial report.
3 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2018
Notes 2018 $ ASSETS Current assets Cash and cash equivalents 5 3,618,384 Trade and other receivables 6 26,601 Total current assets 3,644,985
Total assets 3,644,985
LIABILITIES Current liabilities Trade and other payables 7 3,404,730 Total current liabilities 3,404,730
Total liabilities 3,404,730
Net assets 240,255
EQUITY Issued capital 8 446,001 Accumulated losses (205,746)
Total equity 240,255
The accompanying notes form part of this financial report.
4 STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD 18 APRIL 2018 TO 30 JUNE 2018
Issued Accumulated Capital Losses Total
Balance at 18 April 2018 - - - Loss for the period - (205,746) (205,746) Other comprehensive income - - - Total comprehensive (loss) / income for the period - (205,746) (205,746)
Transactions with owners, directly in equity Issue of capital (net of costs) 446,001 - 446,001 Balance at 30 June 2018 446,001 (205,746) 240,255
The accompanying notes form part of this financial report.
5 STATEMENT OF CASH FLOWS FOR THE PERIOD 18 APRIL 2018 TO 30 JUNE 2018
Notes 2018 $ Cash flows from operating activities Payments to suppliers and employees (67,668) Interest received 51 Net cash outflow from operating activities 15 (67,617)
Cash flows from financing activities Proceeds from issue of shares 470,001 Proceeds from share application monies received pending allotment 3,216,000 Net cash inflow from financing activities 3,686,001
Net increase in cash held 3,618,384 Cash at the beginning of the financial period -
Cash at the end of the financial period 5 3,618,384
The accompanying notes form part of this financial report.
6 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2018
These financial statements and notes represent those of Tempus Resources Limited (‘Tempus’ or ‘the company’)
The financial statements were authorised for issue on 3 December 2020 by the directors of the company.
1. Summary of significant accounting policies
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless otherwise stated. Except for cash flow information, these financial statements have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. a) Income tax
The income tax expense (revenue) for the period comprises current income tax expense (income) and deferred tax expense (income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting period. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
7 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2018 (continued)
1. Summary of significant accounting policies (continued) a) Income tax (continued)
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. b) Trade receivables
All trade debtors are recognised as the amounts receivable as they are due for settlement no more than 120 days from the date of recognition.
Collectability of trade debtors is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for doubtful debts is raised when some doubt as to collection exists and in any event when the debt is more than 60 days overdue. c) Trade and other payables
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services received by the company during the reporting period which remains unpaid. The balance is recognised as a current liability with the amount being normally paid within 30 days of recognition of the liability. d) Issued Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. e) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with short periods to maturity and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position. f) Revenue and Other Income
Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. Any consideration deferred is treated as the provision of finance and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue.
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent in the instrument. g) Goods and services tax (“GST”)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.
8 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2018 (continued)
1. Summary of significant accounting policies (continued) h) Earnings per share
(i) Basic earnings per share
Basic earnings per share is determined by dividing net profit after income tax attributable to members of the company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. i) Segment reporting
A business segment is identified for a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different to those of other business segments. A geographical segment is identified when products or services are provided within a particular economic environment subject to risks and returns that are different from those of segments operating in other economic environments. j) Financial instruments
Initial recognition and measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself to either the purchase or sale of the asset. Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified ‘at fair value through profit or loss’, in which case transaction costs are expensed to profit or loss immediately. Classification and subsequent measurement Finance instruments are subsequently measured at either of fair value, amortised cost using the effective interest rate method, or cost. Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.
Amortised cost is calculated as: a. the amount at which the financial asset or financial liability is measured at initial recognition; b. less principal repayments; c. plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest method; and d. less any reduction for impairment. The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.
9 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2018 (continued)
1. Summary of significant accounting policies (continued) j) Financial instruments (continued) j) The company does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of accounting standards specifically applicable to financial instruments. i. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Loans and receivables are included in current assets, except for those which are not expected to mature within 12 months after the end of the reporting period (All other loans and receivables are classified as non-current assets). ii. Financial liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost. Impairment At the end of each reporting period, the company assesses whether there is objective evidence that a financial instrument has been impaired. De-recognition Financial assets are de-recognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are de-recognised where the related obligations are either discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss. k) Critical accounting judgments, estimates and assumptions
The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the company.
In the opinion of the directors, there have been no significant estimates or judgements used in the preparation of this financial report. l) New, revised or amending Accounting Standards and Interpretations adopted
The company has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the International Accounting Standards Board (IASB) that are mandatory for the current reporting period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on the financial performance or position of the company during the financial period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. m) New Accounting Standards and Interpretations not yet mandatory or early adopted
Accounting Standards issued by the IASB that are not yet mandatorily applicable to the company, together with an assessment of the potential impact of such pronouncements on the company when adopted in future periods, are discussed below:
IFRS 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in IAS 17: Leases and related Interpretations. IFRS 16 introduces a single lessee accounting model that eliminates the requirement for leases to be classified as operating or finance leases.
10 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2018 (continued)
1. Summary of significant accounting policies (continued) m) New Accounting Standards and Interpretations not yet mandatory or early adopted (continued)
The main changes introduced by the new Standard are as follows: - recognition of a right-of-use asset and liability for all leases (excluding short-term leases with less than 12 months of tenure and leases relating to low-value assets); - depreciation of right-of-use assets in line with IAS 16: Property, Plant and Equipment in profit or loss and unwinding of the liability in principal and interest components; - inclusion of variable lease payments that depend on an index or a rate in the initial measurement of the lease liability using the index or rate at the commencement date; - application of a practical expedient to permit a lessee to elect not to separate non-lease components and instead account for all components as a lease; and - inclusion of additional disclosure requirements.
The transitional provisions of IFRS 16 allow a lessee to either retrospectively apply the Standard to comparatives or recognise the cumulative effect of retrospective application as an adjustment to opening equity on the date of initial application. The company will adopt this standard from 1 July 2019. The directors do not anticipate that the adoption of IFRS 16 will significantly impact the company’s financial statements. IFRS 15 Revenue from Contracts with Customers (applicable to annual reporting periods beginning on or after 1 January 2018)
The standard provides a single standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or implied) to be identified, together with the separate performance obligations within the contract; determine the transaction price, adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate performance obligations on a basis of relative stand-alone selling price of each distinct good or service, or estimation approach if no distinct observable prices exist; and recognition of revenue when each performance obligation is satisfied. Credit risk will be presented separately as an expense rather than adjusted to revenue. For goods, the performance obligation would be satisfied when the customer obtains control of the goods. For services, the performance obligation is satisfied when the service has been provided, typically for promises to transfer services to customers. For performance obligations satisfied over time, an entity would select an appropriate measure of progress to determine how much revenue should be recognised as the performance obligation is satisfied. Contracts with customers will be presented in an entity's statement of financial position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required to enable users to understand the contracts with customers; the significant judgments made in applying the guidance to those contracts; and any assets recognised from the costs to obtain or fulfil a contract with a customer. The company will adopt this standard from 1 July 2018 and expect no impact as there are no revenue contracts.
IFRS 9 Financial Instruments (applicable to annual reporting periods beginning on or after 1 January 2018)
The standard replaces all previous versions of IFRS 9 and introduces new classification and measurement models for financial assets. A financial asset shall be measured at amortised cost, if it is held within a business model whose objective is to hold assets in order to collect contractual cash flows, which arise on specified dates and solely principal and interest. All other financial instrument assets are to be classified and measured at fair value through profit or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on equity instruments (that are not held-for-trading) in other comprehensive income ('OCI'). For financial liabilities, the standard requires the portion of the change in fair value that relates to the entity's own credit risk to be presented in OCI (unless it would create an accounting mismatch). New simpler hedge accounting requirements are intended to more closely align the accounting treatment with the risk management activities of the entity. New impairment requirements will use an 'expected credit loss' ('ECL') model to recognise an allowance. Impairment will be measured under a 12-month ECL method unless the credit risk on a financial instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted. The standard introduces additional new disclosures. The company will adopt this standard from 1 July 2018 and the impact of its adoption is expected to be minimal on the company.
11 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2018 (continued)
2. Segment information
The company has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.
The company operates as a single segment which is mineral exploration and in a single geographical location which is Australia.
2018 $ 3. Other income Interest 96 96
4. Income tax expense
Loss before income tax expense 205,746 Tax at the Australian tax rate of 30% 61,724
Tax loss not recognised (61,724) Income tax expense -
Potential tax benefit relating to unused tax losses for which no deferred tax asset has been recognised 61,724
The deferred tax asset attributable to carried forward income tax losses and temporary differences has not been recognised as an asset as the company has not commenced trading and the availability of future profits to recoup these losses is not considered probable at the date of this report.
5. Cash and cash equivalents
Cash at bank 402,384 Restricted cash 1 3,216,000 3,618,384
1 Fund received pursuant to the IPO restricted for use until the company is admitted to the official list of the ASX.
6. Trade and other receivables
Prepayments 14,096 GST receivable 12,460 Withholding tax receivable 45 26,601
7. Trade and other payables
Trade creditors 73,450 Accrued expenses 115,280 Share application monies pending shares allotment 3,216,000 3,404,730
12 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2018 (continued)
2018 $ 8. Issued Capital
Ordinary shares – fully paid 446,001 446,001 a) Ordinary Shares
2018 2018 Issue price Date No. of shares $ $ At the beginning of the reporting period: 18 April 2018 1 1.00 1 5 June 2018 7,000,000 0.01 70,000 5 June 2018 4,000,000 0.10 400,000 Capital raising costs - (24,000) At the end of the reporting period 11,000,001 446,001
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote, and upon a poll, each share is entitled to one vote.
Restricted Shares As at 30 June 2018 8,650,000 ordinary shares were in escrow.
b) Capital Management The objectives of management when managing capital is to safeguard the company’s ability to continue as a going concern, so that the company may continue to provide returns for shareholders and benefits for other stakeholders.
Due to the nature of the company’s activities, being mineral exploration, the company does not have ready access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the company’s capital risk management is the current working capital position against the requirements of the company to meet exploration programmes and corporate overheads. The company’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required. The working capital position of the company at 30 June 2018 is as follows:
2018 $ Cash and cash equivalents 3,618,384 Trade and other receivables 26,601 Trade and other payables (3,404,730) Working capital position 240,255
13 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2018 (continued)
9. Interests of Key Management Personnel (‘KMP’)
The total remuneration paid and payable to KMP of the company during the period are as follows:
2018 $ Short-term employee benefits 21,870 Post-employment benefits - Share based payments - 21,870
10. Related parties a) Key management personnel (‘KMP’)
Refer to Note 9 for remuneration paid and payable to KMP.
b) Other transactions and balances with related parties i. Payables owing to related parties
2018 $ Alexander Molyneux – director’s fees 7,290 Borg Geoscience Pty Ltd – director’s fees (1) 7,290 Consilium Corporate Pty Ltd (2) 19,427 34,007 (1) Payable to Brendan Borg. (2) $7,290 was for director fees and $12,137 for company secretarial and accounting fees from incorporation to 30 June 2018, payable to Melanie Ross.
There are no other transactions with related parties during the period ended 30 June 2018.
11. Remuneration of auditors 2018 $ RSM Australia Partners Audit and review of financial reports 13,000
RSM Corporate Australia Pty Ltd Investigating Accountant’s Report 9,500 22,500
12. Commitments for expenditure
Capital commitments There are no capital commitments contracted for at balance date.
14 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2018 (continued)
13. Events after the reporting period
On 3 August 2018, the company issued 25,000,000 fully paid ordinary shares at an issue price of $0.20 under its Prospectus dated 12 June 2018 and Supplementary Prospectus dated 21 June 2018 to complete its Initial Public Offering.
On 3 August 2018, the company completed its acquisition of Montejinni Resources Pty Ltd by issuing 500,000 fully paid ordinary shares (escrowed to 3 August 2019), 200,000 options with an exercise price of $0.20 expiring 3 August 2021 (escrowed to 3 August 2019) and payment of $25,000 to the vendor.
The company listed and commenced trading on the ASX on 15 August 2018.
On 9 May 2019, the company entered into a binding agreement to acquire two Ecuadorian companies, Condor Gold S.A. and MiningSources S.A. Together, these two companies own three mineral exploration concessions (the “Zamora Projects”). On 19 August 2019, the Company held a General Meeting. At this meeting, shareholder approval was obtained for the acquisition of the Zamora Projects in Ecuador. On 16 October 2019 the Company completed its 100% acquisition of Condor Gold S.A. and Miningsources S.A.. Cash consideration of USD$100,000 was paid to the vendor. 3,446,205 fully paid ordinary shares (escrowed to 25 October 2020) were issued to the vendor and 904,209 fully paid ordinary shares as a finder’s fees on 25 October 2019.
Brendan Borg was appointed Managing Director effective from 19 August 2019.
On 19 August 2019, the Company shareholder approval was obtained for the issue of 1,150,000 performance rights to existing Directors, 100,000 performance rights to the Company’s Exploration Manager and, subject to the successful completion of the acquisition of the Zamora Projects, 4,000,000 performance rights to Rodrigo Izurieta and 500,000 performance rights to Gary Artmont. The 1,150,000 performance rights were issued to the directors on 18 September 2019. The performance rights approved to be issued to Rodrigo Izurieta, Gary Artmont and the Company’s Exploration Manager were issued on 25 October 2019.
As announced by the Company on 19 August 2019, the Company entered into a binding Heads of Agreement for the acquisition of Blackdome-Elizabeth Gold Project in Canada. On 15 November 2019 the Company completed its 100% acquisition of Sona Resources Corp and its subsidiary No. 75 Corporate Ventures Ltd. The Company paid CAD$450,000 to the vendor. A further 1,000,000 fully paid ordinary shares were issued to the optionholders on 24 December 2019.
Gary Artmont was appointed as a Non-Executive Director effective from 14 October 2019.
On 16 December 2019, 230,000 performance rights were converted to fully paid ordinary shares. 400,000 fully paid shares were also issued for employee services performed.
On 7 May 2020, the Company completed a capital raising to raise $1,006,180 before costs by issuing 7,739,843 fully paid ordinary shares at a price of $0.13 per share.
On 25 June 2020, the Company completed a further capital raising to raise $3,000,170 before costs by issuing 2,307,700 fully paid ordinary shares at $0.13 per share, 5,649,217 fully paid ordinary shares at $0.135 per share and 10,473,108 fully paid ordinary shares at $0.185 per share. 1,130,000 fully paid ordinary shares were also issued on 25 June 2020 from the conversion of performance rights.
On 3 July 2020, 200,000 options with an exercise price of $0.20 were exercised and converted into 200,000 fully paid ordinary shares, and 550,000 fully paid ordinary shares were issued as consideration for public relations services received.
15 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2018 (continued)
13. Events after the reporting period (continued)
On 28 August 2020, 8,064,517 fully paid ordinary shares were issued as part of a $2,500,000 placement and 567,742 fully paid ordinary shares were issued in consideration of part of the capital raising fees.
On 10 September 2020, 250,000 fully paid ordinary shares were issued as consideration for public relations services and 100,000 fully paid ordinary shares were issued under an Exploration Agreement. Additionally, 100,000 unlisted options, with an exercise price of $0.37 expiring 10 September 2023 were issued for consulting services and 300,000 performance rights were issued to Mr Jason Bahnsen as part of his appointment as President of Tempus Resources Ltd, under the terms and conditions of his Executive Agreement.
Tom Peregoodoff and Anthony Cina were both appointed as Non-Executive Directors effective from 1 November 2020.
On 30 November 2020, the Company received conditional approval to list on the Canadian TSX Venture Exchange (TSX-V). To meet TSX-V listing requirements, the Company will be required to cancel 1,264,000 performance rights. Subject to any regulatory and shareholder approvals required, the Company will issue 2,528,000 options with an exercise price of $0.31 and a term of five years from issue date to those performance rights holders in lieu of the cancellation.
Whilst exploration activities have been able to continue, the impact of the Coronavirus (COVID-19) pandemic is ongoing. It is not practical to estimate the potential impact, positive or negative, after the reporting date. The situation is continually developing and is dependent on measures imposed by Australian, Canadian and Ecuadorian Governments, and other countries, such as maintaining social distancing requirements, quarantine, travel restrictions and economic stimulus that may be provided.
The directors are not aware of any other matters or circumstances that have arisen since the end of the financial period which significantly affected or may significantly affect the operations of the company the results of those operations, or the state of affairs of the company in future financial years.
14. Loss per share 2018 $ a) Reconciliation of earnings to profit or loss: Loss (205,746) Loss used to calculate basic and diluted EPS (205,746) b) Weighted average number of ordinary shares used as the denominator in calculating basic EPS Weighted average number of dilutive options outstanding 3,864,866 Weighted average number of ordinary shares outstanding during the period used in calculating dilutive EPS 3,864,866
16 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2018 (continued)
15. Cash flow information
a) Reconciliation of loss after income tax to net cash outflow from 2018 operating activities $ Loss after income tax (205,746) Change in operating assets and liabilities: Trade debtors and receivables (26,601) Trade and other payables 164,730 Net cash outflow from operating activities (67,617)
16. Financial Risk Management
The company’s principal financial instruments comprise cash and short-term deposits. The company has various other financial assets and liabilities such as other receivables and payables, which arise directly from its operations.
The company’s activities expose it to a variety of financial risks, including, credit risk, liquidity risk, foreign exchange rate risk and cash flow interest rate risk. The company is not exposed to price risk.
Risk management is carried out by the Board of Directors, who evaluates and agrees upon risk management and objectives.
(a) Interest Rate Risk
The company is not materially exposed to interest rate risk.
(b) Credit risk
The company does not have any significant concentrations of credit risk. Credit risk is managed by the Board of Directors and arises from cash and cash equivalents as well as credit exposure including outstanding receivables.
All cash balances held in Australia are held at internationally recognised institutions.
The maximum exposure to credit risk at reporting date is the carrying amount of the financial assets disclosed within the financial report.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about default rates.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash balances and access to equity funding.
The company’s exposure to the risk of changes in market interest rates relate primarily to cash assets.
The directors monitor the cash-burn rate of the company on an on-going basis against budget and the maturity profiles of financial assets and liabilities to manage its liquidity risk.
The financial liabilities the company had at reporting date were other payables incurred in the normal course of the business. These were noninterest bearing and were due within the normal 30-60 days terms of creditor payments.
Maturity analysis for financial liabilities Financial liabilities of the company comprise trade and other payables. As at 30 June 2018 all financial liabilities are contractually maturing within 60 days.
17 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2018 (continued)
16. Financial Risk Management (continued)
(d) Foreign currency risk
Foreign exchange risks arise when future commercial transactions and recognised financial assets and financial liabilities are denominated in a currency that is not the entity’s functional currency.
As at 30 June 2018, the company does not currently hold any funds in foreign currency bank accounts so the foreign currency risk is minimal.
(e) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. All financial assets and financial liabilities of the company at the reporting date are recorded at amounts approximating their carrying amount.
The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. The quoted market price used for financial assets held by the company is the current bid price. At reporting date the company had no such financial assets.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to their short-term nature.
17. Contingent Assets and Liabilities
Contingent assets
The company had no contingent assets as at 30 June 2018.
Contingent liabilities
Acquisition Agreement
On 9 May 2018, the company entered into a binding terms sheet with Montejinni Resources Pty Ltd (‘Montejinni’) to acquire 90% interest in Montejinni which owns exploration tenements. The acquisition is subject to both parties meeting the conditions precedent as set out in the binding terms sheet.
Subject to the terms and conditions of the binding terms sheet and on settlement of the acquisition, the company agrees:
(a) to pay $25,000 to the vendor (Cash Consideration);
(b) to issue 500,000 fully paid ordinary shares in the capital of the company at a deemed issue price of $0.20 per share (Consideration Shares) to the vendor; and
(c) to issue 200,000 options to acquire fully paid ordinary shares in the capital of the company (Options) each exercisable at $0.20 on or before the date that is 3 years from the date of issue (Consideration Options) to the vendor.
The above has been issued and paid subsequent to 30 June 2018.
18 NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 2018 (continued)
17. Financial Risk Management (continued)
Lead Manager Mandate
The company has entered into a mandate agreement with Aesir Capital Pty Ltd (Lead Manager) pursuant to which the company has appointed the Lead Manager as the lead manager and corporate advisor to the company (Lead Manager Mandate). The material terms and conditions of the Lead Manager Mandate are set out below:
(a) The Lead Manager Mandate commenced on 7 May 2018 and continued for a fixed period of 12 months unless extended by written agreement between the parties.
(b) In consideration for its services, the company has agreed to pay to the Lead Manager:
(i) a capital raising fee of 6% plus GST on all funds raised through the Initial Public Offer or subsequent raisings through to 4 June 2019; and
(ii) subject to the successful completion of the Initial Public Offer, the company will issue to Aesir Capital (or its nominees) 4,000,000 unlisted Lead Manager Options exercisable at $0.25 each on or before the date which is four years from their date of issue;
(c) The capital raising fee remained payable in respect of any fundraising completed up to 6 months after the Lead Manager Mandate expired or was terminated if:
(i) the Lead Manager has provided advice to the company with regards to the specific fundraising; and
(ii) the applicant was directly introduced to the company by the Lead Manager during or prior to the Offer. but will not be payable if the Lead Manager Mandate has been terminated by the Company immediately, by notice under certain terms and conditions.
18. Company Details
The registered office and principal place of business is: Level 2, 22 Mount Street Perth WA 6000 Telephone: 08 6188 8181 Facsimile: 08 6188 8182 Email: [email protected]
19 DIRECTORS’ DECLARATION
In the directors' opinion:
● the attached financial statements and notes comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as stated in Note 1 to the financial statements;
● the attached financial statements and notes give a true and fair view of the company's financial position as at 30 June 2018 and of its performance for the period 18 April 2018 to 30 June 2018; and
● there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.
On behalf of the directors
Brendan Borg Managing Director
Date: 3 December 2020
20 RSM Australia Partners Level 32, Exchange Tower 2 The Esplanade Perth WA 6000 GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100 F +61 (0) 8 9261 9111 www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF TEMPUS RESOURCES LIMITED
Opinion
We have audited the financial report of Tempus Resources Limited (the Company), which comprises the statement of financial position as at 30 June 2018, the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the financial period 18 April 2018 to 30 June 2018, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at 30 June 2018, and of its financial performance for the financial period 18 April 2018 to 30 June 2018 in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Company in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) and the ethical requirements of the International Ethics Standards Board for Accountants (IESBA Code) that are relevant to our audit of the financial report. We have also fulfilled our other ethical responsibilities in accordance with the IESBA Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
We have determined that there are no key audit matters to be communicated in our auditor’s report.
THE POWER OF BEING UNDERSTOOD AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction. RSM Australia Partners ABN 36 965 185 036 Liability limited by a scheme approved under Professional Standards Legislation Other Information
The directors are responsible for the other information. The other information comprises the information included in the Company's annual report for the financial period 18 April 2018 to 30 June 2018 but does not include the financial report and the auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with IFRS, and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Company to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
RSM AUSTRALIA PARTNERS
Perth, WA TUTU PHONG Dated: 3 December 2020 Partner APPENDIX "D" STOCK OPTION PLAN
Attached.
Page 66 of 69 TEMPUS RESOURCES LTD ACN 625 645 338 (Company)
INCENTIVE OPTION PLAN TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION ...... 1 1.1 Definitions ...... 1 1.2 Interpretation...... 5 2. PURPOSE...... 6
3. COMMENCEMENT AND TERM ...... 6
4. OFFERS OF OPTIONS...... 6 4.1 Offer...... 6 4.2 Offer Document...... 7 4.3 Personal Offer ...... 7 4.4 Nominee ...... 7 4.5 Minimum Contents of Offer Document ...... 7 4.6 Number of Options...... 8 4.7 Consideration for grant of Options ...... 9 4.8 Option Exercise Price ...... 9 4.9 Vesting Conditions...... 9 4.10 Share Restriction Period...... 9 4.11 Deferred Taxation ...... 9 4.12 Quotation of Options ...... 9 4.13 Limit on Offers ...... 9 4.14 Expiry Date ...... 10 4.15 Hold Period...... 10 5. ACCEPTANCE OF OFFER...... 10 5.1 Acceptance of Offer...... 10 5.2 Board’s right to reject...... 10 5.3 Participant Agrees to be Bound...... 10 5.4 Lapse of Offer...... 11 6. GRANT OF OPTIONS...... 11 6.1 Grant of Options ...... 11 6.2 Approvals ...... 11 6.3 Restrictions on Transfers, Dealings and Hedging...... 11 7. VESTING AND EXERCISE OF OPTIONS ...... 12 7.1 Vesting Conditions...... 12 7.2 Vesting Condition Exceptions ...... 12 7.3 Exercise on Vesting...... 12 7.4 One or Several Parcels ...... 12 8. ISSUE OF SHARES ...... 13 8.1 Issue of Shares...... 13 8.2 Blackout Period ...... 13 8.3 Necessary Approvals ...... 13 8.4 Withholding ...... 13 8.5 Rights attaching to Shares ...... 14 8.6 Share ranking...... 14 8.7 Quotation on ASX or TSXV...... 14 8.8 Sale of Shares...... 14 9. RESTRICTION ON DEALING IN SHARES ...... 15 9.1 Restriction Period ...... 15
4804-01/1942894_1 9.2 Waiver of Restriction Period...... 15 9.3 No disposal of Restricted Shares...... 15 9.4 ASX Imposed Escrow...... 15 9.5 Enforcement of Restriction Period...... 15 9.6 Lapse of Restriction Period...... 15 10. LAPSE OF OPTIONS...... 16 10.1 Lapsing of Option ...... 16 10.2 Fraud and Related Matters...... 16 11. EXCHANGE DUE TO CHANGE OF CONTROL ...... 17
12. PARTICIPATION RIGHTS AND REORGANISATIONS ...... 17 12.1 Participation Rights...... 17 12.2 Adjustments for Reorganisation ...... 17 12.3 Notice of Adjustments...... 17 12.4 Cumulative Adjustments ...... 17 13. OVERRIDING RESTRICTIONS ON ISSUE AND EXERCISE...... 18
14. AMENDMENTS...... 18 14.1 Amendment or Termination of the Plan...... 18 14.2 Adjustment to Option Terms...... 18 14.3 Notice of amendment...... 19 15. TRUST...... 19
16. MISCELLANEOUS ...... 19 16.1 Rights and obligations of Participant...... 19 16.2 Power of the Board...... 20 16.3 Dispute or disagreement...... 21 16.4 ASIC relief ...... 21 16.5 Non-residents of Australia...... 21 16.6 Communication...... 21 16.7 Attorney ...... 22 16.8 Costs and Expenses...... 22 16.9 Adverse Tax...... 22 16.10 Data protection ...... 22 16.11 Error in Allocation ...... 23 16.12 No fiduciary capacity...... 23 16.13 ASX Listing Rules and TSXV Policies...... 23 16.14 Enforcement ...... 23 16.15 Laws governing Plan ...... 23 SCHEDULE 1 – OPTION PLAN – OFFER DOCUMENT ...... 24
SCHEDULE 2 – OPTION PLAN ACCEPTANCE FORM...... 27
SCHEDULE 3 – NOTICE OF EXERCISE OF OPTIONS ...... 29 TEMPUS RESOURCES LTD INCENTIVE OPTION PLAN
The Directors are empowered to operate the Tempus Resources Ltd Incentive Option Plan (Plan) on the following terms and in accordance with the ASX Listing Rules and policies of the TSXV (where applicable).
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
For the purposes of the Plan, the following words have the following meanings.
Acceptance Form means the Acceptance Form by which an Eligible Participant or Nominee (as applicable) accepts an Offer for Options, in substantially the same form as set out in Schedule 2 or as otherwise approved by the Company from time to time.
ASIC means the Australian Securities and Investments Commission.
Associated Body Corporate means:
(a) a related body corporate (as defined in the Corporations Act) of the Company;
(b) a body corporate which has an entitlement to not less than 20% of the voting Shares of the Company; and
(c) a body corporate in which the Company has an entitlement to not less than 20% of the voting shares.
ASX means ASX Limited (ACN 008 624 691) or the Australian Securities Exchange, as the context requires.
ASX Listing Rules means the official Listing Rules of the ASX as they apply to the Company from time to time.
Blackout Period means a period when the Participant is prohibited from exercising an Option due to trading restrictions imposed by the Company pursuant to any written policy of the Company respecting restrictions on trading that is in effect at that time.
Board means the board of Directors of the Company or committee appointed by the Board for the purposes of the Plan.
Business Day means those days other than a Saturday, Sunday or public holiday in Western Australia and any other day which the ASX shall declare and publish is not a business day.
Change of Control means:
(a) a bona fide Takeover Bid is declared unconditional and the bidder has acquired a Relevant Interest in more than 50% of the Company’s issued Shares;
(b) a court approves, under Section 411(4)(b) of the Corporations Act, a proposed compromise or arrangement for the purposes of, or in
4804-01/1942894_1 1 connection with, a scheme for the reconstruction of the Company or its amalgamation with any other company or companies; or
(c) in any other case, a person obtains Voting Power in the Company which the Board (which for the avoidance of doubt will comprise those Directors immediately prior to the person acquiring that Voting Power) determines, acting in good faith and in accordance with their fiduciary duties, is sufficient to control the composition of the Board.
Class Order means ASIC Class Order 14/1000 as amended or replaced.
Closing Date means the date on which an Offer is stated to close.
Company means Tempus Resources Ltd (ACN 625 645 338).
Consultant has the meaning ascribed thereto in the policies of the TSXV.
Corporations Act means the Corporations Act 2001 (Cth).
Director means any person occupying the position of a director of any Group Company (including an alternate director or managing director appointed in accordance with the relevant constitution).
Eligible Participant means, at the time the Offer is made:
(a) a Consultant of any Group Company, to the extent permitted by the ASX Listing Rules;
(b) a Director (whether executive or non-executive) of any Group Company;
(c) a full or part time employee of any Group Company;
(d) a casual employee or contractor of a Group Company to the extent permitted by the Class Order and the policies of the TSXV; or
(e) a prospective participant, being a person to whom the Offer is made but who can only accept the Offer if an arrangement has been entered into that will result in the person becoming an Eligible Participant under Rules (b), (c) or (d) above,
who is declared by the Board to be eligible to receive grants of Options under the Plan.
Expiry Date means, in respect of an Option, the date that the Option lapses (if it has not already otherwise lapsed in accordance with the Plan).
Grant Date means, in relation to an Option, the date on which the Option is granted.
Group means the Company and each Associated Body Corporate.
Group Company means the Company or any subsidiary of the Company.
Holding Lock has the meaning given to that term in the ASX Listing Rules.
Insider has the meaning ascribed thereto in the policies of the TSXV.
Marketable Parcel has the meaning given to that term in the ASX Listing Rules.
4804-01/1942894_1 2 Nominee means a nominee of an Eligible Participant that is one of the following:
(a) provided that the Shares are not listed on the TSXV, an immediate family member of the Eligible Participant or (subject to Board approval) a trustee of an Eligible Participant’s family trust whose beneficiaries are limited to the Eligible Participant and/or the Eligible Participant’s immediate family members;
(b) a company whose members comprise no persons other than the Eligible Participant or, provided that the Shares are not listed on the TSXV, an immediate family members of the participant;
(c) provided that the Shares are not listed on the TSXV, a corporate trustee of a self-managed superannuation fund (within the meaning of the Superannuation Industry (Supervision) Act 1993) where the Eligible Participant is a director of the trustee; or
(d) subject to the ASX Listing Rules, a Consultant Company or an Eligible Charitable Organization (as such terms are defined in the policies of the TSXV).
Offer means an offer made to an Eligible Participant to be granted one or more Options under the Plan as set out in an Offer Document.
Offer Document means an offer document in substantially the same form as set out in Schedule 2, or such other form as required by the Board from time to time consistent with the Corporations Act and the Class Order.
Option means an option granted pursuant to these Rules to subscribe for a Share upon and subject to the terms of these Rules and the terms of any applicable Offer.
Option Exercise Price means the exercise price of an Option, as determined in accordance with Rule 4.8.
Outstanding Securities at the time of any Share issuance or Offer means, the aggregate number of Shares that are outstanding immediately prior to the Share issuance or Offer in question on a non-diluted basis, or such other number as may be determined under the applicable rules and regulations of all regulatory authorities to which the Company may be subject, including the TSXV, ASX or such other stock exchange as the Shares may be listed for trading.
Participant means an Eligible Participant to whom Options have been granted under the Plan or, if Rule 4.4 applies, a Nominee of the Eligible Participant to whom Options have been granted under the Plan.
Plan means the plan as set out in this document, subject to any amendments or additions made under Rule 14.
Redundancy means termination of the employment, office or engagement of a Relevant Person due to economic, technological, structural or other organisational change where:
(a) no Group Company requires the duties and responsibilities carried out by the Relevant Person to be carried out by anyone; or
(b) no Group Company requires the position held by the Relevant Person to be held by anyone.
4804-01/1942894_1 3 Relevant Interest has the meaning given in the Corporations Act.
Relevant Person means:
(a) in respect of an Eligible Participant, that person; and
(b) in respect of a Nominee of an Eligible Participant, that Eligible Participant.
Restriction Period means the period during which a Share issued on the exercise of an Option cannot be transferred or otherwise dealt with in accordance with Rule 9.1.
Restricted Shares means Shares issued on the exercise of an Option granted under the Plan that the Board has determined are subject to a Restriction Period.
Retirement means where a Relevant Person intends to permanently cease all gainful employment in circumstances where the Relevant Person provides, in good faith, a written statutory declaration to the Board to that effect.
Rules means the rules of the Plan set out in this document.
Security Based Compensation Arrangements means (i) stock option plans for the benefit of employees, Insiders, Consultants or any one of such groups; (ii) individual stock options granted to employees, Consultants or Insiders if not granted pursuant to a plan previously approved by the Company's shareholders; (iii) stock purchase plans where the Company provides financial assistance or where the Company matches the whole or a portion of the securities being purchased; (iv) stock appreciation rights involving issuances by the Company of securities from treasury; (v) any other compensation or incentive mechanism involving the issuance or potential issuances of securities of the Company; and (vi) security purchases from treasury by an employee, Insider or Consultant which is financially assisted by the Company by any means whatsoever.
Severe Financial Hardship means that the Relevant Person is unable to provide themselves, their family or other dependents with basic necessities such as food, accommodation and clothing, including as a result of family tragedy, financial misfortune, serious illness, impacts of natural disaster and other serious or difficult circumstances.
Share means a fully paid ordinary share in the capital of the Company.
Shareholder means a holder of Shares.
Special Circumstances means:
(a) a Relevant Person ceasing to be an Eligible Participant due to:
(i) death or Total or Permanent Disability of a Relevant Person; or
(ii) Retirement or Redundancy of a Relevant Person;
(b) a Relevant Person suffering Severe Financial Hardship;
(c) any other circumstance stated to constitute “Special Circumstances” in the terms of the relevant Offer made to and accepted by the Participant; or
(d) any other circumstances determined by the Board at any time (whether
4804-01/1942894_1 4 before or after the Offer) and notified to the relevant Participant which circumstances may relate to the Participant, a class of Participant, including the Participant or particular circumstances or class of circumstances applying to the Participant.
Takeover Bid means a takeover bid (as defined in the Corporations Act) to acquire Shares.
Total and Permanent Disability means that the Relevant Person has, in the opinion of the Board, after considering such medical and other evidence as it sees fit, become incapacitated to such an extent as to render the Relevant Person unlikely ever to engage in any occupation with the Company or its Associated Bodies Corporate for which he or she is reasonably qualified by education, training or experience.
TSXV means the TSX Venture Exchange.
Vesting Condition means, in respect of an Option, any condition set out in the Offer which must be satisfied (unless waived by the Board in accordance with this Plan) before that Option can be exercised or any other restriction on exercise of that Option specified in the Offer or in these Rules.
Voting Power has the meaning given to that term in Section 9 of the Corporations Act.
Voting Share means a security of the Company that:
(a) is not a debt security, and
(b) carries a voting right either under all circumstances or under some circumstances that have occurred and are continuing.
1.2 Interpretation
In this Plan unless the context otherwise requires:
(a) headings are for convenience only and do not affect the interpretation of this Plan;
(b) any reference in the Plan to any enactment of the ASX Listing Rules includes a reference to that enactment or those ASX Listing Rules as from time to time amended, consolidated, re-enacted or replaced and any reference in the Plan to any policies of the TSXV include a reference to the policies of the TSXV as from time to time amended, consolidated, re- enacted or replaced;
(c) the singular includes the plural and vice versa;
(d) any words denoting one gender include the other gender;
(e) where any word or phrase is given a definite meaning in this Plan, any part of speech or other grammatical form of that word or phrase has a corresponding meaning;
(f) a reference to:
4804-01/1942894_1 5 (i) a person includes a natural person, partnership, joint venture, government agency, association, corporation or other body corporate;
(ii) a document includes all amendments or supplements to that document;
(iii) a Rule is a reference to a Rule of this Plan;
(iv) a law includes a constitutional provision, treaty, decree, convention, statute, regulation, ordinance, by-law, judgment, rule of common law or equity and is a reference to that law as amended, consolidated or replaced;
(v) an agreement other than this Plan includes an undertaking, or legally enforceable arrangement or understanding, whether or not in writing; and
(vi) a monetary amount is in Australian dollars; and
(g) when the day on which something must be done is not a Business Day, that thing must be done on the following Business Day.
2. PURPOSE
The purpose of the Plan is to:
(a) assist in the reward, retention and motivation of Eligible Participants;
(b) link the reward of Eligible Participants to performance and the creation of Shareholder value;
(c) align the interests of Eligible Participants more closely with the interests of Shareholders by providing an opportunity for Eligible Participants to receive Shares;
(d) provide Eligible Participants with the opportunity to share in any future growth in value of the Company; and
(e) provide greater incentive for Eligible Participants to focus on the Company's longer term goals.
3. COMMENCEMENT AND TERM
(a) This Plan will commence on the date determined by resolution of the Board and will continue until terminated by the Board.
4. OFFERS OF OPTIONS
4.1 Offer
(a) The Board may, from time to time, in its absolute discretion, make a written offer to any Eligible Participant (including an Eligible Participant who has previously received an Offer) to apply for Options, upon the terms set out in the Plan and upon such additional terms and conditions as the Board determines (Offer).
4804-01/1942894_1 6 (b) In exercising that discretion, the Board may have regard to the following (without limitation):
(i) the Eligible Participant's length of service with the Group;
(ii) the contribution made by the Eligible Participant to the Group;
(iii) the potential contribution of the Eligible Participant to the Group; or
(iv) any other matter the Board considers relevant.
(c) For the avoidance of doubt, nothing in this document obliges the Company at any time to make an Offer, or further Offer, to any Eligible Participant.
(d) If the Shares are listed on the TSXV, an Offer shall constitute a representation by the Company that the Optionee is a bona fide Employee (as such term is defined in the policies of the TSXV), Consultant or Management Company Employee (as such term is defined in the policies of the TSXV).
4.2 Offer Document
An Offer must be made using an Offer Document.
4.3 Personal Offer
Subject to Rule 4.4, an Offer is personal and is neither assignable nor transferable.
4.4 Nominee
(a) Upon receipt of an Offer, an Eligible Participant may, by notice in writing to the Board, nominate a Nominee in whose favour the Eligible Participant wishes to renounce the Offer.
(b) The Board may, in its discretion, resolve not to allow a renunciation of an Offer in favour of a Nominee without giving any reason for that decision.
4.5 Minimum Contents of Offer Document
An Offer Document must advise the Eligible Participant of the following minimum information regarding the Options:
(a) the maximum number of Options that the Eligible Participant may apply for, or the formula for determining the number of Options that may be applied for;
(b) the maximum number of Shares that the Participant is entitled to be issued on the exercise of each Options or the formula for determining the maximum number of Shares;
(c) any applicable Vesting Conditions;
(d) any Restriction Period the Board has resolved to apply to Shares issued on exercise of the Options;
(e) when unvested Options will expire (Expiry Date);
4804-01/1942894_1 7 (f) the date by which an Offer must be accepted (Closing Date);
(g) any other information required by law or the ASX Listing Rules or considered by the Board to be relevant to the Options or the Shares to be issued on the exercise of the Options; and
(h) the Option Exercise Price.
4.6 Number of Options
(a) Subject to Rule 4.13, the number of Options to be offered to an Eligible Participant from time to time will be determined by the Board in its discretion and in accordance with applicable law and the ASX Listing Rules, provided however, that, if the Shares are listed on the TSXV:
(i) the number of Shares subject to an option granted to any one Participant shall be determined by the Board, but no one Participant shall be granted an option which exceeds the maximum number, if any, permitted by the policies of the TSXV or the ASX Listing Rules;
(ii) the number of Shares reserved for issuance on exercise of Options granted to any one Participant pursuant to all Security Based Compensation Arrangements in a 12-month period shall not exceed 5% of the Outstanding Securities, unless the Company has obtained disinterested Shareholder approval in respect of such grant and meets applicable TSXV requirements;
(iii) the aggregate number of Options:
(A) granted to Insiders of the Corporation, within any one year period, and
(B) granted to Insiders of the Corporation, at any time,
under the Plan, together with all other Security Based Compensation Arrangements, shall not exceed 10% of the number of Outstanding Securities.
(iv) the aggregate number of Shares reserved for issuance to all Optionees employed to provide Investor Relations Activities (as such term is defined in the policies of the TSXV) in a 12-month period shall not exceed 2% of the number of Outstanding Securities (Options granted to Optionees performing Investor Relations Activities shall contain vesting provisions such that vesting occurs over at least 12 months with no more than ¼ of the Options vesting in any three-month period); and
(v) the aggregate number of Shares reserved for issuance to any one Consultant (as such term is defined in the policies of the TSXV) in a 12 month period shall not exceed 2% of the number of Outstanding Securities;
(b) Each Option will entitle the holder to subscribe for and be issued one Share.
4804-01/1942894_1 8 4.7 Consideration for grant of Options
Unless the Options are quoted on the ASX, Options issued under the Plan will be issued for no more than nominal cash consideration.
4.8 Option Exercise Price
(a) Subject to Rule 4.8(b) and Rule 4.8(c), in respect of any Offer, the Board may determine the Option Exercise Price (if any) for an Option offered under that Offer in its absolute discretion.
(b) To the extent the ASX Listing Rules specify or require a minimum price, the Option Exercise Price in respect of an Option offered under an Offer must not be less than any minimum price specified in the ASX Listing Rules.
(c) If the Shares are listed on the TSXV, the Option Exercise Price in respect of an Option offered under an Offer must not be less than the Discounted Market Price (as such term is defined in the policies of the TSXV) or any other minimum price specified in the policies of the TSXV.
4.9 Vesting Conditions
An Option may be made subject to Vesting Conditions as determined by the Board in its discretion and as specified in the Offer for the Option.
4.10 Share Restriction Period
A Share issued on exercise of an Option may be subject to a Restriction Period as determined by the Board in accordance with Rule 9 of this Plan.
4.11 Deferred Taxation
Subdivision 83A-C of the Income Tax Assessment Act 1997 applies to the Plan except to the extent an Offer provides otherwise.
4.12 Quotation of Options
Options will not be quoted on the ASX, except to the extent provided for by this Plan or unless the Offer provides otherwise.
4.13 Limit on Offers
(a) The Company must have reasonable grounds to believe, when making an Offer, that the number of Shares to be received on exercise of Options offered under an Offer, when aggregated with the number of Shares issued or that may be issued as a result of offers made in reliance on the Class Order at any time during the previous 3 year period under an employee incentive scheme covered by the Class Order or an ASIC exempt arrangement of a similar kind to an employee incentive scheme, will not exceed 5% of the total number of Shares on issue at the date of the Offer.
(b) For so long as the Shares are listed on the TSXV, the aggregate number of Shares reserved for issuance under this Plan and to be received on exercise of all Options offered this Plan (together with any other Securities Based Compensation Arrangement of the Company in effect from time to time) shall not exceed 10% of the Shares on issue from time to time on a non-diluted basis. This Plan is a rolling plan, meaning that the reloading
4804-01/1942894_1 9 of Options is permitted under the Plan and Options that are exercised, surrendered, lapsed, cancelled, terminated or expire without being exercised no longer represent Shares reserved for issuance under this Plan and do not decrease the number of Shares issuable under this Rule 4.13(b).
4.14 Expiry Date
If the Company is listed on the TSXV at the time of Offer, the Expiry Date of any Option may not exceed 10 years from the date of Offer, subject to any applicable extension in respect of a Blackout Period.
4.15 Hold Period
In addition to any resale restrictions imposed under applicable securities laws, if required by the TSXV or any other regulatory authority, Options granted under the Plan and Shares issued on exercise of such Options may be required to be legended evidencing that the Options and the Shares issued upon exercise of the Options are subject to a hold period or restricted period as required by the TSXV or any other applicable regulatory authority and the Optionee by accepting the Option agrees to comply therewith.
5. ACCEPTANCE OF OFFER
5.1 Acceptance of Offer
An Eligible Participant (or permitted Nominee) may accept an Offer in whole or in part, by signing and returning an Acceptance Form to the Company no later than the Closing Date.
5.2 Board’s right to reject
(a) The Board may accept or reject any Acceptance Form in its absolute discretion.
(b) Before accepting or rejecting the Acceptance Form, the Board may require the applicant to provide any information that the Board requests concerning the person's entitlement to lodge an Acceptance Form under this Plan.
(c) The Board must promptly notify an applicant if an Acceptance Form has been rejected, in whole or in part.
5.3 Participant Agrees to be Bound
(a) An Eligible Participant, by submitting an Acceptance Form, agrees to be bound by the terms and conditions of the Offer and the Acceptance Form, the Plan and the Constitution of the Company, as amended from time to time.
(b) If the Board resolves to allow a renunciation of an Offer in favour of a Nominee, the Eligible Participant will procure that the permitted Nominee accepts the Offer made to that Eligible Participant and that both the Eligible Participant and the Nominee agree to be bound by the terms and conditions of the Offer and Acceptance Form, the Plan and the Constitution of the Company, as amended from time to time.
4804-01/1942894_1 10 5.4 Lapse of Offer
To the extent an Offer is not accepted in accordance with Rule 5.1, the Offer will lapse on the date following the Closing Date, unless the Board determines otherwise.
6. GRANT OF OPTIONS
6.1 Grant of Options
(a) Subject to Rule 6.2, once the Board has received and accepted a duly signed and completed Acceptance Form for Options, the Company must, provided the Eligible Participant to whom the Offer was made remains an Eligible Participant, promptly grant Options to the applicant, upon the terms set out in the Offer, the Acceptance Form and the Plan and upon such additional terms and conditions as the Board determines.
(b) The Company will, within a reasonable period after the Grant Date of the Options, issue the applicant with a certificate evidencing the grant of the Options.
6.2 Approvals
The Company’s obligation to grant Options is conditional on:
(a) the grant of the Options complying with all applicable legislation, the ASX Listing Rules and, if applicable, the policies of the TSXV; and
(b) all necessary approvals required under any applicable legislation and the ASX Listing Rules being obtained prior to the grant of the Options.
6.3 Restrictions on Transfers, Dealings and Hedging
(a) Subject to the ASX Listing Rules, an Option granted under the Plan is only transferable, assignable or able to be otherwise disposed or encumbered:
(i) provided that the Shares on not listed on the TSXV, in Special Circumstances with the consent of the Board (which may be withheld in its absolute discretion); or
(ii) by force of law upon death to the Participant’s legal personal representative or heirs, further provided, that in such case, any Option so transferred shall lapse on the date that is one year following the date of death of the Participant; or
(iii) provided that the Shares on not listed on the TSXV, upon bankruptcy to the Participant’s trustee in bankruptcy.
(b) A Participant must not enter into any arrangement for the purpose of hedging, or otherwise affecting their economic exposure, to their Option.
(c) Where the Participant purports to transfer, assign, mortgage, charge or otherwise dispose or encumber an Option, other than in accordance with Rule 6.3(a), or hedge an Option contrary to Rule 6.3(b), the Option immediately lapses.
4804-01/1942894_1 11 7. VESTING AND EXERCISE OF OPTIONS
7.1 Vesting Conditions
(a) Subject to Rules 7.2 and 7.3, an Option granted under the Plan will not vest and be exercisable unless the Vesting Conditions (if any) attaching to that Option have been satisfied and the Board has notified the Participant of that fact.
(b) The Board must notify a Participant in writing within 10 Business Days of becoming aware that any Vesting Condition attaching to an Option has been satisfied.
7.2 Vesting Condition Exceptions
Notwithstanding Rule 7.1, the Board may in its absolute discretion, except in respect of Rule 7.2(b), where Vesting Conditions are deemed to be automatically waived, by written notice to a Participant, resolve to waive any of the Vesting Conditions applying to Options due to:
(a) Special Circumstances arising in relation to a Relevant Person in respect of those Options;
(b) a Change of Control occurring;
(c) the Company passing a resolution for voluntary winding up, or an order is made for the compulsory winding up of the Company,
in which case Rule 7.3 applies.
7.3 Exercise on Vesting
A Participant (or their personal legal representative where applicable) may, subject to the terms of any Offer, exercise any vested Option at any time after the Board notifies that the Option has vested and before it lapses by providing the Company with:
(a) the certificate for the Options or, if the certificate for the Options has been lost, mutilated or destroyed, a declaration to that effect, accompanied by an indemnity in favour of the Company against any loss, costs or expenses which might be incurred by the Company as a consequence of its relying on the declaration that the certificate has been lost, mutilated or destroyed;
(b) a notice in the form of Schedule 3 addressed to the Company and signed by the Participant stating that the Participant exercises the Options and specifying the number of Options which are exercised; and
(c) payment to the Company in cleared funds of an amount equal to the Option Exercise Price multiplied by the number of Options which are being exercised, unless there is no exercise price payable in respect of the Options to be exercised.
7.4 One or Several Parcels
Options may be exercised in one or more parcels of any size, provided that the number of Shares issued upon exercise of the number of Options in any parcel is not less than a Marketable Parcel.
4804-01/1942894_1 12 8. ISSUE OF SHARES
8.1 Issue of Shares
If the items specified in Rule 7.3 are delivered in accordance with that Rule, the Company will, subject to the Corporations Act, the ASX Listing Rules, this Plan (including Rule 8.2) and any applicable Offer:
(a) within 10 Business Days of delivery of the documents referred to in Rule 7.3 issue to the Participant the Shares credited as being fully paid in respect of which the Options are exercised, together with any additional Shares an entitlement to which has arisen under Rule 12 in consequence of the exercise of the Options; and
(b) cancel the certificate delivered pursuant to Rule 7.3 and, if any Options which have not lapsed remain unexercised, deliver to the Participant a replacement certificate reflecting the number of those Options which remain unexercised.
8.2 Blackout Period
Should the Expiry Date of any Option fall within a Blackout Period that has been formally imposed by the Company pursuant to its internal trading policies as a result of the bona fide existence of undisclosed material information, such Expiry Date of the Option shall be automatically extended without any further act or formality to that date which is the tenth business day after the end of the Blackout Period, such tenth business day to be considered the Expiry Date for such Option for all purposes under the Plan. The ten business day period referred to in this Rule may not be extended by the Board.
8.3 Necessary Approvals
The ability of a Participant to exercise Options and the obligation of the Company to issue and deliver Shares in accordance with the Plan is subject to any approvals which may be required from Shareholders of the Company and any regulatory authority or stock exchange having jurisdiction over the securities of the Company. If any Shares cannot be issued to any Participant for whatever reason, the obligation of the Company to issue such Shares shall terminate and any Option Exercise Price paid to the Company will be returned to the Participant.
8.4 Withholding
The Company shall have the authority to take steps for the deduction and withholding, or for the advance payment or reimbursement by the Optionee to the Company, of any taxes, duties or other required source deductions which the Company is required by law or regulation of any governmental authority whatsoever to remit in connection with this Plan, any vesting of Options, or any issuance of optioned Shares. Without limiting the generality of the foregoing, the Company may, in its sole discretion:
(a) deduct and withhold additional amounts from other amounts payable to an Optionee;
(b) require, as a condition of the issuance of optioned Shares to an Optionee that the Optionee make a cash payment to the Company equal to the amount, in the Company’s opinion, required to be withheld and remitted by the Company for the account of the Optionee to the appropriate governmental authority and the Company, in its discretion, may with-hold
4804-01/1942894_1 13 the issuance or delivery of optioned Shares until the Optionee makes such payment; or
(c) sell, on behalf of the Optionee, all or any portion of optioned Shares otherwise deliverable to the Optionee until the net proceeds of sale equal or exceed the amount which, in the Company’s opinion, would satisfy any and all withholding taxes and other source deductions for the account of the Optionee.
8.5 Rights attaching to Shares
A Participant will, from and including the issue date of Shares under this Plan, be the legal owner of the Shares issued in respect of them and will be entitled to dividends and to exercise voting rights attached to the Shares.
8.6 Share ranking
All Shares issued under the Plan will rank equally in all respects with the Shares of the same class for the time being on issue except as regards any rights attaching to such Shares by reference to a record date prior to the date of their issue.
8.7 Quotation on ASX or TSXV
(a) If Shares of the same class as those issued under the Plan are quoted on the ASX, the Company will, subject to the ASX Listing Rules, apply to the ASX for those Shares to be quoted on ASX within the later of 10 Business Days after:
(i) the date the Shares are issued; and
(ii) the date any Restriction Period that applies to the Shares ends.
(b) The Company will not apply for quotation of any Options on the ASX or TSXV.
(c) The Company will comply with the policies of the TSXV with respect to listing of the Shares issued on exercise of Options.
8.8 Sale of Shares
(a) Subject to Rule 9 (Restriction on Dealing in Shares) and Rule 4.15 (Hold Period), there will be no transfer restrictions on Shares issued under the Plan unless the sale, transfer or disposal by the Participant of the Shares issued to them on exercise of the Options (or any interest in them) would require the preparation of a disclosure document (as that term is defined in the Corporations Act).
(b) If a disclosure document is required, the Participant agrees to enter into such arrangements with the Company as the Board considers appropriate to prevent the sale, transfer or disposal of the relevant Shares in a manner that would require a disclosure document to be prepared.
(c) The Company will issue, where required to enable Shares issued on exercise of Options to be freely tradeable on the ASX (subject to any Restriction Period), a cleansing statement under Section 708A(5) of the Corporations Act at the time Shares are issued. Where a cleansing statement is required, but cannot be issued, the Company will lodge a prospectus in relation to the Shares with ASIC which complies with the
4804-01/1942894_1 14 requirements of the Corporations Act and allows the Shares to be freely tradeable on the ASX (subject to any Restriction Period).
9. RESTRICTION ON DEALING IN SHARES
9.1 Restriction Period
Subject to Rule 9.4, the Board may, in its discretion, determine at any time up until exercise of Options, that a restriction period will apply to some or all of the Shares issued to a Participant on exercise of those Options (Restricted Shares), up to a maximum of seven (7) years from the Grant Date of the Options (Restriction Period).
9.2 Waiver of Restriction Period
Subject to Rule 9.4, the Board may, in its sole discretion, having regard to the circumstances at the time, waive a Restriction Period determined pursuant to Rule 9.1.
9.3 No disposal of Restricted Shares
A Participant must not dispose of or otherwise deal with any Shares issued to them under the Plan while they are Restricted Shares.
9.4 ASX Imposed Escrow
The Company must impose a Restriction Period on Shares to the extent necessary to comply with any escrow restrictions imposed by the ASX Listing Rules.
9.5 Enforcement of Restriction Period
(a) The Company may implement any procedure it considers appropriate to restrict a Participant from dealing with any Shares for as long as those Shares are subject to a Restriction Period.
(b) The Participant agrees to:
(i) execute an ASX restriction agreement in relation to the Shares reflecting any Restriction Period applying to the Restricted Shares under the Plan;
(ii) the Company lodging the share certificates for Shares (where issuer sponsored) with a bank or recognised trustee to hold until the expiry of any Restriction Period applying to the Shares or until the Shares are otherwise released from restrictions (at which time the Company shall arrange for the share certificates to be provided to the Participant); and
(iii) the application of a Holding Lock over Shares until any Restriction Period applying to the Shares under the Plan has expired (at which time the Company shall arrange for the Holding Lock to be removed).
9.6 Lapse of Restriction Period
When a Share ceases to be a Restricted Share, all restrictions on disposing of or otherwise dealing or purporting to deal with that Share provided in or under these Rules will cease.
4804-01/1942894_1 15 10. LAPSE OF OPTIONS
10.1 Lapsing of Option
An Option will lapse upon the earlier to occur of:
(a) an unauthorised dealing in, or hedging of, the Option occurring, as governed by Rule 6.3(c);
(b) a Vesting Condition in relation to the Option is not satisfied by the due date, or becomes incapable of satisfaction, as determined by the Board in its absolute discretion, unless the Board exercises its discretion to waive the Vesting Condition and vest the Option under Rule 7.2 (Vesting Condition Exceptions) or Rule 10.1(c)(ii) applies;
(c) in respect of unvested Options only, a Relevant Person ceases to be an Eligible Participant, unless the Board:
(i) exercises its discretion to vest the Option under Rule 7.2 (Vesting Condition Exceptions); or
(ii) in its absolute discretion, resolves to allow the unvested Options to remain unvested after the Relevant Person ceases to be an Eligible Participant;
(d) in respect of vested Options only, a Relevant Person ceases to be an Eligible Participant and the Option granted in respect of that Relevant Person is not exercised within one (1) month (or such later date as the Board determines, provided however, that if the Shares are listed on the TSXV, such later date determined by the Board shall not exceed 12 months) of the date the Relevant Person ceases to be an Eligible Participant;
(e) the Board deems that an Option lapses due to fraud, dishonesty or other improper behaviour of the holder/Eligible Participant under Rule 10.2 (Fraud and Related Matters);
(f) in respect of vested Options only, the Company undergoes a Change of Control or a winding up resolution or order is made, and the Option does not vest in accordance with Rule 7.2 (Vesting Condition Exceptions); and
(g) the Expiry Date of the Option.
10.2 Fraud and Related Matters
Notwithstanding any other provision of this document, where a Relevant Person:
(a) in the opinion of the Board, acts fraudulently or dishonestly, is grossly negligent, demonstrates serious and wilful misconduct, or causes a material adverse effect on the reputation of the Company;
(b) has his or her employment or office terminated due to serious or wilful misconduct or otherwise for cause without notice; or
(c) becomes ineligible to hold his or her office due to Part 2D.6 of the Corporations Act,
4804-01/1942894_1 16 the Board may, by written notice to the Participant, deem any unvested, or vested but unexercised, Options of the Participant to have lapsed or require the Participant to do all such things necessary to cancel any Shares issued on exercise of the Participant’s Options.
11. EXCHANGE DUE TO CHANGE OF CONTROL
If a company (Acquiring Company) obtains control of the Company as a result of a Change of Control and both the Company and the Acquiring Company agree, a Participant may, in respect of any vested Options that are exercised, be provided with shares of the Acquiring Company, or its parent, in lieu of Shares, on substantially the same terms and subject to substantially the same conditions as the Shares, but with appropriate adjustments to the number and kind of shares subject to the Options.
12. PARTICIPATION RIGHTS AND REORGANISATIONS
12.1 Participation Rights
(a) There are no participating rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options without exercising the Options.
(b) Unless specified in the Offer Document and subject to compliance with the ASX Listing Rules, an Option does not confer the right to a change in Option Exercise Price or in the number of underlying Shares over which the Option can be exercised.
(c) A Participant who is not a Shareholder is not entitled to:
(i) notice of, or to vote or attend at, a meeting of the Shareholders of the Company; or
(ii) receive any dividends declared by the Company,
unless and until any Option is exercised and the Participant holds Shares that provide the right to notice and dividends.
12.2 Adjustments for Reorganisation
If at any time the issued capital of the Company is reorganised (including consolidation, subdivision, reduction or return), all rights of a Participant are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reorganisation.
12.3 Notice of Adjustments
Whenever the number of Shares to be issued on exercise of an Option or the Option Exercise Price is adjusted pursuant to these Rules, the Company will give notice of the adjustment to the Participant and ASX together with calculations on which the adjustment is based.
12.4 Cumulative Adjustments
Effect will be given to Rule 12.3 in such manner that the effect of the successive applications of them is cumulative, with the intention being that the adjustments they progressively effect will reflect previous adjustments.
4804-01/1942894_1 17 13. OVERRIDING RESTRICTIONS ON ISSUE AND EXERCISE
Notwithstanding the Rules or the terms of any Option, no Option may be offered, granted or exercised and no Share may be issued under the Plan if to do so:
(a) would contravene the Corporations Act, the ASX Listing Rules, the policies of the TSXV, or any other applicable law; or
(b) would contravene the local laws or customs of an Eligible Participant’s country of residence or in the opinion of the Board would require actions to comply with those local laws or customs which are impractical.
14. AMENDMENTS
14.1 Amendment or Termination of the Plan
(a) Subject to Rule 14.1(b), the Board may not, without the prior approval of the holders of Shares, or the prior approval of disinterested holders of Shares to the extent required by the policies of the TSXV in circumstances where the Option Exercise Price of outstanding Options held by Insiders of the Company is being reduced: (i) make any amendment to the Plan to increase the percentage of Shares issuable on exercise of outstanding Options at any time pursuant to Rule 4.13; (ii) make any amendment to reduce the Option Exercise Price of any outstanding Options held by Insiders; (iii) make any amendment to the Plan to increase the maximum limit on the number of Shares that may be issued to any one person or category of persons pursuant to Rule 4.6; (iv) make any amendment to the 10-year maximum term of Options; (v) make any amendment to the Plan that would permit an Optionee to transfer or assign Options to a new beneficial Optionee other than in the case of death of the Optionee; (vii) make any amendment the persons eligible to be made Offers; or (viii) amend this Rule 14.1.
(b) Except as restricted by the foregoing or the Corporations Act and the ASX Listing Rules, the Board may, by resolution, amend or terminate the Plan at any time without shareholder approval provided that any amendment to the Plan that requires approval of any stock exchange on which the Shares are listed for trading may not be made without approval of such stock exchange. The Committee may also make any amendments or alterations to the Plan to the extent they are required in order to comply with the applicable rules and regulations of all regulatory authorities to which the Company may be subject, including the TSXV, ASX or any other stock exchange on which the Shares are listed for trading.
(c) Termination of the Plan shall not affect the rights or obligations of a Participant or the Company which have arisen under the Plan before the date of termination and the provisions of the Plan relating to a Participant’s Options shall survive termination of the Plan until fully satisfied and discharged.
14.2 Adjustment to Option Terms
No adjustment or variation of the terms of an Option will be made without the consent of the Participant who holds the relevant Option if such adjustment or variation would have a materially prejudicial effect upon the Participant (in respect of his or her outstanding Options), other than an adjustment or variation introduced primarily:
4804-01/1942894_1 18 (a) for the purpose of complying with or conforming to present or future State, Territory, Commonwealth, Federal or Provincial legislation governing or regulating the maintenance or operation of the Plan or like plans;
(b) to correct any manifest error or mistake;
(c) to enable a member of the Group to comply with the Corporations Act, the ASX Listing Rules, the policies of the TSXV, applicable foreign law, or a requirement, policy or practice of the ASIC or other foreign or Australian regulatory body;
(d) to take into consideration possible adverse taxation implications in respect of the Plan, including changes to applicable taxation legislation or the interpretation of that legislation by a court of competent jurisdiction or any rulings from taxation authorities administering such legislation; or
(e) to include or modify a cashless exercise feature, payable in cash or Shares.
14.3 Notice of amendment
As soon as reasonably practicable after making any amendment under Rule 14, the Board will give notice in writing of that amendment to any Participant affected by the amendment.
15. TRUST
(a) The Board may, at any time, establish a trust for the sole purpose of acquiring and holding Shares in respect of which a Participant may exercise, or has exercised, vested Options, including for the purpose of enforcing the disposal restrictions and appoint a trustee to act as trustee of the trust.
(b) The trustee will hold the Shares as trustee for and on behalf of a Participant as beneficial owner upon the terms of the trust.
(c) The Board may at any time amend all or any of the provisions of this Plan to effect the establishment of a trust and the appointment of a trustee as detailed in this Rule.
16. MISCELLANEOUS
16.1 Rights and obligations of Participant
(a) The rights and obligations of an Eligible Participant under the terms of their office, employment or contract with a Group Company are not affected by their participating in the Plan. This Plan will not form part of, and are not incorporated into, any contract of any Eligible Participant (whether or not they are an employee of a Group Company).
(b) No Participant will have any rights to compensation or damages in consequence of:
(i) the termination, for any reason, of the office, employment or other contract with a Group Company of the Participant (or, where the Participant is a Nominee of the Eligible Participant,
4804-01/1942894_1 19 that Eligible Participant) where those rights arise, or may arise, as a result of the Participant ceasing to have rights under the Plan as a result of such termination; or
(ii) the lapsing of Options in accordance with this Plan.
(c) Nothing in this Plan, participation in the Plan or the terms of any Option:
(i) affects the rights of any Group Company to terminate the employment, engagement or office of an Eligible Participant or a Participant (as the case may be);
(ii) affects the rights and obligations of any Eligible Participant or Participant under the terms of their employment, engagement or office with any Group Company;
(iii) confers any legal or equitable right on an Eligible Participant or a Participant whatsoever to take action against any Group Company in respect of their employment, engagement or office;
(iv) confers on an Eligible Participant or a Participant any rights to compensation or damages in consequence of the termination of their employment, engagement or office by any Group Company for any reason whatsoever including ceasing to have rights under the Plan as a result of such termination; or
(v) confers any responsibility or liability or any Group Company or its directors, officers, employees, representatives or agents in respect of any taxation liabilities of the Eligible Participant or Participant.
(d) If a Vesting Condition attached to an Option requires a Participant to remain an employee of a Group Company, then the Participant will be treated as having ceased to be an employee of a Group Company at such time the Participant’s employer ceases to be a Group Company.
(e) A Participant who is granted an approved leave of absence and who exercises their right to return to work under any applicable award, enterprise agreement, other agreement, statute or regulation before the exercise of an Option under the Plan will be treated for those purposes as not having ceased to be such an employee.
16.2 Power of the Board
(a) The Plan is administered by the Board which has power to:
(i) determine appropriate procedures for administration of the Plan consistent with this Plan; and
(ii) delegate to any one or more persons, for such period and on such conditions as it may determine, the exercise of any of its powers or discretions arising under the Plan.
(b) Except as otherwise expressly provided in this Plan, the Board has absolute and unfettered discretion to act, or refrain from acting, under or in connection with the Plan or any Options under the Plan and in the exercise of any power or discretion under the Plan.
4804-01/1942894_1 20 16.3 Dispute or disagreement
In the event of any dispute or disagreement as to the interpretation of the Plan, or as to any question or right arising from or related to the Plan or to any Options granted under it, the decision of the Board is final and binding.
16.4 ASIC relief
(a) Notwithstanding any other provisions of the Plan, every covenant or other provisions set out in an exemption or modification granted from time to time by ASIC in respect of the Plan pursuant to its power to exempt and modify the Corporations Act and required to be included in the Plan in order for that exemption or modification to have full effect, is deemed to be contained in the Plan.
(b) To the extent that any covenant or other provision deemed by this Rule to be contained in the Plan is inconsistent with any other provision in the Plan, the deemed covenant or other provision shall prevail.
16.5 Non-residents of Australia
(a) The Board may adopt additional rules of the Plan applicable in any jurisdiction outside Australia under which rights offered under the Plan may be subject to additional or modified terms, having regard to any securities, exchange control or taxation laws or regulations or similar factors which may apply to the Participant or to any Group Company in relation to the rights. Any additional rule must conform to the basic principles an Option of the Plan.
(b) When is granted under the Plan to a person who is not a resident of Australia the provisions of the Plan apply subject to such alterations or additions as the Board determines having regard to any securities, exchange control or taxation laws or regulation or similar factors which may apply to the Participant or to any Group Company in relation to the Option.
16.6 Communication
(a) Any notice or other communication under or in connection with the Plan may be given by personal delivery or by sending the same by post or facsimile:
(i) in the case of a company, to its registered office;
(ii) in the case of an individual, to the individual’s last notified address; or
(iii) where a Participant is a Director or employee of a Group Company, either to the Participant’s last known address or to the address of the place of business at which the Participant performs the whole or substantially the whole of the duties of the Participant’s office of employment.
(b) Where a notice or other communication is given by post, it is deemed to have been received 48 hours after it was put into the post properly addressed and stamped. Where a notice or other communication is given by facsimile, it is deemed to have been received on completion of transmission. Where a notice is given by electronic transmission, the notice
4804-01/1942894_1 21 is taken to have been received at the time the electronic transmission is sent.
16.7 Attorney
Each Participant:
(a) irrevocably appoints the Company and any person nominated from time to time by the Company (each an attorney), severally, as the Participant’s attorney to complete and execute any documents, including applications for Shares and Share transfers, and to do all acts or things on behalf of and in the name of the Participant which may be convenient or necessary for the purpose of giving effect to the provisions of this Plan;
(b) covenants that the Participant will ratify and confirm any act or thing done pursuant to this power;
(c) releases each Group Company and the attorney from any liability whatsoever arising from the exercise of the powers conferred by this Rule; and
(d) indemnifies and holds harmless each Group Company and the attorney in respect thereof.
16.8 Costs and Expenses
The Company will pay all expenses, costs and charges in relation to the establishment, implementation and administration of the Plan, including all costs incurred in or associated with the issue or purchase of Shares for the purposes of the Plan.
16.9 Adverse Tax
Where a Participant may suffer an adverse taxation consequence as a direct result of participating in the Plan that was not apparent to the Participant or the Company at the time the Participant was issued Plan Shares under the Plan, the Board may, in its absolute discretion, agree to compensate the Participant in whole or in part.
16.10 Data protection
By lodging an Acceptance Form, each Participant consents to the holding and processing of personal data provided by the Participant to any Group Company for all purposes relating to the operation of the Plan. These include, but are not limited to:
(a) administering and maintaining Participants' records;
(b) providing information to trustees of any employee benefit trust, registrars, brokers or third party administrators of the Plan;
(c) providing information to future purchasers of the Company or the business in which the Participant works; and
(d) transferring information about the Participant to a country or territory outside Australia.
4804-01/1942894_1 22 16.11 Error in Allocation
If any Options are provided under this Plan in error or by mistake to a person (Mistaken Recipient) who is not the intended recipient, the Mistaken Recipient shall have no right or interest, and shall be taken never to have had any right or interest, in those Options and those Options will immediately lapse.
16.12 No fiduciary capacity
The Board may exercise any power or discretion conferred on it by this Plan in the interest or for the benefit of the Company, and in so doing the Board is not required to act in the interests of another person or as requested by another person and will not be under any fiduciary obligation to another person.
16.13 ASX Listing Rules and TSXV Policies
While the Company remains admitted to the ASX, the provisions of the ASX Listing Rules of the ASX will apply to the Plan, and to the extent that the Plan and the ASX Listing Rules are inconsistent, the provisions of the ASX Listing Rules will prevail.
While the Shares remain listed on the TSXV, the rules and policies of the TSXV will apply to the Plan, and to the extent that the Plan and the rules and policies of the TSXV are inconsistent, the rules and policies of the TSXV will prevail.
16.14 Enforcement
This Plan, any determination of the Board made pursuant to this Plan, and the terms of any Options granted under the Plan, will be deemed to form a contract between the Company and the Participant.
16.15 Laws governing Plan
(a) This Plan, and any Options issued under it, are governed by the laws of Western Australia and the Commonwealth of Australia.
(b) The Company and the Participants submit to the non-exclusive jurisdiction of the courts of Western Australia.
4804-01/1942894_1 23 SCHEDULE 1 – OPTION PLAN – OFFER DOCUMENT
[insert date]
[Name and address of Eligible Participant]
Dear [*]
TEMPUS RESOURCES LTD – INCENTIVE OPTION PLAN
The board of directors of Tempus Resources Ltd (ACN 625 645 338) (Company) is pleased to make an offer to you of Options under its Incentive Option Plan (Plan) on the terms of this offer letter (Offer). Terms used in this Offer have the same meaning as used in the Plan.
The Company is pleased to advise you of the following:
(a) this Offer is subject to the terms and conditions of the Plan, a copy of which is attached to this Offer;
(b) subject to the following, the Company is willing to offer you the following Options, with the following Option Exercise Price and Expiry Date, and subject to the following Vesting Conditions:
[insert details of Options, Option Exercise Price, Expiry Date and Vesting Conditions]
(c) the grant of the Options is subject to the terms of the Plan, including the Company obtaining any necessary Shareholder approvals and you remaining an Eligible Participant at the time the Options are to be granted and (subject to a number of exceptions), exercised and converted into Shares;
(d) the Options under the Plan will be granted to you for [nil] cash consideration;
(e) the Shares issued on exercise of the Options[ will be subject to the following Restriction Periods/will not be subject to any Restriction Periods]:
(i) [insert];
(ii) [insert];
(f) this Offer remains open for acceptance by you until 5pm WST on [insert date] (Closing Date) at which time the Offer will close and lapse;
(g) you may apply for the Options by filling out Acceptance Form below and returning to the Company Secretary before the Closing Date;
(h) you may apply for the Options to be registered in your name, or in a Nominee’s name. Examples of acceptable Nominees are set out in the Plan. Please discuss this with the Company Secretary if you have any queries;
(i) unless the Plan provides otherwise, the Shares to which you are entitled on exercise of the Options will be issued to you as soon as practicable after the exercise date;
4804-01/1942894_1 24 (j) Options are only transferrable in special circumstances as set out in the Plan;
(k) the Company will apply for the Shares to be quoted on the ASX in accordance with the ASX Listing Rules within 10 Business Days of the later of the date the Shares are issued and the date any Restriction Period that applies to the Shares ends. The Shares may be subject to restrictions on disposal in accordance with the Plan in which case the Company will impose a Holding Lock with the Company’s share registry and the Shares will not be able to be traded until the Holding Lock is lifted by the Company;
(l) the Company will issue, where required to enable Shares issued on exercise of Options to be freely tradeable on the ASX (subject to any Restriction Period), a cleansing statement under Section 708A(5) of the Corporations Act at the time Shares are issued. Where a cleansing statement is required, but cannot be issued, the Company will have a prospectus available in relation to the Shares which complies with the requirements of the Corporations Act;
(m) the Company undertakes that, during the period commencing on the date of this Offer and expiring on the Closing Date, it will, within a reasonable period of you so requesting, make available to you the current market price of the underlying Shares to which the Options relate;
(n) the current market price of the underlying Shares to which the Options relate can be found on the Company’s ASX website at [insert]; and
(o) Subdivision 83A-C of the Income Tax Assessment Act 1997¸ which enables tax deferral on Options, [will/will not] apply (subject to the conditions in that Act) to Options granted to you under this Offer.
[SP Comment: Selecting “will” or “will not” will determine the taxing point on the issue of Options. We recommend specific tax advice be obtained to confirm the timing of the taxing point (e.g. deferred or upfront) to ensure it is as intended.]
You should be aware that the business, assets and operations of the Company are subject to certain risk factors that have the potential to influence the operating and financial performance of the Company in the future. These risks can impact on the value of an investment in the securities of the Company, including Options offered under the Plan, and Shares issued on exercise of the Options.
Any advice given by the Company in relation to the Options, or underlying Shares offered under the Plan, does not take into account your objectives, financial situation and needs (including financial or taxation issues).
This Offer and all other documents provided to you at the time of this Offer contain general advice only and you should consider obtaining your own financial product advice from an independent person who is licensed by the Australian Securities and Investments Commission to give such advice. You are advised to seek independent professional advice regarding the Australian tax consequences of the grant of Options and the acquiring and disposing of any Shares that are issued on exercise of Options under the Plan according to your own particular circumstances.
Please confirm your (or your Nominee’s) acceptance of the Offer set out in this letter by completing the Acceptance Form below and returning it to the Company by no later than [insert].
4804-01/1942894_1 25 Yours faithfully
[insert name] For and on behalf of Tempus Resources Ltd
Encl.
4804-01/1942894_1 26 SCHEDULE 2 – OPTION PLAN ACCEPTANCE FORM
Tempus Resources Ltd (ACN 625 645 338) (Company) has invited you (or your Nominee), by an offer dated [insert] (Offer), to apply for the grant under its Option Plan (Plan) of certain Options.
The person below hereby applies for the Option under the terms of the Offer, this Acceptance Form and the Plan.
Full Name:
Address:
Ph: Email:
Tax file number(s) or exemption:
CHESS HIN (where applicable):
In applying for the grant of Option under the Offer, the person below acknowledges and agrees:
(a) to be entered on the register of Option holders of the Company as the holder of the Option applied for, and any Shares issued on the exercise of the Option;
(b) to be bound by the terms of the Constitution of the Company;
(c) to be bound by the terms and conditions of the Plan;
(d) to be bound by the terms and conditions of the Offer;
(e) a copy of the full terms of the Plan has been provided to it;
(f) that, by completing this Acceptance Form, it agrees to appoint the Company Secretary as its attorney to complete and execute any documents and do all acts on its behalf which may be convenient or necessary for the purpose of giving effect to the provisions of the Plan (if applicable);
(g) that any tax liability arising from the Company accepting its application for Option under the Plan or the issue of Shares on exercise of the Option is its responsibility and not that of the Company; and
(h) to the extent required by the terms of the Plan and the ASX Listing Rules, to enter into any necessary restriction agreement in relation to any Shares provided on the exercise of the Option and to the placing of a Holding Lock on those Shares.
4804-01/1942894_1 27 Where an individual
SIGNED by [INSERT NAME OF ) INDIVIDUAL] in the presence of: )
Signature of witness Signature
Name of witness
Where an Australian company
EXECUTED by [INSERT COMPANY NAME] ) ACN [INSERT ACN] ) in accordance with section 127 of the ) Corporations Act 2001 (Cth): )
Signature of director/sole director and Signature of director/company company secretary* secretary*
Name of director/sole director and Name of director/company secretary* company secretary*
*please delete as applicable
4804-01/1942894_1 28 SCHEDULE 3 – NOTICE OF EXERCISE OF OPTIONS
To: The Directors Tempus Resources Ltd
I/ We ______of ______being registered holder(s) of the options to acquire fully paid ordinary shares in the Company set out on the certificate annexed to this notice, hereby exercise ______of the abovementioned options. I/We enclose my/our cheque for $ ______in payment of the option exercise price due in respect of those options calculated on the basis of $ ______per option.
I/ We authorise and direct the Company to register me/us as the holder(s) of the shares to be issued to me/us and I/we agree to accept such shares subject to the provisions of the Constitution of the Company.
Dated:
______Signature of Holder(s)
Note:
1. Each holder must sign.
2. An application by a company must be executed in accordance with section 127 of the Corporations Act 2001 (Cth) and if signing for a company as a sole director/secretary – ensure “sole director” and “sole secretary” is written beside the signature.
3. Cheques should be made payable to [insert].
4804-01/1942894_1 29 APPENDIX "E" TECHNICAL REPORT
Attached.
Page 67 of 69 BLACKDOME—ELIZABETH GOLD PROJECT BRITISH COLUMBIA, CANADA NI 43-101 Technical Report
Prepared for: Tempus Resources Ltd PO Box 7054, Cloisters Square Perth, Western Australia 6850
Submitted by: Garth Kirkham, P.Geo. Kirkham Geosystems Ltd. Burnaby, British Columbia Canada V5E 1Z6 Tel: +1 (604) 529-1070
Effective Date: September 9, 2020 Release Date: October 9, 2020 Blackdome-Elizabeth Gold Project 2020 NI 43-101 Technical Report
TABLE OF CONTENTS 1 EXECUTIVE SUMMARY ...... 1-1 1.1 Introduction...... 1-1 1.2 Property Description, Location and Access...... 1-2 1.3 Tenure ...... 1-4 1.4 Permits ...... 1-4 1.5 First Nations and Community Impact ...... 1-4 1.6 Infrastructure...... 1-4 1.7 History ...... 1-5 1.8 Drilling...... 1-5 1.9 Geology Setting and Mineralization...... 1-5 1.10 Conclusions, Risks and Opportunities...... 1-5 1.11 Recommendations...... 1-8 2 INTRODUCTION...... 2-1 2.1 Terms of Reference ...... 2-2 3 RELIANCE ON OTHER EXPERTS...... 3-1 4 PROPERTY DESCRIPTION AND LOCATION ...... 4-1 4.1 Introduction...... 4-1 4.1.1 Blackdome Property...... 4-1 4.1.2 Elizabeth Property...... 4-1 4.2 Claims...... 4-3 4.3 Environmental and Permitting ...... 4-11 4.4 First Nations and Community Impact ...... 4-14 5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY ...... 5-1 5.1 Accessibility ...... 5-1 5.1.1 Blackdome Property...... 5-3 5.1.2 Elizabeth Property...... 5-3 5.2 Local Resources ...... 5-4 5.3 Climate ...... 5-4 5.3.1 Blackdome Property...... 5-4 5.3.2 Elizabeth Property...... 5-5 5.4 Physiography...... 5-5 5.4.1 Blackdome Property...... 5-5 5.4.2 Elizabeth Property...... 5-5 5.5 Infrastructure...... 5-5 5.5.1 Blackdome Property...... 5-5 5.5.2 Elizabeth Property...... 5-10 5.6 Power...... 5-12 6 HISTORY...... 6-1
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6.1 Introduction...... 6-1 6.2 Blackdome Property...... 6-1 6.3 Elizabeth Property ...... 6-8 7 GEOLOGICAL SETTING AND MINERALIZATION...... 7-1 7.1 Regional Geology ...... 7-1 7.1.1 Blackdome Property...... 7-1 7.1.2 Elizabeth Property...... 7-2 7.2 Local and Property Geology...... 7-5 7.2.1 Blackdome Property...... 7-5 7.2.2 Elizabeth Property...... 7-8 7.3 Structural Setting ...... 7-11 7.3.1 Blackdome Property...... 7-11 7.3.2 Elizabeth Property...... 7-13 7.4 Stratigraphy Sequence and Magmatic History ...... 7-16 7.4.1 Blackdome Property...... 7-16 7.4.2 Elizabeth Property...... 7-17 7.5 Mineralization...... 7-19 7.5.1 Blackdome Property...... 7-19 7.5.2 Elizabeth Property...... 7-21 8 DEPOSIT TYPES...... 8-1 8.1 Elizabeth Property ...... 8-3 9 EXPLORATION ...... 9-1 10 DRILLING...... 10-2 11 SAMPLING PREPARATION, ANALYSES AND SECURITY...... 11-1 12 DATA VERIFICATION...... 12-1 13 MINERAL PROCESSING AND METALLURGICAL TESTING...... 13-1 14 MINERAL RESOURCE ESTIMATES ...... 14-1 15 MINERAL RESERVE ESTIMATES...... 15-1 16 MINING METHODS ...... 16-1 17 RECOVERY METHODS ...... 17-1 18 PROJECT INFRASTRUCTURE ...... 18-1 19 MARKET STUDIES AND CONTRACTS...... 19-1 20 ENVIRONMENTAL STUDIES, PERMITTING OR COMMUNITY IMPACT ...... 20-1 21 CAPITAL AND OPERATING COSTS...... 21-1 22 ECONOMIC ANALYSIS ...... 22-1 23 ADJACENT PROPERTIES...... 23-1 24 OTHER RELEVANT DATA AND INFORMATION ...... 24-1 25 INTERPRETATION AND CONCLUSIONS...... 25-1
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26 RECOMMENDATIONS...... 26-3 27 REFERENCES...... 27-1 28 CERTIFICATE OF QUALIFIED PERSON...... 28-1
LIST OF FIGURES Figure 1-1: Location of Blackdome-Elizabeth Gold Project...... 1-3 Figure 4-1: Location Map ...... 4-2 Figure 4-2: Blackdome Property...... 4-4 Figure 4-3: Elizabeth Property Mineral and Crown-Granted Claims ...... 4-5 Figure 4-4: Letter from B.C. Chief Gold Commissioner Granting Relief...... 4-9 Figure 5-1: Regional Location and Access Map ...... 5-1 Figure 5-1: Blackdome Infrastructure Plan Map ...... 5-8 Figure 5-2: Elizabeth Infrastructure Plan Map ...... 5-10 Figure 7-1: Geological Setting of the Blackdome-Elizabeth Project...... 7-2 Figure 7-2: Geological Setting of the Elizabeth Property ...... 7-5 Figure 7-3: Local Geological Setting of the Blackdome Property...... 7-6 Figure 7-4: Section Lithology Blackdome Property...... 7-7 Figure 7-5: Local Geological Setting of the Elizabeth Property...... 7-8 Figure 7-6: Regional Structural Setting of the Blackdome Property...... 7-11 Figure 7-7: Regional Structural Setting of the Elizabeth Property...... 7-14 Figure 7-8: Blackdome Stratigraphic Column ...... 7-17 Figure 7-9: Blackdome Plan...... 7-20 Figure 8-1: Schematic for Geothermal/Hydrothermal Systems...... 8-1 Figure 8-2: Schematic for Epithermal Alteration ...... 8-2
LIST OF TABLES Table 1.1: Key Project Risks and Opportunities ...... 1-6 Table 1.2: Budget for Proposed 2020-2021 Work Program...... 1-8 Table 2.1: Abbreviations and Acronyms...... 2-2 Table 4.1: Blackdome-Elizabeth Gold Project Mineral Claims ...... 4-6 Table 4.2: Blackdome-Elizabeth Gold Project Crown-Granted Mineral Claims...... 4-10 Table 4.3: Blackdome-Elizabeth Gold Project Mining Leases...... 4-11 Table 6.1 1999 Historical Mineral Resources for Blackdome...... 6-3 Table 6.2: 2010 Historical Mineral Resource Estimate for Blackdome...... 6-5 Table 6.3: 2010 Historical Mineral Resource Estimates s for Blackdome by Domain ...... 6-6 Table 6.4: 2009 Historical Mineral Resources for Elizabeth...... 6-11 Table 10.1: 2020 Blackdome Drilling Program ...... 10-3 Table 23.1: Mineral Resource for Bralorne Gold Project effective date September 4, 2020 .. 23-4 Table 25.1: Key Project Risks and Opportunities ...... 25-1 Table 26.1: Budget for Proposed 2020-2021 Work Program...... 26-4
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1 EXECUTIVE SUMMARY
1.1 Introduction Tempus Resources Ltd (Tempus or the Company) (ASX: TMR) is a mineral exploration and resource development company based in Perth, Australia.
On November 18, 2019, Tempus Resources Ltd (Tempus) acquired the Sona Resources Corp. (Sona) which owns the Blackdome-Elizabeth Project from Skeena Resources Ltd. (Skeena), who had owned the Project from June 2016. The Project comprises two separate zones, Blackdome Gold Mine and Elizabeth Gold Deposit, and both are past-producing gold properties. Tempus is in the process of implementing a multi-stage, multi-year plan to systematically explore and develop the historical Blackdome-Elizabeth mining camps.
Tempus retained Garth Kirkham, P. Geo. of Kirkham Geosystems Ltd. (Kirkham Geosystems) to produce a technical report (the Report) for the Project in compliance with the disclosure and reporting requirements set forth in the Canadian Securities Administrators’ National Instrument 43-101, Standards of Disclosure for Mineral Projects (collectively, NI 43-101).
Garth Kirkham, P. Geo. (the Author) is responsible for all sections of the Report and is also responsible for compiling all aspects of the Report. By virtue of his education and relevant work experience, Mr. Kirkham is an independent Qualified Person (QP) as defined by NI 43-101. The Report is based on information known to the Author as of month day, year.
In preparation of this Report, Kirkham visited the properties, interviewed staff, and examined the underground mine workings. He also reviewed the following: Historical survey measurements of mine excavations and drill holes. Historical QA/QC data pertaining to drill core and underground sample assays. Published maps and reports to verify the geological setting. Digital database. Historical mineral resource estimates for the various veins. Technical reports prepared on the Project for previous owners.
Verification measures confirmed the location, extent, legal status, and general nature of the Project. Note: The Author did not collect independent samples to verify assay results.
The Author visited the Project between August 4 and 6, 2020. for the purpose of fulfilling the site visit obligations in preparation of this Technical Report. During this visit, the Author inspected the camp, accommodations, core-logging and core-storage facilities, offices, outcrops, core-receiving area, and the core-sawing station.
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1.2 Property Description, Location and Access The Project contains the Blackdome Gold Mine and the Elizabeth Gold Deposit. It is located about 250 km northeast of Vancouver, B.C., Canada and is easily accessible from Vancouver by highway and all-weather government-maintained roads. Williams Lake Airport, 120 km north of the Project, provides daily scheduled flights to and from Vancouver.
The Blackdome and Elizabeth properties are approximately 30 km apart, connected by a corridor of claims that form a contiguous claim block. The Project also include an unfinished, 70 km haulage road that links the two properties.
The Blackdome-Elizabeth Project is situated about 250 km north-east of Vancouver British Columbia, Canada and is easily accessible from Vancouver by highway and all-weather government-maintained roads. Williams Lake Airport, 120 km north of the Project provides daily scheduled flight access to Vancouver.The Project encompasses approximately 300 sq. km of contiguous mineral cell claims, Crown-granted mineral claims, and mining leases.
The Blackdome property is located approximately 240 km northeast of Vancouver and 67 km west-northwest of Clinton, B.C. The property is located at UTM Zone 10 (NAD83): 535,400E, 5,685,700N or 51° 19.2’ North, 122° 30’ West. It is shown as “Blackdome Gold Mine” on Figure 1-1.
The Elizabeth property is located approximately 210 km northeast of Vancouver, 35 km northeast of Goldbridge, B.C. and 60 km northwest of Lillooet, B.C. The property is located at UTM Zone 10 (NAD83): 531,790E, 5,653,730N or 51º 02’ North, 122º 32’ West. It is shown as “Elizabeth Gold Deposit” on Figure 1-1.
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Figure 1-1: Location of Blackdome-Elizabeth Gold Project
Source: Tempus 2020
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1.3 Tenure The Project consists of legal mineral properties registered under and subject to the Mineral Tenure Act and Mineral Land Tax Act of the Province of British Columbia. The Project comprises the following contiguous mining claims:
14 Crown-granted mineral claims 73 mineral cell claims 2 mining leases.
Tempus owns 100% of the Blackdome-Elizabeth Gold Project with the exception of four Crown- granted mineral claims and one mineral claim on the Elizabeth property. The four Crown-granted mineral claims are owned by David White and Thomas Illidge. The mineral claim #511626 (formerly, Blue 1 to 4 claims) is owned by Thomas Illidge and subject to an earned-in agreement.
1.4 Permits The Blackdome and Elizabeth properties are currently in the exploration phase with activities on site limited to drilling, sampling, and geological mapping. Based on the information the Author has reviewed, Tempus appears to be in compliance with all current permitting requirements.
The Project has in place all necessary permits to operate and explore on the Blackdome property. A Notice of Work has been submitted for the Elizabeth property and the Company is currently waiting to receive the MX permit. Completion of a final draft of the Interim Closure and Reclamation Plan is required by December 31, 2020. Tempus has applied for an extension, and, although the Company has had conversations with the regulators, it does not have an extension of this compliance date in writing.
1.5 First Nations and Community Impact The Blackdome and Elizabeth projects lie within the traditional territories of the Secwepemc (Shuswap), St’at’imc and Tsilhqot’in First Nations. Immediately after finalizing the acquisition of the Blackdome-Elizabeth Gold Project from Skeena, Tempus reached out to all the First Nations, communities, councils, and settlements involved in the affected areas. Negotiations and agreements are in place and on-going. Current relations are open and positive, and there is no reason to believe that will change in the foreseeable future.
1.6 Infrastructure The infrastructure at the Blackdome mine is well developed. The site includes offices, mill infrastructure, underground workshop, mine dry, core logging and storage, bunkhouse, kitchen, ambulance, including with fuel storage. The site has a well-developed and well-maintained road network along with a high-speed Wi-Fi network and Internet capabilities. The mine and a 300 ton- per-day process plant operated from 1986 to 1991; it is currently on care and maintenance. In addition, the site has a fully permitted tailings storage facility (TSF).
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The infrastructure at the Elizabeth Project includes an upgraded and refurbished camp with a 30- person capacity, including an Atco bunkhouse, commercial kitchen facilities, technical and administration offices, core storage, core-logging and -cutting facilities, fuel storage and First Aid facilities, including an ambulance. The site has a well-developed and well-maintained road network along with a high-speed Wi-Fi network and Internet capabilities.
1.7 History Extensive exploration work has been completed throughout the properties for many years. Current exploration activities are focused on expanding existing vein structures along with identifying new veins. As with many historical projects, there is potential for gains through the mining of historical data and records.
1.8 Drilling Drilling and sampling have commenced; however, assay results are pending as at the effective date of this Technical Report.
1.9 Geology Setting and Mineralization The Blackdome deposit is a low-sulphidation epithermal Au-Ag-bearing system characterized by low-temperature deposition of quartz veining, clay alteration, bleaching and silicification. The mineralization occurs as relatively high-grade small shoots located along fault zones, often in proximity to branches or in zones of steepening of the host structures. Mineralization consists of fine- to medium-grained disseminated and fracture-filling electrum and Ag sulphide with minor Ag sulphosalts in a gangue of quartz, adularia, pyrite, and carbonate.
The Elizabeth deposit is underlain by Late Paleozoic ultramafic rocks (altered to listwanite) intruded by Cretaceous stocks and dykes. Gold occurs in a low-sulphidation quartz vein system, mainly hosted by porphyritic feldspar intrusions. Gold content is highly variable and nuggety as coarse gold is common. Vein alteration is associated with arsenic, copper, and molybdenum.
1.10 Conclusions, Risks and Opportunities Tempus is in the process of implementing a multi-stage, multi-year plan to systematically explore and develop the historical Blackdome-Elizabeth mining camps. The Author’s interpretations and conclusions by area are as follows with Key Risks and Opportunities found in Table 1.1.
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Table 1.1: Key Project Risks and Opportunities Economic Project Element Comment Risk Opportunity Risk Level A significant amount of historical data remains to be analyzed and Issues with existing data may Potential discovery of new veins. Expansion Database Medium digitized. The database should be be discovered which will cause of existing veins. continually reviewed and uncertainty. renewed to ensure data quality. The historical data will be key to If data cannot be validated and The more historical data that can be any future plans to estimate verified, then significant drilling Database Medium validated and utilized, the less confirmation current resources for Blackdome- and exploration will be drilling will be required. Elizabeth. required. Exploration has continued to There is no guarantee that result in discovery and expansion exploration and discovery will An intelligent, systematic program will be Exploration Medium of potential mineral resources in result in an economically viable successful in uncovering new discoveries. a historical mining camp. operation. It has been proven that historical projects Much of the exploration data and There is no guarantee new benefit greatly from the employment of Exploration Medium results are historical and not techniques and data will result current state-of-the-art techniques and current. in discovery. methods. This premise is particularly true in the region and vicinity. Vein solids do not honor drill hole Could cause differences in Would be easier to validate and verify for Geology Low and composite data precisely. volumes. audit purposes. Further work may disprove The geology of the area is well An increased understanding and derivation previous models and therefore known and documented, of alterative theories may result in further Geology Medium result in condemnation of supported by extensive data, discovery and significant expansion for the targets and potential negative analysis, and study. Project. economic outcomes.
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Economic Project Element Comment Risk Opportunity Risk Level There is no guarantee that Within this historical mining camp, it is Exploration has continued to exploration and discovery will feasible that addition discovery is likely and Resources Medium result in discovery in a historical result in an economically viable that an intelligent, systematic program will mining camp. operation. be successful in uncovering new discoveries. Level of detail related to First Uncertainty could arise should Nations and local community Increased certainty of project success and First Nations Medium issues be encountered or are relationships, negotiations, and social license. not known. agreements. Create synergies with operating mines in Creating partnership with close proximity and reduce costs. In addition, Company neighboring concession holders. May limit exploration programs there is the potential for underground Low Conflict/Synergies Also partnering with and access. exploration and activities that will require organizations in the region. Mine Rescue personnel which exist at other mines in the region. Lower gold price will change Gold prices are currently highly size and grade of the potential Higher gold price will change size and grade Gold Price Low volatile, and there is a great deal targets and create opportunity of the potential targets. of market uncertainty. for growth. Travel and safety is a concern; visiting site could be problematic. Inability to travel and perform Opportunity to employ in-country resources COVID-19 Medium Work performed would need to work programs to advance the and personnel. be done by local companies as properties. much as possible. Stopes, mined out areas, drifts Could result in the discovery of panels that and development have been Any exclusions would reduce Mined-out Areas Medium were previously uneconomic to be re- digitized and modelled so that the volumes and tonnages. evaluated. the volumes are extracted.
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1.11 Recommendations To further evaluate the potential of the Blackdome-Elizabeth Project, the following work program is recommended:
Explore for significant new views with an aggregate of 11,000 m of diamond drilling completed over two phases as per below. Phase 2 will be contingent on the success of Phase 1 and expand upon results achieved during the Phase 1 exploration program. Note that approximately $1,000,000 has been expended on the Project on drilling and related activities as at the effective date. o Phase 1 — 4,000 m of diamond drilling to end April 2021 o Phase 2 — 7,000 m of diamond drilling Continue with the historical data compilation along with QA/QC of the master database. Explore using mapping and surface sampling. Acquire and analyze external data sources from other companies and government sources. Continue with environmental work and baseline studies. Continue with First Nations and Community consultations. Check sampling to validate and verify historical data. Rehabilitate the underground workings in a safe and cost-effective manner that can be practically performed and permitted. Ensure all permits are up-to-date and in compliance.
A budget of $3,089,350 is estimated to complete the aforementioned work and is presented in Table 1.2.
Table 1.2: Budget for Proposed 2-Phase Work Program # of Description Unit $/Unit Total $ Units Phase 1 Drilling (Remaining) Meter 4,000 200 800,000 Data compilation, Model update including QA/QC Hour 450 250 112,500 Environment and Permitting Month 6 13,000 78,000 Reporting Hour 200 200 40,000 Sub total for Phase 1 — to end April 2021 1,030,500 Phase 2 Drilling Commencement Meter 7,000 200 1,400,000 Environment and Permitting Month 6 13,000 78,000 Sub total 1,478,000 G&A - Mine Maintenance 300,000 Contingency 280,850
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Total 3,089,350 Source: Kirkham, 2020
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2 INTRODUCTION Tempus Resources Ltd (Tempus or the Company) (ASX: TMR) is a mineral exploration and resource development company based in Perth, Australia.
On November 18, 2019, Tempus Resources Ltd (Tempus) acquired Sona Resources Corp. (Sona) which owns the Blackdome-Elizabeth Project from Skeena Resources Ltd. (Skeena), who had owned the Project from June 2016. The Project comprises two separate zones, Blackdome Gold Mine and Elizabeth Gold Deposit, and both are past-producing gold properties.
Tempus is in the process of implementing a multi-stage, multi-year plan to systematically explore and develop the historical Blackdome-Elizabeth mining camps.
Tempus retained Garth Kirkham, P. Geo. of Kirkham Geosystems Ltd. (Kirkham Geosystems) to produce a technical report (the Report) for the Project in compliance with the disclosure and reporting requirements set forth in the Canadian Securities Administrators’ National Instrument 43-101, Standards of Disclosure for Mineral Projects (collectively, NI 43-101).
Garth Kirkham, P. Geo. (the Author) is responsible for all sections of the Report and is also responsible for compiling all aspects of the Report. By virtue of his education and relevant work experience, Mr. Kirkham is an independent Qualified Person (QP) as defined by NI 43-101. The Report is based on information known to the Author as of September 9, 2020.
In preparation of this Report, Kirkham visited the properties, interviewed staff, and examined the underground mine workings. He also reviewed the following: Historical survey measurements of mine excavations and drill holes. Historical QA/QC data pertaining to drill core and underground sample assays. Published maps and reports to verify the geological setting. Digital database. Historical mineral resource estimates for the various veins. Technical reports prepared on the Project for previous owners.
Verification measures confirmed the location, extent, legal status, and general nature of the Project. Note: The Author did not collect independent samples to verify assay results.
The Author visited the Project between August 4 and 6, 2020. for the purpose of fulfilling the site visit obligations in preparation of this Technical Report. During this visit, the Author inspected the camp, accommodations, core-logging and core-storage facilities, offices, outcrops, core-receiving area, and the core-sawing station.
A tour of the offices, core-logging and core-storage facilities showed a clean, well-organized, professional environment. On-site staff led the Author through the chain-of-custody process and
Effective Date: September 9, 2020 2-1 Blackdome-Elizabeth Gold Project 2020 NI 43-101 Technical Report the methods used at each stage of the logging and sampling processes. All methods and processes adhered to industry standards, and no issues were identified.
This Report is based on information collected by Kirkham during the site visit and additional information provided by Tempus and previous owners, Skeena, and Sona Resources Corp. (Sona). Information was also obtained from the public domain.
This Report is based on the following sources: Discussions with on-site personnel. Site inspections, including surface facilities and drill core. Exploration data, collected by Tempus and Skeena. Studies completed by previous operators and owners, including Skeena and Sona. Public domain material.
The Author has no reason to doubt the reliability of the information provided.
2.1 Terms of Reference The co-ordinate system used in this Report is NAD83, UTM Zone 10N. Unless stated otherwise, all units used in this report are metric and currency is expressed in 2020 Canadian dollars (C$). Abbreviations and acronyms used in this Report are shown in Table 2.1.
Table 2.1: Abbreviations and Acronyms Description Abbreviation or Acronym percent % three dimensional 3D atomic absorption spectroscopy AAS silver Ag gold Au British Columbia Treaty Process BCTP Blackdome Gold Mine Blackdome degrees centigrade oC Canadian dollar C$ Tempus Resources Ltd Company centimetre cm cubic feet per minute CFM copper Cu diamond drill DD day d east E Elizabeth Gold Deposit Elizabeth gram g general and administrative G&A
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Description Abbreviation or Acronym grams per tonne g/t Global Positioning System GPS gross vehicle weight rating GVWR hectare ha kilowatt kW inductively coupled plasma-mass spectrometry ICP-MS Interim Closure and Reclamation Plan ICRP induced polarization IP internal rate of return IRR load, haul, dump LHD kilogram kg Kirkham Geosystems Ltd. Kirkham Geosystems thousand pounds klbs kilometre km thousand ounces koz litre L life of mine LOM length x width x height L x W x H pound lb metre m million years Ma Meters above sea level masl million M million pounds Mlbs Ministry of Environment, Climate Change and MOECCS Sustainability Micon Consultants Micon million ounces Moz, M ounces million tonnes Mt, Mtonnes Mineral Titles Online MTO north N not applicable na Northern Shuswap Tribal Council NSTQ National Instrument 43-101 NI 43-101 Ministry of Energy, Mines and Petroleum Resources MEMPR drill core size (inside diameter 47.6 mm) NQ (NTW) net smelter return NSR Notice of Work NoW ounce oz ounces per tonne oz/t lead Pb Professional Geoscientist P.Geo preliminary economic assessment PEA Blackdome-Elizabeth Gold Project Project
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Description Abbreviation or Acronym parts per million ppm quality assurance/quality control QA/QC qualified person QP Technical Report Report reverse circulation RC rock quality designation RQD south S specific gravity SG Shuswap Nation Tribal Council SNTC square kilometre sq. km Skeena Resources Ltd. Skeena Sona Resources Ltd. Sona Tempus Resources Ltd Tempus Tailings Storage Facility TSF tonne t tonnes per day t/d tonnes per cubic metre t/m3 very high frequency VHF United States dollar US$ Universal Transverse Mercator UTM west W zinc Zn
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3 RELIANCE ON OTHER EXPERTS This Technical Report was prepared by Garth Kirkham, P.Geo. Kirkham is a qualified person for the purposes of NI 43-101 and fulfills the requirements of an “independent qualified person”.
The Author’s opinions, conclusions, and estimates contained herein are based on information provided by Tempus and others throughout the course of the study. The Author has taken reasonable measures to confirm information provided by others and takes responsibility for the information.
The Author of this Report is not qualified to provide extensive commentary on legal, socio- economic, or environmental issues associated with the Project. Therefore, portions of Section 4 that deal with the type and number of mineral tenures and licenses; the nature and extent of title and interest in the Project; and the terms of any royalties, back-in rights, payments or other agreements and encumbrances to which the Project is subject to are only descriptive in nature and are provided exclusive of a legal opinion.
Tempus reported to the Author that, to the best of its knowledge, there are no known litigations that could potentially affect the Blackdome-Elizabeth Gold Project. The Author conducted a title search of the properties on September 1, 2020, and the search confirmed the tenure details as reported in Section 4.
The Author relied upon Laura Smithies, RPBio, Earth Dragon Environmental Ltd, who provided updated details included in Section 4.3 Eenvironmental and Permitting and Charles Daley, Community Relations Manager employed by Tempus, for Section 4.4 First Nations and Community Impact. In addition, Denis Silva of DLA Piper provided detail for Section 4.2 related to tenure and transaction details.
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4 PROPERTY DESCRIPTION AND LOCATION
4.1 Introduction The Project is located about 250 km northeast of Vancouver, B.C., Canada and is easily accessible from Vancouver by highway and all-weather government-maintained roads. Williams Lake Airport, 120 km north of the Project, provides daily scheduled flights to and from Vancouver.
The Project contains the Blackdome Gold Mine and the Elizabeth Gold Deposit (Figure 4-1). Both are historical gold-producing properties. The properties are approximately 30 km apart, connected by a corridor of claims that form a contiguous claim block. The Project also includes an unfinished, 70 km haulage road that links the two properties.
The Project encompasses approximately 300 sq. km of contiguous mineral cell claims, Crown- granted claims, and mining leases.
4.1.1 Blackdome Property The Blackdome property is located approximately 240 km northeast of Vancouver and 67 km west-northwest of Clinton, B.C. The property is located at UTM Zone 10 (NAD83): 535,400E, 5,685,700N or 51° 19.2’ North, 122° 30’ West. It is shown as “Blackdome Gold Mine” on Figure 4-1.
4.1.2 Elizabeth Property The Elizabeth property is located approximately 210 km northeast of Vancouver, 35 km northeast of Goldbridge, B.C. and 60 km northwest of Lillooet, B.C. The property is located at UTM Zone 10 (NAD83): 531,790E, 5,653,730N or 51º 02’ North, 122º 32’ West. It is shown as “Elizabeth Gold Deposit” on Figure 4-1.
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Figure 4-1: Location Map
Source: Intierra Mapping 2020
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4.2 Claims The Project consists of legal mineral properties registered under and subject to the Mineral Tenure Act and Mineral Land Tax Act of the Province of British Columbia. The Project comprises the following contiguous mining claims: (Figures 4-2 and 4-3): 14 Crown-granted mineral claims 73 mineral cell claims 2 mining leases.
Tempus owns 100% of the Blackdome-Elizabeth Gold Project with the exception of four Crown- granted mineral claims and one mineral cell claim on the Elizabeth property. The four Crown- granted claims are owned by David White and Thomas Illidge. The mineral cell claim #511626 (formerly, Blue 1 to 4 claims) is owned by Thomas Illidge and subject to the following Earn-In Agreement (this agreement is due to be completed by the end of 2020, after which Tempus will own 100% of the Project): Tempus to issue Illidge 1,000,000 of its shares upon execution of the Earn-In Agreement. Tempus to pay a total minimum expenditure of $1,000,000 on the Elizabeth property mineral claim before December 31, 2020 Tempus to pay advance royalty payments of $15,000 per year increasing to $30,000 per year by December 31, 2019; payments will increase to $60,000 for each year thereafter until commercial production begins. Illidge holds a 2% net smelter return (NSR) royalty on the Elizabeth property mineral claim. On or before December 31, 2020, Tempus agrees to purchase 1% NSR on or before December 31, 2020 by making payments of $500,000 cash and $500,000 in cash or ordinary shares (at Tempus’ option) The previous requirement to complete a Bankable Feasibility Study for the Project was removed.
In addition, Thomas Illidge, an Elizabeth claim holder, was appointed as a Project Advisor to the Company.
The original Blackdome property consisted of 22 mineral cell claims, ten Crown-granted mineral claims and two mining leases. The original Elizabeth property consisted of 17 mineral cell claims and four Crown-granted mineral claims. Subsequent staking connected the two properties and consolidated access between Blackdome and Elizabeth in addition to securing gaps tenure.
Note: Only the Crown-granted claims have been surveyed.
The Blackdome and Elizabeth properties are held 100% by No. 75 Corporate Ventures Ltd. (FMC 133817), which is 100% owned by Tempus. All mineral claims and mining leases are recorded in the Clinton Mining Division and within the 092O map sheet (Figures 4-2 and 4-3).
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Figure 4-2: Blackdome Property Mining Leases, and Mineral and Crown-Granted Claims
Source: Tempus 2020
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Figure 4-3: Elizabeth Property Mineral and Crown-Granted Claims
Source: Tempus 2020
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Table 4.1 shows the 73 combined mineral claims for the Blackdome and Elizabeth properties. Note: None of the mineral claims have been surveyed.
Table 4.1: Blackdome-Elizabeth Gold Project Mineral Claims Claim Title Claim Issue Good-To Area Status Number Number Name Date Date (ha) 1 509143 bdmnt 2005/MAR/17 2023/NOV/04 GOOD 20.191 2 509145 -- 2005/MAR/17 2020/APR/24 PROTECTED 484.509 3 509354 -- 2005/MAR/22 2020/JUL/26 PROTECTED 223.666 4 509356 -- 2005/MAR/22 2023/NOV/04 GOOD 609.626 5 509357 -- 2005/MAR/22 2020/APR/24 PROTECTED 894.715 6 509358 -- 2005/MAR/22 2020/OCT/10 PROTECTED 609.348 7 509359 -- 2005/MAR/22 2023/NOV/04 GOOD 487.505 8 509360 -- 2005/MAR/22 2024/JUL/26 GOOD 1319.791 9 509405 -- 2005/MAR/22 2020/APR/24 PROTECTED 508.128 10 509409 -- 2005/MAR/22 2025/JUL/26 GOOD 974.226 11 509411 -- 2005/MAR/22 2023/NOV/04 GOOD 263.88 12 509412 -- 2005/MAR/22 2025/JUL/26 GOOD 669.563 13 509415 -- 2005/MAR/22 2020/JUL/26 PROTECTED 406.337 14 509417 -- 2005/MAR/22 2020/JUL/26 PROTECTED 243.726 15 509426 -- 2005/MAR/22 2020/APR/24 PROTECTED 565.416 16 509427 -- 2005/MAR/22 2020/APR/24 PROTECTED 605.416 17 509428 -- 2005/MAR/22 2020/APR/24 PROTECTED 605.469 18 509429 -- 2005/MAR/22 2020/APR/24 PROTECTED 726.945 19 509527 -- 2005/MAR/23 2023/NOV/04 GOOD 384.21 20 509530 -- 2005/MAR/23 2020/APR/24 PROTECTED 606.643 21 509535 -- 2005/MAR/23 2020/APR/24 PROTECTED 363.601 22 509537 -- 2005/MAR/23 2020/APR/24 PROTECTED 606.215 23 509554 -- 2005/MAR/23 2020/APR/24 PROTECTED 485.119 24 509555 -- 2005/MAR/23 2020/APR/24 PROTECTED 282.825 25 509560 -- 2005/MAR/23 2020/APR/24 PROTECTED 323.243 26 509562 -- 2005/MAR/23 2023/NOV/04 GOOD 485.119 27 509564 -- 2005/MAR/23 2023/NOV/04 GOOD 80.853 28 509610 -- 2005/MAR/24 2020/APR/24 PROTECTED 181.875 29 509612 -- 2005/MAR/24 2020/APR/24 PROTECTED 404.322 30 509618 -- 2005/MAR/24 2020/APR/24 PROTECTED 161.565 31 509621 -- 2005/MAR/24 2020/APR/24 PROTECTED 242.276 32 511687 DOME 1 2005/APR/26 2023/NOV/04 GOOD 60.58 33 535738 BD SOUTH 2006/JUN/15 2023/NOV/04 GOOD 242.562 34 535742 BD SOUTH 2006/JUN/15 2023/NOV/04 GOOD 505.726 35 535925 2006/JUN/19 2023/NOV/04 GOOD 485.884
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Claim Title Claim Issue Good-To Area Status Number Number Name Date Date (ha) 36 535993 BD SOUTH 2006/JUN/20 2023/NOV/04 GOOD 485.707 BD ELIZ 37 539006 2006/AUG/09 2023/NOV/04 GOOD 405.3446 CORRIDOR 38 539008 -- 2006/AUG/09 2023/NOV/04 GOOD 201.921 39 539009 -- 2006/AUG/09 2023/NOV/04 GOOD 121.1365 BD SOUTH NW 40 541801 2006/SEP/21 2023/NOV/04 GOOD 303.0471 CORNER 41 666044 ELIZ WEST1 2009/NOV/06 2020/APR/24 PROTECTED 487.416 42 666063 ELIZ WEST 2 2009/NOV/06 2020/APR/24 PROTECTED 507.659 43 666083 2009/NOV/06 2020/APR/24 PROTECTED 487.5632 44 1029609 AGAIN 2014/JUL/14 2020/APR/24 PROTECTED 343.5182 45 1044652 RD3 2016/JUN/08 2020/APR/24 PROTECTED 2024.6611 46 1044658 RD4 2016/JUN/08 2020/APR/24 PROTECTED 484.833 47 1044659 NW1 2016/JUN/08 2020/APR/24 PROTECTED 403.6683 48 1044660 NE2 2016/JUN/08 2020/APR/24 PROTECTED 80.7505 49 1044665 RD2 2016/JUN/08 2020/APR/24 PROTECTED 263.9324 50 1044666 RD1 2016/JUN/08 2020/APR/24 PROTECTED 243.7902 51 1044667 RD1A 2016/JUN/08 2020/APR/24 PROTECTED 20.3176 52 1044715 R549541 2016/JUN/12 2020/APR/24 PROTECTED 485.2944 53 1044716 COR2 2016/JUN/12 2020/APR/24 PROTECTED 202.4294 54 1044737 LIZA 2016/JUN/14 2020/APR/24 PROTECTED 505.7322 55 1044780 R509614 2016/JUN/16 2020/APR/24 PROTECTED 222.4433 56 1044790 RD5 2016/JUN/16 2020/APR/24 PROTECTED 20.1983 57 1044791 RD6 2016/JUN/16 2020/APR/24 PROTECTED 60.5777 58 1044793 RD7 2016/JUN/16 2020/APR/24 PROTECTED 20.1965 59 1044795 RD12 2016/JUN/16 2020/APR/24 PROTECTED 20.2667 60 1044797 RD13 2016/JUN/16 2020/APR/24 PROTECTED 40.5337 61 1044798 RD11 2016/JUN/16 2020/APR/24 PROTECTED 40.5125 62 1044799 RD8 2016/JUN/16 2020/APR/24 PROTECTED 20.2431 63 1044800 RD10 2016/JUN/16 2020/APR/24 PROTECTED 20.2468 64 1044801 RD9 2016/JUN/16 2020/APR/24 PROTECTED 40.486 65 1044813 LIZA2 2016/JUN/17 2020/APR/24 PROTECTED 161.729 66 1044814 R535769-2 2016/JUN/17 2020/APR/24 PROTECTED 80.8537 67 1044854 LIZA3 2016/JUN/20 2020/APR/24 PROTECTED 404.6084 68 1044856 LIZA 4 2016/JUN/20 2020/APR/24 PROTECTED 80.9234 69 1045917 R529008 2016/AUG/10 2020/APR/24 PROTECTED 181.7683 70 1045918 RS14 2016/AUG/10 2020/APR/24 PROTECTED 20.2112 71 1045919 RD15 2016/AUG/10 2020/APR/24 PROTECTED 20.2132
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Claim Title Claim Issue Good-To Area Status Number Number Name Date Date (ha) 72 1046950 -- 2016/SEP/28 2020/APR/24 PROTECTED 1,174.7118 73 1073322 -- 2019/DEC/16 2020/DEC/16 PROTECTED 203.0519 74 1073324 -- 2019/DEC/16 2020/DEC/16 PROTECTED 40.6331 73 511626 Illidge Earn-in 2005/APR/25 2021/APR/08 GOOD 1,829.04 Total 28,659.56 Source: Tempus 2020
Note: Claims shown as “GOOD” in Table 4.1 have a Good-To Date of November 4, 2023 or July 26, 2025; however, Title Number 511626 has a good-to date of April 8, 2021. Claims shown as “PROTECTED” have a “Good-To Date” of April 24, 2020 (which is beyond the effective date of this report). These claims are protected from forfeiture due to current challenges in the mining industry as a result of COVID-19, to afford grace and time for companies to complete work programs and file assessments. Figure 4-4 shows the B.C. Gold Commissioner’s letter granting relief and extending expiry dates to December 31, 2021.
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Figure 4-4: Letter from B.C. Chief Gold Commissioner Granting Relief
Source: MEMPR website
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Table 4.2 shows the combined Crown-granted mineral claims for the Project. Note: All Crown- granted mineral claims have been legally surveyed.
Table 4.3 shows the two mining leases. Note: The mining leases have not been surveyed.
Table 4.2: Blackdome-Elizabeth Gold Project Crown-Granted Mineral Claims District Claim Mining Crown Grant Land Area Lot Name Division Number District (ha) 7871 Moosehorn Clinton 6260/933 Lillooet District 20.97 7872 Saddle Clinton 6257/933 Lillooet District 20.96 7873 Whiskey Jack Clinton 6262/933 Lillooet District 20.97 7874 Pinion Pine Clinton 6261/933 Lillooet District 20.32 7875 Electrum Fraction Clinton 6258/933 Lillooet District 5.49 7876 Bonanza Clinton 6255/933 Lillooet District 20.74 7877 Eldorado Clinton 6256/933 Lillooet District 17.01 7878 Black Dome Clinton 6263/933 Lillooet District 17.38 7879 Ptarmigan Clinton 6264/933 Lillooet District 20.97 7880 Sugar Bowl Fraction Clinton 6259/933 Lillooet District 4.91 7400 Elizabeth No. 1 Lillooet 4504/716 Lillooet District 20.99 7401 Elizabeth No. 2 Lillooet 4501/716 Lillooet District 20.47
7402 Elizabeth No. 3 Lillooet 4502/716 Lillooet District 14.19 7403 Elizabeth No. 4 Lillooet 4503/716 Lillooet District 16.64 Total 242.01 Source: Tempus, 2020
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Table 4.3: Blackdome-Elizabeth Gold Project Mining Leases Good-to Area Title Number Issue Date Date (ha) 209456 1987/MAR/12 2021/MAR/12 443.50 209457 1989/DEC/08 2020/DEC/08 544.83 Total 988.33 Source: Tempus, 2020
Note: The good-to date for the mining leases are December 8, 2020 and March 12, 2021.
According to the Minerals Title Online (MTO) database, the information shown in Tables 4.1, 4.2 and 4.3 is considered accurate as of September 6, 2020.
The Crown-granted mineral claims are subject to the Mineral Land Tax Act; this requires the owner to pay the Ministry of Energy, Mines and Petroleum Resources (MEMPR)a tax of $1.25 per hectare to maintain the claims in good standing for one year. The total annual taxes for the ten Crown-granted mineral claims are $211.51. Currently, all of the Crown-granted mineral claims are in good standing until February 11, 2021, and the annual taxes will be due again prior to that date.
The owner has the option to apply exploration expenditures (with supporting documentation) or pay cash-in-lieu of an exploration expenditure to the Government of British Columbia. The following work value is required for mineral cell claims.
first and second anniversary years C$5.00 per hectare per year third and fourth anniversary years C$10.00 per hectare per year fifth and sixth anniversary years C$15.00 per hectare per year subsequent anniversary years C$20.00 per hectare per year
When paying cash-in-lieu to maintain a mineral claim, the amount owed is equivalent to twice the minimum required work value (exploration and development) for the respective anniversary year.
Any mineral cell that borders another is considered to be contiguous, and the work value performed on one claim can be applied proportionally to all other connected cells. All of the reverted Crown-granted mineral claims and mineral cell claims that comprise the Blackdome- Elizabeth Gold Project are contiguous.
4.3 Environmental and Permitting The Blackdome and Elizabeth properties are not associated with any environmental issues that could prevent the advancement of the Project. However, efforts to develop the mine or operate
Effective Date: September 9, 2020 4-11 Blackdome-Elizabeth Gold Project 2020 NI 43-101 Technical Report the mill and waste management facilities will require advanced engineering studies, comprehensive environmental work, and extensive consultation.
Given the current care-and-maintenance status of the Blackdome Gold Mine, there is limited activity at the site. The Blackdome and Elizabeth properties are currently in the exploration phase with on-site activities limited to drilling, sampling, and geological mapping. Based on the information the Author has reviewed, Tempus appears to be in compliance with all current permitting requirements.
The Project has in place all necessary permits to operate and explore on the Blackdome properties. A Notice of Work (NoW) for the Elizabeth Project has been pending since January 2020, and the Company is currently waiting to receive the MX permit.
The following permits were issued by the B.C. Ministry of Environment and Climate Change Strategy (MOECCS): Water Management Act Permit PE-7378; issued to Blackdome (1986, 2001, and the latest amended in 2013) Reclamation Program Permit M-171 (1985, 2010, and 2013). Before acquiring the Project, Tempus completed a due diligence review to determine the potential for metal leaching and acid rock drainage (ML/ARD) from the Blackdome and Elizabeth properties.
Based on a review of the available information for both properties, there is insufficient geochemistry testing data to determine whether metal leaching and acid rock drainage (ML/ARD) pose a risk for future mining. Exceedances of water quality constituents greater than the current limits of Permit PE-7378 (e.g., levels of copper) and the B.C. approved water quality guidelines (WQGs) for the protection of freshwater aquatic life (e.g., levels of copper, silver and zinc) have been measured in drainage from existing adits at Blackdome. However, the dataset is too limited to determine whether these exceedances will persist. It is possible that future mining at the properties will require additional water management and/or treatment of mine drainage.
In addition, permit PE-7078 (1991 , 1992, 1999, 2010, and 2013) details sampling and monitoring requirements and provides discharge limits for the Tailings Storage Facility (TSF) along with all portals and adits associated with the Blackdome Mine. Reporting requirements include seasonal (after each sampling event) and annual reporting on water quality and discussion of any exceedances that may have occurred throughout the year. There are no federal authorizations required at this time.
Tempus should be prepared to complete detailed geochemical characterization and water management studies before any re-start permits can be approved. The resulting financial implications for the Project cannot be determined until these studies are completed.
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In 1985, 2010 and 2013, the previous owners received approval for the Interim Closure and Reclamation Plan (ICRP) through an Amended Mines Act Permit, M-171. The plan and update, submitted in 2018, outlined the following reclamation objectives for the Blackdome-Elizabeth Gold Project:
Long-term preservation of local water quality and the aquatic environment of decommissioned operations downstream. Long-term stability of engineered structures, including the TSF, waste rock storage areas, and post-closure water management system. Removal and proper disposal of all structures and equipment not required beyond the end- of-mine life, and removal of obsolete roads. Natural integration of disturbed areas so they are compatible with the surrounding landscape, and restoration of a natural appearance to the disturbed areas when mining ceases, to the extent possible. Establishment of a self-sustaining vegetation cover consistent with existing wildlife use. The ICRP was approved by the Government of British Columbia, and the Company has initiated activities as part of the plan.
The current bond for the M-171 Mine Permit at Blackdome is C$100,000. Requirements for this permit includes management, inspections, and reporting for the TSF, including annual dam safety inspections (DSIs); 5-year DSRs; independent tailings review board (ITRB). Reporting includes an annual reclamation report (ARR), mine manager’s annual report (MMAR), and the completion of the health, safety and reclamation code (HSRC), including annual records detailing compliance to the HRSC, permits, and regulatory orders.
Completion of a final draft of the ICRP is required by December 31, 2020. The Company has applied for an extension, and, although the Company has had conversations with the regulators, it does not have an extension of this compliance date in writing.
The Blackdome property has an exploration permit, MX-3-180; it is valid from June 29, 2020 to June 28, 2025. The current bond for the Blackdome MX-3-180 permit is $20,000.
The B.C. MEMPR is currently processing an exploration permit for the Elizbeth property; ) is currently being processed with the Ministry of Energy, Mines and Petroleum Resources. A bond of $30,000 for the anticipated Elizabeth MX permit has already been posted.
Requirements under the MX permits include an Annual Summary for Exploration Activities on the NoW and multi-year, area-based permit, as well as a final year-end completion report. At this time, there are no additions required for these bonds.
From the information provided, Tempus is in compliance with all of its permit requirements. However, re-activation of the Blackdome asset will likely require the terms and conditions of the
Effective Date: September 9, 2020 4-13 Blackdome-Elizabeth Gold Project 2020 NI 43-101 Technical Report existing permits and authorizations to be updated based on current expected practices. The same can be said for the terms and conditions for the ICRP bond. It is also anticipated that the $100,000 ICRP bond will be increased.
4.4 First Nations and Community Impact The Blackdome and Elizabeth properties lie within the traditional territories of the Secwepemc (Shuswap), St’at’imc and Tsilhqot’in First Nations.
The Secwepemc Nation’s traditional territory extends from the eastern Chilcotin Plateau and the Cariboo Plateau southeast through the Thompson Country to Kamloops and the Shuswap Country and spans the Selkirk Mountains and Big Bend of the Columbia River to include the northern part of the Columbia Valley region. Within the territory, which extends to the northeast of the Project, the communities of Stswecem’c Xgat’tem (Dog Creek/Canoe Creek), Esk’etemc (Alkali Lake), High Bar and Whispering Pines/Clinton have “Aboriginal Interests” in the area. Stswecem’c Xgat’tem is a member of the Northern Shuswap Tribal Council (NSTQ), Whispering Pines / Clinton is a member of the Shuswap Nation Tribal Council (SNTC) and the Esk’etemc and High Bar Nations operate independently.
The NSTQ is currently involved in the British Columbia Treaty Process (BCTP); the SNTC is engaged with the Province, outside of the official BCTP associated with land and resource-use within asserted traditional territories. The Esk’etemc and High Bar Nations are not in negotiations, but they have declared aboriginal title and rights in the Blackdome property.
The St’at’imc Nation’s traditional territory covers the area between Pavilion in the northeast to Skookumchuck and Port Douglas in the south. Within the territory, which extends to the southeast of the Project, the communities of Xwisten (Bridge River), T’it’q’et (Lillooet) and Ts’kw’aylaxw (Pavilion) have Aboriginal Interests in the area. The St’at’imc Nation comprises 11 communities, all of which are associated with the St’at’imc Chiefs Council. Xwisten and Ts’kw’aylaxw are also members of the Lillooet Tribal Council. In addition to the 11 official member communities of the St’at’imc Nation, a new settlement, known as Ulliulsc, has been established along the Yalakom Forest Service Road which connects the Elizabeth property to Lillooet and the Bridge River Valley.
The St’at’imc Nation and its communities are not currently involved in any treaty process or other negotiations with the Province but have declared Aboriginal title and rights to their traditional territory which includes the Elizabeth property.
The Tsilhqot’in Nation’s traditional territory lies west of the Fraser River and east of the coast mountains and includes most of the drainage of the Chilcotin River and the headwaters of the Homathko, Klinaklini and Dean Rivers flowing westward through the Coast range. Within the territory, which extends to the northwest of the Project, the communities of Tl’esqox (Toosey) and Yunesit’in (Stone) are designated as the caretaker communities for the Blackdome property. The Tsilhqot’in Nation comprises six communities all of which are associated with the Tsilhqot’in
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National Government that, in 2014, won a landmark Supreme Court of Canada case known as Tsilhqot’in Nation v. British Columbia. It granted Aboriginal Title to 1,700 km² within the core area of the traditional territory. Neither Blackdome or Elizabeth are within the title area but are located within the Tsilhqot’in’s Engagement Area B and Area A, respectively. The Tsilhqot’in are currently navigating the legal process to expand their legal title area.
The multitude of territorial claims that overlap in the Blackdome and Elizabeth property areas and ongoing treaty negotiations with both the provincial and federal governments leave Aboriginal Title, Rights and Interests strongly contested amongst the three nations and their communities.
Immediately after finalizing the acquisition of the Blackdome-Elizabeth Project from Skeena, Tempus reached out to all the First Nations, communities, councils, and settlements involved in the affected areas.
During the week of November 15, 2019, an introductory letter was mailed out requesting a meeting. The letter was followed up by an email and a telephone call. Tempus received responses from and subsequently met with the St’at’imc Chiefs Council, T’it’q’et, the Tsilhqot’in National Government, Whispering Pines/Clinton and the Stswecem’c - Xgat’tem Nation during the weeks of December 2 and 9, 2019.
At this same time, Tempus began to correspond with Xwisten, and an in-person meeting occurred during the week of February 24, 2020. A follow-up in-person meeting was also held with the Tsilhqot’in National government which included representatives from Yunesit’in and Tl’esqox on February 25, 2020. A follow-up meeting also occurred that week with Whispering Pines/Clinton. Following these initial meetings, Tempus has been actively engaging with the councils and communities listed here as well as with the Esk’etemc Nation who reached out to Tempus in September 2020.
In September 2020, Tempus finalized a key exploration agreement with the St’at’imc community of Xwisten whose traditional territory and reserve lands have the closest proximity to the Elizabeth project area. The agreement acknowledges and respects their Indigenous Title and Rights, and provides for a variety of heritage protection, environmental and commercial benefits. Concurrent to the negotiations with Xwisten, Tempus engaged with the Ulliulsc settlement whose stated intent is to be the protectors of the land, particularly in the Yalakom River Valley where they have a makeshift blockade setup along the Forest Service Road. Tempus reached a cooperation agreement with the Ulliulsc whereby, in exchange for access to the Elizabeth property to carry out exploration activities, Tempus would maintain regular communications and help the Ulliulsc monitor traffic along the Yalakom Forest Service Road and conduct an archeological assessment of the Project area using an archeologist of Ulliulsc’s choosing. That same month, the Preliminary Field Reconnaissance portion of the study was completed by Michael Klassen PhD of Klahanee Heritage Research along with an associate following input from both Xwisten and Ulliulsc. The final report is expected before the end of 2020.
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Additionally, Tempus has a formal “Chance Find” set of procedures in place and has agreed to enlist a Cultural Heritage Resource Monitor, who will be agreed on by Xwisten and Ulliulsc persons who are present during any work that requires ground disturbances.
Tempus is currently negotiating an exploration agreement with the Stswecem’c Xgat’tem Nation whose traditional territory and reserve lands are in the closest proximity to the Blackdome property. During the work program at Blackdome in 2020, all ground disturbances were overseen by a Cultural Heritage Field Monitor from the Stswecem’c Xgat’tem Nation in accordance with the company’s Chance Find procedure. Tempus also has a fee-for-service arrangement with the Tsilhqot’in National Government and the Esk’etemc Nation. Future exploration agreements are also possible for entities with direct interest in the Blackdome-Elizabeth Project area.
A permit condition for Blackdome from MEMPR for Blackdome states that prior to performing mechanical disturbance on areas not previously disturbed, the work program is subject to an assessment conducted by a qualified professional that takes into consideration Cultural Heritage Resources, including archeology. Accordingly, Tempus contracted Ridgeline Archeology Ltd. to complete the report. The Preliminary Field Reconnaissance portion of the study was completed in August 2020. Cultural Heritage Resource Monitors were present from the Tsilhqot’in communities of Yunesit’in and Tl’esqox to oversee the fieldwork. Follow-up tours are in the planning stage with representatives from the Stswecem’c Xgat’tem and Esk’etemc Nations. A complete report is expected at the end of 2020.
Tempus is working to open lines of communication with all the Indigenous communities in the area and will continue efforts to build meaningful progressive relationships and partnerships. Tempus understands that ongoing meaningful engagement with Indigenous communities is very important, and it has committed to ensuring all opportunities for success are explored. Current relations are open and positive, and there is no reason to believe that will change in the foreseeable future.
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5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
5.1 Accessibility Figure 5-1 shows the Blackdome-Elizabeth Project, which is located about 250 km northeast of Vancouver, B.C., Canada and is easily accessible from Vancouver via Highway 97 and 99 connecting to all-weather government-maintained roads. In addition, Williams Lake Airport, 120 km north of the Project, provides daily scheduled flights to and from Vancouver.
Figure 5-1: Regional Location and Access Map
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Source: Tempus 2020
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5.1.1 Blackdome Property The Blackdome property is located at an elevation of approximately 1,920 m above sea level (masl) in the Camelsfoot Range of the Fraser Plateau. Blackdome is 565 road km north of Vancouver, B.C. and approximately 124 road km west from the town of Clinton B.C. The Blackdome property is accessible by road year round.
There are two alternative road routes to the Blackdome property:
From Clinton B.C., travel north on Highway 97 approximately 12 km; at mile marker 58, travel west on the Meadow Lake Road for 80 km through the community of Canoe Creek to the Gang Ranch Road and the Empire Valley Road to the Blackdome Road, and travel for an additional 32 km to the Project’s locked gate. This access route crosses the Fraser River at the Gang Ranch Bridge, a cable suspension bridge with a GVWR of 29,000 kg.
For larger loads that cannot use the Gang Ranch Bridge, travel on the Chilcotin Bella Coola Highway 20 and cross the Fraser River at the Sheep Creek Bridge. From the Sheep Creek Bridge, a cable suspension bridge with a GVWR of 34,000 kg, access to Blackdome is in a southerly direction along the Empire Valley Road for 18 km to the Blackdome Mine Road at Brown Lake. The Project is an additional 32 km to the locked gate. The Blackdome property is accessible by air via Williams Lake Airport (CYWL) located approximately 120 road km north of the Project. Pacific Coastal Airlines operates daily scheduled flights to and from Vancouver year around.
5.1.2 Elizabeth Property The Elizabeth property is located at an elevation of approximately 2,000 to 2,400 masl in the Shulaps Range between the Fraser Plateau to the east and the Chilcotin Ranges to the west. Elizabeth is 365 road km north of Vancouver, B.C. and approximately 108 road km northwest of Lillooet, B.C. The Elizabeth property is accessible by road year-round.
Road access to the Elizabeth property from Vancouver is via Hwy 99 to Lillooet, then west on Highway 40 to Goldbridge, then 78 km along unpaved logging and private roads to the Project site. Elizabeth is located in the Lillooet Mining Division about 35 km northeast of the town of Goldbridge and 60 km northwest of Lillooet.
There are two alternative road routes to the Elizabeth property:
From Vancouver, travel north on paved Highway 99 through Squamish, Whistler and Pemberton, then travel 231 km to Lillooet, then west 32 km on Highway 40, then 67 km via an unpaved logging road that follows the Yalakom River to the northwest, and then 9 km west on a private road along Blue Creek (Figure 4-1). (Highway 40 is approximately
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75% paved from Lillooet to Goldbridge and is maintained throughout the year, mainly for logging and residential access.) It takes approximately 7 hours to drive this route. In the spring, summer, and fall only, drive to Pemberton on Highway 99, then northwest 20 km to Pemberton Meadows and northeast 35 km over the gravel Hurley River Forest access road to the town of Goldbridge. Access from Goldbridge to the property is 84 km via Highway 40 that connects Lillooet and Goldbridge, then 67 km via an unpaved logging road that follows the Yalakom River to the northwest, and then 9 km west on a private road along Blue Creek. It takes approximately 6 hours to drive this route from Vancouver, but it is important to note that the Hurley River Forest road is not snow-ploughed in the winter. Air access to the Elizabeth property is restricted to flights from Vancouver, Kamloops, or Williams Lake and then travelling to the Project site by road.
5.2 Local Resources Lillooet and Pemberton can provide all the services required to operate a mine. The nearest population centre is the town of Lillooet with a population of 2,300 in town and another 4,500 in the surrounding region. Williams Lake (population 11,000) and Clinton (population 700) will also serve as excellent sources of skilled labour and resources. In general, the local population is considered pro-mining, and it would like to see the mine revived for the benefits it would generate for the surrounding communities.
The community of Goldbridge is 30 km southwest of the Elizabeth property, and, including the surrounding area, has a population of approximately 50. There are limited facilities in Goldbridge; however, due to the proximity to the Bralorne property, there are opportunities for synergies and shared resources, particularly for mine-rescue assistance in emergencies.
5.3 Climate
5.3.1 Blackdome Property Climate in the region is typical of the Interior Plateau, with moderate to light annual precipitation; warm, dry summers; and cold winters. The mine site is just below the tree line, at an elevation of approximately 1,950 masl, so the local climate is somewhat cooler, and more typical of the far north. Snowfalls are common from October to May, and snow has been recorded in all months of the year.
The Property lies on the boundary between West Coast Marine and Interior climatic zones and is in the rain shadow created by the Coast Mountains. Precipitation is moderate, with generally warm, dry summers. Moderate to heavy snowfalls occur in winter months, with accumulations on the property that can exceed 3 m. Surface exploration work is generally curtailed during winter months due to freezing conditions.
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5.3.2 Elizabeth Property The property is on the boundary between the marine west coast and interior climate zones and is in the rain shadow created by the Coast Mountains. Precipitation is moderate, with generally warm, dry summers. Moderate to heavy snowfalls occur in winter months, with accumulations that can exceed 3 m. Surface exploration work is generally curtailed during winter months due to freezing conditions.
5.4 Physiography
5.4.1 Blackdome Property The property is situated in the Chilcotin Plateau region of B.C. and encompasses Blackdome Mountain, which is an isolated peak (approximately 2,400 masl). The surrounding terrain is forestland of relatively modest relief, comprising low-rolling hills with the occasional deeply incised creek valley.
Principal land use in the area includes ranching and forestry. The property resides within land operated by two ranches: the Empire Valley Ranch to the south and the Gang Ranch to the north. There is limited recreational use, consisting of snowmobiling and hunting, and very little fishing due to the relative lack of fish-bearing streams or lakes in the immediate mine area.
5.4.2 Elizabeth Property The property is situated in the Shulaps Range between the Fraser Plateau to the east and the Chilcotin Ranges to the west and occupies several broad glacial valleys. Streams in these valleys, the most prominent of which is Blue Creek, are tributaries of the Yalakom River and drain to the east.
Topographic relief is about 1,000 m, rising from about 1,800 masl along Blue Creek, to about 2,800 masl on Big Dog Mountain. Terrain is moderate to steep. Elevations in the southern portion of the property are up to about 2,400 masl. Much of the property is covered by glacial debris which, on the lower slopes and valleys, is tens of metres thick, and which, on the prominent ridge within the Elizabeth claims, is both thick and notably stratified.
Lower elevations are forested by pine and balsam. The tree line is about 2,200 masl, above which there is almost no vegetation of any type. The property experienced a relatively recent fire event which destroyed a large percentage of the trees and vegetation.
5.5 Infrastructure The infrastructure at both the Blackdome and Elizabeth properties is well developed.
5.5.1 Blackdome Property The infrastructure at the Blackdome mine is well developed. Figure 5-1 shows the site layout which includes offices, mill infrastructure, underground workshop, mine dry, core logging and
Effective Date: September 9, 2020 5-5 Blackdome-Elizabeth Gold Project 2020 NI 43-101 Technical Report storage, bunkhouse, kitchen, ambulance along with fuel storage. The site has a well-developed and well-maintained road network along with high-speed Wi-Fi network and internet capabilities. The mine and a 300 ton-per-day process plant operated from 1986 to 1991 producing approximately 232,000 ounces of gold at an average grade of more than 20 g/t Au. Production was briefly restarted in 1998 but was halted after six months due to low prevailing gold prices at the time. The Blackdome process plant, mine operations and ancillary works were put on care and maintenance in 1999.
Road access to the Blackdome mine is generally in very good shape. The cable suspension bridge over the Fraser River is in good condition with a 29,000 kg GVW load limit. The support cables on the north side of the bridge create a height restriction that may present challenges for larger loads delivered to the mine. Ongoing maintenance and road widening will be required. The unpaved sections become slick and difficult during rain or thawing periods.
The Blackdome exploration camp has a 12-kW diesel generator on site, and it provides power for the entire camp and core-cutting facility. Power is generated on-site by diesel generators. The cost of self-generated electricity is relatively high, so extending the existing B.C. Hydro powerline could be a cost-effective measure for the Project. The mine has a water well on site.
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The existing Blackdome mine infrastructure and equipment include:
Mill Building (steel fabricated; concrete foundation) Existing 300 tpd capacity with crushing/grinding and both gravity and flotation circuits and a gold-pouring room (which has not operated for approximately 20 years) Machine Shop with overhead cranes Mine Office with Changerooms and First Aid, Light Room Warehouse Trailer Fuel Tank (diesel) Generator (Detroit Diesel, 500 kW) Miscellaneous mobile equipment, including haul truck, forklift, and ambulance VHF repeater station On-site water well.
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Figure 5-2: Blackdome Infrastructure Plan Map
Source: Tempus 2020
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5.5.1.1 BLACKDOME TAILINGS STORAGE FACILITY The Tailings Storage Facility (TSF) shown in Figure 5-1 was permitted under the existing mine permit, M-171 with the Province of British Columbia. Mine tailings were discharged as a slurry into the TFS.
It is an earthfill dam approximately 250 m long by 150 m wide by 36 m high (height measured from embankment crest to the downstream toe). The TSF was constructed in four stages over the mine life.
TSF Stage 1 Stage 1 was designed by Reimchen Urlich Geological Engineering in 1985. The Stage 1 embankment was built to a height of 21 m (crest elevation, 1,815.4 m). The original design concept allowed for two years of tailings disposal into the Stage 1 impoundment. The embankment was constructed from predominantly glacial till material sourced from within the tailings impoundment. It was built as a homogeneous earthfill dam that included a coarse- drainage zone along the base of the downstream shell. Seepage from the drainage zone reported to the Seepage Collection and Recycle Pond located immediately downstream of the TSF.
Weathered and fractured bedrock were encountered within the impoundment borrow area during the Stage 1 construction program, particularly along the north side of the impoundment. The designers concluded that the exposed bedrock materials were relatively pervious, particularly after unexpectedly high seepage flows were observed from the dam toe during initial filling. The seepage rate decreased during operations due to the accumulation of tailings in the facility.
TSF Stage 2 The Stage 2 expansion was designed by Robinson Dames and Moore in 1987. The centreline embankment was raised to an elevation of 1,821 m. The downstream section of the embankment included a zone of mine waste rock up to elevation 1,805 m, overlain by compacted glacial till. An upstream toe drain was installed to control the phreatic surface. The upstream toe drain included a 150 mm diameter perforated plastic drainpipe with a filter fabric surround that was placed along the upstream face of the embankment. The perforated drainpipe connected into a solid PVC pipe which extended through the left abutment of the tailings embankment.
TSF Stage 3 The Stage 3 expansion was designed by SRK-Robinson Inc. in 1988. It included a 5 m high upstream raise to elevation of 1,825.6 m. The design incorporated wick drains within the sandy tailings beach and an overlying gravel drain that connected to the previously installed upstream toe drain. Localized tension cracks were identified along a section of the upstream crest of the raise which were the result of minor differential settlement from frozen foundation tailings.
Construction activities were completed in 1990 to improve flood routing around and through the tailings impoundment and the Seepage Collection and Recycle Pond. These activities included remedial work and rip-rap placement along the stream diversion channel, the tailings
Effective Date: September 9, 2020 5-9 Blackdome-Elizabeth Gold Project 2020 NI 43-101 Technical Report impoundment overflow spillway, and the Seepage Collection and Recycle Pond overflow spillway. Mine waste rock was placed on the tailings surface and along the upstream face of the tailings embankment at a slope of about 4H:1V.
TSF STAGE 4 The Stage 4 expansion was designed by Knight Piésold (1999) in 1998. It included a 2.8 m centreline embankment raised on top of the Stage 3 embankment. This increased the Stage 4 crest elevation to 1,828.4 m, which is the current crest elevation of the TSF embankment. (Knight Piésold, 2020).
5.5.2 Elizabeth Property The infrastructure at the Elizabeth property includes an upgraded and refurbished camp with a 30-person capacity, including an Atco bunkhouse, commercial kitchen facilities, technical and administration offices, core storage, core-logging and -cutting facilities, fuel storage and First Aid facilities, including an ambulance (Figure 5-2). The site has a well-developed and well-maintained road network along with a high-speed Wi-Fi network and Internet capabilities.
The site is far from the B.C. Hydro grid, and so generators will be required. Fuel and explosives storage will be managed in accordance with regulations, and waste rock storage will be located close to the mine portals and safely away from the camp site.
The Elizabeth property is powered by a 12-kW diesel generator. The nearest power grid is a 69 kV line along Carpenter Lake between Lillooet and Goldbridge.
The existing Elizabeth property infrastructure includes miscellaneous historical plant and site equipment:
Trailer camp complex (22 person; 6 units; 10 ft x 60 ft) Trailer shells currently stored in Pemberton; (13 units; 10 ft ’x 20 ft) Storage seacans (5 units; 10 ft x 20 ft) Travel trailer (8 ft x 24 ft) Generator (diesel; 12 kW) Compressor (900 CFM) LHD loader (2 yd) Figure 5-3: Elizabeth Infrastructure Plan Map
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Source: Tempus 2020
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5.6 Power The Blackdome exploration camp has a 12-kW diesel generator on site, and it provides power for the entire camp and core-cutting facility. The Blackdome mill facilities were previously powered by a series of diesel generators. Access to the nearest B.C. Hydro power grid is from substantial lines running along Highway 97, which is the main power conduit to northern B.C.
The Elizabeth property also has a 25-kW diesel generator on site. The approximately 2.5 ha flat area adjacent to the current camp and core storage area offers ample room for the location of a future power plant to supply the mine. There is also potential for the application of renewable energy penetration in the form of solar power to reduce future power costs associated with diesel- generated power. Access to the nearest power grid is a 69 kV line along Carpenter Lake between Lillooet and Goldbridge.
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6 HISTORY
6.1 Introduction Mining activity within the Lillooet mining district dates back to the mid-19th century when prospectors entered the Bridge River area from the Fraser River Canyon.
In 1896, part of the Bralorne property was first staked. Placer miners followed gold up the Fraser River, Bridge River, Hurley River, and Cadwallader Creek to discover the gold sources on the property. At that time, small-scale production began in the area of the Pioneer mine using an arrastra to treat the ore.
In 1928, larger scale production began, and operations used then-current mining and milling methods, producing between 136 tonnes and 500 tonnes per day until the mine closed in 1971.
Total historical production from the Bralorne and Pioneer mines is recorded as 7.3M tonnes grading 17.7 grams per tonne gold (8.0M short tons at 0.52 ounces per ton), equating to 129.14 tonnes (4.2M ounces) of gold (Church and Jones, 1999). From these deposits, silver production was recorded as 29.61 tonnes (952,000 ounces), zinc as 297 kilograms, and lead as 216 kilograms. Minor scheelite production occurred during the World War II.
The first mining activity in and around the Blackdome and Elizabeth properties was the discovery of placer gold in Fairless Creek in the 1940s. Since then, the Blackdome and Elizabeth properties have been explored and developed by various operators.
6.2 Blackdome Property In the 1940s, placer gold was discovered in Fairless Creek west of the Black Dome Mountain summit.
In 1947, prospecting by Lawrence Frenier led to the discovery of gold-bearing quartz veins on the southwest slope of the mountain that resulted in the staking of mineral claims.
In the 1950s, Empire Valley Gold Mines and Silver Standard Mines Ltd. completed basic surface work and drove two adits.
In 1977, after a period of dormancy, Barrier Reef Resources Ltd. staked the area and completed programs of soil and rock sampling, trenching, drilling and underground development.
In 1978, Blackdome Mining Corp. (Blackdome Mining) was formed to continue development of the area. During the next seven years, Blackdome Mining, in a joint venture with Heath Steele Mines Ltd., carried out extensive exploration and underground development work with a total expenditure of $8M.
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In 1984, ore reserves were estimated at 222,500 tonnes grading at 22.6 grams per tonne gold (0.61 ounces per tonne) and 106 grams per tonne silver (3.6 ounces per tonne).
In 1986, the Blackdome mine and mill (initial capacity of 200 t/d) commenced production with a total production capital expenditure of $10M.
When mining ceased in 1991, a total of 338,000 tonnes of ore had been milled at an average gold grade of 21.9 grams per tonne (0.64 ounces per ton) yielding 225,000 ounces of gold and 547,000 ounces of silver (Godard et al., 2010).
In late 1988, after a period of inactivity, Claimstaker Resources Ltd. (Claimstaker) took over the Project and reopened the mine. Mining operations lasted just six months and ended in May 1999. During this period, 6,547 ounces of gold and 17,300 ounces of silver were produced from 21,268 tons of ore (SRK Consulting, 2001). Approximately 90% of Blackdome’s production came from the Vein 1 and Vein 2 systems. Mining occurred over slightly more than a one kilometre strike length. As recent as 2008, extensions of this major vein system and several others on the property remained largely undeveloped (Harrop, 2008).
The 1999 historical mineral resources are shown in Table 6.1 (Boronowski, 1999). These mineral resources were compiled by the Blackdome mine staff immediately after the mine closure. They are historical in nature and were compiled using a minimum 2 m mining width with a 10 gram per tonne gold cut-off grade.
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Table 6.1 1999 Historical Mineral Resources for Blackdome Boronowski, 1999 (after 1998—99 mining) Zone Block Location Resource Tonnes Grade Grade Gold Silver (Vein) Category* Diluted (t) Au (g/t) Ag (g/t) (oz) (oz) 1 97A-1 12,700N:1890 elevation ------1 97A-2 12,400N: 1950 elevation ------1 97A-3 13400-13500N: Drill ind. 14,000 9.90 4.80 4,456 2,174 2 97A-4 13500N: 2080 elevation Drill ind. 3,000 13.00 43.00 1,254 4,148 11 97A-5 1880 drift: 11650 N ------18 97A-6 1960 Level, 11450N ------18 97A-7 1850 elevation, 11450N Drill ind. 2,691 22.45 72.40 1,942 6,269 Redbird 97A-8 14100N: 2100 elevation Drill ind. 5,000 15.70 18.40 2,524 2,958 Redbird 97A-9 14040N: 2100 elevation Drill ind. 2,153 12.50 19.00 864 1,315 1 70-8 Drill ind. 1,200 12.00 - 463 - 1 97B-10 13600N: 1920 elevation ------18 97B-11 1870-1960 el, SBk C ------18 97B-12 1975+ elevation, Block D ------1 97B-21 13400-13500N: ------11 97C-13 11900N: 1950 elevation Drill ind. 11,000 6.80 47.40 2,405 16,753 11 11800N 11800N Drill ind. 5,750 12.40 10.80 2,292 1,997 17 97C-14 14650N: 1950 elevation Drill ind. 7,662 11.40 23.80 2,808 5,863 18 97C-15 11350N: 1850 elevation Drill ind. 5,600 12.90 38.00 2,323 6,842 18 97C-16 11650N: 1950 elevation Drill ind. 5,600 13.40 136.00 2,412 24,486 Redbird 97C-17 14330N: 1950 elevation Drill ind. 6,000 18.20 36.60 3,511 7,060 Giant 97C-18 Block A: 1915 elevation Drill ind. 19,033 11.40 16.30 6,970 9,986 Giant 97C-19 Block B: 1950 elevation Drill ind. 21,912 10.00 41.00 7,042 28,871 Giant 97C-20 Block A: 2025 elevation Drill ind. 13,519 22.00 36.00 9,568 15,664 TOTAL 124,120 12.80 33.70 50,834 134,386 *Drill ind. = Indicated Source: Boronowski, 1999
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Note: The QP considers the historical mineral resources in Table 6.1 reliable because they were estimated by mine staff who used then-current industry best practices at the time operations ceased. The QP also believes that these historical mineral resources provide historical context and are relevant for the exploration and development of the Project. The “Drill ind.” mineral resources (Table 6.1) are historical estimates. The categories set out in Sections 1.2 and 1.3 of NI 43-101 were not applied, but the mineral resources are thought to be equivalent to Indicated resources; however, the QP has not done sufficient work to classify the historical estimate as current mineral resources. Note: The Company is not treating the historical estimates as current mineral resources.
Over the years following 1999, further exploration programs were continued by Claimstaker, and a Japanese joint-venture partner was brought on board, prompting a name change to J-Pacific Gold Inc. (J-Pacific).
In early 2002, a drilling program was conducted to determine the gold content of the mine tailings. A total of 51 closely spaced, vertical holes were drilled with most holes ending in an overburden that represented the pre-tailings surface. Analysis revealed that the tailings contained significant amounts of gold in three distinct areas of the tailings pond with samples ranging from 0.07 grams per tonne to 37.61 grams per tonne Au. The arithmetic average of the samples collected from this program was 1.89 g/t Au.
In 2006, an independent, consulting engineering firm reported that all the equipment was in good condition and the mill had been shut down properly. The tailings pond was reported to have been inspected yearly by an independent engineering firm.
In August 2006, J-Pacific commissioned Aero Geometrics Ltd. to complete an aerial photo and digital mapping survey over the Blackdome property to provide an updated and detailed view of the surface.
In 2006 J-Pacific completed a Phase 1 drilling program which consisted of 10 diamond drill holes totaling 2,014.9 meters.
In 2007, J-Pacific completed Phase 2 of their drill program with 13 holes totaling 2,079.3 meters. Results form the two phases of drilling concluded the Giant, Redbird and No. 17 veins to be highly prospective and warrant further exploration.
In 2010, the joint venture was dissolved resulting in another name change to Sona Resources Corp. (SRK Consulting, 2001; Company records).
In 2010, Sona Resources Corp. (Sona) completed three key milestones: mineral resource estimate for the Blackdome tailings (Micon, 2010); mineral resource estimate for the Blackdome mine (SRK, 2010); and a
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Preliminary Economic Assessment (PEA) for the Blackdome mine and the Elizabeth property (Micon, 2010). In addition, the company signed a four-year option with SXDLP of Canoe Creek Indian Band. Note: SXDLP is the wholly owned and independently operated economic development corporation for the Canoe Creek Indian Band.
Micon generated a block model mineral resource estimate for the Blackdome mine tailings based on 2002 drill hole data. Using a 0.5 gram per tonne Au cut-off grade, the Inferred mineral resource was estimated to be 298,389 tonnes at 1.47 grams per tonne Au, which would be equivalent to 439,970 grams (14,145 ounces) of gold at zero dilution (Geoquest Consulting Ltd. and Micon; April 2010). All mineral resources were classified as Inferred mineral resources within the meaning of CIM Definition Standards for Mineral Resources and Mineral Reserves (December 2005).
An estimate of the remaining mineral resources was generated by SRK (Canada) Inc. (SRK). The source database contained drilling information for 909 surface boreholes (99,485 m), which also included 13 surface boreholes (2,896 m) drilled in 2007, 10 surface boreholes (2,015 m) drilled in 2006, 98 underground boreholes (8,605 m) drilled by previous project operators between 1986 and 1999, and 127 trenches (850 m). Three-dimensional wireframes for the gold-silver mineralization were created which considered lithology as well as mineralization trends.
Ten distinct vein structures were modelled which included Vein 1, Vein 2, Vein 11, Vein 17, Vein 18, Vein 19, and the Giant, Watson, Redbird and Southwest veins. These solid domains were generated from digitized polylines spaced every 25 to 50 m. The cut-off grade chosen for reporting mineral resources was 5 grams per tonne Au which was based on a gold price of US$1,000 and metallurgical recoveries of 100%. Table 6.2 summarizes the 2010 historical mineral resources for the Blackdome mine, and Table 6.3 shows the mineral resources by vein.
Table 6.2: 2010 Historical Mineral Resource Estimate for Blackdome Resource Quantity Grade Contained Metal Classification (tonnes) Au (g/t) Ag (g/t) Au (oz) Ag (oz) Indicated 144,500 11.29 50.01 52,600 232,300 Inferred 90,600 8.79 18.61 29,500 54,400 Source: SRK, 2010
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Table 6.3: 2010 Historical Mineral Resource Estimates s for Blackdome by Domain Indicated Inferred Contained Contained Domain Grade Grade Quantity Metal Quantity Metal (Vein) (tonne) Gold Silver Gold Silver (tonne) Gold Silver Gold Silver (g/t) (g/t) (ounce) (ounce) (g/t) (g/t) (oz) (oz) Vein 1 114,800 10.93 51.13 40,400 188,700 16,700 7.36 27.98 4,000 15,100 Vein 2 15,000 18.82 51.28 9,100 24,700 3,700 15.98 37.82 1,900 4,500 Watson 1,500 5.58 8.26 300 400 3,600 5.46 6.55 700 800 Vein 11 3,300 5.59 27.57 600 2,900 200 5.02 3.97 100 100 Vein 18 3,900 6.30 106.24 800 13,300 – – - – – Redbird 6,000 7.08 11.65 1,400 2,300 3,300 7.06 8.35 800 900 Giant – – – – – 63,100 9.04 16.27 18,400 33,000 Total 144,500 11.29 50.01 52,600 232,300 90,600 8.79 18.61 25,900 54,400 Source: SRK, 2010
Note: The QP considers the historical mineral resources in Tables 6.2 and 6.3 reliable because they were estimated by a long-standing reputable firm that used reasonable parameters and then- current industry best practices. The QP also believes that these historical mineral resources provide historical context and are relevant for the exploration and development of the Project.
The Indicated and Inferred mineral resources in Tables 6.2 and 6.3 are historical estimates that use the categories set out in Sections 1.2 and 1.3 of NI 43-101. However, the QP has not done sufficient work to classify the historical estimate as a current mineral resource.
Note: The Company is not treating the historical estimates as current mineral resources. The work needed to treat the historical estimate as a current mineral resource estimate comprises check sampling historical core, validating and verifying the data, quality assurance and quality control procedures, and additional current drilling and sampling.
In 2010, metallurgical testing was conducted on a relatively low grade tailings sample with a grade of 1.12 grams per tonne Au; it was analyzed for gold recovery and amiability to cyanide destruction. The results of the cyanide leach testing showed a- 92.3% gold recovery. In addition, this limited test showed that ≥99% of the cyanide could be neutralized,
In 2010, a preliminary economic assessment (PEA) was prepared by Micon (effective date June 10, 2010). The PEA included a mineral resource estimate for the formerly producing Blackdome Gold Mine (by SRK), and a mineral resource estimate for the Blackdome mine tailings (by Micon). The PEA also explored the possibility of using the Elizabeth deposit as feed material for the existing mill at the Blackdome mine. Results favoured the development of a combined Blackdome-Elizabeth operation.
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The assumptions and outcomes of the 2010 PEA are as follows: Estimated start-up capital costs at Blackdome and Elizabeth were $11.4M and $9.4M, respectively, with a combined sustaining capital of $9.45M for the six subsequent years. Base case gold price was US$950/oz Estimated recoverable Indicated resources at the Blackdome deposit were 48,673 tonnes grading 12.9 grams per tonne Au and 46.1 grams per tonne Ag and estimated recoverable Inferred resources of 23,478 tonnes grading 13.3 grams per tonne Au and 16.0 grams per tonne Ag. Estimated recoverable Inferred resources at the Elizabeth deposit were 526,089 tonnes at 10.19 g/t Au. The target mill throughput production rate was 200 dry metric tonnes (dmt) per day or 73,000 dmt per year. Total recovery from Blackdome ore was 94.5% Au and 77.6% Ag. Total gold recovery from Elizabeth ore was 92.5%. The estimated mine life for the combined Blackdome-Elizabeth Gold Project was 8 years. Average annual gold production was approximately 23,505 ounces. Average LOM cash operating costs were $686/oz Au. At US$950/ounce Au, US$15/ounce Ag, and a 1.08 Canadian to US dollar exchange rate, the pre-tax net present value (NPV) was $11.5M (2010 dollars) at a 10% discount rate generating an IRR of 31%. The QP considers the historical mineral resources and the results of the PEA to be reliable because they were analyzed and estimated by a long-standing, reputable firm using reasonable parameters and then-current industry best practices. The QP also believes that these historical resources and PEA results provide historical context and are relevant for the exploration and future development of the Project.
The Indicated and Inferred mineral resources are historical estimates that use the categories set out in Sections 1.2 and 1.3 of NI 43-101. However, the QP has not completed sufficient work to classify the historical estimate as a current mineral resource.
The Company is not treating the historical estimates as current mineral resources, and the Company is not treating the PEA as current. The work needed to treat the historical estimate as a current mineral resource comprises check sampling the historical core, validating, and verifying the data, completing quality assurance and quality control procedures, and additional current drilling and sampling. The work needed to bring the PEA up to current standards would include an updated mineral resource estimate, an updated metallurgical analysis, and updated engineering studies; all would need to assume current costs and metal prices.
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Since 2010, the limited surface work programs have focused on the combined Blackdome and Elizabeth properties. These programs have included individual airborne magnetic and radiometric surveys, geochemical grids and rehabilitation and environmental monitoring.
In 2011, a surface diamond drilling program was completed (16 drill holes; 3,762 m) in an effort to explore and increase the potential mineral resources on the veins peripheral to the veins which hosted the bulk of the mineralization historically mined.
Since 2012, the Blackdome property has been on care and maintenance. The 2012 focus was on consulting with First Nations and obtaining the required permitting to join existing forest service roads to provide a direct ore haul road from the Elizabeth property to the Blackdome mill. The special-use permit (SUP) to construct the road was approved in the fall of 2012 subject to posting a $200,000 reclamation bond which was posted in the late summer of 2013. Management subsequently terminated the SUP and recovered the $200,000 bond.
The 2010 PEA (Micon) had also contemplated refurbishing the existing Blackdome process plant following the previous gravity flotation flowsheet at a throughput rate of 200 t/d.
In October 2016, Skeena Resources Ltd. commissioned Precision Geosurveys Inc. to complete a high-resolution airborne magnetic and radiometric survey of the Blackdome property. The survey encompassed the main Blackdome claim block, covering an area of 14.9 kilometers by 10.9 kilomters, and includes 176 survey lines and 12 tie lines. The survey block was flown at 100 metre spacing on a heading of 125°/305°, and tie lines were flown at 1000-meter intervals at a heading of 035°/215°. A total of 1413.6 line-kilometers of data was collected.
Geochemical soil sampling was completed in 2018 in an effort to explore for veins on strike from the Blackdome mine to the southeast and northeast. The northeast grid produced results that indicated a potential to show continuity between the Redbird/Vein 17 and the Midas showing (Minfile 092O 052) further to the northeast (Nichols & Despotovic, 2019).
Since Tempus acquired the Project in November 2019, the Company has initiated a diamond drilling program at the Blackdome property which commenced in mid-July 2020. As of the effective date of this report, a total of 4,026.5 m has been drilled; all assays are pending. Drilling at Blackdome is ongoing and scheduled to end by early October 2020. The focus of this program has been to target the Giant Vein, Redbird Vein, Vein 17, the northern extent of the Veins 1 and 2 structure, and the New Vein. Details of the current drilling program are presented in Section 10 of the Technical Report.
6.3 Elizabeth Property The following work history for the Elizabeth deposit is referenced to Gruenwald, Harrop, SRK, Goddard et. al (2011) and SRK (2009).
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Mining activity within the Lillooet mining district dates to the mid-19th century when prospectors entered the Bridge River area from the Fraser River Canyon. Most mining activity was centered on gold deposits such as Bralorne, Pioneer, Minto, Coronation and Wayside. Placer gold was found in the area in 1863 and the first mineral claims were staked in 1896. The Pioneer mine went into production in 1914 and the Bralorne mine in 1932. By the time production ceased at Bralorne in 1971, the Bralorne and Pioneer mines had together produced 4.1M ounces of gold at an average grade of 0.53 ounces per ton. The Bralorne mine was put back into production in 2004 and operated until 2014 when the focus of the Bralorne mine shifted to exploration, and the mill equipment was sold and salvaged.
Gold-bearing quartz veins were discovered near Blue Creek in 1934.
In 1940 to 1941, the Elizabeth Nos. 1 to 4 claims were staked. Bralorne Mines Ltd. optioned the property in 1941 and, during the period of 1948 to 1949, explored the present-day Main and West Veins by developing about 700 m of drifts and crosscuts in addition to about 110 m of raises.
Between 1950 and 1952, Bralorne explored the Vein 9 using surface trenching and about 250 m of drifting.
Between 1956 and 1958, Bethlehem Copper developed the Upper Workings at elevation 2,204 masl to explore the Main and West Veins with approximately 250 m of crosscuts and drifts.
In 1958, Bethlehem Copper reported a “reserve” of 1,430 tonnes with an average grade of 95.3 grams per tonne gold for the West Vein above the Upper Adit.
In 1983 Cal-Denver Resources re-sampled the No.9 Adit and estimated an indicated reserve of 3,850 tonnes with an average grade of 41.1 grams per tonne gold for that portion of Vein 9 that was explored by drifting.
In 1987 Carson Gold Corp. re-sampled the No.9 Adit and drilled four holes (600 m) to test Vein 9.
From 1988 to 1989, Corona Corporation performed a regional geochemical stream sediment sampling program.
In 1990, Blackdome Mining rehabilitated the Upper and Lower Workings, sampled the West Vein in the Upper Workings, and also conducted surface trenching, sampling, and geological mapping.
In 1990, Balsam Resources tested Vein 9 with 1 drill hole (123.7 m).
In 2002, J-Pacific acquired the Elizabeth Project and conducted a series of exploration programs that included a 66 drill hole program totaling 8,962.8 m. Other exploration work at the Elizabeth property has included two soil sampling programs, a stream sediment sampling program, geological mapping and sampling, underground rehabilitation, structural mapping along with airborne photography and topographic base map generation (SRK, 2009).
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In May 2002, J-Pacific entered into an option agreement with White and Illidge to earn a 100% working interest in the Elizabeth property’s Nos.1 to 4 claims subject to: aggregate cash payments of C$15,000; the issuance of 200,000 shares from Sona to White and Illidge; advance royalty payments of C$10,000 per year, starting on the second anniversary of the agreement; a work commitment of C$500,000, and a 4 % net smelter return (NSR) royalty.
J-Pacific also entered into a separate option agreement with Illidge to acquire a 100% working interest in claim #511626 which included the former Blue 1 to 4 claims, but excluding the areas covered by the Crown-granted mineral claims. The agreement entailed a cash payment of C$2,000; advance royalty payments of C$5,000, commencing on the first anniversary of the agreement; issuance of 100,000 shares; a work commitment of C$500,000; and a 3% NSR royalty.
In 2002, J-Pacific drilled 16 diamond drill holes totaling 1,642 m which targeted the West Vein, Main Vein and the stockwork zone. A geochemical soil survey was conducted during the drilling program which identified the Southwest anomaly and the extension of the West and Main Veins to the southwest.
In 2003, the geochemical soil survey was expanded to the east and west along with service roads to prepare for the upcoming drilling programs. The road that crossed the Southwest anomaly uncovered the Southwest Vein at surface where visible gold was identified. Chip samples were taken; they assayed up to 110 g/t Au over 0.50 m.
In 2004, J-Pacific drilled seven diamond drill holes totaling 1,268.7 m. This drilling program tested the Southwest Vein, the Tommy Vein, the Ella, and Vein 9.
In 2005, the located claims that comprised the Elizabeth property, with the exception of the Elizabeth Nos. 1 to 4 Crown-granted mineral claims, were converted to MTO (Mineral Titles Online) claims. The new, electronic-format claims are essentially coincident with the previous claims with the exception of the former Blue 1 to 4 claims that have been amalgamated into MTO Claim #511626. The Elizabeth Nos. 1 to 4 Crown-granted mineral claims remained in effect.
In 2005, a drilling program of 19 holes (totaling 2,908 m) was completed which focused on the Southwest Vein. In addition, a structural geology study was completed to understand the geological and structural controls of gold mineralization.
In 2007, a Phase II drilling program of 14 holes (totaling 1,725 m) was completed to further test the Southwest Vein.
In 2009, J Pacific published an NI 43-101 mineral resource estimate for the Elizabeth gold deposit. The Technical Report reported an estimated Inferred resource of 522,843 tonnes at 12.26 grams per tonne Au using a 5 gram per tonne Au cut-off (SRK, 2009).
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The 2009 Mineral Resource Statement for the Elizabeth Gold Deposit is shown in Table 6.4.
Table 6.4: 2009 Historical Mineral Resources for Elizabeth Gold Project SRK 2009 Quantity Grade Gold Metal Gold Domain (tonnes) (g/t) (oz) Inferred Mineral Resources Southwest 328,280 13.63 143,900 West 194,563 9.95 62,239 Total Inferred 522,843 12.26 206,139 Source: SRK, 2009
Notes: Reported at a cut-off grade of 5.0 grams of gold per tonne assuming underground mining scenario, a gold price of US$1,000 per ounce of gold and 100 percent metallurgical recovery.
Mineral Resources reported demonstrate reasonable prospect of eventual economic extraction, as required under NI 43-101. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. The Mineral Resources may be materially affected by environmental, permitting, legal, marketing, and other relevant issues. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. However, it is reasonably expected that the majority of Inferred Mineral Resources could have been upgraded to Indicated Resources.
The QP considers the historical mineral resources in Table 6.4 reliable because they have been estimated by a long-standing, reputable firm using reasonable parameters and then-current industry best practices. The QP also believes that these historical resources provide historical context and are relevant for the exploration and development of the Project.
The Inferred mineral resources are historical estimates and use the categories set out in Section 1.2 and 1.3 of NI 43-101; however, the QP has not completed sufficient work to classify the historical estimate as current mineral resources.
The Company is not treating the historical estimates as current mineral resources. The work needed to treat the historical estimate as a current mineral resource comprises check sampling the historical core, validating and verifying the data, completing quality assurance and quality control procedures, and additional current drilling and sampling.
In 2010, Micon completed a PEA that showed the potential economic viability of the Blackdome- Elizabeth Gold Project based on Indicated and Inferred mineral resources for the Blackdome property and Inferred mineral resources for the Elizabeth property as estimated by SRK (SRK 2009, SRK 2010). The PEA was based on the concept of mining underground first at the Blackdome deposit and then the Elizabeth deposit second, with all processing performed at the
Effective Date: September 9, 2020 6-11 Blackdome-Elizabeth Gold Project 2020 NI 43-101 Technical Report existing Blackdome mill at a rate of 200 t/d, or 73,000 t/y. Details of the PEA are provided in Section 6.2 (Goddard et al., 2010).
In 2010, Sona completed a surface drilling program of 19 drill holes (totalling 3,778.9 m of NQ drilling); the program focused on the Southwest Vein. Work began on a portal to access the Southwest Vein. In addition, a camp was built for future exploration and development activities on the property.
In 2011, Sona completed a drilling program of 55 drill holes (totaling 7,358 m of underground and surface drilling). This included 20 surface drill holes (totaling 3,182 m) and 35 drill holes (totaling 4,176 m). In addition, a new road was constructed to improve access from the Upper Portal to the Southwest Portal.
In 2012, Sona put the Elizabeth project on care and maintenance. A special-use permit (SUP) was approved to construct a road joining the existing forest service roads to provide a direct haul road linking the Elizabeth and Blackdome properties. The SUP was subsequently terminated.
In August 2012, Sona received the Effluent Discharge Approval from the Ministry of Environment and Climate Change Strategy to allow for underground development to access the Southwest Vein.
In 2016, Skeena acquired Sona and its wholly owned subsidiary No. 75 Corporate Ventures Ltd. and was the 100% owner of all 73 contiguous mineral claims, two mining leases, and 14 Crown- granted mineral claims.
On November 18, 2019, Tempus Resources Ltd acquired Sona Resources Corp. and wholly owned subsidiary No. 75 Corporate Ventures Ltd. from Skeena Resources Ltd.
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7 GEOLOGICAL SETTING AND MINERALIZATION The Blackdome deposit is a low-sulphidation epithermal gold-silver-bearing system characterized by low temperature deposition of quartz veining, clay alteration, bleaching and silicification. The mineralization occurs as relatively high-grade small shoots located along fault zones, often in proximity to branches or in zones of steepening of the host structures. Mineralization consists of fine- to medium-grained disseminated and fracture-filling electrum and silver sulphide with minor gold sulphosalts in a gangue of quartz, adularia, pyrite, and carbonate.
The Elizabeth deposit is underlain by Late Paleozoic ultramafic rocks (altered to listwanite) intruded by Cretaceous stocks and dykes. Gold occurs in a low-sulphidation quartz vein system, mainly hosted by porphyritic feldspar intrusions. Gold content is highly variable and nuggety as coarse gold is common. Vein alteration is associated with arsenic, copper, and molybdenum.
The geological setting of the Blackdome-Elizabeth Gold Project is shown in Figure 7-1.
7.1 Regional Geology
7.1.1 Blackdome Property The Blackdome deposit is situated in the Stikinia terrane west of the Cache Creek Complex and the Fraser River fault. Across the Yalakom fault to the south, orogenic gold deposits, such as Bralorne-Pioneer, can be found in the Bridge River and Shulaps Ultramafic complexes. The Borin Creek placer gold deposit is 6 km northwest of Blackdome, and the Frenier perlite deposit is 10 km to the east. Blackdome is hosted in post-accretionary Tertiary volcanics and volcaniclastic sediments, with no basement exposed, but is presumed to overlay the Spences Bridge Group.
The Spences Bridges Group contains two distinct stratigraphic units: the Pimainus Formation and the Spius Formation. The lower Pimainus Formation is approximately 2.5 km thick, comprising basaltic to rhyolitic lavas with intercalations of pyroclastic flows and volcaniclastic sediments and ranges in age from the Aptian to Cenomanian. The upper Spius Formation is mostly amygdaloidal andesites and tuffs, approximately 1 km thick, and late Albian to Cenomanian in age. The Spius Formation is laterally discontinuous, probably related to local effusive centres (Thorkelson and Smith, 1989).
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Figure 7-1: Geological Setting of the Blackdome-Elizabeth Project
Source: modified from MapPlace2 2020
7.1.2 Elizabeth Property The 2009 SRK Technical Report (El-Rassi et al., 2009) states:
The area in which the Elizabeth Gold Project is situated is underlain by several Late Paleozoic to Mesozoic tectono-stratigraphic assemblages that are juxtaposed across a complex system of faults of mainly Cretaceous and Tertiary age. These Paleozoic to Mesozoic-age rocks are intruded by Cretaceous and Tertiary-age stocks and dykes of mainly felsic to intermediate composition and are locally overlain by Paleogene volcanic and sedimentary rocks.
The Property area is underlain by ultramafic rocks of the Shulaps Ultramafic Complex (usually considered part if the Bridge River Terrane), a dismembered ophiolite probably of late Paleozoic age. It is comprised of two major structural divisions; an upper unit of harzburgite with a mantle tectonic fabric, and a structurally underlying serpentinite mélange. These rocks were thrust emplaced above the Cadwallader Terrane and other parts of the Bridge River Terrane during the Cretaceous.
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The Methow Terrane is juxtaposed by fault contact to the northeast of the Shulaps Ultramafic Complex across the Yalakom Fault and is comprised of Lower Jurassic-age sedimentary and volcanic rocks and overlying mid-Cretaceous-age sedimentary rocks.
The Upper Tyaughton Basin, a belt of Jurassic-Cretaceous clastic sedimentary rocks lies principally to the northwest, and as several slices to the west of the Shulaps Ultramafic Complex. The Cadwallader Terrane is located further to the west and is made up of Triassic and Jurassic- age turbiditic sediments, mafic volcanics, and shallow water conglomerate and carbonate rocks.
The Bridge River Terrane is situated to the south of the Shulaps Ultramafic Complex and is represented mainly by the Bridge River Complex, an assemblage of chert, argillite, greenstone, gabbro, serpentinite, limestone, and clastic sedimentary rocks with no coherent stratigraphy. Ages range from Mississippian to late Middle Jurassic. The Bridge River Complex is overlain by a thick, coherent succession of clastic metasedimentary rocks referred to as the Cayoosh Assemblage.
Igneous intrusion occurred during much of the interval from mid-Cretaceous through to Neogene and coincided with major deformational events that transitioned from mainly compressional events in the mid-Cretaceous, to dextral strike-slip and normal faulting during Late Cretaceous and into Tertiary time.
The largest local intrusive bodies are medium-grained equigranular granitic batholiths of Late Cretaceous age (80 to 90 million years; “Ma”). Hornblende-feldspar porphyry intrusives form stocks, plugs, and dykes, and range in age from mid-Cretaceous to Paleocene. These porphyries consist of variable proportions of plagioclase and hornblende phenocrysts within a grey to green aphanitic to very fine-grained groundmass, and locally grade into equigranular, medium grained diorite. The Blue Creek Porphyry that hosts the Elizabeth Gold Project veins is mapped as a member of this group with an age date of 70.27 ± 5.25 Ma by Ar-Ar from a hornblende separate (Schiarizza et al., 1997). This date is believed to be more reliable than the later date of 58.4 ± 2.0 Ma by whole-rock K-Ar (Church and Pettipas, 1989). This younger date is similar to that of the Poison Mountain stocks. There are known to be two phases of porphyry on the Elizabeth Gold Project. Although it is likely that both of the age date samples came from the same unit, the younger date may have been influenced by a later intrusion. This younger age is also consistent with the relative timing relationships suggested by SRK (Siddorn and Lee, 2005) based on structural evidence.
All these intrusives are inferred to belong to the late stages of the Coast Plutonic Complex, the main portion of which was emplaced between 110 and 95 Ma, during the convergence of the North American and Pacific Plates. Diminished plutonism continued along the east flank of the complex until about 60 Ma. Felsic dykes are a common component of the Coast Plutonic Complex and are commonly observed cutting the Blue Creek Porphyry on the Elizabeth Gold Project.
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Metamorphism is generally of low, predominantly greenschist, grade. Local amphibolite grade metamorphism is recorded, and the Bridge River Complex contains blueschist metamorphic rocks (Schiarizza et al., 1997).
The geological setting of the Elizabeth property is shown in Figure 7-2.
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Figure 7-2: Geological Setting of the Elizabeth Property
Elizabeth
Source: El-Rassi et al., 2009; originally modified from Schiarizza et al., 1997
7.2 Local and Property Geology
7.2.1 Blackdome Property Mineralization at Blackdome is controlled by northeast-southwest striking apparent normal faults that cut across Eocene volcanics and volcaniclastic sediments. These faults host hydrothermal
Effective Date: September 9, 2020 7-5 Blackdome-Elizabeth Gold Project 2020 NI 43-101 Technical Report breccias and quartz veins. The primary focus of mining activity was within the No.1 and No.2 faults / veins (Figures 7-3 and 7-4).
Figure 7-3: Local Geological Setting of the Blackdome Property
Source: Bird 1989
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The latest movement along the No.1 fault / vein is normal with approximately 50 m of displacement (northwest block downthrown). Kinematic indicators are variable; however, some faults show reverse or dextral movement (Rennie, 2005). Slickensides can be unreliable as they only record the latest event, which may not be the most significant. Offset stratigraphy, which generally shows apparent normal displacement on the property, is a much better indicator:
Figure 7-4: Section Lithology Blackdome Property
Source: Bird 1989
Most of the veins are near vertical or dip steeply to the northwest (45 to 75°). The exceptions are the Watson and Southwest veins (located south-southwest of the veins in Figure 7-4) which dip between 30 to 50° to the northwest (Bird, 1989). These veins show much wider alteration halos but lower grade. Southward, the strike of the No.1 vein abruptly shifts to north-south, shallows out and corresponds with a decline in ore quality. Rennie (2005) suggests that this north-south striking structure is actually a separate fault offsetting the No.1 vein and it may potentially continue along its original trajectory across the fault (albeit offset) and presents an attractive exploration target.
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The faults commonly show significant zones of crushed to fractured rock with gouge and quartz veins and may be several metres thick. Core recovery can be problematic across fault zones, and the poor rock quality should factor into mine planning (Rennie, 2005).
Blackdome geologists have observed that ore shoots are more likely to occur when faults are steeply dipping, and the faults refract across stratigraphic units of varying competencies (Rennie, 2005). Bird (1989) likewise states that ore shoots are continuous within the more brittle flow- banded lithologies, but veins are pinched at soft ashy-tuffaceous units. Stratigraphy seems to be an important control on mineralization.
Mining at Blackdome was productive within a vertical range of 350 to 400 m; the best ore was recovered between 1,890 and 2,000 m elevation (Rennie, 2005). This may be a result of epithermal processes (See Section 8 Deposit Types) or supergene enrichment, but stratigraphy could also be a factor (see above). The Giant and Redbird veins initially showed promising drilling results (20 to 30 g/t Au intercepts), but open pit mining yielded lower grades (~10 g/t Au). Underground exploration at Redbird encountered thinner veins, with narrow alteration zones and less deformation. Breccias were intersected by drilling, and breccia clasts lacked alteration (Rennie, 2005). Bird (1989) suggests that the Giant and Redbird structures are steep and merge with the No.1 vein / fault at depth.
7.2.2 Elizabeth Property Mineralization at Elizabeth is primarily hosted in quartz veins situated within a feldspar porphyry that is surrounded by ultramafic rocks. The Main, Southwest, and West Veins and the No.9 vein are shown in the map in Figure 7-5.
Figure 7-5: Local Geological Setting of the Elizabeth Property
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Source: modified from El-Rassi et al. 2009
The 2009 SRK Technical Report (El-Rassi et al., 2009) states:
The lithological simplicity of the Elizabeth Gold Project is offset by structural complexity: the ultramafic rocks are commonly sheared and the ultramafic-diorite contacts are marked by wide zones, measuring in the tens of meters, of interleaving of slices of ultramafic and dykes or tectonic slices of diorite.
Although only two relatively minor faults are shown in the area of the Elizabeth Gold Project on the published British Columbia Geological Survey map of the Taseko-Bridge River area, structures that are significant on a property scale are common.
The most obvious structure on the Elizabeth Gold Project is the listwanitic shear zone that marks the western edge of the Blue Creek Porphyry. The northerly portion of this fault trends about 015º azimuth and has been traced for about 1000 meters between the No.9 Zone area and the height of land between the No.9 area and the cirque to the south, at which point it curves to the southeast on a trend of about 135º azimuth. This trend can be followed for about 700 meters to the access
Effective Date: September 9, 2020 7-9 Blackdome-Elizabeth Gold Project 2020 NI 43-101 Technical Report road leading to the Southwest Vein area, where a shear zone in serpentinite is exposed in a road cut. Beyond that point the course of the fault is not known.
The western margin of the Blue Creek Porphyry is poorly exposed but has been investigated by trenching and drilling because of the discovery of the Southwest Vein in 2002. Within the area investigated by drilling, the diorite-serpentinite contact zone appears to be vertical to steeply east- dipping and coincides with the projection of the listwanitic fault zone exposed to the northwest. The contact zone is comprised of tectonic slices of porphyry interlayered with slices of serpentinite. Felsic dykes occur within the diorite, notably in the area of drill hole E04-17. Shearing of both the serpentinite and porphyry is common and minor listwanitic alteration of the serpentinite was observed locally.
The southern margin of the Blue Creek Porphyry is exposed in only one roadcut on the Southwest Vein access road. Two other isolated exposures of diorite further to the east on this road, at the Ella Vein, and at the Lower Portal appear to be fault slices. Both are bounded by serpentinite to the south, and both are overlain by serpentinite with contacts that dip to the north. At the lower portal, this contact is clearly exposed and has a strike of 220º and a dip of 70º. These exposures are inferred to be thrust slices although SRK work suggests they could be normal faults.
A portion of the eastern margin of the Blue Creek Porphyry is exposed above the Upper Portal and has been penetrated by both the Upper and Lower underground workings, and as well by drilling carried out in 2002 and 2005.
All this information indicates that this margin of the porphyry is structurally complex.
The exposed margin of the porphyry above the Upper Portal strikes about 135º and dips about 50º to the northeast and is structurally overlain to the northeast by a slice of serpentinite that has a surface exposure of about 100 meters width. Several rafts of diorite are entrained within the serpentinite.
The 2002 drilling in this area indicated that the serpentinite slice exposed at surface is tabular and dips to the southeast at about 45º, together with several tectonic slices of diorite. Exposures of serpentinite in the two northerly drifts of the Lower Portal workings indicate that here the serpentinite-diorite contact also has a strike of about 135º, and that the contact dips at about 45º, and probably represents the same contact.
A slab of diorite porphyry, about 100 meters in thickness, structurally overlies the serpentinite to the northeast. On surface, this block contains the David Vein, and was intersected in drill holes E02-08, 09, and 16. This slab is projected to host the Allison Vein, and to be exposed in the Lower Portal crosscut where it lies in the immediate footwall of the thick serpentinite unit that is encountered immediately inside the portal and is exposed for about 200 meters along the crosscut. The serpentinite-diorite contact is steep, about 70º, and strikes about 220º, and is assumed to be a northeastward continuation of the southern thrust margin of the Blue Creek
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Porphyry. Both the strike and dip of this contact are similar to that of the serpentinite-diorite contact exposed at the Lower Portal, a contact also inferred to be a thrust.
Three holes drilled during 2005, E05-34, 35 and 36, indicate that the structural relationships described above persist to the northwest. The northeast portion of the main diorite body is separated from the porphyry slab described above, by the northwest extension of the serpentinite also described above. The near-surface extent of the main diorite body is therefore fully constrained by surface exposures and drill intercepts, and all contacts with the enclosing serpentinite appear to be tectonic in nature. The northwesterly extent of the smaller diorite slab that lies to the northeast of the main diorite body has not been established.
An isolated outcrop of diorite is exposed in a roadcut at the junction of the spur road to the Upper Portal, and the main road. It is not known how this diorite body relates to the others on the Property but may be another tectonic sliver.
7.3 Structural Setting
7.3.1 Blackdome Property Collisional tectonics have governed much of the geological history of B.C. over the past 200 million years. The Farallon plate subducted under North America at an east-west orientation until the late Mesozoic (85 Ma) when the Kula plate was born out of rifting of the Farallon. Subduction subsequently changed to a north-south orientation (65 Ma). The result was strike-slip movement along major fault systems, such as the Fraser River fault (See Figure 7-1), juxtaposing tectono- stratigraphically distinct accreted terranes (Rennie, 2005).
Blackdome is located in post-accretionary volcanics on the eastern edge of the Stikinia terrane, approximately 20 km west-southwest of the Fraser River fault which separates Stikinia from the Cache Creek Complex/Quesnellia terrane; these three make up an intermontane superterrane accreted during the mid-Jurassic (Hammer and Clowes, 2004). See Figure 7-6 and 7-1. The Stikinia tectonostratigraphic terrane formed in a volcanic arc during the Late Paleozoic-Mesozoic (Currie and Parrish, 1997). The Cache Creek terrane is an accretionary complex with low- temperature/high-pressure metamorphic rocks, ophiolites and carbonate platforms; it is Carboniferous to Jurassic in age with closure of the sea having occurred by the mid-Jurassic (Colpron et al., 2007; Zagorevski et al., 2017). Quesnellia comprises Paleozoic (Devonian onward) continental margin sediments overlain by volcanic rocks associated with a Mesozoic volcanic arc. Whether Quesnellia is an allochthonous or autochthonous terrane is contested (Petersen et al., 2011):
Figure 7-6: Regional Structural Setting of the Blackdome Property
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Source: modified from Ootes et al. 2017
While dextral movement is established on the Fraser River fault, Mathews and Rouse (1984) note a substantial dip slip component, estimating approximately 1.5 km of downthrow on the western side. Large packages of Cretaceous rocks observed to the west are not present to the east of the fault. Much of the movement is suspected to have occurred during the Cenozoic (Mathews and Rousse, 1984).
The post-accretionary Eocene volcanics at Blackdome are deformed into a gentle anticline that plunges shallowly to the northeast, approximately along the northeast-southwest normal faults that host the mineralization. As a result, beds generally dip either shallowly to the northwest or southeast but vary locally with faulting. The Blackdome faults were active during and post- mineralization, evidenced by broken quartz veins, and do not crosscut the overlying basalts but seem to fracture them, indicating the most significant deformation terminated prior to the late Oligocene (Rennie, 2005). The deformational events and stresses that created the anticlines and faults are not well documented in the literature. It is speculated that movement along the Fraser
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River fault played an integral role in generating the normal faults and mineralizing structures at Blackdome (Price, 2001; Rennie, 2005).
7.3.2 Elizabeth Property The 2005 SRK Technical Report (Siddorn and Lee, 2005) states:
The Elizabeth gold project (see Figure 7-7) is situated in the Permian Shulaps Ultramafic Complex, a dismembered ophiolite complex... The Shulaps Ultramafic Complex comprises two units, a structurally higher unit of harzburgite and a lower serpentinite melange unit, that was derived from ultramafic cumulates. This relationship is the reverse of what is expected from an undisturbed ophiolite sequence… and implies that the complex has been structurally inverted during thrust faulting. The base of the harzburgite is generally marked by several hundred meters of strongly foliated, moderately northeast-north dipping serpentinite.
The Shulaps Ultramafic Complex is entirely fault-bounded. against the Bridge River Complex, Cadwallader Group and Bralorne-East Liza Complex. The faults include a complex network of thrusts, normal and strike slip faults.
The serpentinite melange unit (Shulaps Ultramafic Complex) lies directly above the Bralorne-East Liza Complex and the Cadwallader Group, with a gently dipping thrust-related mylonite zone occurring at the contact. The Bralorne-East Liza Complex is structurally underlain by the Cadwallader Group, with another thrust-related mylonite zone occurring at the contact.
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Figure 7-7: Regional Structural Setting of the Elizabeth Property
Source: modified from Siddorn and Lee, 2005; Schiarizza et al., 1997
The northwest striking, steeply dipping Marshall Creek fault occurs south of the Elizabeth property and extends into the north striking Quartz Mountain fault (Figure 7-7). The Quartz Mountain fault merges into the Yalakom fault. Kinematic indicators associated with the Marshall Creek fault indicate dextral displacement, similar to the Yalakom fault. However, it also displays a significant southwest side down, normal offset, indicated by the juxtaposition of different metamorphic facies and lithologies across the fault. This extensional offset is related to uplift and brittle extensional faulting along both the Marshall Creek fault and the Mission Ridge fault, that occurred after the dextral transpression.
The Mission Ridge fault is a northwest striking, moderately (25-40°) dipping fault system. It separates rocks with distinctly different metamorphic grades within the Bridge River Complex. The footwall of the fault contains greenschist facies schists whereas the hanging wall contains prehnite-pumpellyite facies sedimentary rocks. The juxtaposition of higher grade metamorphic
Effective Date: September 9, 2020 7-14 Blackdome-Elizabeth Gold Project 2020 NI 43-101 Technical Report rocks in the fault footwall against lower grade metamorphic rocks in the fault hanging wall, in combination with slickensides that indicate normal dip-slip, indicates the Mission Ridge fault has a normal (extensional) displacement across it. The Mission Ridge fault crosscuts dextral tectonic fabrics in the Mission Ridge pluton (47 Ma), indicating the normal displacement post-dates at least some component of dextral movement and is no older than 47 Ma.
North of Carpenter Lake, the Marshall Creek fault splays into three separate northwest striking faults. These include the Red Mountain fault which is the southern most splay. Late Eocene dextral displacement occurred along the Red Mountain fault which offsets the Yalakom fault, Mission Ridge fault and the Mission Ridge pluton with a dextral separation.
The Yalakom, Mission Ridge and Marshall Creek fault systems are all cut by the Fraser fault system, to the south, which in turn is crosscut by the 34 Ma Chilliwack batholith (Coleman and Parrish 1991).
The Main and West vein systems [at Elizabeth] contain excellent examples of mineral lineations preserved in vein quartz. All mineral lineations are steeply down dip, indicating the veins either formed in reverse (compressional) or normal (extensional) dip-slip faults... The mineral steps associated with the mineral lineations all indicate normal displacement…, with hanging wall moving down relative to the footwall. Extensional mineral fibres, orthogonal to the vein contacts, are preserved in minor veins associated with the West and Main veins...
The geometry, kinematic indicators and offset of marker units all indicate the Elizabeth vein systems were formed during extensional deformation. We suggest vein formation is associated with extensional deformation during the mid-Eocene, after the intrusion of the Mission Ridge pluton (47 Ma). Vein formation is related to extensional deformation on the Marshall Creek, Mission Ridge, and Quartz Mountain faults. Gold mineralisation therefore occurred after thrusting and exhumation of the Shulaps Ultramafic Complex ophiolite and after dextral strike slip deformation along the Yalakom, Marshall Creek and Quartz Mountain faults, but before dextral strike slip faulting along the Red Mountain fault.
This is supported by structural relationships between listwanite alteration and deformation in the Yalakom fault. At Elizabeth, listwanite alteration formed prior to gold mineralisation... Structural relationships in the Yalakom fault indicate listwanite alteration was coeval with mid- Eocene dextral strike slip faulting, and therefore prior to extensional deformation and gold mineralisation at Elizabeth.
In vein systems formed during normal dip-slip, ore plunges are commonly controlled by the intersection of different veins and the plunge of dilational jogs. Dilational zones may occur at any angle to the slip vector, however, those at the highest angles to the slip direction will experience the greatest amount of dilation and are therefore the most favourable sites for enhanced mineralization. At Elizabeth, dilational zones would have preferentially formed within steeper sections of the vein system along sub-horizontal trends. (Siddorn and Lee, 2005).
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7.4 Stratigraphy Sequence and Magmatic History
7.4.1 Blackdome Property The earliest geological units exposed at Blackdome are from the Tertiary age and are thought to unconformably overlie volcanics from the Spences Bridge Group (Cretaceous); the contact is not locally exposed. Geologists have historically grouped lithologies into mine units rather than traditional geological nomenclature. Note that the unit name does not always correspond with the lithology it represents:
Miocene Basalts: The youngest units exposed at Blackdome are responsible for the name of the deposit. The porphyritic basalt flows, fine-grained and dark brown to black in colour, cap the peak of Black Dome Mountain. Basalt dykes are common throughout the deposit. Plateau basalts elsewhere yield an age of 24 Ma (Price and Glanville, 2001; Vivian, 1988). Upper Andesite: An unconformity divides the basalts from a 150 m package of andesitic flows. These are porphyritic with white plagioclase phenocrysts and a green-grey colour. Dykes of the same lithology are common throughout the deposit (Vivian, 1988). The flows are dated to 51.5 Ma (Price and Glanville, 2001). The andesites are underlain by a discontinuous volcaniclastic sandstone to agglomerate. The unit may be up to 30 m thick but is generally thinner (Vivian, 1988). Rhyolite: In the North, this unit comprises porphyritic dacite flows, red-brown to green grey, fine-grained and containing white feldspar phenocrysts. Flow banding is common. The unit may be up to 75 m in thickness (Vivian, 1988). To the South, the dacite flows become intercalated and then are transcended by volcanic breccias and volcaniclastic sediments, kaolinized and pale in colour but likely of dacitic or rhyolitic composition (Buchholz, 1988). See Figure 7-8. Lower Andesite: This unit shows a great deal of variety in rock type, and its thickness is unknown. The deepest lithologies encountered comprise a thick (at least 60 m) package of welded tuffs, blue to grey and medium to coarse grained. A thin olive-green amygdaloidal flow separates the welded tuffs from an overlying sequence of fine- to medium-grained, poorly sorted lapilli tuffs, grey in colour and approximately 30 m thick. Both the welded and lapilli tuffs are intercalated by porphyritic andesites, basalt flows and flow-banded rhyolite (Buchholz, 1988; Rennie, 2005). Fairless Volcanics: The andesite flows of the Fairless volcanics are exposed northwest of the deposit along the Fairless Creek and the contact with the Lower Andesite is hidden. Grey basalt flows dominate but intercalations of crystal and lapilli tuffs of rhyolitic composition as well as tuffaceous sediments are present (Rennie, 2005).
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Figure 7-8: Blackdome Stratigraphic Column
Source: modified from Bird 1989
7.4.2 Elizabeth Property The 2009 SRK Technical Report (El-Rassi et al., 2009) states:
Four rock-types are described on the property: harzburgite, porphyritic diorite, serpentinite and listwanite. The listwanite is an alteration product of the harzburgite as is the serpentinite. Both listwanite and serpentinite have been mapped and logged as rock types with the intensity of alteration not always clearly indicated. Harzburgite is comprised of orthopyroxene and olivine, and where undeformed, weathers rusty-brown with a warty texture that results from the resistant orthopyroxene weathering in relief against more-abundant but less-resistant olivine. On fresh surface, orthopyroxene is medium to dark grey in a dark grey to black groundmass. Harzburgite is not commonly observed in drill core, presumably because most holes have been drilled in porphyry or in areas of strong deformation in which the harzburgite has been sheared and serpentinized.
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Serpentinization is common and of variable degree. In the least-deformed harzburgite, shearing has formed a network of hairline fractures that disrupt the porphyritic texture and deform the orthopyroxenes. With more-advanced deformation, both orthopyroxene and olivine are serpentinized and the rock varies from nebulous dark-grey and black, to black. Texture varies from amorphous to highly sheared with slickenside shear surfaces. Rare asbestos-like fibres were noted on shear planes in drill core, as well as minor blue-green to bluish coloured fracture- coatings, suggestive of various asbestos minerals. Buff to whitish talc was also observed on fracture surfaces.
Listwanite, a talc-carbonate ± silica alteration of serpentinite, is present on the property in areas of intense deformation, prominently along the western margin of the main diorite porphyry intrusive where it defines a shear or thrust contact between ultramafic and diorite. Listwanite also occurs in minor zones within the margins of the diorite itself where slices of serpentinite have been caught up in the intrusion, probably as fault wedges.
Diorite porphyry is used here as a field term for the intrusive rocks that cut the ultramafic complex and form the principal host for gold-bearing quartz veins on the property. This intrusive is termed the Blue Creek Porphyry (Schiarizza et al., 1997). The rock is comprised of plagioclase, hornblende, and quartz ± rare biotite. Typically, plagioclase phenocrysts constitute about 40 to 60 percent of the rock by volume and where observed in drill core, form a phenocryst supported meshwork the interstices of which are filled by groundmass. Groundmass supported phenocrysts are less common. Hornblende also occurs as phenocrysts but is less abundant, about 10 percent or less of the rock by volume, and the crystals are millimetre-scale.
Groundmass within the porphyry is generally cream-coloured, but where altered is commonly very pale green in colour. Where alteration is more advanced, the plagioclase phenocrysts are translucent green, and the groundmass is light-brown and sericitized. Alteration, as noted in drill core, is almost invariably associated with zones of shearing and the degree and extent of alteration into the wallrock are reliable indicators of the intensity of deformation.
Although there are minor variations in abundance and size of phenocrysts, the main mass of diorite is essentially uniform throughout the area of surface exposures and in drill core. As mentioned above, this diorite has been mapped (Schiarizza et al., 1997) as hornblende-feldspar porphyry with an assumed correct age of about 70 Ma. However, the distinctive, crowded nature of the plagioclase phenocrysts is consistent with the description of a younger (58 Ma) porphyry that occurs east of Poison Mountain, about 15 kilometers to the north of the Elizabeth Gold Project. A similar age has also been reported for the Blue Creek Porphyry on the Elizabeth Gold Project, but the 70 Ma date is apparently considered more reliable.
The Blue Creek Porphyry is cut by felsic dykes that seem to be most common near the margins of the intrusive, but this may be a function of exploration bias. Above the Upper Portal, a felsic dyke strikes 080º and dips 40º. In the northern drifts of the Lower Portal workings, felsic dykes are common near the diorite-serpentinite contact and appear to be approximately parallel to the
Effective Date: September 9, 2020 7-18 Blackdome-Elizabeth Gold Project 2020 NI 43-101 Technical Report contact, i.e. about 310º/ 70º. The felsic dykes were probably emplaced along fractures in the diorite.
A second diorite body occurs on the Elizabeth Gold Project immediately to the west of the prominent listwanitic fault zone on the western boundary of the Blue Creek Diorite. This porphyry is equigranular, coarse-grained and contains biotite in addition to hornblende. Geochemical analysis (Gruenwald, 2004) has shown that this unit contains essentially no gold, but is anomalous with respect to copper and molybdenum, and is distinctive by virtue of a pyrite content sufficiently high to permit consistent rusty weathering of the host rock. In addition, petrographic study has shown the two porphyries are mineralogically distinct. These characteristics match closely those of the intrusions that contain the Poison Mountain copper-molybdenum porphyry deposit, which has been dated at 57 to 61 Ma. A dyke or extension of this intrusion has been traced for several kilometers north from the No.9 Zone area toward Poison Mountain and may continue beyond the limits investigated. It is therefore possible that the biotite-bearing porphyry is related to the Poison Mountain area intrusives.
No obvious metamorphism of either the ultramafic or dioritic rocks was observed on surface or in drill core. Neither thermal metamorphism of the enclosing ultramafic rocks, nor chill margins within the diorite porphyry were noted in numerous examples of such contacts observed in drill core. It was noted, however, that most, if not all, such contacts are sheared and therefore post-intrusion deformation may have destroyed or dislocated any evidence of contact metamorphism.
7.5 Mineralization
7.5.1 Blackdome Property Gold and silver at Blackdome is present in quartz veins and hydrothermal breccias along faults showing apparent normal displacement (Bird, 1989). See Figure 7-9. Multiple phases of brecciation are evidenced by breccia clasts found within younger hydrothermal breccias (Rennie, 2005). Bird (1989) observed that while the bulk of the deposit occurs along the No.1 and No.2 faults, mineralization does not cover the extent of the faults. Instead, the richest zones are associated with jogs or crossover structures between the two. Ore shoots are relatively short and occur over a vertical extent of approximately 100 m and plunge ~10 to 15° to the southwest. Many of these are breccia “pipes” show convex shapes and may contain clasts up to 0.6 m in diameter (Bird, 1989).
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Figure 7-9: Blackdome Plan
Source: modified from Bird 1989
Abundant pyrite and silver sulphosalts occur in proximity to the “pipes”, but the “pipes” themselves commonly have lower gold-silver values (5 to 6 g/t Au). However, the breccias within 3 m of the “pipes” are rich and can run several hundred grams of gold. These pipes likely created additional permeability along pressure shadows during subsequent activity along the faults. While hydrothermal breccias are common and present in zones of dilation along the faults, fault breccias are also frequently observed but are generally straight and not convex in shape (Bird, 1989). Faulting clearly continued post-mineralization as broken quartz veins are observed and the gouge is often gold bearing (Rennie, 2005).
An exceptionally rich ore shoot (70-8 stope) is found where a hydrothermal breccia abuts against a clay-altered, pre-mineral cross-fault between the No.1 and No.2. Bird (1989) postulates that the clay-filled structure acted as a barrier to fluid-flow and concentrated gold between the two structures where values greater than 2,000 g/t Au are common.
Native gold is present along with electrum, silver sulphosalts and minor iron, zinc, and silver sulphides (acanthite, acanthite-aguilarite). Colloform banding is common in quartz veins especially along the No.1 and No.2 faults (Price, 2001; Rennie, 2005). Vivian (1988) concludes that there were three stages of veining: pre-ore, ore and post-ore. Quartz in the pre-ore stage is massive or cockscomb. Minor crustifications are present along vein walls which include sulphides. Veins from the ore stage show massive, milky to grey, colloform, fine-grained quartz intergrown with adularia, sulphides and precious-metal minerals. Post-ore stage quartz is transparent, euhedral to anhedral and mostly present as infill in fractures and open spaces. Carbonate and zeolites are in association, and fluid inclusions are common (Vivian, 1988).
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Propylitic alteration and silicification are widespread. Bleaching and sericite alteration are common (Rennie, 2005). The most abundant clay minerals within the fault zones are kaolinite and illite (Vivian, 1988). Kaolinite is attributed to both hydrothermal and supergene processes. Rennie (2005) notes that alteration mapping was carried out sporadically throughout the history of the mine and should have been conducted routinely to accurately predict mineralization. Oxidation in ore zones is widespread, and visible gold commonly coincided with limonite. Poor- grade mineralization was frequently observed as lacking oxidation. Supergene enrichment was not considered a significant process during mining activities but may have been a critical component (Rennie, 2005).
7.5.2 Elizabeth Property The 2009 SRK Technical Report (El-Rassi et al. 2009) states:
Gold-bearing quartz veins hosted by feldspar porphyry intrusions have been the focus of past exploration programs on the Elizabeth property. Veins are generally milky white and range from massive to banded or ribboned quartz, the latter suggestive of repeated fracturing during emplacement and vein formation. Inclusions of altered wallrock are not uncommon and suggest stoping and partial replacement of the adjacent wallrock. Alteration “haloes” up to one metre wide occasionally contain anomalous concentrations of gold, arsenic, copper, and molybdenum. Anomalous values of bismuth and tellurium are also reported. The West, Main and No. 9 Veins have historically been the primary exploration targets with the Southwest vein becoming the recent focus. Metallic minerals, by volume, constitute at most a few percent of the veins. These consist of pyrite, pyrrhotite and arsenopyrite, with lesser amounts of galena, sphalerite, chalcopyrite and molybdenite. Native gold occurs as visible blebs with or without sulphide minerals and often along partings near the vein margins. Grey metallic minerals noted in some samples and the geochemistry suggest the presence of bismuth and antimony sulphides. In the No. 9 Vein, quartz is ribboned with laminations of chlorite and carbonaceous material, features that have been said to be typical of the mesothermal vein systems found in the region (Church, 1996).
A quartz stockwork zone found in 2002 north of the West Vein was found to contain native gold up to 0.7 millimeters in a panned sample of crushed material. The nature of this zone is not consistent with mesothermal type mineralization but rather appears similar to a late stage epithermal event. Drilling in 2002 encountered only moderately anomalous gold in this zone. The following outlines the sampling results on the Elizabeth Gold Project claims prior to J-Pacific’s programs. The quality and control of analytical laboratory work is not well established, and results must be treated with caution. They are presented here for historical reference and are not used in the resource evaluation of this report. They do warrant additional exploration to establish their validity.
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The Southwest Vein is commonly not a single coherent vein, but a series of centimetre to decimetre-scale veins that occur within a relatively discrete interval. Thickness of the interval varies in true width from less than one, to several meters’ true width.
Gold content is highly variable: the 2005 drilling program generated 256 samples in which the gold content ranged from less than detection (0.01 g/t gold) to 338.4 g/t gold. About 13 percent of the samples (34) had a gold content at or below the detection limit. Fourteen percent (14 percent) of the samples (36) contained more than one g/t gold. Distribution of gold within the Southwest Vein is also variable although the majority of holes drilled through the Southwest Vein encountered gold values in excess of one g/t: 42 holes have been drilled to date of which 33 intersected the vein; nine vein intercepts contained less than one g/t gold; 24 (57 percent) contained more than one g/t gold.
Although molybdenum is commonly observed to be present in the Southwest Vein, it appears to have no quantifiable relationship with gold: the correlation coefficient for 380 samples is -0.01. The highest correlation is with silver (coefficient of 0.50) and secondly arsenic (coefficient 0.38).
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8 DEPOSIT TYPES Blackdome is a low-sulphidation epithermal (LS) gold deposit and Elizabethgold deposit belong to a well-recognized group of deposits referred to as mesothermal, orogenic or greenstone-hosted quartz-carbonate gold vein deposits. Blackdome Property
Blackdome is a low-sulphidation epithermal (LS) gold deposit (Figure 8-1). LS deposits occur distal to volcanic vents or magmatic sources where hydrothermal fluids are highly acidic. Interaction with host rocks and meteoric water neutralizes the pH of these fluids during transport to sites of LS mineralization. These deposits form at relatively shallow depths, generally 1 km or less, from surface and at temperatures ranging from 150 to 300°C from fluids of neutral pH and low salinity (White and Hedenquist, 1995). Gold is precipitated during the boiling of ore fluids when hydrogen sulphide is vaporized.
Figure 8-1: Schematic for Geothermal/Hydrothermal Systems
Source: White and Hedenquist 1995
Vivian (1988) conducted fluid inclusion work that confirmed low-salinity fluids and a temperature range of 260 to 295°C.
LS deposits are associated with extensional structures and magmatic sources but may be found in a variety of environments. They are present in high-relief terrane near collapsed calderas or volcanic edifices as well as in low-relief terrane with Maar volcanoes and hot springs. They are commonly hosted in structures creating horst and graben topography or listric faulting.
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Preserved LS systems are capped by sinters or travertines, steam-heated alteration and silicification around the water table (Figure 8-2). These features typically show anomalous gold- silver values, as well as arsenic, antimony, selenium, and mercury, but have presumedly all been eroded at Blackdome. Nevertheless, adularia-, crustiform- and colloform-banding are all indicative of the mid-upper portions of LS systems.
Figure 8-2: Schematic for Epithermal Alteration
Source: modified from Buchanan 1981
Illite-smectite wall rock alteration is common towards the top of these systems with a distal alteration of chlorite-smectite-carbonate. The lowermost extent of LS systems show sericite- carbonate alteration of wall rocks, and quartz veins are massive with calcite present.
There is little to indicate that drilling has reached the lower extent of the LS system at Blackdome, but an interpretation would benefit from TerraSpec sampling and alteration mapping.
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8.1 Elizabeth Property The Elizabeth gold-bearing veins were deposited from low-salinity fluids at 300 to 400°C and 1.25 to 1.75 kbar (Leitch, 1990). The vein style, structure, mineralogy, and alteration are all similar to those defined for orogenic gold deposits (Groves et al., 1998).
The Elizabeth gold deposits belong to a well-recognized group of deposits referred to as mesothermal, orogenic or greenstone-hosted quartz-carbonate gold vein deposits. These deposits include the Mother Lode district in California and most of the greenstone-hosted gold deposits in the Canadian Shield, including the Timmins, Val d'Or, and Red Lake camps. These deposits are quartz-carbonate veins hosted in moderately to steeply dipping brittle-ductile shear zones and, locally, in shallow dipping extensional fractures.
The 2005 SRK Technical Report (Siddorn and Lee, 2005) states:
Historically, the Elizabeth vein systems have been described as both mesothermal and epithermal, with evidence cited for the veins forming in both normal-extensional (Gruenwald 2002) and reverse-compressional (Schiarizza et al., 1997) structural settings. Resolving this contradiction has strong implications on how it is explored. Epithermal gold deposits tend to have shallow depth extents and long strike extents, indicating exploration should be aimed at drilling along strike rather than down dip. Mesothermal gold deposits have deeper depth extents (often with mineralization to 1-2km present depth) and shorter strike extents.
The terms mesothermal and epithermal were first described by Lindgren (1933). He defined the two groups of deposits based on their mineralogy and mode of occurrence. Mesothermal type deposits form at moderate temperatures (200-300°C) and pressures, (approximately 1-5 km depth). They are commonly associated with chalcopyrite, sphalerite, galena, tetrahedrite, bornite, chalcocite, quartz, carbonates (calcite, siderite, rhodochrosite) and pyrite gangue minerals. Silver is usually present, but typically subordinate to gold, with Au:Ag rations in the range of 5:1 to 10:1. They often display ribbon-laminated structures parallel to vein walls and wall rock breccias. Some mesothermal deposits are associated with ultramafic rocks including listwanite (fuchsite or mariposite, green mica bearing altered varieties). Mesothermal gold deposits tend to form in compressional settings.
The historical deposit model of the Elizabeth Gold Project is mesothermal-style, gold-bearing veins. The veins formed by fluids moving along fracture systems which were generated by movement along the nearby Yalakom fault and related fault systems. The similarity in appearance, mineralogy, and geological setting of the veins to the Bralorne-Pioneer deposits no doubt attracted Bralorne Mines in the 1940s. Consequently, the Bralorne-Pioneer deposit has been the primary model type used in exploration at the Elizabeth Gold Project and references in the geological literature to Bralorne-Pioneer are therefore indirectly relating to the Elizabeth Gold Project.
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The Elizabeth and Bralorne gold deposits display many similarities and differences. Both deposits display evidence of mesothermal gold mineralization in the form of laminated, ribboned quartz vein hosted gold, associated with propylitic alteration, pyrite, sphalerite, and galena. Both deposits are also located in similar age ophiolite sequences, the Bralorne-East Liza Complex at Bralorne and the Shulaps Ultramafic Complex at Elizabeth. However, the Bralorne deposit is hosted within a gabbroic crustal plutonic sequence of the Bralorne-East Liza Complex ophiolite, whereas the Elizabeth deposit is hosted in a late stage porphyry intrusion which has intruded the Shulaps Ultramafic Complex ophiolite. The two ophiolitic hosts also represent different levels of the ophiolite sequence. At Bralorne, the Bralorne-East Liza Complex is dominated by the gabbroic crustal plutonic section, whereas the Shulaps Ultramafic Complex, at Elizabeth, is dominated by the tectonized deeper harzburgite.
The Elizabeth and Bralorne deposits both display a spatial and temporal association with felsic dykes. At Bralorne, gold mineralization is associated with a suite of albitite dykes. At Elizabeth, gold mineralization is associated with a suite of aplitic (possibly, also albitite) dykes, that crosscut the Blue Creek porphyry.
The difference in age and structural controls on auriferous veining, highlight major divergences in the geology of the two deposits. Mineralization at Bralorne formed during east to west, contractional tectonics during the mid to late Cretaceous. We suggest gold mineralization at Elizabeth formed during extensional tectonics during the mid-Eocene.
Despite the Elizabeth veins seemingly being generated by extensional tectonics, the ribboned, stylolitic quartz veins are diagnostic of orogenic, mesothermal gold mineralization. The associated sulphides, wall rock alteration and Au:Ag ratios likewise support this interpretation.
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9 EXPLORATION This section summarizes the exploration activities that have been completed by Tempus. The information details the findings and recommendations related to a geochemical survey performed by Coast Mountain Geological Mineral Exploration Consultants (CMG) on behalf of Sona Resources Ltd. (Sona).
Sona collected 1,740 B-horizon soil samples over a three-week period in the fall of 2019.
The samples were collected across a single grid at each target. The 2019 survey grid at Blackdome expanded on the grid and results from the 2018 exploration program detailed by Nichols and Despotovic (2019). The wider spaced 2019 reconnaissance survey grid at the Elizabeth target was draped over a prominent southeast-northwest-trending ridge identified as a geologically significant structure in relation to mineralization at the Elizabeth mine. It was located approximately 4 km to the east of the main workings.
The geochemical sampling, results, and analyses from both targets identified statistically significant gold trends that have a strong correlation with a group of select pathfinder elements. The expanded grid at Blackdome extended the geochemical trend identified in 2018 as well as discovering two new trends parallel to and southeast of the 2018 anomalies. An exceptional soil sample (high of ~0.9 g/t Au) was collected during this program. The exploration grid at Elizabeth identified a 150 by 250 m northeast-southwest-trending gold anomaly in an area with no known mineral showings, which included multiple samples >0.1 g/t Au to a maximum of ~0.65 g/t Au.
CMG concluded that a follow-up first-phase of exploration work should consist of infill sampling around anomalous trends; sampling beyond the extent of current geochemical grids; and prospecting and mapping high-priority targets generated from previous work programs. Trenching would follow if the anomalies could be substantiated by detailed geological observations. At both properties, digital compilation of historical data would be an asset prior to advancing field programs (Lewis, 2019).
As of the effective date of this report, Tempus has not conducted any exploration work apart from a drilling program on the Blackdome-Elizabeth Gold Project.
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10 DRILLING In July 2020, Tempus commenced a diamond drilling program at the Blackdome property. It is currently ongoing as of the effective date of this Report and is expected to be completed in early October 2020. To date, Tempus has drilled 20 holes totaling 4,006.5 m with an estimated total of 5,000 m by the end of the program in early October 2020.
Full Force Diamond Drilling Ltd. (Full Force) has been contracted for the drilling program. It is using a standard skid-mounded, hydraulic diamond drill rig. Coring is completed using an HQ- sized (63.5 mm) drill bit. Full Force is using an EZ-Shot Reflex instrument to conduct downhole surveys every 30 m starting at 15 m downhole.
Tempus is using historical drill pads and existing roads to minimize surface disturbance. Drill hole depths are shallow, averaging 200 m, and range in dip from -45 to -65 degrees. Drill holes are targeting known quartz veins and structures to intersect as close to normal angles as possible.
Core recovery is generally excellent. Except, where mineralized quartz veins and structures occur, core recovery drops to between 50 and 80%. Poor core recovery is typical in ore zones and is recorded in previous drill logs.
Assays are pending as of the effective date of this Report.
Table 10.1 shows the drill hole locations and orientations (handheld GPS; recorded in NAD83, UTM Zone 10N coordinates.
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Table 10.1: 2020 Blackdome Drilling Program Hole Target UTM Easting UTM Northing Elevation Azimuth Hole ID Dip Depth (Vein) (NAD83 Z10) (NAD83 Z10) (m) (grid) (m) BD-20-01 Giant 535496 5687609 2,070 115.1 -65 249 BD-20-02 Giant 535496 5687609 2,070 132 -50 195 BD-20-03 Giant 535496 5687609 2,070 129.2 -60 216 BD-20-04 Giant 535585 5687683 2,062 134.7 -50 162 BD-20-05 Giant 535585 5687683 2,062 120.8 -50 168 BD-20-06 No. 17 536330 5687321 2,030 137 -60 171 BD-20-07 No.17 536330 5687321 2,030 124.8 -60 174 BD-20-08 Redbird 535876 5687264 2,110 138 -55 222 BD-20-09 Redbird 535876 5687264 2,057 125 -60 228 BD-20-10 Giant 535367 5687259 2,090 303 -45 171 BD-20-11 Giant 535367 5687259 2,090 304 -57 202.5 BD-20-12 Giant 535367 5687256 2,090 284.5 -45 240 BD-20-13 Giant 535470 5687578 2,075 130.3 -62 213 BD-20-14 Redbird 536033.9 5687386 2,055 131 -45 183 BD-20-15 Redbird 536033.9 5687386 2,055 155 -47 178 BD-20-16 No.19 534644 5684172 2,025 130 -45 309 BD-20-17 New 534896 5683965 2,020 125 -45 210 BD-20-18 New 534896 5683965 2,020 138 -44 183 BD-20-19 New 534788 5683879 2,040 127.6 -43 186 BD-20-20 No.19 534644 5684172 2,025 126.3 -42 146
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11 SAMPLING PREPARATION, ANALYSES AND SECURITY Logging and sampling are completed on site under the supervision of a Tempus Geologist. Drill core is typically sampled at 1 m intervals but range between 0.5 and 2 m. A standard wet saw with a diamond blade is used to cut the core; half is sent for analysis and the other half is stored on site in core racks.
The half core that is sampled and sent for analysis is placed in high-strength poly bags and identified with waterproof sample ID tags and secured using zip ties. Samples are then placed in a larger rice bag with up to four samples per bag; they are secured with another zip tie and labelled with sample numbers and a shipping address.
Samples are driven by a Tempus employee to a commercial trucking company in Williams Lake, B.C. The commercial trucking company then takes the samples directly to SGS Canada Inc. (SGS), located at 3260 Production Way, Burnaby B.C. for analysis.
Tempus geologists conduct strict QA/QC standards and protocols on all sampling. One in every 10 samples is a control sample which includes either a blank, standard or a lab preparation duplicate. If visible gold is identified, a blank and a standard sample will immediately follow the sample.
Tempus has contracted SGS, an ISO 9001 certified laboratory, for assay analysis. Core samples sent to the lab will be crushed, 75% passing 2 mm, and pulverized to 85% passing 75 microns. A 50 g pulp is analyzed by fire assay atomic absorption spectroscopy (AAS) for gold along with multi-element inductively coupled plasma-mass spectrometry (ICP-MS). Any sample with a grade over 10 g/t Au will be re-assayed by fire assay with a gravimetric finish.
Multi-element ICP-MS includes: Ag, Al, As, Ba, Bi, Ca Cd, Ce, Co, Cr, Cu, Fe Ga, Hg, K La, Mg, Mn, Mo, Na, Ni, P, Pb, Rb, Sb, Sc, Sn, Sr, Th, Ti, Tl, U, V, W, Y, Zn
It is the Author's opinion that the drill core sample preparation, security, and analytical procedures used at Blackdome are consistent with generally accepted industry best practices and are, therefore, reliable for the nature of this program, and that the quality of the drill core assay results are adequate for the purpose of the Project.
There are no analytical results nor QA/QC data being report within this Technical Report as assays are pending at the effective date.
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12 DATA VERIFICATION There is no current exploration or development data being reported in the creation of this Technical Report. Additionally, this report is not the subject of a current mineral resource estimate.
Garth Kirkham, P. Geo., first visited the property on August 4 to 5, 2020. The site visit included an inspection of the property, offices, vein exposures, core storage facilities and a tour of major centers.
Mr. Kirkham is confident that the data and results are valid and can be relied upon, including methods and procedures used. It is the opinion of Garth Kirkham, the independent Author, that all work, procedures, and results have adhered to best practices and industry standards required by NI 43-101.
As the Blackdome Mine and Elizabeth Gold Property have a long history and the fact that the historic projects have been combined, there are significant amounts of historic data and records that add value to current exploration.
The historical exploration activities (Section 6, History) were completed by previous operators. The QP has not validated or verified the information or any underlying data; however, the information is considered reasonable and reliable.
The geological information used to create this Technical Report was from publicly available sources, and information provided by Tempus, which is supported by publicly available reports and is therefore deemed to be reliable by the QP.
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13 MINERAL PROCESSING AND METALLURGICAL TESTING There has been no current mineral processing and metallurgical testwork directly performed in relation to this Report.
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14 MINERAL RESOURCE ESTIMATES There are no current mineral resource estimates to be reported in this Technical Report.
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15 MINERAL RESERVE ESTIMATES There are no mineral reserve estimates for the Project.
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16 MINING METHODS This section is not applicable.
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17 RECOVERY METHODS There are no other relevant data or information.
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18 PROJECT INFRASTRUCTURE As this is not considered an advanced project at this time, this section is not applicable.
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19 MARKET STUDIES AND CONTRACTS This section is not applicable.
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20 ENVIRONMENTAL STUDIES, PERMITTING OR COMMUNITY IMPACT As this is not considered as advanced project at this time, this section is not applicable.
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21 CAPITAL AND OPERATING COSTS There are no relevant data or information.
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22 ECONOMIC ANALYSIS There are no relevant data or information.
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23 ADJACENT PROPERTIES The Bralorne mine which is located 30 km southwest of the Blackdome-Elizabeth Project is 100% owned by Talisker Resources Ltd. It is situated within the Bridge River district in southwestern B.C. The geological setting and metallogeny of the region is described by Hart et al. (2008) and Church and Jones (1999).
The Bridge River district is situated at a tectonic boundary between the Cache Creek and Stikine allochthonous terranes. The Bridge River terrane is possibly equivalent to the Cache Creek terrane comprising slabs of oceanic and transitional crust that were stacked against the continental margin together with island-arc-related units of the Cadwallader terrane, interpreted as part of the Stikine terrane. Diverse rock units of these two terranes are structurally deformed and imbricated in the area, together with large fault-bounded slices of gabbroic and ultramafic rocks. These early structures are crosscut by later north- and northwest- -trending major faults related to the Fraser-Yalakom regional dextral strike slip fault system and by Late Cretaceous and Tertiary granitic plutons and related dykes (Church, 1996).
The Bridge River terrane comprises Mississippian to Middle Jurassic accretionary complexes of oceanic basalt and gabbro and related ultramafic rocks, chert, basalt, shale, and argillite. It is juxtaposed with Late Triassic to Early Jurassic island-arc volcanic rocks and mostly marine, arc- marginal clastic strata of the Cadwallader terrane. These assemblages are variably overlain, mostly to the north, by clastic, mostly non-marine, successions belonging to the Jurassic- Cretaceous Tyaughton Basin (Hart et al., 2008).
The region has been intruded by a wide range of Cretaceous and Tertiary plutonic and volcanic rocks and their hypabyssal equivalents. Most significant among these are the dominantly Cretaceous granitoid bodies that form the Coast Plutonic Complex (CPC), which is locally characterized by the 92 Ma Dickson-McClure intrusions and the large individual bodies of the Late Cretaceous Bendor plutonic suite. Hypabyssal magmatism is reflected by emplacement of porphyritic dykes between 84 and 66 Ma; the youngest magmatic event was 44 Ma lamprophyre dykes (Hart et al., 2008).
The Bridge River district has been deformed by mid-Cretaceous contractional deformation within the westerly trending Shulaps thrust belt and by contractional and oblique-sinistral deformation associated with the Bralorne-Eldorado fault system. The timing of this deformation and metamorphism is ca. 130 to 92 Ma, with synorogenic sedimentary flysch, as young as mid- Cretaceous, cut by the faults (Hart et al., 2008). The Bridge River and Cadwallader terranes are juxtaposed along the Bralorne-Eldorado fault system, which, in the Bridge River district, consists of linear, tectonized and serpentinized slices of late Paleozoic mafic and ultramafic rocks known as the Bralorne-East Liza Lake thrust belt, a 1 to 3 km wide zone defined by Schiarizza et al. (1997).
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The principal stratigraphic assemblages of the local area include the Bridge River Complex and Cadwallader Groups. Nomenclature is described by Leitch (1990) and Church and Jones (1999). The Bridge River Complex consists of two packages, sedimentary and volcanic, with a thickness of 1,000 m or more of ribbon chert and argillite with very minor discontinuous limestone lenses and large volumes of basalt, some pillowed (Cairnes, 1937). The Cadwallader Group has been subdivided into three formations: lowermost sedimentary Noel Formation, Pioneer Formation greenstones, and upper Hurley Formation sedimentary rocks (Cairnes, 1937). The Pioneer Formation, commonly called “greenstones” in mine usage, ranges from fine-grained, massive amygdaloidal flows and medium-grained dykes or sills, to coarse lapilli tuffs and aquagene breccias. It is estimated to be at least 300 m thick in the Cadwallader Valley (Cairnes, 1937) but may be thicker elsewhere. The Hurley Formation comprises a rhythmically layered green volcanic wacke and darker argillite. The Noel Formation consists of black argillites that are less calcareous than those of the Hurley; however, differentiation between the two formations is difficult (Cairnes, 1937).
The gold-quartz veins form an approximate en echelon array. They have strike lengths of as much as 1,500 m between bounding fault structures and extend to at least 2,000 m deep, with no significant changes in grade or style of mineralization recorded. Ores consist mainly of ribboned fissure veins with septa defined by fine-grained chlorite, sericite, graphite or sulphide minerals.
Veins are dominantly composed of quartz, with minor carbonate minerals, mainly calcite and ankerite, and lesser amounts of chlorite, sericite, clay-altered mariposite, talc, scheelite and native gold. Sulphides are present and, although locally abundant, make up less than 1% of total vein volume. Pyrite and arsenopyrite are the most abundant sulphides with lesser marcasite, pyrrhotite, sphalerite, stibnite, galena, chalcopyrite and rare tetrahedrite.
Total historical production from the Bralorne and Pioneer mines is recorded as 7.3M tonnes grading 17.7 grams per tonne gold (8.0M short tons at 0.52 ounces per ton), equating to 129.14 tonnes (4.2M ounces) of gold (Church and Jones, 1999). Silver production from the deposits is recorded as 29.61 tonnes (952,000 ounces), zinc production as 297 kilograms, and lead production as 216 kilograms. Minor scheelite production occurred during the World War II.
The mineral resource estimate reported herein evaluated the potential for mineable underground resources in and around established veins. In addition, new veins were identified based on current drilling results. The mineral resources are based on the “reasonable prospects for eventual economic extraction” requirement. This requirement generally implies that quantity and grade estimates meet certain economic thresholds and that mineral resources are reported at an appropriate cut-off grade, taking into account extraction scenarios and processing recovery. The cut-off grade chosen for reporting mineral resources was 0.11 oz/t Au which is based on a gold price of US$1,450; gold recovery of 90%; and mining, processing, and G&A costs of $115, $45, and $40, respectively.
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Classification of mineral resources was based on CIM definition standards, where distance-to- nearest-composite was used as a guide, and Measured resources were within 25 ft, Indicated resources were within 50 ft, and Inferred resources were within 100 ft. Final classification of mineral resources was based on the CIM definition standards, which dictate that continuity must be demonstrated. The spacing distances are intended to define contiguous volumes, and they should allow for some irregularities due to actual drill hole placement. The final classification volume results were smoothed manually to arrive at a coherent classification scheme.
The mineral resources are shown in Table 23.1.
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Table 23.1: Mineral Resource for Bralorne Gold Project effective date September 4, 2020 Mineral Resource for Bralorne Gold Project Measured Indicated Measured & Indicated Inferred Vein Au Au Au Au Au Au Tons Au opt Tons Au opt Tons Tons Ounces Ounces opt Ounces opt Ounces 51b FW 8,000 0.265 2,000 29,000 0.210 6,000 38,000 0.222 8,000 136,000 0.203 26,000 51bFW/HW ------25,000 0.620 16,000 25,000 0.667 16,000 35,000 0.415 14,000 Alhambra 15,000 0.284 4,000 15,000 0.275 4,000 30,000 0.280 8,000 9,000 0.204 2,000 BK 21,000 0.481 10,000 47,000 0.351 16,000 68,000 0.391 26,000 35,000 0.184 6,000 BK-9870 6,000 0.548 3,000 7,000 0.277 2,000 13,000 0.396 5,000 2,000 0.243 1,000 BKN ------35,000 0.380 13,000 35,000 0.380 13,000 44,000 0.314 14,000 Prince ------0 12,000 0.173 2,000 Shaft ------40,000 0.283 11,000 40,000 0.283 11,000 24,000 0.283 7,000 Taylor ------13,000 0.174 2,000 1,000 0.174 3,000 21,000 0.235 5,000 TOTAL 49,000 0.394 19,000 211,000 0.341 72,000 260,000 0.351 91,000 317,000 0.231 78,000 Source: Bralorne Technical Report (Kirkham, 2020)
Notes: 1. Numbers are rounded and therefore may not add up exactly. 2. Mineral Resources reported demonstrate reasonable prospect of eventual economic extraction, as required under NI 43-101. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. 3. The Mineral Resources may be materially affected by environmental, permitting, legal, marketing, and other relevant issues. 4. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. However, it is reasonably expected that the majority of Inferred Mineral Resources could have been upgraded to Indicated Resources.
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Exclusive of the mineral resources reported in Table 23.1, there is geological potential within the vein domains between 150,000 and 250,000 tons at a gold grade of between 0.25 and 0.35 oz/t or between 40,000 and 70,000 ounces of gold. It is important to note that the potential tonnes and grade are conceptual in nature, and there has been insufficient exploration to define a mineral resource. In addition, it is uncertain whether further exploration will result in a delineated target. The basis for the estimate of geological potential, as stated here, has been derived from existing assay and composite data along with geological interpretations. However, they are outside and beyond the Measured, Indicated and Inferred delineated boundaries.
The source of the information related to the Bralorne Project is derived from the NI 43-101 Technical Report (Kirkham, 2020) on behalf of Talisker Resources Ltd.
The information related to the Bralorne mine has been taken from Talisker’s 2020 NI 43-101 Technical Report. It should be noted that the information is not necessarily indicative of the mineralization on the Blackdome-Elizabeth Property which is the subject of this Report.
Avino Gold and Silver Mines Ltd. (Avino) holds mineral claims totalling 1,240.4 ha covering the past-producing Minto mine, located approximately 12 km south of the Project beside Highway 40 on Carpenter Lake.
The Minto mine is underlain by sedimentary and volcanics of the Bridge River Complex. Vein mineralization, alteration and structural controls are similar to those observed on the Blackdome- Elizabeth Gold Project. Upper Cretaceous dykes cut north to northwest across the sediments, dipping steeply. Mineralization occurs in shear zones following the intrusive contact of porphyry dykes or the stratigraphic contact between sediments and volcanics. The principal ore shoot occurs in cherty quartzites in a strong shear which follows, in part, along the footwall of a 6 m wide, altered, fine-grained feldspar porphyry dyke (Minto dyke). Veins up to 1.2 m wide contain lenses and narrow bands of quartz, calcite and ankerite with coarsely crystalline sulphides and gold. Vein material generally has a banded structure defined by alternating metallic mineral concentrations and quartz-carbonate gangue. Wallrock alteration is characterized by rare to abundant ankerite and calcite with lesser chlorite, sericite and mariposite.
The Minto mine was in operation from 1934 to 1940; more than 2,130 m of underground work was completed, and a total of 80,650 tonnes of ore grading 6.8 grams gold and 19.9 grams silver per tonne were produced. The mine yielded 546 kg (17,558 oz) of gold, 1,573 kg Ag, 9,673 kg Cu, and 56,435 kg Pb.
Note: The information related to the Minto mine has been provided by Avino and the production data is listed on the Avino website. The Author is not able to validate and verify the information and it should be also noted that the information is not necessarily indicative of the mineralization on the Blackdome-Elizabeth Property which is the subject of this Report.
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24 OTHER RELEVANT DATA AND INFORMATION There are no other relevant data or information.
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25 INTERPRETATION AND CONCLUSIONS Tempus Resources Ltd (Tempus or the Company) (ASX: TMR) is a mineral exploration and resource development company based in Perth, Australia.
Tempus acquired the Blackdome-Elizabeth Gold Project from Skeena Resources Ltd. (Skeena) on November 18, 2019. Tempus is in the process of implementing a multi-stage, multi-year plan to systematically explore and develop the historical Blackdome-Elizabeth mining camps.
Given the current care-and-maintenance state of the Blackdome Gold Mine, there is limited activity at the site. Tempus is in compliance with all permitting requirements as of the effective date of this Technical Report.
The Blackdome and Elizabeth properties are currently in the exploration phase with activities on site limited to drilling, sampling, and geological mapping. Based on the information the Author has reviewed, Tempus appears to have all necessary exploration permits in-place or in progress.
The Project has in place all necessary permits to operate and explore on the Blackdome property. Tempus has submitted a Notice of Work for the Elizabeth property and is currently awaiting the MX permit.
Completion of a final draft of the Interim Closure and Reclamation Plan is required by December 31, 2020. Tempus has applied for an extension, and, although the Company has had conversations with the regulators, it does not have an extension of this compliance date in writing.
The Blackdome and Elizabeth projects lie within the traditional territories of the Secwepemc (Shuswap), St’at’imc and Tsilhqot’in First Nations. Immediately after finalizing the acquisition of the Blackdome-Elizabeth Gold Project from Skeena, Tempus reached out to all the First Nations, communities, councils and settlements involved in the affected areas. The Company understands that ongoing meaningful engagement with Indigenous communities is very important, and it has committed to ensuring all opportunities for success are explored. Negotiations and agreements are in place and on-going. Current relations are open and positive, and there is no reason to believe that will change in the foreseeable future. The infrastructure at the Blackdome mine is well developed. The site includes offices, mill infrastructure, underground workshop, mine dry, core logging and storage, bunkhouse, kitchen, ambulance, including fuel storage. The site has a well-developed and well-maintained road network along with a high-speed Wi-Fi network and Internet capabilities. The mine and a 300 ton-per-day process plant operated from 1986 to 1991 producing approximately 232,000 ounces of gold at an average grade of more than 20 g/t Au.
The Tailings Storage Facility (TSF) is permitted under the existing mine permit, M-171 with the Province of British Columbia, Canada. The TSF is approximately 250 m long by 150 m wide. The TSF embankment is an earthfill dam approximately 36 m high, as measured from the embankment crest to the downstream toe. Mine tailings were discharged as a slurry into the TFS.
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The infrastructure at the Elizabeth property includes an upgraded and refurbished camp with a 30-person capacity, including an Atco bunkhouse, commercial kitchen facilities, technical and administration offices, core storage, core-logging and -cutting facilities, fuel storage and First Aid facilities, including an ambulance. The site has a well-developed and well-maintained road network along with a high-speed Wi-Fi network and Internet capabilities.
The Blackdome deposit is a low-sulphidation epithermal Au-Ag-bearing system characterized by low-temperature deposition of quartz veining, clay alteration, bleaching and silicification. The mineralization occurs as relatively high-grade small shoots located along fault zones, often in proximity to branches or in zones of steepening of the host structures. Mineralization consists of fine- to medium-grained disseminated and fracture-filling electrum and Ag sulphide with minor Ag sulphosalts in a gangue of quartz, adularia, pyrite, and carbonate.
The Elizabeth deposit is underlain by Late Paleozoic ultramafic rocks (altered to listwanite) intruded by Cretaceous stocks and dykes. Gold occurs in a low-sulphidation quartz vein system, mainly hosted by porphyritic feldspar intrusions. Gold content is highly variable and nuggety as coarse gold is common. Vein alteration is associated with arsenic, copper, and molybdenum.
Extensive exploration work has been completed throughout the Property for many years. Current exploration activities are focused on expanding existing vein structures along with identifying new veins. As with many historical projects, there is potential for gains through the mining of historical data and records.
Drilling and sampling have commenced at the Blackdome Property; however, assay results are pending as at the effective date of this Technical Report.
The Author’s interpretations and conclusions by area, including key risks and opportunities for the Project are shown in Table 25.1.
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Table 25.1: Key Project Risks and Opportunities Economic Project Element Comment Risk Opportunity Risk Level A significant amount of historical data remains to be Issues with existing analyzed and Potential discovery of new data may be Database Medium digitized. The veins. Expansion of existing discovered which will database should be veins. cause uncertainty. continually reviewed and renewed to ensure data quality. The historical data If data cannot be The more historical data will be key to any validated and that can be validated and future plans to verified, then Database Medium utilized, the less estimate current significant drilling confirmation drilling will be resources for and exploration will required. Blackdome-Elizabeth. be required. Exploration has continued to result in There is no guarantee discovery and An intelligent, systematic that exploration and expansion of program will be successful Exploration Medium discovery will result potential mineral in uncovering new in an economically resources in a discoveries. viable operation. historical mining camp. It has been proven that historical projects benefit Much of the There is no guarantee greatly from the exploration data and new techniques and employment of current Exploration Medium results are historical data will result in state-of-the-art techniques and not current. discovery. and methods. This premise is particularly true in the region and vicinity. Vein solids do not Could cause Would be easier to validate honor drill hole and Geology Low differences in and verify for audit composite data volumes. purposes. precisely. The geology of the Further work may An increased area is well known disprove previous understanding and Geology Medium and documented, models and therefore derivation of alterative supported by result in theories may result in
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Economic Project Element Comment Risk Opportunity Risk Level extensive data, condemnation of further discovery and analysis, and study. targets and potential significant expansion for negative economic the Project. outcomes. Within this historical mining camp, it is feasible Exploration has There is no guarantee that addition discovery is continued to result in that exploration and likely and that an Resources Medium discovery in a discovery will result intelligent, systematic historical mining in an economically program will be successful camp. viable operation. in uncovering new discoveries. Level of detail related to First Nations and Uncertainty could Increased certainty of local community arise should issues be First Nations Medium project success and social relationships, encountered or are license. negotiations, and not known. agreements. Create synergies with operating mines in close Creating partnership proximity and reduce with neighboring costs. In addition, there is Company concession holders. May limit exploration the potential for Low Conflict/Synergies Also partnering with programs and access. underground exploration organizations in the and activities that will region. require Mine Rescue personnel which exist at other mines in the region. Lower gold price will Gold prices are change size and currently highly Higher gold price will grade of the potential Gold Price Low volatile, and there is a change size and grade of targets and create great deal of market the potential targets. opportunity for uncertainty. growth. Travel and safety is a concern; visiting site Inability to travel and Opportunity to employ in- could be problematic. perform work COVID-19 Medium country resources and Work performed programs to advance personnel. would need to be the properties. done by local
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Economic Project Element Comment Risk Opportunity Risk Level companies as much as possible. Stopes, mined out areas, drifts and Could result in the development have Any exclusions would discovery of panels that Mined-out Areas Medium been digitized and reduce the volumes were previously modelled so that the and tonnages. uneconomic to be re- volumes are evaluated. extracted.
26 RECOMMENDATIONS To further evaluate the potential of the Blackdome-Elizabeth Project, the following work program is recommended:
Explore for significant new views with an aggregate of 11,000 m of diamond drilling completed over two phases as per below. Phase 2 will be contingent on the success of Phase 1 and expand upon results achieved during the Phase 1 exploration program. Note that approximately $1,000,000 has been expended on the Project on drilling and related activities as at the effective date. o Phase 1 — 4,000 m of diamond drilling to end April 2021 o Phase 2 — 7,000 m of diamond drilling Continue with the historical data compilation along with QA/QC of the master database. Explore using mapping and surface sampling. Acquire and analyze external data sources from other companies and government sources. Continue with environmental work and baseline studies. Continue with First Nations and Community consultations. Check sampling to validate and verify historical data. Rehabilitate the underground workings in a safe and cost-effective manner that can be practically performed and permitted. Ensure all permits are up-to-date and in compliance.
A budget of $3,089,350 is estimated to complete the aforementioned work and is presented in Table 26.1.
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Table 26.1: Budget for Proposed 2-Phase Work Program Unit # of Description $/Unit Total $ Units Phase 1 Drilling (Remaining) Meter 4,000 200 800,000 Data compilation, Model update including QA/QC Hour 450 250 112,500 Environment and Permitting Month 6 13,000 78,000 Reporting Hour 200 200 40,000 Sub total for Phase 1 — to end April 2021 1,030,500 Phase 2 Drilling Commencement Meter 7,000 200 1,400,000 Environment and Permitting Month 6 13,000 78,000 Sub total for Phase 2 1,478,000 G&A - Mine Maintenance 300,000 Contingency 280,850 Total 3,089,350 Source: Kirkham, 2020
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27 REFERENCES Bird, A.G., 1989. A geologic interpretation of the Blackdome Mine, Caribou District, British Columbia, Canada, internal report to J-Pacific Gold, 9 pp.
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Buchanan, L.J., 1981. Precious metal deposits associated with volcanic environments in the Southwest. In: Dickson, W.R., and Payne, W.D., eds., Relations of tectonics to ore deposits in the Southern Cordillera. Arizona Geological Society Digest, v.14, pp. 237-262.
Buchholz, J., 1988. Blackdome 1987 exploration summary report, internal report to Blackdome Mining Corp., 20 pp.
Cairnes, C. E. (1937). Geology and mineral deposits of Bridge River mining camp, British Columbia Geological Survey of Canada, Memoir 213, 140 p.
Church, B.N., 1996. Geology and mineral deposits of the Bridge River mining camp; BC Ministry of Energy, Mines and Petroleum Resources, Paper 1995-3, 160 p.
Church, B. N., & Jones, L. D. (1999). Metallogeny of the Bridge River Mining Camp (092J10, 15 & 092O02).
Church, B.N. and Pettipas A.R. (1989): Research and exploration in the Bridge River mining camp (92J/15, 16); in Geological Fieldwork 1988, BC Ministry of Energy, Mines and Petroleum Resources, Paper 1989-1, p. 105-114.
Colpron, M., Nelson, J.L., Murphy, D.C., 2007. Northern Cordilleran terranes and their interactions through time. GSA Today, v.17, no.4., pp. 4-10.
Currie, L.D., and Parrish, R.R., 1997. Paleozoic and Mesozoic rocks of Stikinia exposed in northwestern British Columbia: Implications for correlations in the northern Cordillera. GSA Bulletin, v.109, no.11, pp.1402-1420.
El-Rassi, D., Harrop, J., Siddorn, J.P., Chartier, D., and Couture, J.F., 2009. Mineral resource evaluation Elizabeth Gold Project, British Columbia, Canada. SRK Consulting technical report prepared for J-Pacific Gold Inc., pp. 98.
Goddard, M. et al., 2010. Preliminary Economic Assessment for the Blackdome-Elizabeth Gold Project, British Columbia, Canada. June 10, 2010 presented by Micon (Canada) Ltd.
Groves, D. I., Goldfarb, R. J., Gebre-Mariam, M., Hagemann, S. G., & Robert, F. (1998). Orogenic gold deposits: a proposed classification in the context of their crustal distribution and relationship to other gold deposit types. Ore Geology Reviews, v. 13, pp 7-27.
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Gruenwald, W., 2002. Report on the Geochemical and Diamond Drilling Programs, Elizabeth Property, Lillooet Mining Division, British Columbia. Internal Report for J-Pacific Gold Inc., pp. 59.
Hammer, P.T.C., and Clowes, R.M., 2004. Accreted terranes of northwestern British Columbia, Canada: lithospheric velocity structure and tectonics, Journal of Geophysical Research, v.109, issue. B6.
Harrop, J., 2008. Technical Report on the Elizabeth Property, Lillooet Division, British Columbia, May 22, 2008.
Hart, C. J., Goldfarb, R. J., Ullrich, T. D., & Friedman, R. (2008). Gold, Granites, and Geochronology:Timing of Formation of the Bralorne-Pioneer Gold Orebodies and the Bendor Batholith, Southwestern British Columbia (NTS092J/15). Geoscience British Columbia, Summary of Activities 2007, Geoscience British Columbia, Report 2008-1, pp 47-54.
Hedenquist, J.W., and Lowenstern, J., 1994. The role of magmas in the formation of hydrothermal ore deposits. Nature, v.370, pp. 519-527.
Lewis, J., 2019. CMG Geochemical Report on the Blackdome-Elizabeth Property effective date December 19, 2019.
Kirkham, G.D., 2020. NI 43-101 Technical Report for the Bralorne Property effective date September 4, 2020.
Knight Piésold, 1999.
Knight Píésold Ltd. 2007. J-Pacific Gold Inc. Blackdome Mine, Tailings Storage Facility, Report on 2007 Annual Inspection. Ref. No. VA101-70/06-1. 31 pp.
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Leitch, C. H. (1990). Bralorne: a mesothermal, shield-type vein gold deposit of Cretaceous age in southwestern British Columbia. Canadian Institute of Mining and Metallugy Bulletin, V. 83, pp 53-80.
Lindgren, W., 1933. Mineral deposits, 4th edition: New York, McGraw-Hill, pp. 930.
Micon International Limited, 2010. Technical Report on the Preliminary Assessment of the Elizabeth Blackdome Project, British Columbia, Canada effective date June 10, 2010
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MapPlace 2, 2020. British Columbia Geological Survey, British Columbia, https://www2.gov.bc.ca/gov/content/industry/mineral-exploration-mining/british-columbia- geological-survey/mapplace.
Makepeace, D. and Gruenwald., 2010. Technical Report on the Blackdome Tailings, Clinton, British Columbia. Canada. April 3, 2010 presented by Micon (Canada) Ltd. and GeoQuest.Consulting Ltd. to Sona Resources.
Mathews, W.H., and Rouse, G.E., 1984. The Gang Ranch-Big Bar Ranch area, South Central British Columbia: stratigraphy, geochronology, and palynology of the Tertiary beds and their relationship to the Fraser Fault. Canadian Journal of Earth Sciences, v.21, pp. 1132-1144.
Ministry of Energy and Mines, British Columbia Geological Survey Paper 2017-1, pp. 49-59.
Nichols and Despotovic (2019). Assessment Report for the 2018 Geochemical Exploration Program on the Blackdome Property. Sona Internal Report, Office confidential February 2020.
Ootes, L., Elliott, J.M., and Rowins, S.M., 2017. Testing the relationship between the Llewellyn fault, gold mineralization, and Eocene volcanism in northwest British Columbia: A preliminary report. In: Geological Fieldwork 2016, British Columbia.
Petersen, N.T., Smith, P.L., Mortensen, J.K., Creaser, R.A., and Tipper, H.W., 2011. Provenance of Jurassic sedimentary rocks of south-central Quesnellia, British Columbia: implications for paleogeography. Canadian Journal of Earth Sciences, v.41, pp. 103-125.
Price, B.J. and Glanville, R.O., 2001. Geological summary report Blackdome gold-silver property, internal report to J-Pacific Gold, 77 pp.
Rennie, D.W., 2005. Technical report on the Blackdome Mine property, BC, NI43-101 Technical Report for J-Pacific Gold, 68 pp.
Schiarizza, P, Gaba, R.G., Glover, J.K., Gaver, J.I., and Umhoefer, P.J., 1997. Geology and mineral occurrences of the Taseko-Bridge River Area, British Columbia Ministry of Employment and Investment, Bulletin 100.
SRK Consulting (Canada) Ltd., 2001. Geological Modeling and Preliminary Review of the Resource Estimate for the Blackdome Gold-Silver Property, British Columbia, Canada. December 2009.
SRK Consulting (Canada) Ltd. (Siddorn, J. and Lee, C.), 2005. Structural geology of the Elizabeth Gold Project, British Columbia, SRK Consulting technical report prepared for J-Pacific Gold Inc., pp. 46.
Effective Date: September 9, 2020 27-3 Blackdome-Elizabeth Gold Project 2020 NI 43-101 Technical Report
SRK Consulting (Canada) Ltd., 2009. Due Diligence Review for the Blackdome Gold Project, British Columbia, Canada. December 2009.
SRK Consulting (Canada) Ltd., 2010. Due Diligence Review for the Elizabeth Gold Project, British Columbia, Canada. December 2010.
SRK Consulting (Canada) Ltd., 2019. Due Diligence Review for the Blackdome-Elizabeth Gold Project, British Columbia, Canada. December 2019.
Thorkelson, D.J., and Smith, A.D., 1989. Arc and intraplate volcanism in the Spences Bridge Group: implications for Cretaceous tectonics in the Canadian Cordillera. Geology, v.17, pp. 1093-1096.
Vivian, G.J., 1988. The Geology of the Blackdome Epithermal Deposit, B.C.; unpublished M.Sc. thesis, University of Alberta, 184 pp.
White, N. and Hedenquist, J., 1995. Epithermal gold deposits. Styles, characteristics, and exploration. Society of Economic Geologists, Newsletter. 23. 1, pp. 9-13.
Zagorevski, A., Bedard, J.H., Bogatu, A., Coleman, M., Golding, M., and Joyce, N., 2017. Stikinia Bedrock Report of Activities, British Columbia, and Yukon: GEM2 Cordillera. Geological Survey of Canada, open file 8329, pp. 13.
Effective Date: September 9, 2020 27-4 Blackdome-Elizabeth Gold Project 2020 NI 43-101 Technical Report
28 CERTIFICATE OF QUALIFIED PERSON
I, Garth David Kirkham, P.Geo., do hereby certify that:
1. I am a consulting geoscientist with an office at 6331 Palace Place, Burnaby, British Columbia. 2. This certificate applies to the document entitled “NI 43-101 Technical Report for the Blackdome- Elizabeth Gold Project, British Columbia, Canada” dated effective September 9, 2020 (“Technical Report”) prepared for Tempus Resources Ltd, West Australia. 3. I am a graduate of the University of Alberta in 1983 with a B. Sc. I have continuously practiced my profession since 1988. I have worked on and been involved with many similar NI 43-101 technical reports including Bralorne, Table Mountain, Monument Bay and Cerro Las Minitas. 4. I am a member in good standing of the Association of Professional Engineers and Geoscientists of British Columbia. 5. I have visited the property on August 4 to 5, 2020. 6. In the independent report titled “NI 43-101 Technical Report for the Blackdome-Elizabeth Gold Project, British Columbia, Canada” dated effective September 9, 2020, I am responsible for all sections. 7. I have not had prior involvement in the Blackdome-Elizabeth project, British Columbia. 8. I am independent of Tempus Resources Ltd as defined in Section 1.5 of National Instrument 43- 101. 9. I have read the definition of “qualified person” set out in National Instrument 43-101 and certify that by reason of education, experience, independence and affiliation with a professional association, I fulfil the requirements of a Qualified Person as defined in National Instrument 43- 101. 10. I am not aware of any material fact or material change with respect to the subject matter of the technical report that is not reflected in the Technical Report and that this technical report contains all scientific and technical information that is required to be disclosed to make the technical report not misleading. 11. I have read National Instrument 43-101, Standards for Disclosure of Mineral Properties and Form 43-101F1. This technical report has been prepared in compliance with that instrument and form. “Garth Kirkham” {signed and sealed}
Garth Kirkham, P.Geo.
Dated this 9th day of October, 2020 in Burnaby, British Columbia.
Effective Date: September 9, 2020 28-1 APPENDIX "F" AUDIT COMMITTEE CHARTER
Attached.
Page 68 of 69 SCHEDULE 3 - AUDIT AND RISK COMMITTEE CHARTER
1. ROLE
The role of the Audit and Risk Committee is to assist the Board in monitoring and reviewing any matters of significance affecting financial reporting and compliance. This Charter defines the Audit and Risk Committee's function, composition, mode of operation, authority and responsibilities.
2. COMPOSITION
(a) The Committee will be comprised of at least three Directors or such greater number as the Board may determine from time to time and all members of the Committee shall be “independent” (as such term is used in National Instrument 52-110 – Audit Committees (“NI 52-110”)) unless the Board determines that an exemption contained in NI 52-110 is available and determines to rely thereon. “Independent” generally means free from any business or other direct or indirect material relationship with the Company that could, in the view of the Board, reasonably interfere with the exercise of the member’s independent judgment.
(b) All of the members of the Committee must be “financially literate” (as defined in NI 52-110) unless the Board determines that an exemption under NI 52-110 from such requirement in respect of any particular member is available and determines to rely thereon in accordance with the provisions of NI 52-110. Being “financially literate” means members have the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the Company’s financial statements.
(c) The Board shall from time to time designate one of the members of the Committee to be the chairperson of the Committee (the “Chair”).
3. PURPOSE
The primary purpose of the Committee is to assist the Board in fulfilling its statutory and fiduciary responsibilities relating to:
(a) the quality and integrity of the Company's financial statements, accounting policies and financial reporting and disclosure practices;
(b) compliance with all applicable laws, regulations and company policy;
(c) the effectiveness and adequacy of internal control processes;
(d) the performance of the Company's external auditors and their appointment and removal;
(e) the independence of the external auditor and the rotation of the lead engagement partner;
(f) the identification and management of business, economic, environmental and social sustainability risks; and
CAN: 35070845.2 (g) the review of the Company's risk management framework at least annually to satisfy itself that it continues to be sound and to determine whether there have been any changes in the material business risks the Company faces and to ensure that they remain within the risk appetite set by the Board.
A secondary function of the Committee is to perform such special reviews or investigations as the Board may consider necessary.
4. DUTIES AND RESPONSIBILITIES OF THE COMMITTEE
4.1 Review of Financial Reports
(a) Review the appropriateness of the accounting principles adopted by management in the financial reports and the integrity of the Company's financial reporting.
(b) Review the Company’s financial statements and reports and any related management’s discussion and analysis (“MD&A”), any annual earnings, interim earnings and press releases before the Company publicly discloses this information and any reports or other financial information (including quarterly financial reports), which are submitted to any governmental body, or to the public, including any certification, report, opinion, or review rendered by the external auditors; the process should include but not be limited to:
(i) reviewing changes in accounting principles and policies, or in their application, which may have a material impact on the current or future years’ financial statements;
(ii) reviewing significant accruals, reserves or other estimates such as the ceiling test calculation;
(iii) reviewing accounting treatment of unusual or non-recurring transactions;
(iv) ascertaining compliance with covenants under loan agreements;
(v) reviewing financial reporting relating to asset retirement obligations;
(vi) reviewing disclosure requirements for commitments and contingencies;
(vii) reviewing adjustments raised by the external auditors, whether or not included in the financial statements;
(viii) reviewing unresolved differences between management and the external auditors;
(ix) obtain explanations of significant variances with comparative reporting periods; and
(x) determine through inquiry if there are any related party transactions and ensure the nature and extent of such transactions are properly disclosed.
(c) Review the financial reports and related information included in prospectuses, MD&A, information circular-proxy statements and annual information forms and all public disclosure containing audited or unaudited financial information (including, without
2 limitation, annual and interim press releases and any other press releases disclosing earnings or financial results) before release and prior to Board approval. The Committee must be satisfied that adequate procedures are in place for the review of the Company’s disclosure of all other financial information and will periodically assess the adequacy of those procedures.
(d) Assess whether external reporting is adequate for shareholder needs.
(e) Assess management processes supporting external reporting.
(f) Establish procedures for treatment of accounting complaints.
(g) Review the impact of any proposed changes in accounting policies on the financial statements.
(h) Review the quarterly, half yearly and annual results.
(i) Ensure that, before the Board approves the Company's financial statements for a financial period, the Chief Executive Officer and Chief Financial Officer (or, if none, the person(s) fulfilling those functions) have declared that, in their opinion, the financial records of the Company have been properly maintained and that the financial statements comply with the appropriate accounting standards and give true and fair view of the financial position and performance of the Company and that the opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.
4.2 Relationship with External Auditors
(a) Recommend to the Board procedures for the selection and appointment of external auditors and for the rotation of external auditor partners.
(b) Review performance, succession plans and rotation of lead engagement partner.
(c) Approve the external audit plan and fees proposed for audit work to be performed.
(d) Obtain annually, a formal written statement of external auditors setting forth all relationships between the external auditors and the Company and confirming their independence from the Company, if required by applicable law.
(e) Discuss any necessary recommendations to the Board for the approval of quarterly, half yearly or Annual Reports.
(f) Review the adequacy of accounting and financial controls together with the implementation of any recommendations of the external auditor in relation thereto.
(g) Meet with the external auditors at least twice in each financial year and at any other time the Committee considers appropriate.
(h) Provide pre-approval of audit and non-audit services that are to be undertaken by the external auditor.
(i) Ensure adequate disclosure as may be required by law of the Committee's approval of all non-audit services provided by the external auditor.
3 (j) Ensure that the external auditor prepares and delivers an annual statement as to their independence which includes details of all relationships with the Company.
(k) Receive from the external auditor their report on, among other things, critical accounting policies and alternative accounting treatment, prior to the filing of their audit report in compliance with the Corporations Act.
(l) Ensure that the external auditor attends the Company's Annual General Meeting and is available to answer questions from security holders relevant to the audit.
4.3 Internal Audit Function
(a) Monitor the need for a formal internal audit function and its scope.
(b) Assess the performance and objectivity of any internal audit procedures that may be in place.
(c) Review risk management and internal compliance procedures.
(d) Monitor the quality of the accounting function.
(e) Review the internal controls of the Company via consideration of any comments from the Company's internal and/or external auditors and/or commissioning an independent report on the Company's internal controls.
4.4 Risk Management
(a) Oversee the Company's risk management systems, practices and procedures to ensure effective risk identification and management and compliance with internal guidelines and external requirements.
(b) Assist in identifying and managing potential or apparent business, economic, environmental and social sustainability risks (if appropriate).
(c) Review the Company's risk management framework at least annually to satisfy itself that it continues to be sound.
(d) Review reports by management on the efficiency and effectiveness of the Company's risk management framework and associated internal compliance and control procedures.
4.5 Other
(a) The Committee will oversee the Company's environmental risk management and occupational health and safety processes.
(b) The Committee will oversee procedures for whistleblower protection.
(c) As contemplated by the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations, and to the extent that such deviation or waiver does not result in any breach of the law, the Committee may approve any deviation or waiver from the "Corporate code of conduct". Any such waiver or deviation will be promptly disclosed where required by applicable law.
4 (d) Monitor related party transactions.
5. MEETINGS
(a) The Committee shall meet at least four times per year and/or as deemed appropriate by the Committee Chair. As part of its job to foster open communication, the Committee will, if deemed advisable, meet at least annually with management and the external auditors in separate sessions, and at such other times as the external auditor and/or the Committee consider appropriate. The Chief Financial Officer of the Company shall attend meetings of the Committee, unless otherwise excused from all or part of any such meeting by the Chair.
(b) Meetings are called by the Secretary as directed by the Board or at the request of the Chair of the Committee.
(c) Where deemed appropriate by the Chair of the Committee, meetings and subsequent approvals and recommendations can be implemented by a circular written resolution or conference call.
(d) A quorum for meetings of the Committee will be a majority of its members, and the rules for calling, holding, conducting and adjourning meetings of the Committee will be the same as those governing the Board unless otherwise determined by the Committee or the Board.
(e) The Chair will preside at all meetings of the Committee, unless the Chair is not present, in which case the members of the Committee that are present will designate from among such members the Chair for purposes of the meeting.
(f) Decisions will be based on a majority of votes with the Chair having a casting vote.
(g) The Committee Chair, through the Secretary, will prepare a report of the actions of the Committee to be included in the Board papers for the next Board meeting.
(h) Minutes of each meeting are included in the papers for the next full Board meeting after each Committee meeting.
6. SECRETARY
(a) The Company Secretary or their nominee shall be the Secretary of the Committee and shall attend meetings of the Committee as required.
(b) The Secretary will be responsible for keeping the minutes of meetings of the Committee and circulating them to Committee members and to the other members of the Board.
(c) The Secretary shall distribute supporting papers for each meeting of the Committee as far in advance as possible.
7. RELIANCE ON INFORMATION OR PROFESSIONAL OR EXPERT ADVICE
Each member of the Committee is entitled to rely on information, or professional or expert advice, to the extent permitted by law, given or prepared by:
5 (a) an employee of the Group whom the member believes on reasonable grounds to be reliable and competent in relation to the matters concerned;
(b) a professional adviser or expert in relation to matters that the member believes on reasonable grounds to be within the person's professional or expert competence; or
(c) another Director or officer of the Group in relation to matters within the Director's or officer's authority.
8. ACCESS TO ADVICE
(a) Members of the Committee have rights of access to management and to the books and records of the Company to enable them to discharge their duties as Committee members, except where the Board determines that such access would be adverse to the Company's interests.
(b) Members of the Committee may meet with the auditors, both internal and external, without management being present.
(c) Members of the Committee may consult independent legal counsel or other advisers they consider necessary to assist them in carrying out their duties and responsibilities, subject to prior consultation with the Chair. Any costs incurred as a result of the Committee consulting an independent expert will be borne by the Company.
9. REVIEW OF CHARTER
(a) The Board will conduct an annual review of the membership to ensure that the Committee has carried out its functions in an effective manner, and will update the Charter as required or as a result of new laws or regulations.
(b) The Charter shall be made available to members on request, to senior management, to the external auditor and to other parties as deemed appropriate and will be posted to the Company's website.
10. REPORT TO THE BOARD
(a) The Committee must report to the Board formally at the next Board meeting following from the last Committee meeting on matters relevant to the Committee's role and responsibilities.
(b) The Committee must brief the Board promptly on all urgent and significant matters.
6 APPENDIX "G" BOARD MANDATE
Attached
Page 69 of 69 SCHEDULE 1 - BOARD CHARTER
1. ROLE OF THE BOARD
The Board of Directors (the “Board”) of Tempus Resources Ltd. (the “Company”) is responsible under law to supervise the management of the business and affairs of the Company. The Board derives its authority to act from the Company's Constitution.
The principal mandate of the Board is to oversee the management of the business and affairs of the Company, and monitor the performance of management.
In keeping with generally accepted corporate governance practices and the recommendations contained in National Policy 58-201 adopted by the Canadian Securities Administrators, and the requirements of any stock exchange on which the Company’s securities are listed, the Board assumes responsibility for the stewardship of the Company and, as part of the overall stewardship responsibility, explicitly assumes responsibility for the matters contained in this Board Charter.
2. THE BOARD'S RELATIONSHIP WITH MANAGEMENT
(a) The Board shall delegate responsibility for the day-to-day operations and administration of the Company to the Chief Executive Officer/Managing Director.
(b) Specific limits on the authority delegated to the Chief Executive Officer/Managing Director and the Executive Team must be set out in the Delegated Authorities approved by the Board.
(c) The role of management is to support the Chief Executive Officer/Managing Director and implement the running of the general operations and financial business of the Company, in accordance with the delegated authority of the Board.
(d) In addition to formal reporting structures, members of the Board are encouraged to have direct communications with management and other employees within the Group to facilitate the carrying out of their duties as Directors.
3. SPECIFIC RESPONSIBILITIES OF THE BOARD
In addition to matters it is expressly required by law to approve, the Board has reserved the following matters to itself.
(a) Driving the strategic direction of the Company, ensuring appropriate resources are available to meet objectives and monitoring management's performance.
(b) Appointment, and where necessary, the replacement, of the Chief Executive Officer/Managing Director and other senior executives and the determination of their terms and conditions including remuneration and termination.
(c) Approving the Company's remuneration framework.
(d) Monitoring the timeliness and effectiveness of reporting to Shareholders.
CAN: 35075859.2 (e) Reviewing and ratifying systems of audit, risk management and internal compliance and control, codes of conduct and legal compliance to minimise the possibility of the Company operating beyond acceptable risk parameters.
(f) Approving and monitoring the progress of major capital expenditure, capital management and significant acquisitions and divestitures.
(g) Approving and monitoring the budget and the adequacy and integrity of financial and other reporting such that the financial performance of the company has sufficient clarity to be actively monitored.
(h) Approving the annual, half yearly and quarterly accounts.
(i) Approving significant changes to the organisational structure.
(j) Approving decisions affecting the Company's capital, including determining the Company's dividend policy and declaring dividends.
(k) Recommending to shareholders the appointment of the external auditor as and when their appointment or re-appointment is required to be approved by them (in accordance with the ASX Listing Rules if applicable).
(l) Ensuring a high standard of corporate governance practice and regulatory compliance and promoting ethical and responsible decision making.
(m) Procuring appropriate professional development opportunities for Directors to develop and maintain the skills and knowledge needed to perform their role as Directors effectively.
4. COMPOSITION OF THE BOARD
(a) The Board should comprise Directors with a mix of qualifications, experience and expertise which will assist the Board in fulfilling its responsibilities, as well as assisting the Company in achieving growth and delivering value to shareholders.
(b) In appointing new members to the Board, consideration must be given to the demonstrated ability and also future potential of the appointee to contribute to the ongoing effectiveness of the Board, to exercise sound business judgement, to commit the necessary time to fulfil the requirements of the role effectively and to contribute to the development of the strategic direction of the Company.
(c) The composition of the Board is to be reviewed regularly against the Company's Board skills matrix prepared and maintained by the Nominations Committee or the Board, to ensure the appropriate mix of skills and expertise is present to facilitate successful strategic direction.
(d) Where practical, the majority of the Board should be comprised of non-executive Directors. Where practical, at least 50% of the Board should be independent or such other percentage as required by applicable law.
(i) Generally, an independent Director is a director who is free of any interest, position, association or relationship that might influence, or reasonably be perceived to influence, in a material respect his or her capacity to bring an independent
2 judgement to bear on issues before the Board and to act in the best interests of the Company and its security holders generally.
(ii) In considering whether a Director is independent, the Board should consider the definition of what constitutes independence as detailed in Box 2.3 of the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations 3rd Edition as set out in Annexure A (Independence Tests) and as set out in National Instrument 58-101 Disclosure of Corporate Governance Practices.
(e) Prior to the Board proposing re-election of non-executive Directors, their performance will be evaluated by the Remuneration and Nomination Committee or the Board to ensure that they continue to contribute effectively to the Board.
(f) The Company must disclose the length of service of each Director in, or in conjunction with, its Annual Report.
(g) The Company must disclose the relevant qualifications and experience of each Board Member in, or in conjunction with, its Annual Report.
5. DIRECTOR RESPONSIBILITIES
(a) Where a Director has an interest, position, association or relationship of the type described in the Independence Tests, but the Board is of the opinion that it does not compromise the independence of the Director, the Company must disclose the nature of the interest, position, association or relationship in question and an explanation of why the Board is of that opinion.
(b) Directors must disclose their interests, positions, associations or relationships. The independence of the Directors should be regularly assessed by the Board in light of the interests disclosed by them.
(c) Directors are expected to bring their independent views and judgement to the Board and must declare immediately to the Board any potential or active conflicts of interest.
(d) Directors must declare immediately to the Board, and the Board will determine whether to declare to the market, any loss of independence.
(e) Subject to compliance with applicable stock exchange requirements, no member of the Board (other than a Managing Director) may serve for more than three years or past the third annual general meeting following their appointment, whichever is the longer, without being re-elected by the shareholders.
6. THE ROLE OF THE CHAIRMAN
(a) The Chairman is responsible for the leadership of the Board, ensuring it is effective, setting the agenda of the Board, conducting the Board meetings, ensuring then approving that an accurate record of the minutes of board meetings is held by the Company and conducting the shareholder meetings.
3 (b) Where practical, the Chairman should be a non-executive Director. If a Chairman ceases to be an independent Director then the Board will consider appointing a lead independent Director.
(c) Where practical, the Chief Executive Officer/Managing Director should not be the Chairman of the Company during his term as Chief Executive Officer/Managing Director or in the future.
(d) The Chairman must be able to commit the time to discharge the role effectively.
(e) The Chairman should facilitate the effective contribution of all Directors and promote constructive and respectful relations between Board members and management.
(f) In the event that the Chairman is absent from a meeting of the Board then the Board shall appoint a Chairman for that meeting in an Acting capacity
7. BOARD COMMITTEES
(a) Once the Board is of a sufficient size and structure, reflecting that the Company's operations are of a sufficient magnitude, to assist the Board in fulfilling its duties, the Board must establish the following committees, each with written charters:
(i) Audit and Risk Committee;
(ii) Remuneration Committee; and
(iii) Nomination Committee.
(b) The charter of each Committee must be approved by the Board and reviewed following any applicable regulatory changes.
(c) The Board will ensure that the Committees are sufficiently funded to enable them to fulfil their roles and discharge their responsibilities.
(d) Members of Committees are appointed by the Board. The Board may appoint additional Directors to Committees or remove and replace members of Committees by resolution.
(e) The Company must disclose the members and Chairman of each Committee in, or in conjunction with, its annual report.
(f) The minutes of each Committee meeting shall be provided to the Board at the next occasion the Board meets following approval of the minutes of such Committee meeting.
(g) The Company must disclose in, or in conjunction with, its annual report, in relation to each reporting period relevant to a Committee, the number of times each Committee met throughout the period and the individual attendances of the members at those Committee meetings.
(h) Where the Board does not consider that the Company will benefit from a particular separate committee:
(i) the Board must carry out the duties that would ordinarily be assigned to that committee under the written terms of reference for that committee; and
4 (ii) the Company must disclose in, or in conjunction with, its annual report:
(A) the fact a Committee has not been established; or
(B) if an Audit and Risk Committee has not been established, the processes the Board employs that independently verify and safeguard the integrity of its financial reporting, including the processes for the appointment and removal of the external auditor and the rotation of the audit engagement partner, and the process it employs for overseeing the Company's risk management framework.
8. BOARD MEETINGS
(a) The Directors may determine the quorum necessary for the transaction of business at a meeting, however, until otherwise determined, there must be two Directors present at a meeting to constitute a quorum.
(b) The Board will schedule formal Board meetings at least quarterly and hold additional meetings, including by telephone, as may be required.
(c) Non-executive Directors may confer at scheduled times without management being present.
(d) The minutes of each Board meeting shall be prepared by the Company Secretary, approved by the Chairman and circulated to Directors after each meeting.
(e) The Company Secretary shall ensure that the business at Board and committee meetings is accurately captured in the minutes.
(f) The Company Secretary shall co-ordinate the timely completion and distribution of Board and committee papers for each meeting of the Board and any committee.
(g) Minutes of meetings must be approved at the next Board meeting.
(h) Further details regarding Board meetings are set out in the Company's Constitution.
9. THE COMPANY SECRETARY
(a) When requested by the Board, the Company Secretary will facilitate the flow of information of the Board, between the Board and its Committees and between senior executives and non-executive Directors.
(b) The Company Secretary is accountable directly to the Board, through the Chair, on all matters to do with the proper functioning of the Board.
(c) The Company Secretary is to facilitate the induction and professional development of Directors.
(d) The Company Secretary is to facilitate and monitor the implementation of Board policies and procedures.
5 (e) The Company Secretary is to provide advice to the Board on corporate governance matters, the application of the Company's Constitution, the ASX Listing Rules and applicable other laws.
(f) All Directors have access to the advice and services provided by the Company Secretary.
(g) The Board has the responsibility for the appointment and removal, by resolution, of the Company Secretary.
10. ACCESS TO ADVICE
(a) All Directors have unrestricted access to company records and information except where the Board determines that such access would be adverse to the Company's interests.
(b) All Directors may consult management and employees as required to enable them to discharge their duties as Directors.
(c) The Board, Committees or individual Directors may seek independent external professional advice as considered necessary at the expense of the Company, subject to prior consultation with the Chairman. A copy of any such advice received is made available to all members of the Board.
11. PERFORMANCE REVIEW
The Nomination Committee shall conduct an annual performance review of the Board that:
(a) compares the performance of the Board with the requirements of its Charter;
(b) critically reviews the mix of the Board; and
(c) suggests any amendments to the Charter as are deemed necessary or appropriate.
6