Take the lead 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. Exploration and evaluation of mineral assets Key audit matter How our audit addressed the key audit matter Refer to Note 8 Mineral exploration and evaluation At 30 June 2023 the carrying value of exploration and evaluation assets was $881,453. In accordance with AASB 6 Exploration for and Evaluation of Mineral Resources the Company is required to assess at each reporting date if there are any triggers for impairment which may suggest the carrying value is more than the recoverable value. The process undertaken by management to assess whether there are any impairment triggers in each area of interest involves management judgement. This area is a key audit matter due to the significant judgement involved in determining the existence of impairment triggers. Our procedures included: • Obtaining the reconciliation of capitalised exploration and evaluation and agreeing it to the general ledger. • Reviewing the area of interest considerations against AASB 6. • Conducting a detailed review of the assessment of trigger events prepared in accordance with AASB 6 including: o Determined whether the rights to tenures exist. o Ability to carry out exploration and evaluation activity in the relevant exploration area o Assessed whether the carrying value of these exploration and evaluation assets are unlikely to be recovered through development or sale, and o Evaluated the potential impairment triggers. • Assessing the appropriateness of the related financial statement disclosures. Performance rights issue Key audit matter How our audit addressed the key audit matter Refer to Note 14 Reserves The Company has issued 3,000,000 performance rights, vesting over 3 years with both share price and JORC mineral resource estimate performance conditions attached. Each of these arrangements under AASB 2 Share-Based Payments required significant judgments and estimations by management, including the following: • the evaluation of the grant date of each arrangement, and the evaluation of the fair value of the underlying share price of the company as at that grant date; and • the evaluation of key inputs into the valuation model, including the significant judgment of the forecast volatility of the share option over its exercise period. The results of this performance rights arrangements materially affect the disclosure made both in the financial statements relating to the remuneration paid to Key Management Personnel. Our procedures included: • Evaluating the fair values of the performance rights arrangement by agreeing assumptions to third party evidence. • Determining the grant dates, evaluating what were the most appropriate dates based on the terms and conditions of the performance rights. • Assessing the vesting period, and evaluating the expense of each performance rights tranche granted to the arrangement’s beneficiaries. • For the specific valuation model used, we assessed the experience of the external expert used to advise the value of the performance rights. • Used an audit expert to recalculate the fair value of the performance rights to ensure the reasonableness. • Reconciling the vesting of the performance rights arrangements to disclosures made in the key management personnel compensation note, and • Assessing the appropriateness of the related financial statement disclosures.
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