Vision for the future ANNUAL REPORT 2022 Vango Mining Limited ASX:VAN
1 Chairman’s Address 2 Company Strategy 3 2022 Snapshot 4 Review of Operations 13 Directors’ Report 26 Auditor’s Independence Declaration 27 Operating and Financial Review 34 Corporate Governance Statement 49 Consolidated Statement of Profit or Loss and Other Comprehensive Income 50 Consolidated Statement of Financial Position 51 Consolidated Statement of Changes in Equity 52 Consolidated Statement of Cash Flows 53 Notes to the Consolidated Financial Statements 90 Directors’ Declaration 91 Independent Auditor’s Report 95 Shareholder and Investor Information Directors Bruce McInnes Chairman, Executive Shengqiang (Sean) Zhou Deputy Chair, Non-Executive Zhenzhu (Carol) Zhang Non-Executive Director Yan Chao (Hunter) Guo Non-Executive Director Craig Wallace Non-Executive Director Company Secretary Ian Morgan Share Registry Boardroom Limited Grosvenor Place Level 12, 225 George Street Sydney NSW 2000 T: 1300 737 760 (in Australia) W: boardroomlimited.com.au Auditor RSM Australia Partners Level 13, 60 Castlereagh Street Sydney NSW 2000 Registered Office Aurora Place Building 1, Level 29 88 Phillip Street Sydney NSW 2000 ASX Code VAN www.vangomining.com ABN 68 108 737 711 Corporate Directory Contents Vango Mining Limited Annual Report 2022
Vango Mining Limited Annual Report 2022 1 Chairman’s Address Dear Shareholders This past year has been another of significant activity and progress for our Company, both from an exploration and corporate perspective, and in the positioning of Vango for its next phase of growth at our flagship asset, the Marymia Gold Project in the mid-west region of Western Australia. As shareholders would be aware our end-goal is to commence mining operations and become a substantial gold producer at Marymia. At the project level, our core focus for the year was an extensive open pit-focused drilling program that targeted 11 historically mined open pits spread across the Marymia Project, not included in the Project’s current JORC Mineral Resource Estimate. This program was completed prior to Christmas 2021 with the results flowing through into the first half of 2022, and successfully confirmed that all targeted open pits hosted further unmined gold mineralisation. All results have since been released to the market by way of ASX Announcements.1 Corporately, your Company completed a successful capital raising with Collins Street Value Fund (CSVF) via a convertible note offer of $7.5m with an exercise price of 6 cents2. The terms of the offer allow for an additional $2.5m in funding to the Company under the same terms if both parties agree. The Board of Vango is pleased with the support of CSVF for Vango’s plans to develop the Marymia Project. Vango has deployed some of the funds raised into its 2022 field season, with a program of drilling to test for a step-out of the gold resource in the Triple P area. We will keep the market updated as analysis of results becomes available. In conclusion, I would like to reiterate the Board’s commitment to our goal of establishing your Company as a gold miner, and look forward to sharing further news on our progress toward this goal in the coming months. Finally, I wish to thank you, our shareholders for your continued support to the Company on its journey towards becoming a significant gold producer. Bruce McInnes Chairman 1 ASX Announcements, 19 January, 21 February, 25 February, 14 March and 5 April 2022 2 ASX Announcement, 16 June 2022
Company Strategy Critical Mass Delivered Vango’s vision is to build a sustainable, mid-tier gold production company Vango has progressed a deliberate strategy of growing its high-grade gold endowment at the Marymia Gold Project to achieve its ambitions of becoming a significant high-grade Western Australian gold miner. Targeted drilling during the 2021 field season has been successful in delivering further open pit potential, which offers the potential to commence a mining strategy delivering both underground and potentially alternate open pits. Successfully implemented, this strategy is designed to achieve the high levels of recovery that the Company’s metallurgical testing has achieved. The success of the Company’s targeted exploration strategy has delivered the critical mass necessary to ensure a mine life for future mining operations at Marymia which has now provided confidence to the Company’s Board to move forward with the development of mine planning and project financing. In the near term, the Company’s focus and strategy will be to obtain financing for future mining. Deliver Financing 2 Vango Mining Limited Annual Report 2022 Develop and Complete Mine Planning
2022 Snapshot 3. V ango confirms all material assumptions and technical parameters underpinning the resource estimate continue to apply and have not materially changed as per Listing Rule 5.23.2 Ongoing Exploration Success Strong Balance Sheet Mineral Resource Commercial Opportunity Safety Dominant land position Total manhours worked 13,331 Zero lost time injuries in the year Total reportable injury frequency rate of 0 317 km2 of mining leases, 77 km2 exploration tenements 80% of the PlutonicMarymia belt 12,001 metre drill program successfully completed, consisting of 73 reverse circulation (RC) holes resulting in the collection of 14,219 samples Confirmed potential mineralisation at 11 targeted open pits Further priority nearmine and regional targets identified Completed $10 million capital raising Global Mineral Resource of one million ounces of gold at a grade of 3.0g/t3 Significant drill program of >5,000 metres underway, targeting extensions to mineralisation in the Triple P area. Stand-alone processing options developed Pursuing potential value accretive commercial opportunities to fast track project development Vango Mining Limited Annual Report 2022 3
Review of Operations Vango has progressed a deliberate strategy of growing its high-grade gold endowment at the Marymia Gold Project to achieve its ambitions of becoming a significant highgrade Western Australian gold miner. Operations focussed on targeting mineralisation below 11 open-pits, delivering the critical mass necessary to ensure a mine life for future mining operations at Marymia. 4 Vango Mining Limited Annual Report 2022
Vango Mining Limited Annual Report 2022 5 Marymia Gold Project (Marymia, VAN 100%) The 100%-owned Marymia Gold Project is located approximately 300 kilometres northeast of Meekatharra in the mid-west region of Western Australia, at the northern end of the world class Eastern Gold Fields Province (Figure 1). During the year a significant drill program was completed targeting extensions to mineralisation below 11 historical pits within the project area. These pits are outside of the current resource areas for the project and definition of extensions to these mineralised systems could provide early resources for operations within the project area. A total of 73 RC holes were completed for 12,001m of drilling. There were also 3 holes drilled at the Mareast Pit to test for deep continuation for the resources at this pit. The breakdown of metres drilled is provided in Table 1. Table 1: Summary of 2021/2022 Drilling activities Marymia Project Pit No of Holes Total m APOLLO 3 471 EXOCET 5 786 IBIS 5 813 KOOKABURRA 4 745 MAREAST 3 396 PARROT 12 2133 PIGEON 5 862 PRICKLEY 8 1,230 REDFIN 5 759 ROSELLA 5 801 SKYHAWK 13 2,162 SPECKLED 5 843 Total 73 12,001 Figure 1: Location of 2021/2022 Drilling targets Drilling was designed to test the continuity and tenor of mineralised structures at depth below the pits as well as potential for parallel structures that may not have been previously identified. The drilling in all areas intersected the projected mineralisation with some intersections showing excellent economic potential, such as Skyhawk and Parrot, which were immediately followed up with second phases of drilling. Other pits such as Redfin, Rosella, Pigeon also showed good promise while others will be lower priority targets moving forward. Review of Operations
6 Vango Mining Limited Annual Report 2022 Review of Operations continued Skyhawk A total of 13 RC holes were completed at the Skyhawk area where there is historic laterite pit, but the main oxide zone has not been mined. Highlight results were:4 − 15m at 3.5 g/t Au from 113m in VSKRC0010 incl. 7m at 6.6 g/t Au from 119m − 12m at 2.4 g/t Au from 110m in VSKRC0009 incl. 1m at 7.6 g/t Au from 118m − 16m @ 4.4 g/t Au, from 54m in VSKRC0007, including 6m @ 8.2 g/t Au This is in addition to historical intercepts: − 18m @ 2.0 g/t Au, from 76m in DSHRC0023, including 1m @ 8.5 g/t Au − 16m @ 3.5 g/t Au from 132m in DSHRC0014 − 12m @ 2.5 g/t Au from 65m in DSHRC0004 − 18m @ 2.0 g/t Au from 76m in DSHRC0023 − 7m at 4.6 g/t Au from 67m in DSHRC0015 − 5m at 6.4 g/t Au from 84m in DSHRC0015 These results demonstrate the continuation of a significant zone of near-surface gold mineralisation extending the mineralised zone at Skyhawk. Further work is required to determine the full extents of mineralisation with these zones open in most directions. Figure 2: Drilling plan Skyhawk showing current and previous drilling intersections 4 VAN ASX 25/02/2022 “Vango Intersects Wide, High-Grade Gold Zones at Marymia Gold Project”
Vango Mining Limited Annual Report 2022 7 Figure 3: Cross Section 28320mE at the Skyhawk open pit target
8 Vango Mining Limited Annual Report 2022 Review of Operations continued Figure 4: Cross Section 28280mE at the Skyhawk open pit target Parrot Open Pit Drilling at the historical Parrot Pit consisted of 12 holes for 2,133m of RC drilling (Fig 5). The work was completed in 2 phases with Phase 1 drilling intersected broad structures with anomalous gold but only moderate grade with the highlight being 3m @ 1.3 g/t Au from 124m in VPARC0002.5 The width and style of alteration made this pit area a priority for the second phase of RC drilling. Holes were planned across the pit to further define the mineralisation. This second phase confirmed the continuity of a significant gold bearing structure with the highlight being hole VPARC0011 which returned 19m at 4.7 g/t Au from 81m incl. 2m at 18.6 g/t Au from 96m (Fig 6).6 This zone demonstrates the potential for this area to produce significant gold for the project. 5 VAN ASX, 20/10/21 “Vango continues to confirm open pit potential at Marymia” 6 VAN ASX 05/04/2022 “Vango’s Marymia Gold Project Intersects High Grade Gold”
Vango Mining Limited Annual Report 2022 9 The most significant intercepts from the second phase were: − 19m at 4.7 g/t Au from 81m in VPARC0011 incl. 2m at 18.6 g/t Au from 96m − 1m at 2.7 g/t Au from 109m in VPARC0005 − 9m at 1 g/t Au from 119m in VPARC0007 incl. 1m at 2.3 g/t Au from 127m − 11m at 0.7 g/t Au from 149m in VPARC0007 incl. 1m at 3.9 g/t Au from 156m These are in addition to the Phase 1 results7 − 1m @ 2.5 g/t Au from 177m in VPARC0001 − 1m @ 1.3 g/t Au from 78m in VPARC0002 − 1m @ 1.2 g/t Au from 84m in VPARC0002 − 3m @ 1.3 g/t Au from 124m in VPARC0003 − 1m @ 1.1 g/t Au from 133m in VPARC0003 These were from zones with previous intersections including: − 12m @ 2.6 g/t Au from 43m in PARC0073 − 2m @ 11.1 g/t Au from 99m in PBR7977 − 8m @ 1.6 g/t Au from 67m in PBRD1753 The intercept in Hole VPARC0011 is of significant grade and width and is potentially part of a larger high grade zone to be targeted by further drilling. Figure 5: Parrot Drill Plan - Current Drilling 7 VAN ASX, 20/10/21 “Vango continues to confirm open pit potential at Marymia”
10 Vango Mining Limited Annual Report 2022 Figure 6: Cross-section Parrot 13140mE Figure 7: Location of Marymia Gold Project in the Yilgarn block of Western Australia Review of Operations continued
Vango Mining Limited Annual Report 2022 11 JORC compliant Mineral Resource Estimate (ASX Announcement dated 20 May 2020)8 MARYMIA GOLD PROJECT JORC 2012 MINERAL RESOURCE ESTIMATE – MAY 2020 Deposit Cut-off Indicated Inferred Total Mineral Resource Au g/t K t g/t K oz K t g/t Oz Kt g/t K oz Open Pits 0.5 5,300 1.8 311 2,950 1.6 150 8,250 1.7 461 Underground 3.0 1,142 9.6 352 992 5.9 189 2,134 7.9 541 Total 6,442 3.2 663 3,942 2.7 339 10,384 3.0 1,002 * VAN confirms all material assumptions and technical parameters underpinning the Resource Estimate and Reserve continue to apply, and have not materially changed as per Listing Rule 5.23.2 Mineral Resources reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (Joint Ore Reserves Committee Code – JORC 2012 Edition). Open pit resources reported within optimised conceptual pit shells at A$2,500/oz gold price above a 0.5 g/t Au cut off and include oxide, transition and fresh material. Trident underground resources are retained as first reported 18 April 2019 above a 3.0 g/t Au cut-off grade, and modelled at a gold price of A$2,000/oz, on the basis that the information has not materially changed since last reported. Other underground resources reported above a 3.0 g/t Au cut off (with minor 2.5 g/t Au cut-off material included for continuity purposes) and includes fresh material only. Totals may differ due to rounding, Mineral Resources reported on a dry in-situ basis. Ned’s Creek JV Lodestar Minerals Limited completed an RC drilling program at the Contessa gold prospect located on the Ned’s Creek Joint Venture (Vango Mining (ASX: VAN) earning 51%) is completed and all samples have been dispatched to the laboratory for assay. The program comprised 29 holes in total for 3715m (see Table 1) and consisted of two phases.9 − a series of 12 vertical RC holes at Contessa to test the supergene zone − 14 holes targeting the Contessa granite contact as a potential source of the widespread supergene and nugget-related gold discovered in the Contessa area; and − 3 additional RC holes were completed on the contact zone 1500m southwest of Contessa, at the Central Park prospect RC drilling confirms sub-horizontal oxide gold mineralisation at the Contessa Supergene zone:10 − 12m at 1.46g/t Au from 50m in LNRC083 − 8m at 1.84g/t Au from 36m in LNRC089 − 7m at 2.99g/t Au from 58m in LNRC092 − 4m at 1.5g/t Au from 36m in LNRC086 On the Contact zone at Contessa and Central Park results included:11 − 20m at 0.69g/t Au from 120m in LNRC097, including 8m at 1g/t Au from 132m − 24m at 0.51g/t Au from 116m in LNRC099 − 4m at 2.35g/t Au from 120m in LNRC095 8 VAN ASX 19/05/2020 “Marymia Mineral Resource Increases to One Million Ounces” 9 LSR ASX 14/03/2022 “Contessa – Large Target Identified on Granite Contact” 10 LSR ASX 31/03/2022 “Ned’s Ck JV update” 11 LSR ASX 22/11/2021 “Exploration Update Ned’s Ck JV”
12 Vango Mining Limited Annual Report 2022 Review of Operations continued Previous aircore drilling at Contessa intersected extensive supergene gold mineralisation prior to RC drilling programs that targeted deeper primary mineralisation. Significant intercepts from earlier aircore drilling include7: − 15m at 3.1g/t Au from 40m in LNR546 − 21m at 3.01g/t Au from 40m in LNR656 − 20m at 1.61g/t Au from 48m in LNR796 − 12m at 1.3g/t Au from 48m in LNR800 − 8m at 3.35g/t Au from 48m in LNR810 − 16m at 2.16g/t Au from 84m in VCTRC0003, including 4m at 9.63g/t Au. Information in this announcement is extracted from reports lodged as market announcements available on the Company’s website https://vangomining.com/. The Company confirms that it is not aware of any new information that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Persons’ findings are presented have not been materially modified from the original market announcements. Notes and Competent Persons Statements 1. Mineral Resources reported in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (Joint Ore Reserves Committee Code – JORC 2012 Edition). 2. Open pit resources reported within optimised conceptual pit shells at A$2,500/oz gold price above a 0.5 g/t Au cut off and include oxide, transition and fresh material, see breakdown Appendix 2. 3. Trident underground resources are retained as first reported 18 April 201912 above a 3.0 g/t Au cut-off grade and modelled at a gold price of A$2,000/oz, on the basis that the information has not materially changed since last reported. Other underground resources reported above a 3.0 g/t Au cut off (with minor 2.5 g/t Au cut-off material included for continuity purposes) and includes fresh material only. 4. Totals may differ due to rounding, Mineral Resources reported on a dry in-situ basis. 5. The Statement of Mineral Resource Estimates has been compiled by Dr. Spero Carras who is a full-time employee of Carras Mining Pty Ltd and a Fellow of the Australian Institute of Mining and Metallurgy (“FAusIMM”). Dr. Carras has sufficient experience, including over 40 years’ experience in gold mine evaluation, relevant to the style of mineralisation and type of deposits under consideration to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (“JORC”) Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves. Dr. Carras consents to the inclusion in this report of the matters based on this information in the form and context in which it appears. 6. The information in this report that relates to exploration results that form the basis of the Mineral Resource Estimate has been reviewed, compiled and fairly represented by Mr David Jenkins, a Member of the Australian Institute of Geoscientist (“MAIG”) and a full time employee of Terra Search Pty Ltd. Mr Jenkins has sufficient experience, including over 30 years’ experience in exploration, resource evaluation, and project management relevant to the style of mineralisation and type of deposits under consideration to qualify as a Competent Person as defined in the 2012 Edition of the Joint Ore Reserves Committee (“JORC”) Australasian Code for Reporting of Exploration Results, Minerals Resources and Ore Reserves. Mr Jenkins consents to the inclusion in this report of the matters based on this information in the form and context in which it appears. Previous ASX releases referenced in this section (a) VAN ASX 05/04/2022 “Vango’s Marymia Gold Project Intersects High Grade Gold” (b) VAN ASX 25/02/2022 “Vango Intersects Wide, High-Grade Gold Zones at Marymia Gold Project” (c) LSR ASX 31/03/2022 “Ned’s Ck JV update” (d) VAN ASX 19/05/2020 “Marymia Mineral Resource Increases to One Million Ounces” (e) LSR ASX 14/03/2022 “Contessa – Large Target Identified on Granite Contact” (f) LSR ASX 22/11/2021 “Exploration Update Ned’s Ck JV” (g) VAN ASX, 20/10/21 “Vango continues to confirm open pit potential at Marymia” VAN ASX 18/04/2019 “New High-Grade Trident Gold Resource Upgrade” 12 VAN ASX 18/04/2019 “New High-Grade Trident Gold Resource Upgrade”
Vango Mining Limited Annual Report 2022 13 Directors’ Report Your directors present their report on the consolidated entity consisting of Vango Mining Ltd and the entities it controlled at the end of or during the year ended 30 June 2022. Throughout this report, the consolidated entity is referred to as the Group. Board of Directors The Directors of the Company at any time during or since the end of the financial year are: Mr Bruce McInnes Executive Chairman, Chair of the Audit Committee and Member of the Remuneration Committee Mr McInnes has been in the public and commercial accounting sectors for over 40 years. He was a founding partner and is now the senior partner at accounting firm McInnes & Associates based in Leeton New South Wales. Mr McInnes also owns a large agricultural business in Riverina, New South Wales. Mr McInnes volunteered as the treasurer of Telstra Child Flight, a not-for-profit organisation that provided helicopter transport for sick and injured children in remote areas of New South Wales. He has held no other directorships of listed companies in the last three years. Mr McInnes commenced as a director of the Company on 9 May 2013. Mr Shengqiang (Sean) Zhou Deputy Chairman, Non-Executive Director, Member of the Audit Committee and Remuneration Committee Mr Zhou has over 13 years of experience in project management, funds management and investment banking with a focus on infrastructure investment in the Asia Pacific Region. During Mr Zhou’s time as Head of the China team of Inbound Investment at CPG Capital Partners Ltd, a Singapore based investment bank, he was responsible for raising over US$500 million in funding. Prior to CPG, Sean was General Manager Australia for Shanghai General Metal Structural Engineering Limited. He has held no other directorships of listed companies in the last three years. Mr Zhou commenced as a director of the Company on 15 August 2014. Dr Zhenzhu (Carol) Zhang Executive Director (Non-Executive from 26 October 2020), Member of the Audit Committee and Remuneration Committee Dr Zhang has a PhD in management. Prior to moving to Australia, she was an associate professor at the University of Science and Technology of Tianjin, teaching logistics management from 2006 to 2015. She has held no other directorships of listed companies in the last three years. Dr Zhang commenced as a director of the Company on 25 August 2015.
14 Vango Mining Limited Annual Report 2022 Directors’ Report continued The Honourable Mr Craig Wallace Non-Executive Director and Chair of the Remuneration Committee The Honourable Mr Craig Wallace is an accomplished international commercial negotiator and communicator with extensive senior executive and Board experience. He served as the Deputy Chairman of TerraCom Resources (ASX: TER) between 2012 and 2020. Mr Wallace was the member for Thuringowa in the Queensland State Parliament from 7 February 2004 to 24 March 2012. His appointment as a NonExecutive Director continues our focus on adding new skills to the Board, supporting Vango Mining to achieve its corporate objectives. He has held no other directorships of listed companies in the last three years. Mr Yan Chao (Hunter) Guo Non-Executive Director Mr Guo has more than 25 years of experience in global commodity research and trade as well as gold futures analysis and investment. He is a senior executive of a significant commodities trading house with annual turnover in excess of US$2 billion. Mr Guo became a strategic investor in Vango Mining in 2017 and a Director in January 2020. He has held no other directorships of listed companies in the last three years. Mr Guo commenced as a director of the Company on 6 January 2020. Former directorships, in the last three years, noted above are directorships held in the last three years for listed entities only and excludes directorships of all other types of entities, unless otherwise stated. As Messrs McInnes and Stocks are executives, they are considered not independent. Further, as substantial shareholders of the Company, Messrs Zhou and Guo and Dr Zhang are not independent.
Vango Mining Limited Annual Report 2022 15 Meetings of Directors There were 4 board meetings held during the year ended 30 June 2021 with attendance as follows. All directors attended all meetings that they were eligible to attend during the reporting period. The number of meetings held (including committee meetings of Directors) and the number of meetings attended during the financial year are: Board Meetings Audit Committee Meetings Remuneration Committee Meetings Directors Eligible to Attend Attended Eligible to Attend Attended Eligible to Attend Attended Bruce McInnes 4 4 – – 1 1 Hunter Guo 4 4 – – – – Craig Wallace 4 4 – – 1 1 Sean Zhou 4 4 – – 1 1 Carol Zhang 4 4 – – 1 1 Principal activities The principal activity of the Group during the year was the exploration and evaluation of the Group’s gold interests at the Marymia Gold Project in Western Australia. Dividends No dividends were paid, declared or recommended during the year ended 30 June 2022. Significant changes in the state of affairs There were no significant changes in the state of affairs of the Group during the financial year. Events since the end of the financial year Directors are not aware of any matter or circumstance that has arisen since the end of the financial year that has significantly affected or may significantly affect the Group’s operations, the results of these operations or the Group’s state of affairs in future financial years excepting ongoing discussions that may result in a corporate structural change. On 18 July 2022, the Company secured a $10 convertible note facility. To date, the Company has received $7.5 million for Tranche 1 of the note facility. The company repaid the cash advance in Note 18 totalling $1.5 million and accrued interest of $88,767 on 17 July 2022. Likely developments and expected results of operations Likely developments in the operations of the Group and expected results of these operations in future financial years have been included in the Operating and Financial Review. Environmental regulation The Group’s operations are subject to environmental regulation in respect to mineral tenements relating to exploration activities on those tenements. On-ground exploration was undertaken during the financial year and the Board is not aware of any breach of environmental requirements as they apply to the Group. The Group has reviewed its energy consumption and greenhouse gas emissions for the reporting year, with both found to be below the reporting threshold as specified within the National Greenhouse and Energy Reporting Act 2007 (Cth) (NGER).
16 Vango Mining Limited Annual Report 2022 Remuneration report The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001. The remuneration arrangements detailed in this report are for the Directors who held office during the financial year as follows: Director Position Appointed Resigned Bruce McInnes Executive Chairman 15 August 2014 Current Non-Executive Deputy Chairman 25 October 2013 14 August 2014 Non-Executive Director 9 May 2013 24 October 2013 Shengqiang Zhou Non-executive Deputy Chairman 20 January 2020 Current Managing Director 30 January 2018 20 January 2020 Non-Executive Director 15 August 2014 29 January 2018 Zhenzhu Zhang Non-Executive Director 29 October 2020 Current Executive Director 25 August 2015 28 October 2020 Yanchao Guo Non-Executive Director 6 January 2020 Current Craig Wallace Non-Executive Director 11 January 2021 Current A. Remuneration Philosophy The remuneration report details the remuneration arrangements for key management personnel (KMP) who are defined as those having authority and responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly, including any director (whether executive or otherwise). Key management personnel of the Company comprise the Board of Directors only. The performance of the Company depends upon the quality of its key management personnel. To prosper the Company must attract, motivate and retain appropriately skilled directors and executives. The Company’s broad remuneration policy is to ensure the remuneration package rewards performance, properly reflects the person’s duties and responsibilities and is competitive in attracting, retaining and motivating people of the highest quality. B. Remuneration Structure and Approvals Remuneration is set by the Board of Directors. The Board has established a separate Remuneration Committee to make recommendations to the Board. During the financial year the Board engaged the services of a remuneration consultant to review, provide industry comparisons and independently recommend remuneration levels, for the Remuneration Committee to rely on when making recommendations to the Board for setting Directors’ remuneration. Executive Remuneration Structure The Company aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Company and aligned with market practice. Executive remuneration and incentive policies and practices must: − be aligned with the Company’s vision, values and overall business objectives; − be designed to motivate the executives to pursue the Company’s long-term growth and success; and − demonstrate a clear relationship between the Company’s overall performance and the performance of executives. The nature and amount of remuneration of executives are assessed on a periodic basis by the Remuneration Committee for Board approval, with the overall objective of ensuring maximum stakeholder benefit from the retention of high performing executives. Directors’ Report continued
Vango Mining Limited Annual Report 2022 17 The main objectives sought when reviewing executive remuneration is that the Company has: − coherent remuneration policies and practices to attract and retain executives; − executives who will create value for shareholders − competitive remuneration offered benchmarked against the external market; and − fair and responsible rewards to executives having regard to the performance of the Company, the performance of the executives and the general pay environment. There is no predetermined equity compensation element within the remuneration structure nor are there predetermined performance conditions to be satisfied. All directors (subject to members’ approval in accordance with the ASX Listing Rules) and executives are entitled to participate in the Company’s “Vango Mining Limited Employee Equity Incentive Plan” approved on 25 November 2020. The Company’s “Vango Mining Limited Share Loan Plan” was approved by shareholders on 8 October 2021. Further details relating to remuneration of Executive Directors are contained in the remuneration table disclosed in Section D of this Report; and within the Notes to the Financial Statements: Note 25 Key Management Personnel Disclosures. Non-Executive Remuneration Structure The Company’s non-executive directors are remunerated by way of fees, in the form of cash, non-cash benefits and superannuation contributions. The Board’s intention is to remunerate non-executive directors at market rates for time, commitment and responsibilities. The Board of Directors determines the payments to the non-executive directors and reviews their remuneration annually, based on market price, duties and accountability. Independent external advice is sought when required. The maximum aggregate fee pool to be paid to Directors (excluding executive directors) is set at $250,000 per year (in accordance with the Company’s Constitution) and as approved by the shareholders of the Company. Non-executive directors are able to participate in share-based incentive plans and encouraged to hold shares, to align directors’ interests with shareholders’ interests. Non-executive directors may enter into separate consultancy mandates with the Company for the provision of professional and technical services that fall outside the scope of their directorship role. Under this mandate directors receive a consultancy fee in connection with time spent on Company business, including reasonable expenses incurred by them in carrying out this consultancy role. Further details relating to remuneration of non-executive directors are contained in the remuneration table disclosed in Section D of this Report; and within the Notes to the Financial Statements: Note 25 Key Management Personnel Disclosures. C. Remuneration and Performance Director remuneration may include either long term or short-term performance conditions. The Board will continue to monitor this policy to ensure that it is appropriate for the Company in future years.
18 Vango Mining Limited Annual Report 2022 D. Details of Remuneration The key management personnel of the Company are the Board of Directors. Details of the remuneration of the Directors of the Company for the financial year ended 30 June 2022 are set out below. Postemployment benefits Share-based payment Share-based payments as a % of total remuneration Salary & fees Nonmonetary Superannuation Share Plan & Share loan Total 2022 $ $ $ $ $ Director B McInnes 407,498 – 37,000 11,559 456,057 2.53% S Zhou 165,000 – – (31,689) 133,311 23.77% Z Zhang 40,000 – 4,000 70,654 114,654 61.62% Y Guo – – – – – – C Wallace 39,996 – 3,996 43,992 – Total 652,494 – 44,996 50,524 748,014 6.75% Details of the remuneration of the Directors of the Company for the financial year ended 30 June 2021 are set out below: Postemployment benefits Share-based payment Share-based payments as a % of total remuneration Salary & fees Nonmonetary Superannuation Vango share Plan Total 2021 $ $ $ $ $ Director B McInnes 339,163 – 27,750 270,354 637,267 42.42% A Stocks 406,344 – 17,220 – 423,564 – S Zhou 120,000 – – 270,354 390,354 69.26% Z Zhang 60,000 – 10,100 135,177 205,277 65.85% M Keegan 5,538 – 554 – 6,092 – Y Guo – – – – – – C Wallace 16,665 – 1,665 18,330 – Total 947,710 – 57,289 675,885 1,680,884 40.21% Directors’ Report continued
Vango Mining Limited Annual Report 2022 19 Contractual Arrangements Mr Bruce McInnes – Executive Chairman − Contract commencement date: Mr McInnes signed a letter of appointment on commencement as the Executive Chairman which sets out the terms of his appointment. Director fees commenced on date of appointment as director. − Term: Open, although subject to retirement by rotation under the Company’s Constitution. Mr Shengqiang (Sean) Zhou – Non-executive Deputy Chairman − Contract commencement date: Mr Zhou signed a letter of appointment on commencement as a non-executive director which sets out the terms of his appointment. Director fees commenced on date of appointment as director. − Term: Open, although subject to retirement by rotation under the Company’s Constitution. Dr Zhenzhu (Carol) Zhang – Non-Executive Director − Contract commencement date: Dr Zhang signed a letter of appointment on commencement as a non-executive director which sets out the terms of her appointment. Director fees commenced on date of appointment as director. − Term: Open, although subject to retirement by rotation under the Company’s Constitution. Mr Yanchao (Hunter) Guo – Non-Executive Director − Contract commencement date: Mr Guo signed a letter of appointment on commencement as a non-executive director which sets out the terms of his appointment. Director fees commenced on date of appointment as director. − Term: Open, although subject to retirement by rotation under the Company’s Constitution. Mr Craig Wallace – Non-Executive Director − Contract commencement date: Mr Wallace signed a letter of appointment on commencement as a non-executive director which sets out the terms of his appointment. Director fees commenced on date of appointment as director. − Term: Open, although subject to retirement by rotation under the Company’s Constitution.
20 Vango Mining Limited Annual Report 2022 E. Share-based Compensation The Company rewards Directors for their performance and aligns their remuneration with the creation of shareholder wealth by issuing share options and shares. Share-based compensation is at the discretion of the Board and no individual has a contractual right to participate in any share-based plan or to receive any guaranteed benefits. Options The Company issued performance options on 18 June 2019 to key management personnel as part of remuneration. These performance options are subject to performance hurdles, and as at the date of this report, these hurdle conditions have not been met. The details of these performance options are as follows. Category Expiry Date Exercise Price Zhou McInnes Zhang Total C 18/06/2024 $0.30 10,000,000 10,000,000 5,000,000 25,000,000 D 18/06/2024 $0.35 5,000,000 5,000,000 2,500,000 12,500,000 E 18/06/2024 $0.50 5,000,000 5,000,000 2,500,000 12,500,000 F 18/06/2024 $0.60 10,000,000 10,000,000 5,000,000 25,000,000 Total 30,000,000 30,000,000 15,000,000 75,000,000 Performance Hurdles Category C. Subject to the definition by the Company (or an entity controlled by the Company) of a total (measured, indicated and inferred) JORC 2012-compliant resource of 1,500,000 ounces of contained gold at an average grade greater than or equal to 3 grams per tonne (Option Vesting Condition C). Nb. The performance target is 1,500,000 ounces of contained gold at an average grade greater than or equal to 3 grams per tonne. The grade given is a performance hurdle only and has no relationship to the tonnage being targeted; i.e. this is not an exploration target. Category D. The production of 10,000 ounces of gold bars from ore produced by the Company (or an entity controlled by the Company) (Option Vesting Condition D). Category E. The production of 50,000 ounces of gold bars from ore produced by the Company (or an entity controlled by the Company) (Option Vesting Condition E). Category F. The price of the Company’s shares traded on ASX achieving a 20-day volume weighted average price of $1.00 per share (Option Vesting Condition F). No shares were issued over the financial year from the exercise of options. Directors’ Report continued
Vango Mining Limited Annual Report 2022 21 At balance date, the relevant interest of each key management personnel in the Company’s options were: Balance at the start of the year Acquired Granted as part of remuneration Expired Converted Balance at end of the year Vested and exercisable 2022 Bruce McInnes 40,000,000 – – (10,000,000) – 30,000,000 – Craig Wallace – – – – – – – Shengqiang Zhou 40,000,000 – – (10,000,000) – 30,000,000 – Zhenzhu Zhang 20,000,000 – – (5,000,000) – 15,000,000 – Yanchao Guo – – – – – – – 100,000,000 – – (25,000,000) – 75,000,000 – 2021 Bruce McInnes 40,000,000 – – – – 40,000,000 – Craig Wallace – – – – – – – Shengqiang Zhou 40,000,000 – – – – 40,000,000 – Zhenzhu Zhang 20,000,000 – – – – 20,000,000 – Yanchao Guo – – – – – – – 100,000,000 – – – – 100,000,000 – Loan plan shares On 5 Nov 2021 the Company issued a total of 130,000,000 Plan Shares for a price of $0.09 per Plan Share, and provision of a loan to acquire those Shares repayable during the period up to three years commencing on the date the Shares are issued. The details of the Share Loan Plan are as follows: 1. The Company issued 50,000,000 Plan Shares for a price of $0.09 per Plan Share to Bruce McInnes. Subject to the terms of the Plan, the Plan Shares cannot be sold, transferred, assigned, charged or otherwise encumbered until the following Vesting Conditions are satisfied, unless waived by the Board in accordance with the Plan (such period being the Restriction Period): i. 25,000,000 Shares to be issued and vesting within one month of approval by Shareholders; ii. 2 5,000,000 Shares to be issued within one month of approval by Shareholders and vesting after the following conditions precedent: a) Bruce McInnes remains a Director until the date the Shares vest; b) and whichever occurs first: A. two years after the date the Shares are issued; and B. t he Company’s JORC 2012 resource determined by a Competent Person independent to the Company increases to 1.8 million ounces of gold.
22 Vango Mining Limited Annual Report 2022 2. The Company issued 40,000,000 Plan Shares for a price of $0.09 per Plan Share to Shengqiang (Sean) Zhou. Subject to the terms of the Plan, the Plan Shares cannot be sold, transferred, assigned, charged or otherwise encumbered until the following Vesting Conditions are satisfied, unless waived by the Board in accordance with the Plan (such period being the Restriction Period): i. 10,000,000 Shares to be issued and vesting within one month of approval by Shareholders; ii. 1 0,000,000 Shares to be issued within one month of approval by Shareholders and vesting after the following conditions precedent: a) Shengqiang (Sean) Zhou remains a Director until the date the Shares vest; and b) One year after the date the Shares are issued: iii. 1 0,000,000 Shares to be issued within one month of approval by Shareholders and vesting after the following conditions precedent: a) Shengqiang (Sean) Zhou remains a Director until the date the Shares vest; and b) Two years after the date the Shares are issued; and iv. 1 0,000,000 Shares to be issued within one month of approval by Shareholders and vesting after the following conditions precedent; a) Shengqiang (Sean) Zhou remains a Director until the date the Shares vest; and b) Three years after the date the Shares are issued: 3. The Company issued 40,000,000 Plan Shares for a price of $0.09 per Plan Share to Zhenzhu (Carol) Zhang. Subject to the terms of the Plan, the Plan Shares cannot be sold, transferred, assigned, charged or otherwise encumbered until the following Vesting Conditions are satisfied, unless waived by the Board in accordance with the Plan (such period being the Restriction Period): i. 20,000,000 Shares to be issued and vesting within one month of approval by Shareholders; ii. 2 0,000,000 Shares to be issued within one month of approval by Shareholders and vesting after the following conditions precedent; a) Zhenzhu (Carol) Zhang remains a Director until the date the Shares vest; and b) and whichever occurs first: A. two years after the date the Shares are issued; and B. t he Company’s JORC 2012 resource determined by a Competent Person independent to the Company increases to 1.8 million ounces of gold. At balance date, the relevant interest of each key management personnel in the Company’s plan shares were: Balance at the start of the year Loan plan shares issued Expired Vested Balance at end of the year Vested and exercisable Unvested 2022 Bruce McInnes – 50,000,000 – 25,000,000 25,000,000 25,000,000 Craig Wallace – – – – – – Shengqiang Zhou – 40,000,000 – 10,000,000 10,000,000 30,000,000 Zhenzhu Zhang – 40,000,000 – 20,000,000 20,000,000 20,000,000 Yanchao Guo – – – – – – – 130,000,000 – 55,000,000 55,000,000 75,000,000 Shares At the General Meeting of shareholders held on 27 August 2018, shareholders approved the establishment of the Vango Mining Share Plan (‘Share Plan’) in accordance with ASX Listing Rule 7.2 and sections 259B(2) and 260c(4) of the Corporations Act. Under the Share Plan, eligible participants are provided with a non-recourse loan from the Company to fund the subscription price of issued shares in accordance with the terms and conditions of the Share Plan. Directors’ Report continued
Vango Mining Limited Annual Report 2022 23 At the General Meeting of shareholders held on 25 November 2020, shareholders approved the establishment of the Vango Mining Limited Employee Equity Incentive Plan (‘EIP’) in accordance with ASX Listing Rule 7.2 (exception 13). Eligible participants of the Share Plan may not deal with the shares while the loan remains outstanding. Although the Share Plan shares are shares for legal and taxation purposes, Accounting Standards require they be treated as options for accounting purposes. Their value is the estimated fair value using the Black-Scholes option pricing model which is expensed in the year of issue. In accordance with the terms and conditions of the Share Plan, the shares are under a Company-imposed trading lock until such time as each Director has repaid the loan provided by the Company to fund the subscription price for shares issued to them. It is at the Board’s discretion whether to seek early repayment of the loan should the Director cease to be employed by the Company. At balance date the relevant interest of each key management personnel in ordinary fully paid shares of the Company were: Balance at the start of the year or appointment date (as applicable) Acquired Granted as part of remuneration Capital raising fee (approved on 25 November 2020 by members) Balance at end of the year or resignation date (as applicable) 2022 Bruce McInnes 19,371,373 50,000,000 – – 69,371,373 Shengqiang Zhou 56,123,203 40,000,000 – – 96,123,203 Zhenzhu Zhang 89,987,795 70,769,231 – – 160,757,026 Yanchao Guo 163,839,254 – – – 163,839,254 Craig Wallace 277,749 – – – 277,749 2021 Bruce McInnes 14,350,918 3,125,000 1,895,455 – 19,371,373 Andrew Stocks (resigned 14 December 2020) – – – – – Shengqiang Zhou 54,289,873 – 1,833,330 – 56,123,203 Zhenzhu Zhang 86,354,474 2,500,000 1,133,321 – 89,987,795 Yanchao Guo 119,213,235 12,126,019 – 32,500,000 163,839,254 Matthew Keegan (appointed 27 October 2020 and resigned 15 December 2020) – – – – – Craig Wallace (appointed 11 January 2021) 14,830 262,919 – – 277,749 Link to Performance Shares issued under the Share Plan are treated as options for accounting purposes, there are no performance requirements to be met before exercise can take place largely because by setting the option price or share price at a level above the current share price at the time the options or shares are granted, the Board considers this to be a sufficient, long-term incentive to align the goals of the Directors and management with those of the shareholders to improve the Company’s performance. The Board will continue to monitor this policy to ensure that it is appropriate for the Company in future years. End of remuneration report
24 Vango Mining Limited Annual Report 2022 Shares Under Option The Company has 90,864,406 shares under option (2021: 115,864,406) and 130,000,000 Loan Plan Shares. By payment of the exercise price, each option provides the holder with the right to be issued one ordinary fully paid share by the Company. Unless the options are converted into shares with payment of the strike price, no person entitled to exercise these options had or has any right by virtue of the option to participate in any share issue of the Company or any related body corporate. Issue Date Exercise Price Expiry Date Number 1 July Issued Expired Number 30 June 2022 18 June 2019 $0.25 18 June 2022 12,500,000 – (12,500,000) – 18 June 2019 $0.25 18 June 2022 12,500,000 – (12,500,000) – 18 June 2019 $0.30 18 June 2024 25,000,000 – – 25,000,000 18 June 2019 $0.35 18 June 2024 12,500,000 – – 12,500,000 18 June 2019 $0.50 18 June 2024 12,500,000 – – 12,500,000 18 June 2019 $0.60 18 June 2024 25,000,000 – – 25,000,000 19 December 2019 $0.21 19 December 2022 9,864,406 – – 9,864,406 20 August 2020 $0.112 20 August 2023 6,000,000 – – 6,000,000 5 November 2021 $0.09 5 November 2024 50,000,000 – – 50,000,000 5 November 2021 $0.09 5 November 2024 40,000,000 – – 40,000,000 5 November 2021 $0.09 5 November 2024 40,000,000 – – 40,000,000 Total 245,864,406 - (25,000,000) 220,864,406 2021 11 July 2018 $0.27 11 July 2020 16,253,904 – (16,253,904) – 18 June 2019 $0.25 18 June 2022 12,500,000 – – 12,500,000 18 June 2019 $0.25 18 June 2022 12,500,000 – – 12,500,000 18 June 2019 $0.30 18 June 2024 25,000,000 – – 25,000,000 18 June 2019 $0.35 18 June 2024 12,500,000 – – 12,500,000 18 June 2019 $0.50 18 June 2024 12,500,000 – – 12,500,000 18 June 2019 $0.60 18 June 2024 25,000,000 – – 25,000,000 21 November 2019 $0.27 21 November 2020 15,613,014 – (15,613,014) – 19 December 2019 $0.21 19 December 2022 9,864,406 – – 9,864,406 20 August 2020 $0.112 20 August 2023 – 6,000,000 – 6,000,000 Total 141,731,324 6,000,000 (31,866,918) 115,864,406 Dividends No dividend has been paid during the financial year and no dividend is recommended for the financial year. There were no dividends paid, recommended or declared during the current or previous financial year. 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 purposes of taking responsibility on behalf of the Company for all or part of those proceedings. The Company was not a party to any such proceedings during the year. Directors’ Report continued
Vango Mining Limited Annual Report 2022 25 Indemnification and Insurance of Directors and Officers During the financial year, the Company paid a premium in respect of a contract insuring all its Directors and current Executive Officers against a liability incurred as such a director or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Company has not otherwise, during or since the financial year, indemnified or agreed to indemnify an officer or auditor of the Company against a liability incurred as such an officer or auditor. Indemnification of Auditors To the extent permitted by Law, the Company has agreed to indemnify its auditors as part of the terms of its audit engagement agreement against claims by third parties arising from the audit. No payment has been made to indemnify the auditors during the financial year. Non-Audit Services There were no non-audit services provided by the Company’s auditors during the financial year. Lead Auditor’s Independence Declaration The Lead Auditor’s Independence Declaration for the financial year ended 30 June 2022 has been received as required under Section 307C of the Corporations Act 2001 and can be found on the following page. Signed in accordance with a resolution of the Board of Directors. Mr Bruce McInnes Executive Chairman Leeton, New South Wales 30 September 2022
26 Vango Mining Limited Annual Report 2022 26 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 13, 60 Castlereagh Street Sydney NSW 2000 GPO Box 5138 Sydney NSW 2001 T +61 (0) 2 8226 4500 F +61 (0) 2 8226 4501 www.rsm.com.au AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the financial report of Vango Mining Limited for the year ended 30 June 2022, 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 Gary Sherwood Partner Sydney, NSW Dated: 30 September 2022 Auditor’s Independence Declaration
RkJQdWJsaXNoZXIy MjE2NDg3