AMANI GOLD LIMITED
(ABN 14 113 517 203)
ANNUAL REPORT
2018
Amani Gold Limited
Corporate Directory
Directors
Yu Qiumin
Chan Sik Lap
Grant Thomas
Fu Sheng
Antony Truelove
Company Secretary
Craig McPherson
Registered and Administrative
Office
Suite 28
1 Park Road
Milton
Queensland 4064
Telephone:
+61 1300 258 985
Auditors
Share Registry
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco Western Australia 6008
Advanced Share Registry Limited
110 Stirling Highway
Nedlands Western Australia 6009
Telephone: +61 8 9389 8033
Facsimile: +61 8 9262 3723
Website:
www.amanigold.com
Securities trade on the Australian Securities Exchange – ANL
Page 1
Amani Gold Limited
Contents
For the year ended 30 June 2018
Chairman’s Message
Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Audit Report
Additional Shareholder Information
3
4
10
21
22
23
26
26
27
53
54
57
Page 2
Amani Gold Limited
Chairman’s Message
For the year ended 30 June 2018
Dear Shareholders,
I am pleased to present the 2018 Annual Report for Amani Gold Limited (ASX: ANL).
This year has seen your Company continue to concentrate our exploration focus and development efforts into our
flagship Giro Gold Project in the Democratic Republic of Congo.
Attendent with a new change of Board and management, the Company has spent considerable time and effort in
developing a new corporate outlook, expressing our intention to become a major gold player with over 10 Moz Au
resources in the DRC, building on from the existing 2.3 Moz Au Resource at Giro. As such, the Company announced
in June its new strategy which is divided into three key areas:
• Mining
• Discovery
• Acquisition
The Board and Management is now focused on moving toward project feasibility and potential gold production, with
all efforts now directed to implementing this strategy. As part of this, resource estimates for the Giro Gold Project
will be upgraded and new resource estimates will be completed for prospects such as Douze Match where we have
completed over 400 drill holes to date.
Our Giro Gold Project shows significant opportunity to build on the existing resource, given it demonstrates the same
geological setting as Randgold’s 16 Moz Kibali Gold Deposit which is located just 35km away from Giro.
The drilling program throughout the year was a resounding success with a total of 10 diamond core drill holes for
1,050m and 120 RC drill holes for 7,024m completed on Kebigada satellite targets: Congo Ya Sika, Kebigada North
and Kebigada NW extension targets and at the Douze Match prospect.
The Company is already well placed with its existing DRC assets as a foundation for the +10 Moz goal and will
aggressively work towards achieving it by implementing the new strategy over the coming year to include:
• Extending and defining mineralisation at Kebigada
• Complete Feasibility Study
• Assess near term mining options
• Define Kebigada Satellite and Douze Match mineralisation – integrated Mine Plan
• Discoveries via exploration through extensive geochemical and geophysical surveys
• Major drilling campaigns 10,000-15,000m (RC and core)
• Aggressive acquisition of quality gold projects
We look forward to working towards production throughout this coming year and wish to thank all of our
shareholders for their continued support.
YU Qiuming
Chairman
Page 3
Amani Gold Limited
Review of Operations
For the year ended 30 June 2018
REVIEW OF OPERATIONS
GIRO GOLD PROJECT, DEMOCRATIC REPUBLIC OF CONGO (Amani 55.25%)
The Amani Giro Gold Project is located within the Moto Greenstone Belt, NE Democratic Republic of Congo (DRC). The
Project comprises two permits covering 497km² (PE’s 5046 and 5049) and is located 35km west of Randgold / Anglo Ashanti’s
16 Moz Kibali depositis (Figure 1).
The Giro Project area is underlain by highly prospective volcano-sedimentary lithologies in a similar structural and lithological
setting as the Kibali gold deposits. Both primary and alluvial gold was mined from two main areas, the Giro and Tora areas,
during Belgian rule and today these areas are mined extensively by artisanal miners.
To put into perspective and significance of the area, Rangold has signed a JV agreement for 51% of the Moku Licences which
border Giro to the east.
Infrastructure wise, Giro is well situated, gifted with easy access to the well-maintained road to Kampala, Uganda which is highly
developed.
Figure 1: Giro project location in north-east Democratic Republic of Congo
During the year, Amani completed extensive Reverse Circulation (“RC”) and diamond drilling programmes to expand the current
global gold resource of 45.62 million tonnes for 2.14 million ounces of gold at 1.5g/t Au for the Kebigada deposit (0.9g/t Au
cut-off grade) by delineating satellite prospects and to define a resource at the highly prospective Douze Match prospect (resource
estimate underway).
The drilling campaign was completed between November 2017 – February 2018 and comprised a total of 10 diamond core drill
holes for 1,050m and 120 RC drill holes for 7,024m on Kebigada satellite targets, namely; Congo Ya Sika, Kebigada North and
Kebigada NW extension targets and at Douze Match prospect (Figures 2-4).
Regional and infill soil sampling programmes were completed over gold targets with full coverage of both PE’s 5046 and 5049.
Page 4
Amani Gold Limited
Review of Operations
For the year ended 30 June 2018
Figure 2: Tenement Map at Giro showing prospects, interpreted structural corridor and soil anomalies
Page 5
Amani Gold Limited
Review of Operations
For the year ended 30 June 2018
Kebigada and Satellite Prospects
Amani has outlined a gold resource at Kebigada, within the Giro Gold Project, of 45.62Mt @ 1.46g./t Au for 2.14Moz at a cut-
off grade of 0.9g/t Au (see ASX Announcement 20 October 2017, Table 1).
Table 1. Kebigada Mineral Resource at 0.90g/t Cut-Off Grade
Category
Laterite
Measured
Indicated
Inferred
Total Laterite
Saprolite
Measured
Indicated
Inferred
Total Saprolite
Fresh
Measured
Indicated
Inferred
Total Fresh
Total
Measured
Indicated
Inferred
Total Mineral
Resource
Notes:
Tonnes
(Millions)
Au grade
g/t
Ounces
(Millions)
-
1.18
0.77
1.95
-
1.93
0.77
2.69
-
13.37
27.60
40.97
-
16.48
29.14
45.62
-
1.65
1.20
1.47
-
1.55
1.27
1.47
-
1.51
1.43
1.46
-
1.53
1.42
1.46
-
0.06
0.03
0.09
-
0.10
0.03
0.13
-
0.65
1.27
1.92
-
0.81
1.33
2.14
1. All tabulated data has been rounded and as a result minor computational errors may occur.
2. Mineral Resources which are not Ore Reserves have no demonstrated economic viability.
3. The Gross Mineral Resource for the Project is reported.
Drilling
During the year, at Kebigada, a total of 61 RC drill holes for 3,450m were completed on Kebigada satellite targets which were
previously identified in exploration as either soil anomalies, IP/resistivity anomalies or areas of extensive artisanal mining
activities (Figure 3).
Page 6
Amani Gold Limited
Review of Operations
For the year ended 30 June 2018
6m at 4.83g/t,
incl. 4m at 6.72g/t
5m at 13.74g/t,
Incl. 2m at 32.36g/t
2m at 3.73g/t
5m at 1.41g/t,
incl. 1m at 4.13
4m at 5.75g/t,
Incl. 2m at 10.1g/t
6m at 5.8g/t,
incl. 3m at 10.9g/t
7m at 2.33g/t,
Incl. 1m at 12.8g/t
19m at 1.36g/t,
incl. 4m at 4.41g/t
19m at 1.36g/t,
incl. 4m at 4.41g/t
3m at 42.11g/t,
incl. 2m at 62.65g/t
IP
Chargeability
5m at 2.51g/t,
incl. 2m at 4.77g/t
14m at 5.12g/t,
incl. 4m at 16.15g/t
Figure 3: Kebigada satellite targets and selected assay results. Map shows both Soil and IP Chargeability anomalies.
Anomaly zones are Congo Ya Sika (green frame), Giro Vein (Red frame), Belgians Trench (Purple frame) and Kebigada
East, North and Northeast (black frames)
Amani has previously reported high grade gold drill hole assay results from the 61 RC holes which were completed at Congo Ya
Sika, Kebigada East, Kebigada Northwest and Giro Vein (see ASX Announcements 2 January 2018, 15 February 2018, 19 April
2018 and Quarterly Report June 2018), with significant highlights including:
• Kebigada NW Extension:
o 6m at 4.83g/t Au from 45m, incl. 4m at 6.72g/t Au from 45m (GRRC274)
o 5m at 1.41g/t Au from 30m, incl. 1m at 4.13g/t Au from 30m (GRRC279)
o 4m at 5.75g/t Au from 29m, incl. 2m at 10.10g/t Au from 29m (GRRC282)
o 7m at 2.33g/t Au from 20m, incl. 1m at 12.8g/t Au from 20m (GRRC284)
o 5m at 13.74g/t Au from 21m, incl. 2m at 32.36g/t Au from 22m (GRRC285)
• Congo Ya Sika
o 3m at 42.11g/t Au from 10m, incl. 2m at 62.56g/t Au from 10m (GRRC297)
• Kebigada Northwest and Giro Vein
o 3m at 1.22g/t Au from 12m (GRRC300)
o 3m at 1.24g/t Au from 42m (GRRC302)
o 6m at 0.98g/t Au from 54m (GRRC306)
o 6m at 0.90g/t Au from 11m (GRRC307)
Page 7
Amani Gold Limited
Review of Operations
For the year ended 30 June 2018
Douze Match
During the year, at Douze Match, a total of 10 diamond core drill holes for 1,050m and 59 RC drill holes for 3,574m were
completed, principally as infill drilling to to define a resource (resource estimate underway). The drilling campaign was
completed between November 2017 – February 2018 (Figure 4).
The RC drilling was also aimed at delineating continuity along strike of the NE-trending and SE-dipping Douze Match gold
mineralization at the granite – volcanic contact and the diamond core drilling aimed to extend mineralization at depth. To date,
less than 1.5km of the 6km long NE-trending gold in soil anomaly at Douze Match has been adequately drill tested.
Figure 4: Douze Match surface soil results, drill hole traverses and selected assay results
Amani has previously reported high grade gold drill hole assay results from the 10 diamond core and 61 RC holes which were
completed at Douze Match (see ASX Announcements 2 January 2018, 15 February 2018, 19 April 2018 and Quarterly Report
June 2018), with significant highlights including:
• Douze Match
o 7m at 3.32g/t Au from 29m, (DMRC249)
o 5m at 4.01g/t Au from 16m, (DMRC282)
o 14m at 2.84g/t Au from 54m, (DMRC286)
o 17m at 2.05g/t Au from 36m, (DMRC287)
o 14m at 4.11g/t Au from 16m, (DMRC289)
o 6m at 3.00g/t Au from 77m, (DMRC293)
o 11m at 4.69g/t Au from 77m, incl. 2.0m at 22.75g/t Au from 76m (DMR301)
o 14m at 2.72g/t Au from 28m, (DMRC311)
o 16m at 1.24g/t Au from 80m, incl. 3.4m at 2.42g/t Au from 85.5m and 2m at 2.23g/t Au from 94m
(DMDD009)
Page 8
Amani Gold Limited
Review of Operations
For the year ended 30 June 2018
o 16m at 1.75g/t Au from 52.5m, incl. 5.75m at 3.54g/t Au from 60m and 18.3m at 3.89g/t Au from 72.7m,
incl. 11.3m at 5.68g/t Au from 72.7m (DMDD010)
o 12m at 1.95g/t Au from 110m, incl. 0.85m at 6.05g/t Au from 111.2m, 0.7m at 9.57g/t Au from 116.3m and
1.8m at 3.44g/t Au from 120.2m (DMDD014)
o 5m at 1.83g/t Au from 11m, incl. 1m at 6.23g/t Au from 11m (DMRC321)
o 7m at 3.67g/t Au from 12m, incl. 3m at 7.74g/t Au from 12m (DMRC343)
o 10m at 2.08g/t Au from 27m, incl. 6m at 3.19g/t Au from 31m (DMRC344)
o 4m at 3.11g/t Au from 98m, incl. 3m at 3.79g/t Au from 98m, (DMRC346)
o 4m at 3.81g/t Au from 0m, incl. 2m at 3.81g/t from 2m and 13m at 1.63g/t from 14m, incl. 2m at 5.78g/t
from 14m (DMRC351)
o 4m at 3.53g/t Au from 22m, incl. 1m at 9.88g/t Au from 22m, (DMRC352)
o 4m at 7.03g/t Au from 51m (DMRC354)
o 4m at 2.95g/t Au from 27m, incl. 1m at 9.45g/t Au from 29m, (DMRC385)
The drilling results have confirmed the NE-SW trending nature of the gold mineralization at Douze Match. It is interpreted that
the NE-SW trending mineralisation at Douze Match may have a shallow NE-dipping plunge which may be tested by several
diamond core drill holes in follow-up drill campaigns.
In May a total of 392 drill hole, auger and surface samples, for approximately 750kg, were selected from Douze Match oxide
zone and dispatched to laboratories in China for sighter metallurgical studies.
Following the success of the drill program outlining significant gold mineralization at multiple prospects, Amani has planned an
additional 10-15,000m of combined RC and diamond drilling at Giro Gold Project in late 2018 to increase ore body confidence
at the main Kebigada deposit, fully delineate Congo Ya Sika and Kebigada NW, Kolongoba targets and Douze Match plus test
additional prospects as they are defined (Figure 2).
Competent Person’s Statement
The information in this report that relates to exploration results, mineral resources and ore reserves is based on, and fairly represents
information and supporting documentation prepared by Mr Grant Thomas, a Competent Person who is a member of The Australasian Institute
of Mining and Metallurgy and Australian Institute of Geoscientists. Mr Thomas is a director of Amani Gold Limited. Mr Thomas has sufficient
experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify
as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resource and
Ore Reserves”. Mr Thomas consents to the inclusion in this report of the matters based on his information in the form and context in which it
appears.
The information in this report that relates to the Giro Gold Project has been previously reported by the Company in compliance with JORC
2012 in various market releases. The Company confirms that it is not aware of any new information or data that materially affects the
information included in those earlier market announcements.
Page 9
Amani Gold Limited
Directors’ Report
For the year ended 30 June 2018
Your Directors present their report together with the financial statements of Amani Gold Limited and the entities it
controlled at the end of, or during, the year ended 30 June 2018 (“the consolidated entity” or “Group”) and the
auditor’s report thereon.
DIRECTORS
The names and details of the Directors in office during or since the end of the financial year are as follows. Directors
were in office for the entire year unless otherwise stated.
Qiuming Yu
Chairman from 11 July 2017
(appointed Director on 11 July
2017)
Mr Qiuming Yu holds a Bachelor’s degree from Nanjing University of
China. He has a wealth of mine investment, development and management
experience. In 2006, Mr Yu initiated the creation of China Poly Group
Energy Sector (Poly Energy Holdings Limited) (Poly Energy), the main
business of which is the development of nonferrous metals and coal
resources. He has been instrumental in the development of a number of
producing copper-zinc mines in China.
In the last three years Qiuming Yu has not been, an is currently not, a director
of any ASX listed companies.
Sheng Fu
Non-Executive Director
(appointed Director on 11 July
2017)
Mr Sheng Fu holds a Bachelor’s degree in mining machinery. He has
significant experience investing in, developing and managing mines and has
been involved in the creation of more than ten mining entities. In particular,
Mr Fu has a very deep understanding of non-ferrous metals project
development and management.
Sik Lap Chan1
MAusIMM, MAIG
Managing Director and CEO
(appointed Director on 11 July
2017)
1 With effect from 1 September 2017, Mr
Chan has been appointed in an executive
role and with effect from 1 April 2018,
Mr Chan has been appointed Managing
Director and CEO
Mr Fu is currently the General Manager of Hubei Huangshi Xin Delong
Mining Co., Ltd and Chairman of Xinjiang Shanshan Houwang Copper Mine
Co., Ltd, which has a copper-zinc mine plant with a production capacity of
450,000 tons / year.
In the last three years Sheng Fu has not been, an is currently not, a director
of any ASX listed companies.
Mr Sik Lap Chan holds a Bachelor of Science degree with first class honors
in the Department of Earth Sciences from the University of Hong Kong in
2004. He subsequently obtained a Masters in Philosophy and lectured, both
at the University of Hong Kong from 2013 to 2014.
Mr Chan is a professional geologist and valuer with more than 12 years
experience in the mining industry. He has been involved in the planning,
supervision of various exploration prgrams,
implementation and
resources/reserve estimation, open pit and underground production,
feasibility
compilation,
JORC
Engineering/Procurement/Construction (EPC)/Management, valuation and
listing preparation for mineral assets in Australia, China, North America,
Central and South-East Asia.
studies,
report
Mr Chan has held senior management positions in diverse international
exploration and mining companies providing him experience in corporate
management,
and
environmental, health and safety. He has also undertaken a number of senior
executive roles with mining consulting and valuation companies.
development
government
business
liaisons,
Page 10
Amani Gold Limited
Directors’ Report
For the year ended 30 June 2018
Grant Thomas2
BSc (Hon)
Executive Director
(Director since 1 January 2018)
2 With effect from 1 April 2018, Mr
Thomas has been appointed
in an
executive role as Technical Director
Antony Truelove3
BSc (Hon)
Non-Executive Director
(Director since 27 March 2018)
3 Mr Truelove is considered to be and
Independent Non-Executive Director
Grant Thomas Mr Thomas is a geoscientist and experienced company
director and is currently director of ASX listed company Kazakhstan Potash
Corporation Limited. Mr Thomas has previously served as Managing
Director of ASX listed Tianshan Goldfields Limited, Celsius Coal Limited,
ActivEX Limited and has held senior positions with Rio Tinto Exploration
(Australia, Brazil and China) and Hamersley Iron. Mr Thomas has 30 years
of professional experience covering project acquisition, mineral exploration
and resource project evaluations for several minerals, including diamonds,
gold, iron ore, copper, lead, zinc, uranium, fluorspar and coal in Australia,
China, South Africa, Tajikistan, Kazakhstan, Brazil, Cambodia and
Mongolia. Mr Thomas has completed several substantial capital raisings in
London, Sydney, Hong Kong and Singapore. Mr Thomas has been involved
with successful project leadership and exploration discoveries within
Australia and China including; Homestead, Mount Sheila and Mount Sylvia
(iron ore) and 2.4Moz Au Xinjiang Gold Mountain and Kuan Gou (gold)
discoveries. Mr Thomas holds a bachelor’s degree in science from Adelaide
University.
In the past three years Mr Thomas has been a director of ASX listed company
ActivEX Limited, and he is currently a director of ASX listed company
Kazakhstan Potash Corporation Limited.
Mr Truelove is a geologist and experienced company director and is
currently managing director of unlisted UK based company Anglo Saxony
Mining Ltd and COO of AIM listed company Panthera Resources Plc. Mr
Truelove has previously floated, and served as Managing Director of, ASX
listed company Southern Cross Goldfields Limited and has held senior
positions with Billiton, Newmont, Newcrest and Delta Gold. Mr Truelove
has 35 years of professional experience in the resource industry covering
project acquisition, mineral exploration and feasibility studies for gold and
tin mineralisation. He has been involved with the discovery and definition
of over 15 million ounces of gold and 120,000t tin, plus associated zinc and
indium. He also has considerable experience in base metals, iron ore and
nickel exploration. Mr Truelove has experience working in Australia,
Indonesia, India, China, UK, Germany, Zimbabwe and West Africa. Mr
Truelove graduated from Adelaide University with a Bachelor of Science
with First Class Honors in 1981.
In the last three years Mr Truelove has not been, an is currently not, a director
of any ASX listed companies.
Klaus Peter Eckhof
Dip. Geol. TU, AusIMM
Mr Eckhof served as the Company’s Managing Director and Chief Executive
Officer up to 12 August 2014, and as part-time Executive Chairman up to 11
July 2017. Mr Eckhof resigned on 27 March 2018.
Mark Andrew Calderwood
MAusIMM
Mr Calderwood was appointed as a Non-Executive Director on 12 August
2014 and resigned on 31 December 2017.
Susmit Mohanlal Shah
BSc Econ, CA
Mr Shah was appointed as a Non-Executive Director and Company Secretary
on 16 June 2005 and resigned on 27 March 2018.
Page 11
Amani Gold Limited
Directors’ Report
For the year ended 30 June 2018
COMPANY SECRETARY
Mr McPherson was appointed as Company Secretary of Amani Gold Limited
on 27 March 2018.
Craig McPherson
BCom, CA
Susmit Mohanlal Shah
BSc Econ, CA
Mr Shah was appointed as a Non-Executive Director and Company Secretary
on 16 June 2005 and resigned on 27 March 2018.
CORPORATE STRUCTURE
Amani Gold Limited is a limited liability company that is incorporated and domiciled in Australia. During the
financial year, it had the following subsidiaries:
• Amani Consulting sarl
• Giro Goldfields sarl
• Burey Resources Pty Ltd (dormant)
PRINCIPAL ACTIVITIES
The principal activity of the consolidated entity during the course of the year was acquiring and exploring mineral
interests, prospective for precious metals and energy.
RESULTS AND DIVIDENDS
The consolidated loss after tax for the year ended 30 June 2018 was $1,562,315 (30 June 2017: profit after tax
$257,624). No dividends were paid during the year and the Directors do not recommend payment of a dividend. The
profit for the prior reporting period includes $1,991,919 recognised as a gain on the disposal of subsidiaries in Guinea
and Ghana. The gain primarily comprises a historical foreign currency translation gain of $2,062,807, which was
transferred from the foreign currency translation reserve to profit or loss for the period as a result of the disposal of
the West African subsidiaries.
EARNINGS PER SHARE
Basic loss per share for the year was 0.10 cents (30 June 2017: profit 0.02 cents).
REVIEW OF OPERATIONS / OPERATING AND FINANCIAL REVIEW
The Group is engaged in mineral exploration for metals and energy in North-East Democratic Republic of Congo
(“DRC”). A review of the Group’s operations, including information on exploration activity and results thereof,
financial position, strategies and projects of the consolidated entity during the year ended 30 June 2018 is provided
in this Financial Report and, in particular, in the "Review of Operations" section immediately preceding this
Directors’ Report. The Group’s financial position, financial performance and use of funds information for the
financial year is provided in the financial statements that follow this Directors’ Report.
As an exploration entity, the Group has no operating revenue or earnings and consequently the Group’s performance
cannot be gauged by reference to those measures. Instead, the Directors’ consider the Group’s performance based
on the success of exploration activity, acquisition of additional prospective mineral interests and, in general, the value
added to the Group’s mineral portfolio during the course of the financial year.
Whilst performance can be gauged by reference to market capitalisation, that measure is also subject to numerous
external factors. These external factors can be specific to the Group, generic to the mining industry and generic to
the stock market as a whole and the Board and management would only be able to control a small number of these
factors.
Page 12
Amani Gold Limited
Directors’ Report
For the year ended 30 June 2018
The Group’s business strategy for the financial year ahead and, in the foreseeable future, is to continue exploration
activity on the Group’s existing mineral project, identify and assess new mineral project opportunities in the DRC
and review development strategies where individual projects have reached a stage that allows for such an assessment.
Due to the inherent risky nature of the Group’s activities, the Directors are unable to comment on the likely results
or success of these strategies. The Group’s activities are also subject to numerous risks, mostly outside the Board’s
and management’s control. These risks can be specific to the Group, generic to the mining industry and generic to
the stock market as a whole. The key risks, expressed in summary form, affecting the Group and its future
performance include but are not limited to:
• Geological and technical risk posed to exploration and commercial exploitation success;
• Sovereign risk, change in government policy, change in mining and fiscal legislation;
• Prevention of access by reason of political or civil unrest, disease, outbreak of hostilities, inability to obtain
regulatory or landowner consents or approvals, or native title issues;
force majeure events;
•
• change in metal market conditions;
• mineral title tenure and renewal risks; and
• capital requirement and lack of future funding.
This is not an exhaustive list of risks faced by the Group or an investment in it. There are other risks generic to the
stock market and the world economy as a whole and other risks generic to the mining industry, all of which can
impact on the Group.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
During the first quarter of the financial year, the Company completed a $15 million private placement with Luck
Winner Investment Limited to fund its exploration activities and to supplement working capital.
EVENTS SUBSEQUENT TO REPORTING DATE
Since the end of the financial year and to the date of this report no matter or circumstance has arisen which has
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 subsequent financial years other than the matters referred
to below.
• On 9 August 2018 the Company announced that it had received commitments to issue 116,666,667 fully paid
ordinary shares (New Shares) at a price of $0.015 each for $1.75M (‘Placement’). In addition, the Company
agreed to issue convertible notes with a face value of $0.953M (‘Notes’). The Notes have a 12-month
maturity from the date of issue (‘Maturity Date’) and will attract interest at a rate of 6% per annum,
commencing from the date which is 4 months from the date of issue. The Company may elect to repay all or
part of the outstanding Notes at any time prior to the Maturity Date. In addition, the Company may elect to
convert any of the Notes into new shares at $0.015 per share.
The Placement and Notes will be applied to the Company’s project in the DRC (including relocation of
artisanal miners), repayment of unsecured loans and for general working capital purposes.
Page 13
Amani Gold Limited
Directors’ Report
For the year ended 30 June 2018
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Company’s objective is to maximise shareholder value through the discovery and delineation of significant
mineral deposits. The Directors will also continue to assess additional opportunities within the mineral and energy
sectors in Central Africa.
The Directors are unable to comment on the likely results from the Company’s planned exploration and pre-
development activities due to the speculative nature of such activities.
DIRECTORS’ MEETINGS
The number of meetings of the Company’s Directors and the number of meetings attended by each Director during
the year ended 30 June 2018 are:
Directors’ meetings held during
period of office
Directors’ meetings attended
Yu Qiuming (appointed 11 July 2017)
Fu Sheng (appointed 11 July 2017)
Chan Sik Lap (appointed 11 July 2017)
G Thomas (appointed 1 January 2018)
T Truelove (appointed 27 March 2018)
K P Eckhof (resigned 27 March 2018)
M A Calderwood (resigned 31 December 2018)
S M Shah (resigned 27 March 2018)
K P Thomson (resigned 11 July 2017)
5
5
5
4
3
2
1
2
-
4
1
5
4
3
2
1
2
-
There were 5 directors’ meetings held during the year. However, matters of Board business have been resolved by
circular resolutions of Directors, which are a record of decisions made at a number of informal meetings of the
Directors held to control, implement and monitor the Group’s activities throughout the period.
At present, the Company does not have any formally constituted committees of the Board. The Directors consider
that the Group is not of a size nor are its affairs of such complexity as to justify the formation of special committees.
DIRECTORS’ INTERESTS
The interests of each Director in the securities of Amani Gold Limited at the date of this report are as follows:
Fully Paid
Ordinary Shares
Options Over
Ordinary Shares
Qiuming Yu (appointed 11/7/17)
Sheng Fu (appointed 11/7/17)
Sik Lap Chan (appointed 11/7/17)
Grant Thomas (appointed 1/1/18)
Antony Truelove (appointed 27/3/18)
300,000,000(1)
300,000,000(1)
-
200,000
-
-
-
-
-
-
(1) Each of Mr Yu and Mr Fu has a relevant interest in 300 million shares, as directors and controllers of Luck
Winner Investment Limited which is the registered holder of 300 million shares in the Company.
Page 14
Amani Gold Limited
Directors’ Report
For the year ended 30 June 2018
SHARE OPTIONS AND PERFORMANCE RIGHTS
As at the date of this report, there are 41,500,000 unlisted options on issue.
Unlisted Options
Number
7,500,000
7,500,000
7,500,000
9,500,000
9,500,000
Exercise Price
3 cents
4 cents
5 cents
8 cents
10 cents
Expiry Date
31 December 2020
31 December 2020
31 December 2020
2 November 2019
2 November 2019
There were no unlisted options issued to employees during the year under the Employee Option Plan. 10,000,000
unlisted options previously issued to directors under the Employee Option Plan lapsed during the year following their
resignation. No unlisted options were exercised.
During the prior year, 67.5 million performance rights (issued in FY2016) and half of the 17 million performance
rights (issued in FY2015) vested and were converted into shares. The balance of 8.5 million performance rights
(issued in FY2015) vested in the current year and were converted into shares. As at the date of this report, there are
no performance rights on issue.
During the year, 211,415 listed options were exercised and converted into shares. The remaining 434,039,922 listed
options expired on 31 July 2017.
This report outlays the remuneration arrangements in place for the Directors of Amani Gold Limited. The information
provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.
Remuneration Report – Audited
The Director in office during the period are contained on Page 10 of this report. Other than the Directors there were
no Key Management Personnel.
Remuneration philosophy
The Board reviews the remuneration packages applicable to the executive Director and non-executive Directors on
an annual basis. The broad remuneration policy is to ensure the remuneration package properly reflects the person’s
duties and responsibilities and level of performance and that remuneration is competitive in attracting, retaining and
motivating people of the highest quality. Independent advice on the appropriateness of remuneration packages is
obtained, where necessary, although no such independent advice was sought during the financial year.
Remuneration is not linked to past company performance but rather towards generating future shareholder wealth
through share price performance. As a minerals explorer, the Company does not generate operating revenues or
earnings and company performance, at this stage, can only be judged by exploration success and ultimately
shareholder value. Market capitalisation is one measure of shareholder value but this is subject to many external
factors over which the Company has no control. Consequently linking remuneration to past performance is difficult
to implement and not in the best interests of the Company. Presently, total fixed remuneration for senior executives
is determined by reference to market conditions and incentives for out performance are provided by way of options
or performance rights over unissued shares. The Directors believe that this best aligns the interests of the shareholders
with those of the senior executives.
Page 15
Amani Gold Limited
Directors’ Report
For the year ended 30 June 2018
Remuneration committee
The Company does not have a formally constituted remuneration committee of the Board. The Directors consider
that the Group is not of a size nor are its affairs of such complexity as to justify the formation of a Remuneration
committee.
The Board assesses the appropriateness of the nature and amount of remuneration of Directors and senior managers
on a periodical basis by reference to relevant employment market conditions with the overall objective of ensuring
maximum stakeholder benefit from the retention of a high quality board and management team.
Remuneration structure
In accordance with best practice corporate governance, the structure of non-executive Directors and executive
Director remuneration is separate and distinct.
Non-executive Directors remuneration
Objective
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and
retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive Directors shall
be determined from time to time by a general meeting. An amount not exceeding the amount determined is then
divided between the directors as agreed. The present limit of approved aggregate remuneration is $200,000 per year.
The Board aims to reviews the remuneration packages applicable to the non-executive Directors on a regular basis.
The Board considers fees paid to non-executive directors of comparable companies when undertaking its review
process. The Board determines the level of remunearation to be paid to non-executive Directors as considered
appropriate in the circumstances. Non-executive Directors fees are currently $36,000 per annum.
The remuneration of the non-executive Directors for the year ending 30 June 2018 is detailed in Table 2 of this report.
Executive Directors remuneration
Objective
The Company aims to reward Executive Directors with a level of remuneration commensurate with their position
and responsibilities within the Company and so as to:
• align the interests of the Executive Directors with those of shareholders;
• link reward with the strategic goals and performance of the Company; and
• ensure total remuneration is competitive by market standards.
Structure
Remuneration consists of the following key elements:
• Fixed remuneration
• Variable remuneration
Page 16
Amani Gold Limited
Directors’ Report
For the year ended 30 June 2018
Fixed remuneration
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the
position and is competitive in the market. The Board aims to review fixed remuneration annually and the process
consists of a review of companywide, business unit and individual performance, relevant comparative remuneration
in the market and internal and, where appropriate, external advice on policies and practice.
The fixed component of the Executive Director remuneration for the year ending 30 June 2018 is detailed in Table 2
of this report.
Variable remuneration – Long Term Incentive (‘LTI’)
Objective
The objective of the LTI plan is to reward executives and senior managers in a manner which aligns this element of
remuneration with the creation of shareholder wealth.
As such LTI grants are only made to executives who are able to influence the generation of shareholder wealth and
thus have a direct impact on the Group’s performance.
Structure
LTI grants to executives are delivered in the form of options and performance rights. The issue of options /
performance rights as part of the remuneration packages of executive and non-executive directors is an established
practice of junior public listed companies and, in the case of the Company, has the benefit of conserving cash whilst
properly rewarding each of the directors.
Remuneration is not linked to past group performance but rather towards generating future shareholder wealth
through share price performance. Amani Gold Ltd listed on 14 December 2006 at 20c per share and the share price
at 30 June 2018 was 0.9 cents (2017: 4.3 cents). The shares recorded high and low points of 4.5c and 0.8 cents during
the year. With the exception of the 2017 year, the Company has recorded a loss each financial year to date as it carries
out exploration activities on its tenements. The profit recorded in the 2017 year was due to the disposal of foreign
subsidiaries. No dividends have been paid.
Service agreements
Mr Chan is employed under an employment agreement with Amani Gold Limited which provides for base salary
arrangements as follows: i) $200,000 per annum for the period ending 31 August 2018; ii) $250,000 per annum for
the period ending 31 August 2019; iii) $300,000 per annum from 1 September 2019. The agreement with Mr Chan
provides for 3 months notice of intention to resign. Amani may terminate the agreement by giving 3 months notice.
Mr Thomas is employed under a written employment agreement with Amani Gold Limited as Chief Technical Officer
which provides for base salary arrangements of $180,000 (plus superannuation). The agreement with Mr Thomas
provides for 3 months notice of intention to resign. Amani may terminate the agreement by giving 3 months notice.
Page 17
Amani Gold Limited
Directors’ Report
For the year ended 30 June 2018
Table 2: Director and other Executives Remuneration for the year ended 30 June 2018
Director
Yu Qiuming (i)
Non-executive
Chairman
Fu Sheng (ii)
Non-executive
Chan Sik Lap (iii)
Managing Director
G Thomas (iv)
Executive Director
T Truelove (v)
Non-executive
K P Eckhof (vi)
Executive Chairman
M A Calderwood (vii)
Non-executive
S M Shah (viii)
Non-executive
K P Thomson (ix)
Non-executive
M Gasson (x)
Exploration Manager
Total
Short Term
Cash
Salary/Fees
$
Non-Cash
Benefits
$
Post
Employment
Superannuation
$
EquityValue
of
Incentive
securities
$
Total
$
Incentive
securities as a
Percentage of
Remuneration
%
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
-
-
-
-
158,599
-
75,000
-
9,000
-
97,497
129,996
12,000
24,000
15,000
20,000
-
24,000
-
180,000
367,096
377,996
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,275
-
-
-
-
-
1,140
2,280
1,425
1,900
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
130,100
-
-
-
-
-
-
-
158,599
-
79,275
-
9,000
-
97,497
260,096
13,140
26,280
16,425
140,479
162,379
-
-
-
-
24,000
-
-
-
-
-
-
-
-
-
-
-
-
50%
-
-
-
87%
-
-
-
153,453
333,453
46%
6,840
4,180
-
373,936
424,032
806,208
(i) Mr Yu was appointed as a director on 11 July 2017. He did not receive any remuneration during the year.
(ii) Mr Fu was appointed as a director on 11 July 2017. He did not receive any remuneration during the year.
(iii) Mr Chan was appointed as a director on 11 July 2017. With effect from 1 September 2017, Mr Chan has been appointed in an executive
role and with effect from 1 April 2018, Mr Chan has been appointed Managing Director and CEO.
(iv) Mr Thomas was appointed as a director on 1 Janaury 2018. With effect from 1 April 2018, Mr Thomas has been appointed in an executive
role as Technical Director.
(v) Mr Truelove was appointed as a director on 27 March 2018.
(vi) Mr Eckhof resigned as a director on 27 March 2018. During the prior year, Mr Eckhof was issued 24.25 million shares from the vesting
of performance rights issued in FY2015 and FY2016. No additional incentive securities were issued during the current year. In FY2016,
22.5 million performance rights valued at $447,750 were issued to Mr Eckhof. These performance rights were valued over the vesting
period and the charge to the profit or loss account for the prior reporting period of $130,100.
(vii) Mr Calderwood resigned as a director on 31 December 2017.
(viii)Mr Shah resigned as a director on 27 March 2018. During the prior year, Mr Shah was issued 25.25 million shares from the vesting of
performance rights issued in FY2015 and FY2016. No additional incentive securities were issued during the current year. In FY2016,
22.5 million performance rights valued at $447,750 were issued to Mr Shah. These performance rights were valued over the vesting period
and the charge to the profit or loss account for the prior reporting period of $140,479.
(ix) Mr Thomson resigned as a director on 11 July 2017.
(x) Mr Gasson resigned as exploration manager in the prior financial year. During the prior year, Mr Gasson was issued 26.5 million shares
from the vesting of performance rights issued in FY2015 and FY2016. No additional incentive securities were issued during the current
year. In FY2016, 22.5 million performance rights valued at $447,750 were issued to Mr Gasson. These performance rights were valued
over the vesting period and capitalised to deferred exploration expenditure for the prior reporting period of $153,453.
Page 18
Amani Gold Limited
Directors’ Report
For the year ended 30 June 2018
Shareholdings of Key Management Personnel
The numbers of shares in the Company held during the financial period by Directors and other Key Management
Personnel, including shares held by entities they control, are set out below:
Balance at
1 July 2017
Received as
Remuneration1
Other
Movements
Balance at
30 June 2018
Directors
Yu Qiuming
Fu Sheng
Chan Sik Lap
G Thomas
A Truelove
Klaus Eckhof
Mark Calderwood
Susmit Shah
Kevin Thomson
Mark Gasson
300,000,0002
300,000,0002
Nil2
200,0002
Nil2
24,250,000
2,609,862
17,350,000
Nil
-
-
-
-
-
1,750,000
-
2,750,000
-
26,700,000
4,000,000
-
-
-
-
-
-
-
-
-
-
300,000,000
300,000,000
Nil
200,000
Nil
26,000,0003
2,609,8623
20,100,0003
Nil3
30,700,0003
1Shares issued to Messrs Eckhof, Shah and Gasson were on vesting and conversion of previously issued performance rights
2Balances represent the shares held at the date of appointment as a director
3Balances represent the shares held at the date of retirement as a director
Optionholdings and Performance Rights of Key Management Personnel
The numbers of options and performance rights in the Company held during the financial period by Directors and other
Key Management Personnel, including options held by entities they control, are set out below:
Balance at
1 July 2017
Received as
Remuneration
Exercised /
converted
Expired
Balance at
30 June 2018
Directors
Klaus Eckhof
– Performance rights
Mark Calderwood
- Options
Susmit Shah
- Options
- Performance rights
Kevin Thomson
- Options
Other KMP
Mark Gasson
- Options
- Performance rights
1,750,000
5,000,000
1,050,000
2,750,000
5,000,000
100,000
4,000,000
-
-
-
-
-
-
-
(1,750,000)
-
-
(5,000,000)
-
(2,750,000)
(1,050,000)
-
-
(5,000,000)
-
(4,000,000)
(100,000)
-
Nil1
Nil1
Nil1
Nil1
Nil1
-
-
1Balances represent the shares held at the date of retirement as a director
No options and performance rights were issued to any directors or KMP during the year.
Page 19
Amani Gold Limited
Directors’ Report
For the year ended 30 June 2018
Loans to key management personnel and their related parties
There were no loans outstanding at the reporting date to key management personnel and their related parties.
Use of Remuneration Consultants
The Company did not use any remuneration consultants during the period.
End of Audited Remuneration Report
INDEMNIFICATION AND INSURANCE OF OFFICERS AND AUDITORS
The Company’s Constitution requires it to indemnify directors and officers of any entity within the consolidated
entity against liabilities incurred to third parties and against costs and expenses incurred in defending civil or criminal
proceedings, except in certain circumstances. An indemnity is also provided to the Company’s auditors under the
terms of their engagement. Directors and officers of the consolidated entity have been insured against all liabilities
and expenses arising as a result of work performed in their respective capacities, to the extent permitted by law. The
insurance premium, amounting to $13,942 (2017 - $7,082) relates to:
•
•
costs and expenses incurred by the relevant officers in defending proceedings, whether civil or criminal and
whatever the outcome;
other liabilities that may arise from their position, with the exception of conduct involving a wilful breach of
duty or improper use of information or position to gain a personal advantage.
ENVIRONMENTAL REGULATIONS
The consolidated entity’s exploration activities in the Democratic Republic of Congo during the year were subject to
environmental laws, regulations and permit conditions in that jurisdiction. There have been no known breaches of
environmental laws or permit conditions while conducting operations in the Democratic Republic of Congo during
the year.
The Directors have considered compliance with the National Greenhouse and Energy Reporting Act 2007 which
requires entities to report annual greenhouse gas emissions and energy use. For the measurement period 1 July 2017
to 30 June 2018 the Directors have assessed that there are no current reporting requirements, but may be required to
do so in the future.
NON-AUDIT SERVICES
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or consolidated entity is important. During the year ended
30 June 2018 BDO Corporate Finance provided $25,500 (2017: $nil) in non-audit related services. Refer to Note 4
in the financial statements for further details.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor, BDO Audit (WA) Pty Ltd, has provided the Board of Directors with an independence declaration in
accordance with section 307C of the Corporations Act 2001.
The independence declaration is located on the next page.
Signed in accordance with a resolution of Directors.
Chan Sik Lap
Director - 28 September 2018
Page 20
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY MATTHEW CUTT TO THE DIRECTORS OF AMANI GOLD LIMITED
As lead auditor of Amani Gold Limited for the year ended 30 June 2018, I declare that, to the best of
my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Amani Gold Limited and the entities it controlled during the period.
Matthew Cutt
Director
BDO Audit (WA) Pty Ltd
Perth, 28 September 2018
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
Page 21
Amani Gold Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2018
Revenue from continuing operations
Consultants and corporate costs
Due diligence costs
Employee benefits expense
Share based payments expense
Depreciation expense
Occupancy expenses
Travel expenses
Foreign exchange (loss)
Gain on disposal of subsidiaries
Profit / (loss) before related income tax
Income tax (expense)/benefit
Profit /(loss) for the year after income tax
Net Profit /(loss) attributable to:
Owners of Amani Gold Limited
Non-controlling interest
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit
or loss
Exchange differences on translation of foreign
operations
Reclassification to profit or loss on disposal of
foreign subsidiaries
Total comprehensive income/(loss) for the year
Total comprehensive income/(loss) attributable to:
Owners of Amani Gold Limited
Non-controlling interest
Earnings/(Loss) per share for the year attributable to
the members of Amani Gold Limited
Notes
2018
$
2017
$
2
3
3, 14
3
3
3
3
5
93,960
98,321
(1,023,290)
-
(215,337)
-
(33,020)
(67,597)
(266,733)
(50,298)
-
(1,562,315)
-
(1,562,315)
(1,453,571)
(108,744)
(1,562,315)
(507,293)
(326,798)
(407,833)
(270,579)
(25,111)
(73,852)
(167,288)
(53,862)
1,991,919
257,624
-
257,624
245,084
12,540
257,624
995,632
(679,232)
-
(566,683)
(2,062,807)
(2,484,415)
(441,920)
(124,763)
(566,683)
(2,478,619)
(5,796)
(2,484,415)
Basic and diluted gain / (loss) per share
6
(0.10) cents
0.02 cents
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
Page 22
Amani Gold Limited
Consolidated Statement of Financial Position
As at 30 June 2018
Current Assets
Cash and cash equivalents
Other receivables
Total Current Assets
Non-Current Assets
Other receivables
Property, plant & equipment
Exploration and evaluation expenditure
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Loan
Total Liabilities
Net Assets
Equity
Contributed equity
Reserves
Accumulated losses
Capital and reserves attributed to the owners of
Amani Gold Limited
Non-controlling interest
Total Equity
Notes
2018
$
2017
$
8
9
9
10
11
867,360
24,476
1,062,471
211,777
891,836
1,274,248
11,000
378,469
39,958,658
-
99,420
24,787,528
40,348,127
24,886,948
41,239,963
26,161,196
12a
12b
221,850
675,054
395,932
91,081
896,904
487,013
40,343,059
25,674,183
13
15
62,868,356
47,883,517
9,114,996
(31,899,230)
7,852,626
(30,445,659)
40,084,122
258,937
25,290,484
383,699
40,343,059
25,674,183
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Page 23
Amani Gold Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2018
Balance at 1 July 2016
Loss for the year
Exchange differences on translation of
foreign operations
Changes in the fair value of available for
sale financial assets
Total comprehensive profit / (loss) for the
Year
Transactions with equity holders in
their capacity as equity holders
Share and listed option issue
Share issue costs
Share based payments expense – options
issue
Share based payments expense –
performance rights
Transactions with non-controlling interests
Balance at 30 June 2017
Contributed
Equity
Accumulated
Losses
Option Premium
Reserve
Share based
Reserves
$
36,719,406
-
▪
▪
$
(30,690,743)
245,084
$
1,388,544
-
$
4,699,688
-
Foreign
Currency
Translation
Reserve
$
3,593,410
-
Non-controlling
interest
$
365,363
12,540
Total Equity
$
16,075,668
257,624
▪
▪
▪
-
-
-
-
-
245,084
11,825,542
(661,431)
-
-
-
47,883,517
-
-
-
-
-
(30,445,659)
-
-
1,396,044
-
-
-
7,500
-
-
-
-
-
(685,028)
5,796
(679,232)
(2,062,807)
-
(2,062,807)
(2,747,835)
18,336
(2,484,415)
-
-
487,287
424,033
-
5,611,008
-
-
-
-
-
845,574
-
-
-
-
-
383,699
11,833,042
(661,431)
487,287
424,033
-
25,674,183
-
-
53,246
-
-
-
-
Page 24
Amani Gold Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2018
Contributed
Equity
$
47,883,517
-
▪
▪
Accumulated
Losses
$
(30,445,659)
(1,453,571)
Option Premium
Reserve
$
Share based
Reserves
$
1,396,044
-
5,611,008
-
Foreign
Currency
Translation
Reserve
$
845,574
-
Non-controlling
interest
$
383,699
(108,744)
Total Equity
$
25,674,183
(1,562,315)
Balance at 1 July 2017
Profit for the year
Exchange differences on translation of
foreign operations
Total comprehensive loss for the year
▪
-
-
-
(1,453,571)
-
-
-
-
1,011,650
(16,018)
995,632
1,011,650
(124,762)
(566,683)
Transactions with equity holders in
their capacity as equity holders
Share and listed option issue
Share issue costs
Share based payments expense – options
issue
Transactions with non-controlling interests
Balance at 30 June 2018
15,010,571
(25,732)
-
-
62,868,356
-
-
-
-
(31,899,230)
-
-
-
-
1,396,044
-
-
-
-
1,857,224
-
-
-
-
258,937
15,010,571
(25,732)
250,720
-
40,343,059
250,720
5,861,728
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Page 25
Amani Gold Limited
Consolidated Statement of Cash Flows
for the year ended 30 June 2018
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
Notes
2018
$
2017
$
(1,747,488)
93,960
(1,577,763)
81,581
Net Cash outflows from Operating Activities
19
(1,653,528)
(1,496,182)
Cash Flows from Investing Activities
Payments for plant and equipment
Payments for exploration and development expenditure
Option payment to acquire project
Payments for rental bonds
Net Cash outflows from Investing Activities
Cash Flows from Financing Activities
Proceeds from securities issues
Securities issue expenses
Repayment of loan
Proceeds from borrowings
Net Cash inflows from Financing Activities
Net increase / (decrease) in Cash and Cash Equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate fluctuations on the balances of cash
held in foreign currencies
(353,640)
(13,763,920)
-
(11,000)
(98,732)
(8,381,797)
(326,798)
-
(14,128,560)
(8,807,327)
15,010,571
(25,732)
(91,081)
675,054
11,825,542
(661,431)
(239,916)
91,081
15,568,812
11,015,276
(213,276)
1,062,471
711,767
416,453
18,165
(65,749)
Cash and Cash Equivalents at End of Year
8
867,360
1,062,471
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Page 26
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues
Group Interpretations and the Corporations Act 2001.
The financial statements are for the consolidated entity consisting of Amani Gold Limited and its subsidiaries (the
“group” or the “consolidated entity”). Amani Gold Limited is a listed for-profit public company, incorporated and
domiciled in Australia. During the year ended 30 June 2018, the consolidated entity conducted operations in
Australia, and the Democratic Republic of Congo. The financial statements have also been prepared on a historical
cost basis. Cost is based on the fair values of the consideration given in exchange for assets.
The financial report is presented in Australian dollars.
Going Concern Basis
The financial report has been prepared on the basis of accounting principles applicable to a “going concern” which
assumes the Group will continue in operation for the foreseeable future and will be able to realise its assets and
discharge its liabilities in the normal course of operations.
The Group has the ability to seek to raise funds from shareholders or other investors and intends to raise such
funds as and when required to complete its projects. Subsequent to year end, the Group announced that it had
received commitments to issue 116,666,667 fully paid ordinary shares (New Shares) at a price of $0.015 each for
$1.75M (‘Placement’). In addition, the Company agreed to issue convertible notes with a face value of $0.953M
(‘Notes’). The Placement and Notes will be applied to the Company’s project in the DRC (including relocation
of artisanal miners), repayment of unsecured loans and for general working capital purposes.
The Group has no source of operating cash inflows, other than interest income, and has incurred net cash outflows
from operating and investing activities for the year ended 30 June 2018 of $15,782,088 (2017: $10,303,509).
At 30 June 2018, the Group had cash balances of $867,360 (2017: $1,062,471).
The directors have prepared cash flow projections that support the ability of the Group to continue as a going
concern. These cash flow projections assume the Group obtains sufficient additional funding from shareholders
or other parties. If such funding is not achieved, the Group plans to reduce expenditure significantly, which may
result in an impairment loss on the book value of exploration and evaluation expenditure recorded at reporting
date.
These conditions give rise to a material uncertainty that may cast doubt upon the Group’s ability to continue as a
going concern. The ongoing operation of the Group is dependent upon:
• The Group raising additional funding from shareholders or other parties; and/or
• The Group reducing expenditure in line with available funding.
In the longer term, the development of economically recoverable mineral deposits found on the Group’s existing
or future exploration properties depends on the ability of the Group to obtain financing through equity financing,
debt financing or other means. If the Group’s exploration programs are ultimately successful, additional funds
will be required to develop the Group’s properties and to place them into commercial production. The ability of
the Group to arrange such funding in the future will depend in part upon the prevailing capital market conditions
as well as the business performance of the Group. There can be no assurance that the Group will be successful in
its efforts to arrange additional financing, if needed, on terms satisfactory to the Group. If adequate financing is
not available, the Group may be required to delay, reduce the scope of, or eliminate its current or future exploration
activities or relinquish rights to certain of its interests. Failure to obtain additional financing on a timely basis
could cause the Group to forfeit its interests in some or all of its properties and reduce or terminate its operations.
Page 27
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge
its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the
financial statements and that the financial report does not include any adjustments relating to the recoverability
and classification of recorded asset amounts or liabilities that might be necessary should the group not continue
as a going concern.
The Group may be unable to realise its assets and discharge its liabilities in the ordinary course of businesss.
Adoption of New and Revised Standards
A number of new standards, amendments to standards and interpretations are effective for annual periods
beginning after 1 July 2018, and have not been applied in preparing these consolidated financial statements. Those
which may be relevant are set out below.
AASB 9 Financial Instruments
AASB 9, published July 2014, replaces existing guidance in AASB 139 Financial Instruments: Recognition and
Measurement. AASB 9 includes revised guidance on the classification and measurement of financial instruments,
including a new expected loss model for calculating impairment on financial assets and the new general hedge
accounting requirements. It also carries forward the guidance on recognition and de-recognition of financial
instruments from AASB 139.
AASB 9 is effective for annual periods beginning on or after 1 January 2018 with early adoption permitted.
AASB 16 Leases
AASB 16 eliminates the operating and finance lease classifications for lessees currently accounted for under
AASB 117 Leases. It instead requires an entity to bring most leases onto its balance sheet in a similar way to how
existing finance leases are treated under AAS8 117. An entity be required to recognise a lease liability and a fight
of use asset in its balance sheet for most leases. There are some optional exemptions for leases with a period of
12 months or less and for low value leases.
Lessor accounting remains largely unchanged from AASB 117.
The group is yet to undertake a detailed assessment of the impact of AASB 16. However, based on the group’s
preliminary assessment, the Standard is not expected to have a material impact on the transactions and balances
recognised in the financial statements when it is first adopted for the year ending 30 June 2020.
The Group does not plan to adopt this standard early and its impact on the Group is not significant.
Statement of Compliance
These financial statements were authorised for issue on 28 September 2018.
The consolidated financial statements comprising the financial statements and notes thereto, comply with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB).
Basis of Consolidation
The consolidated financial statements comprise the financial statements of Amani Gold Limited (the “Company”)
and subsidiaries. Subsidiaries are all entities over which the group has control. The group controls an entity when
the group is exposed to, or has rights to variable returns from its involvement with the entity and has the ability
to affect those returns through its power to direct the activities of the entity.
Page 28
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
The financial statements of the subsidiaries are prepared for the same reporting period as the parent company,
using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profit or losses resulting from intra-group transactions have been eliminated in full. Subsidiaries are
fully consolidated from the date on which control is transferred to the consolidated entity and cease to be
consolidated from the date on which control is transferred out of the consolidated entity.
Parent Entity Financial Information
The financial information for the parent entity, Amani Gold Limited, disclosed in Note 21 has been prepared on
the same basis as the consolidated financial statements.
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the consolidated
entity and the revenue is capable of being reliably measured.
Interest income is recognised in the statement of profit or loss and other comprehensive income as it accrues,
using the effective interest method.
All revenue is stated net of the amount of goods and services tax (GST).
Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks and other short-term highly
liquid investments readily convertible to cash.
Foreign currency transactions and balances
The functional and presentation currency of Amani Gold Limited is Australian dollars.
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at
the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at
the rate of exchange ruling at the end of the reporting period.
Foreign currency transactions are translated into the functional currency using the exchange rates ruling at the
date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the
rate of exchange ruling at the end of the reporting period. Foreign exchange gains and losses resulting from settling
foreign currency transactions, as well as from restating foreign currency denominated monetary assets and
liabilities, are recognised in profit or loss, except when they are deferred in other comprehensive income as
qualifying cash flow hedges or where they relate to differences on foreign currency borrowings that provide a
hedge against a net investment in a foreign entity.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rate as at the date of the initial transaction.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the date
the fair value was determined.
The functional currencies of the overseas subsidiaries are as follows:
Democratic Republic of Congo subsidiaries United States Dollars (USD)
Page 29
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
At the end of the reporting period, the assets and liabilities of these overseas subsidiaries are translated into the
presentation currency of Amani Gold Limited at the closing rate at the end of the reporting period and income and
expenses are translated at the weighted average exchange rates for the year. All resulting exchange differences
are recognised in other comprehensive income as a separate component of equity (foreign currency translation
reserve). On disposal of a foreign entity, the cumulative exchange differences recognised in foreign currency
translation reserves relating to that particular foreign operation is recognised in profit or loss.
Taxes
Income tax
Deferred income tax is provided for on all temporary differences at reporting date between the tax base of assets
and liabilities and their carrying amounts for financial reporting purposes.
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 is calculated at the tax rates that are expected to apply to the period when the asset is realised or
liability is settled. Deferred tax is credited in the statement of profit or loss and other comprehensive income
except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted
directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available
against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that
no adverse change will occur in income taxation legislation and the anticipation that the Group will derive
sufficient future assessable income to enable the benefit to be realised and comply with the conditions of
deductibility imposed by the law. The carrying amount of deferred tax assets is reviewed at each reporting date
and only recognised to the extent that sufficient future assessable income is expected to be obtained.
At the reporting date, the Directors have not made a decision to elect to be taxed as a single entity. In accordance
with Australian Accounting Interpretations, “Substantive Enactment of Major Tax Bills in Australia”, the financial
effect of the legislation has therefore not been brought to account in the financial statements for the year ended
30 June 2018, except to the extent that the adoption of the tax consolidation would impair the carrying value of
any deferred tax assets.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
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 on 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.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
Page 30
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Investments and other financial assets
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as
loans and receivables. When financial assets are recognised initially, they are measured at fair value, plus, in the
case of investments not at fair value through profit or loss, directly attributable transactions costs. The Group
determines the classification of its financial assets after initial recognition and, when allowed and appropriate, re-
evaluates this designation at each financial year-end.
Loans and receivables
During the year, the consolidated entity has held loans and receivables.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses
are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through
the amortisation process.
Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that
are either designated in this category or not classified in any of the other categories. They are included in non-
current assets unless management intends to dispose of the investment within 12 months of the reporting date.
Investments are designated as available-for-sale if they do not have fixed maturities and fixed or determinable
payments and management intends to hold them for the medium to long term.
Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair
value through profit or loss. Changes in the fair value of securities classified as available-for-sale assets are
recognised in equity. The group assesses at each reporting datee whether there is objective evidence that a financial
asset or group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a
significant or prolonged decline in the fair value of a security below its cost is considered as an indicator that the
securities are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss
measured as the difference between the acquisition cost and the current fair value, less any impairment loss on
that financial asset previously recognised in profit or loss is removed from equity and recognised in the profit or
loss.
Property, plant and equipment
Items of plant and equipment are carried at cost less accumulated depreciation and impairment losses (see
accounting policy “impairment testing”).
Plant and equipment
Plant and equipment acquired is initially recorded at their cost of acquisition at the date of acquisition, being the
fair value of the consideration provided plus incidental costs directly attributable to the acquisition.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the consolidated entity
and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement
of profit or loss and other comprehensive income during the financial period in which they are incurred.
Page 31
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Depreciation
All assets have limited useful lives and are depreciated using the straight line method over their estimated useful
lives commencing from the time the asset is held ready for use.
Depreciation and amortisation rates and methods are reviewed annually for appropriateness. When changes are
made, adjustments are reflected prospectively in current and future periods only. The estimated useful lives used
in the calculation of depreciation for plant and equipment for the current and corresponding period are between
three and ten years.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and
losses are included in the statement of profit or loss and other comprehensive income. When revalued assets are
sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings, through
other comprehensive income.
Mineral interest acquisition, exploration and development expenditure
Mineral interest acquisition, exploration and evaluation expenditure incurred is accumulated in respect of each
identifiable area of interest. These costs are only carried forward to the extent that the Group’s rights of tenure to
that area of interest are current and either the costs are expected to be recouped through the successful development
and commercial exploitation of the area of interest or where exploration activities in the area of interest have not
yet reached a stage that permits reasonable assessment of the existence of economically recoverable reserves and
active and significant operations, in, or in relation to, the area of interest are continuing.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the
decision to abandon the area is made.
Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical
feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the
recoverable amount (see impairment accounting policy).
Impairment testing
The carrying amount of the consolidated entity’s assets, other than deferred tax assets, are reviewed at each
reporting date to determine whether there is any indication of impairment. Where such an indication exists, a
formal assessment of recoverable amount is then made and where this is in excess of carrying amount, the asset
is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. Value in use is the present value
of the future cash flows expected to be derived from the asset or cash generating unit. In estimating value in use,
a pre-tax discount rate is used which reflects current market assessments of the time value of money and the risks
specific to the asset. Any resulting impairment loss is recognised immediately in the statement of profit or loss
and other comprehensive income.
Impairment losses are reversed when there is an indication that the impairment loss may no longer exist and there
has been a change in the estimate used to determine the recoverable amount. An impairment loss is reversed only
to the extent that the assets’ carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Page 32
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
Trade and other payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services
provided to the consolidated entity prior to the end of the financial year that are unpaid and arise when the
consolidated entity becomes obliged to make future payments in respect of the purchase of these goods and
services.
Employee benefits
Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within
12 months of the reporting date are recognised in other payables in respect of employees’ services up to the
reporting date. They are measured at the amounts expected to be paid when the liabilities are settled.
Contributions are made by the consolidated entity to superannuation funds as stipulated by statutory requirements
and are charged as expenses when incurred.
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the
present value of expected future payments to be made in respect of services provided by employees up to the
reporting date using the projected unit credit method. Consideration is given to expected future wage and salary
levels, experience of employee departures and periods of service. Expected future payments are discounted using
market yields at the reporting date on national government bonds with terms to maturity and currency that match,
as closely as possible, the estimated future cash outflows.
Contributed equity
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.
Earnings per share
Basic earnings per share is determined by dividing the net result attributable to members, adjusted to exclude costs
of servicing equity (other than dividends), by the weighted average number of ordinary shares, adjusted for any
bonus element.
Diluted earnings per share is determined by dividing the net result attributable to members, adjusted to exclude
costs of servicing equity (other than dividends) and any expenses associated with dividends and interest of dilutive
potential ordinary shares, by the weighted average number of ordinary shares (both issued and potentially dilutive)
adjusted for any bonus element.
Share based payments
The Group provides compensation benefits to employees (including directors) of the Group in the form of share-
based payment transactions, whereby employees render services in exchange for shares or rights over shares
(‘equity-settled transactions’).
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date
at which they are granted. The fair value is determined by a Black Scholes model or similar such market based
valuation models.
Page 33
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance conditions are fulfilled, ending on the date on which the relevant employees
become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects
(i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the
directors of the Group, will ultimately vest. This opinion is formed based on the best available information at
reporting date. No adjustment is made for the likelihood of market performance conditions being met as the effect
of these conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional
upon a market condition.
Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms
had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a
result of the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for
the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new
award are treated as if they were a modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
earnings per share.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief decision maker has been identified as the Board of Directors.
Critical accounting estimates
The preparation of financial statements in conformity with AIFRS requires the use of certain critical accounting
estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting
policies. The areas that may have a significant risk of causing a material adjustment to the carrying amounts of
certain assets and liabilities within the next annual reporting period are:
(a) Exploration and evaluation expenditure
In accordance with accounting policy note described above under “Mineral interest acquisition, exploration and
development expenditure” the Board determines when an area of interest should be abandoned. When a decision
is made that an area of interest is not commercially viable, all costs that have been capitalised in respect of that
area of interest are written off. In determining this, assumptions, including the maintenance of title, ongoing
expenditure and prospectivity are made. As described in Note 17, under existing contractual terms of a shareholder
agreement a feasibility study is required to be completed by 31st December 2018 at the Giro Gold Project. Based
on the amendment to the shareholder agreement, concluded in December 2017, with Societe Miniere De Kilo
Moto SA (“Sokimo”), a company wholly owned by the DRC Government (the original holder of the Giro
exploitation permits), an angreement was reached between the parties that the deadline for completion of the
feasibility study would be extended up to 31st December 2018, with a further 12-month extension if Amani shows
that the work to complete the feasibility study is progressing positively.
Page 34
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
(b) Share Based Payments to employees
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 of options with non-market
conditions is determined by an internal valuation using a Black-Scholes option pricing model taking into account
the terms and conditions upon which the instruments were granted. The fair value of performance rights with
market conditions is determined by an internal valuation using a Trinomial Barrier option pricing model.
(c) Control Over Subsidiaries
In determining whether the consolidated group has control over subsidiaries that are not wholly owned, judgement
is applied to assess the ability of the consolidated group to control the day to day activities of the partly owned
subsidiary and its economic outcomes. In exercising this judgement, the commercial and legal relationships that
the consolidated group has with other owners of partly owned subsidiaries are taken into consideration. Whilst
the consolidated group is not able to control all activities of a partly owned subsidiary, the partly owned subsidiary
is consolidated within the consolidated group where it is determined that the consolidated group controls the day
to day activities and economic outcomes of a partly owned subsidiary. Changes in agreements with other owners
of partly owned subsidiaries could result in a loss of control and subsequently de-consolidation.
During the year ended 30 June 2015, Amani Gold Limited acquired 85% of the issued shares of Amani Consulting
sarl (Amani Consulting) by the issue of shares, options and cash. Amani Consulting holds a 65% shareholding in
Giro Goldfields sarl (Giro). Giro explores the Giro gold project in the Haut-Uele Province, northeast DRC. Under
the terms of shareholders agreements the Company is at this stage solely responsible for funding exploration
activities and therefore has control over the day to day activities and economic outcomes of Amani Consulting
and Giro. Future changes to the shareholders agreements may impact on the ability of the Company to control
Amani Consulting and Giro.
(d) Contingent liabilities
Under the terms of the agreement to acquire an interest in Amani Consulting sarl (Amani Consulting) the
Company may be liable in the future to make additional payments subject to certain events occurring as described
in Note 17.
After an assessment of the conditions that would require these payments to be made in the future, the Company
has judged that these possible future payments are a contingent liability.
Change in circumstances or the future occurrence of specified events may cause liabilities that are currently
assessed as being contingent to be reclassified as financial liabilities.
(e) Tax in foreign jurisdictions
The consolidated entity operates in overseas jurisdictions and accordingly is required to comply with the taxation
requirements of those relevant countries. This results in the consolidated entity making estimates in relation to
taxes including but not limited to income tax, goods and services tax, withholding tax and employee income tax.
The consolidated entity estimates its tax liabilities based on the consolidated entity’s understanding of the tax law.
Where the final outcome of these matters is different from the amounts that were initially recorded, such
differences will impact profit or loss in the period in which they are settled.
Page 35
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
2. REVENUE
Other revenue includes the following:
Foreign exchange gain
Interest - other parties
Others
3. EXPENSES
Profit / Loss for the year includes the following specific
expenses:
Depreciation expense
Due diligence costs 1
Foreign exchange loss
Rental expense, minimum lease payments
Share based payments expense
Salaries, wages and employment expenses
Travel and accommodation
Gain on disposal of subsidiaries 2
Consolidated
2018
$
2017
$
-
93,960
-
93,960
6,254
81,581
10,486
98,321
33,020
-
50,298
67,597
-
215,337
266,733
-
25,111
326,798
53,862
73,852
270,579
407,833
167,288
(1,991,919)
1. A cash fee of US$250,000 was paid to Medidoc FZE to acquire the exclusive right to
negotiate an interest in the Tendao project, which borders the Giro Gold project.
2. On 29 December 2016, the Company disposed its 100% interest in subsidiaries, Burey Gold
(Ghana) Ltd and Burey Gold Guinee SARL for nominal consideration. The Company
recognised a gain on disposal of $1,991,919 at the half year, and the two subsidiaries were
deconsolidated fom the Group at 31 December 2016. The foreign currency translation
reserve carrying value of $2,062,807 was transferred to profit or loss.
4. AUDITOR’S REMUNERATION
Audit services:
- Amounts paid or payable to auditors of the Group – BDO
Audit (WA) Pty Ltd
45,433
36,494
In addition, during the year BDO Corporate Finance provided $25,500 (2017: $nil) in non-audit
related services.
Page 36
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
5.
INCOME TAX EXPENSE
(a) The prima facie tax benefit at 27.5% (2017: 30%) on
loss for the year is reconciled to the income tax
provided in the financial statements as follows:
Profit / (loss) before income tax
Prima facie income tax expense / (benefit) @ 30%
Tax effect of permanent differences:
Capital raising costs
Legal fees
Exploration expenses
Employee option expense / share based payments
Consultants – Capital
Income tax benefit not brought to account
Income tax expense
(b) The following deferred tax balances have not been
recognised:
Deferred Tax Assets at 30%:
- Carry forward revenue losses
- Capital raising costs
- Provisions and accruals
Consolidated
2018
$
2017
$
(1,562,315)
(429,637)
257,624
77,287
(105,029)
6,117
(3,869,384)
-
-
(4,397,932)
4,397,932
(114,546)
14,362
(2,750,059)
81,174
98,039
(2,593,743)
2,593,743
-
-
16,197,737
260,132
(7,425)
12,882,415
366,990
7,500
16,450,444
13,256,905
The tax benefits of the above deferred tax assets will only be obtained if:
•
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefits to be
utilised;
the Group continues to comply with the conditions for deductibility imposed by law; and
•
• no changes in income tax legislation adversely affect the Group in utilising benefits.
Deferred tax liabilities in relation to capitalised exploration costs have been recognised and offset against deferred
tax assets above.
6. EARNINGS PER SHARE
Basic and diluted gain / (loss) per share
Consolidated
2018
Cents
2017
Cents
(0.10)
0.02
2018
Number
2017
Number
Weighted average number of ordinary shares used in the
calculation of basic and diluted loss per share
1,556,851,441 1,242,649,981
The Company’s potential ordinary shares, being its options granted, are not considered dilutive as the conversion of
these options would result in a decrease in the net profit per share.
Page 37
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
7. SEGMENT INFORMATION
The Directors have determined that the Group has one reportable segment, being mineral exploration in Africa. As the
Group is focused on mineral exploration, the Board monitors the Group based on actual versus budgeted exploration
expenditure incurred by area of interest. This internal reporting framework is the most relevant to assist the Board with
making decisions regarding the Group and its ongoing exploration activities, while also taking into consideration the results
of exploration work that has been performed to date.
Revenue from external sources
Reportable segment profit
Reportable segment assets
Reportable segment liabilities
Reconciliation of reportable segment profit or loss
Reportable segment profit / (loss)
Other revenue / income
Unallocated:
Corporate expenses
Gain on disposal of foreign subsidiaries
Profit /(loss) before tax
Reconciliation of reportable segment assets to total assets
and liabilities
Segment assets
Unallocated:
Corporate assets
Segment liabilities
Unallocated:
Corporate liabilities
8. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Consolidated
2018
$
-
330,180
40,238,526
(779,059)
2017
$
-
43,482
25,330,920
(240,092)
(330,180)
93,960
43,482
90,450
(1,326,095)
(1,868,227)
-
(1,562,315)
1,991,919
257,624
40,238,526
25,330,920
1,001,437
41,239,963
830,276
26,161,196
(779,059)
(240,092)
(117,845)
(896,904)
(246,920)
(487,012)
Consolidated
2018
$
2017
$
867,360
1,062,471
- Cash at bank earns interest at floating rates based on daily bank deposit rates. Refer Note 16.
Page 38
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
9. OTHER RECEIVABLES
Current
Other receivables
Non-Current
Other receivable
Consolidated
2018
$
2017
$
24,476
24,476
11,000
11,000
211,777
211,777
-
-
None of the reported receivables are past due or require impairment.
Refer to Notes 16(a) and 16(b) for information about the Group’s exposure to credit and liquidity risk.
10. PROPERTY, PLANT AND EQUIPMENT
Plant and equipment
At cost
Less accumulated depreciation
Reconciliation
Movement in the carrying amounts for each class of property,
plant and equipment between the beginning and the end of the
current financial period.
Balance at the beginning of the year
Additions
Disposals
Depreciation expense
Foreign currency translation difference movement
Carrying amount at the end of the year
11. EXPLORATION AND EVALUATION
EXPENDITURE
Exploration and evaluation phase – at cost
Balance at the beginning of the year
Expenditure incurred during the year
Foreign currency translation difference movement
Carrying amount at the end of the year
Consolidated
2018
$
2017
$
519,457
(140,988)
378,469
152,871
(53,451)
99,420
99,420
353,640
-
(86,557)
11,965
378,469
39,812
86,904
(9,314)
(25,111)
7,129
99,420
Consolidated
2018
$
2017
$
24,787,528
14,070,486
1,100,645
39,958,658
16,051,030
9,166,863
(430,365)
24,787,528
The expenditure above relates principally to the exploration and evaluation phase. The ultimate recoupment of this
expenditure is dependent upon the successful development and commercial exploitation, or alternatively, sale of the
respective areas of interest.
In order to carry out future infill drill programs at Kebigada to upgrade and add to the existing mineral resources, the
Amani Group commenced relocation of artisanal miners and sections of the Giro village during the reporting period.
The relocation activities, at a cost of approximately $6.2m during the reporting period, were carried out primarily by
a sub-commission constituted under the terms of a regulatory legal deed and appointed by and under the control of
the Government of the Haut-Uele Province.
Page 39
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
12a. TRADE AND OTHER PAYABLES
Current
Trade and other payables
Consolidated
2018
$
2017
$
221,850
221,850
395,932
395,932
Terms and conditions relating to the above financial instruments:
- Trade and other creditors are non-interest bearing and are normally settled on 30 day terms.
Risk exposure:
-
Information about the group’s risk exposure to foreign exchange risk is provided in Note 16.
12b. LOANS
Current
Other loan i
(i)
This loan is unsecured, interest free and repayable upon demand.
13. CONTRIBUTED EQUITY
Consolidated
2018
$
2017
$
675,054
675,054
91,081
91,081
Consolidated
2018
$
2017
$
(a) Issued and paid-up share capital
Ordinary shares, fully paid 1,566,163,747 (2017: 1,257,452,332)
62,868,356
47,883,517
Movements in Ordinary Shares:
Details
Balance at 1 July 2016
Number of
Shares
$
962,237,497
36,719,406
July 2016 capital raising at a price of $0.054 per share
216,199,999
11,674,800
Conversion of performance rights
August 2016 exercise of listed options at $0.05 per option
Less: Share issue costs
Balance at 30 June 2017
76,000,000
3,014,836
-
-
150,742
(661,431)
1,257,452,332
47,883,517
Balance at 1 July 2017
1,257,452,332
47,883,517
July 2017 capital raising at a price of $0.05 per share
300,000,000
15,000,000
July 2017 exercise of listed options at $0.05 per option
Conversion of performance rights
Less: Share issue costs
Balance at 30 June 2018
211,415
8,500,000
10,571
-
-
(25,731)
1,566,163,747
62,868,356
Page 40
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
(b) Listed Share Options
Consolidated
2018
$
2017
$
Options to subscribe for ordinary shares nil (2017: 434,251,337)
1,396,044
1,396,044
Movements in Options:
Details
Balance at 1 July 2016
Exercise of options
Prior year issue of options recognised in current year
Balance at 30 June 2017
Balance at 1 July 2017
Exercise of options
Expiry of options
Balance at 30 June 2018
Number of
Options
$
437,266,173
1,388,544
(3,014,836)
-
-
7,500
434,251,337
1,396,044
434,251,337
1,396,044
(211,415)
(434,039,922)
-
-
-
1,396,044
Page 41
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
(c) Unlisted Options
2018 - Options to take up ordinary shares in the capital of the Company have been granted as follows:
Exercise
Period
Note
Exercise
Price
Opening
Balance
1 July 2017
Options
Issued
2017/18
Exercised/
Cancelled/
Expired
2017/18
Closing
Balance
30 June 2018
Number
Number
Number
Number
15 Apr 2016 – 31 Dec 2020
15 Apr 2016 – 31 Dec 2020
15 Apr 2016 – 31 Dec 2020
2 Nov 2016 – 2 Nov 2016
2 Nov 2016 – 2 Nov 2019
(ii)
(ii)
(ii)
(iii)
(iii)
0.03
0.04
0.05
0.08
0.10
Weighted averge exercise price ($)
7,500,000
12,500,000
12,500,000
9,500,000
9,500,000
51,500,000
0.06
-
-
-
-
-
-
(5,000,000)
7,500,000
7,500,000
(5,000,000)
7,500,000
-
-
9,500,000
9,500,000
- (10,000,000)
41,500,000
0.06
2017 - Options to take up ordinary shares in the capital of the Company have been granted as follows:
Exercise
Period
Note
Exercise
Price
Opening
Balance
1 July 2016
Options
Issued
2016/17
Exercised/
Cancelled/
Expired
2016/17
Closing
Balance
30 June 2017
Number
Number
Number
Number
5 Sept 2014 -31 Dec 2016
15 Apr 2016 – 31 Dec 2020
15 Apr 2016 – 31 Dec 2020
15 Apr 2016 – 31 Dec 2020
2 Nov 2016 – 2 Nov 2016
2 Nov 2016 – 2 Nov 2019
(i)
(ii)
(ii)
(ii)
(iii)
(iii)
$0.05
$0.03
$0.04
$0.05
$0.08
$0.10
47,500,000
7,500,000
12,500,000
12,500,000
-
-
-
-
9,500,000
9,500,000
- (47,500,000)
-
-
7,500,000
12,500,000
12,500,000
9,500,000
9,500,000
-
-
-
-
-
Weighted averge exercise price ($)
0.05
0.09
0.06
80,000,000
19,000,000 (47,500,000)
51,500,000
(i) 47.5 million options were issued as partial consideration for the acquisition of the interest in the Giro Gold Project.
During the year ended 30 June 2017, all 47.5 million options expired without being exercised.
(ii) In the 2016 year 10 million options were issued as part of the remuneration package for the Company’s directors. In
addition, 22.5 million options were issued to a corporate advisor for equity market and strategic advice in market
positioning and corporate strategy.
(iii) In the 2017 year, 19 million options were issued under the Employee Option Plan for nil consideration as part of the
remuneration package of employees of the Company. Refer to Note 14 for further details.
The weighted average contractual life of the unlisted options are 1.73 (2017: 2.85) years.
None of the options have any voting rights, any entitlement to dividends or any entitlement to the proceeds of liquidation in
the event of a winding up.
Page 42
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
(d) Performance Rights
2018 - Performance Rights over ordinary shares in the capital of the Company have been granted as follows:
Expiry date
31 December 2017
Note
(i)
Opening
Balance
1 July 2017
Issued
2017/18
Exercised/
Cancelled
2017/18
Closing
Balance
30 June 2018
Number
Number
Number
Number
8,500,000
8,500,000
-
-
(8,500,000)
(8,500,000)
-
-
2017 - Performance Rights over ordinary shares in the capital of the Company have been granted as follows:
Expiry date
31 December 2017
31 December 2020
Note
(i)
(ii)
Opening
Balance
1 July 2016
Issued
2016/17
Exercised/
Cancelled
2016/17
Closing
Balance
30 June 2017
Number
Number
Number
Number
17,000,000
67,500,000
84,500,000
-
(8,500,000)
8,500,000
- (67,500,000)
-
- (76,000,000)
8,500,000
(i) Performance rights vest subject to meeting specific performance conditions. The 17 million performance rights issued
comprise two tranches of 8.5 million each. Tranche 1 performance rights had a market vesting condition being a share
price of 5 cents or more over a consecutive 20 day business period. Tranche 2 performance rights had a non-market
vesting condition being estimation of a mineral resource of at least one million gold or gold equivalent ounces at any
Amani Group mineral project. Each right is converted to one ordinary share upon vesting. Tranche 2 performance rights
vested during the year ended 30 June 2018 and the Tranche 1 performance rights vested during the year ended 30 June
2017 and were converted into shares.
(ii) Performance rights vest subject to meeting specific performance conditions. The 67.5 million performance rights issued
in the year ended 30 June 2016 comprise of three tranches of 22.5 million each. Tranche 1, 2 and 3 performance rights
had a market vesting condition being the Company’s shares trade at a daily volume weighted average share price
(“VWAP”) of at least 3, 4 and 5 cents respectively for a consective period of at least 10 trading days. During the prior
year ended 30 June 2017, these rights vested and were converted into shares.
(d) Terms and conditions of contributed equity
Ordinary Shares:
Ordinary shares have the right to receive dividends as declared and, in the event of winding up of the Company, to participate
in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary
shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
14. SHARE BASED PAYMENTS EXPENSE
Employee Option Plan
In August 2007, the Company adopted the Amani Gold Limited Employee Option Plan (“Plan”). The Plan allows Directors
from time to time to invite eligible employees to participate in the Plan and offer options to those eligible persons. The Plan
is designed to provide incentives, assist in the recruitment, reward, retention of employees and provide opportunities for
employees (both present and future) to participate directly in the equity of the Company. The contractual life of each option
granted is three years or as otherwise determined by the Directors. There are no cash settlement alternatives. During the year,
no options (2017: 19 million ) were issued to employees of the Company (refer to Note 13(c)).
Non Plan based payments
The Company also makes share based payments to consultants and / or service providers from time to time, not under any
specific plan. The Amani Gold Limited Employee Option Plan does not allow for issue of options to the directors of the
parent entity. Hence, specific shareholder approval is obtained for any share based payments to directors of the parent entity.
No options (2017: nil) were issued during the year.
Page 43
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
The expense recognised in the statement of profit or loss and other comprehensive income in relation to share-based payments
is disclosed in Note 3.
Expenses arising from share-based payment transactions
Other share based payments, not under any plans, are as follows (with additional information provided in Note 13 above):
2018
Number
2018
$
2016 Performance rights to director, Mr Klaus
Eckhof (i)
2016 Performance rights to director, Mr Susmit
Shah (i)
2015 Performance rights to director, Mr Klaus Eckhof
(ii)
2015 Performance rights to director, Mr Susmit Shah (ii)
2016 Performance rights to Mr Mark Gasson (iii)
2015 Performance rights to Mr Mark Gasson (ii and iii)
Total
-
-
-
-
-
2017
Number
22,500,000
2017
$
111,938
22,500,000
111,938
3,500,000
5,500,000
22,500,000
8,000,000
18,162
28,541
-
-
270,579
-
-
-
-
-
-
-
(i)
(ii)
(iii)
67.5 million performance rights were granted during the year ended 30 June 2016 (refer to Note 13(c) for more
information). The fair value of the performance rights estimated at that time was $895,500. These performance
rights vested and were converted into shares during the year end 30 June 2017 and were expensed over the updated
vesting period. Nil (2017: $223,875) was recognised as share based payment expense during the year.
17 million performance rights were granted in 2015 (not under any plans). Refer to Note 13(c) for further details
of the grant. The fair value of the performance rights estimated at the time of grant was $296,650 with a vesting
period of up to 31 December 2017. The first tranche of performance rights (8.5 million) vested during the prior year
and second tranche of performance rights (8.5 million) vested during the current year end. Based on this revised
vesting of performance rights, the balance share based payment expense of $46,703 was recognised during the prior
year.
The share based payment expense relating to performance rights issued to Mark Gasson was capitalised as deferred
exploration expenditure during the prior year.
The fair value of the equity-settled share options and performance rights granted is estimated as at the date of grant using the
Black Scholes model or the Barrier pricing model as appropriate, and taking into account the terms and conditions upon
which the options and rights were granted, including by reference to the market value of the shares trading on the Australian
Securities Exchange (ASX) on or around the date of grant.
The model inputs for options granted during the prior reporting period included:
30 June 2017
Model Inputs
Quantity
Exercise price (cents)
Grant date
Expiry date
Share price at grant date (cents)
Expected volatility (%)
Risk free rate (%)
Fair value per option
19m unlisted employee share options
9,500,000
8.0
2 November 2016
2 November 2019
6.6
105
1.5
$0.0402
9,500,000
10.0
2 November 2016
2 November 2019
6.6
105
1.5
$0.0374
The share based payment expense of $250,720 (2017: $487,287) relating to the 19 million options issued during the year
ended 30 June 2017 was capitalised as deferred exploration expenditure.
Page 44
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
15. RESERVES
The following table shows a breakdown of the statement of financial position line item ‘other reserves’ and the movements
in these reserves during the year. A description of the nature and purpose of each reserve is provided below the table.
Share based payments reserve (Note 15a)
Option premium reserve (Note 15b)
Foreign currency translation reserve (Note 15c)
Consolidated
2018
$
2017
$
5,861,728
1,396,044
1,857,224
9,114,996
5,611,008
1,396,044
845,574
7,852,626
Non-controlling interest reserve (Note 15d)
258,936
383,699
(a) Movement During the Year – Share based payment
Opening balance
Issue of options and performance rights to directors and
key management personnel
Issue of performance rights to key management personnel
which is capitalised to deferred exploration expenditure
Closing balance
(b) Movement During the Year – Option premium
Opening balance
Issue of listed options
Closing balance
(c) Movement During the Year – Foreign Currency
Translation
Opening balance
Foreign currency translation differences
Disposal of foreign subsidiaries
Closing balance
(d) Movement During the Year – Non-controlling interest
Opening balance
NCI share of profit / (loss) for the year
Foreign currency translation differences
Closing balance
Nature and purpose of reserves
Share based payment Reserve
5,611,008
250,720
4,699,689
270,579
-
5,861,728
640,740
5,611,008
1,396,044
-
1,396,044
1,388,544
7,500
1,396,044
845,574
1,011,650
-
1,857,224
3,593,410
(685,029)
(2,062,807)
845,574
383,699
(108,744)
(16,018)
258,937
365,363
12,540
5,796
383,699
The share based payments reserve is used to record the fair value of options and performance rights issued but not exercised.
Option Premium Reserve
Option premium reserves are amounts received in consideration for the issue of options to subscribe for ordinary shares in
the Company.
Foreign Currency Translation Reserve
The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the
financial statements of foreign operations where their functional currency is different to the presentation currency of the
reporting entity.
Page 45
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Available for sale financial asset Reserve
The Available for sale financial asset reserve is used to record the revaluation of the investment in listed securities to market
value as the investment is designated as an available for sale financial asset..
Non-controlling interest’s Reserve
The non-controlling interest’s reserve records the difference between the fair value of the amount by which the non-
controlling interests were adjusted to record their initial relative interest and the consideration paid.
16. FINANCIAL RISK MANAGEMENT
Overview
The Group has exposure to the following risks from their use of financial instruments:
- credit risk
- liquidity risk
- market risk
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and processes
for measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
The Board monitors and manages the financial risks relating to the operations of the Group through regular reviews of the
risks.
(a) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and arises principally from the Group’s receivables from customers and investment securities.
(i)
Investments
The Group limits its exposure to credit risk by only investing in liquid securities and only with counterparties that have an
acceptable credit rating.
(ii) Receivables
As the Group operates in the mineral exploration sector rather than trading, it does not have receivables.
Presently, the Group undertakes exploration and evaluation activities in the DRC. At the reporting date there were no
significant concentrations of credit risk.
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group does not have any
material risk exposure to any single debtor or group of debtors. A very large proportion of the bank deposits are held in
Australia with leading banks and a minor percentage of the Group’s bank deposits is held in well established DRC banks.
(b) Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach
to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when
due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s
reputation.
The Group manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and actual cash
flows.
Due to the nature of the Group’s activities and the present lack of operating revenue, the Group has to raise additional capital
from time to time in order to fund its exploration activities. The decision on how and when the Group will raise future capital
will depend on market conditions existing at that time and the level of forecast activity and expenditure.
Page 46
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
Typically the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of at
least three to six months, including the servicing of financial obligations; this excludes the potential impact of extreme
circumstances that cannot reasonably be predicted, such as natural disasters.
The following table details the Group’s expected maturity for its non-derivative financial liabilities. These have been drawn
up based on undiscounted contractual maturities of the financial liabilitiesbased on the earliest date on which the Group can
be required to pay.
Less than 6
months
$
6 – 12
months
$
Over 1 year
Total
$
$
Group at 30 June 2018
Financial Liabilities:
Current:
Trade and other payables
Short-term borrowings
Total Financial Liabilities
221,850
675,054
896,904
-
-
-
-
-
-
221,850
675,054
896,904
Less than 6
months
$
6 – 12
months
$
395,932
91,081
487,013
-
-
-
Over 1 year
Total
$
-
-
-
$
395,932
91,081
487,013
Group at 30 June 2017
Financial Liabilities:
Current:
Trade and other payables
Short-term borrowings
Total Financial Liabilities
(c) Market Risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect
the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to
manage and control market risk exposures within acceptable parameters, while optimising the return.
The company’s assets include 4.65 million shares in Blox Inc. The Company is exposed to fluctuations in the share price of
Blox Inc. The investment will be recorded at fair value at each reporting date, with changes in value recognised directly in
other comprehensive income. As at 30 June 2017 and 2018, the investment has been impaired to nil.
(i) Foreign exchange risk
The Group is exposed to foreign exchange risk on investments, purchases and borrowings that are denominated in a currency
other than the respective functional currency of Group entities, primarily the Australian dollar (AUD). The currencies in
which these transactions are primarily denominated are AUD and USD.
The Group has not entered into any derivative financial instruments to hedge such transactions and anticipated future receipts
or payments that are denominated in a foreign currency.
(ii) Exposure to foreign exchange risk
The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting
date explained in Australian dollars are as follows:
Notes
30 June 2018
Assets
$
Liabilities
$
30 June 2017
Assets
$
Liabilities
$
United States Dollar
226,220
226,220
779,060
779,060
512,344
512,344
302,236
302,236
Page 47
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
The following significant exchange rates applied during the year:
United States Dollar
Notes
Average rate
Reporting date spot rate
2018
$
0.74
2017
$
0.75
2018
$
0.77
2017
$
0.77
There has been no material exposure to non functional currency amounts during the financial year.
(iii)
Sensitivity analysis
A 10 percent strengthening (based on forward exchange rates) of the Australian dollar against the above currencies at 30 June
would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other
variables, in particular interest rates, remain constant.
+10% Strengthening of the Australian Dollar
(Profit) or loss
Equity
-10% Weakening of the Australian Dollar
(Profit) or loss
Equity
Consolidated
Notes
(i)
(ii)
(i)
(ii)
2018
$
(14,788)
50,258
18,074
(61,427)
2017
$
(20,242)
(38,777)
24,741
47,394
this is mainly attributable to the exposure on USD cash
(i)
(ii) this is mainly related to the translation of foreign operations at reporting date
(iv)
Interest Risk
The Group’s exposure to the risk of changes in market interest rate relates primarily to the Group’s cash and cash equivalents.
At 30 June 2018 the weighted average interest rate on cash and cash equivalents was Nil (2017: 2.09%)
Sensitivity analysis
An increase of 50 basis points in interest rates would not have had a material impact on the Consolidated Entity’s profit or
loss.
(d)
Net fair values
For assets and other liabilities, the net fair value approximates their carrying value. No financial assets and financial liabilities
are readily traded on organised markets in standardised form.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the statement
of financial position and in the notes to and forming part of the financial statements.
(e)
Capital risk management
Management controls the capital of the Group in order to ensure that the Group can fund its operations on an efficient and
timely basis and continue as a going concern.
There are no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s cash projections up to twelve months in the
future and any associated financial risks. Management will adjust the Group’s capital structure in response to changes in
these risks and in the market.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.
Page 48
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
17. CONTINGENCIES
If 3moz (measured and indicated category) gold resources at a cut-off grade of 2.5g/t Au are estimated at the Giro Project,
Amani will be required to pay US$5,350,000 to the former shareholders of Amani Consulting sarl (“Amani Consulting”)
from whom Amani acquired its 85% interest in the capital of Amani Consulting. At Amani’s election, 50% of this amount
can be settled by an issue of Amani shares at the then market value of Amani shares. In any case, the liability for this amount
of US$5.35M only falls due for payment upon drawdown of development funds.
As described in Note 17, under existing contractual terms of a shareholder agreement a feasibility study is required to be
completed by 31st December 2018 at the Giro Gold Project. Based on the amendment to the shareholder agreement, concluded
in December 2017, with Societe Miniere De Kilo Moto SA (“Sokimo”), a company wholly owned by the DRC Government
(the original holder of the Giro exploitation permits), an angreement was reached between the parties that the deadline for
completion of the feasibility study would be extended up to 31st December 2018, with a further 12-month extension if Amani
shows that the work to complete the feasibility study is progressing positively.
On conclusion of feasibility studies and a decision to mine at the Giro Project, payments of US$2.5 million and US$0.7
million will be required to be made by Amani to the DRC Government and Societe Miniere De Kilo Moto SA (Sokimo)
respectively.
In view of the nature of the trigger events and the early stage of exploration activity at the Giro Gold Project, these liabilities
are contingent in nature and no values were allocated as liabilities in this financial report (2017: Nil).
18. COMMITMENTS
(a)
Capital commitments
There were no capital commitments, not provided for in the financial statements as at 30 June 2018.
(b)
Lease commitments: non-cancellable operating lease
Amani Gold Limited entered into a lease agreement for the use of office space at its corporate office effective from 1 April
2018 to its expiry date of 31 March 2020.
Commitments for minimum lease payments in relation to
non-cancellable operating leases are payable as follows:
Within one year
One year to five years
Total
Consolidated
2018
$
2017
$
41,250
33,750
75,000
-
-
-
19. STATEMENTS OF CASH FLOWS
(a) Reconciliation of loss after income tax to net cash outflow from
operating activities
Profit / (loss) after income tax
Add back non-cash items:
Depreciation
Share based payments expense
Net exchange differences
Disposal of subsidiaries
Change in assets and liabilities:
(Increase) / Decrease in receivables
Increase / (Decrease) in operating payables
Net cash outflow from operating activities
Page 49
2018
$
2017
$
(1,562,315)
257,624
86,556
-
(34,184)
-
25,111
270,579
(54,699)
(1,991,919)
(14,509)
(129,076)
(128,781)
125,903
(1,653,528)
(1,496,182)
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
(b) Non-Cash Financing and Investing Activities
Share based payments of $250,720 (2017 - $628,740) were classified and capitalised under exploration expenditure for
incentive securities awarded to exploration staff.
20. RELATED PARTY TRANSACTIONS
(a) Key Management Personnel
Short term remuneration
Share based payments
2018
$
373,936
-
373,936
2017
$
382,176
424,032
806,208
A number of key management persons, or their related parties, hold positions in other entities that result in them having
control or significant influence over the financial or operating policies of those entities. Transactions between related parties
are on normal commercial terms and conditions unless otherwise stated.
Accounting, secretarial and corporate service fees paid or payable to
Corporate Consultants Pty Ltd, a company in which Mr Shah has
beneficial interests.
Rental fees for the sub-lease of furnished office space paid or payable
to Corporate Consultants Pty Ltd, a company in which Mr Shah has
beneficial interests.
Balances due to Directors and Director Related Entities at year end
Consolidated
2018
$
2017
$
157,182
140,318
22,500
30,841
- included in trade creditors and accruals
-
12,487
(b) Parent entity
Amani Gold Limited is the ultimate parent entity.
Page 50
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
21. PARENT ENTITY DISCLOSURES
Financial position
Assets
Current assets
Non-current assets (note i)
Total assets
Liabilities
Current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Accumulated losses
Reserves
Share based reserves
Option premium reserve
Total equity
Financial performance
Loss for the year
Total comprehensive loss
Parent
2018
$
2017
$
828,282
39,026,676
39,854,958
830,276
24,330,096
25,160,372
,
117,845
117,845
246,920
246,920
39,737,113
24,913,452
62,868,356
(30,389,015)
47,883,516
(29,977,116)
5,861,728
1,396,044)
5,611,008
1,396,044
39,737,113
24,913,452
Parent
2018
$
411,899
411,899
2017
$
3,245,145
3,245,145
(i) The recoupment of the parent entity’s investments and loans to its subsidiaries is dependent upon the successful
development and commercial exploitation or sale of the underlying exploration assets.
Contingent liabilities of the parent entity
The parent entity’s contingent liabilities are noted in Note 17.
For details on commitments, see Note 18.
Commitments for the acquisition of property, plant and equipment by the parent entity
The parent entity has not made any commitments for the acquisition of property, plant and equipment.
Interest in Subsidiaries
Parent Entity
Amani Gold Limited
Subsidiary
Amani Consulting sarl1
- Giro Goldfields sarl
Burey Resources Pty Ltd
Place of
Incorporation
Consolidated
Entity Interest
2018
%
Consolidated
Entity Interest
2017
%
Class of
Shares
Australia
DRC
DRC
Australia
85%
65%
100%
85%
65%
100%
Ord
Ord
Ord
1. Amani Consulting sarl is the parent entity of Giro Goldfields sarl with a 65% interest.
Page 51
Amani Gold Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2018
22.
EVENTS OCCURRING AFTER THE REPORTING DATE
Since the end of the financial year and to the date of this report no matter or circumstance has arisen which has 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 subsequent financial years other than the matters referred to below.
• On 9 August 2018 the Company announced that it had received commitments to issue 116,666,667 fully paid
ordinary shares (New Shares) at a price of $0.015 each for $1.75M (‘Placement’). In addition, the Company agreed
to issue convertible notes with a face value of $0.953M (‘Notes’). The Notes have a 12-month maturity from the
date of issue (‘Maturity Date’) and will attract interest at a rate of 6% per annum, commencing from the date which
is 4 months from the date of issue. The Company may elect to repay all or part of the outstanding Notes at any time
prior to the Maturity Date. In addition, the Company may elect to convert any of the Notes into new shares at $0.015
per share.
The Placement and Notes will be applied to the Company’s project in the DRC (including relocation of artisanal
miners), repayment of unsecured loans and for general working capital purposes.
Page 52
Amani Gold Limited
Directors’ Declaration
for the year ended 30 June 2018
In the opinion of the Directors:
a)
The financial statements and the notes and the additional disclosures included in the directors’ report
designated as audited of the consolidated entity are in accordance with the Corporations Act 2001, including:
(i)
(ii)
Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2018 and of its
performance for the year ended on that date; and
Complying with Accounting Standards (including Australian Accounting Standards) and
Corporations Regulations 2001 and other mandatory professional reporting requirements; and
b)
c)
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 financial statements and notes thereto include an explicit and unreserved statement of compliance with
International Financial Reporting Standards issued by the International Accounting Standards Board.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
Signed in accordance with a resolution of the Directors made pursuant to s 295(5) of the Corporations Act 2001.
On behalf of the Board
Chan Sik Lap
Director
Dated 28th day of September 2018
Page 53
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Amani Gold Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Amani Gold Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2018, 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 report, 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 2018 and of its
financial performance for the year ended on that date; 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 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.
Material uncertainty related to going concern
We draw attention to Note 1 in the financial report which describes the events and/or conditions which
give rise to the existence of a material uncertainty that may cast significant doubt about the group’s
ability to continue as a going concern and therefore the group may be unable to realise its assets and
discharge its liabilities in the normal course of business. Our opinion is not modified in respect of this
matter.
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. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
Page 54
Exploration and Evaluation Expenditure
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 11, the Group incurred
Our procedures included, but were not limited to:
significant exploration and evaluation
expenditure during the year and at 30 June
2018 the carrying value of the exploration and
evaluation expenditure represents a significant
asset to the Group. Included within the current
year expenditure is $6.2 million relating to
relocation activities undertaken on the Group’s
licence area.
The Group’s policy for accounting for
exploration and evaluation expenditure is
disclosed in Note 1 and Note 1 (a) of the
financial report.
·
Obtaining a schedule of the areas of interest held by the
Group and assessing whether the rights to tenure of
those areas of interest remained current at balance
date;
·
Verifying, on a sample basis, exploration and evaluation
expenditure capitalised during the year for compliance
with the recognition and measurement criteria of
relevant accounting standards;
·
Verifying relocation expenditure capitalised during the
year for compliance with the recognition and
measurement criteria of relevant accounting standards;
The carrying value of the exploration and
evaluation asset is a key audit matter due to
the level of procedures undertaken to evaluate
managements application of the requirements
of relevant accounting standards in light of any
indicators of impairment that may be present.
·
·
Reviewing supporting documentation relating to the
relocation expenditure;
Considering the status of the ongoing exploration
programmes in the respective areas of interest by
holding discussions with management, and reviewing the
Group’s exploration budgets, ASX announcements and
Judgement is applied in determining the
director’s minutes;
appropriateness of expenditure capitalised as
exploration expenditure in accordance with
relevant accounting standards, combined with
the significance of expenditure capitalised
during the year and the unique nature of the
village relocation costs resulted in this being a
key audit matter.
·
Considering whether any such areas of interest had
reached a stage where a reasonable assessment of
economically recoverable reserves existed;
·
·
Considering whether any facts or circumstances existed
to suggest impairment testing was required; and
Assessing the adequacy of the related disclosures in Note
1, Note 1 (a) and Note 11 of the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 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 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.
Page 55
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 has 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:
http://www.auasb.gov.au/auditors_responsibilities/ar1.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 pages 15 to 20 of the directors’ report for the
year ended 30 June 2018.
In our opinion, the Remuneration Report of Amani Gold Limited, for the year ended 30 June 2018,
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.
BDO Audit (WA) Pty Ltd
Matthew Cutt
Director
Perth, 28 September 2018
Page 56
Amani Gold Limited
Annual Report 2018
Additional Shareholder Information
The shareholder information set out below was applicable as at 17 September 2018.
Corporate Governance Statement
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Amani
Gold Limited support and adhere to the principles of corporate governance. Please refer to the Company’s website
the year ended 30 June 2018:
for details of
https://www.amanigold.com/corporate/corporate-governance/
the Corporate Governance Statement effective for
Substantial shareholders
An extract of the Company’s register of substantial shareholders is set out below.
Number of Shares
300,000,000
105,414,249
Shareholders
Luck Winner Investment Limited
JP Morgan Nominees Australia Limited
Distribution of equity security holders
Size of
Holding
Ordinary
Shares (ANL)
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
62
92
172
1,056
526
1,908
The number of shareholdings comprising less than a marketable parcel was 1,908.
Twenty Largest Shareholders
Number of
Shares
% Held
J P MORGAN NOMINEES AUSTRALIA LIMITED
LUCK WINNER INVESTMENT LIMITED
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
PERSEUS MINING LIMITED
TIME STRONG LIMITED
YUAN JIMING
KANG XIAO HAN
CITICORP NOMINEES PTY LIMITED
CS THIRD NOMINEES PTY LIMITED
REDLAND PLAINS PTY LTD
MR KENG HUAT GOH
BNP PARIBAS NOMINEES PTY LTD
VICEX HOLDINGS PROPRIETARY LIMITED
MR BRIAN BERNARD RODAN
REDLAND PLAINS PTY LTD
MR JOHN PHILIP DANIELS
CUSTODIAL SERVICES LIMITED
ESM LIMITED
MR MEIZHAI GUO
316,772,775
300,000,000
295,620,705
122,835,269
72,530,199
45,366,667
42,222,222
21,111,111
17,793,152
17,263,141
8,455,500
8,219,276
7,901,333
7,000,000
5,298,600
5,273,000
4,612,403
4,182,350
4,000,000
3,899,999
1,310,357,702
19.66
18.62
18.34
7.62
4.5
2.82
2.62
1.31
1.1
1.07
0.52
0.51
0.49
0.43
0.33
0.33
0.29
0.26
0.25
0.24
81.31
Page 57
Amani Gold Limited
Annual Report 2018
Additional Shareholder Information
Voting Rights
The voting rights attaching to ordinary shares are governed by the Constitution. On a show of hands every person
present who is a member or representative of a member shall have one vote and on a poll, every member present in
person or by proxy or by attorney or duly authorised representative shall have one vote for each share held. None of
the options has any voting rights.
On-market buy-back
There is no current on-market buy-back.
Unquoted equity securities
Class
Unlisted Options – exercisable at 3 to
10 cents each on or before 31 December
2020
Number
41,500,000
Note 1: Holders of more than 20% of this class of options:
Hartleys Limited – 22,500,000
Mineral Interests
Location
Concession
name
and type
Registered
Amani’s Maximum
Notes
Holder
current
equity
interest
equity
interest
capable of
being earned
DRC
Giro Exploitation
Permits
PEs 5046 & 5049
Giro Goldfields sarl
55.25%
55.25%
1
DRC - Democratic Republic of Congo
Notes:
1.
In September 2014 Amani Gold completed the acquisition of 85% of the share capital in Amani Consulting sarl (“Amani
Consulting”), which entity owns 65% of the capital in Giro Goldfields sarl (“Giro sarl”), a DRC registered company and the
registered holder of the two exploitation permits comprising the Giro Project. Amani Gold is responsible for sole funding
exploration on the Giro Project. Societe Miniere De Kilo Moto SA (“Sokimo”), a limited liability company wholly owned
by the DRC Government holds the other 35% interest in Giro sarl.
Under the terms of an agreement between Amani Consulting and Sokimo, Amani Consulting was required to complete a
feasibility study at the Giro Gold Project by February 2017. The parties have been in discussion and negotiation for an
extension of the date for completion of a feasibility study and, in March 2017, Sokimo confirmed its in-principle agreement
to grant a two year extension however at this point in time formal binding agreements to that effect have not yet been
executed by the parties (Sokimo has not issued any notice of breach).
Page 58