ABN 96 125 222 9242017ANNUAL REPORTApollo Minerals LimitedPERTHLevel 9, BGC Centre, 28 The Esplanade Perth WA 6000Telephone: +61 8 9322 6322 Facsimile: +61 8 9322 6558Website: www.apollominerals.com.auEmail: info@apollominerals.com.auAPOLLO MINERALS LIMITED ANNUAL REPORT 2017LONDONUnit 3C, Princes House, 38 Jermyn Street London SW1Y 6DNTelephone: +44 203 903 1930 Facsimile: +44 207 434 4450 CORPORATE DIRECTORY
Directors:
Mr Ian Middlemas – Chairman
Mr Robert Behets – Non-Executive Director
Dr Michel Bonnemaison – Non-Executive Director
Mr Ajay Kejriwal – Non-Executive Director
Mr Mark Pearce – Non-Executive Director
Company Secretary:
Mr Clint McGhie
Registered and Principal Office:
London Office:
Share Register:
Securities Exchange Listing:
ASX Code:
Bankers:
Solicitors:
Level 9, BGC Centre, 28 The Esplanade, Perth WA 6000
Tel: +61 8 9322 6322
Fax: +61 8 9322 6558
Unit 3C, Princes House, 38 Jermyn Street, London SW1Y 6DN
Tel: +44 203 903 1930
Fax: +44 207 434 4450
Security Transfer Australia Pty Ltd
770 Canning Highway, Applecross WA 6953
Tel: +61 8 9315 2333
Fax: +61 8 9315 2233
Australian Securities Exchange
Home Branch – Perth
Level 40, Central Park
152-158 St Georges Terrace
Perth WA 6000
AON – Fully paid ordinary shares
Australia – Australia and New Zealand Banking Group Limited
France – Banque Populaire
DLA Piper Australia
DLA Piper France
Auditor:
Hall Chadwick
CONTENTS
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 Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Corporate Governance
ASX Additional Information
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DIRECTORS’ REPORT
The Directors of Apollo Minerals Limited present their report on the Consolidated Entity consisting of Apollo Minerals
Limited (“Company” or “Apollo Minerals”) and the entities it controlled at the end of, or during, the year ended 30
June 2017 (“Consolidated Entity” or “Group”).
DIRECTORS
The names and details of the Company's directors in office at any time during the financial year or since the end of
the financial year are:
Current Directors
Mr Ian Middlemas
Mr Robert Behets
Dr Michel Bonnemaison
Mr Ajay Kejriwal
Mr Mark Pearce
Former Directors
Chairman (appointed 8 July 2016)
Non-Executive Director (appointed 12 October 2016)
Non-Executive Director (appointed 30 June 2017)
Non-Executive Director (appointed 30 June 2017)
Non-Executive Director (appointed 8 July 2016)
Mr Richard Shemesian
Mr Eric Finlayson
Mr Guy Robertson
Non-Executive Director (resigned 30 June 2017)
Non-Executive Director (resigned 8 July 2016)
Non-Executive Director (resigned 8 July 2016)
Unless otherwise stated, Directors held their office from 1 July 2016 until the date of this report.
CURRENT DIRECTORS AND OFFICERS
Mr Ian Middlemas B.Com, CA
Chairman
Mr Middlemas is a Chartered Accountant, a member of the Financial Services Institute of Australasia and holds a
Bachelor of Commerce degree. He worked for a large international Chartered Accounting firm before joining the
Normandy Mining Group where he was a senior group executive for approximately 10 years. He has had extensive
corporate and management experience, and is currently a director with a number of publicly listed companies in the
resources sector.
Mr Middlemas was appointed a Director of the Company on 8 July 2016. During the three year period to the end
of the financial year, Mr Middlemas has held directorships in Cradle Resources Limited (May 2016 – present),
Paringa Resources Limited (October 2013 – present), Berkeley Energia Limited (April 2012 – present), Prairie
Mining Limited (August 2011 – present), Salt Lake Potash Limited (January 2010 – present), Equatorial Resources
Limited (November 2009 – present), Piedmont Lithium Limited (September 2009 – present), Sovereign Metals
Limited (July 2006 – present), Odyssey Energy Limited (September 2005 – present), Syntonic Limited (April 2010
– June 2017) and Papillon Resources Limited (May 2011 – October 2014).
Mr Robert Behets B.Sc(Hons), FAusIMM, MAIG
Non-Executive Director
Mr Behets is a geologist with over 28 years’ experience in the mineral exploration and mining industry in Australia
and internationally. He has had extensive corporate and management experience and has been Director of a
number of ASX-listed companies in the resources sector including Mantra Resources Limited (“Mantra”), Papillon
Resources Limited, and Berkeley Energia Limited. Mr Behets was instrumental in the founding, growth and
development of Mantra, an African-focused uranium company, through to its acquisition by ARMZ for approximately
A$1 billion in 2011. Prior to Mantra, he held various senior management positions during a long career with WMC
Resources Limited.
Mr Behets has a strong combination of technical, commercial and managerial skills and extensive experience in
exploration, mineral resource and ore reserve estimation, feasibility studies and operations across a range of
commodities, including uranium, gold and base metals. He is a Fellow of The Australasian Institute of Mining and
Metallurgy, a Member of the Australian Institute of Geoscientists and was previously a member of the Australasian
Joint Ore Reserve Committee (“JORC”).
Apollo Minerals Limited ANNUAL REPORT 2017
1
DIRECTORS’ REPORT
(Continued)
CURRENT DIRECTORS AND OFFICERS (Continued)
Mr Behets was appointed a Director of the Company on 12 October 2016. During the three-year period to the end
of the financial year, Mr Behets has also held directorships in Piedmont Lithium Limited (February 2017 – present),
Berkeley Energia Limited (April 2012 – present), Equatorial Resources Limited (February 2016 – present), Cradle
Resources Limited (May 2016 – July 2017) and Papillon Resources Limited (May 2012 – October 2014).
Dr Michel Bonnemaison D.Sc, PhD, F. SEG
Non-Executive Director
Dr Bonnemaison is a French geologist with extensive experience in Europe, Africa and South America. Dr
Bonnemaison spent much of the last 35 years working with the French geological survey (BRGM) and was the
Deputy Head of Minerals Resources Division. He was President and CEO of SEIEMSA, a subsidiary of the BRGM
mining group in Spain. Dr Bonnemaison completed a PhD on the metallogeny of the Salsigne gold mine and is
widely recognised as one the preeminent authorities on gold deposits in France.
Dr Bonnemaison was appointed a Director of the Company on 30 June 2017. During the three year period to the
end of the financial year, Dr Bonnemaison has not held any other directorships in listed companies.
Mr Ajay Kejriwal B.Sc (Economics), ACA
Non-Executive Director
Mr Kejriwal has over 25 years’ experience in finance and commerce, and is currently a consultant to Juniper Capital,
a natural resource investment and advisory business. Prior to Juniper Capital he was a banker leading many
investment transactions across oil and gas, mining, real estate and asset management sectors. He has previously
worked as a banker for the Principal Investments business at Nomura in London and Hong Kong, Cazenove and
Co and Morgan Stanley. Mr Kejriwal is a Chartered Accountant, having qualified with PriceWaterhouseCoopers in
1994.
Mr Kejriwal was appointed a Director of the Company on 30 June 2017. During the three year period to the end of
the financial year, Mr Kejriwal held a directorship in Sirius Petroluem plc (September 2013 – November 2015).
Mr Mark Pearce B.Bus, CA, FCIS, FFin
Non-Executive Director
Mr Pearce is a Chartered Accountant and is currently a director of several listed companies that operate in the
resources sector. He has had considerable experience in the formation and development of listed resource
companies and has worked for several large international Chartered Accounting firms. Mr Pearce is also a Fellow
of the Governance Institute of Australia and a Fellow of the Financial Services Institute of Australasia.
Mr Pearce was appointed a Director of the Company on 8 July 2016. During the three year period to the end of the
financial year, Mr Pearce has held directorships in Salt Lake Potash Limited (August 2014 – present), Prairie Mining
Limited (August 2011 – present), Equatorial Resources Limited (November 2009 – present), Piedmont Lithium
Limited (September 2009 – present), Sovereign Metals Limited (July 2006 – present), Odyssey Energy Limited
(September 2005 – present) and Syntonic Limited (April 2010 – October 2016).
Mr Clint McGhie B.Com, CA, ACIS, FFin
Company Secretary
Mr McGhie is a Chartered Accountant and Chartered Secretary. He commenced his career at a large international
Chartered Accounting firm, and has held the position of Company Secretary and/or Chief Financial Officer for a
number of listed companies that operate in the resources sector.
Mr McGhie was appointed Company Secretary of Apollo Minerals Limited on 8 July 2016.
2
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the year consisted of the identification, acquisition,
exploration and development of resource projects. During the year, the Group identified and acquired the Couflens
tungsten-copper-gold project (“Couflens Project”) in southern France.
OPERATING AND FINANCIAL REVIEW
Operations
Highlights during and subsequent to the end of the year included:
➢ Completed the acquisition of an 80% interest in the Couflens Project which comprises an exploration licence
that covers a 42km2 area in the Pyrenees region. The Couflens Project includes the historic Salau mine, which
was one of the world’s highest grade tungsten mines when it operated from 1971 to 1986.
• Salau mine is recorded to have produced approximately 930,000 tonnes at 1.5% WO3 for around 11,500
tonnes of WO3 in concentrate prior to closure
• Production grades were 2.0 to 2.5% WO3 in the mine’s latter years
• Deposit remains open at depth, with previous drilling below the base of the existing underground
development that confirmed the continuation of the mineralised system
• An initial review of extensive historical exploration and production database has been completed
• Priority tungsten-copper-gold exploration targets identified within, and immediately adjacent to, the Salau
mine
• Substantial news flow is expected with a planned work program to include mine sampling and drilling
utilising existing underground development in order to outline sufficient high grade tungsten
mineralisation to facilitate estimation of Mineral Resources and commencement of mine feasibility
studies
• Salau mine’s existing underground development and infrastructure will be examined to determine the
most efficient method to progress mine exploration and development activities and potential mine
reactivation
• Additional tungsten-copper-gold prospects have been identified within the broader project area and
surface exploration programs will be undertaken with a view to further assessing these prospects and
generating new targets
➢ Dr Michel Bonnemaison, a highly credentialed French geologist with specific expertise in gold deposits in France
and Mr Ajay Kejriwal, an experienced European based corporate and capital markets executive, were appointed
as Directors of the Company with effect from the completion of the Couflens Project acquisition.
Apollo Minerals Limited ANNUAL REPORT 2017
3
DIRECTORS’ REPORT
(Continued)
OPERATING AND FINANCIAL REVIEW (Continued)
Couflens Project
The Couflens Project area is located 130km south of Toulouse, within the Pyrenees region near the border with
Spain (Figure 1). The Couflens Project comprises the recently granted Couflens exploration licence (“Couflens
PER”) which covers an area of 42km2 centred on the Salau mine, formerly one of the world’s highest grade tungsten
mines.
Figure 1 - Couflens Project / Salau Mine Location
The Salau scheelite skarn tungsten deposit was discovered in the early 1960’s by the Bureau de Recherches
Géologiques et Minières (“BRGM”). Les Mines d’Anglade (“LMA”) operated the mine from 1971 to 1986 which is
reported to have produced approximately 930,000 tonnes of ore at an average grade of 1.5% WO3 to yield
approximately 11,500 tonnes of WO3 in concentrate.
Notwithstanding the existence of remaining resources, the discovery of promising mineralised zones elsewhere
(Fonteilles et al., 1989) and the higher grade production from the latter years of production (up to 2.48% WO 3)
(Figure 2), the precipitous fall in the tungsten price caused by Chinese dumping in 1986 led to mine closure.
4
Figure 2 - Tonnage and grade from historic tungsten (WO3) production at the Salau Mine
Project Geology
Salau is a tungsten-bearing (primarily scheelite) skarn deposit developed at the contact between Devonian pelites
and calcareous sediments of the Barregiennes Formation and a Hercynian-aged granodiorite stock (“Fourque”)
(Figure 3). The skarn formed within both the carbonate-bearing sediments and, to a much lesser degree, the host
granodiorite. Mineralisation is directly related to the Fourque granodiorite which provided hot, tungsten-copper-gold
bearing solutions that reacted with the host rocks to form the skarns and deposit metal-bearing minerals.
Figure 3 - Salau Mine Geology with Exploration Targets
Apollo Minerals Limited ANNUAL REPORT 2017
5
DIRECTORS’ REPORT
(Continued)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Salau consists of two known mineralised systems, the Bois d’Anglade embayment (Formation Nord, Gulfe,
Formation Sud, and S.C. ore zones) and Veronique (Figures 3 and 4). Bois d’Anglade was discovered first and
provided the bulk of the early production. Veronique, 300m to the west, was discovered in 1975 and provided higher
grade tungsten production (average 1.9% WO3), including gold-rich material (not recovered in milling) towards the
end of the mine life. Limited sampling of material from the lower section of the Veronique Southeast zone indicated
the presence of high grade gold (Fonteilles et al, 1989).
Figure 4 - Salau Mine Long Section
Exploration Potential - Salau Mine Area
Previous underground drilling by the former mine owners recorded a number of high grade tungsten-bearing skarn
intersections below the 1,230m level access adit (Figure 4), which represents the down-plunge continuation of the
Veronique ore system. The tungsten grade of this zone of mineralisation was reported as being similar to that
derived from mining in the upper levels of Veronique. The system remains open at depth and is believed to contain
substantial gold credits as stated in Fonteilles et al, 1989.
Potential also remains around the other previously mined areas (Veronique and Bois d’Anglade systems) where
remnant zones of tungsten-bearing material appear present.
In addition, discoveries documented by LMA at “Quer de l’Aigle” and “Christine”, plus a number of other scheelite
skarn occurrences at the surface on the flanks of the Fourque granodiorite remain largely untested (Figure 3).
Additional tungsten-copper-gold prospects have been identified within the broader project area and surface
exploration programs will be undertaken with a view to further assessing these prospects and generating new
targets.
6
Work Plan - Salau Mine Area
The initial work plan for the Salau mine area includes:
• Continued review and digitisation of available mine production and exploration data
• Mine area and old tailings area risk assessments
•
Initial access and assessment of existing mine development and stoping areas
• Mapping and sampling of mineralisation exposed in previously developed mine areas
• Generation of a 3D model of the geology, zones of mineralisation and principal controls on mineralisation
• Underground drilling to confirm known zones of mineralisation and test for extensions of these zones
• Estimation and reporting of a Mineral Resource in accordance with the JORC Code
Initial work will focus on defining sufficient high grade tungsten mineralisation to justify commencement of mine
feasibility studies, as well as testing the gold potential within and adjacent to the Salau mine area.
The Company will undertake the work program with a strong commitment to all aspects of sustainable development
with an integrated approach to economic, social, environmental, health and safety management.
Orpheus Joint Venture – Fraser Range
The Company has a 70% interest in the nickel, copper and gold prospective Orpheus JV Project in the Fraser
Range province in south eastern Western Australia (Figure 5).
The Orpheus JV Project area consists of four tenements covering over 600km² in a highly prospective portion of
the world class Fraser Range exploration district, host to Independence Group’s (ASX: IGO) major Nova nickel and
copper deposit. Apollo Minerals is required to sole fund all activities on the Orpheus JV Project until completion of
a Bankable Feasibility Study.
Figure 5 - Tenement Plan – Orpheus JV Project, Fraser Range province on gravity image
Apollo Minerals Limited ANNUAL REPORT 2017
7
DIRECTORS’ REPORT
(Continued)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
The Fraser Range province is highly prospective for nickel, copper and gold, and has attracted significant
exploration since the discovery of the Nova deposit in 2012. The bulk of the Orpheus JV Project is strategically
located along strike and mid-way between the Nova deposit to the northeast and Independence Group’s Crux nickel
prospect to the southwest.
During the year the Company completed a comprehensive review of all available data within the Orpheus JV Project
area. With the exception of E63/1281, where previous work has identified disseminated nickel-copper sulphides in
fertile mafic intrusives, minimal effective exploration has been undertaken over much of Apollo Mineral’s ground
holding.
The review identified a number of priority targets, both empirical and conceptual, that require ground follow-up.
These included two airborne electromagnetic (“HeliTEM”) anomalies that had not been previously identified and a
conceptual drill target at the Plato Prospect.
Gravity surveys, field verification and surface sampling programs are underway to follow-up these priority targets.
Once the results from this field work are returned and assessed, additional ground based geophysical surveys (i.e.
electromagnetic) will be carried out to further delineate these targets (if warranted).
Kango North Iron Project
The Kango North Iron project covers 400km2 in Gabon, on the west coast of Central Africa. The Project is located
110km by road from the country’s capital Libreville and is positioned close to well-maintained roads, the national
electricity grid, shipping ports and open access railway.
Apollo Minerals has an earn-in joint venture with a diversified Middle Eastern group who are required to sole fund
exploration at the Project. The JV partner can earn up to a 50.1% interest in the Project through the contribution of
~$4m (US$3m) in exploration and development. Apollo Minerals will be free carried at no cost during exploration
until the JV partner earns a 50.1% interest or ceases funding prior to completing the earn-in. In the first stage of the
JV, the partner has earned a 30% interest.
The results of a field geological mapping and sampling program, undertaken with the objective of providing greater
geological understanding of the known mineralised anomalies and to better identify targets for further iron ore
exploration activities, were received during the year. Based on the accumulation of historical technical data and in
conjunction with this mapping campaign, the recommend next phase of exploration is to conduct an initial scout
drilling on the P3-P4-P6 Prospect and additional infill drilling at the P2 Prospect.
Corporate
On 30 June 2017, Apollo Minerals completed the acquisition of Ariege Tungstene SAS (“Ariege”), which holds an
80% interest in Mines du Salat SAS (“MdS”). MdS is governed by a Shareholder Agreement with Variscan Mines
SAS (“Variscan France”) which holds the remaining 20% interest.
Pursuant to the Shareholder Agreement and subject to regulatory approval, Variscan France will transfer the
Couflens PER into MdS. Ariege is required to spend €2.5 million over 3 years, or it may elect to withdraw from the
Shareholder Agreement and return its shareholding in MdS to Variscan France. Variscan France will be free carried
until completion of a Definitive Feasibility Study (“DFS”) (or total expenditures reaching €25 million).
Dr Michel Bonnemaison, a highly credentialed French geologist with specific expertise in gold deposits in France
and Mr Ajay Kejriwal, an experienced European based corporate and capital markets executive, were appointed as
Directors of the Company with effect from the completion of the Couflens Project acquisition.
In May 2016, the Company announced that it would restructure the Board and undertake a comprehensive
recapitalisation process. Following Shareholder approval in June 2016, the Company has completed a 1 for 4 share
consolidation, a placement of 42 million shares at $0.05 each raising $2.1 million (before costs), followed by a 1 for
1 non-renounceable entitlements issue at $0.05 each raising $3.1 million (before costs). Upon completion of the
placement in July 2016, Mr Ian Middlemas was appointed Chairman of the Company and Mr Mark Pearce was
appointed a Non-Executive Director.
Mr Robert Behets, an experienced mining executive, was appointed to the Board in October 2016.
8
Results of Operations
The net loss of the Group attributable to members of the Company for the year ended 30 June 2017 was $1,383,441
(2016 Restated: $2,631,611). This loss is partly attributable to:
(i)
(ii)
exploration and evaluation expenditure of $519,928 (2016 Restated: $622,982), which is attributable to the
Group’s accounting policy of expensing exploration and evaluation expenditure (other than expenditures
incurred in the acquisition of the rights to explore) incurred by the Group in the period subsequent to the
acquisition of the rights to explore up to the successful completion of definitive feasibility studies for each
separate area of interest. Refer to note 1(d) regarding a change in the policy for accounting for exploration
and evaluation expenditure to that applied in previous years; and
non-cash share based payments expenses of $442,219 (2016: $357,518) which is attributable to the Group’s
accounting policy of expensing the value of shares and incentive options (estimated using an option pricing
model) granted to key employees, consultants and advisors. The value of incentive options is measured at
grant date and recognised over the period during which the option holders become unconditionally entitled
to the options.
The decrease in the loss for the year ended 30 June 2017 compared to the year ended 30 June 2016 (restated) is
is partly attributed to the impairment of exploration and evaluation assets of $50,000 in 2017 and $930,757 in 2016.
Financial Position
At 30 June 2017, the Group had cash reserves of $3,741,309 (2016: $175,362) and no debt, placing the Company
in a good position to continue exploration on its current exploration and development activities.
At 30 June 2017, the Group had net assets of $10,116,176 (2016 Restated: $515,358), an increase of $9,600,818
compared with the previous year. This is largely attributable to the Company’s capital raising during the year which
raised net proceeds of $5.2 million, less the net cash used in operating and investing activities of $1.6 million, and
the net increase in exploration and evaluation expenditure of $6.2 million following the acquisition of the Couflens
Project on 30 June 2017.
Earnings Per Share
Basic loss per share
Note:
1 2016 basic loss per share is post 1 for 4 consolidation effective 17 June 2016.
Dividends
2017
Cents
(1.21)
2016
Restated
Cents
(14.44)1
No dividends were paid or declared since the start of the financial year. No recommendation for payment of
dividends has been made.
Apollo Minerals Limited ANNUAL REPORT 2017
9
DIRECTORS’ REPORT
(Continued)
OPERATING AND FINANCIAL REVIEW (CONTINUED)
Business Strategies and Prospects for Future Financial Years
The objective of the Group is to create long-term shareholder value through the discovery, development and
acquisition of technically and economically viable mineral deposits.
To date, the Group has not commenced production of any minerals, nor has it identified a Mineral Resource in
accordance with the JORC Code. To achieve its objective, the Group currently has the following business strategies
and prospects over the medium term:
•
•
•
•
defining sufficient high grade tungsten mineralisation within and adjacent to the Salau Mine area to justify
commencement of mine feasibility studies;
testing the gold potential within and adjacent to the Salau mine area;
undertake regional exploration on the wider 42km² Couflens Project area where additional tungsten-copper-
gold prospects have been identified; and
conduct further field work to follow up targets identified at the Fraser Range Project.
All of these activities are inherently risky and the Board is unable to provide certainty of the expected results of
these activities, or that any or all of these likely developments will be achieved. The material business risks faced
by the Group that could have an effect on the Group’s future prospects, and how the Group manages these risks,
include:
The Company’s exploration properties may never be brought into production – the exploration for,
and development of, mineral deposits involves a high degree of risk. Few properties which are explored are
ultimately developed into producing mines. The Salau mine operated from April 1971 to November 1986.
Since that time, the original mine portal has been barricaded up and as a result the Company has not been
able to enter the mine to assess the condition of the existing mine development and underground
infrastructure or conduct any due diligence activities. There is no guarantee that the Company will be able
to utilise existing mine development and infrastructure or that it will identify sufficient resources or established
economic qualities of reserves to re-establish mine operations. To mitigate this risk, the Company will
undertake systematic and staged exploration and testing programs on its mineral properties (including the
Couflens Project) and, subject to the results of these exploration programs, the Company will then
progressively undertake a number of technical and economic studies with respect to its projects prior to
making a decision to mine. However there can be no guarantee that the studies will confirm the technical
and economic viability of the Company’s mineral properties or that the properties will be successfully brought
into production;
The Company’s activities at the Couflens Project are subject to the laws of France – The Couflens
Project is located in the Region of Midi-Pyrenees, France and as such, the operations of the Company will
be exposed to related risks and uncertainties associated with the country, regional and local jurisdictions.
As part of the regulatory framework in France for exploration and mining activities, the Company will be
required to engage with the local community. Opposition to the Project, or changes in local community
support, along with any changes in mining or investment policies or in political attitude in France and, in
particular to the mining, processing or use of tungsten, may adversely affect the operations, delay or impact
the approval process or conditions imposed, increase exploration and development costs, or reduce
profitability of the Company;
The Company has contractual rights in the Couflens PER until regulatory approval is granted for the
transfer of Couflens PER into MdS – Whilst the Company expects approval to be granted in due course,
it may need to negotiate a satisfactory resolution if the transfer were not approved and appeals and other
remedies are exhausted;
The Company’s activities will require further capital – the exploration and any development of the
Company’s exploration properties will require substantial additional financing. Failure to obtain sufficient
financing may result in delaying, or the indefinite postponement of, exploration and any development of the
Company’s properties or even a loss of property interest. There can be no assurance that additional capital
or other types of financing will be available if needed or that, if available, the terms of such financing will be
favourable to the Company;
•
•
•
•
10
•
•
The Company may be adversely affected by fluctuations in commodity prices, including tungsten
and gold – the price of commodities fluctuate widely and are affected by numerous factors beyond the
control of the Company. Future production, if any, from the Company’s mineral properties will be dependent
upon the price of commodities being adequate to make these properties economic. The Company currently
does not engage in any hedging or derivative transactions to manage commodity price risk. As the
Company’s operations change, this policy will be reviewed periodically going forward; and
Global financial conditions may adversely affect the Company’s growth and profitability – many
industries, including the mineral resource industry, are impacted by these market conditions. Some of the
key impacts include contraction in credit markets resulting in a widening of credit risk, devaluations and high
volatility in global equity, commodity, foreign exchange and precious metal markets, and a lack of market
liquidity. Due to the current nature of the Company’s activities, a slowdown in the financial markets or other
economic conditions may adversely affect the Company’s growth and ability to finance its activities.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Group's operations are subject to various environmental laws and regulations under the relevant government's
legislation. Full compliance with these laws and regulations is regarded as a minimum standard for all operations
to achieve.
Instances of environmental non-compliance by an operation are identified either by external compliance audits or
inspections by relevant government authorities.
There have been no known breaches of environmental laws and regulations by the Group during the financial year.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
(i)
On 30 June 2017, the Company completed the acquisition of an 80% interest in the Couflens Project in
southern France. The Couflens Project comprises a recently granted exploration permit that covers a 42km2
area in the Pyrenees region and includes the historic Salau mine, which was one of the world’s highest grade
tungsten mines when it operated from 1971 to 1986.
Apollo Minerals acquired its interest in the Couflens Project through the acquisition of 100% of the shares in
Ariege Tungstene SAS, which holds an 80% interest in Mines du Salat SAS. Consideration for the acquisition
of Ariege included:
(a)
(b)
(c)
A$250,000 cash paid on completion, and A$500,000 in deferred cash consideration payable in two
instalments of A$250,000 upon satisfaction of performance milestones;
15,000,000 fully paid ordinary shares issued on completion; and
65,000,000 convertible performance shares issued on completion, which convert into fully paid
ordinary shares upon upon satisfaction of performance milestones.
Following completion of the acquisition of its interest in the Couflens Project, Dr Michel Bonnemaison, a
highly credentialed French geologist with specific expertise in gold deposits in France and Mr Ajay Kejriwal,
an experienced European based corporate and capital markets executive, were appointed Non-Executive
Directors of the Company effective 30 June 2017. Mr Richard Shemesian also retired as a Non-Executive
Director following the completion of the acquisition.
On 12 October 2016, the Company appointed experienced mining executive, Mr Robert Behets, as a Non-
Executive Director of the Company.
As announced in May 2016, the Company completed a recapitalisation in August 2016, including the
placement of 42 million shares at an issue price of $0.05 to raise $2.1 million before costs, and a 1 for 1 non-
renounceable entitlement issue of 62.4 million shares at an issue price of $0.05 to raise $3.12 million before
costs.
Following completion of the initial placement, Mr Ian Middlemas was appointed Chairman and Mr Mark
Pearce was appointed Non-Executive Director of the Company with effect from 8 July 2016. Mr Eric
Finlayson and Mr Guy Roberston resigned as Non-Executive Directors effective the same date. Mr
Robertson was also replaced as Company Secretary by Mr Clint McGhie.
(ii)
(iii)
Apollo Minerals Limited ANNUAL REPORT 2017
11
DIRECTORS’ REPORT
(Continued)
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
As at the date of this report, there are no matters or circumstances which have arisen since 30 June 2017 that have
significantly affected or may significantly affect:
•
•
•
the operations, in financial years subsequent to 30 June 2017, of the Consolidated Entity;
the results of those operations, in financial years subsequent to 30 June 2017, of the Consolidated Entity;
or
the state of affairs, in financial years subsequent to 30 June 2017, of the Consolidated Entity.
DIRECTORS' INTERESTS
As at the date of this report, the Directors' interests in the securities of the Company are as follows:
Interest in securities at the date of the report
Ordinary
Shares(1)
Performance
Shares(2)
$0.05
Options(3)
$0.075
Options(4)
$0.20
Options(5)
$0.25
Options(6)
Ian Middlemas
12,000,000
Robert Behets
2,500,000
-
-
-
-
-
-
500,000
500,000
500,000
500,000
Michel Bonnemaison
1,875,000
8,125,000
Ajay Kejriwal(7)
13,125,000
56,875,000
-
-
-
-
Mark Pearce
4,000,000
-
500,000
500,000
-
-
-
-
-
-
Notes:
1
2
3
4
5
6
7
“Ordinary Shares” means fully paid ordinary shares in the capital of the Company.
“Performance Shares” means a performance share that will convert into ordinary shares upon satisfaction of relevant
milestones.
“$0.05 Options” means an option to subscribe for 1 ordinary Share in the capital of the Company at an exercise price of
$0.05 on or before 30 June 2018.
“$0.075 Options” means an option to subscribe for 1 ordinary Share in the capital of the Company at an exercise price of
$0.075 on or before 30 June 2019.
“$0.20 Options” means an option to subscribe for 1 ordinary Share in the capital of the Company at an exercise price of
$0.20 on or before 30 June 2020.
“$0.25 Options” means an option to subscribe for 1 ordinary Share in the capital of the Company at an exercise price of
$0.25 on or before 30 June 2021.
Mr Kejriwal’s interest in the Ordinary Shares and Performance Shares is an indirect interest in the securities held by
Juniper Capital Partners Limited. Mr Kejriwal has been nominated as a Director by Juniper Capital Partners Limited and
he may be able to indirectly influence voting of the securities.
SHARE OPTIONS
At the date of this report the following options have been issued by the Company over unissued capital:
•
•
•
•
•
•
1,678,125 unlisted options exercisable at $0.52 each on or before 28 February 2018;
1,500,000 unlisted options exercisable at $0.05 each on or before 30 June 2018;
2,000,000 unlisted options exercisable at $0.075 each on or before 30 June 2019;
1,250,000 unlisted options exercisable at $0.20 each on or before 30 June 2020;
1,500,000 unlisted options exercisable at $0.32 each on or before 30 November 2020; and
1,600,000 unlisted options exercisable at $0.25 each on or before 30 June 2021.
During the year ended 30 June 2017 and up to the date of this report, no ordinary shares have been issued as a
result of the exercise of options.
12
INDEMNIFICATION AND INSURANCE OF OFFICERS AND AUDITORS
The Constitution of the Company requires the Company, to the extent permitted by law, to indemnify any person
who is or has been a director or officer of the Company or Group for any liability caused as such a director or officer
and any legal costs incurred by a director or officer in defending an action for any liability caused as such a director
or officer.
During or since the end of the financial year, no amounts have been paid by the Company or Group in relation to
the above indemnities. During the financial year, $8,409 insurance premiums were paid by the Group (2016: $7,110)
to insure against a liability incurred by a person who is or has been a director or officer of the Company or Group.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a part for the purpose of taking responsibility on behalf of the Company for
all or any part of those proceedings.
The Company was not a party to any such proceedings during the year.
DIRECTORS' MEETINGS
The number of meetings of directors held during the year and the number of meetings attended by each director
were as follows:
Board Meetings
Number eligible to attend
Number attended
Current Directors
Ian Middlemas
Robert Behets
Michel Bonnemaison
Ajay Kejriwal
Mark Pearce
Former Directors
Richard Shemesian
Eric Finlayson
Guy Robertson
3
1
-
-
3
4
1
1
2
1
-
-
3
4
1
1
There were no Board committees during the financial year. The Board as a whole currently performs the functions
of an Audit Committee, Risk Committee, Nomination Committee, and Remuneration Committee, however this will
be reviewed should the size and nature of the Company’s activities change.
Apollo Minerals Limited ANNUAL REPORT 2017
13
DIRECTORS’ REPORT
(Continued)
REMUNERATION REPORT (AUDITED)
This Remuneration Report, which forms part of the Directors’ Report, sets out information about the remuneration
of Key Management Personnel (“KMP”) of the Group.
Details of Key Management Personnel
The KMP of the Group during or since the end of the financial year were as follows:
Current Directors
Mr Ian Middlemas
Mr Robert Behets
Dr Michel Bonnemaison
Mr Ajay Kejriwal
Mr Mark Pearce
Former Directors
Chairman (appointed 8 July 2016)
Non-Executive Director (appointed 12 October 2016)
Non-Executive Director (appointed 30 June 2017)
Non-Executive Director (appointed 30 June 2017)
Non-Executive Director (appointed 8 July 2016)
Mr Richard Shemesian
Mr Eric Finlayson
Mr Guy Robertson
Non-Executive Director (resigned 30 June 2017)
Non-Executive Director (resigned 8 July 2016)
Non-Executive Director (resigned 8 July 2016)
Other KMP
Mr Clint McGhie
Company Secretary (appointed 8 July 2016)
Unless otherwise disclosed, the KMP held their position from 1 July 2016 until the date of this report.
Remuneration Policy
The Group’s remuneration policy for its KMP has been developed by the Board taking into account the size of the
Group, the size of the management team for the Group, the nature and stage of development of the Group’s current
operations, and market conditions and comparable salary levels for companies of a similar size and operating in
similar sectors.
In addition to considering the above general factors, the Board has also placed emphasis on the following specific
issues in determining the remuneration policy for KMP:
•
•
•
the Group is currently focused on undertaking exploration and appraisal activities on existing projects, and
identifying and acquiring suitable new resource projects;
risks associated with small market capitalisation resource companies whilst exploring and developing
projects; and
other than profit which may be generated from asset sales, the Company does not expect to be undertaking
profitable operations until sometime after the commencement of commercial production on any of its
projects.
Executive Remuneration
The Group’s remuneration policy is to provide a fixed remuneration component and a performance based
component (short term incentive and long term incentive). The Board believes that this remuneration policy is
appropriate given the considerations discussed in the section above and is appropriate in aligning executives’
objectives with shareholder and business objectives.
Fixed Remuneration
Fixed remuneration consists of base salaries, as well as employer contributions to superannuation funds and other
non-cash benefits. Fixed remuneration is reviewed annually by the Board. The process consists of a review of
company and individual performance, relevant comparative remuneration externally and internally and, where
appropriate, external advice on policies and practices.
14
Performance Based Remuneration – Short Term Incentive
Executives may be entitled to an annual cash bonus upon achieving various key performance indicators (“KPI’s”),
as set by the Board. Having regard to the current size, nature and opportunities of the Company, the Board has
determined that these KPI’s will include measures such as successful completion of exploration activities (e.g.
completion of exploration programs within budgeted timeframes and costs), development activities (e.g. completion
of scoping and/or feasibility studies), corporate activities (e.g. recruitment of key personnel) and business
development activities (e.g. project acquisitions and capital raisings). Prior to the end of each financial year, the
Board assesses performance against these criteria.
Given recent market conditions and the status of the Company’s operations, the Board has determined not to pay
any cash bonuses in respect to the 2017 financial year (2016: Nil).
Performance Based Remuneration – Long Term Incentive
The Board has chosen to issue Incentive Options (where appropriate) to some executives as a key component of
the incentive portion of their remuneration, in order to attract and retain the services of the executives and to provide
an incentive linked to the performance of the Company. The Board considers that each executive’s experience in
the resources industry will greatly assist the Company in progressing its projects to the next stage of development
and the identification of new projects.
The Board may grant Incentive Options to executives with exercise prices at and/or above market share price (at
the time of agreement). As such, Incentive Options granted to executives will generally only be of benefit if the
executives perform to the level whereby the value of the Company increases sufficiently to warrant exercising the
Incentive Options granted. Other than service-based vesting conditions, there are no additional performance criteria
on the Incentive Options granted to executives, as given the speculative nature of the Company’s activities and the
small management team responsible for its running, it is considered the performance of the executives and the
performance and value of the Company are closely related. The Company prohibits executives entering into
arrangements to limit their exposure to Incentive Options granted as part of their remuneration package.
Non-Executive Director Remuneration
The Board’s policy is to remunerate Non-Executive Directors at market rates for comparable companies for time,
commitment and responsibilities. Given the current size, nature and risks of the Company, Incentive Options have
also been used to attract and retain Non-Executive Directors. The Board determines payments to the Non-Executive
Directors and reviews their remuneration annually, based on market practice, duties and accountability.
Independent external advice is sought when required.
The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by
shareholders at a General Meeting. Director’s fees paid to Non-Executive Directors accrue on a daily basis. Fees
for Non-Executive Directors are not linked to the performance of the Group. However, to align Directors’ interests
with shareholder interests, the Directors are encouraged to hold shares in the Company and Non-Executive
Directors may in limited circumstances receive Incentive Options in order to secure their services.
The Company prohibits Non-Executive Directors from entering into arrangements to limit their exposure to Incentive
Options granted as part of their remuneration package.
Fees for the Chairman are presently set at $36,000 (2016: $60,000) per annum. Fees for Non-Executive Directors’
are presently set at $20,000 per annum plus compulsory superannuation where applicable (2016: $36,000 - $70,000
inclusive of superannuation). These fees cover main board activities only.
Non-Executive Directors may receive additional remuneration for other services provided to the Company, including
but not limited to, membership of committees.
Apollo Minerals Limited ANNUAL REPORT 2017
15
DIRECTORS’ REPORT
(Continued)
REMUNERATION REPORT (AUDITED) (Continued)
Relationship between Remuneration of KMP and Shareholder Wealth
During the Company’s exploration and development phases of its business, the Board anticipates that the Company
will retain earnings (if any) and other cash resources for the exploration and development of its resource projects.
Accordingly the Company does not currently have a policy with respect to the payment of dividends and returns of
capital. Therefore there was no relationship between the Board’s policy for determining, or in relation to, the nature
and amount of remuneration of KMP and dividends paid and returns of capital by the Company during the current
and previous four financial years.
The Board did not determine, and in relation to, the nature and amount of remuneration of the KMP by reference to
changes in the price at which shares in the Company traded between the beginning and end of the current and the
previous four financial years. However, as noted above, a number of KMP have received Incentive Options which
generally will only be of value should the value of the Company’s shares increase sufficiently to warrant exercising
the Incentive Options.
Relationship between Remuneration of KMP and Earnings
As discussed above, the Company is currently undertaking exploration activities and is actively pursuing new
business opportunities, and does not expect to be undertaking profitable operations (other than by way of material
asset sales, none of which is currently planned) until sometime after the successful commercialisation, production
and sales of commodities from one or more of its projects. Accordingly the Board does not consider earnings during
the current and previous four financial years when determining, and in relation to, the nature and amount of
remuneration of KMP.
The Board does not directly base remuneration levels on the Company’s share price or movement in the share
price over the financial year. However, as noted above, a number of KMP have received Incentive Options which
generally will only be of value should the value of the Company’s shares increase sufficiently to warrant exercising
the Incentive Options granted.
Emoluments of Directors and Other KMP
Details of the nature and amount of each element of the emoluments of each of the KMP of Apollo Minerals Limited
are as follows:
Short-term benefits
Salary &
fees
$
Super-
annuation
$
Share-based
payments
Options
Total
Percentage
performance
related
$
$
%
35,250
106,951
-
-
19,603
20,000
-
5,745
-
187,549
-
1,372
-
-
1,862
-
-
-
-
161,786
-
-
39,854
-
-
-
-
3,234
73,482
275,122
35,250
270,109
-
-
61,319
20,000
-
5,745
73,482
465,905
-
59.9%
-
-
65.0%
-
-
-
100.0%
2017
Current Directors
Ian Middlemas(1)
Robert Behets(2)
Michel Bonnemaison(3)
Ajay Kejriwal(4)
Mark Pearce(5)
Former Directors
Richard Shemesian(6)
Eric Finlayson(7)
Guy Robertson(8)
Other KMP
Clint McGhie(9)
Total
Notes:
1 Mr Middlemas was appointed Chairman on 8 July 2016.
16
2 Mr Behets was appointed Non-Executive Director on 12 October 2016. In addition to Non-Executive Directors fees, Ouro Preto
Pty Ltd, an entity associated with Mr Behets, was paid, or is payable, A$92,507 for additional services provided in respect of
exploration and business development activities which is included in Mr Behets’ salary & fees amount.
3 Dr Bonnemaison was appointed Non-Executive Director on 30 June 2017.
4 Mr Kejriwal was appointed Non-Executive Director on 30 June 2017.
5 Mr Pearce was appointed Non-Executive Director on 8 July 2016.
6 Mr Shemesian resigned as a Director on 30 June 2017.
7 Mr Finlayson resigned as a Director on 8 July 2016.
8 Mr Robertson resigned as a Director and Company Secretary on 8 July 2016. In addition to Non-Executive Director fees,
Integrated CFO Solutions Pty Ltd, an entity associated with Mr Robertson was paid $5,000 for the provision of company
secretarial and CFO support services to the Company in July 2016 which is included in Mr Robertson’s salary & fees amount.
9 Mr McGhie was appointed Company Secretary on 8 July 2016. Mr McGhie provides services as the Company Secretary through
a services agreement with Apollo Group Pty Ltd (‘Apollo’). During the year, Apollo was paid or is payable A$225,000 for the
provision of serviced office facilities and administrative, accounting, company secretarial and transaction services to the Group.
Short-term benefits
Super-
annuation
$
Salary &
fees
$
Share-based payments
Options
Shares
$
$
Total
$
Percentage
performance
related
%
60,000
20,698
62,129
13,334
-
-
-
-
114,769
270,930
8,453
8,453
-
19,200
9,750
13,750
16,250
58,950
268,302
18,158
-
18,158
-
304,618
328,302
58,056
71,879
45,242
139,472
642,951
81.7%
31.3%
-
40.1%
-
2016
Directors
Richard Shemesian
Eric Finlayson(1)
Guy Robertson(2)
Anthony Ho(3)
Other KMP
Derek Pang(4)
Total
Notes:
1 Share based payments to Mr Finlayson include $19,200 in shares issued to Mr Finlayson on 28 June 2016 in lieu of cash fees
following shareholder approval.
2 Mr Robertson was appointed a Director on 8 March 2016. Mr Robertson was previously appointed Company Secretary on 12
November 2009, and Salary & Fees include an amount of $60,000 ($5,000 per month) paid or payable to Integrated CFO
Solutions Pty Ltd for the provision of company secretarial and CFO support services to the Company by Mr Robertson. Share
based payments to Mr Roberston include $9,750 in shares issued to Mr Robertson in lieu of cash fees.
3 Mr Ho resigned as a Director on 8 March 2016. Share based payments to Mr Ho include $13,750 in shares issued to Mr Ho in
lieu of cash fees.
4 Mr Pang resigned as General Manager Exploration on 29 February 2016.
Options Granted to Key Management Personnel
Details of the value of options, exercised or lapsed for each KMP of the Company or Group during the financial year
are as follows:
Options Granted Options Exercised
Options Lapsed
Value at Grant
Date(1)
Value at Exercise
Date
Value at Time of
Lapse
Value of Options
included in
Remuneration
for the Period
Percentage of
Remuneration for
the Period that
Consists of
Options
$
$
$
$
%
161,786
39,854
73,482
-
-
-
-
-
-
161,786
39,854
59.9%
65.0%
73,482
100.0%
2017
Directors
Robert Behets
Mark Pearce
Other KMP
Clint McGhie
Note:
1 Determined at the time of grant per AASB 2. For details on the valuation of Incentive Options, including models and
assumptions used, please refer to Note 17 of the financial statements.
Apollo Minerals Limited ANNUAL REPORT 2017
17
DIRECTORS’ REPORT
(Continued)
REMUNERATION REPORT (AUDITED) (Continued)
Options Granted to Key Management Personnel (Continued)
Details of unlisted Incentive Options granted by the Company to each KMP of the Group during the financial year
are as follows:
Security
Grant
Date
Expiry
Date
Exercise
Price
$
Grant Date
Fair
Value(1)
$
No.
Granted
No. Vested
at 30 June
2017
2017
Directors
Robert Behets
Options
7-Jul-16
30-Jun-18
Options
7-Jul-16
30-Jun-19
Options
21-Jun-17
30-Jun-20
Options
21-Jun-17
30-Jun-21
Mark Pearce
Options
7-Jul-16
30-Jun-18
0.05
0.075
0.20
0.25
0.05
0.0400
500,000
500,000
0.0397
500,000
500,000
0.1187
500,000
500,000
0.1252
500,000
500,000
0.0400
500,000
500,000
Options
7-Jul-16
30-Jun-19
0.075
0.0397
500,000
500,000
Other KMP
Clint McGhie
Options
21-Jun-17
30-Jun-20
Options
21-Jun-17
30-Jun-21
0.20
0.25
0.1187
250,000
250,000
0.1252
350,000
350,000
Note:
1 Determined at the time of grant per AASB 2. For details on the valuation of Incentive Options, including models and
assumptions used, please refer to Note 17 of the financial statements.
Option Holdings of Key Management Personnel
Held at 1
July 2016
Granted
as Compen-
sation
(#)
(#)
Expired
(#)
Net Change
Other
Held at
30 June 2017
Vested and
Exercisable at
30 June 2017
(#)
(#)
(#)
-(1)
1,000,000(1)(3)
-(1)
-(1)
1,000,000(1)
-
1,000,000
-
-
-
3,375,000
193,750
22,500
-
-
-
-(1)
600,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
-
-
1,000,000
3,375,000(2)
193,750(2)
22,500(2)
-
2,000,000
-
-
1,000,000
3,375,000
193,750
22,500
600,000
600,000
2017
Current Directors
Ian Middlemas
Robert Behets
Michel Bonnemaison
Ajay Kejriwal
Mark Pearce
Former Directors
Richard Shemesian
Eric Finlayson
Guy Robertson
Other KMP
Clint McGhie
Notes:
1 As at date of appointment.
2 As at date of resignation.
3
Issued as compensation prior to appointment as a Director.
18
Ordinary Shareholdings of Key Management Personnel
2017
Current Directors
Ian Middlemas
Robert Behets
Michel Bonnemaison
Ajay Kejriwal(4)
Mark Pearce
Former Directors
Richard Shemesian
Eric Finlayson
Guy Robertson
Other KMP
Clint McGhie
Held at 1 July
2016
(#)
Granted as
compensation
(#)
Purchases
(#)
Net Other
Changes
(#)
Held at 30 June
2017
(#)
6,000,000(1)
2,500,000(1)
1,875,000(1)
13,125,000(1)
2,000,000(1)
934,395
576,708
195,000
500,000(1)
-
-
-
-
-
-
-
-
-
6,000,000(3)
-
-
-
2,000,000(3)
9,117,363(5)
-
-
1,330,000(6)
-
-
-
-
-
-
-
-
-
12,000,000
2,500,000
1,875,000
13,125,000
4,000,000
10,051,758(2)
576,708(2)
195,000(2)
1,830,000
Notes:
1 As at date of appointment.
2 As at date of resignation.
3 Acceptance of pro-rata entitlements issue at an issue price of $0.05.
4 Mr Kejriwal’s interest in the Ordinary Shares is an indirect interest in the securities held by Juniper Capital Partners Limited.
Mr Kejriwal has been nominated as a Director by Juniper Capital Partners Limited and he may be able to indirectly influence
voting of the securities.
5 Shares purchased by Mr Shemesian include 4,000,000 shares acquired in a placement at arms length terms following
shareholder approval, 4,934,395 shares acquired on acceptance of pro-rata entitlements issue at an issue price of $0.05 and
182,968 shares acquired on off-market transfer.
6 Shares purchased by Mr McGhie include 680,000 shares acquired in a placement at arms length terms and 650,000 shares
acquired on acceptance of pro-rata entitlements issue at an issue price of $0.05.
Performance Shareholdings of Key Management Personnel
2017
Current Directors
Ian Middlemas
Robert Behets
Michel Bonnemaison
Ajay Kejriwal(3)
Mark Pearce
Former Directors
Richard Shemesian
Eric Finlayson
Guy Robertson
Other KMP
Clint McGhie
Held at 1 July
2016
(#)
Granted as
compensation
(#)
Purchases
(#)
Net Other
Changes
(#)
Held at 30 June
2017
(#)
-(1)
-(1)
8,125,000(1)
56,875,000(1)
-(1)
-
-
-
-(1)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,125,000
56,875,000
-
-(2)
-(2)
-(2)
-
Notes:
1 As at date of appointment.
2 As at date of resignation.
3 Mr Kejriwal’s interest in the Performance Shares is an indirect interest in the securities held by Juniper Capital Partners
Limited. Mr Kejriwal has been nominated as a Director by Juniper Capital Partners Limited and he may be able to indirectly
influence voting of the securities.
Apollo Minerals Limited ANNUAL REPORT 2017
19
DIRECTORS’ REPORT
(Continued)
REMUNERATION REPORT (AUDITED) (Continued)
Employment Contracts with Directors and Key Management Personnel
Current Directors
Mr Ian Middlemas, Chairman, has a letter of appointment confirming the terms and conditions of his appointment
as a non-executive director and chairman of the Company dated 8 July 2016. In accordance with the terms of this
letter of appointment, Mr Middlemas receives a fee of $36,000 per annum plus superannuation.
Mr Robert Behets, Non-Executive Director, has a letter of appointment confirming the terms and condtions of his
appointment as a non-executive director of the Company dated 21 February 2017. In accordance with the terms of
this letter of appointment, Mr Behets receives a fee of $20,000 per annum plus superannuation. Mr Behets also has
a services agreement with the Company effective 15 August 2016, which provides for a consultancy fee at the rate
of $1,000 per day for management and technical services provided by Mr Behets. Either party may terminate the
agreement without penalty or payment by giving one months’ notice.
Dr Michel Bonnemaison, Non-Executive Director, has a letter of appointment confirming the terms and conditions
of his appointment as a non-executive director of the Company dated 28 June 2017. In accordance with the terms
of this letter of appointment, Dr Bonnemaison currently receives a fee of $20,000 per annum. With effect from 1
August 2017, Dr Bonnemaison will receive gross remuneration of €5,000 per month (plus any statutory social
security and tax charges attributable to the Company) in respect of his mandate as President of Mines du Salat
SAS. Dr Bonnemaison will also be employed as CEO of Mines du Salat on terms yet to be finalised, but including
gross remuneration of €10,000 per month (plus any statutory social security and tax charges attributable to the
Company). Upon commencement as CEO of Mines du Salat, the Non-Executive Director fees payable to Dr
Bonnemaison under his letter of appointment dated 28 June 2017 will be considered to form part of the gross
remuneration paid for the role of CEO.
Mr Ajay Kejriwal, Non-Executive Director, has a letter of appointment confirming the terms and conditions of his
appointment as a non-executive director of the Company dated 28 June 2017. In accordance with the terms of this
letter of appointment, Mr Kejriwal receives a fee of $20,000 per annum.
Mr Mark Pearce, Non-Executive Director, has a letter of appointment confirming the terms and conditions of his
appointment as a non-executive director of the Company dated 8 July 2016. In accordance with the terms of this
letter of appointment, Mr Pearce receives a fee of $20,000 per annum plus superannuation.
Loans from Key Management Personnel
No loans were provided to or received from Key Management Personnel during the year ended 30 June 2017 (2016:
Nil).
Other Transactions
Apollo Group Pty Ltd (‘Apollo Group’), a Company of which Mr Mark Pearce is a director and beneficial shareholder,
provides corporate, administration and company secretarial services and serviced office facilities to the Company
under a services agreement effective from 1 July 2016. Either party can terminate the services agreement at any
time for any reason by giving one months’ written notice. Apollo Group received a monthly retainer of $15,000
(exclusive of GST) for the provision of these services for the period from 1 July 2016 to 31 March 2017, and $20,000
per month from 1 April 2017 to 30 June 2017. The monthly retainer is reviewed every six to twelve months and is
based on Apollo Group’s budgeted cost of providing the services to the Company (and other companies utilising
same or similar services from Apollo) for the next six to twelve month period, with minimal or no mark-up. From time
to time, Apollo Group may also receive additional fees (as agreed with the Company) in respect of services provided
by Apollo Group to the Company that are not included in the agreed services covered by the monthly retainer.
During the year, Apollo Group was paid additional fees of $30,000 for services in relation to a transaction.
20
Mines du Salat SAS has signed a services agreement dated 1 September 2017 with SARL E-Mines (‘E-Mines’), a
Company of which Dr Michel Bonnemaison is a director and beneficial shareholder. In accordance with the
agreement, E-Mines will provide geoscience consulting services to Mines du Salat in support of the Company’s
Couflens Project for a 12 month period from 1 September 2017. There is a schedule of rates applicable to the
services provided based on the relevant qualifications and experience of the individuals providing the services
ranging from €350 to €1,100 per day. The agreement may be extended by mutual agreement and can be terminated
by either party with 30 days notice without penalty.
End of Remuneration Report
NON-AUDIT SERVICES
There were no non-audit services provided by the auditor (or by another person or firm on the auditor’s behalf)
during the financial year.
AUDITOR'S INDEPENDENCE DECLARATION
The lead auditor's independence declaration for the year ended 30 June 2017 has been received and can be found
on page 22 of the Directors' Report.
Signed in accordance with a resolution of the directors.
ROBERT BEHETS
Director
28 September 2017
Competent Person Statement
The information in this report that relates to Exploration Results from the Couflens Project in France is based on
information compiled by Robert Behets, a Competent Person who is a Fellow of The Australasian Institute of Mining
and Metallurgy and a Member of the Australian Institute of Geoscientists. Mr Behets is a holder of shares and
options in, and is a director of, Apollo Minerals Limited. Mr Behets has sufficient experience which is relevant to the
style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify
as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’. Mr Behets consents to the inclusion in the report of the matters
based on his information in the form and context in which it appears.
.
Apollo Minerals Limited ANNUAL REPORT 2017
21
AUDITOR’S INDEPENDENCE DECLARATION
22
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Continuing Operations
Interest income
Exploration and evaluation expenses
Corporate and administrative expenses
Business development expenses
Impairment of exploration and evaluation expenditure
Other income and expenses
Loss before income tax
Income tax expense
Loss for the year
2017
2016
Restated(1)
Notes
$
$
2(a)
82,073
8,334
(519,928)
(622,982)
(449,299)
(740,228)
(463,057)
(345,978)
(50,000)
(930,757)
2(a)
16,770
-
(1,383,441)
(2,631,611)
-
-
(1,383,441)
(2,631,611)
Loss attributable to members of Apollo Minerals Limited
(1,383,441)
(2,631,611)
Other comprehensive income for the period, net of tax
Total comprehensive loss for the period
-
-
(1,383,441)
(2,631,611)
Total comprehensive loss attributable to members of Apollo
Minerals Limited
(1,383,441)
(2,631,611)
Loss per share
Basic and diluted loss per share (cents per share)
12
(1.21)
(14.44)(2)
Note:
1 See Note 1(d) for details of the restatement as a result of a change in accounting policy.
2 2016 basic and diluted loss per share is post 1 for 4 consolidation effective 17 June 2016.
The accompanying notes form part of these financial statements.
Apollo Minerals Limited ANNUAL REPORT 2017
23
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Total Current Assets
Non-Current Assets
Property, plant and equipment
Exploration and evaluation assets
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Total Current Liabilities
2017
$
2016
Restated(1)
As at
1 July 2015
Restated(1)
$
$
3,741,309
122,926
3,864,235
175,362
14,785
190,147
808,308
757,665
1,565,973
4,835
6,667,645
6,672,480
-
500,000
500,000
-
1,314,656
1,314,656
10,536,715
690,147
2,880,629
420,539
420,539
174,789
174,789
327,728
327,728
Notes
11(b)
4
5
6
7
TOTAL LIABILITIES
420,539
174,789
327,728
NET ASSETS
10,116,176
515,358
2,552,901
EQUITY
Contributed equity
Reserves
Accumulated losses
8
9
10
44,072,803
35,940,353
35,650,903
2,124,395
690,188
686,391
(37,248,920)
(36,115,183)
(33,784,393)
Equity Attributable To Members of Apollo
Minerals Limited
8,948,278
515,358
2,552,901
Non-controlling interests
TOTAL EQUITY
1,167,898
10,116,176
-
-
515,358
2,552,901
Note:
1 See Note 1(d) for details of the restatement as a result of a change in accounting policy.
The accompanying notes form part of these financial statements.
24
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2017
Attributable to the equity holders of the parent
Contributed
Equity
Share
based
Payment
Reserve
Accumulated
Losses
$
$
$
Total
$
Balance at 1 July 2016
35,940,353
690,188
(36,115,183)
515,358
Net loss for the year
Total comprehensive
income/(loss) for the year
Transactions with owners
recorded directly in equity
-
-
Issue of shares
8,198,885
-
-
-
(1,383,441)
(1,383,441)
(1,383,441)
(1,383,441)
Share issue costs
Share based payments
Expiry of incentive options
Initial recognition of Non-
controlling interests
Balance at 30 June 2017
Balance at 1 July 2015
Adjustment on change in
accounting policy(1)
Balance at 1 July 2015
(Restated)
Net loss for the year
(Restated)
Total comprehensive
income/(loss) for the year
Transactions with owners
recorded directly in equity
Issue of shares
Expiry of options
Share based payments
Balance at 30 June 2016
(Restated)
(66,435)
-
-
-
1,683,911
(249,704)
-
-
-
249,704
-
44,072,803
-
2,124,395
-
(37,248,920)
8,198,885
(66,435)
1,683,911
-
-
8,948,278
35,650,903
686,391
(27,381,438)
8,955,856
-
-
(6,402,955)
(6,402,955)
35,650,903
686,391
(33,784,393)
2,552,901
-
-
-
-
(2,631,611)
(2,631,611)
(2,631,611)
(2,631,611)
289,450
-
-
-
(300,821)
304,618
-
300,821
-
289,450
-
304,618
35,940,353
690,188
(36,115,183)
515,358
Non-
controlling
interests
$
-
-
-
-
-
-
-
Total
Equity
$
515,358
(1,383,441)
(1,383,441)
8,198,885
(66,435)
1,683,911
-
1,167,898
1,167,898
1,167,898
10,116,176
-
-
-
-
-
-
-
-
-
8,955,856
(6,402,955)
2,552,901
(2,631,611)
(2,631,611)
289,450
-
304,618
515,358
Note:
1 See Note 1(d) for details of the restatement as a result of a change in accounting policy.
The accompanying notes form part of these financial statements.
Apollo Minerals Limited ANNUAL REPORT 2017
25
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
Operating activities
Payments to suppliers and employees
Research and development tax rebate
GST refunds received
Interest received
2017
2016
Restated(1)
Notes
$
$
(1,085,560)
(1,345,885)
-
51,498
82,073
665,522
103,794
13,623
Net cash flows used in operating activities
11(a)
(951,989)
(562,946)
Investing activities
Proceeds from sale of exploration and evaluation assets
Purchase of property, plant and equipment
50,000
(4,932)
Acquisition of a subsidiary, net of cash acquired
13
(691,250)
-
-
-
Payment for acquisition of exploration assets
Net cash flows used in investing activities
Financing activities
Proceeds from issue of shares
Share issue costs
Net cash flows from financing activities
-
(70,000)
(646,182)
(70,000)
5,219,104
(54,986)
5,164,118
-
-
-
Net increase/(decrease) in cash and cash equivalents
3,565,947
(632,946)
Cash and cash equivalents at the beginning of the year
175,362
Cash and cash equivalents at the end of the year
11(b)
3,741,309
808,308
175,362
Note:
1 See Note 1(d) for details of the restatement as a result of a change in accounting policy.
The accompanying notes form part of these financial statements.
26
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies adopted in preparing the financial report of Apollo Minerals Limited (“Apollo
Minerals” or “Company”) and its consolidated entities (“Consolidated Entity” or “Group”) for the year ended 30 June
2017 are stated to assist in a general understanding of the financial report.
Apollo Minerals is a Company limited by shares, incorporated and domiciled in Australia, whose shares are publicly
traded on the Australian Securities Exchange.
The financial report of the Group for the year ended 30 June 2017 was authorised for issue in accordance with a
resolution of the Directors on 26 September 2017.
(a) Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with Australian
Accounting Standards (“AASBs”) adopted by the Australian Accounting Standards Board (“AASB”) and the
Corporations Act 2001.
The financial report has been prepared on a historical cost basis. The financial report is presented in Australian
dollars.
The consolidated financial statements have been prepared on a going concern basis which assumes the continuity
of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary course of
business.
The Consolidated Entity has incurred a net loss after tax of $1,383,441 (2016: loss of $2,631,611) and net cash
outflows used in operations of $951,989 (2016: outflows of $562,946). The ability of the Consolidated Entity to
continue as a going concern is dependent on the ability of the consolidated entity to manage its planned exploration
activities and other expenses including minimum expenditure so as not to exceed the existing cash reserves. The
Consolidated Entity’s forecast for the period to 30 September 2018 indicates that if required, the Consolidated Entity
will have sufficient cash to continue the exploration without raising additional funds.
The Group has updated the classification of expenses to make the Statement of Profit or Loss and Other
Comprehensive Income more relevant to users of the financial report. This has resulted in the reclassification of
some items in the prior period, however, has not impacted upon the reported loss for the period or earnings per
share.
(b) Statement of Compliance
The financial report complies with Australian Accounting Standards and International Financial Reporting Standards
(“IFRS”) as issued by the International Accounting Standards Board.
In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the
AASB that are relevant to its operations and effective for the current annual reporting period. New and revised
standards and amendments thereof and interpretations effective for the current reporting period that are relevant to
the Group include:
•
•
•
AASB 2014-4 Amendments to Australian Accounting Standards - Clarification of Acceptable Methods of
Depreciation and Amortisation which clarify the principle in AASB 116 Property, Plant and Equipment and
AASB 138 Intangible Assets that revenue reflects a pattern of economic benefits that are generated from
operating a business (of which the asset is part) rather than the economic benefits that are consumed
through use of the asset;
AASB 2015-1 Amendments to Australian Accounting Standards - Annual Improvements to Australian
Accounting Standards 2012–2014 Cycle which clarify certain requirements in AASB 5 Non-current Assets
Held for Sale and Discontinued Operations, AASB 7 Financial Instruments: Disclosures, AASB 119
Employee Benefits, and AASB 134 Interim Financial Reporting; and
AASB 2015-2 Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments to
AASB 101 which amends AASB 101 Presentation of Financial Statements to clarify existing presentation
and disclosure requirements and to ensure entities are able to use judgement when applying the Standard
in determining what information to disclose, where and in what order information is presented in their financial
statements.
The adoption of these new and revised standards has not resulted in any significant changes to the Group's
accounting policies or to the amounts reported for the current or prior periods.
Apollo Minerals Limited ANNUAL REPORT 2017
27
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(b) Statement of Compliance (Continued)
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
effective have not been adopted by the Group for the annual reporting period ended 30 June 2017. Those which
may be relevant to the Group are set out in the table below, but these are not expected to have any significant
impact on the Group's financial statements:
Standard/Interpretation
AASB 2016-2 Amendments to Australian Accounting Standards - Disclosure Initiative:
Amendments to AASB 107
Application
Date of
Standard
Application Date
for Group
1 January 2017
1 July 2017
AASB 9 Financial Instruments, and relevant amending standards
1 January 2018
1 July 2018
AASB 15 Revenue from Contracts with Customers, and relevant amending standards
1 January 2018
1 July 2018
AASB 2016-5 Amendments to Australian Accounting Standards – Classification and
Measurement of Share-based Payment Transactions
1 January 2018
1 July 2018
AASB Interpretation 22 Foreign Currency Transactions and Advance Consideration
1 January 2018
1 July 2018
AASB 16 Leases
1 January 2019
1 July 2019
(c)
Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at
30 June 2017 and the results of all subsidiaries for the year then ended.
Subsidiaries are all entities (including structured 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.
The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using
consistent accounting policies. Accounting policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Company.
Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are de-
consolidated from the date that control ceases. Intercompany transactions and balances, income and expenses
and profits and losses between Group companies, are eliminated.
Non-controlling interests are allocated their share of net profit after tax in the statement of comprehensive income
and are presented within equity in the consolidated statement of financial position, separately from the equity of the
owners of the parent.
Total comprehensive income within a subsidiary is attributed to the non-controlling interest even if that results in a
deficit balance.
A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an
equity transaction.
(d) Change in Accounting Policy
The Group has re-assessed its accounting for exploration and evaluation expenditure after initial recognition. The
Group has previously capitalised all costs incurred in connection with the exploration and evaluation of areas with
current rights of tenure and recognised them as exploration and evaluation assets. Costs carried forward in respect
of an area of interest that was abandoned were written off in the year in which the decision to abandon was made.
The Group has elected to change the method of accounting for exploration and evaluation expenditure, and the
new policy has been applied retrospectively (with comparative information restated accordingly). Under the new
policy:
28
•
•
exploration and evaluation expenditure incurred in the acquisition of the rights to explore (including payments
to landowners required under the Group’s mineral leases) is capitalised and recognised as an exploration
and evaluation asset; and
exploration and evaluation expenditure incurred subsequent to the acquisition of the rights to explore will
now be expensed as incurred, up to and until the completion of a bankable feasibility study.
For further details, refer to Note 1(k).
The Directors are of the opinion that the change in accounting policy provides users with more relevant and no less
reliable information as the policy is more transparent and less subjective. The policy is common for exploration
focussed companies where exploration and evaluation expenditure is viewed as an ongoing expense of discovery,
until a technical feasibility study has been completed. The impact of this change in accounting policy is reflected
below.
For comparative purposes, the change of accounting policy has resulted in the restatement of the affected financial
statement line items for the prior periods as follows:
Impact on equity
Decrease in exploration and evaluation assets
Net decrease in equity
Impact on statement of profit or loss
Recognised exploration expenditure
Decrease in exploration and evaluation expenditure written off
Decrease in loss
Attributable to:
Members of Apollo Minerals Limited
Non-controlling interests
1 July 2015
$
(6,402,955)
(6,402,955)
30 June 2016
$
(417,786)
(417,786)
30 June 2016
$
(502,110)
6,487,279
5,985,169
5,985,169
-
Basic and diluted loss per share have also been restated. The amount of the impact on basic and diluted loss per
share for the restated result for the year ended 30 June 2016 due to the change in accounting policy is a decrease
in loss per share of 32.9 cents.
Impact on statement of cash flows
Operating activities
Payments to suppliers
GST refunds received
Research and development tax rebate
Increase in net cash outflow from operating activities
Payment for exploration expenditure
Research and development tax rebate
Decrease in net cash outflow from investing activities
30 June 2016
$
(569,354)
103,794
665,522
199,962
465,560
(665,522)
(199,962)
The impact of the change in accounting policy has not been quantified for the current period as these accounting
records have not been maintained.
Apollo Minerals Limited ANNUAL REPORT 2017
29
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(e)
Foreign Currencies
Functional and presentation currency
The functional currency of each of the Group's entities is measured using the currency of the primary economic
environment in which that entity operates. The consolidated financial statements are presented in Australian dollars
which is the Company's functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date
of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary
items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-
monetary items measured at fair value are reported at the exchange rate at the date when fair values were
determined.
Exchange differences arising on the translation of monetary items are recognised in the income statement, except
where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent
that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the income
statement.
Group companies
The financial results and position of foreign operations whose functional currency is different from the group's
presentation currency are translated as follows:
•
•
•
assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the group's foreign
currency translation reserve in equity. These differences are recognised in profit or loss in the period in which the
operation is disposed.
(f)
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of 2 months or less, and bank overdrafts. Bank overdrafts are shown within
short-term borrowings in current liabilities on the statement of financial position.
(g)
Trade and Other Receivables
Trade receivables are recognised and carried at original invoice amount less an allowance for any uncollectable
debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts
are written-off as incurred.
Receivables from related parties are recognised and carried at the nominal amount due and are interest free.
(h)
Investments and Other Financial Assets
(i)
Classification
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as
either financial assets at fair value though profit or loss, loans and receivables, held-to-maturity investments, or
available-for-sale investments, as appropriate. 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 transaction
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.
30
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified
in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised
as held for trading unless they are designated as hedges. Assets in this category are classified as current assets.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market. They arise when the Group provides money, goods or services directly to a debtor with no
intention of selling the receivable. They are included in current assets, except for those with maturities greater than
twelve months after the reporting date which are classified as non-current assets. Loans and receivables are
included in receivables in the statement of financial position.
Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-to-
maturity when the Group has the positive intention and ability to hold to maturity. Investments intended to be held
for an undefined period are not included in this classification. Investments that are indeed to be held-to-maturity,
such as bonds, are subsequently measured at amortised cost. This cost is computed as the amount initially
recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest
method of any difference between the initially recognised amount and the maturity amount. This calculation includes
all fees and points paid or received between parties to the contract that are an integral part of the effective interest
rate, transaction costs and all other premiums and discounts. For investments carried at amortised cost, gains and
losses are recognised in profit or loss when the investments 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 twelve months of the reporting date.
(i)
Recognition and derecognition
Purchases and sales of investments are recognised on trade-date – the date on which the Group commits to
purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial
assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive
cash flows from the financial assets have expired or have been transferred and the Group has transferred
substantially all the risks and rewards of ownership.
(ii)
Subsequent measurement
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried
at fair value. Loans and receivables and held-to-maturity investments are carried at amortised cost using the
effective interest rate method. Realised and unrealised gains and losses arising from changes in the fair value of
the 'financial assets at fair value through profit or loss' category are included in the statement of comprehensive
income in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of non-
monetary securities classified as available-for-sale are recognised in equity in the investments available for sale
reserve. When securities classified as available-for-sale are sold or impaired, the accumulated fair value
adjustments previously reported in equity are included in the statement of comprehensive income as gains and
losses on disposal of investment securities.
(iii)
Impairment
The Group assesses at each balance date 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 in determining whether the security is 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 and loss – is transferred from equity to the statement of comprehensive income. Impairment
losses recognised in the statement of comprehensive income on equity instruments classified as held for sale are
not reversed through the statement of comprehensive income.
Apollo Minerals Limited ANNUAL REPORT 2017
31
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(i)
Interests in Joint Ventures
The Group's share of the assets, liabilities, revenue and expenses of joint venture operations (if any) are included
in the appropriate items of the consolidated financial statements. Details of the Group's interests in joint ventures
are shown at Note 19.
(j)
Parent entity financial information
The financial information for the parent entity, Apollo Minerals Limited, disclosed in Note 16 has been prepared
on the same basis as the consolidated financial statements, except for investments in subsidiaries, associates
and joint venture entities which are accounted for at cost in the financial statements of Apollo Minerals Limited.
(k)
Property, Plant and Equipment
(i)
Cost and valuation
Plant and equipment is measured at cost less accumulated depreciation and impairment losses.
(ii)
Depreciation
Depreciation is provided on a straight line basis on all property, plant and equipment.
Major depreciation periods are:
Plant and equipment
Office equipment
(l)
Exploration and Evaluation Expenditure
2017
2016
2 – 5 years
2 – 5 years
2 – 5 years
2 – 5 years
Expenditure on exploration and evaluation is accounted for in accordance with the 'area of interest' method.
Exploration and evaluation expenditure encompasses expenditures incurred by the Group in connection with the
exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of
extracting a mineral resource are demonstrable.
For each area of interest, expenditure incurred in the acquisition of rights to explore is capitalised, classified as
tangible or intangible, and recognised as an exploration and evaluation asset. Exploration and evaluation assets
are measured at cost at recognition and are recorded as an asset if:
(i)
the rights to tenure of the area of interest are current; and
(ii) at least one of the following conditions is also met:
•
the exploration and evaluation expenditures are expected to be recouped through successful development
and exploitation of the area of interest, or alternatively, by its sale; and
• exploration and evaluation activities in the area of interest have not at the reporting date reached a stage
which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves,
and active and significant operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation expenditure incurred by the Group subsequent to the acquisition of the rights to explore
is expensed as incurred, up until the technical feasibility and commercial viability of the project has been
demonstrated with a bankable feasibility study.
32
Capitalised exploration costs are reviewed at each reporting date to establish whether an indication of impairment
exists. If any such indication exists, the recoverable amount of the capitalised exploration costs is estimated to
determine the extent of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying
amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the
increased carrying amount does not exceed the carrying amount that would have been determined had no
impairment loss been recognised for the asset in previous years.
Where a decision is made to proceed with development, accumulated expenditure is tested for impairment and
transferred to development properties, and then amortised over the life of the reserves associated with the area of
interest once mining operations have commenced.
Recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful
development and commercial exploitation, or alternatively, sale of the respective areas of interest.
(m) Payables
Liabilities are recognised for amounts to be paid in the future for goods and services received. Trade accounts
payable are normally settled within 60 days.
(n) Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which
it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
(o) Revenue Recognition
Revenues are recognised at the fair value of the consideration received net of the amount of goods and services
tax (GST) payable to the taxation authority. Revenue is recognised to the extent that it is probable that the economic
benefits will flow to the Group and can be reliably measured.
Interest revenue is recognised as it accrues, taking into account the effective yield on the financial asset.
(p)
Income Tax
The income tax expense for the period is the tax payable on the current period's taxable income based on the
notional income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial
statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when
the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively
enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable
temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary
differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised
in relation to these temporary differences if they arose on goodwill or in a transaction, other than a business
combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and
tax bases of investments in controlled entities where the Company is able to control the timing of the reversal of the
temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income
tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Apollo Minerals Limited ANNUAL REPORT 2017
33
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(p)
Income Tax (Continued)
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly
in equity.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against tax liabilities and the deferred tax liabilities relate to the same taxable entity and the same taxation
authority.
(q) Employee Entitlements
A provision is made for the Group's liability for employee benefits arising from services rendered by employees to
balance date. Employee benefits that are expected to be settled within 12 months have been measured at the
amounts expected to be paid when the liability is settled, plus related on-costs. Employee benefits payable later
than 12 months have been measured at the present value of the estimated future cash outflows to be made for
those benefits.
(r)
Earnings per Share
Basic earnings per share (“EPS”) is calculated by dividing the net profit/loss attributable to members of the Company
for the reporting period, after excluding any costs of servicing equity, by the weighted average number of ordinary
shares of the Company, adjusted for any bonus issue or share consolidation.
Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs
associated with dilutive potential Ordinary Shares and the effect on revenues and expenses of conversion to
Ordinary Shares associated with dilutive potential Ordinary Shares, by the weighted average number of Ordinary
Shares and dilutive Ordinary Shares adjusted for any bonus issue or share consolidation.
(s) Goods and Services Tax
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 the expense. Receivables and payables in the statement of financial
position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
(t)
Use and Revision of Accounting Estimates
The preparation of the financial report requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if
the revision affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amount recognised in the financial statements are
described Note 1(aa).
34
(u) Operating Segments
An operating segment is a component of an entity that engages in business activities from which it may earn
revenues and incur expenses (including revenues and expenses relating to transactions with other components of
the same entity), whose operating results are regularly reviewed by the entity's chief operating decision maker to
make decisions about resources to be allocated to the segment and assess its performance and for which discrete
financial information is available. The chief operating decision maker has been identified as the Board of Directors,
taken as a whole. This includes start up operations which are yet to earn revenues. Management will also consider
other factors in determining operating segments such as the existence of a line manager and the level of segment
information presented to the board of directors.
Operating segments have been identified based on the information provided to the Board of Directors.
The group aggregates two or more operating segments when they have similar economic characteristics, and the
segments are similar in each of the following respects:
• Nature of the products and services,
• Nature of the production processes,
•
Type or class of customer for the products and services,
• Methods used to distribute the products or provide the services, and if applicable
• Nature of the regulatory environment.
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately. However,
an operating segment that does not meet the quantitative criteria is still reported separately where information about
the segment would be useful to users of the financial statements.
Information about other business activities and operating segments that are below the quantitative criteria are
combined and disclosed in a separate category for “all other segments”.
(v)
Impairment of Assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of
the asset's recoverable amount. An asset's recoverable amount is the higher of its fair value less costs to sell and
its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are
largely independent of those from other assets or groups of assets and the asset's value in use cannot be estimated
to be close to its fair value. In such cases the asset is tested for impairment as part of the cash-generating unit to
which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount,
the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. In assessing
the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset.
An assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount
is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates
used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case
the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised
for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at a revalued
amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation
charge is adjusted in future periods to allocate the asset's revised carrying amount, less any residual value, on a
systematic basis over its remaining useful life.
(w) Fair Value Estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
Apollo Minerals Limited ANNUAL REPORT 2017
35
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(w) Fair Value Estimation (Continued)
The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and trading and
available-for-sale securities) is based on quoted market prices at the reporting date. The quoted market price used
for financial assets held by the Group is the current bid price; the appropriate quoted market price for financial
liabilities is the current ask price.
The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate
their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future
contractual cash flows at the current market interest rate that is available to the Group for similar financial
instruments.
(x)
Issued Capital
Ordinary Shares are classified as equity. Issued and paid up capital is recognised at the fair value of the
consideration received by the Company. 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.
(y) Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the
discretion of the Group, on or before the end of the year but not distributed at balance date.
(z)
Share-Based Payments
Equity-settled share-based payments are provided to officers, employees, consultants and other advisors. These
share-based payments are measured at the fair value of the equity instrument at the grant date. Where options are
issued, fair value is determined using the Black Scholes option pricing model. Where ordinary shares are issued,
fair value is determined using volume weighted average price for ordinary shares for an appropriate period prior to
the issue of the shares. Further details on how the fair value of equity-settled share based payments has been
determined can be found in Note 17.
The fair value determined at the grant date is expensed on a straight-line basis over the vesting period, based on
the Company's estimate of equity instruments that will eventually vest. At each reporting date, the Company revises
its estimate of the number of equity instruments expected to vest. The impact of the revision of the original
estimates, if any, is recognised in profit or loss over the remaining vesting period, with a corresponding adjustment
to the share based payments reserve.
Equity-settled share-based payments may also be provided as consideration for the acquisition of assets. Where
ordinary shares are issued, the transaction is recorded at fair value based on the volume weighted average price
for ordinary shares for an appropriate period prior to the issue of the shares. Where performance shares are issued,
the transaction is recorded at fair value based on the volume weighted average price for ordinary shares for an
appropriate period prior to the issue of the performance shares, adjusted for Management’s assessment of the
probability that the relevant milestone for each class of performance share will be met. The acquisition is then
recorded as an asset or expensed in accordance with accounting standards.
(aa) Significant judgements and key assumptions
The directors evaluate estimates and judgements incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events
and are based on current trends and economic data, obtained both externally and within the group.
36
(i)
Key judgements
The Group capitalises expenditure incurred in the acquisition of rights to explore and records this as an asset where
it is considered likely to be recoverable or where the activities have not reached a stage which permits a reasonable
assessment of the existence of reserves (Note 1(l)). In accordance with this policy and with the impairment policy
at Note 1(v), the Company has written down some of the carrying value of exploration and evaluation expenditure
during the year. There are also certain areas of interest from which no reserves have been extracted, but the
directors are of the continued belief that such expenditure should not be written off since feasibility studies in such
areas have not yet concluded. Such capitalised expenditure is carried at reporting date at $6,667,645 (2016
Restated: $500,000).
The Group recognises share based payments in accordance with the policy at Note 1(z) and Note 17.
2. REVENUE AND OTHER INCOME
(a) Other income
Interest income
Foreign exchange gain
2017
$
2016
$
82,073
16,770
98,843
8,334
-
8,334
2017
2016
Restated
$
$
3.
INCOME TAX
(a) Recognised in the Statement of Comprehensive Income
Current income tax
Current income tax benefit in respect of the current year
Adjustments in respect of current income tax of previous years
-
-
-
(193,361)
Deferred income tax
Relating to origination and reversal of temporary differences
446,859
(666,577)
Deferred tax assets not previously brought to account
Deferred tax assets not brought to account
Income tax expense reported in the statement of comprehensive income
(446,859)
-
-
-
859,938
-
Apollo Minerals Limited ANNUAL REPORT 2017
37
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
2017
2016
Restated
$
$
3.
INCOME TAX (Continued)
(b) Reconciliation Between Tax Expense and Accounting Loss
Before Income Tax
Accounting loss before income tax
(1,383,441)
(2,631,611)
At the domestic income tax rate of 27.5% (2016: 30%)
Expenditure not allowable for income tax purposes
Effect of decrease in Australian income tax rate(1)
Adjustments in respect of current income tax of previous years
Deferred tax assets not previously brought to account
Deferred tax assets not brought to account
Income tax expense attributable to loss
(c) Deferred Tax Assets and Liabilities
Deferred income tax at 30 June relates to the following:
Deferred Tax Liabilities
Exploration and evaluation assets
Deferred tax assets used to offset deferred tax liabilities
Deferred Tax Assets
Accrued expenditure
Property, plant and equipment
Capital allowances
Tax losses available to offset against future taxable income
Deferred tax assets used to offset deferred tax liabilities
Deferred tax assets not brought to account
(380,446)
(789,483)
241,246
586,059
122,906
-
-
(193,361)
(446,859)
-
-
-
859,938
-
114,612
150,000
(114,612)
(150,000)
-
-
9,075
1,692
22,898
34,086
2,401
62,333
6,666,797
7,083,889
(114,612)
(150,000)
(6,585,850)
(7,032,709)
-
-
Note:
1 From the 2016–17 income tax year, the small business company tax rate has been reduced to 27.5% in accordance with
enacted tax legislation.
The benefit of deferred tax assets not brought to account will only be brought to account if:
•
•
•
future assessable income is derived of a nature and of an amount sufficient to enable the benefit to be
realised;
the conditions for deductibility imposed by tax legislation continue to be complied with; and
no changes in tax legislation adversely affect the Group in realising the benefit.
(d)
Tax Consolidation
The Company and its wholly-owned Australian resident entities have not implemented the tax consolidation
legislation.
38
4. TRADE AND OTHER RECEIVABLES (CURRENT)
GST and other receivables
5. PROPERTY, PLANT AND EQUIPMENT
(NON-CURRENT)
(a) Plant and Equipment
At cost
Accumulated depreciation and impairment
Net carrying amount
(b) Reconciliation
Carrying amount at beginning of year
Acquisitions
Depreciation
Carrying amount at end of year, net of accumulated depreciation and
impairment
2017
$
2016
$
122,926
122,926
14,785
14,785
2017
$
2016
$
4,932
(97)
4,835
-
4,932
(97)
4,835
40,020
(40,020)
-
-
-
-
-
Apollo Minerals Limited ANNUAL REPORT 2017
39
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
Notes
2017
$
2016
Restated
$
6. EXPLORATION AND EVALUATION ASSETS
(NON-CURRENT)
(a) Exploration and evaluation assets by area of
interest
Couflens (France)
Fraser Range (Western Australia)
Commonwealth Hill (South Australia)(2)
Kango North (Gabon)(2)
Total exploration and evaluation assets
(b) Reconciliation of carrying amount:
Carrying amount at beginning of year
Acquisition of Couflens
13
Acquisition of additional interest in Gabon project
Disposal of interest in Commonwealth Hill project
Exploration expenditure written off(2)
Research and development rebate received/receivable
Balance at end of financial year(1)
6,267,645
400,000
-
-
6,667,645
500,000
6,267,645
-
(50,000)
(50,000)
-
6,667,645
-
400,000
100,000
-
500,000
1,314,656
-
250,000
-
(930,757)
(133,899)
500,000
Notes:
1 The ultimate recoupment of costs carried forward for exploration and evaluation expenditure is dependent on the successful
development and commercial exploitation or sale of the respective areas of interest.
2 The Directors have made an assessment of the recoverability of the capitalised exploration and evaluation expenditure for each
of the Commonwealth Hill and Kango North area of interest and have written these areas down to nil.
7. TRADE AND OTHER PAYABLES (CURRENT)
Trade creditors
Accrued expenses
2017
$
2016
$
387,539
33,000
420,539
2017
$
70,590
104,199
174,789
2016
$
Notes
8. CONTRIBUTED EQUITY
(a)
Issued Capital
139,914,218 (2016: 20,382,141) Ordinary Shares
8(b)
44,072,803
44,072,803
35,940,353
35,940,353
40
(b) Movements in Ordinary Shares During the Past Two Years Were as Follows:
Date
Details
1-Jul-16
7-Jul-16
Opening Balance
Issue of placement shares
15-Jul-16
Issue of placement shares
19-Aug-16
Issue of entitlement issue shares
31-Aug-16
Issue of shortfall shares
31-Aug-16
Issue of employee shares
30-Jun-17
Issue of consideration shares (Note 13)
Share issue expenses
30-Jun-17
Closing Balance
01-Jul-15
Opening Balance
14-Oct-15
Issue of shares
7-Dec-15
Issue of shares
16-Feb-16
Issue of shares
23-Mar-16
Issue of shares
17-Jun-16
1 for 4 share consolidation
28-Jun-16
Issue of shares
30-Jun-16
Closing Balance
(c) Rights Attaching to Ordinary Shares
Number of
Ordinary
Shares
Issue
Price
$
20,382,141
34,000,000
8,000,000
45,312,077
17,070,000
150,000
15,000,000
-
139,914,218
70,155,576
250,000
1,510,000
1,910,578
4,285,714
(58,583,727)
854,000
20,382,141
0.05
0.05
0.05
0.05
0.09
0.20
0.04
0.038
0.031
0.028
-
0.05
$
35,940,353
1,700,000
400,000
2,265,604
853,500
13,875
2,965,906
(66,435)
44,072,803
35,650,903
10,000
56,750
60,000
120,000
-
42,700
35,940,353
The rights attaching to fully paid ordinary shares (“Ordinary Shares”) arise from a combination of the Company's
Constitution, statute and general law.
Ordinary Shares issued following the exercise of Options in accordance with Note 9(c) or conversion of Performance
Shares in accordance with Note 9(e) will rank equally in all respects with the Company's existing Ordinary Shares.
Copies of the Company's Constitution are available for inspection during business hours at the Company's
registered office. The clauses of the Constitution contain the internal rules of the Company and define matters such
as the rights, duties and powers of its shareholders and directors, including provisions to the following effect (when
read in conjunction with the Corporations Act 2001 or Listing Rules).
(i)
Shares
The issue of shares in the capital of the Company and options over unissued shares by the Company is under the
control of the directors, subject to the Corporations Act 2001, ASX Listing Rules and any rights attached to any
special class of shares.
(ii)
Meetings of Members
Directors may call a meeting of members whenever they think fit. Members may call a meeting as provided by the
Corporations Act 2001. The Constitution contains provisions prescribing the content requirements of notices of
meetings of members and all members are entitled to a notice of meeting. A meeting may be held in two or more
places linked together by audio-visual communication devices. A quorum for a meeting of members is
2 shareholders.
Apollo Minerals Limited ANNUAL REPORT 2017
41
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
8.
CONTRIBUTED EQUITY (Continued)
(c) Rights Attaching to Ordinary Shares (Continued)
(iii)
Voting
Subject to any rights or restrictions at the time being attached to any shares or class of shares of the Company,
each member of the Company is entitled to receive notice of, attend and vote at a general meeting. Resolutions of
members will be decided by a show of hands unless a poll is demanded. On a show of hands each eligible voter
present has one vote. However, where a person present at a general meeting represents personally or by proxy,
attorney or representative more than one member, on a show of hands the person is entitled to one vote only
despite the number of members the person represents. On a poll each eligible member has one vote for each fully
paid share held and a fraction of a vote for each partly paid share determined by the amount paid up on that share.
(iv)
Changes to the Constitution
The Company's Constitution can only be amended by a special resolution passed by at least three quarters of the
members present and voting at a general meeting of the Company. At least 28 days' written notice specifying the
intention to propose the resolution as a special resolution must be given.
(v)
Listing Rules
Provided the Company remains admitted to the Official List, then despite anything in its Constitution, no act may be
done that is prohibited by the Listing Rules, and authority is given for acts required to be done by the Listing Rules.
The Company's Constitution will be deemed to comply with the Listing Rules as amended from time to time.
Notes
2017
$
2016
$
9. RESERVES
Share based payments reserve:
Nil (2016:1,763,549) $1.20 Options expiring 28 February 2017
1,678,125 (2016: 1,678,125) $0.52 Options expiring 28 February 2018
1,500,000 (2016: 500,000 Unissued) $0.05 Options expiring 30 June 2018
2,000,000 (2016: 1,000,000 Unissued) $0.075 Options expiring 30 June
2019
1,250,000 (2016: Nil) $0.20 Options expiring 30 June 2020
1,500,000 (2016: 1,500,000) $0.32 Options expiring 30 November 2020
1,600,000 (2016: Nil) $0.25 Options expiring 30 June 2021
Sub-total options
9(b)
10,000,000 (2016: Nil) Class A Performance Shares
10,000,000 (2016: Nil) Class B Performance Shares
10,000,000 (2016: Nil) Class C Performance Shares
15,000,000 (2016: Nil) Class D Performance Shares
20,000,000 (2016: Nil) Class E Performance Shares
Sub-total performance shares
Total share based payments reserve
Total Reserves
42
-
135,868
69,233
97,195
148,381
217,896
200,255
868,828
593,181
197,727
197,727
148,295
118,637
249,704
135,868
29,264
57,456
-
217,896
-
690,188
-
-
-
-
-
-
9(d)
1,255,567
2,124,395
690,188
2,124,395
690,188
(a) Nature and Purpose of Reserves
(i)
Share Based Payments Reserve
The Share Based Payments Reserve is used to record the fair value of options and performance shares issued by
the Group.
(b) Movements in Options During the Past Two Years were as Follows:
Date
Details
1-Jul-16
Opening Balance
7-Jul-16
Grant of options
28-Feb-17 Expiry of options
21-Jun-17 Grant of options
30-Jun-17 Closing Balance
Date
Details
01-Jul-15
Opening Balance
01-Jul-15
Expiry of performance rights
19-Jul-15
Expiry of options
07-Dec-15
Issue of options to directors and employees
17-Jun-16
1 for 4 consolidation
30-Jun-16
Expensing of unissued options granted to
director
30-Jun-16 Closing Balance
(c)
Terms and conditions of options
Number of
Options
6,441,674
2,000,000
$
690,188
79,708
(1,763,549)
(249,704)
2,850,000
9,528,125
348,636
868,828
Number of
Options
Number of
Performance
Rights
14,266,674
1,300,000
-
(1,300,000)
(500,000)
6,000,000
(14,825,000)
1,500,000
6,441,674
-
-
-
-
-
$
686,391
(60,000)
(240,821)
217,898
-
86,720
690,188
The options are granted based upon the following terms and conditions:
•
•
each option entitles the holder to subscribe for one Share upon exercise of each option;
the options have exercise prices, vesting dates and expiry dates as follows:
$0.52 Options vested on issue and expire 28 February 2018;
$0.05 Options vested on issue and expire 30 June 2018;
$0.075 Options vested on issue and expire 30 June 2019;
$0.20 Options vested on issue and expire 30 June 2020;
$0.25 Options vested on issue and expire 30 June 2021; and
$0.32 Options vested on issue and expire 30 November 2020;
o
o
o
o
o
o
the options are exercisable at any time after the Vesting Date and on or prior to the Expiry Date;
•
• Shares issued on exercise of the options rank equally with the then shares of the Company;
•
application will be made by the Company to ASX for official quotation of the Shares issued upon the
exercise of the options;
if there is any reconstruction of the issued share capital of the Company, the rights of the Option holders
may be varied to comply with the ASX Listing Rules which apply to the reconstruction at the time of the
reconstruction;
no application for quotation of the options will be made by the Company; and
the options are transferable provided that the transfer of options complies with section 707(3) of the
Corporations Act.
•
•
•
Apollo Minerals Limited ANNUAL REPORT 2017
43
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
9.
RESERVES (Continued)
(d) Movements in Performance Shares During the Past Two Years were as Follows:
Date
Details
1-Jul-16
Opening Balance
30-Jun-17
Issue of Class A Performance Shares
Issue of Class B Performance Shares
Issue of Class C Performance Shares
Issue of Class D Performance Shares
Issue of Class E Performance Shares
Number of
Performance Shares
-
10,000,000
10,000,000
10,000,000
15,000,000
20,000,000
$
-
593,181
197,727
197,727
148,296
118,636
30-Jun-17 Closing Balance
65,000,000
1,255,567
Note:
1 The fair value of the Performance Shares at the acquisition date has been determined with reference to the share price of
Apollo Minerals Limited on the date of acquisition of Ariege Tungstene SAS (refer Note 13), adjusted for Management’s
assessment of the probability that the relevant milestone for each class of Performance Shares will be met.
(e)
Terms and Conditions of Performance Shares
The Performance Shares are granted on the following terms and conditions:
• Each Performance Share will convert into one Share upon Share will convert into one Share upon the first of
the following occurring, on or prior to the Expiry Date:
(i)
the satisfaction of the relevant Milestone; or
(ii) an Asset Sale.
• Milestones:
- Class A Milestone: means the announcement by the Company to ASX of the delineation of at least an
Inferred and Indicated Mineral Resource of at least 25,000 tonne WO3 at an average grade of not less
than 1.0% WO3 using a cut-off grade of not less than 0.3% WO3 on the Project Licences and which is
prepared and reported in accordance with the provisions of the JORC Code. For the avoidance of doubt,
the referenced tonnes and grade are WO3 values, not WO3 equivalent values incorporating by-products
credits.
- Class B Milestone: means the announcement by the Company to ASX of the delineation of at least an
Inferred and Indicated Mineral Resource of at least 500,000 troy ounces of gold at an average grade of
not less than 0.8 grams per tonne on the Project Licences and which is prepared and reported in
accordance with the provisions of the JORC Code.
- Class C Milestone: means the release of a comprehensive announcement by the Company to ASX of the
results of a positive Scoping Study on all or part of the Project Licences.
- Class D Milestone: means the release of a comprehensive announcement by the Company to ASX of the
results of a positive Pre-Feasibility Study on all or part of the Project Licences.
- Class E Milestone: means the release of a comprehensive announcement by the Company to ASX of the
results of a positive Definitive Feasibility Study on all or part of the Project Licences.
• Asset Sale means the announcement by the Company of any completed direct or indirect sale, lease, exchange,
or other transfer (in one transaction or a series of related transactions) of all or part of the Exploration Permit,
other than to an entity controlled by the Company, provided that the total amount of consideration received by
the Company is at least A$21 million.
• Subject to a number of conditions, if on or prior to the Expiry Date a Share Sale occurs then each Performance
Share will immediately convert into one Share.
• Share Sale means:
(i)
(ii)
the announcement by the Company of an unconditional Takeover Bid in relation to the Company resulting
in the person making the Takeover Bid having a Relevant Interest of 50% or more of the Shares and which
is announced as, or has been declared, unconditional; or
the announcement by the Company that shareholders of the Company have, at a Court convened meeting
of shareholders, voted in favour, by the necessary majority, of a proposed scheme of arrangement under
which all Shares are to be either cancelled or transferred to a third party, and the Court, by order, approves
the proposed scheme of arrangement; or
44
(iii)
the announcement by the Company of the acquisition by a person or any group of related persons (other
than the Company) of the power, directly or indirectly, to vote or direct the voting of the Shares having
more than 50% of the ordinary voting power of the Company,
provided that that the price paid per Share acquired is at least A$0.15 (as adjusted to take into account any pro
rata issue of securities, bonus issue of securities, or reconstruction of issued capital, including consolidation,
sub-division, reduction or return, taking place after the grant or issue of the Performance Shares).
• Expiry Date means 5.00pm (Perth time) on the date which is 5 years after the date of issue.
•
If the Milestone for a Performance Share is not met by the Expiry Date, the total number of the relevant class of
Performance Shares will convert into one Share.
• The Company shall allot and issue Shares upon conversion of the Performance Shares for no consideration.
• Shares issued on conversion of the Performance Shares rank equally with the then shares of the Company.
•
If there is any reorganisation of the issued share capital of the Company, the rights of the Performance
Shareholders will be varied to the extent necessary to comply with the ASX Listing Rules which apply to the
reorganisation at the time of the reorganisation. The Performance Shareholders shall have no right to vote,
subject to the Corporations Act.
• No application for quotation of the Performance Shares will be made by the Company.
• The Performance Share are not transferable.
10. ACCUMULATED LOSSES
Balance at 1 July
Transfer of expired option and performance rights balances
Net loss for the year attributable to members of the Company
Balance at 30 June
2017
$
2016
Restated
$
(36,115,183)
(33,784,393)
249,704
300,821
(1,383,441)
(2,631,611)
(37,248,920)
(36,115,183)
Apollo Minerals Limited ANNUAL REPORT 2017
45
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
11. STATEMENT OF CASH FLOWS
(a) Reconciliation of the Net Loss After Tax to the Net Cash Flows
from Operations
Loss for the year
Adjustment for non-cash income and expense items
Equity settled share-based payments
Exploration expenditure written off
Depreciation
Foreign exchange movement
Provision for receivable
Adjustment for R&D Rebate
Change in operating assets and liabilities
(Increase)/decrease in trade and other receivables
(Decrease) in trade and other payables
Net cash outflow from operating activities
(b) Reconciliation of Cash
Cash at bank and on hand
Balance at 30 June
(c) Non-cash Financing and Investing Activities
2017
$
2016
Restated
$
(1,383,441)
(2,631,611)
442,219
50,000
97
(16,810)
-
-
357,518
930,757
-
-
41,500
133,899
(17,284)
(26,770)
(951,989)
742,880
(137,889)
(562,946)
3,741,309
3,741,309
175,362
175,362
30 June 2017
On 30 June 2017, the Company issued 15,000,000 Ordinary Shares and 65,000,000 Performance Shares as
consideration for the acquisition of Ariege Tungstene SAS. Refer to Note 13 for further details.
30 June 2016
During the year ended 30 June 2016, the Company issued new shares to the value of $180,000 in part consideration
for the acquisition of a 17.5% interest in Apollo African Holdings Limited. 1,910,578 shares were issued on 16
February 2016 at a deemed issue price of $0.031 each, and 4,285,714 shares were issued on 23 March 2016 at a
deemed price of $0.028, for total share based consideration of $180,000.
There were no other non-cash financing and investing activities during the year ended 30 June 2017 or 30 June
2016.
2017
Cents
2016
Restated
Cents
12. EARNINGS PER SHARE
(a) Basic and Diluted Profit/(Loss) per Share
Total basic and diluted loss per share
(1.21)
(14.44)
Note:
1
2016 basic and diluted loss per share is post 1 for 4 consolidation effective 17 June 2016.
46
2017
$
2016
Restated
$
The following reflects the income and share data used in the calculations of
basic and diluted earnings per share:
Net loss attributable to members of the Company
Effect of dilutive securities
(1,383,441)
(2,631,611)
-
-
Earnings used in calculating basic and diluted earnings per share from
continuing operations
(1,383,441)
(2,631,611)
Number of
Ordinary
Shares
2017
Number of
Ordinary
Shares
2016
Weighted average number of Ordinary Shares used in calculating basic
and diluted earnings per share
114,745,380
18,218,511
On 17 June 2016, the Company completed a 1 for 4 Consolidation. The weighted average number of ordinary
shares used in calculating basic and diluted earnings per share has been retrospectively adjusted in the prior period
to reflect the impact of the Consolidation.
(b) Non-Dilutive Securities
As at balance date, there were 9,528,125 issued options and 65,000,000 issued Performance Shares (which
represent 74,528,125 potential Ordinary Shares) which were not dilutive as they would decrease the loss per share.
(c) Conversions, Calls, Subscriptions or Issues after 30 June 2017
There have been no conversions to, calls of, or subscriptions for Ordinary Shares or issues of potential Ordinary
Shares since the reporting date and before completion of this financial report.
Apollo Minerals Limited ANNUAL REPORT 2017
47
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
13. ACQUISITION OF CONTROLLED ENTITY
On 30 June 2017, the Group completed the acquisition of Ariege Tungstene SAS which holds an 80% interest in
Mines du Salat SAS. Mines du Salat SAS is governed by a Shareholder Agreement with Variscan Mines SAS,
holder of the Couflens PER, pursuant to which Variscan France will transfer the Couflens PER to Mines du Salat
SAS. The transaction has been accounted for as an asset acquisition in accordance with the Group’s accounting
policy for exploration and evaluation expenditure, considering AASB 3 Business Combinations and the nature of
the asset being acquired.
The total cost of the acquisition was $4,959,203 and comprised as follows:
Notes
30 June 2017
$
Fair value of net assets acquired:
Cash and cash equivalents
Trade and other receivables
Exploration and evaluation assets
Trade and other payables
Net assets acquired
Non-Controlling Interest
Net assets acquired attributable to members of Apollo Minerals Limited
Costs of the acquisition:
Cash and cash equivalents
Loan to Ariege Tungstene SAS pre-acquisition
Deferred cash consideration(1)
15,000,000 Fully Paid Ordinary Shares(2)
10,000,000 Class A Performance Shares(3)
10,000,000 Class B Performance Shares(3)
10,000,000 Class C Performance Shares(3)
15,000,000 Class D Performance Shares(3)
20,000,000 Class E Performance Shares(3)
Net cash outflow on acquisition:
Cash consideration
Loan provided pre-acquisition
Cash acquired on acquisition
29,669
90,857
6,267,645
(261,070)
6,127,101
(1,167,898)
4,959,203
250,000
487,730
-
2,965,906
593,181
197,727
197,727
148,296
118,636
4,959,203
(250,000)
(470,919)
29,669
(691,250)
8(b)
9(e)
9(e)
9(e)
9(e)
9(e)
Notes:
1 Deferred cash consideration includes A$250,000 payable upon satisfaction of the Class A Milestone (refer Note 9(e)) and
A$250,000 payable upon satisfaction of the Class B Milestone (refer Note 9(e)). In accordance with AASB 137, these deferred
payments are considered contingent liabilities as there is a present obligation that can be reliably measured, but the obligation
is not probable (more likely than not).
2 The fair value of the fully paid ordinary shares issued at the acquisition date has been determined using the 7 day volume
weighted average share price on 30 June 2017 being $0.198 per share.
3 The fair value of the performance shares at the acquisition date has been determined with reference to the 7 day volume
weighted average share price on 30 June 2017 being $0.198 per share, adjusted for Management’s assessment of the
probability that the relevant milestone for each class of Performance Shares will be met.
48
14. RELATED PARTIES
(a) Ultimate Parent
Apollo Minerals Limited, incorporated in Australia, is the ultimate parent of the Group.
(b) Subsidiaries
Name
Subsidiaries of Apollo Minerals Limited:
Apollo Iron Ore Pty Ltd
Southern Exploration Pty Ltd
Fraser Range Exploration Pty Ltd
Apollo Iron Ore No 2 Pty Ltd
Apollo Iron Ore No 3 Pty Ltd
Apollo African Holdings Limited
Apollo Gabon SA
Ariege Tungstene SAS
Mines du Salat SAS
Country of
Incorporation
% Equity Interest
2017
%
2016
%
Australia
Australia
Australia
Australia
Australia
Hong Kong
Gabon
France
France
100
100
100
100
100
100
70
100
80
100
100
100
100
100
100
70
-
-
Note:
1
The Company acquired its interest in Ariege Tungstene SAS and Mines du Salat SAS on 30 June 2017. Refer to Note 13
for further details.
(c) Key Management Personnel
Transactions with Key Management Personnel, including remuneration, are included at Note 15.
(d)
Transactions with Related Parties
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and are not disclosed in this note.
Interests in joint venture entities are set out in Note 19.
Apollo Minerals Limited ANNUAL REPORT 2017
49
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
15. KEY MANAGEMENT PERSONNEL
(a) Details of Key Management Personnel
The KMP of the Group during or since the end of the financial year were as follows:
Current Directors
Mr Ian Middlemas
Mr Robert Behets
Dr Michel Bonnemaison
Mr Ajay Kejriwal
Mr Mark Pearce
Former Directors
Chairman (appointed 8 July 2016)
Non-Executive Director (appointed 12 October 2016)
Non-Executive Director (appointed 30 June 2017)
Non-Executive Director (appointed 30 June 2017)
Non-Executive Director (appointed 8 July 2016)
Mr Richard Shemesian
Mr Eric Finlayson
Mr Guy Robertson
Non-Executive Director (resigned 30 June 2017)
Non-Executive Director (resigned 8 July 2016)
Non-Executive Director (resigned 8 July 2016)
Other KMP
Mr Clint McGhie
Company Secretary (appointed 8 July 2016)
Unless otherwise disclosed, the KMP held their position from 1 July 2016 until the date of this report.
(b) Key Management Personnel Compensation
Short-term employee benefits
Post-employment benefits
Share-based payments – shares
Share-based payments – grant of options
Total compensation
(c)
Loans from Key Management Personnel
2017
$
2016
$
187,549
270,930
3,234
-
275,122
465,905
8,453
58,950
304,618
642,951
No loans were provided to or received from Key Management Personnel during the year ended 30 June 2017 (2016:
Nil).
(d) Other Transactions
Apollo Group Pty Ltd (‘Apollo Group’), a Company of which Mr Mark Pearce is a director and beneficial shareholder,
provides corporate, administration and company secretarial services and serviced office facilities to the Company
under a services agreement effective from 1 July 2016. Either party can terminate the services agreement at any
time for any reason by giving one months’ written notice. Apollo Group received a monthly retainer of $15,000
(exclusive of GST) for the provision of these services for the period from 1 July 2016 to 31 March 2017, and $20,000
per month from 1 April 2017 to 30 June 2017. The monthly retainer is reviewed every six to twelve months and is
based on Apollo Group’s budgeted cost of providing the services to the Company (and other companies utilising
same or similar services from Apollo) for the next six to twelve month period, with minimal or no mark-up. From time
to time, Apollo Group may also receive additional fees (as agreed with the Company) in respect of services provided
by Apollo Group to the Company that are not included in the agreed services covered by the monthly retainer.
During the year, Apollo Group was paid additional fees of $30,000 for services in relation to a transaction.
50
Subsequent to year end, Mines du Salat SAS has signed a services agreement with SARL E-Mines (‘E-Mines’), a
Company of which Dr Michel Bonnemaison is a director and beneficial shareholder. In accordance with the
agreement, E-Mines will provide geoscience consulting services to Mines du Salat in support of the Company’s
Couflens Project for a 12 month period from 1 September 2017. There is a schedule of rates applicable to the
services provided based on the relevant qualifications and experience of the individuals providing the services
ranging from €350 to €1,100 per day. The agreement may be extended by mutual agreement and can be terminated
by either party with 30 days notice without penalty.
16. PARENT ENTITY DISCLOSURES
(a)
Financial Position
Assets
Current Assets
Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Total Liabilities
Equity
Contributed Equity
Reserves
Accumulated Losses
Total Equity
(b)
Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive loss
(c) Other
2017
$
2016
$
3,743,709
4,876,310
8,620,019
190,147
917,789
1,107,936
159,462
159,462
174,785
174,785
44,072,803
2,124,395
(37,736,641)
8,460,557
35,940,353
690,188
(35,697,390)
933,151
(1,871,168)
(8,504,503)
-
-
(1,871,168)
(8,504,503)
No guarantees have been entered into by the parent entity in relation to its subsidiaries.
Refer to Note 22 for details of commitments.
Apollo Minerals Limited ANNUAL REPORT 2017
51
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
17. SHARE-BASED PAYMENTS
(a) Recognised Share-based Payment Expense
Goods or services received or acquired in a share-based payment transaction are recognised as an increase in
equity if the goods or services were received in an equity-settled share-based payment transaction or as a liability
if the goods and services were acquired in a cash settled share-based payment transaction.
For equity-settled share-based transactions, goods or services received are measured directly at the fair value of
the goods or services received provided this can be estimated reliably. If a reliable estimate cannot be made the
value of the goods or services is determined indirectly by reference to the fair value of the equity instrument granted.
From time to time, the Group also provides Incentive Options to officers, employees, consultants and other key
advisors as part of remuneration and incentive arrangements. The number of options granted, and the terms of the
options granted are determined by the Board. Shareholder approval is sought where required.
During the past two years, the following equity-settled share-based payments have been recognised:
Expense arising from equity-settled share-based payment transactions:
Options / Rights issued
Shares in lieu of cash payments
Net share based payment expense recognised in the profit or loss
2017
$
2016
$
428,344
304,618
13,875
52,900
442,219
357,518
Notes:
1
2
During the year, the Company acquired a 100% interest in Ariege Tungstene SAS for consideration totalling $4,959,203,
including $2,965,906 in shares and $1,255,567 in performance shares (Note 13)
In 2016, the Company acquired a 100% interest in Apollo African Holdings Limited during the year for consideration totalling
$250,000, including $180,000 in shares (Note 11(c)).
(b) Summary of Options Granted as Share-based Payments
The following options were granted as share-based payment arrangements during the last two years:
Security
Type
Number
Grant Date
Expiry Date
Exercise
Price
$
Fair Value
$
Option
1,000,000
7-Jul-16
30-Jun-18
$0.05
Option
1,000,000
7-Jul-16
30-Jun-19
$0.075
Option
Option
1,250,000
21-Jun-17
30-Jun-20
1,600,000
21-Jun-17
30-Jun-21
$0.20
$0.25
$0.040
$0.040
$0.119
$0.125
Security
Type
Option
Option
Option
Number
Grant Date
Expiry Date
Exercise
Price
$
Fair Value
$
1,500,000
23-Nov-15
30-Nov-20
500,000
15-Jun-16
30-Jun-18
0.32
0.05
1,000,000
15-Jun-16
30-Jun-19
0.075
0.145
0.058
0.057
2017
Series
Series 1
Series 2
Series 3
Series 4
2016
Series
Series 5
Series 6
Series 7
52
The following table illustrates the number and weighted average exercise prices (WAEP) of Incentive Options
granted as share-based payments at the beginning and end of the financial year:
2017
Number
2017
WAEP
2016
Number
2016
WAEP
Outstanding at beginning of year
4,412,500
$0.394
6,150,000
Adjustment for consolidation
-
-
(4,237,500)(1)
Granted by the Company during the year
4,850,000
$0.160
3,000,000
Expired/cancelled during the year
(625,000)
$1.200
(500,000)
Outstanding at end of year
8,637,500
$0.204
4,412,500
$0.390
$0.205
$0.193
$2.500
$0.394
Note:
1 Adjustment for 1 for 4 consolidation effective 17 June 2016.
The outstanding balance of options granted as share based payments on issue as at 30 June 2017 is represented
by:
•
•
•
•
•
•
787,500 $0.52 Incentive Options at an exercise price of $0.52 on or before 28 February 2018;
1,500,000 $0.05 Incentive Options at an exercise price of $0.05 on or before 30 June 2018;
2,000,000 $0.075 Incentive Options at an exercise price of $0.075 on or before 30 June 2019;
1,250,000 $0.20 Incentive Options at an exercise price of $0.20 on or before 30 June 2020
1,500,000 $0.32 Incentive Options at an exercise price of $0.32 on or before 30 November 2020; and
1,600,000 $0.25 Incentive Options at an exercise price of $0.25 on or before 30 June 2021.
(c) Weighted Average Remaining Contractual Life
The weighted average remaining contractual life for the Incentive Options outstanding at 30 June 2017 is 2.47 years
(2016: 2.8 years).
(d) Range of Exercise Prices
The range of exercise prices of Incentive Options outstanding at 30 June 2017 is $0.05 to $0.52 (2016: $0.05 to
$1.20
(e) Weighted Average Fair Value
The weighted average fair value of Incentive Options granted during the year ended 30 June 2017 is $0.088 (2016:
$0.101).
Apollo Minerals Limited ANNUAL REPORT 2017
53
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
17. SHARE-BASED PAYMENTS (Continued)
(f)
Option Pricing Model
The fair value of the equity-settled Incentive Options granted is estimated as at the date of grant using the Black-
Scholes option valuation model taking into account the terms and conditions upon which the options were granted.
30 June 2017 and 30 June 2016
The following table lists the inputs to the valuation model used for share options granted by the Group during the
years ended 30 June 2017 and 30 June 2016:
2017
Inputs
Exercise Price
Grant date share price
Dividend yield(1)
Volatility(2)
Risk free interest rate
Grant date
Expiry date
Expected life of option(3)
Options
Series 1
$0.05
$0.069
-
95%
1.58%
7-Jul-16
30-Jun-18
1.98 years
Fair value at grant date
$0.040
Options
Series 2
$0.075
$0.069
-
95%
1.54%
7-Jul-16
30-Jun-19
2.98 years
$0.040
Options
Series 3
$0.20
$0.198
-
95%
1.79%
Options
Series 4
$0.25
$0.198
-
95%
1.99%
21-Jun-17
30-Jun-20
21-Jun-17
30-Jun-21
3.03 years
4.03 years
$0.119
$0.125
Notes:
1
2
3
The dividend yield reflects the assumption that the current dividend payout will remain unchanged.
The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not
necessarily be the actual outcome.
The expected life of the options is based on the expiry date of the options as there is limited track record of the early exercise
of options.
2016
Inputs
Exercise Price
Grant date share price
Dividend yield(2)
Volatility(3)
Risk free interest rate
Grant date
Expiry date
Expected life of option(4)
Fair value at grant date
Options
Series 5(1)
$0.32
$0.16
-
160%
1.81%
23-Nov-15
30-Nov-20
5.02 years
$0.145
Options
Series 6
$0.05
$0.09
-
95%
1.63%
15-Jun-16
30-Jun-18
2.04 years
$0.058
Options
Series 7
$0.075
$0.09
-
95%
1.58%
15-Jun-16
30-Jun-19
3.04 years
$0.057
Notes:
1 Adjusted for 1 for 4 consolidation effective 17 June 2016.
2 The dividend yield reflects the assumption that the current dividend payout will remain unchanged.
3 The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not
necessarily be the actual outcome.
4 The expected life of the options is based on the expiry date of the options as there is limited track record of the early exercise
of options.
54
18. AUDITORS' REMUNERATION
Amounts received or due and receivable by Hall Chadwick for:
an audit or review of the financial report of the entity and any other
entity in the consolidated group
other services in relation to the entity and any other entity in the
consolidated group
19.
INTERESTS IN JOINT VENTURES
The Group has interests in the following joint venture operations:
2017
$
2016
$
27,500
28,177
-
27,500
1,650
29,827
Name
Principal Activities
Country
Orpheus JV
Exploration for nickel,
copper and gold in
the Fraser Range
Western
Australia
Orpheus Joint Venture
Interest
Carrying Amount
2017
%
2016
%
2017
$
2016
$
70
70
400,000
400,000
Fraser Range Exploration Pty Ltd, a 100% owned subsidiary of Apollo Minerals Limited has a 70% interest in the
unincorporated Orpheus Joint Venture with Enterprise Metals Limited (30% interest). The Orpheus Joint Venture
area consists of four tenements in the prospective Fraser Range province.
Fraser Range Exploration Pty Ltd is required to sole fund all joint venture activities until the date when Fraser Range
Exploration Pty Ltd delivers a Bankable Feasibility Study for a Mining Area to Enterprise Metals Limited.
20. SEGMENT INFORMATION
AASB 8 requires operating segments to be identified on the basis of internal reports about components of the
Consolidated Entity that are regularly reviewed by the chief operating decision maker in order to allocate resources
to the segment and to assess its performance.
The Consolidated Entity operates in one segment, being exploration for mineral resources. This is the basis on
which internal reports are provided to the Directors for assessing performance and determining the allocation of
resources within the Consolidated Entity. Following acquisition of Ariege Tungstene SAS on 30 June 2017, the
Consolidated Entity operates in Australia and France.
Information regarding the non-current assets by geographical location is reported below. No segment information
is provided for France in relation to revenue and profit or loss for the year ended 30 June 2017.
(a) Reconciliation of Non-current Assets by geographical location
Australia
France
2017
$
404,835
6,267,645
6,672,480
2016
$
500,000
-
500,000
Apollo Minerals Limited ANNUAL REPORT 2017
55
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
21. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
(a) Overview
The Group's principal financial instruments comprise receivables, payables, cash and short-term deposits. The
main risks arising from the Group's financial instruments are interest rate risk, credit risk and liquidity risk.
This note presents information about the Group's exposure to each of the above risks, its objectives, policies and
processes for measuring and managing risk, and the management of capital. Other than as disclosed, there have
been no significant changes since the previous financial year to the exposure or management of these risks.
The Group manages its exposure to key financial risks in accordance with the Group's financial risk management
policy. Key risks are monitored and reviewed as circumstances change (e.g. acquisition of a new project) and
policies are revised as required. The overall objective of the Group's financial risk management policy is to support
the delivery of the Group's financial targets whilst protecting future financial security.
Given the nature and size of the business and uncertainty as to the timing and amount of cash inflows and outflows,
the Group does not enter into derivative transactions to mitigate the financial risks. In addition, the Group's policy
is that no trading in financial instruments shall be undertaken for the purposes of making speculative gains. As the
Group's operations change, the Directors will review this policy periodically going forward.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management
framework. The Board reviews and agrees policies for managing the Group's financial risks as summarised below.
(b) 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. This arises principally from cash and cash equivalents and trade and other
receivables.
There are no significant concentrations of credit risk within the Group. The carrying amount of the Group's financial
assets represents the maximum credit risk exposure, as represented below:
Cash and cash equivalents
Trade and other receivables
2017
$
3,741,309
122,926
3,864,235
2016
$
175,362
14,785
190,147
Trade and other receivables are comprised primarily of GST/TVA refunds due. Where possible the Group trades
only with recognised, creditworthy third parties. It is the Group's policy that all customers who wish to trade on
credit terms are subject to credit verification procedures.
With respect to credit risk arising from cash and cash equivalents, the Group's exposure to credit risk arises from
default of the counter party, with a maximum exposure equal to the carrying amount of these instruments.
56
(c)
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Board's
approach to managing liquidity is to ensure, as far as possible, that the Group will always have sufficient liquidity to
meet its liabilities when due. At 30 June 2017, the Group had sufficient liquid assets to meet its financial obligations.
The contractual maturities of financial liabilities, including estimated interest payments, are provided below. There
are no netting arrangements in respect of financial liabilities.
2017 Group
≤6 Months
$
6-12
Months
$
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
(d)
Interest Rate Risk
3,741,309
122,926
3,864,235
420,539
420,539
-
-
-
-
-
1-5 Years
≥5 Years
Total
$
-
-
-
-
-
$
-
-
-
-
-
$
3,741,309
122,926
3,864,235
420,539
420,539
The Group's exposure to the risk of changes in market interest rates relates primarily to the cash and short-term
deposits with a floating interest rate.
These financial assets with variable rates expose the Group to cash flow interest rate risk. All other financial assets
and liabilities, in the form of receivables and payables are non-interest bearing.
At the reporting date, the interest rate profile of the Group's interest-bearing financial instruments was:
Interest-bearing financial instruments
Cash at bank and on hand
2017
$
3,741,309
3,741,309
2016
$
175,362
175,362
The Group currently does not engage in any hedging or derivative transactions to manage interest rate risk.
Apollo Minerals Limited ANNUAL REPORT 2017
57
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(Continued)
21. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Continued)
(d)
Interest Rate Risk (Continued)
Interest rate sensitivity
A sensitivity of 1% (100 basis points) has been selected as this is considered reasonable given the current level of
both short term and long term interest rates. A 1% (100 basis points) movement in interest rates at the reporting
date would have increased (decreased) equity and profit and loss by the amounts shown below. This analysis
assumes that all other variables, remain constant. The analysis is performed on the same basis for 2016.
Profit or loss
Other Comprehensive
Income
100bp
Increase
100bp
Decrease
100bp
Increase
100bp
Decrease
2017
Group
Cash and cash equivalents
37,413
(37,413)
37,413
(37,413)
2016
Group
Cash and cash equivalents
1,753
(1,753)
1,753
(1,753)
(e) Commodity Price Risk
The Group is exposed to commodity price risk. These commodity prices can be volatile and are influenced by factors
beyond the Group's control. As the Group is currently engaged in exploration and business development activities,
no sales of commodities are forecast for the next 12 months, and accordingly, no hedging or derivative transactions
have been used to manage commodity price risk.
(f)
Capital Management
The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. Given the stage of development of the Group, the Board's
objective is to minimise debt and to raise funds as required through the issue of new shares.
There were no changes in the Group's approach to capital management during the year.
The Group is not subject to externally imposed capital requirements.
(g)
Fair Value
The net fair value of financial assets and financial liabilities approximates their carrying value. The methods for
estimating fair value are outlined in the relevant notes to the financial statements.
58
22. COMMITMENTS
Management have identified the following material commitments for the consolidated group as at 30 June 2017 and
30 June 2016:
Commitments for exploration expenditure:
Not longer than 1 year
Longer than 1 year and shorter than 5 years
2017
$
2016
$
1,780,363
2,430,438
624,000
739,750
4,210,801
1,363,750
23. CONTINGENT ASSETS AND LIABILITIES
(a) Contingent Assets
As at the date of this report, no contingent assets had been identified at 30 June 2017.
(b) Contingent Liabilities
The Group acquired Ariege Tungstene SAS on 30 June 2017. In accordance with the terms of the Share Sale
Agreement, consideration for the acquisition includes A$250,000 payable upon satisfaction of the Class A Milestone
(refer Note 9(e)) and A$250,000 payable upon satisfaction of the Class B Milestone (refer Note 9(e)). Whilst there
is a present obligation that can be reliably measured, the obligation is not currently considered probable (more likely
than not), and accordingly, no provision for any liability has been recognised in these financial statements for this
payment.
24. EVENTS SUBSEQUENT TO BALANCE DATE
As at the date of this report, there are no matters or circumstances which have arisen since 30 June 2017 that have
significantly affected or may significantly affect:
•
•
•
the operations, in financial years subsequent to 30 June 2017, of the Group;
the results of those operations, in financial years subsequent to 30 June 2017, of the Group; or
the state of affairs, in financial years subsequent to 30 June 2017, of the Group.
Apollo Minerals Limited ANNUAL REPORT 2017
59
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Apollo Minerals Limited:
1.
In the opinion of the directors:
(a)
the attached financial statements, notes and the additional disclosures included in the directors' report
designated as audited, are in accordance with the Corporations Act 2001, including:
(i)
section 296 (compliance with accounting standards and Corporations Regulations 2001); and
(ii)
section 297 (gives a true and fair view of the financial position as at 30 June 2017 and of the
performance for the year ended on that date of the Group); and
(b)
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 attached financial statements and notes thereto are in compliance with International Financial Reporting
Standards, as stated in Note 1(b) to the financial statements.
The Directors have been given a declaration required by section 295A of the Corporations Act 2001 for the
financial year ended 30 June 2017.
2.
3.
On behalf of the Board
ROBERT BEHETS
Director
28 September 2017
60
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF APOLLO MINERALS LIMITED
Apollo Minerals Limited ANNUAL REPORT 2017
61
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF APOLLO MINERALS LIMITED
(Continued)
62
Apollo Minerals Limited ANNUAL REPORT 2017
63
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF APOLLO MINERALS LIMITED
(Continued)
64
Apollo Minerals Limited ANNUAL REPORT 2017
65
CORPORATE GOVERNANCE STATEMENT
Apollo Minerals Limited (“Apollo Minerals” or “Company”) and the entities it controls believe corporate governance
is important for the Company in conducting its business activities.
The Board of Apollo Minerals has adopted a suite of charters and key corporate governance documents which
articulate the policies and procedures followed by the Company.
the Company’s website,
These documents are available
www.apollominerals.com.au. These documents are reviewed annually to address any changes in governance
practices and the law.
the Corporate Governance section of
in
The Company’s Corporate Governance Statement 2017, which explains how Apollo Minerals complies with the
ASX Corporate Governance Council’s ‘Corporate Governance Principles and Recommendations – 3rd Edition’ in
relation to the year ended 30 June 2017, is available in the Corporate Governance section of the Company’s
website, www.apollominerals.com.au and will be lodged with ASX together with an Appendix 4G at the same time
that this Annual Report is lodged with ASX.
In addition to the ASX Corporate Governance Council’s ‘Corporate Governance Principles and Recommendations
– 3rd Edition’ the Board has taken into account a number of important factors in determining its corporate
governance policies and procedures, including the:
•
relatively simple operations of the Company, which currently only undertakes mineral exploration and
development activities;
cost verses benefit of additional corporate governance requirements or processes;
size of the Board;
•
•
• Board’s experience in the resources sector;
•
•
•
•
organisational reporting structure and number of reporting functions, operational divisions and employees;
relatively simple financial affairs with limited complexity and quantum;
relatively small market capitalisation and economic value of the entity; and
direct shareholder feedback.
66
ASX ADDITIONAL INFORMATION
The shareholder information set out below was applicable as at 8 September 2017.
1.
TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest shareholders are listed below
Name
Juniper Capital Partners Ltd
Arredo Pty Ltd
Pershing Australia Nominees Pty Ltd
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