20
13
ANNUAL REPORT
Contents
2
4
Chairman’s Letter
Review of Operations
16
Competent Persons
Statements
18
Directors’ Report
34
40
41
Corporate Governance
Statement
Statement of
Comprehensive Income
Statement of
Financial Position
42
Statement of
Changes in Equity
43
Statement of
Cash Flows
80
44
Notes to the Financial
Statements
77
Directors
Declaration
78
Auditors’ Independence
Declaration
82
Independent Auditor’s
Report
Additional ASX
Information
Company information
1
DirectorsMr Anthony Wehby – Chairman Mr Rimas Kairaitis – Managing DirectorMr Robin Chambers Mr Gary CombDr Wenxiang GaoMr Michael MenziesMr Mark MilazzoMs Christine Ng Company SecretaryMr Richard Willson Registered Office and Principal Place of BusinessYTC Resources Limited2 Corporation Place ORANGE NSW 2800 Telephone: (02) 6361 4700Facsimile: (02) 6361 4711Email: office@ytcresources.comShare RegisterSecurity Transfer Registrars Pty Ltd770 Canning HighwayAPPLECROSS WA 6153Telephone: (08) 9315 2333Facsimile: (08) 9315 2233Stock Exchange ListingYTC Resources Limited shares are listed on the Australian Stock Exchange, the home branch being Perth.ASX Code: YTCAuditorsErnst and Young680 George StreetSydney NSW 2000Websitewww.ytcresources.com YTC RESOURCES LIMITED ANNUAL REPORT
Chairman’s Letter
20
13
Dear Shareholders
Once again I am pleased to introduce to you a report on a year of achievement and encouragement for YTC and its
community.
This Annual Report summarises many of the important announcements from throughout the year and gives context
to our continuing transition from explorer to producer. There remain many challenges to be met, however the
demonstrated abilities of our management team allow for great optimism.
In addition to the outstanding contribution of management I also acknowledge the support of our major contractors,
financiers and advisors. The collective team has allowed and facilitated progress despite the difficulties of equity
and financial market conditions. It is gratifying to have partners who share our longer term vision for the Company
at Hera, Nymagee and beyond.
Early in the financial year Steve Woodham and Richard Hill, two founding directors of YTC retired from the Board
to make way for new directors with the experience required for the next stage of development. Steve and Richard
were instrumental in bringing YTC to the stage it has now reached, with a promising future as a mining company. I
formally record my gratitude, on behalf of the Board and Shareholders, for their service.
Gary Comb and Mike Milazzo joined the Board and bring extensive, relevant experience. Our first year working
together in YTC has been rewarding and encouraging.
In March 2013 I was particularly encouraged by the overwhelming support shown by shareholders for the Glencore
Financing Proposals at the EGM. This formal support and the many other shareholder contacts received expressing
confidence in the future for YTC are greatly appreciated by us all.
Shareholder input is always welcome, even if it is to express an alternate view. The Board is conscious that YTC is
your company and our objective is to be worthy of your continued support.
As part of the financing of our future developments we welcomed Glencore as a 10% shareholder and Mike Menzies
as their representative onto the Board. We are delighted with the beginnings of this relationship and look forward
to a long and fruitful partnership.
I am aware that optimising the opportunities that will emerge in the coming year will require a great deal of
commitment from the Board and management and on their behalf I assure shareholders of our best endeavours.
Yours sincerely
Tony Wehby
Non-Executive Chairman
2
YTC RESOURCES LIMITED ANNUAL REPORT2013 3
YTC RESOURCES LIMITED ANNUAL REPORT2013 YTC RESOURCES LIMITED ANNUAL REPORT
Review and Results of Operations
Review and Results of Operations
20
13
HERA-NYMAGEE PROJECT
HERA PROJECT PERMITTING
Company activities for the year were again dominated
by activity on the Hera and Nymagee Projects.
The Hera-Nymagee Project represents YTC’s flagship
Project and consists of the Hera gold-base metal
deposit (YTC 100%) and the Nymagee copper deposit
(YTC 95%), and is located approximately 100km
south-east of Cobar, hosted in the Cobar Basin rocks
of central NSW. The Cobar Basin also hosts the major
mineral deposits at CSA (Cu-Ag), The Peak (Cu-Au) and
Endeavor (Cu-Pb-Zn-Ag).
YTC has now commenced full scale development
activities at the Hera Gold Project following:
1. The completion of the Hera Definitive Feasibility Study
(‘DFS’) which confirmed the technical and financial
viability of the development of the Hera deposit as
a shallow underground mine and processing plant
producing gold and silver doré bars and a bulk lead-
zinc concentrate for sale.
2. Receipt of NSW Government permitting approval,
and;
3. Completion of Hera project financing arrangements.
The Company is also continuing exploration and
feasibility at the Nymagee copper deposit, located 4.5km
to the north of Hera, with a view to demonstrating an
integrated development of the Hera and Nymagee
deposits. The Company considers both deposits have
the potential to evolve into very large ‘Cobar style’
mineral systems.
Following an exhaustive approvals process, YTC
received project approval for the Hera Project from
the NSW Department of Planning and Infrastructure
(DP&I) under Part 3A of the NSW EP&A Act on the 1st
August 2012. The Project Approval represents the key
approval for the Project and lays down the key consent
conditions for the projects development.
Following the Part 3A Project Approval, YTC was
granted the Hera Mining Lease (ML 1686) on the 27th
May 2013, replacing a pre-existing Part 5 Exploration
Decline Approval that was in place when YTC acquired
the Hera Project.
The other significant approval, being the grants of the
Environmental Protection Licence (EPL) was received in
March 2013.
HERA AND NYMAGEE PROJECT FINANCING
On 22 November 2012, YTC announced a A$158m
funding package secured under a binding term sheet
with Glencore International AG (“Glencore”) to develop
the Hera and Nymagee Projects. The funding is
structured as A$155 million in debt and converting
note facilities (together ‘Project Finance Facilities’),
in addition to the subscription by Glencore of
$2.95 million in YTC shares at a 25% premium to YTC’s
30 day average share price as at 20 November 2012
(together ‘the Glencore Funding Package’).
On 26 March 2013, following receipt of Shareholder
approval, YTC Resources Limited formally completed
the A$158m funding package.
4
YTC RESOURCES LIMITED ANNUAL REPORT2013 Cobar Superbasin
3D Cutaway - Hera to CSA
Showing Major Mineral Deposits
5
YTC RESOURCES LIMITED ANNUAL REPORT2013 Review and Results of Operations
On Completion:
• YTC issued 9.39 million shares in YTC at 31.38 cents
per share to Glencore Australia, representing a 25%
premium to YTC’s share price at the time of signing
the transaction term sheet (‘Placement’).
• YTC commenced drawdown of Facilities A & E as part
of the A$155 million in debt and converting note
facilities.
• Mr Mike Menzies was appointed to the YTC Board as
a nominee of Glencore.
The key terms of Glencore Funding Package are
summarised below:
Placement
Facility A
Facility B
Facility C
Facility D
Facility E
Shares:
Amount
Issue Price:
Glencore Position:
Limit:
Conversion:
Interest Rate:
Use of Funds:
Maturity Date:
Drawdown Period:
Limit:
Conversion:
Interest Rate:
Use of Funds:
Maturity Date:
Drawdown Period:
Limit:
Interest Rate:
Use of Funds:
Maturity Date:
Drawdown Period:
Limit:
Interest Rate:
Use of Funds:
Maturity Date:
Drawdown Period:
Limit:
Interest Rate:
Use of Funds:
Maturity Date:
Drawdown Period:
9,390,000
A$2,946,582.00
$0.3138 per share (being a 25% premium to YTC’s 30 day VWAP)
The placement will increase Glencore’s total shareholding in YTC to
9.9% (undiluted)
A$20 million Converting Note Facility
Convertible at YTC’s option at $0.251 per share
3M AUD BBSW + 4%
Hera Development, Nymagee feasibility study and development,
working capital
60 months after shareholder approval
12 months from shareholder approval
A$50 million Converting Note Facility
Convertible at YTC’s option at 60 day VWAP Price prior to conversion
3M AUD BBSW + 4%
Hera Development, Nymagee feasibility study and development,
working capital
60 months after shareholder approval
12 months from shareholder approval
A$30 million Debt Facility
3M AUD BBSW + 4.5%
Hera Development, Nymagee feasibility study and development,
working capital
60 months after shareholder approval
18 months from shareholder approval
A$50 million Debt Facility
3M AUD BBSW + 4.5%
Nymagee development
42 months after first drawdown
12 months after completion of approved Nymagee bankable feasibility
study or earlier with Glencore consent
A$5 million Debt Facility
3M AUD BBSW + 4.5%
Purchase of precious and/or base metal option cover.
42 months after first drawdown
12 months from shareholder approval
6
YTC RESOURCES LIMITED ANNUAL REPORT2013 SUMMARY OF OTHER AGREED TERMS
• YTC will grant life of mine offtake and marketing
arrangements to Glencore in respect of base metals
concentrate production from the Hera and Nymagee
projects with YTC able to sell precious metal doré
production at its sole discretion.
• Glencore and YTC to establish a Technical Steering
Committee with equal representation from both
parties to advise YTC on the technical aspects of the
mining feasibility, development and operations of the
Hera and Nymagee Projects.
• Glencore shall have the right to appoint one member
to the YTC Board whilst holding more than 5% of YTC.
• Subject to obtaining a waiver from ASX, following
completion of the Glencore transaction, Glencore will
have a top-up right to maintain its interest in YTC at
9.9%.
• During the term of the Project Finance Facilities,
Glencore shall have a right of first offer if YTC
chooses to divest Hera or Nymagee. The right of first
offer obligates YTC to first offer any sale of the Hera
or Nymagee projects to Glencore, following which
YTC may sell without restriction to any third party in
the subsequent 6 month period on terms not more
favourable to the purchaser than were offered to
Glencore.
• YTC will not be prevented from issuing further equity
during the terms of the Project Finance Facilities on
terms it sees fit. The conversion price of the Facility A
converting notes will adjust to reflect any YTC share
capital reorganisation or share issuance including a
placement or rights issue.
In April 2013 YTC utilised the full funding allocation
under Facility E, being $5m, for the purchase of Put
Options to cover approximately 75% of the expected
gold production from the Hera project for the period
April 2015 to July 2016. The Options give YTC the right,
but not the obligation, to sell up to a total of 29k
ounces of gold at AUD$1,500/oz.
COMMENCEMENT OF FULL SCALE
CONSTRUCTION AT HERA
UNDERGROUND DEVELOPMENT COMMENCED
YTC commenced development of the Hera portal
and decline in December 2012 under an early works
agreement with Pybar Mining Services
(‘Pybar’).
Following financial completion of the Project Finance
Facilities in March, YTC was able to finalise the full
underground mining contract with Pybar and move to
full scale construction.
As at 30 June 2013, the following key activities had
been completed:
• Completion of Pybar site establishment
• Completed establishment of explosives magazine
• Installation of underground fan at the portal face
• Delivery of new underground loader and haul truck
• Hera underground development advanced to 912m
• Installation of concrete batch plant
EPC CONTRACT SIGNED
On completion of Project Financing, YTC executed
the EPC (Engineering, Procurement and Construction)
Contract for the Hera process plant with Gekko Systems
of Ballarat, Victoria. YTC had been working closely with
Gekko on development of the flow sheet and plant
design since the Hera Definitive Feasibility Study. The
EPC Contract is a lump sum, turnkey contract for the
construction of the process plant, operating to agreed
performance warranties.
7
YTC RESOURCES LIMITED ANNUAL REPORT2013 YTC RESOURCES LIMITED ANNUAL REPORT
20
13 Review and Results of Operations
Progress under the EPC contract to 30 June 2013
included:
• Commencement of detailed design.
• Orders placed for reverse osmosis plant, ball mill and
re-grid mill.
Other key project construction activities completed to
30 June 2013 included:
• Execution of Camp Accommodation Construction
(‘Ausco’) and
Contract with Ausco Modular
installation of first set of camp bunkhouses.
• Commencement of heavy vehicle access road,
clearing of process plant area and establishment of
final waste rock emplacements.
HERA EXPLORATION
Hera exploration drilling during the year focused on
targeting down hole EM (DHEM) conductor targets to
the north and south of the Hera deposit. Strong drilling
results have extended the size of the Hera deposit in
both directions.
Highlight intersections to the south of Hera include:
Highlight intersections to the north of Hera include:
• HRD042: 11m @ 279g/t Ag, 2.2% Pb, 4.7% Zn
and 0.16g/t Au from 382m, including
7m @ 343g/t Ag, 3.0% Pb, 6.7% Zn and 0.21g/t
Au from 382m
• HRD042W1: 11m @ 107g/t Ag, 7.2% Pb, 12.3%
Zn and 0.15g/t Au from 324m
• HRD042W2: 4.75m @ 0.34g/t Au, 359g/t Ag,
10.9% Pb and 22.2% Zn from 350.78m, and
1.90m @ 0.89g/t Au, 601g/t Ag from 364m
HRD049 was drilled approximately 50m above hole
HRD042W1 and intersected further high grade results:
• HRD049: 4.0m @ 0.11g/t Au, 163g/t Ag, 4.9%
Pb and 8.7% Zn
This result extends the vertical extent of the Hera North
Lens for over 150m. The Hera North Lens remains open
on a northerly plunge.
Hole HRD043 was drilled at the southern end of Hera
testing a shallow DHEM conductor. The hole drilled
just above the plate and recorded an unusual, wide
intersection of grading >1% Pb + Zn.
• HRD043: 58m @ 0.51% Pb and 0.55% Zn from
335m
• HRD040: 14m @ 2.40g/t Au, 22g/t Ag & 6.6%
Pb + Zn from 628m, including
6m @ 4.54g/t Au, 15g/t Ag & 5.3% Pb + Zn
from 628m
Although below ore grade, the intersection confirms
the Hera mineralisation remains open to the south.
This hole is the southernmost hole at Hera at this level
(refer accompanying long section).
8
3D schematic of the Hera Processing Facility
YTC RESOURCES LIMITED ANNUAL REPORT2013 Exploration also included the identification of the
Federation prospect, located approximately 12km south
of Hera. The Federation prospect is a strong gravity
anomaly with coincident gold-lead geochemistry. Four
RC holes drilled to test the anomaly returned broad,
low grade gold-lead-zinc results, which is considered
to potentially represent a ‘halo’ around higher grade
mineralisation, similar to low grade lead-zinc zones
observed above the Hera deposit.
Results from Federation drilling included:
• FRC001: 61m @ 0.27% Pb and 0.11% Zn from
surface, including
5m @ 0.5g/t Au, and 0.15% Zn from 66m
• FRC001: 11m @ 0.23g/t Au and 0.2% Zn from
66m
• FRC004: 118m @ 0.11% Pb and 0.17% Zn from
0m
• FRC002: 114m @ 0.19% Zn from 14m,
including
1m @ 0.64% Pb and 1.3% Zn from 126m
Further drilling at Federation is planned to test beneath
and west of these results.
NYMAGEE EXPLORATION
During the year, Nymagee exploration focused on
Nymagee North, approximately 500m north of the
existing Nymagee Resource. Drilling of moderate
strength DHEM
strongly
encouraging results including:
conductors produced
• NMD075: 18m @ 1g/t Au, 23g/t Ag, 0.9% Cu,
0.6% Pb and 1.3% Zn including
1m @ 11.3g/t Au, 26g/t Ag and 1.8% Cu from
432m
• NMD075: 6m @ 0.5g/t Au, 149g/t Ag, 5% Pb
and 11.6% Zn from 512m
• NMD078: 9m @ 1.0g/t Au, 25g/t Ag, 0.8% Cu,
0.5% Pb and 0.9% Zn from 518m, and
• NMD078: 2m @ 90g/t Ag, 6.3% Pb and 12.1%
Zn from 539m
The completion of a further DHEM survey at Nymagee
North identified a new, high priority conductor target
to the north of all previous drilling. The new conductor
target has an interpreted strong conductivity of 50-
60ms, which is consistent with the strength of the
DHEM response from the Nymagee Main Lode.
9
YTC RESOURCES LIMITED ANNUAL REPORT2013 YTC RESOURCES LIMITED ANNUAL REPORT
20
13 Review and Results of Operations
HERA - NYMAGEE CORRIDOR
Regional Gravity Targets
Grid: GDA - Zone 55
10
YTC RESOURCES LIMITED ANNUAL REPORT2013 YTC is strongly encouraged by results from Nymagee
North to date, as mineralisation is consistent with the
upper sections of a ‘typical’ Cobar style ore deposit.
NEW COPPER-COBALT TARGET AT NYMAGEE
Reconnaissance mapping at Nymagee re-discovered the
historic Queens Cross mine shaft located approximately
350m north east of the Nymagee copper mine. The
Queens Cross mine is recorded as an historic gold mine
however rock chip sampling of outcrop and mullock
recorded strong copper values (to 0.8% Cu) and very
high grade cobalt (to 1.5% Co).
The Queens Cross mine may lie on a north west
trending fault structure which appears to control the
main Nymagee orebody.
DORADILLA PROJECT
The Doradilla Project is located near Bourke in north-
western NSW and is prospective for large tonnage
tin mineralisation with associated copper, zinc, silver
and indium. Previous exploration on Doradilla was
conducted under a joint venture with YTC holding the
right to earn a 70% joint venture interest. During the
year, YTC reached agreement with Straits Resources Ltd
(ASX: SRQ) to acquire 100% of the Doradilla Project (EL
6258). Under the agreement YTC will issue Straits with
$250,000 worth of YTC fully paid ordinary shares at
a deemed issue price of $0.286 per share. At 30 June
2013, YTC was awaiting NSW Government approvals as
a condition precedent to completion.
LARGE SCALE TIN MINERALISATION
CONFIRMED AT DORADILLA
YTC completed a programme of 1,830m of shallow
aircore drilling to test for tin mineralisation within the
oxide zone at the Doradilla tin deposit, located at the
southwest end of the DMK skarn. Previous exploration
has shown tin mineralisation extends to over 450m
vertical depth but only limited drilling had been
completed at shallow levels.
Drilling returned a number of strong tin results over a
strike length of over 1.8km, with best results including:
• DRAC004: 7m @ 0.93% Sn from 10m
• DRAC006: 6m @ 0.61% Sn from 44m
• DRAC009: 10m @ 1.09% Sn from 80m
• DRAC016: 14m @ 0.44% Sn from 30m
• DRAC023: 6m @ 0.92% Sn from 24m
CORPORATE
As a major shareholder of Taronga Mines Limited, YTC
supported the merger of Taronga Mines Limited with
AusNiCo Limited (ASX:ANW). Upon merger completion
YTC holds approximately 16% of AusNiCo’s ordinary
shares, and 27.5 million unlisted options in AusNiCo.
11
YTC RESOURCES LIMITED ANNUAL REPORT2013 Review and Results of Operations
EL6258 – Doradilla Project. Schematic Long Section of the DMK Skarn. Scale as shown.
12
YTC RESOURCES LIMITED ANNUAL REPORT2013 APPOINTMENT OF MR GARY COMB AS NON-
EXECUTIVE DIRECTOR
APPOINTMENT OF MR MARK MILAZZO AS
NON-EXECUTIVE DIRECTOR
On the 4th July 2012, Mr Gary Comb was appointed an
Independent Non-Executive Director of YTC Resources.
Mr Comb is an Engineer and mining industry veteran
with over 26 years’ experience in the Australian mining
industry, both with mining companies and in mining
contractor roles. He spent four years as Chief Executive
Officer of BGC Contracting Pty Ltd, the mining
contracting arm of West Australian construction
group BGC Ltd. From 2003, Mr Comb was Managing
Director of Jabiru Metals Limited, taking the Jaguar
Copper/Zinc Project from discovery through feasibility,
construction to operations. Jabiru Metals was taken
over by Independence Group Limited for A$532 million
in 2011.
YTC is very pleased to have the addition of Mr Comb’s
experience to the Board as the Company approaches
the commencement of mining.
Mr Comb replaces Mr Richard Hill who resigned as
a Non-Executive Director of YTC. Mr Hill had been a
Director since before the Company’s IPO in 2007 and
played a key role in the company’s development and
in the acquisition of the Hera-Nymagee Project. The
Company thanks Mr Hill for his substantial contribution.
On the 6th August 2012 YTC announced the appointment
of Mr Mark Milazzo as an Independent, Non-Executive
Director of YTC.
Mr Milazzo is a Mining Engineer with 30 years’
experience in mining operations, both surface and
underground, including the management of project
development and expansion activities across a range
of commodities. Mr Milazzo was previously the General
Manager of BHP’s Olympic Dam Mine, Western Mining
Corporation’s Kambalda Nickel Operations and the
General Manager of mining contractor HWE Mining. He
is a Fellow of the Australasian Institute of Mining and
Metallurgy. YTC is very pleased to have the addition of
Mr Milazzo’s experience to the Board as the Company
approaches the commencement of mining.
Mr Milazzo replaces Mr Stephen Woodham who
resigned as a Non-Executive Director of YTC on the
same day. Mr Woodham was one of the founders of
YTC and has been a Director since incorporation. YTC
wishes to express its gratitude to Mr Woodham for his
significant contribution to the Company, he has been
instrumental in getting the Company to the position
it is in today. The Company wishes Mr Woodham every
success with his future endeavours.
Table 1: Collar summary for Hera drill holes results in this report
Hole
HRD040
HRD042
HRD042W1
HRD042W2
HRD049
HRD043
GDA_E
436793
435932
435932
435932
435935
436792
GDA_N
6446915
6447539
6447539
6447539
6447541
6446917
DIP
-71
-67
-67
-67
-55
-60
AZI_MGA
240.3
60.3
60.3
60.3
66.3
250.3
Depth
720
657.25
459.24
457.5
399.4
528
Comments
Test southern EM target
Hera North
Hera North
Hera North
Hera North
Hera South
Table 2: Intersection summary for Hera drill holes in this report
From
(m)
To (m)
Intercept
(m)
Est true
width (m)
Au*
(g/t)
Hole
HRD040
Includes
HRD042
Includes
HRD042W1
628
628
382
382
324
642
634
393
389
335
14
6
11
7
11
HRD042W2
350.78
355.53
4.75
HRD043
HRD049
364
335
278
365.9
393
282
1.9
58
4
8.8
4
5.2
3.3
8.2
2.8
1.2
37
2.7
2.40
4.54
0.16
0.21
0.15
0.34
0.89
-
0.11
Cu
(%)
0.15
0.13
-
-
-
-
-
-
-
Pb
(%)
4.7
3.3
2.2
3.0
7.2
10.9
0.5
0.5
4.9
Zn
(%)
1.9
1.9
4.7
6.7
12.3
22.2
0.9
0.55
8.7
Ag
(g/t)
22
14
279
343
107
359
601
Comments
Hera South
Hera North
Hera North
Hera North
Hera North
-
Hera South
163
Hera North
13
YTC RESOURCES LIMITED ANNUAL REPORT2013 Review and Results of Operations
Table 3: Collar summary for Nymagee drill holes in this report
Hole
NMD075
NMD078
GDA_E
434350
434345
GDA_N
6452980
6452977
DIP
-74
-74
AZI_MGA
240.3
250.3
Depth
588.9
561.7
Comments
Nymagee North
Nymagee North
Table 4: Intersection summary for Nymagee drill holes in this release
Hole
From
(m)
NMD075
Includes
NMD078
167
431
432
512
518
539
To
(m)
178
449
433
518
527
541
Intercept
(m)
Est true
width (m)
Au (g/t)
11
18
1
6
9
2
unknown
unknown
-
1.0
unknown
11.25
unknown
unknown
unknown
0.53
1.0
0.15
Cu
(%)
-
0.9
1.8
0.3
0.8
0.1
Pb
(%)
1.1
0.5
0.17
5.0
0.5
6.3
Zn
(%)
2.5
1.3
0.4
11.6
0.9
12.1
Ag
(g/t)
6
23
26
149
25
90
* Gold assays by the screen fire assay (SFA) method.
The screen fire assay is considered the most accurate assay technique in coarse gold environments.
Comments
14
YTC RESOURCES LIMITED ANNUAL REPORT2013 Table 5: Collar summary for aircore drill hole programme
Hole
DRAC001
DRAC002
DRAC003
DRAC004
DRAC005
DRAC006
DRAC007
DRAC008
DRAC009
DRAC010
DRAC011
DRAC012
DRAC013
DRAC014
DRAC015
DRAC016
DRAC017
DRAC018
DRAC019
DRAC020
DRAC021
DRAC022
DRAC023
DRAC024
DRAC025
DRAC026
DRAC027
DRAC028
DRAC029
DRAC030
DRAC031
GDA_E
433341
433479
433657
433816
433801
433990
434088
434106
434239
434206
435223
435281
435119
435105
434999
435011
434994
434842
434863
434780
434789
434801
434624
434639
434461
434483
434501
434303
435013
435183
434178
GDA_N
6641218
6641353
6641462
6641586
6641607
6641692
6641833
6641829
6641822
6641826
6642607
6642655
6642515
6642532
6642473
6642452
6642419
6642384
6642357
6642324
6642302
6642279
6642178
6642159
6642060
6642036
6642011
6641938
6642389
6642561
6641820
DIP
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-60
-90
AZI_MGA
Depth
Comments
320
320
322
318
320
320
140
320
320
325
320
322
320
322
320
325
310
320
320
320
320
320
320
320
320
320
320
320
320
317
0
34
38.5
20
17
17
51
2
3
94
83
102
120
40
60
2
51
70
115
75
53
76
79
39
72
41
75
12
63
98
141
101
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide – did not reach target
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide – did not reach target
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide – did not reach target
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Doradilla Oxide
Table 6: Intersection summary for drill holes in this release
Hole
From
(m)
To
(m)
Intercept
(m)
Est true
width (m)
Sn
(%)
Cu
(%)
Pb
(%)
Zn
(%)
Ag
(g/t)
Comments
DRAC004
DRAC009
DRAC016
Includes
DRAC023
Includes
DRAC006
10
80
30
30
6
24
44
17
90
44
32
34
36
50
7
10
14
2
28
6
6
4.5
7.7
9.0
1.3
18.0
3.9
4.0
0.93
0.10
0.10
0.11
1.09
0.44
2.50
0.21
0.92
0.61
-
-
-
-
-
0.18
0.39
0.32
0.68
0.38
0.76
0.47
-
0.45
0.69
0.1
-
0.04
1
5
2
1
3
11
2
Hole finished in
tin zone
15
YTC RESOURCES LIMITED ANNUAL REPORT2013 YTC RESOURCES LIMITED ANNUAL REPORT
20
13 Competent Persons Statements
COMPETENT PERSONS STATEMENT
– NYMAGEE & HERA RESOURCE
ESTIMATE
The Resource Estimation for both Hera and Nymagee
deposits has been completed by Mr Dean Fredericksen
the Chief Operating Officer of YTC Resources Ltd
who is a Member of the Australasian Institute of
Mining and Metallurgy. Mr Dean Fredericksen 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 2004 Edition
of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves.’ Mr
Fredericksen consents to the inclusion in this report of
the matters based on his information in the form and
context in which it appears.
COMPETENT PERSONS STATEMENT –
EXPLORATION RESULTS
information
The
in this report that relates to
Exploration Results is based on information compiled
by Rimas Kairaitis, who is a Member of the Australasian
Institute of Mining and Metallurgy. Rimas Kairaitis 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 2004 Edition
of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves.’ Mr
Kairaitis consents to the inclusion in this report of
the matters based on his information in the form and
context in which it appears.
COMPETENT PERSONS STATEMENT –
HERA ORE RESERVE
The Information in this report relating to Ore Reserves
is based on work undertaken by Mr Michael Leak of
Optiro Pty Ltd under supervision of Mr Sean Pearce.
This report has been compiled by Sean Pearce, who is
a Member of the Australasian Institute of Mining and
Metallurgy. Sean Pearce 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 2004 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources
and Ore Reserves.’ Mr Pearce consents to the inclusion
in this report of the matters based on his information
in the form and context in which it appears.
COMPETENT PERSONS STATEMENT
– 3KEL-MIDWAY RESOURCE
ESTIMATION
The resource estimates of oxide material at 3KEL and
Midway have been performed by Dr William Yeo,
MAusIMM, who is an employee of Hellman & Schofield
Pty Ltd and who qualifies as a Competent Person under
the meaning of the 2004 JORC Code. He consents to
the inclusion of these estimates, and the attached
notes, in the form and context in which they appear.
16
YTC RESOURCES LIMITED ANNUAL REPORT2013 MINERAL RESOURCES AND RESERVES
Table 7: Hera Deposit Mineral Resource Estimate (YTC – 100%) – June 2011
Category
Tonnes
NSR (A$)
Au g/t
Ag g/t
Cu % Pb % Zn %
Indicated
2,113,000
Inferred
330,000
Total
2,444,000
243
207
238
4.2
3.5
4.1
17.0
14
16.7
0.2
0.1
0.2
2.8
2.3
2.8
Table 8: Hera Deposit – DFS Mining Reserve (YTC-100%) – September 2011
Source
Tonnes
Development Sub-total
278,158
Stope Sub-Total
1,597,760
MINE PROBABLE RESERVE
1,875,918
Au
(g/t)
2.86
3.72
3.59
Ag
(g/t)
13.06
15.39
15.04
Cu
(%)
0.13
0.17
0.16
Pb
(%)
2.26
2.56
2.51
3.9
3.3
3.8
Zn
(%)
3.19
3.55
3.50
Au Eq
(g/t)
Contained Au
ozs Eq
9.2
7.5
8.6
677,200
Au Eq
(g/t)
Contained Gold
Ounces (Au Eq.)
7.00
423,471
Table 9: Nymagee Deposit Mineral Resource Estimate (YTC – 95%) – December 2011
Description
INDICATED
Cut Off
Tonnes
Cu %
Pb %
Zn %
Ag g/t
Shallow Cu Resource (above 90mRL)
0.3% Cu
5,147,000
Deeper Cu Resource (below 90m RL)
0.75% Cu
1,984,000
Lead-Zinc-Silver Lens
5% Pb + Zn
364,000
INFERRED
Deeper Cu Resource (below 90m RL)
0.75% Cu
601,000
GLOBAL
Contained Metal (tonnes)
8,096,000
1.00
1.80
0.50
1.30
1.20
0.10
0.30
4.40
0.10
0.30
0.20
0.60
7.80
0.20
0.70
96,000
27,000
53,000
5
11
41
8
9
69
Table 10: Midway & 3KEL deposits – Doradilla JV (YTC earning 70%) – February 2008
Midway
3KEL
TOTAL
Category
Sn Cut-off
Tonnes (M)
% Sn
Tonnes (M)
% Sn
Tonnes (M)
% Sn
Inferred
Inferred
Inferred
0.1%
0.2%
0.5%
4.63
1.97
0.38
0.25
0.4
0.92
3.18
1.85
0.56
0.34
0.48
0.89
7.81
3.82
0.94
0.29
0.44
0.90
17
YTC RESOURCES LIMITED ANNUAL REPORT2013 YTC RESOURCES LIMITED ANNUAL REPORT
20
13 Financial Report
DIRECTORS’ REPORT
The following report is submitted in respect of the results
of YTC Resources Limited (“YTC” or “the Company”)
and its subsidiaries, together the consolidated group
(“Group”), for the financial year ended 30 June 2013,
together with the state of affairs of the Group as at
that date.
DIRECTORS AND OFFICERS
The names, qualifications and experience of the
Company’s Directors in office during the financial
year and until the date of this report are as follows.
Directors and Officers were in office for this entire
period unless otherwise stated.
Mr Anthony Wehby - Chairman
Mr Wehby was a partner with PWC Australia (Coopers
& Lybrand) for 19 years during which time he
specialised in the provision of corporate finance advice
to a wide range of clients including those in the mining
and exploration sectors. Since 2001, Mr Wehby has
maintained a financial consulting practice, advising
corporate clients considering significant changes to
their business activities. Mr Wehby is a Fellow of the
Institute of Chartered Accountants in Australia and
a Member of the Australian Institute of Company
Directors.
Mr Wehby is the Chairman of Tellus Resources Limited
and a Director of Royal Rehabilitation Centre Sydney;
he is also a Member of the Advisory Board of Moss
Capital Pty Limited. He has held no other company
directorships in the past three years.
Mr Rimas Kairaitis – Managing Director
Mr Kairaitis is a geologist with over 19 years’ experience
in minerals exploration and resource development in
gold, base metals and industrial minerals in Queensland
and NSW, working with companies including Shell
Minerals, Plutonic Resources, CRA (Rio Tinto) and
Alkane Resources.
Mr Kairaitis was a founding Director of the mineral
exploration company LFB Resources NL
(now a
subsidiary of Alkane Resources Limited). From 1999 to
2006 he worked as a geological consultant to Alkane
until becoming a founding Director of YTC Resources
Limited and its Chief Executive Officer in 2007.
In the last three years Mr Kairaitis has held no other
listed company directorships.
Mr Robin Chambers AO
Mr Robin Chambers is a lawyer with over 30 years’
experience in the resources sector. He is the Senior
Partner of Chambers & Company, an international law
firm based in Melbourne, and Special Counsel – China
and Chief Representative for its affiliate, the New York
law firm of Chadbourne & Parke, which has its China
office in Beijing. He was previously General Counsel of
CRA Limited (now Rio Tinto Limited).
Mr Chambers has advised a number of major Chinese
state owned enterprises on their investments in
Australia over more than 29 years. He has also advised
Australian and US corporations on a range of projects
in China.
Mr Chambers graduated with an Arts degree and an
Honours Law degree from the University of Melbourne
and with a Master of Laws degree from Duke University
in the United States.
Mr Chambers has held no other listed company
directorships in the past three years.
Mr Chambers was recently appointed as an Officer in
the General Division of the Order of Australia for his
distinguished service to Australia-China relations,
particularly through the promotion of trade and
investment relationships in the minerals and metals
sector, and as an advisor on international corporation
law.
Mr Gary Comb – Appointed 4 July 2012
Mr Comb is an engineer with over 27 years’ experience
in the Australian Mining Industry, both with mining
companies and in mining contractor roles. He has a
strong track record in successfully commissioning and
operating base metal mines.
He spent four years as Chief Executive Officer of
BGC Contracting Pty Limited, the mining and civil
contracting arm of West Australian construction group
BGC Limited.
From 2003, Mr Comb was Managing Director of Jabiru
Metals Limited, taking the Jaguar Copper/Zinc Project
from discovery
feasibility, construction
to operations. Jabiru Metals was taken over by
Independence Group Limited for A$532 million in 2011.
through
Mr Kairaitis has a strong exploration track record,
leading the geological field team to the discovery of
the Tomingley Gold deposit in NSW in 2001 and the
McPhillamy’s Gold Deposit in 2006.
He is currently Chairman of Finders Resources Limited
and a Director of Ironbark Zinc Limited, and was
Chairman of Zenith Minerals Limited from 2 March
2007 until 11 June 2013.
He graduated with a Bachelor of Applied Science
(Geology) with first class Honours and University Medal
in 1992 from the University of Technology, Sydney. He
is also a member of the Australian Institute of Mining
and Metallurgy.
Dr Wenxiang Gao
Dr Gao has over 30 years’ experience as a senior mining
engineer in China. He graduated as a Master of Mining
Engineering from the Mining Academy of Kunming
18
YTC RESOURCES LIMITED ANNUAL REPORT2013 and University of Science and Technology. He earned
his Doctor Degree in the School of Resources & Safety
Engineering of South Central University, China in June
2009.
Dr Gao commenced work with Yunnan Tin Group in
1984 and has held a number of senior roles before
becoming its General Manager.
Dr Gao is currently Acting Chairman of Yunnan Tin
Co., Limited (Shenzhen Stock Exchange), appointed
21 October 2006, and was a Company Director of
China Yunnan Tin Minerals Group Company Limited
(Hong Kong Stock Exchange), from 16 May 2009 to 26
November 2010.
Mr Richard Hill - Resigned 11 July 2012
Mr Richard Hill has over 20 years’ experience in the
resource industry as both a solicitor and a geologist. He
initially worked for the law firm Clayton Utz practising
in commercial, corporate and resources law and
litigation.
Over the past 16 years, Mr Hill has worked as a geologist
for several major and mid cap Australian mining
companies and more recently has founded a series of
successful ASX-listed mining companies. Mr Hill has a
diversity of practical geological experience as a mine
based and exploration geologist across a range of
commodities and locations. In his commercial and legal
roles, he has been involved in project generation and
evaluation, acquisition and joint venture negotiation,
mining law and land access issues as well as local and
international marketing and fund raising.
Mr Hill’s professional associations include membership
of the Australian Institute of Mining and Metallurgy
and The Financial Services Institute of Australia. Mr
Hill’s qualifications are B.Juris, LLB., B.Sc. (Geology)
(First Class Honours), ASIA.
Mr Hill is currently a Director of Centaurus Resources
Limited (Australian Stock Exchange), appointed 11
October 2007.
Mr Michael Menzies - Appointed 26 March 2013
Mr Menzies has more than 35 years’ experience in the
mining industry and in a variety of operational and
management roles covering open cut and underground
mining and processing operations in each of base
metals, gold and coal.
Mr Menzies has been retained by Glencore in a
number of capacities since 2010, including conducting
operation reviews and mining project evaluation work,
primarily in the base metals sector.
Mr Menzies has held no other
directorships in the past three years.
listed company
Mr Mark Milazzo – Appointed 6 August 2012
Mr Milazzo is a mining engineer with over 30 years’
experience in the development and management of
mines and mineral processing plants across a range of
commodities in Australia and overseas. This includes
both underground and surface operations, and covers
a wide range of mining applications, from small scale
selective to mechanised bulk extraction methods. He has
been involved in a number of new mine development
and mine expansion projects.
19
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Report
Past senior roles include General Manager of the
Olympic Dam Mine and Kambalda Nickel Operations
with WMC Resources, and General Manager with
mining contractor HWE Mining. Mr Milazzo is a Fellow
of the Australasian Institute of Mining and Metallurgy.
He is currently a Director of Red 5 Limited and was a
Director of Cortona Resources Limited from 23 May
2011 until 9 January 2013.
Ms Christine Ng
Ms Christine Ng is an Executive Director of China
Yunnan Tin Minerals Group Co. Limited, which is a
major shareholder of YTC Resources Limited. Ms Ng’s
role with China Yunnan Tin Minerals Group includes
liaisons and analysis of proposals and business plans,
formulation and implementation of business strategies,
feasibility studies, presentations and meetings with
investors.
Tin Minerals Group (Hong Kong Stock Exchange),
appointed 31 August 2007.
Mr Stephen Woodham - Resigned 6 August 2012
Mr Woodham has over 19 years’ experience in the
mining and exploration industry in Western Australia
and New South Wales specialising in field logistics
and support and land access in rural and remote
environments. He also has a successful track record
investment and
of tenement acquisition, mining
commercial and cross-cultural negotiation.
Mr Woodham is currently a Director of Tellus Resources
Limited (Australian Stock Exchange), appointed 30
January 2012, and was a Company Director of Centaurus
Resources Limited (Australian Stock Exchange), from 11
October 2007 to 8 January 2010.
Mr Yong Chen – Alternate for Ms Christine Ng &
Alternate for Mr Robin Chambers on 13 June 2013
Ms Ng has a Bachelor of Economics from the University
of Sydney and is fluent in English and Chinese.
Mr Chen is an accountant with more than 20 years’
experience in both Australia and China.
Ms Ng is currently a Company Director of China Yunnan
Mr Chen is a Director & CFO of Yunnan Tin Australia
20
YTC RESOURCES LIMITED ANNUAL REPORT2013 Investment Holding Pty Limited, a subsidiary of Yunnan
Tin Group Limited based in China which is the largest
tin producer in the world.
He has worked in various accounting roles including 9
years as the GST & Investment Accountant with Sydney
Church of England Grammar School (Shore School) in
North Sydney.
Mr Chen has a Bachelor of Economics from the
Shanghai University of Finance & Economics and a
Master of Business in Accounting and Finance from the
University of Technology, Sydney.
Mr Richard Willson – Company Secretary & Chief
Financial Officer, Alternate for Mr Richard Hill
on 4 July 2012, Alternate for Mr Tony Wehby 22
September 2012 to 22 October 2012, Alternate for
Mr Gary Comb from 20 November 2012, Alternate
for Mr Mark Milazzo from 8 March 2013 & Alternate
for Mr Michael Menzies on 31st July 2013.
Mr Willson is an accountant with more than 19 years’
experience in public practice and in various financial
management and company secretarial roles within the
resources and agricultural sectors for both publicly
listed and private companies.
Mr Willson has a Bachelor of Accounting from the
University of South Australia, is a fellow of CPA
Australia, and a Fellow of the Australian Institute of
Company Directors. Richard is a founding member of
the AICD Tomorrows Director Committee.
In addition to his role as Chief Financial Officer and
Company Secretary with YTC Resources Limited, Mr
Willson is a Non-Executive Director of the ASX listed
companies Tellus Resources Limited, and AusNiCo
Limited and a Non-Executive Director and Company
Secretary of the not for profit Unity Housing Company.
Dr Guoqing Zhang - Alternate for Dr Wenxiang
Gao
Dr Zhang was previously Deputy General Manager of
the Sino-Platinum Metal Company Limited, which is a
Shanghai listed subsidiary company of the Yunnan Tin
Group. Dr. Zhang is based in Australia and is a Director
of Australian companies controlled by the Yunnan Tin
Group.
Dr Zhang has extensive experience in research and
development of metal alloys and has received a number
of Chinese national awards. Dr. Zhang has a B.Sc (Hon)
degree and Ph.D. in Material Science.
Dr Zhang is currently a Director of China Yunnan Tin
Minerals Group Company Limited (Hong Kong Stock
Exchange), appointed 26 November 2010.
Directors’ Interests in the shares and options of the
Company
At the date of this report the interests of the Directors in
the shares and other equity securities of the Company
were:
Directors
Mr Anthony Wehby
Mr Rimas Kairaitis
Mr Robin Chambers
Mr Gary Comb
Dr Wenxiang Gao
Mr Michael Menzies
Mr Mark Milazzo
Ms Christine Ng
Mr Yong Chen
Mr Richard Willson
Dr Guoqing Zhang
Ordinary Shares
Options over
Ordinary Shares
Performance Rights
745,000
4,468,544
860,003
250,000
510,000
-
-
-
-
20,000
-
600,000
600,000
500,000
500,000
500,000
-
500,000
500,000
-
100,000
-
-
250,000
-
-
-
-
-
-
-
50,000
-
21
YTC RESOURCES LIMITED ANNUAL REPORT2013
Financial Report
DIVIDENDS
No dividend was paid or declared by the Company
in the period since the end of the previous financial
year, and up to the date of this report. The Directors
do not recommend that any amount be paid by way
of dividend for the financial year ended 30 June 2013.
CORPORATE STRUCTURE
YTC Resources Limited is a company limited by shares
that is incorporated and domiciled in Australia.
YTC Resources has four wholly owned subsidiaries,
Stannum Pty Ltd (incorporated 15 September 2007),
Defiance Resources Pty Ltd (incorporated 15 May 2007),
Hera Resources Pty Ltd (incorporated 20 August 2009)
and Nymagee Resources Pty Ltd (incorporated 7
November 2011).
NATURE OF OPERATIONS AND PRINCIPAL
ACTIVITIES
During the financial year, the Group’s principal activity
was mineral exploration and development. At the date
of this report the Group holds interests in gold, base
metals and tin projects in New South Wales.
REVIEW AND RESULTS OF
OPERATIONS
HERA – NYMAGEE PROJECT
Company activities for the year were again dominated
by activity on the Hera – Nymagee project. Activities
are summarised below:
Hera Project Permitting
YTC received Project Approval for the Hera Project from
the NSW Department of Planning and Infrastructure
(DP&I) under Part 3A of the NSW EP&A Act on 1 August
2012.
Following the key Part 3A Project Approval, YTC was
granted the Hera Mining Lease (ML 1686) on 16 May
2013, replacing a pre-existing Part 5 Exploration
Decline Approval that was in place when YTC acquired
the Hera Project.
Hera – Nymagee Project Financing
On 22 November 2012, YTC announced a A$158
million funding package secured under a binding term
sheet with Glencore International AG to develop the
Hera – Nymagee project. The funding is structured as
A$155 million in debt and converting note facilities,
in addition to the subscription by Glencore for $2.95
million of YTC shares at a 25% premium to YTC’s 30 day
average share price at 20 November 2012.
On 26 March 2013, following receipt of Shareholder
approval, YTC Resources Limited formally completed
the A$158 million funding package.
On completion:
• YTC issued 9.39 million shares in YTC at 31.38 cents
per share to Glencore Australia, representing a 25%
premium to YTC’s share price at the time of signing
the transaction term sheet.
• YTC commenced drawdown of facilities A & E as part
of the A$155 million in debt and converting note
facilities.
• Mr Mike Menzies was appointed to the YTC Board as
a nominee of Glencore.
Commencement of Full Scale Construction at Hera
Following financial completion of the project finance
facilities in March 2013, YTC moved to full scale
construction at the Hera Project.
Activities completed to 30 June 2013 included:
• Execution of Underground Mining Contract with
Pybar Mining Services.
• Establishment of the Hera portal and installation of
underground fan.
• Hera underground development advanced to 912m.
• Execution of Camp Accommodation Construction
Contract with Ausco Modular and installation of first
set of camp bunkhouses.
• Finalisation of Scope of Works and EPC Plant
Construction Contract with Gekko Systems.
• Installation of concrete batch plant.
• Commencement of site works for process plant.
Hera Exploration
Hera exploration drilling during the year focused on
targeting down hole EM (DHEM) conductor targets
to the north and south of the Hera deposit. Strong
drilling results have extended the size of the Hera
deposit in both directions.
Highlight intersections to the south of Hera include:
• HRD040: 14m @ 2.40g/t Au, 22g/t Ag & 6.6%
Pb+Zn from 628m, including
6m @ 4.54g/t Au, 15g/t Ag & 5.3% Pb + Zn
from 628m
22
YTC RESOURCES LIMITED ANNUAL REPORT2013 Highlight intersections to the north of Hera include:
• NMD075: 6m @ 0.5g/t Au, 149g/t Ag, 5% Pb
• HRD042: 11m @ 279g/t Ag, 2.2% Pb, 4.7% Zn
and 0.16g/t Au from 382m, including
7m @ 343g/t Ag, 3.0% Pb, 6.7% Zn and 0.21g/t
Au from 382m
and 11.6% Zn from 512m
• NMD078: 9m @ 1.0g/t Au, 25g/t Ag, 0.8% Cu,
0.5% Pb and 0.9% Zn from 518m, and
• NMD078: 2m @ 90g/t Ag, 6.3% Pb and 12.1%
• HRD042W1: 11m @ 107g/t Ag, 7.2% Pb, 12.3%
Zn from 539m
Zn and 0.15g/t Au from 324m
• HRD042W2: 4.75m @ 0.34g/t Au, 359g/t Ag,
10.9% Pb and 22.2% Zn from 350.78m, and
1.90m @ 0.89g/t Au, 601g/t Ag from 364m
Exploration also included the identification of the
Federation prospect, located approximately 12km south
of Hera. The Federation prospect is a strong gravity
anomaly with coincident gold-lead geochemistry. Four
RC holes drilled to test the anomaly returned broad,
low grade gold-lead-zinc results.
Nymagee Exploration
Nymagee exploration focused on Nymagee North,
approximately 500m north of the existing Nymagee
Drilling of moderate strength DHEM
Resource.
conductors produced encouraging results including:
• NMD075: 18m @ 1g/t Au, 23g/t Ag, 0.9% Cu,
0.6% Pb and 1.3% Zn including
1m @ 11.3g/t Au, 26g/t Ag and 1.8% Cu from
432m
The completion of a further downhole EM (DHEM)
survey at Nymagee North identified a new, high priority
conductor target to the north of all previous drilling.
The new conductor target has an interpreted strong
conductivity of 50-60ms, which is consistent with the
strength of the DHEM response from the Nymagee
Main Lode.
DORADILLA PROJECT
YTC reached agreement with Straits Resources Limited
(ASX: SRQ) to acquire 100% of the Doradilla Project (EL
6258) in north-western NSW. Under the agreement
YTC will issue Straits with $250,000 worth of YTC
fully paid ordinary shares at a deemed issue price of
$0.286 per share. At 30 June 2013, YTC was awaiting
NSW government approvals as a condition precedent
to completion.
23
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Report
Large Scale Tin Mineralisation Confirmed at Doradilla
YTC completed an aircore drilling programme to test
the oxide zone above the Doradilla tin deposit. Drilling
confirmed strong results from shallow holes over a
1.8km strike length with best results including:
• DRAC009: 10m @ 1.09% Sn from 80m
• DRAC016: 14m @ 0.44% Sn from 30m
CORPORATE
As a major shareholder of Taronga Mines Limited, YTC
supported the merger of Taronga Mines Limited with
AusNiCo (ASX:ANW). YTC now holds approximately
16% of AusNiCo’s ordinary shares, and 27.5 million
unlisted options in AusNiCo.
Competent Persons Statement – Nymagee & Hera
Resource Estimate
The Resource Estimation for both Hera and Nymagee
deposits has been completed by Mr Dean Fredericksen
the Chief Operating Officer of YTC Resources Limited
who is a Member of the Australasian Institute of
Mining and Metallurgy. Mr Dean Fredericksen 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 2004 Edition
of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves.’ Mr
Fredericksen consents to the inclusion in this report of
the matters based on his information in the form and
context in which it appears.
Competent Persons Statement – Exploration
Results
The information in this report that relates to Exploration
Results is based on information compiled by Mr
Rimas Kairaitis, who is a Member of the Australasian
Institute of Mining and Metallurgy. Mr Kairaitis 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 2004 Edition
of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves.’ Mr
Kairaitis consents to the inclusion in this report of
the matters based on his information in the form and
context in which it appears.
Competent Persons Statement – Hera Ore Reserve
The Information in this report relating to Ore Reserves
is based on work undertaken by Mr Michael Leak of
Optiro Pty Ltd under supervision of Mr Sean Pearce.
This report has been compiled by Sean Pearce, who is
a Member of the Australasian Institute of Mining and
Metallurgy. Sean Pearce 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 2004 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources
and Ore Reserves.’ Mr Pearce consents to the inclusion
in this report of the matters based on his information
in the form and context in which it appears.
24
YTC RESOURCES LIMITED ANNUAL REPORT2013 SIGNIFICANT CHANGES IN THE STATE OF
AFFAIRS
increase
Total Group equity increased by $4,006,720. The
movement was mainly due to the
in
contributed equity of $3,105,964, with $2,946,582
of shares being issued to Glencore during the year. A
$155 million project financing facility was secured with
Glencore, with $35 million drawn at year end. A profit
of $535,572 was recorded for the financial year, largely
due to revaluation of Gold Put Options purchased
during the year (revaluation gain of $4,674,619).
Deferred Exploration and Evaluation Assets decreased
by $29,459,834 (after transfer of $37,355,915 to mine
properties). Mine properties increased by $54,199,920
(after transfer of $37,355,915 from exploration &
evaluation assets). The estimated royalty payable on
gravity gold production from the Hera deposit was
reduced by $733,088 (increase in provision $266,912,
offset by payment of $1,000,000 to amend the terms
of the agreement).
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
The Directors are not aware of any matter or
circumstance that has arisen since the end of the
year to the date of this report which may significantly
impact on the state of affairs of the Company.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
OF OPERATIONS
The Directors have excluded from this report any
further information on the likely developments in the
operations of the Company and the expected results
of those operations in future financial years, as the
Directors believe that it would be speculative and
prejudicial to the interests of the Company.
Number of
Options
Expiry
Exercise Price
(per share)
340,000
950,000
31-Dec-14
31-Dec-14
1,850,000
29-Nov-15
1,850,000
29-Nov-15
4,990,000
$0.40
$0.45
$0.35
$0.45
No option holder has any right under the options to
participate in any other share issue of the Company or
any other entity.
(ii) Shares issued as a result of the exercise of options
During the year no unlisted options were exercised.
(iii) Expiry of options
During the year 1,625,000 unlisted options expired.
PERFORMANCE RIGHTS
As at the date of this report, there were 2,510,000 un-
issued ordinary shares subject to Performance Rights.
The Performance Rights are unlisted and have terms as
set out below.
Number of
Performance
Rights
Expiry
Performance Hurdle
840,000
15-Mar-16
1,670,000
18-Jun-16
5 Day YTC VWAP of
80 cents per share
Various share price
and operational
performance
measures
ENVIRONMENTAL REGULATION AND
PERFORMANCE
2,510,000
The Group carries out operations in New South Wales
that are subject to environmental regulations under
both Commonwealth and State legislation in relation
to its exploration activities. The Group has formal
procedures in place to ensure regulations are adhered
to. During the financial year there has been no
significant breach of these regulations.
SHARE OPTIONS
(i) Unissued shares under option
As at the date of this report, there were 4,990,000 un-
issued ordinary shares under options. The options are
unlisted and have various terms as set out below.
Refer to the remuneration report for further details.
No Performance Right Holder has any right under the
Performance Right to participate in any other share
issue of the Company or any other entity.
There have been no shares issued as a result of the
exercise of Performance Rights.
MEETINGS OF DIRECTORS
During the financial year, in addition to regular Board
discussions, the number of meetings of Directors
attended during the year by each director and the
number of meetings held was as follows (see next page):
25
YTC RESOURCES LIMITED ANNUAL REPORT2013 YTC RESOURCES LIMITED ANNUAL REPORT
20
13 Financial Report
Board Meetings
Name
Mr Anthony Wehby
Mr Rimas Kairaitis
Mr Robin Chambers
Mr Gary Comb
Dr Wenxiang Gao
Mr Richard Hill
Mr Michael Menzies
Mr Mark Milazzo
Ms Christine Ng
Mr Stephen Woodham
Mr Yong Chen – as Alternate
Mr Richard Willson – as Alternate
Dr Guoqing Zhang – as Alternate
Board Committee Meetings
Attended
Eligible
12
12
10
12
2
0
2
9
6
1
6
3
8
12
12
12
12
12
1
2
11
12
1
6
3
8
Name
Audit Committee
Finance Committee
Nomination
Committee
Remuneration
Committee
Attended
Eligible
Attended
Eligible
Attended
Eligible
Attended
Eligible
Mr Anthony Wehby
Mr Rimas Kairaitis
Mr Robin Chambers
Mr Gary Comb
Dr Wenxiang Gao
Mr Richard Hill
Mr Michael Menzies
Mr Mark Milazzo
Ms Christine Ng
Mr Stephen
Woodham
Mr Yong Chen – as
Alternate
Mr Richard Willson
– as Alternate
Dr Guoqing Zhang
– as Alternate
2
2
-
1
-
-
-
-
1
-
-
-
-
2
2
-
1
-
-
-
-
1
-
-
-
-
13
13
-
12
-
-
-
-
-
-
-
-
-
13
13
-
13
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
-
1
-
-
-
-
1
-
-
-
-
-
1
-
1
-
-
-
-
1
-
-
-
-
-
Attended – Number of Board/Board Committee Meetings attended by each Director/Alternate Director
Eligible - Number of Board/Board Committee Meetings held which were eligible to be attended by each Director/Alternate Director
26
YTC RESOURCES LIMITED ANNUAL REPORT2013 EMPLOYEES
The Company had 20 employees at 30 June 2013 (2012:
18 employees).
Of the 20 employees at 30 June 2013, 9 (45%) are
female. None of the senior executives is female. The
Company’s Board has 1 (12.5%) female Director.
purposes of this report, key management personnel
(KMP) of the Group are defined as those persons having
authority and responsibility for planning, directing and
controlling the major activities of the Company and
the Group, directly or indirectly, including any Director
(whether executive or otherwise) of the Company, and
includes key management personnel.
INSURANCE OF DIRECTORS AND OFFICERS
Remuneration policy and committee
The Company paid insurance premiums in respect of
Directors’ and Officers’ Liability Insurance for current
officers of the Company, including officers of the
Company’s controlled entities. The liabilities insured
are damages and legal costs that may be incurred in
defending civil or criminal proceedings that may be
brought against the Officers in their capacity as officers
of entities in the Group and related joint venture
companies. The total amount of insurance premiums
paid has not been disclosed for confidentiality reasons.
REMUNERATION REPORT (AUDITED)
This remuneration report outlines the director and
executive remuneration arrangements of the Company
and the Group in accordance with the requirements of
the Corporations Act 2001 and its Regulations. For the
As part of
its Corporate Governance Policies
and Procedures, the Board has adopted a formal
Remuneration Committee Charter and has established
a Remuneration Committee.
The Remuneration Committee
is responsible for
determining and reviewing compensation arrangements
for the directors and executives. The committee
assesses the appropriateness of the nature and amount
of emoluments of such officers on a periodic basis by
reference to relevant employment market conditions
with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high
quality board and executive team. At the committee’s
discretion the nature and amount of executive and
director’s emoluments may be linked to the Company’s
financial and operational performance.
DETAILS OF DIRECTORS AND KEY MANAGEMENT PERSONNEL
Directors
Position
Mr Anthony Wehby
Mr Rimas Kairaitis
Mr Robin Chambers
Mr Gary Comb
Dr Wenxiang Gao
Mr Richard Hill
Mr Michael Menzies
Mr Mark Milazzo
Ms Christine Ng
Mr Stephen Woodham
Mr Yong Chen
Independent Non-Executive Director
Independent Non-Executive Chairman
Managing Director
Non-Executive Director
Independent Non-Executive Director
Non-Executive Director
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Independent Non-Executive Director
Non-Executive Director
Non-Executive Director
Alternate Director
Mr Richard Willson
Alternate Director
Dr Guoqing Zhang
Executives
Mr Dean Fredericksen
Mr Sean Pearce
Mr Richard Willson
Alternate Director
Position
Chief Operating Officer
General Manager – Hera Project
Chief Financial Officer & Company Secretary
* Mr Kairaitis was also a Director from 24 March 2004 - 27 March 2007.
Appointed
14-Sep-06
13-Dec-11
12-Jun-08*
27-Mar-07
4-Jul-2012
27-Mar-07
25-Feb-08
28-Apr-06
26-Mar-2013
6-Aug-2012
12-Jun-08
24-Mar-04
5-Dec-11
4-Jul-12
22-Sep-12
20-Nov-12
24-Nov-11
Appointed
1-Mar-2011
1-Mar-2011
5-Feb-2010
Resigned
-
-
-
-
-
-
13-Dec-11
11-Jul-12
-
-
-
6-Aug-12
-
4-Jul-12
22-Oct-12
-
-
Resigned
-
-
-
27
YTC RESOURCES LIMITED ANNUAL REPORT2013 YTC RESOURCES LIMITED ANNUAL REPORT
20
13 Financial Report
Remuneration of directors and key management personnel
Short term
Post
employment
Share based
payment
Directors
Fees
Salary
and Fees
Non-
Monetary
Super-
annuation
Options/
Performance
Rights
Total
Remuneration
consisting of
options/perfo-
rmance rights
$
$
$
$
$
$
2013 - Directors
Mr Anthony Wehby
60,000
27,500
-
Mr Rimas Kairaitis
Mr Robin Chambers
Mr Gary Comb
Dr Wenxiang Gao
Mr Richard Hill
Mr Mike Menzies
Mr Mark Milazzo
Ms Christine Ng
Mr Stephen Woodham
2013 - Executives
Mr Dean Fredericksen
Mr Sean Pearce
Mr Richard Willson
Total 2013
2012 - Directors
Mr Yong Chen
Dr Wenxiang Gao
Mr Richard Hill
Ms Christine Ng
Mr Stephen Woodham
Dr Guoqing Zhang
2012 - Executives
Mr Dean Fredericksen
Mr Sean Pearce
Mr Richard Willson
-
285,000
26,691
50,000
49,692
54,500
1,507
13,322
45,171
54,500
5,068
-
32,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
272,936
258,482
230,161
19,474
56,992
-
-
11,250
59,359
50,000
54,500
50,000
19,212
-
36,840
-
75,200
-
-
-
-
-
-
-
-
-
-
-
270,833
259,562
243,750
19,474
63,245
-
Mr Anthony Wehby
57,771
15,153
-
Mr Rimas Kairaitis
-
308,750
24,679
Mr Robin Chambers
50,000
-
5,400
25,650
4,500
7,397
-
136
-
4,065
-
456
24,564
26,640
20,714
45,238
45,238
37,698
37,698
37,698
-
-
37,698
37,698
-
138,138
382,579
92,198
127,287
92,198
1,643
13,322
86,934
92,198
5,524
19,295
18,428
336,269
360,542
-
250,875
5,199
27,788
4,500
-
-
4,500
-
4,500
1,729
24,375
27,863
21,938
-
78,123
102,500
463,717
-
-
-
-
-
-
-
32,800
90,033
20,500
54,500
11,250
59,359
91,340
54,500
129,700
20,941
347,482
440,703
286,188
333,760
1,106,579
103,157
119,522
316,689
1,979 ,707
Total 2012
340,842
1,221,338
107,398
122,392
245,833
2,037,803
28
%
33%
12%
41%
30%
41%
-
-
43%
41%
-
6%
5%
-
16%
-
22%
-
-
-
-
-
-
-
9%
20%
7%
12%
YTC RESOURCES LIMITED ANNUAL REPORT2013
Shareholdings of directors and key management personnel (consolidated)
Balance at
the start of
the year
Granted during
the year as
compensation
On exercise
of share
options
Other changes
during the year
Balance at
the end of
the year
745,000
4,438,544
860,003
-
510,000
-
-
-
-
-
-
-
-
6,553,547
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
745,000
30,000 (a)
4,468,544
-
250,000 (a)
-
-
-
-
-
-
-
-
860,003
250,000
510,000
-
-
-
-
-
-
-
20,000 (a)
20,000
300,000
6,853,547
Balance at
the start of
the year
Granted during
the year as
compensation
On exercise
of share
options
Other changes
during the year
Balance at
the end of
the year
2013
Directors
Mr Anthony Wehby
Mr Rimas Kairaitis
Mr Robin Chambers
Mr Gary Comb
Dr Wenxiang Gao
Mr Mike Menzies
Mr Mark Milazzo
Ms Christine Ng
Mr Yong Chen
Dr Guoqing Zhang
Executives
Mr Dean Fredericksen
Mr Sean Pearce
Mr Richard Willson
2012
Directors
Mr Anthony Wehby
Mr Rimas Kairaitis
Mr Robin Chambers
Dr Wenxiang Gao
Mr Richard Hill
Ms Christine Ng
245,000
3,438,544
360,003
10,000
1,158,821
-
Mr Stephen Woodham
3,520,317
Mr Yong Chen
Dr Guoqing Zhang
Executives
Mr Dean Fredericksen
Mr Sean Pearce
Mr Richard Willson
-
-
-
-
-
8,732,685
(a) Acquired or disposed via on, or off market transaction.
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
1,000,000
500,000
500,000
500,000
-
-
-
-
-
745,000
4,438,544
860,003
510,000
80,167 (a)
1,738,988
-
-
500,000
(3,520,317) (a)
500,000
-
-
-
-
160,000
(160,000) (a)
-
-
-
-
-
-
-
-
-
3,660,000
(3,600,150)
8,792,535
29
YTC RESOURCES LIMITED ANNUAL REPORT2013
Financial Report
Option and Performance Right holdings of directors
and key management personnel (consolidated)
The numbers of options over ordinary shares in the
Company and performance rights held during the
financial year by each director, executive and key
management personnel of YTC Resources Limited
and specified executive of the Group, including their
personally related parties, are set out below.
2013
Directors
Balance at
the start of
the year
Granted during
the year as
compensation
Exercised
during the year
Other changes
during the year
Balance at
the end of
the year
Mr Anthony Wehby
-
Mr Rimas Kairaitis
250,000
Mr Robin Chambers
Mr Gary Comb
Dr Wenxiang Gao
Mr Mike Menzies
Mr Mark Milazzo
Ms Christine Ng
Mr Yong Chen
Dr Guoqing Zhang
Executives
-
-
-
-
-
-
-
-
Mr Dean Fredericksen
Mr Sean Pearce
Mr Richard Willson
420,000
550,000
650,000
600,000
600,000
500,000
500,000
500,000
-
500,000
500,000
-
-
330,000
270,000
-
1,870,000
4,300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(500,000) (a)
600,000
850,000
500,000
500,000
500,000
-
500,000
500,000
-
-
750,000
820,000
150,000
(500,000)
5,670,000
Balance at
the start of
the year
Granted during
the year as
compensation
Exercised
during the year
Other changes
during the year
2012
Directors
Mr Anthony Wehby
Mr Rimas Kairaitis
Mr Robin Chambers
Dr Wenxiang Gao
Mr Richard Hill
Ms Christine Ng
500,000
1,000,000
500,000
500,000
500,000
-
Mr Stephen Woodham
500,000
Mr Yong Chen
Dr Guoqing Zhang
Executives
Mr Dean Fredericksen
Mr Sean Pearce
Mr Richard Willson
-
-
500,000
500,000
600,000
-
250,000
-
-
-
-
-
-
-
80,000
50,000
50,000
500,000
1,000,000
500,000
500,000
500,000
-
500,000
-
-
160,000
-
-
5,100,000
430,000
3,660,000
(a) Employee Options expired
30
Balance at
the end of
the year
-
250,000
-
-
-
-
-
-
-
420,000
550,000
650,000
1,870,000
-
-
-
-
-
-
-
-
-
-
-
-
-
YTC RESOURCES LIMITED ANNUAL REPORT2013
Compensation options: granted and vested during the
year (consolidated)
• Be exercisable at 35 cents each on or before the date
which is three years from their date of issue;
At the 2012 Annual General Meeting, the Company’s
Shareholders approved the issue of 3,700,000 options
to the Company’s Directors (or their nominee) on the
terms and conditions set out below.
1,850,000 Class A Options which shall:
• Vest on that date which is 12 months from their date
of issue so long as the holder is a Director at the time
of vesting;
1,850,000 Class B Options which shall:
• Vest on that date which is 24 months from their date
of issue so long as the holder is a Director at the time
of vesting;
• Be exercisable at 45 cents each on or before the date
which is three years from their date of issue
A summary of the Director Options issued is detailed in
the following table:
Related Party
Mr Anthony Wehby
Mr Rimas Kairaitis
Mr Robin Chambers
Mr Gary Comb
Dr Wenxiang Gao
Mr Mark Milazzo
Ms Christine Ng
TOTAL
Total Director
Options
Class A Director
Options
Class B Director Options
600,000
600,000
500,000
500,000
500,000
500,000
500,000
300,000
300,000
250,000
250,000
250,000
250,000
250,000
3,700,000
1,850,000
300,000
300,000
250,000
250,000
250,000
250,000
250,000
1,850,000
During the year, 600,000 Performance Rights were
issued to key management personnel, Dean Fredericksen
330,000 and Sean Pearce 270,000. Each Performance
Right entitles the holder, upon vesting, to one fully paid
ordinary share at no cost. The Performance Rights vest
upon certain share price and operation performance
hurdles being met. Please refer to Note 25(g) of the
Financial Statements for more details on the vesting
conditions.
The fair value of the equity share options and
Performance Rights at grant date is determined using
a Black-Scholes pricing model and Trinomial Barrier
Options model respectively that takes into account
the terms and conditions upon which the options
and performance rights were granted. The following
assumptions were used:
Class A Director
Options
Class B Director
Options
Class A
Performance
Rights
Class B
Performance
Rights
Grant Date
29 Nov 2012
29 Nov 2012
12 Apr 2013
12 Apr 2013
No. of options/performance rights
1,850,000
1,850,000
595,000
1,075,000
Share price at date of grant
Exercise price
Vesting date
Expected price volatility
Risk free rate
Expected life
Expected dividend yield
Fair value
$0.37
$0.35
$0.37
$0.45
$0.24
$0.00
$0.24
$0.00
29 Nov 2013
29 Nov 2014
19 Jun 2016
31 Dec 2013
69%
3.00%
3 years
0.00%
$0.182
69%
3.00%
3 years
0.00%
$0.153
68%
2.60%
3 years
0.00%
$0.20
68%
2.60%
0.72 years
0.00%
$0.24
31
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Report
No other options or performance rights were granted
or vested in relation to key management personnel
during the financial year ended 30 June 2013.
DIRECTORS AND EXECUTIVES
A summary of the key terms of remuneration
agreements with Directors and executives are outlined
below:
EXECUTIVE DIRECTORS AND EXECUTIVES
The Managing Director, Mr Rimas Kairaitis, is employed
under an executive employment agreement. The
agreement may be terminated by Mr Kairaitis at any
time by giving three months’ notice in writing, or such
shorter period of notice as may be agreed. The Company
may terminate the agreement by the Board giving
three months written notice and making a payment
equivalent to nine months remuneration or by paying
an amount equivalent to twelve months remuneration
or by giving one months’ notice for gross misconduct
or a serious persistent beach of the employment
agreement or without notice in case of Mr Kairaitis
being convicted of a major criminal offence which
brings the Company into lasting disrepute, at which
time Mr Kairaitis would be entitled to that portion of
remuneration arising up to the date of termination. Mr
Kairaitis’ annual salary is $285,000 plus superannuation
for services as the Managing Director and Executive
Director. Mr Kairaitis is entitled to the private use of a
Company motor vehicle.
The Chief Financial Officer and Company Secretary,
Mr Richard Willson, is employed under an executive
employment agreement. The agreement may be
32
YTC RESOURCES LIMITED ANNUAL REPORT2013 terminated by Mr Willson at any time by giving three
months’ notice in writing, or such shorter period of
notice as may be agreed. The Company may terminate
the agreement by giving three months written notice
and making a payment equivalent to nine months
remuneration or by paying an amount equivalent to
twelve months remuneration or by giving one months’
notice for gross misconduct or a serious persistent
beach of the employment agreement or without notice
in case of Mr Willson being convicted of a major
criminal offence which brings the Company into lasting
disrepute, at which time Mr Willson would be entitled
to that portion of remuneration arising up to the date
of termination. Mr Willson’s annual salary is $256,500
inclusive of superannuation for services as the Chief
Financial Officer and Company Secretary.
The Chief Operating Officer, Mr Dean Fredericksen, is
employed under an executive employment agreement.
The agreement may be terminated by Mr Fredericksen
at any time by giving three months’ notice in writing,
or such shorter period of notice as may be agreed.
The Company may terminate the agreement by giving
three months written notice and making a payment
equivalent to nine months remuneration or by paying
an amount equivalent to twelve months remuneration
or by giving one months’ notice for gross misconduct
or a serious persistent beach of the employment
agreement or without notice in case of Mr Fredericksen
being convicted of a major criminal offence which
brings the Company into lasting disrepute, at which
time Mr Fredericksen would be entitled to that portion
of remuneration arising up to the date of termination.
Mr Fredericksen’s annual salary is $322,500 inclusive
of superannuation for services as the Chief Operations
Officer. Mr Fredericksen is entitled to five weeks annual
leave and the private use of a Company motor vehicle.
The General Manager – Hera Project, Mr Sean Pearce, is
employed under an executive employment agreement.
The agreement may be terminated by Mr Pearce at any
time by giving three months’ notice in writing, or such
shorter period of notice as may be agreed. The Company
may terminate the agreement by giving three months
written notice and making a payment equivalent to
nine months remuneration or by paying an amount
equivalent to twelve months remuneration or by giving
one months’ notice for gross misconduct or a serious
persistent beach of the employment agreement or
without notice in case of Mr Pearce being convicted
of a major criminal offence which brings the Company
into lasting disrepute, at which time Mr Pearce would
be entitled to that portion of remuneration arising up
to the date of termination. Mr Pearce’s annual salary
is $340,080 inclusive of superannuation for services
as the General Manager – Hera Project. Mr Pearce is
entitled to the private use of a Company motor vehicle.
No performance conditions are currently stipulated in
any of the executive agreements.
NON-EXECUTIVE DIRECTORS
The constitution and the ASX listing rules specify
that the aggregate remuneration of Non-Executive
Directors shall be determined from time to time by
a general meeting. The latest determination was an
aggregate remuneration excluding consulting fees of
$600,000 per year. Directors are as follows:
• Chairman $60,000 p.a. plus superannuation or
equivalent
• Directors $50,000 p.a. plus superannuation or
equivalent
CORPORATE GOVERNANCE
In recognising the need for the highest standards of
corporate behaviour and accountability, the Directors
of the Company support and have adhered to the
principles of sound corporate governance. The Board
recognises the recommendations of the Australian
Stock Exchange Corporate Governance Council, and
considers that the Company is in compliance with those
guidelines, which are of importance to the commercial
operation of a junior listed resources company. During
the financial year, shareholders continued to receive
the benefit of an efficient and cost-effective corporate
governance policy for the Company. The Company’s
Corporate Governance Statement and disclosures are
contained elsewhere in the annual report.
AUDITOR’S INDEPENDENCE AND NON-AUDIT
SERVICES
During the year the Company’s auditors did not provide
any non-audit services.
The Company has obtained an independence declaration
from its auditors, Ernst and Young, which forms part of
this report. A copy of that declaration is included at
page 78 of this report.
Signed on behalf of the Board in accordance with a
resolution of the Directors.
Mr Anthony Wehby
Non-Executive Chairman
3 September 2013
33
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Report
CORPORATE GOVERNANCE STATEMENT
The Board of Directors of YTC Resources Limited
is responsible for the corporate governance of
the Company. The Board guides and monitors the
business and affairs of the Company on behalf of the
shareholders by whom they are elected and to whom
they are accountable.
listing the Company established a set of
Upon
corporate governance policies and procedures. These
were revised to take into account the Australian
Stock Exchange Corporate Governance Council’s
(the Council’s) “Corporate Governance Principles
and Recommendations with 2010 Amendments”
(the Recommendations). For further information on
corporate governance policies adopted by the Company,
refer to our website: www.ytcresources.com.
This report summarises the Company’s application
of
the Corporate Governance Principles and
Recommendations.
PRINCIPLE 1 – LAY SOLID
FOUNDATIONS FOR MANAGEMENT
AND OVERSIGHT
Recommendation 1.1: Companies should establish the
functions reserved to the Board and those delegated to
Senior Executives and disclose those functions
The Board of Directors (hereinafter referred to as the
Board) is responsible for the corporate governance of
the Company. The Directors of the Company are required
to act honestly, transparently, diligently, independently,
and in the best interests of all shareholders in order to
increase shareholder value.
The Directors are responsible to the shareholders for the
performance of the Company in both the short and the
longer term and seek to balance sometimes competing
objectives in the best interests of the Company as a
whole. Their focus is to enhance the interests of
shareholders and other key stakeholders and to ensure
the Company is properly managed.
ROLE OF THE BOARD
The responsibilities of the Board include:
• Contributing to the development of and approving
the corporate strategy.
• Reviewing and approving business results, business
plans and financial plans.
• Ensuring regulatory compliance.
• Ensuring adequate risk management processes.
• Monitoring the Board composition, directors selection
and Board processes and performance
• Overseeing and monitoring:
- Organisational performance and the achievement of
the Company’s strategic goals and objectives.
- Compliance with the Company’s Code of Conduct.
• Monitoring financial performance including approval
of the annual report and half-year financial reports
and liaison with the Company’s auditors.
• Appointment and contributing to the performance
assessment of the Managing Director and Key
Management Personnel.
• Enhancing and protecting the reputation of the
Company.
• Reporting to shareholders.
ROLE OF SENIOR EXECUTIVES
The responsibilities of Senior Executives include:
• Managing organisational performance and the
achievement of the Company’s strategic goals and
objectives.
• Management of financial performance.
• Management of internal control.
Recommendation 1.2: Companies should disclose
the process for evaluating the performance of Senior
Executives
Performance of senior executives is measured against
strategic goals approved by the Board. Performance is
measured on an ongoing basis.
PRINCIPLE 2 – STRUCTURE THE
BOARD TO ADD VALUE
Details of the members of the Board, their experience,
expertise, qualifications and independent status are set
out in the Directors’ Report.
The term in office held by each Director in office at the
date of this report is as follows:
Name
Mr Anthony Wehby
Mr Rimas Kairaitis
Mr Robin Chambers
Mr Gary Comb
Dr Wenxiang Gao
Mr Michael Menzies
Mr Mark Milazzo
Ms Christine Ng
Term in office
7 years
5 years 3 months
6 years 6 months
1 year 3 months
6 years 6 months
5 months
1 year 2 Months
5 years 3 months
Recommendation 2.1: A majority of the Board should
be Independent Directors
In accordance with the definition of independence
set out in the ASX’s Principle of Good Governance,
Mr Anthony Wehby, Mr Gary Comb and Mr Mark
Milazzo are considered the only Independent Directors.
34
YTC RESOURCES LIMITED ANNUAL REPORT2013 Accordingly, a majority of the Board is not considered
independent.
The Directors have
the current structure and
composition of the Board under review and expect it
will continue to evolve.
Recommendation 2.2: The Chair should be an
Independent Director.
Mr Wehby is the Company’s Chairman, he is considered
to be independent.
Recommendation 2.3: The roles of Chair and Chief
Executive Officer should not be exercised by the same
individual
Code’ which has been endorsed by the Board and
applies to all directors and employees. The Code is
regularly reviewed to ensure it reflects the highest
standards of behaviour and professionalism and the
practices necessary to maintain confidence in the
Company’s integrity.
In summary, the Code requires that at all times all
Company personnel act with the utmost integrity,
objectivity and in compliance with the letter and the
spirit of the law and company policies. This includes
taking into account:
• Their legal obligations and the reasonable expectations
of their stakeholders.
The roles of Chair and Chief Executive Officer are not
occupied by the same individual.
• Their responsibility and accountability for reporting
and investigating reports of unethical practices.
Recommendation 2.4: The Board should establish a
Nomination Committee
The Board has formed a separate Nomination
Committee.
The main responsibility of the Committee is in assisting
the Board to:
• Assess the membership of the Board having regard to
present and future needs of the Company.
• Assess the independence of Directors.
• Propose
candidates
in
consideration of qualifications, experience and
domicile.
for Board vacancies
• Oversee Board succession.
• Evaluate Board performance.
• Ensure the mix of skills and diversity of the Board is
appropriate for the operations of the Company.
Recommendation 2.5: Companies should disclose the
process for evaluating the performance of the Board,
its Committees and Individual Directors
The Board has not adopted a formal performance
review of its members however there is open dialogue
on an ongoing basis throughout the year. The small size
of the Group and hands on management style requires
an increased level of interaction between directors and
executives throughout the year. Board members meet
amongst themselves both formally and informally. The
Board considers that the current approach that it has
adopted with regard to the review of its performance
provides the best guidance and value to the Group.
PRINCIPLE 3 – PROMOTE ETHICAL
AND RESPONSIBLE DECISION-
MAKING
Recommendation 3.1: Companies should establish a
Code of Conduct
The Company has developed a Code of Conduct ‘The
Recommendation 3.2: Companies should establish a
policy concerning diversity and disclose the policy or
a summary of that policy. The policy should include
requirements for the board to establish measurable
objectives for achieving gender diversity for the Board
to assess annually both the objectives and progress in
achieving them.
The Company has not developed a specific diversity
policy, but aims to achieve an appropriate level of
diversity across both the Board and Company. The
Company is satisfied that it has an appropriate level of
diversity throughout the Company.
Recommendation 3.3: Companies should disclose
in each annual report the measurable objectives
for achieving gender diversity set by the Board in
accordance with the diversity policy and progress
towards achieving them.
The Company has not developed specific gender
diversity objectives. The Company is satisfied that it has
an appropriate level of gender diversity throughout the
Company.
Recommendation 3.4: Companies should disclose
in each annual report the proportion of women
employees in the whole organisation, women in senior
executive positions and women on the Board.
The details of the proportion of women employed by
the Company is disclosed in the Directors Report under
the heading ‘Employees’
PRINCIPLE 4 – SAFEGUARD
INTEGRITY IN FINANCIAL REPORTING
Recommendation 4.1: The Board should establish an
Audit Committee
The Board has formally adopted an Audit Committee
Charter and has formed a separate Committee.
It is the Committee’s responsibility to ensure that an
effective internal control framework exists within the
35
YTC RESOURCES LIMITED ANNUAL REPORT2013 YTC RESOURCES LIMITED ANNUAL REPORT
20
13 Financial Report
entity. This includes both internal controls to deal with
both the effectiveness and efficiency of significant
business processes, the safeguarding of assets, the
maintenance of proper accounting records, and the
reliability of financial and non-financial information.
It is the Committee’s responsibility to establish and
maintain a framework of internal control.
Recommendation 4.2: The Audit Committee should be
structured so that it:
• Consists only of Non-Executive Directors.
• Consists of a majority of Independent Directors.
• Is chaired by an independent chair, who is not Chair
of the Board.
• Has at least three members.
The Audit Committee consists of four directors, two of
whom are independent and three are non-executive.
The Chairman of the Committee is independent.
The Chairman of the Audit Committee is also the
Chairman of the Board. He is considered to be the most
appropriate Chairman of the Committee.
The Directors consider that the current structure and
composition of the Committee is appropriate for the
size and nature of the Group.
Recommendation 4.3: The Audit Committee should
have a formal charter
The main requirements of the Audit Committee Charter
are to ensure that the Board:
• Review, assess and approve the annual report,
half-year financial report and all other financial
information published by the Company or released to
the market
• Review the effectiveness of the organisation’s internal
control environment covering:
- Effectiveness and efficiency of operations.
- Reliability of financial reporting.
- Compliance with applicable laws and regulations.
• Oversee
the effective operation of
the
risk
management framework.
• Recommend
the
removal
appointment,
and
remuneration of the external auditors, and review
the terms of their engagement, the scope and quality
of the audit and assess performance and consider
the independence and competence of the external
auditor on an ongoing basis. The Board receives
certified independence assurances from the external
auditors.
• Review and approve the level of non-audit services
provided by the external auditors and ensure it does
not adversely impact on auditor independence. The
external auditor will not provide services to the
Company where the auditor would have a mutual
or conflicting interest with the Company; be in a
36
position where they audit their own work; function
as management of the Company; or have their
independence impaired or perceived to be impaired
in any way.
• Review and monitor related party transactions and
assess their probity.
The external auditor will attend the Annual General
Meeting and be available to answer shareholder
questions about the conduct of the audit and the
preparation and content of the audit report.
PRINCIPLE 5 – MAKE TIMELY AND
BALANCED DISCLOSURE
Recommendation 5.1: Companies should establish
written policies designed to ensure compliance with
ASX Listing Rule disclosure requirements and to ensure
accountability at a senior executive level for that
compliance and disclose those policies or a summary
of those policies
role
includes
The Company Secretary and Managing Director
have been nominated as the persons responsible for
communications with the Australian Stock Exchange
(ASX). This
for
ensuring compliance with the continuous disclosure
requirements in the ASX listing rules and overseeing
and co-ordinating information disclosure to ASX. The
Board, Managing Director and Company Secretary
are responsible for disclosure to analysts, brokers and
shareholders, the media and the public.
responsibility
the
The Company has written policies and procedures
on information disclosure that focus on continuous
disclosure of any information concerning the Company
that a reasonable person would expect to have a
material effect on the price of the Company’s securities.
PRINCIPLE 6 – RESPECT THE RIGHTS
OF SHAREHOLDERS
Recommendation 6.1: Companies should design
a communications policy for promoting effective
communication with shareholders and encouraging
their participation at general meetings and disclose
their policy or a summary of that policy
The Board aims to ensure that shareholders are
informed of all major developments affecting the
Company.
Shareholders are updated on the Company’s operations
via ASX announcements “Quarterly Activities Report”
and “Quarterly Cash Flow Report” and other disclosure
information. All recent ASX announcements and
annual reports are available on the ASX website, or
alternatively, by request via email, facsimile or post.
In addition, a copy of the annual report is distributed
to all shareholders who elect to receive it, and all
YTC RESOURCES LIMITED ANNUAL REPORT2013 37
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Report
announcements
available on the Company’s website.
including the annual report are
following certifications to the Board in accordance
with Section 295A of the Corporations Act:
The Board encourages participation by shareholders at
the Annual General Meeting to ensure a high level of
accountability and to ensure that shareholders remain
informed about the Company’s performance and goals.
PRINCIPLE 7 – RECOGNISE AND
MANAGE RISK
Recommendation 7.1: Companies should establish
policies for the oversight and management of material
business risks and disclose a summary of those policies
The Board is committed to the identification and
quantification of risk throughout the Company’s
operations.
Considerable importance is placed on maintaining a
strong control environment. There is an organisational
structure with clearly drawn lines of accountability.
Adherence to the Code of Conduct is required at all
times and the Board actively promotes a culture of
quality and integrity. The Company conducts regular
high level risk assessments for its key operational risks.
Recommendation 7.2: The Board should require
implement the risk
management to design and
management and internal control system to manage
the Company’s material business risks and report to it
on whether those risks are being managed effectively.
The Board should disclose that management has
reported to it as to the effectiveness of the Company’s
management of its material business risks
It is the Board’s responsibility to ensure that an
effective internal control framework exists within the
entity. This includes both internal controls to deal with
both the effectiveness and efficiency of significant
business processes, the safeguarding of assets, the
maintenance of proper accounting records, and the
reliability of financial and non-financial information.
It is the Board’s responsibility for the establishment
and maintenance of a framework of internal control.
Regular high level risk assessments conducted by
include the adoption of mitigation
management
strategies which are reported back to the YTC Board.
Recommendation 7.3: The Board should disclose
whether it has received assurance from the Chief
Executive Officer (or equivalent) and the Chief
Financial Officer (or equivalent) that the declaration
provided in accordance with section 295A of the
Corporations Act is founded on a sound system of risk
management and internal control and that the system
is operating effectively in all material respects in
relation to financial reporting risks
The Managing Director and the Company Secretary,
namely Mr Kairaitis and Mr Willson have made the
38
• That the Company’s financial reports are complete
and present a true and fair view, in all material
respects, of the financial condition and operational
results of the Company and its consolidated entities
in accordance with all mandatory professional
reporting requirements.
• That the above statement is founded on a sound
system of internal control and risk management
which implements the policies adopted by the Board
and that the Company’s risk management and internal
control is operating effectively and efficiently in all
material respects in relation to financial reporting
risks.
PRINCIPLE 8 – REMUNERATE FAIRLY
AND RESPONSIBLY
Recommendation 8.1: The Board should establish a
Remuneration Committee
The Board has formally adopted a Remuneration
Committee Charter
separate
and
Remuneration Committee.
formed
a
Recommendation 8.2: The Remuneration Committee
should be structured so that it:
• Consists of a majority of Independent Directors
• Is chaired by an Independent Director
• Has at least three members.
The Remuneration Committee consists of three
Directors of which two are independent. The Chairman
of the Remuneration Committee is independent.
Recommendation 8.3: Companies should clearly
distinguish the structure of non-executive directors’
remuneration from that of executive directors and
senior executives
It is the Company’s objective to provide maximum
stakeholder benefit from the retention of a high quality
board and management by remunerating fairly and
appropriately with reference to relevant employment
market conditions. To assist in achieving the objective,
the Remuneration Committee may link the nature and
amount of executive and directors’ emoluments to the
Company’s financial and operational performance.
At the Remuneration Committee’s discretion the nature
and amount of executive and director’s emoluments
may be
linked to the Company’s financial and
operational performance.
The Company does not have a policy in place relating to
the executives limiting their exposure to risk in relation
to the Company’s equity instruments issued to them as
part of remuneration.
YTC RESOURCES LIMITED ANNUAL REPORT2013 For details of remuneration of directors and executives
please refer to the Directors’ Report.
There is no scheme to provide retirement benefits,
other than statutory superannuation, to non-executive
directors.
CORPORATE GOVERNANCE COMPLIANCE
During the financial year YTC Resources has complied
with each of the eight Corporate Governance Principles
and the corresponding Best Practice Recommendations,
other than in relation to the matters specified below:
Best Practice
Recommendation
Notification of Departure
Explanation of Departure
2.1
The Company does not have
a majority of
independent
directors.
The Company does not have
a Policy concerning diversity
and has not defined specific
gender diversity objectives.
3.2 & 3.3
4.2
The Audit Committee does not
consist only of non-executive
directors and it is chaired by
the Chair of the Board.
The majority of Directors consider that the current
structure and composition of the Board is not optimum
for the size and nature of operations. The Board
continues to work towards improving its composition.
The Company recognises the benefits of diversity but has
not developed a specific diversity policy nor set specific
gender diversity objectives. The Company aims to achieve
an appropriate level of diversity across both the Board
and Company. The Company is satisfied that it has an
appropriate level of diversity throughout the Company.
The Company’s Managing Director is a member of the
Audit Committee. The Chairman of the Audit Committee is
also the Chairman of the Company. The Directors consider
that the structure and composition of the Committee is
appropriate for the size and nature of the Group.
39
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Statements
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2013
Income
Management fee
Interest income
Gain on sale of tenements
Gain on sale of investments in associates
Loss on revaluation of investments
Gain on revaluation of financial assets
R&D refund
Total income
Expenses
Compliance costs
Consulting and legal costs
Legal and other costs in relation to negotiation of financing
for Hera – Nymagee project
Audit fees
Employee benefits expense
Directors fees
Promotion
Administration expense
Travel expenses
Capitalised exploration costs written off
Loss on disposal of assets
Depreciation and amortisation
Total expenses
Profit / (loss) before income tax
Income tax expense
Profit / (loss) after income tax
Other comprehensive income
Total comprehensive profit / (loss) for the period
Earnings per share for profit / (loss) attributable to the
ordinary equity holders of the parent
Basic profit / (loss) per share (cents per share)
Diluted profit / (loss) per share (cents per share)
Note
3(a)
3(a)
3(a)
3(a)
3(a)
3(a)
3(a)
3(b)
3(c)
9(a)
4
15
19
19
Consolidated
2013
$
2012
$
24,204
398,377
-
320,912
(750,200)
4,674,619
264,242
4,932,154
224,364
537,405
679,123
77,264
1,541,307
333,760
68,093
390,220
276,965
9,826
-
258,255
4,396,582
535,572
-
383,374
1,233,673
635,648
-
-
-
199,728
2,452,423
81,014
543,395
-
55,104
1,821,712
340,842
116,321
447,171
541,177
361,554
645
220,101
4,529,036
(2,076,613)
-
535,572
(2,076,613)
-
-
535,572
(2,076,613)
0.21
0.20
(0.83)
(0.83)
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
40
YTC RESOURCES LIMITED ANNUAL REPORT2013
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2013
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total current assets
Non current assets
Plant and equipment
Investments in associates
Financial assets
Deferred exploration and evaluation expenditure
Mine properties
Total non current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non current liabilities
Provisions
Borrowings
Total non current liabilities
Total liabilities
Net assets
EQUITY
Contributed equity
Reserves
Retained losses
Total equity
Note
16(b)
5
6
7
8
9(a)
9(b)
10
11
11
12
13
14
15
Consolidated
2013
$
2012
$
16,312,989
1,489,900
15,087,184
158,417
118,792
133,836
17,921,681
15,379,437
1,208,177
1,357,550
-
10,532,650
16,149,403
57,934,018
85,824,248
1,152,118
110,000
45,609,237
3,734,098
51,963,003
103,745,929
67,342,440
3,857,218
206,508
4,063,726
793,392
155,028
948,420
7,401,303
29,675,551
37,076,854
7,795,391
-
7,795,391
41,140,580
8,743,811
62,605,349
58,598,629
70,180,671
2,396,118
(9,971,440)
62,605,349
67,074,707
2,030,934
(10,507,012)
58,598,629
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
41
YTC RESOURCES LIMITED ANNUAL REPORT2013
YTC RESOURCES LIMITED ANNUAL REPORT
20
13 Financial Statements
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2013
Consolidated
Issued Share
Capital
Share Option
Performance
Rights Reserve
Accumulated
Losses
$
$
$
Total
$
Balance as at 1 July 2011
Total comprehensive profit / (loss) for
the period
Transactions with owners in their
capacity as owners
Shares issued for the period
Tax refund on share issue costs
Options and performance rights issued
during the period
1,617,401
(8,430,399)
58,899,598
-
1,186,500
175,611
-
-
-
-
413,533
(2,076,613)
(2,076,613)
-
-
-
1,186,500
175,611
413,533
Balance as at 30 June 2012
67,074,707
2,030,934
(10,507,012)
58,598,629
Balance as at 1 July 2012
67,074,707
2,030,934
(10,507,012)
58,598,629
Total comprehensive profit / (loss) for
the period
Transactions with owners in their
capacity as owners
Shares issued for the period
Costs of Share Issue
Options and performance rights issued
during the period
-
3,196,582
(90,618)
-
-
-
-
365,184
535,572
535,572
-
-
-
3,196,582
(90,618)
365,184
Balance as at 30 June 2013
70,180,671
2,396,118
(9,971,440)
62,605,349
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
42
YTC RESOURCES LIMITED ANNUAL REPORT2013 STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2013
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Research & development refund
Interest received
GST on purchases refunded from ATO
Consolidated
2013
$
2012
$
Note
93,064
362,087
(3,648,585)
(3,639,109)
264,242
538,220
1,721,718
199,728
1,437,312
-
Net cash flows used in operating activities
16 (a)
(1,031,341)
(1,639,982)
Cash flows from investing activities
Purchase of property, plant and equipment
Exploration & evaluation expenditure
Development expenditure
Purchase of gold put options and associated costs
Additional consideration to amend Hera royalty
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Borrowings
Share issue/facility establishment costs
Net cash flows from financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
(161,998)
(775,645)
(4,680,649)
(8,630,768)
(18,564,594)
(3,734,098)
(5,027,720)
(1,100,000)
-
-
(29,534,961)
(13,140,511)
2,946,582
1,086,500
35,000,000
(6,154,475)
31,792,107
-
175,611
1,262,111
1,225,805
13,518,382
15,087,184
28,605,566
Cash and cash equivalents at end of year
16 (b)
16,312,989
15,087,184
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
43
YTC RESOURCES LIMITED ANNUAL REPORT2013 YTC RESOURCES LIMITED ANNUAL REPORT
20
13 Financial Statements
1. CORPORATE INFORMATION
The financial report of YTC Resources Limited and
its subsidiaries for the year ended 30 June 2013 was
authorised for issue in accordance with a resolution of
the Directors on 3 September 2013.
YTC Resources Limited is a company limited by shares
incorporated in Australia whose shares are publicly
traded on the Australian Stock Exchange. The Company
is a for-profit entity.
YTC Resources has four 100% owned subsidiaries,
Stannum Pty Ltd (incorporated 15 September 2007),
Defiance Resources Pty Ltd (incorporated 15 May 2007),
Hera Resources Pty Ltd (incorporated 20 August 2009)
and Nymagee Resources Pty Ltd (incorporated 7
November 2011).
The nature of the operations and principal activities of
the Group are mineral exploration and development.
2A. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
The significant accounting policies that have been
adopted by YTC Resources Limited are as follows:
(a) Basis of preparation
The financial report is a general-purpose financial
report which has been prepared in accordance with
the requirements of the Corporations Act 2001,
the Australian Accounting Standards and other
the Australian
authoritative pronouncements of
Accounting Standards Board. The financial report has
been prepared on a historical cost basis, except deferred
acquisition costs which are measured at fair value.
The financial report is presented in Australian dollars.
(b) Compliance with IFRS
The financial report complies with Australian Accounting
Standards as issued by the Australian Accounting
Standards Board and International Financial Reporting
Standards as issued by the International Accounting
Standards Board.
(c) New accounting standards and interpretations
Changes in accounting policy and disclosures
The accounting policies adopted are consistent with
those of the previous financial year except as follows:
The Group has adopted the following new and
amended Australian Accounting Standards and AASB
interpretations where applicable from 1 July 2012.
• AASB 2011-9 Amendments to Australian Accounting
Standards -Presentation of Other Comprehensive
Income [AASB 1, 5, 7, 101, 112, 120, 121, 132, 133,
134, 1039 & 1049].
• AASB 2010-8 Amendments to Australian Accounting
Standards - Deferred Tax: Recovery of Underlying
Assets [AASB 112].
Where the adoption of the Standard or Interpretation is
deemed to have an impact on the financial statements
or performance of the Group, its impact is described
below:
AASB 2011-9 Amendments to Australian Accounting
Standards -Presentation of Other Comprehensive
Income [AASB 1, 5, 7, 101, 112, 120, 121, 132, 133,
134, 1039 & 1049]
This standard requires entities to group items presented
in other comprehensive income on the basis of whether
they might be reclassified subsequently to profit
or loss and those that will not. The adoption of this
amendment did not have any impact on the financial
position or the performance of the Group.
AASB 2010-8 Amendments to Australian Accounting
Standards - Deferred Tax: Recovery of Underlying
Assets [AASB 112]
These amendments address the determination of
deferred tax on investment property measured at
fair value and introduce a rebuttable presumption
that deferred tax on investment property measured
at fair value should be determined on the basis that
the carrying amount will be recoverable through sale.
The amendments also incorporate SIC-21 Income
Taxes - Recovery of Revalued Non-Depreciable Assets
into AASB 112. The adoption of this amendment did
not have any impact on the financial position or the
performance of the Group.
(d) Accounting standards and interpretations
issued but not yet effective
The following table sets out new Australian Accounting
Standards and Interpretations that have been issued
but are not yet mandatory and which have not been
early adopted by the Company for the annual reporting
period ending 30 June 2013.
44
YTC RESOURCES LIMITED ANNUAL REPORT2013 (d) New accounting standards and interpretations (continued)
Reference
AASB 10
Consolidated
Financial
Statements
1 Jan 2013
No impact expected
Summary
AASB 10 establishes a new control model that applies to all entities.
It replaces parts of AASB 127 Consolidated and Separate Financial
St atements dealing with the accounting for consolidated financial
statements and UIG-112 Consolidation - Special Purpose Entities.
The new control model broadens the situations when an entity is
considered to be controlled by another entity and includes new guidance
for applying the model to specific situations, including when acting as a
manager may give control, the impact of potential voting rights and when
holding less than a majority voting rights may give control.
Consequential amendments were also made to this and other standards
via AASB
1 July 2013
2011-7 and AASB 2012-10.
Title
Application
date of
standard
Impact
on Group
financial
report
Application
date for
Group
Reference
AASB 11
Title
Joint Arrangements
AASB 11 replaces AASB 131 Interests in Joint Ventures and UIG-113
Jointly- controlled
Application
date of
standard
Impact
on Group
financial
report
Application
date for
Group
1 Jan 2013
No impact expected
1 July 2013
Entities - Non-monetary Contributions by Ventures.
AASB 11 uses the principle of control in AASB 10 to define joint control,
and therefore the determination of whether joint control exists may
change. In addition it removes the option to account for jointly controlled
entities (JCEs) using proportionate consolidation. Instead, accounting
for a joint arrangement is dependent on the nature of the rights and
obligations arising from the arrangement. Joint operations that give the
venturers a right to the underlying assets and obligations themselves is
accounted for by recognising the share of those assets and obligations.
Joint ventures that give the venturers a right to the net assets is
accounted for using the equity method.
Consequential amendments were also made to this and other standards
via AASB 2011-7, AASB 2010-10 and amendments to AASB 128.
AASB 12 includes all disclosures relating to an entity’s interests in
subsidiaries, joint arrangements, associates and structured entities.
New disclosures have been introduced about the judgments made
by management to determine whether control exists, and to require
summarised information about joint arrangements, associates, structured
entities and subsidiaries with non-controlling interests.
Reference
AASB 12
Disclosure of
Interests in Other
Entities
1 Jan 2013
No impact expected
1 July 2013
Title
Application
date of
standard
Impact
on Group
financial
report
Application
date for
Group
45
YTC RESOURCES LIMITED ANNUAL REPORT2013 YTC RESOURCES LIMITED ANNUAL REPORT
20
13 Financial Statements
(d) New accounting standards and interpretations (continued)
Summary
AASB 13 establishes a single source of guidance for determining the fair
value of assets and liabilities. AASB 13 does not change when an entity
is required to use fair value, but rather, provides guidance on how to
determine fair value when fair value is required or permitted. Application
of this definition may result in different fair values being determined for
the relevant assets.
AASB 13 also expands the disclosure requirements for all assets or
liabilities carried at fair value. This includes information about the
assumptions made and the qualitative impact of those assumptions on
the fair value determined.
Consequential amendments were also made to other standards via AASB
2011-8.
The main change introduced by this standard is to revise the accounting
for defined benefit plans. The amendment removes the options for
accounting for the liability, and requires that the liabilities arising from
such plans is recognised in full with actuarial gains and losses being
recognised in other comprehensive income. It also revised the method of
calculating the return on plan assets.
The revised standard changes the definition of short-term employee
benefits. The distinction between short-term and other long-term
employee benefits is now based on whether the benefits are expected to
be settled wholly within 12 months after the reporting date.
Reference
AASB 13
Title
Application
date of
standard
Impact
on Group
financial
report
Application
date for
Group
Fair Value
Measurement
1 Jan 2013
No impact expected
1 July 2013
Reference
AASB 119
Title
Employee Benefits
1 Jan 2013
No impact expected
Application
date of
standard
Impact
on Group
financial
report
Application
date for
Group
1 July 2013
Consequential amendments were also made to other standards via AASB
2011-10.
Reference
Interpretation 20
Stripping Costs
in the Production
Phase of a Surface
Mine
1 Jan 2013
No impact expected
1 July 2013
Title
Application
date of
standard
Impact
on Group
financial
report
Application
date for
Group
This interpretation applies to stripping costs incurred during the
production phase of a surface mine. Production stripping costs are to
be capitalised as part of an asset, if an entity can demonstrate that it
is probable future economic benefits will be realised, the costs can be
reliably measured and the entity can identify the component of an ore
body for which access has been improved. This asset is to be called the
“stripping activity asset”.
The stripping activity asset shall be depreciated or amortised on a
systematic basis, over the expected useful life of the identified component
of the ore body that becomes more accessible as a result of the stripping
activity. The units of production method shall be applied unless another
method is more appropriate.
Consequential amendments were also made to other standards via AASB
2011-12.
46
YTC RESOURCES LIMITED ANNUAL REPORT2013 (d)
New accounting standards and interpretations(continued)
Reference
AASB 2012-2
Title
Amendments to Australian Accounting
Standards - Disclosures - Offsetting Financial
Assets and Financial Liabilities
Application date
of standard
Impact on Group
financial report
Application date
for Group
1 Jan 2013
No impact expected
1 July 2013
Reference
AASB 2012-3
Title
Amendments to Australian Accounting
Standards - Offsetting Financial Assets and
Financial Liabilities
Application date
of standard
Impact on Group
financial report
Application date
for Group
1 Jan 2014
No impact expected
1 July 2014
Summary
AASB 2012-2 principally amends AASB
7 Financial Instruments: Disclosures
to require disclosure of the effect or
potential effect of netting arrangements.
This includes rights of set-off associated
with the entity’s recognised financial
assets and liabilities on the entity’s
financial position, when the offsetting
criteria of AASB132 are not all met.
AASB 2012-3 adds application guidance
to AASB 132 Financial Instruments:
Presentation to address inconsistencies
identified in applying some of the
offsetting criteria of AASB 132, including
clarifying the meaning of “currently has
a legally enforceable right of set-off”
and that some gross settlement systems
may be considered equivalent to net
settlement.
47
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Statements
(d) New accounting standards and interpretations (continued)
Reference
AASB 9
Financial
Instruments
1 Jan 2015
Title
Application
date of
standard
Impact
on Group
financial
report
Application
date for
Group
Summary
AASB 9 includes requirements for the classification and measurement
of financial assets. It was further amended by AASB 2010-7 to reflect
amendments to the accounting for financial liabilities.
These requirements improve and simplify the approach for classification
and measurement of financial assets compared with the requirements of
AASB 139. The main changes are described below.
No impact expected
(a) Financial assets that are debt instruments will be classified based on (1)
the objective of the entity’s business model for managing the financial
assets; (2) the characteristics of the contractual cash flows.
1 July 2015
(b) Allows an irrevocable election on initial recognition to present gains and
losses on investments in equity instruments that are not held for trading
in other comprehensive income. Dividends in respect of these investments
that are a return on investment can be recognised in profit or loss and
there is no impairment or recycling on disposal of the instrument.
(c) Financial assets can be designated and measured at fair value through
profit or loss at initial recognition if doing so eliminates or significantly
reduces a measurement or recognition inconsistency that would arise
from measuring assets or liabilities, or recognising the gains and losses
on them, on different bases.
(d) Where the fair value option is used for financial liabilities the change in
fair value is to be accounted for as follows:
- The change attributable to changes in credit risk are presented in other
comprehensive income (OCI)
- The remaining change is presented in profit or loss
If this approach creates or enlarges an accounting mismatch in the profit or
loss, the effect of the changes in credit risk are also presented in profit or loss.
Further amendments were made by AASB 2012-6 which amends the
mandatory effective date to annual reporting periods beginning on or
after 1 January 2015. AASB 2012-6 also modifies the relief from restating
prior periods by amending AASB 7 to require additional disclosures on
transition to AASB 9 in some circumstances.
Consequential amendments were also made to other standards as a result
of AASB 9, introduced by AASB 2009-11 and superseded by AASB 2010-7
and 2010-10.
All other new Australian Accounting Standards that
have been issued but are not yet effective are not
expected to have a material impact on the Group.
(e) Basis of consolidation
The consolidated financial statements comprise the
financial statements of YTC Resources Limited and its
subsidiaries (as outlined in Note 1).
are currently exercisable or convertible are considered
whether a group controls an entity.
The financial statements of subsidiaries are prepared
for the same reporting period as the Company, using
consistent accounting policies. Adjustments are made
to bring into line any dissimilar accounting policies that
may exist.
Subsidiaries are all those entities over which the Group
has the power to govern the financial and operating
policies so as to obtain benefits from their activities.
The existence and effect of potential voting rights that
In preparing the consolidated financial statements, all
intercompany balances and transactions, income and
expenses and profit and losses resulting from intra-
group transactions, have been eliminated in full.
48
YTC RESOURCES LIMITED ANNUAL REPORT2013 Subsidiaries are fully consolidated from the date on
which control is obtained by the Group and ceases to
be consolidated from the date of control is transferred
out of the Group.
(f) Cash and cash equivalents
Cash and cash equivalents in the balance sheet
comprise cash at bank and on hand and short-term
deposits with an original maturity of three months or
less that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of
changes in value.
For the purposes of the cash flow statement, cash and
cash equivalents consist of cash and cash equivalents
as defined above, net of outstanding bank overdrafts.
Bank overdrafts are included within interest-bearing
loans and borrowings in current liabilities on the
balance sheet.
(g) Trade and other receivables
Trade receivables, which generally have 30-90 day
terms, are recognised and carried at original invoice
less an allowance for any uncollectible
amount
amounts.
An estimate for doubtful debts is made when collection
of the full amount is no longer probable. Bad debts are
written off when identified.
(h) Plant and equipment
Plant and equipment is stated at historical cost less
accumulated depreciation, amortisation and any
impairment in value. Depreciation is calculated on a
straight-line basis over their estimated useful lives as
follows:
• Plant and equipment over 4 to 8 years
• Land – not depreciated
• Motor vehicles – 7 years
• Leasehold improvements – 6 years
Impairment
The carrying values of plant and equipment are
reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be
recoverable.
For an asset that does not generate largely independent
cash inflows, the recoverable amount is determined for
the cash-generating unit to which the asset belongs.
If any indication of impairment exists and where the
carrying values exceed the estimated recoverable
amount, the assets or cash-generating units are written
down to their recoverable amount.
The recoverable amount of plant and equipment is the
greater of fair value less costs to sell and value in use. In
assessing 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.
Impairment losses are recognised in the income
statement.
Gains and losses on disposals are determined by
comparing proceeds with the carrying amount. These
are included in the income statement.
Derecognition
An item of plant and equipment is derecognised upon
disposal or when no further future economic benefits
are expected from its use or disposal.
(i) Recoverable amount of assets
At each reporting date, the Company assesses whether
there is any indication that an asset may be impaired.
Where an indicator of impairment exists, the Company
makes a formal estimate of recoverable amount. Where
the carrying amount of an asset exceeds its recoverable
amount the asset is considered impaired and is written
down to its recoverable amount.
Recoverable amount is the greater of fair value less
costs to sell and value in use. It is determined for an
individual asset, unless the asset’s value in use cannot
be estimated to be close to its fair value less costs to
sell and it does not generate cash inflows that are
largely independent of those from other assets or
groups of assets, in which case, the recoverable amount
is determined for the cash-generating unit to which
the asset belongs.
In assessing 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.
(j) Exploration and evaluation expenditure
Expenditure on acquisition, exploration and evaluation
relating to an area of interest is carried forward where
rights to tenure of the area of interest are current and;
i) It is expected that expenditure will be recouped
through successful development and exploitation of
the area of interest or alternatively by its sale and/or;
ii) Exploration and evaluation activities are continuing
in an area of interest but at balance date have not
yet reached a stage which permits a reasonable
assessment of the existence or otherwise of
economically recoverable reserves.
the
technical
When
feasibility and commercial
viability of extracting a mineral resource have been
then any capitalised exploration
demonstrated
and evaluation expenditure
reclassified as
is
capitalised ‘Mine properties in development’. Prior to
reclassification, capitalised exploration and evaluation
expenditure is assessed for impairment.
49
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Statements
If facts and circumstances suggest that the carrying
amount of any recognised exploration and evaluation
assets may be impaired, the entity must perform
impairment tests on those assets in accordance with
AASB 136 “Impairment of Assets”. Impairment of
exploration and evaluation assets is to be assessed at a
cash generating unit or group of cash generating units
level provided this is no larger than an area of interest.
Any impairment loss is to be recognised as an expense
in accordance with AASB 136. Accumulated costs in
relation to an abandoned area are written off to the
income statement in the period in which the decision
to abandon the area is made.
(k) Trade and other payables
Trade payables and other payables are carried at
amortised cost. They represent liabilities for goods and
services provided to the Company prior to the end of
the financial year that are unpaid and arise when the
Company becomes obliged to make future payments in
respect of the purchase of these goods and services.
The amounts are unsecured and are usually paid within
30 days of recognition.
(l) Provisions and employee benefits
Provisions are recognised when the Company has a
present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of
the amount of the obligation.
Where the Company expects some or all of a provision
to be reimbursed, the reimbursement is recognised as
a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision
is presented in the income statement net of any
reimbursement.
If the effect of the time value of money is material,
provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and,
where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision
due to the passage of time is recognised as a finance
cost.
EMPLOYEE LEAVE BENEFITS
Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-
monetary benefits, annual leave and accumulating sick
leave expected to be settled within 12 months of the
reporting date are recognised in respect of employee’s
services up to the reporting date. They are measured at
the amounts expected to be paid when the liabilities are
settled. Liabilities for non-accumulating sick leave are
recognised when the leave is taken and are measured
at the rates paid or payable.
(m) Borrowing costs
Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalised as part of the cost
of the asset. All other borrowing costs are expensed
in the period in which they occur. Borrowing costs
consist of interest and other costs that an entity incurs
in connection with the borrowing of funds.
(n) Income recognition
Income, including management fees, is recognised
and measured at the fair value of the consideration
received or receivable to the extent it is probable that
the economic benefits will flow to the Company and
the income can be reliably measured. The following
specific recognition criteria must also be met before
income can be recognised:
Interest
is recognised as
Income
interest accrues using
the effective interest method. This is a method of
calculating the amortised cost of a financial asset
and allocating the interest income over the relevant
period using the effective interest rate. This is the rate
that exactly discounts estimated future cash receipts
through the expected life of the financial asset to the
net carrying amount of the financial asset.
(o) Share-based payment transactions
The Company provides benefits to employees (including
in the form of share-based payment
directors)
transactions, whereby employees render services in
exchange for shares or rights over shares (‘equity-
settled transactions’).
The cost of these equity-settled transactions with
employees is measured by reference to the fair value
at the date at which they are granted. The fair value
is determined by an internal valuation using the Black
Scholes model or Trinomial Barrier Option model,
further details of which are given in Note 14(c).
In valuing equity-settled transactions, no account
is taken of any performance conditions, other than
conditions linked to the price of the shares of YTC
(‘market conditions’).
The cost of equity-settled transactions is recognised,
together with a corresponding increase in equity, over
the period in which the performance conditions are
fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (‘vesting
date’).
The cumulative expense recognised for equity-settled
transactions at each reporting date until vesting date
reflects (i) the extent to which the vesting period has
expired and (ii) the number of awards that, in the
opinion of the Directors of the Company, will ultimately
50
YTC RESOURCES LIMITED ANNUAL REPORT2013 vest. This opinion is formed based on the best available
information at balance date. No adjustment is made for
the likelihood of market performance conditions being
met as the effect of these conditions is included in the
determination of fair value at grant date.
unused tax assets and unused tax losses, to the extent
that it is probable that taxable profit will be available
against which the deductible temporary differences,
and the carry-forward of unused tax assets and unused
tax losses can be utilised:
No expense is recognised for awards that do not
ultimately vest, except for awards where vesting is
conditional upon a market condition.
Where the terms of an equity-settled award are
modified, as a minimum an expense is recognised as
if the terms had not been modified. In addition, an
expense is recognised for any increase in the value
of the transaction as a result of the modification, as
measured at the date of modification.
Where an equity-settled award is cancelled, it is treated
as if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised
immediately. However, if a new award is substituted for
the cancelled award, and designated as a replacement
award on the date that it is granted, the cancelled and
new award are treated as if they were a modification
of the original award, as described in the previous
paragraph.
The dilutive effect, if any, of outstanding options is
reflected as additional share dilution in the computation
of earnings per share.
(p) Income tax
Current tax assets and liabilities for the current and
prior periods are measured at the amount expected to
be recovered from or paid to the taxation authorities
based on the current period’s taxable income. The tax
rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the
balance sheet date.
Deferred income tax is provided on all temporary
differences at the balance sheet date between the
tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all
taxable temporary differences:
• Except where the deferred income tax liability arises
from the initial recognition of an asset or liability in
a transaction that is not a business combination and,
at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
• In respect of taxable temporary differences associated
with investments in subsidiaries, associates and
interests in joint ventures, except where the timing
of the reversal of the temporary differences can
be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all
deductible temporary differences, carry-forward of
• Except where the deferred income tax asset relating
to the deductible temporary difference arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination and,
at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
in
• In respect of deductible temporary differences
subsidiaries,
investments
associated with
associates and interests in joint ventures, deferred
tax assets are only recognised to the extent that it is
probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be
available against which the temporary differences
can be utilised.
The carrying amount of deferred income tax assets is
reviewed at each balance sheet 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 sheet 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.
Deferred income tax assets and liabilities are measured
at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based
on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity
are recognised in equity and not in the income statement.
Deferred tax assets and deferred tax liabilities are
offset only if a legally enforceable right exists to set
off current tax assets against current tax liabilities and
the deferred tax assets and liabilities relate to the same
taxable entity and the same taxation authority.
(q) Other taxes
Income, expenses and assets are recognised net of the
amount of GST except:
• Where the GST incurred on a purchase of goods
and services is not recoverable from the taxation
authority, in which case the GST is recognised as part
of the cost of acquisition of the asset or as part of the
expense item as applicable; and
• Receivables and payables are stated with the amount
of GST included.
The net amount of GST recoverable from, or payable to,
the taxation authority is included as part of receivables
or payables in the balance sheet.
51
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Statements
Cash flows are included in the cash flow statement on
a gross basis and the GST component of cash flows
arising from investing and financing activities, which is
recoverable from, or payable to, the taxation authority
are classified as operating cash flows.
Commitments and contingencies are disclosed net of
the amount of GST recoverable from, or payable to, the
taxation authority.
(r) Contributed equity
Ordinary shares are classified as equity. Incremental
costs directly attributable to the issue of new shares or
options are shown directly in equity as a deduction, net
of tax, from proceeds.
(s) Operating segments
An operating segment is a component of an entity
that engages in business activities from which it may
earn income and incur expenses (including income
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.
This includes start up operations which are yet to earn
income. 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 chief operating decision
makers – being the executive management team.
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”.
52
(t) Profit / (loss) per share
Basic profit / (loss) per share
Basic profit / (loss) per share is calculated by dividing
the profit / (loss) attributable to equity holders of the
company, excluding any costs of servicing equity other
than dividends, by the weighted average number of
ordinary shares, adjusted for any bonus elements.
Diluted profit / (loss) per share
Diluted earnings per share is calculated as net profit
/ (loss) attributable to members of the Company,
adjusted for:
• Costs of servicing equity (other than dividends);
• The after tax effect of dividends and interest
associated with dilutive potential ordinary shares
that have been recognised as expenses; and
• Other non-discretionary changes
income or
expenses during the period that would result from
the dilution of potential ordinary shares;
in
divided by the weighted average number of ordinary
shares and dilutive potential ordinary shares, adjusted
for any bonus elements.
(u) Financial assets
Investments and financial assets in the scope of
AASB 139 Financial Instruments: Recognition and
Measurement are categorised as either financial
assets at fair value through profit or loss, loans and
receivables, held-to-maturity investments, or available-
for-sale financial assets. The classification depends
on the purpose for which the investments were
acquired or originated. Designation is re-evaluated
at each reporting date, but there are restrictions on
reclassifying to other categories.
When financial assets are recognised initially, they are
measured at fair value, plus, in the case of assets not
at fair value through profit or loss, directly attributable
transaction costs.
Recognition and derecognition
All regular way purchases and sales of financial assets
are recognised on the trade date i.e., the date that the
Group commits to purchase the asset. Regular way
purchases or sales are purchases or sales of financial
assets under contracts that require delivery of the
assets within the period established generally by
regulation or convention in the market place. Financial
assets are derecognised when the right to receive cash
flows from the financial assets has expired or when the
entity transfers substantially all the risks and rewards
of the financial assets. If the entity neither retains nor
transfers substantially all of the risks and rewards, it
derecognises the asset if it has transferred control of
the assets.
YTC RESOURCES LIMITED ANNUAL REPORT2013 Subsequent valuation
After initial recognition, the Group measures financial
assets, including derivatives that are assets, at their fair
values, without any deduction for transaction costs
it may incur on sale or other disposal, except for the
following financial assets:
• Loans and receivables as defined in paragraph,
which shall be measured at amortised cost using the
effective interest method;
• Held-to-maturity
in
investments
paragraph, which shall be measured at amortised
cost using the effective interest method; and
as defined
• Investments in equity instruments that do not have
a quoted market price in an active market and whose
fair value cannot be reliably measured and derivatives
that are linked to and must be settled by delivery of
such unquoted equity instruments, which shall be
measured at cost.
The Group assesses, at each reporting date, whether
there is any objective evidence that a financial asset or
a group of financial assets is impaired. A financial asset
or a group of financial assets is deemed to be impaired
if, and only if, there is objective evidence of impairment
as a result of one or more events that has occurred
after the initial recognition of the asset (an incurred
”loss event”) and that loss event has an impact on the
estimated future cash flows of the financial asset or the
group of financial assets that can be reliably estimated.
(v) Associates
The Group’s investment in its associates is accounted
for using the equity method of accounting in the
consolidated financial statements and at cost in the
parent. The associates are entities over which the
Group has significant influence and that are neither
subsidiaries nor joint ventures.
The Group generally deems they have significant
influence if they have over 20% of the voting rights.
Under the equity method, investments in associates
are carried in the consolidated statement of financial
position at cost plus post-acquisition changes in the
Group’s share of net assets of the associates. Goodwill
relating to an associate is included in the carrying
amount of the investment and is not amortised. After
application of the equity method, the Group determines
whether it is necessary to recognise any impairment
loss with respect to the Group’s net investment in
associates. Goodwill included in the carrying amount
of the investment in associate is not tested separately,
rather the entire carrying amount of the investment
is tested for impairment as a single asset. If an
impairment is recognised, the amount is not allocated
to the goodwill of the associate.
The Group’s share of its associates’ post-acquisition
profits or losses is recognised in the statement of
comprehensive income, and its share of post-acquisition
movements in reserves is recognised in reserves. The
cumulative post-acquisition movements are adjusted
against the carrying amount of the investment.
Dividends receivable from associates are recognised in
the parent entity’s statement of comprehensive income
as a component of other income.
When the Group’s share of losses in an associate
equals or exceeds its interest in the associate, including
any unsecured long-term receivables and loans, the
Group does not recognise further losses, unless it has
incurred obligations or made payments on behalf of
the associate.
The reporting dates of the associates and the Group
are identical and the associates’ accounting policies
conform to those used by the Group for like transactions
and events in similar circumstances.
(w) Comparative information
Where necessary, the prior year financial data was
restated for comparability purposes.
2B. CRITICAL ACCOUNTING
ESTIMATES AND ASSUMPTIONS
The preparation of the financial statements requires
management to make judgements, estimates and
assumptions that affect the reported amounts in the
financial statements.
Management continually evaluates its judgements and
estimates in relation to assets, liabilities, contingent
liabilities, income and expenses. Management bases its
judgements and estimates on historical experience and
on other various factors it believes to be reasonable
under the circumstances, the result of which form the
basis of the carrying values of assets and liabilities that
are not readily apparent from other sources. Actual
results may differ from these estimates under different
assumptions and conditions.
Management has identified the following critical
accounting policies for which significant judgements,
estimates and assumptions are made. Actual results
may differ from these estimates under different
assumptions and conditions and may materially affect
financial results or the financial position reported in
future periods.
(a) Significant accounting judgements
Exploration and evaluation expenditure
Exploration and evaluation expenditure is capitalised
when either, costs are expected to be recouped through
successful development and exploitation of the area of
interest; or alternatively by its sale: or exploration and/
or evaluation activities in the area have not reached
a stage which permits a reasonable assessment of the
existence or otherwise of economically recoverable
53
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Statements
reserves. In determining this, assumptions, including
the maintenance of title, ongoing expenditure and
prospectivity are made and in the event that these
assumptions no longer hold valid then this expenditure
may, in part or full, be expensed through the income
statement in future periods – see Note 9 for disclosure
of carrying values.
(b) Significant accounting estimates and
assumptions
Share-based payment transactions
The Company measures the cost of equity-settled
transactions with employees by reference to the
fair value of the equity instruments at the date at
which they are granted. The fair value is determined
by using a Black-Scholes or Trinomial Barrier Option
Model formula taking into account the terms and
conditions upon which the instruments were granted.
The accounting estimates and assumptions relating to
equity-settled share-based payments would have no
impact on the carrying amounts of assets and liabilities
within the next annual reporting period but may impact
expenses and equity.
Deferred acquisition costs in relation to Hera
The Company measures the deferred acquisition costs
by reference to the fair value of net present value of
future cash outflows. The following assumptions have
been taken into account: risk free bond rate, gold price,
possibility of payment.
54
YTC RESOURCES LIMITED ANNUAL REPORT2013 3. INCOME AND EXPENSES
(a) Income from continuing operations
Management fee
Interest income
Gain on sale of tenements
Gain on sale of investments in associates
Loss on revaluation of investments
Gain on revaluation of Financial Assets
R&D Refund
Consolidated
2013
$
2012
$
24,204
398,377
-
320,912
(750,200)
4,674,619
264,242
4,932,154
383,374
1,233,673
635,648
-
-
-
199,728
2,452,423
Management fee income consists of consulting fees earned from YT Parksong Australia Holdings Pty Ltd, a
Company involved in a joint venture with Metals X Limited in the Renison tin mine in Tasmania.
Gain on sale of tenements relates to tenements sold to Taronga Mines Limited for which further details can be
found in Note 7.
Gain / (loss) on sale of investments in associates relates to the sale of YTC’s shareholding in Taronga Mines Limited
to the ASX listed AusNiCo Limited. Loss on revaluation of investments relates to the subsequent revaluation of the
consideration shares held in AusNiCo to the ASX market value at 30th June 2013.
Gain on revaluation of financial assets relates to unrealised gain on gold put options for which further details can
be found in Note 8.
Expenses from continuing operations
Profit / (loss) before income tax includes the following
specific expenses:
(b) Employee benefits expense
Salaries and on-costs
Options and Performance Rights expense
Employee benefits expense and directors fees include
superannuation expense of
Note
28
(c) Administration expense
Bank fees
Insurance
Printing and stationery
Postage and freight
Subscriptions
Telephone
IT expenses
Leased office premises
Leasing office equipment
Other
Consolidated
2013
$
2012
$
1,176,123
365,184
1,541,307
1,408,179
413,533
1,821,712
93,095
251,225
2,797
103,079
18,295
2,454
29,349
33,859
95,367
60,000
11,021
33,999
390,220
3,381
124,919
50,720
10,813
21,306
51,551
85,710
52,277
33,210
13,284
447,171
55
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Statements
4. INCOME TAX
The major components of income tax expense
Income Statement
Current income Tax
Current income tax charge
Deferred income tax
Relating to origination and reversal of temporary differences
Unrecognised tax losses
Income tax expense reported in the income statement
A reconciliation between tax expense and the product of
accounting loss before income tax multiplied by the Company’s
applicable income tax rate is as follows:
Consolidated
2013
$
2012
$
39,152
(2,876,986)
3,026,483
(3,065,635)
-
551,002
2,325,984
-
Accounting profit / (loss) before income tax
535,572
(2,076,613)
At the Company’s statutory income tax rate (30%)
Share based payments & other non-assessable items
Income tax benefit (expense) not brought to account
Income tax reported in the income statement
The Group had formed a tax consolidated group at 30 June 2013.
160,671
(199,823)
39,152
-
(622,984)
71,982
551,002
-
Consolidated
Deferred income tax
Deferred income tax at 30 June
relates to the following:
Deferred tax liabilities
Deferred exploration and
evaluation expenditure
Receivables
Deferred Tax Assets
Provisions
Carried forward losses not
recognised
Net deferred tax
Deferred tax income/(expense)
Statement of
Financial Position
2013
$
2012
$
Statement of
Comprehensive Income
2012
2013
$
$
(12,957,193)
(12,221)
(10,105,848)
(27,953)
(1,453,216)
(904,280)
(3,671,169)
60,732
2,417,992
2,437,588
64,712
1,284,453
10,551,422
-
7,696,213
-
2,292,784
2,325,984
-
-
At 30 June 2013 the Group had carried forward tax losses totalling $44,623,199 (2012: $35,776,750).
56
YTC RESOURCES LIMITED ANNUAL REPORT2013
5. TRADE AND OTHER RECEIVABLES - CURRENT
Trade receivables
Receivable from Australian Taxation Office
Accrued interest
Consolidated
2013
$
2012
$
9,344
66,440
1,439,819
40,737
1,489,900
-
91,977
158,417
All of the above are non-interest bearing and generally receivable on 30 day terms. Due to the short term nature
their carrying value approximates their fair value.
6. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment at cost
Accumulated depreciation amortisation and impairment
Total property, plant and equipment
2,009,320
1,862,049
(801,143)
(504,499)
1,208,177
1,357,550
Property, plant and equipment is represented by the following:
Motor Vehicles
At 1 July, net of accumulated depreciation and impairment
280,833
213,482
Additions
Depreciation expense
At 30 June, net of accumulated depreciation and impairment
Plant & Equipment
At 1 July, net of accumulated depreciation and impairment
Additions
Disposals
Depreciation expense
At 30 June, net of accumulated depreciation and impairment
-
(59,575)
221,258
122,168
(54,817)
280,833
762,303
147,272
367,841
540,314
-
(1,985)
(217,259)
(143,867)
692,316
762,303
Leasehold improvements
At 1 July, net of accumulated amortisation and impairment
39,414
59,611
Additions
Amortisation expense
At 30 June, net of accumulated amortisation and impairment
Land 1
At 1 July
Additions
At 30 June
1 – Land assets are held at cost and are not depreciated.
-
(19,811)
19,603
-
(20,197)
39,414
275,000
-
275,000
90,000
185,000
275,000
57
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Statements
7. INVESTMENTS IN ASSOCIATES
Shares in Taronga Mines Limited
Consolidated
2013
$
2012
$
-
-
1,152,118
1,152,118
As at 30 June 2012, YTC held a 25% interest (or 13.64 million shares) and 5.5 million options in Taronga Mines
Limited (TAZ), most of which were received as consideration for the sale of tin tenements. The sale of the tenements
to TAZ resulted in the Group recognising a $635,647 gain on sale as at 30 June 2012. Shares in TAZ were recorded
as an equity accounted investment as at 30 June 2012.
During the reporting period, TAZ merged with AusNiCo Limited. As a result of this transaction, YTC Resources
Limited disposed all its holdings in TAZ for 68.2 million shares in AusNiCo Limited (representing 15.8% interest
in AusNiCo) and 27.5 million options in AusNiCo Limited. As a result of this transaction YTC Resources Limited
recognised a $320,912 gain on disposal of investment in associate. YTC’s shareholding and options in AusNiCo are
recorded as financial assets in the statement of financial position as at 30 June 2013.
8. FINANCIAL ASSETS
(a) Carrying values of financial assets
Shares in AusNiCo Limited
Options in AusNiCo Limited
Options in Taronga Mines Limited
Gold put options
(b) Gold Put Options
Purchase price paid including brokerage
Gain on revaluation during the period
Consolidated
2013
$
2012
$
Note
477,400
355,431
-
-
-
110,000
8(b)
9,699,819
-
10,532,650
110,000
5,025,200
4,674,619
9,699,819
-
-
-
28,912 oz. of gold put options were purchased on 26th April 2013 at a strike price of $AUD 1,500 per ounce. The
options expire in 6 quarterly tranches with the first tranche expiring in April 2015. The options give YTC the right,
but not the obligation, to sell gold at the strike price. The options are revalued each period using a Black-Scholes
methodology, with revaluation adjustments appearing as gains / (losses) in the statement of comprehensive
income.
58
YTC RESOURCES LIMITED ANNUAL REPORT2013 9. (A) DEFERRED EXPLORATION AND
EVALUATION EXPENDITURE
At cost
Accumulated impairment
Transfer to mine development
Total exploration and evaluation
At 1 July
Exploration expenditure during the year
Increase in deferred acquisition costs
Transfer to mine properties
Impairment charge recognised
At 30 June
Consolidated
2013
$
2012
$
54,727,629
(1,222,311)
(37,355,915)
47,358,473
(1,749,236)
-
16,149,403
45,609,237
45,609,237
33,480,004
4,449,038
3,456,869
(37,355,915)
8,428,348
4,062,439
-
(9,826)
(361,554)
16,149,403
45,609,237
The recoverability of the carrying amount of the deferred exploration and evaluation expenditure is dependent on
successful development and commercial exploitation, or alternatively the sale, of the respective areas of interest.
An impairment charge of $9,826 has been recognised in 2013 (2012: $361,554). Impairment has been recognised
on exploration expenditure incurred on tenements where prospectivity will not be pursued or has deteriorated.
Movements in the provision for impairment loss were as follows:
At 1 July
Tenements relinquished during the year
Charge for the year
At 30 June
(1,749,236)
(1,387,682)
536,751
(9,826)
-
(361,554)
(1,222,311)
(1,749,236)
An amount of $3,456,869 (2012: $4,062,439) within exploration expenditure during the 2013 year relates to an
increase in the provision for estimated royalty payable on gravity gold dore production from the Hera deposit.
This provision increase occurred during the first half of 2013, when Hera expenditure was treated as ‘exploration’.
All accumulated Hera exploration costs were transferred to ‘mine properties’ during the second half of 2013.
Following this transfer the provision for royalty was reduced by $3,189,957 (refer to Note 9(b)), thus the net fair
value increment in 2013 due to royalty adjustments was $266,912. Refer to Note 29 for further information.
9. (B) MINE PROPERTIES
At 1 July
Development expenditure during the year
Transfers from exploration and evaluation expenditure
Reduction in deferred acquisition costs
Interest on project borrowings
At 30 June
3,734,098
19,696,900
37,355,915
(3,189,957)
337,062
-
3,734,098
-
-
-
57,934,018
3,734,098
Mine properties relate to expenditure incurred in the development of the Hera project under the terms and
conditions of Mining Licence No. 1686 (Act 1992) granted 16th May 2013.
59
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Statements
10. TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
Consolidated
2013
$
2012
$
800,048
3,057,170
3,857,218
270,151
523,241
793,392
Trade payables are non-interest bearing and generally payable on 7 to 30 day terms and due to the short term
nature of these payables their carrying value is assumed to approximate their fair value.
11. PROVISIONS
Current
Annual leave
Non – current
Deferred acquisition costs
Hera rehabilitation provision (a)
Note
29
206,508
155,028
7,062,303
339,000
7,401,303
7,795,391
-
7,795,391
(a) The Group makes full provision for the future cost of rehabilitating the Hera mine site and related production
facilities at the time of developing the mine and installing and using those facilities. The rehabilitation provision
represents the present value of rehabilitation costs relating to mine sites, which are expected to be incurred
up to February 2022. These provisions have been created based on YTC’s internal estimates. Assumptions based
on the current economic environment have been made, which management believes are a reasonable basis
upon which to estimate the future liability. These estimates are reviewed regularly to take into account any
material changes to the assumptions. However, actual rehabilitation costs will ultimately depend upon future
market prices for the necessary rehabilitation works required that will reflect market conditions at the relevant
time. Furthermore, the timing of rehabilitation is likely to depend on when the mine ceases to produce at
economically viable rates. This, in turn, will depend upon future gold, lead and zinc prices, which are inherently
uncertain.
12. BORROWINGS
Glencore borrowings:
Facility A
Facility B
Facility E
Glencore borrowings total
Interest accrued on borrowings
Less: Facility establishment costs
20,000,000
10,000,000
5,000,000
35,000,000
383,099
(5,707,548)
29,675,551
-
-
-
-
-
-
-
During the period YTC completed a funding transaction with Glencore International. Upon completion of the
funding transaction,
• YTC issued 9.39 million shares in YTC at 31.38 cents per share to Glencore Australia, representing a 25% premium
to YTC’s share price at the time of signing the transaction term sheet.
• YTC commenced drawdown of Facilities A & E under the A$155 million in debt and converting note facilities.
• Mr Mike Menzies was appointed to the YTC Board as a nominee of Glencore.
60
YTC RESOURCES LIMITED ANNUAL REPORT2013 The key terms of the binding term sheet in respect of the Glencore Transaction are summarised below:
Placement
Shares:
Amount:
Issue Price:
Facility A
Facility B
Facility C
Facility D
Facility E
Glencore Position:
Limit:
Conversion:
Interest Rate:
Use of Funds:
Maturity Date:
Drawdown Period:
Limit:
Conversion:
Interest Rate:
Use of Funds:
Maturity Date:
Drawdown Period:
Limit:
Interest Rate:
Use of Funds:
Maturity Date:
Drawdown Period:
Limit:
Interest Rate:
Use of Funds:
Maturity Date:
Drawdown Period:
Limit:
Interest Rate:
Use of Funds:
Maturity Date:
Drawdown Period:
9,390,000
A$2,946,582.00
$0.3138 per share (being a 25% premium to YTC’s 30 day VWAP at date of
binding Term Sheet)
The placement will increase Glencore’s total shareholding in YTC to 9.9%
(undiluted)
A$20 million Converting Note Facility
Convertible at YTC’s option at $0.251 per share
3M AUD BBSW + 4%
Hera Development, Nymagee feasibility study and development, working
capital
60 months after date of shareholder approval
12 months date of shareholder approval
A$50 million Converting Note Facility
Convertible at YTC’s option at 60 day VWAP Price prior to conversion
3M AUD BBSW + 4%
Hera Development, Nymagee feasibility study and development, working
capital
60 months after date of shareholder approval
12 months from date of shareholder approval
A$30 million Debt Facility
3M AUD BBSW + 4.5%
Hera Development, Nymagee feasibility study and development, working
capital
60 months after date of shareholder approval 18 months from date of
shareholder approval
A$50 million Debt Facility
3M AUD BBSW + 4.5%
Nymagee development
42 months after first drawdown
12 months after completion of approved Nymagee bankable feasibility
study or earlier with Glencore consent
A$5 million Debt Facility
3M AUD BBSW + 4.5%
Purchase of precious and/or base metal option cover.
42 months after first drawdown
12 months from date of shareholder approval
At 30 June 2013 YTC had fully drawn Facilities A & E and drawn $10 million under Facility B; and as a result issued
30 million converting notes under Facilities A & B all of which remain unconverted. There were no converting notes
converted during the year.
The converting notes can be repaid as per a conventional debt facility or converted only at YTC’s election and will
convert at various prices; Facility A converting notes can convert (upon YTC’s election) at 25.1 cents per share
resulting in the issue of 79,681,275 YTC shares; Facility B converting notes can convert (upon YTC’s election) at YTC’s
60 day VWAP Share Price prior to conversion cents per share.
61
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Statements
13. CONTRIBUTED EQUITY
(a) Issued and paid up capital
Ordinary shares fully paid
(b) Movements in ordinary shares on issue
Details
Opening balance
Issue of shares
Issue of shares
Less: Share issue costs
Closing Balance
(c) Ordinary shares
Ordinary shares have the right to receive dividends
as declared and, in the event of a winding up of
the Parent, to participate in the proceeds from sale
of all surplus assets in proportion to the number of
and amounts paid up on shares held. Ordinary shares
entitle their holder to one vote, either in person or
proxy, at a meeting of the Company.
(d) Capital Risk Management
When managing capital, management’s objective is
to ensure the entity continues as a going concern as
well as to maintain optimal returns to shareholders
Consolidated
2013
$
2012
$
70,180,671
67,074,707
Date
1-Jul-12
26-Mar-13
28-Jun-13
Number
252,724,334
9,390,000
555,556
-
$
67,074,707
2,946,582
250,000
(90,618)
262,669,890
70,180,671
and benefits for other stakeholders. Management also
aims to maintain a capital structure that ensures the
lowest costs of capital available to the entity.
In order to maintain or adjust capital structure, the
entity may adjust the amount of dividends paid to
shareholders, return capital to shareholders, issue new
shares, enter into joint ventures or sell assets.
The entity does not have a defined share buy-back
plan.
No dividends were paid in the year ending 30 June
2013.
62
YTC RESOURCES LIMITED ANNUAL REPORT2013 14. RESERVES
Option and performance rights reserve
(a) Movements
Carrying amount at beginning of financial year
Options and performance rights issued during the year
Carrying amount at the end of the financial year
(b) Details of options and performance rights issued or
lapsed during the year
Opening balance
Expiry of 100,000 options at $0.40
Expiry of 350,000 options at $0.45
Issue of 1,850,000 options at $0.35
Issue of 1,850,000 options at $0.45
Expiry of 1,175,000 options at $0.40
Issue of 1,670,000 performance rights
Closing balance
Consolidated
2013
$
2012
$
2,396,118
2,030,934
2,030,934
365,184
2,396,118
1,617,401
413,533
2,030,934
Date
1-Jul-12
4-Sep-12
4-Sep-12
29-Nov-12
29-Nov-12
31-Dec-12
12-Apr-13
Number
$
3,755,000
2,030,934
(100,000)
(350,000)
1,850,000
1,850,000
(1,175,000)
1,670,000
7,500,000
-
-
196,082
82,443
-
86,659
2,396,118
(c) Valuation of Options and Performance Rights Reserve
This reserve is used to record the options and performance rights issued to directors, executives and employees.
Valuation of the options and performance rights is based on Black-Scholes methodology and Trinomial Barrier
Options methodology respectively using the following assumptions:
Class A
Director
Options
Class B
Director
Options
Class A
Performance
Rights
Class B
Performance
Rights
Grant date
29 Nov 2012
29 Nov 2012
12 Apr 2013
12 Apr 2013
No. of options / performance
rights
Share price at date of grant
Exercise price
Vesting date
Expected price volatility
Risk free rate
Expected life
Expected dividend yield
Fair value
1,850,000
1,850,000
$0.37
$0.35
$0.37
$0.45
595,000
$0.24
$0.00
1,075,000
$0.24
$0.00
29 Nov 2013
29 Nov 2014
19 Jun 2016
31 Dec 2013
69%
3.00%
3 years
0.00%
$0.182
69%
3.00%
3 years
0.00%
$0.153
68%
2.60%
3 years
0.00%
$0.20
68%
2.60%
0.72 years
0.00%
$0.24
63
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Statements
15. ACCUMULATED LOSSES
Movements in accumulated losses were as follows:
Balance at beginning of year
Net profit / (loss) attributable to members of YTC Resources Limited
Balance at end of year
16. CASH FLOW STATEMENT
(a) Reconciliation of the net loss after tax to the net cash
flows used in operating activities
Net profit / (loss) after tax
Adjustments for:
Issue of options
Capitalised exploration costs written off
Depreciation and amortisation
Gain on disposal of assets
Gain on sale of investments in associates
Loss on revaluation of investments
Profit on revaluation of commodity derivatives
GST not included in net profit / (loss)
Changes in assets and liabilities:
(Increase) / decrease in receivables
(Increase) / decrease in prepayments
Consolidated
2013
$
2012
$
(10,507,012)
535,572
(8,430,399)
(2,076,613)
(9,971,440)
(10,507,012)
535,572
(2,076,613)
365,184
9,827
258,255
-
(320,912)
750,200
(4,674,619)
1,324,314
(1,331,483)
15,044
413,533
361,554
220,101
(635,648)
-
-
-
-
182,352
(71,755)
Increase / (decrease) in trade and other payables
3,063,826
(77,704)
Increase / (decrease) in provisions
Changes in asset and liability values not related to net profit / (loss)
Net cash flow used in operating activities
(b) Reconciliation of cash
Cash at bank and in hand
Short-term deposits
51,480
(1,078,029)
(1,031,341)
12,882,989
3,430,000
16,312,989
44,198
-
(1,639,982)
1,166,189
13,920,995
15,087,184
All short term deposits can be withdrawn at any time.
Of the $16,312,989 cash at 30th June 2013, $14,399,593 is held in Hera Resources Pty Limited, as a result of
borrowings drawn on the Glencore loan facilities, but not used at year end. Under the terms of these facilities,
funds drawn are only available for use in the development of the Hera – Nymagee project, and may not be used
for other purposes.
64
YTC RESOURCES LIMITED ANNUAL REPORT2013 17. EXPENDITURE COMMITMENTS
Commitments contracted for at reporting date but not recognised
as liabilities are as follows:
Within one year
After one year but not longer than 5 years
Consolidated
2013
$
2012
$
5,304,574
344,105
5,648,679
67,348
23,627
90,975
18. SUBSEQUENT EVENTS
The Directors are not aware of any matter or circumstance that has arisen since the end of the year to the date of
this report which may significantly impact on the state of affairs of the Company.
19. PROFIT / (LOSS) PER SHARE
Profit / (loss) used in calculating basic and dilutive EPS
Weighted average number of ordinary shares outstanding
during the period used in the calculation of basic EPS
Weighted average number of ordinary shares outstanding
during the period used in the calculation of diluted EPS
Basic profit / (loss) per share (cents per share)
Diluted profit / (loss) per share (cents per share)
20. AUDITOR’S REMUNERATION
The auditor of YTC Resources Limited is Ernst & Young.
Amounts received or due and receivable by Ernst & Young for:
Audit or review of the financial report of the Company and any
other entity in the Group
Non-audit services – Research & Development grant application
Consolidated
2013
$
2012
$
535,572
(2,076,613)
255,224,325
249,505,438
262,724,325
249,505,438
0.21
0.20
(0.83)
(0.83)
77,264
-
77,264
55,104
27,012
82,116
There were no other services provided by Ernst & Young other than as disclosed above.
65
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Statements
21. RELATED PARTY AND INTER
COMPANY DISCLOSURES
Mr Woodham is the owner of the premises leased by
the Company at 2 Corporation Place, Orange NSW.
The lease is for a three year period to May 2013, and
an option to extend by a further three years has been
accepted. The gross rent paid in 2013 was $66,000
(including GST) (2012: $66,000). At 30 June 2013 $Nil
(2012: $Nil) was payable to Mr Woodham for rent.
For all payments to directors and executives please
refer to the “Remuneration Report” contained in the
“Directors Report”.
22. OPERATING SEGMENTS
Identification of reportable segments
The Consolidated Entity has identified its operating
segments based on the internal reports that are
reviewed and used by the Managing Director and
the Board of Directors (the chief operating decision
makers) in assessing performance and in determining
the allocation of resources.
The Consolidated Entity operates entirely in the industry
of exploration for and development of minerals in
Australia. The operating segments are identified by
management based on the size of the exploration
tenement. The reportable segments are split between
the Hera – Nymagee project, being the most significant
current project of the Company, all other tenements.
Financial information about each of these segments
is reported to the Managing Director and Board of
Directors on a monthly basis.
Corporate office activities are not allocated to operating
segments and form part of the reconciliation to net loss
after tax.
Accounting policies and inter-segment transactions
The accounting policies used by the Company in
reporting segments are the same as those contained
in note 2A to the accounts. The following items are
not allocated to operating segments as they are not
considered part of the core operations of any segment:
• Interest and other income
• Gain or loss on sale of financial assets
• Research & development grant
• Corporate costs
• Depreciation and amortisation of property, plant and
equipment
The following represents profit and loss and asset and
liability information for reportable segments for the
years ended 30 June 2013 and 30 June 2012.
66
YTC RESOURCES LIMITED ANNUAL REPORT2013 Segment Results
Year ended 30 June 2013
Segment income
Deferred exploration costs written-off
Segment net profit / (loss) after tax
Hera –
Nymagee
Project
Other
Exploration
Projects
Total
4,674,619
-
4,674,619
-
(9,827)
(9,827)
4,674,619
(9,827)
4,664,792
Reconciliation of segment net profit / (loss) after
tax to net profit / (loss) after tax:
Interest income
Other income
Loss on sale/revaluation of investments in associates
Research & development grant
Corporate operating costs
Corporate asset depreciation and amortisation
Net profit after tax per the statement of comprehensive income
Year ended 30 June 2012
Segment income
Deferred exploration costs written-off
Depreciation and amortisation
Other allocated costs
Segment net profit after tax
Reconciliation of segment net loss after tax to
net loss after tax
Interest income
Other income
Research & development grant
Corporate operating costs
Corporate asset depreciation and amortisation
Net Loss after tax per the statement of comprehensive income
Segment assets and liabilities for the year ended
30 June are as follows:
Segment assets at 30 June 2013
Cash and cash equivalents
Trade and other receivables
Property, plant and equipment
Financial Assets
Deferred exploration and evaluation expenditure
Mines under development
-
-
-
-
-
635,648
(361,554)
-
-
274,094
398,377
24,204
(429,288)
264,242
(4,128,500)
(258,255)
535,572
635,648
(361,554)
-
-
274,094
1,233,673
383,374
199,728
(3,947,381)
(220,101)
(2,076,613)
14,399,593
27,387
375,202
9,699,819
12,583,108
57,934,018
95,019,127
-
-
-
-
3,566,295
-
3,566,295
14,399,593
27,387
375,202
9,699,819
16,149,403
57,934,018
98,585,422
67
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Statements
Segment Results
Reconciliation of segment assets to total assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Corporate plant and equipment
Investments in associates
Financial assets
Total assets per the balance sheet at 30 June 2013
Segment liabilities at 30 June 2013
Trade and other payables
Deferred acquisition costs
Hera rehabilitation provision
Borrowings
Reconciliation of segment liabilities to total liabilities
Trade and other payables
Provisions
Total liabilities per the balance sheet at 30 June 2013
Segment assets at 30 June 2012
Property, plant and equipment
Deferred exploration and evaluation expenditure
Mines under development
Held-for-sale exploration assets
Reconciliation of segment assets to total assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Corporate plant and equipment
Investments in associates
Financial assets
Total assets per the balance sheet at 30 June 2012
Segment liabilities at 30 June 2012
Deferred acquisition costs
Reconciliation of segment liabilities to total
liabilities
Trade and other payables
Provisions
Total liabilities per the balance sheet at 30 June 2012
Hera –
Nymagee
Project
Other
Exploration
Projects
Total
42,566
7,062,303
339,000
29,675,551
37,119,420
-
-
-
-
-
242,671
42,671,068
3,734,098
-
46,647,837
-
2,938,169
-
-
2,938,169
1,913,396
1,462,513
118,792
832,975
477,400
355,431
103,745,929
42,566
7,062,303
339,000
29,675,551
37,119,420
3,814,652
206,508
41,140,580
242,671
45,609,237
3,734,098
-
49,586,006
15,087,184
158,417
133,836
1,114,879
1,152,118
110,000
67,342,440
7,795,391
7,795,391
-
-
7,795,391
7,795,391
793,392
155,028
8,743,811
68
YTC RESOURCES LIMITED ANNUAL REPORT2013 23. PARENT COMPANY INFORMATION
Information relating to the parent entity of the Group,
YTC Resources Limited:
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Issued capital
Reserves
Accumulated losses
Total shareholders’ equity
Profit / (loss) for the year
Commitments
Commitments contracted for at reporting date but not recognised as
liabilities are as follows:
Within one year
After one year but not longer than 5 years
Parent
2013
$
2012
$
3,494,701
58,467,016
61,961,717
4,021,160
-
4,021,160
57,940,557
15,379,437
51,963,003
67,342,440
948,420
7,795,391
8,743,811
58,598,629
70,180,671
2,396,118
67,074,707
2,030,934
(14,636,232)
(10,507,012)
57,940,557
58,598,629
(4,129,220)
(2,076,613)
Parent
2013
$
2012
$
190,834
344,105
534,939
67,348
23,627
90,975
24. FINANCIAL RISK MANAGEMENT
OBJECTIVES AND POLICIES
The Group’s management of financial risk is aimed at
ensuring cash flows are sufficient to:
• Withstand significant changes in cash flow at risk
scenarios and still meet all financial commitments as
and when they fall due; and
• Maintain the capacity to fund project development,
exploration and acquisition strategies.
The Group continually monitors and tests its forecast
financial position against these criteria.
The Group is exposed to the following financial risks:
liquidity risk, credit risk, and market risk (including
foreign exchange risk, commodity price risk and
interest rate risk).
The Directors are responsible for monitoring and
managing financial risk exposures of the Group.
The Group’s financial instruments consist mainly of
borrowings, deposits with banks, derivatives, payables
and receivables.
69
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Statements
The Group holds the following financial instruments:
a) Liquidity Risk
Financial Assets
Cash at bank
Term deposits
Receivables
Derivatives (put options)
Available for sale financial assets
Total financial assets
Financial Liabilities
Trade and other payables
Borrowings
Total financial liabilities
$
12,882,989
3,430,000
1,489,900
9,699,819
832,831
28,335,539
3,857,218
35,383,099
39,240,317
Liquidity risk arises from the possibility that the group
might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial
liabilities. Prudent liquidity risk management implies
maintaining sufficient cash to meet obligations when
due. The Group manages liquidity risk by continuously
monitoring forecast and actual cash flows. As the
Group is still in a development phase funds are
generated from equity subscriptions and by drawing
down on borrowing facilities.
Maturities of financial liabilities:
• Payables: Trade and other payables are expected to be
settled within 12 months.
• Borrowings: The table below shows the Group’s
financial arrangements at 30 June 2013 in their
relevant contractual maturity groupings.
Contractual maturities of loans
Glencore Facility A - matures 15/3/18
Glencore Facility B - matures 15/3/18
Glencore Facility E - matures 15/8/16
Total
<1 Year
1-2 Years
-
-
-
-
2-3 Years
-
-
5,078,542
5,078,542
4-5 Years
20,293,348
10,011,209
-
30,304,557
-
-
-
-
Total
20,293,348
10,011,209
5,078,542
35,383,099
b) Credit Risk Exposures
Credit risk represents the loss that would be recognised
if counterparties failed to perform as contracted.
The credit risk on financial assets of the entity which
have been recognised in the Consolidated Statement of
Financial Position is the carrying amount, net of any
provision for doubtful debts.
Credit risk is managed through the maintenance
of procedures which ensure, to the extent possible,
that counterparties to transactions are of sound
creditworthiness. Such monitoring is used in assessing
receivables for impairment.
No receivables are considered past due or impaired.
c) Foreign Currency Risk
impacted by
The Group undertakes transactions
foreign currencies; hence exposures to exchange
rate fluctuations arise. Although the majority of the
Group costs, including development expenditure, are
in Australian dollars many of these costs are affected
either directly or indirectly by movements in exchange
rates. When the Group begins to earn revenue from the
sale of commodities in 2014 most of the revenue will be
affected by movements in the USD:AUD exchange rate.
Currently the Group does not hedge against this risk.
The group considers the effects of foreign currency risk
on its financial position and financial performance and
assesses its option to hedge based on current economic
conditions and available market data.
d) Commodity Price Risk
There was no commodity price risk in the 2012/13 year
because there were no commodity sales. However the
Group is mindful that future revenue is exposed to
commodity price fluctuations, particularly gold, lead
and zinc prices. Price risk relates to the risk that the
fair value of future cash flows of commodity sales will
fluctuate because of changes in market prices largely
due to supply and demand factors for commodities. The
Group will be exposed to commodity price risk due to
the sale of gold, lead, zinc and copper on physical prices
determined by the market at the time of sale.
70
YTC RESOURCES LIMITED ANNUAL REPORT2013 Gold price risk is managed with the use of hedging
strategies through the purchase of gold put options to
establish gold “floor prices” in Australian dollars over
part of the group’s future gold production. Currently
28,912 ounces are optioned at a strike price of $AUD
1,500 per ounce. These options give YTC the right,
but not the obligation, to sell gold at the strike price
thereby allowing YTC to retain exposure to any future
rises in the gold price while providing protection to a
fall in the gold price below the strike price. As there
is no obligation to deliver into the options there is no
obligation to produce the gold. Gold prices, gold futures
and economic forecasts are constantly monitored to
determine whether to implement a hedging program.
As there have been no commodity sales during the
current financial year no price sensitivity analysis can
be performed.
e) Interest Rate Risk
Exposure to interest rate risk arises on financial assets
and liabilities recognised at reporting date whereby a
future change in interest rates will affect future cash
flows or the fair value of fixed rate financial instruments.
The group has long term financial liabilities on which
it pays interest and also holds cash and short term
deposits on which it receives interest.
The Group has not entered in any hedging activities to
cover interest rate risk. In regard to its interest rate risk
the Group continually analyses its exposure. Within
this analysis consideration is given to alternative
financing options, potential renewal of existing
positions, alternative investments and the mix of fixed
and variable interest rates.
The Group has performed a sensitivity analysis relating
to its exposure to interest rate risk at balance date.
This sensitivity analysis demonstrates the effect on the
current year results and equity which could result from
a change in interest rates.
Trade and other receivables, payables, derivatives
and available for sale assets, are not interest bearing.
Based on the cash and loan balances at the end of the
financial year, if interest rates were to change by + or
– 2% with all other variables remaining constant, the
estimated impact on pre-tax profits and equity would
have been as follows:
Interest Rate Sensitivity
Decrease interest
rates by 2%
Increase interest
rates by 2%
Profit
$
Equity
$
Profit
$
Equity
$
Carrying
Amount
$
2013
Financial Assets:
Borrowings net of cash and cash
equivalents assets 1
2012
Financial assets:
(19,070,110)
-
-
-
Cash and cash equivalents assets 2
15,087,184
(301,774)
-
301,774
-
-
1 Cash and cash equivalents include only short-term deposits with floating rates in AUD.
2 Under current accounting policy, interest is capitalised to mine properties in the statement of financial position, therefore any change to interest
rates does not impact current period profit.
f) Capital Risk Management
and acquisitions are funded from equity.
The Group’s capital management strategy is to maximise
shareholder value by debt financing its development
aspirations. The group believes this will reduce the
cost of capital and maximise shareholder returns but
it does bring an increased level of risk. The Group has
sought to reduce this risk by ensuring part of the debt
(44%) is convertible to equity, that interest rates are
favourable, that commodity prices are protected and
that non development activities including exploration
The Group’s capital structure consists of borrowings
and equity. The Group continues to monitor the capital
of YTC by assessing the financial risks and adjusting the
capital structure in response to changes in the risks.
The Group is continually evaluating financing and
capital raising opportunities.
The Group is not subject to any externally imposed
capital requirements.
71
YTC RESOURCES LIMITED ANNUAL REPORT2013
Financial Statements
YTC’s capital structure consists of:
Capital Structure
Borrowings
Cash and cash equivalents
Net borrowings
Equity
Total Capital (net borrowings
and equity)
g) Fair Value
$
(35,383,099)
16,312,989
(19,070,110)
62,605,349
43,535,239
All financial assets and liabilities recognised in the
balance sheet, whether they are carried at cost or at
fair value, are recognised at amounts that represent a
reasonable approximation of fair value unless otherwise
stated in the applicable note. Certain financial assets
were valued at cost as their fair value cannot be
determined reliably.
Fair value hierarchy
The Group uses the following hierarchy for determining
and disclosing the fair value of financial instruments by
valuation technique:
Level 1: quoted (unadjusted) prices in active markets
for identical assets or liabilities.
Level 2: other techniques for which all inputs that
have a significant effect on the recorded fair value are
observable, either directly or indirectly.
Level 3: techniques that use inputs which have a
significant effect on the recorded fair value that are
not based on observable market data.
The Group held the following financial instruments carried at fair value in the statement of financial
position, and measured at fair value through profit or loss:
2013
Assets
Shares in AusNiCo Limited
Options in AusNiCo Limited
Gold Put Options
Liabilities
Deferred acquisition costs
2012
Assets
Options in Taronga Mines Limited
Liabilities
Deferred acquisition costs
Level 1
$
Level 2
$
Level 3
$
477,400
-
-
-
-
-
-
355,431
9,699,819
7,062,303
110,000
7,795,391
-
-
-
-
-
-
During the reporting period ended 30 June 2013, and 30 June 2012, there were no transfers between level 1 and
level 2 fair value measurements.
25. SHARE BASED PAYMENT ARRANGEMENTS
(a) Recognised share based payments expenses
The expense recognised for executive and employee services received during the year is shown in the table below:
Expenses arising from the equity settled share based payment
transactions - eligible employees and directors
Consolidated
2013
$
2012
$
365,184
413,533
72
YTC RESOURCES LIMITED ANNUAL REPORT2013 (b) Type of share based payment plan
Employee Share Option Plan & Performance Rights Plan
The Company has established an Employee Share
Option Plan (ESOP) and a Performance Rights Plan.
The objective of these is to assist in the recruitment,
reward, retention and motivation of employees of YTC.
An individual may receive the options or nominate a
relative or associate to receive the options. The plans
are open to directors and eligible employees of YTC.
(c) Options and performance rights granted as at 30 June 2013
Grant Date
Expiry Date
Exercise
Price
Balance
at start of
the year
Number
Granted
during
the year
Number
Exercised
during
the year
Number
1-Jan-10
31-Dec-12
$0.40 1,275,000
6-May-11
31-Dec-14
$0.40 340,000
6-May-11
31-Dec-14
$0.45
1,300,000
15-Mar-12
15-Mar-16
-
840,000
-
-
-
-
29-Nov-12
29-Nov-15
29-Nov-12
29-Nov-15
12-Apr-13
18-Jun-16
$0.35
$0.45
-
-
-
-
1,850,000
1,850,000
1,670,000
Totals
3,755,000 5,370,000
Weighted average exercise price
0.42
0.40
-
-
-
-
-
-
-
-
-
Lapsed
during
the year
Number
1,275,000
Balance at
the end of
the year
Number
Exercisable
at the end
of the year
Number
-
-
-
340,000
340,000
350,000
950,000
950,000
-
-
-
-
840,000
1,850,000
1,850,000
1,670,000
-
-
-
-
1,625,000
7,500,000
1,290,000
0.41
0.41
0.44
(d) Options and performance rights granted as at 30 June 2012
Grant Date
Expiry Date
Exercise
Price
Balance
at start of
the year
Number
Granted
during
the year
Number
Exercised
during
the year
Number
Lapsed
during
the year
Number
Balance at
the end of
the year
Number
Exercisable
at the end
of the year
Number
4-May-07
4-May-12
$0.25
4,000,000
- 4,000,000
1-Jan-10
31-Dec-12
$0.40
1,275,000
6-May-11
31-Dec-14
$0.40
500,000
6-May-11
31-Dec-14
$0.45
1,350,000
-
-
-
-
160,000
50,000
15-Mar-12
15-Mar-16
-
-
840,000
-
Totals
7,125,000
840,000
4,210,000
Weighted average exercise price
0.32
-
0.26
-
-
-
-
-
-
-
-
-
1,275,000
1,275,000
340,000
340,000
1,300,000
1,300,000
840,000
-
3,755,000
2,915,000
0.42
0.42
(e) Weighted average remaining contractual life
(g) Performance Rights
The weighted average remaining contractual life for
the options outstanding as at 30 June 2013 is 2.2 years
(2012: 1.6 years).
(f) Fair Value of options granted
The fair value of the equity share options at grant date
is determined using a Black-Scholes option pricing
model or Trinomial Barrier Options model that takes
into account the terms and conditions upon which the
options were granted.
The model inputs for options granted and assessed fair
value at grant date of options granted during the year
ended 30 June 2013 is shown in Note 14.
During the year 1,670,000 Performance Rights were
issued to employees. Each Performance Right entitles
the Holder, upon vesting, to one fully paid ordinary
share at no cost. The Performance Rights vest as
follows:
• 595,000 Performance Rights vest upon the Company’s
shares price recording a 5 day VWAP of 40 cents
before 18 June 2016.
• 1,075,000 Performance Rights vest upon achieving
key KPI’s related to Hera Project delivery to 31st
December 2013.
73
YTC RESOURCES LIMITED ANNUAL REPORT2013 Financial Statements
26. CONTINGENT LIABILITIES
There are no contingent liabilities that require disclosure.
27. DIVIDENDS
No dividend was paid or declared by the Company
in the period since the end of the previous financial
year, and up to the date of this report. The Directors
do not recommend that any amount be paid by way of
dividend for the financial year ended 30 June 2013. The
balance of our franking account is nil (2012: Nil).
Consolidated
2013
$
2012
$
1,543,496
1,669,578
119,522
122,392
759,750
245,833
2,422,768
2,037,803
Short-term employee
benefits
Post-employment
benefits
Share based
payments
Total
28. KEY MANAGEMENT PERSONNEL
(i) Share holdings
Share, option & performance rights holdings
of directors, executives and key management
personnel
The number of shares in the Company held during
the financial year held by each director, executive and
key management personnel of YTC Resources Limited,
including their related parties, is set out below.
2013
Directors
Mr Anthony Wehby
Mr Rimas Kairaitis
Mr Robin Chambers
Mr Gary Comb
Dr Wenxiang Gao
Mr Mike Menzies
Mr Mark Milazzo
Ms Christine Ng
Mr Yong Chen
Dr Guoqing Zhang
Executives
Mr Dean Fredericksen
Mr Sean Pearce
Mr Richard Willson
Balance at
the start of
the year
Granted during
the year as
compensation
On exercise
of share
options
Other changes
during the year
Balance at
the end of
the year
745,000
4,438,544
860,003
-
510,000
-
-
-
-
-
-
-
-
6,553,547
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
745,000
30,000 (a)
4,468,544
-
250,000 (a)
-
-
-
-
-
-
-
-
860,003
250,000
510,000
-
-
-
-
-
-
-
20,000 (a)
20,000
300,000
6,835,547
74
YTC RESOURCES LIMITED ANNUAL REPORT2013
Balance at
the start of
the year
Granted during
the year as
compensation
On exercise
of share
options
Other changes
during the year
Balance at
the end of
the year
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
1,000,000
500,000
500,000
500,000
-
-
-
-
-
745,000
4,438,544
860,003
510,000
80,167 (a)
1,738,988
-
-
500,000
(3,520,317) (a)
500,000
-
-
-
-
160,000
(160,000) (a)
-
-
-
-
-
-
-
-
-
3,660,000
(3,600,150)
8,792,535
2012
Directors
Mr Anthony Wehby
Mr Rimas Kairaitis
Mr Robin Chambers
Dr Wenxiang Gao
Mr Richard Hill
Ms Christine Ng
245,000
3,438,544
360,003
10,000
1,158,821
-
Mr Stephen Woodham
3,520,317
Mr Yong Chen
Dr Guoqing Zhang
Executives
Mr Dean Fredericksen
Mr Sean Pearce
Mr Richard Willson
-
-
-
-
-
8,732,685
a) Acquired or disposed via on, or off market transaction.
(ii) Option & Performance Rights holdings
The numbers of options over ordinary shares in the Company and performance rights held during the financial year
by each director, executive and key management personnel of YTC Resources Limited and specified executive of the
Group, including their personally related parties, are set out below.
2013
Directors
Mr Anthony Wehby
Mr Rimas Kairaitis
Mr Robin Chambers
Mr Gary Comb
Dr Wenxiang Gao
Mr Mike Menzies
Mr Mark Milazzo
Ms Christine Ng
Mr Yong Chen
Dr Guoqing Zhang
Executives
Mr Dean Fredericksen
Mr Sean Pearce
Mr Richard Willson
Balance at
the start of
the year
Granted during
the year as
compensation
Exercised
during
the year
Other changes
during the year
Balance at
the end of
the year
-
250,000
-
-
-
-
-
-
-
-
420,000
550,000
650,000
600,000
600,000
500,000
500,000
500,000
-
500,000
500,000
-
-
330,000
270,000
-
1,870,000
4,300,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(500,000) (a)
600,000
850,000
500,000
500,000
500,000
-
500,000
500,000
-
-
750,000
820,000
150,000
(500,000)
5,670,000
75
YTC RESOURCES LIMITED ANNUAL REPORT2013
Financial Statements
Share, option & performance rights holdings of directors, executives and key management personnel
(continued)
2012
Directors
Mr Anthony Wehby
Mr Rimas Kairaitis
Mr Robin Chambers
Dr Wenxiang Gao
Mr Richard Hill
Ms Christine Ng
Mr Stephen Woodham
Mr Yong Chen
Dr Guoqing Zhang
Executives
Mr Dean Fredericksen
Mr Sean Pearce
Mr Richard Willson
Balance at
the start of
the year
Granted during
the year as
compensation
Exercised
during
the year
Other changes
during the year
Balance at
the end of
the year
500,000
1,000,000
500,000
500,000
500,000
-
500,000
-
-
500,000
500,000
600,000
-
500,000
250,000
1,000,000
-
-
-
-
-
-
-
80,000
50,000
50,000
500,000
500,000
500,000
-
500,000
-
-
160,000
-
-
5,100,000
430,000
3,660,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
250,000
-
-
-
-
-
-
-
420,000
550,000
650,000
1,870,000
29. HERA PROJECT DEFERRED
ACQUISITION COSTS
On 18 June 2009, the Company reached agreement to
purchase a 100% interest in the Hera Project and an
80% interest in the adjacent Nymagee Joint Venture
from CBH Resources Limited (CBH).
The total cost of the acquisition was as follows:
• Initial purchase price of $12,000,000 paid in cash.
• 5% gold royalty on gravity gold dore production from
the Hera deposit, capped at 250,000 oz Au.
During the reporting period, the Consolidated Entity
made a payment of $1,000,000 to amend the terms
of the acquisition, which includes reducing the gold
royalty from 5% to 4.5%.
The Consolidated Entity has
recorded deferred
consideration of $7,062,303 ($7,795,391 at 30 June
2013) representing the net present value of projected
royalty payments due under the revised terms of the
acquisition, calculated based on information available
as at 30 June 2013. The deferred consideration is
revalued at each reporting date in accordance with
AASB 3 with a corresponding adjustment to exploration
and evaluation assets acquired.
The Consolidated Entity had provisionally calculated the
fair value of the identifiable net assets. The fair values
at acquisition date were subsequently determined to be
as follows:
76
YTC RESOURCES LIMITED ANNUAL REPORT2013
2013
Fair Value as
reported
$
Transfers
$
Fair Value
Adjustments
$
Total
consideration
$
Exploration and evaluation assets
19,655,391
(19,655,391)
-
-
Mine development assets
-
19,655,391
266,912
19,922,303
Other property, plant and equipment
Fair value of identifiable net assets
140,000
19,795,391
-
-
-
140,000
266,912
20,062,303
Cost of the combination at 30 June 2013:
Cash consideration (paid)
Additional consideration paid during the reporting period
Deferred consideration (re-valued at 30 June 2013)
$
12,000,000
1,000,000
7,062,303
20,062,303
2012
Exploration and evaluation assets
Other property, plant and equipment
Fair value of identifiable net assets
Fair Value as
reported
$
15,592,952
140,000
15,732,952
Transfers
$
Fair Value
Adjustments
$
Total
consideration
$
4,062,439
19,655,391
-
140,000
4,062,439
19,795,391
-
-
-
$
12,000,000
7,795,391
19,795,391
Company will be able to pay its debts as and when they
become due and payable.
(d) This declaration has been made after receiving the
declarations required to be made to the Directors in
accordance with section 295A of the Corporations Act
2001 for the financial year ending 30 June 2013.
On behalf of the Board
Cost of the combination at 30 June 2012:
Cash consideration (paid)
Deferred consideration (re-valued at 30 June 2012)
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of YTC
Resources Limited, we state that:
In the opinion of the Directors:
(a) The financial statements and notes of the
consolidated entity are
in accordance with the
Corporations Act 2001, including:
(i) Giving a true and fair view of the consolidated
entity’s financial position as at 30 June 2013 and
of its performance for the year ended on that
date; and
(ii) Complying
Accounting
Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations
2001;
Australian
with
(b) The financial statements and notes also comply
with International Financial Reporting Standards as
disclosed in Note 2A (b); and
(c) There are reasonable grounds to believe that the
Anthony Wehby
Non-Executive Chairman
3 September 2013
77
YTC RESOURCES LIMITED ANNUAL REPORT2013 YTC RESOURCES LIMITED ANNUAL REPORT
20
13 Auditor’s Independence Declaration
680 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Auditor’s Independence Declaration to the Directors of YTC Resources
Limited
In relation to our audit of the financial report of YTC Resources Limited for the financial year ended 30
June 2013, to the best of my knowledge and belief, there have been no contraventions of the auditor
independence requirements of the Corporations Act 2001 or any applicable code of professional conduct.
Ernst & Young
Fisk
Ryan
Partner
Sydney
3 September 2013
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
78
YTC RESOURCES LIMITED ANNUAL REPORT2013
The Community and YTC
Top: Nymagee Magpies cricket team grand finalists. Middle left: First aid administered to YTC staff. Middle right, lower
left and lower right: Hera Mine Open Day at Nymagee.
79
YTC RESOURCES LIMITED ANNUAL REPORT2013 Independent Auditor’s Report
680 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001
Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au
Independent auditor's report to the members of YTC Resources Limited
Report on the financial report
We have audited the accompanying financial report of YTC Resources Limited, which comprises the
consolidated statement of financial position as at 30 June 2013, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
of cash flows for the year then ended, notes comprising a summary of significant accounting policies and
other explanatory information, and the directors' declaration of the consolidated entity comprising the
company and the entities it controlled at the year's end or from time to time during the financial year.
Directors' responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal controls as the directors determine are necessary to enable the preparation of the financial
report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also
state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the
financial statements comply with International Financial Reporting Standards.
Auditor's responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial report, whether due to fraud or error. In making
those risk assessments, the auditor considers internal controls relevant to the entity's preparation and
fair presentation of the financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal controls. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Independence
In conducting our audit we have complied with the independence requirements of the Corporations Act
2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a
copy of which is included in the directors’ report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
80
YTC RESOURCES LIMITED ANNUAL REPORT2013
2
Opinion
In our opinion:
a.
the financial report of YTC Resources Limited is in accordance with the Corporations Act 2001,
including:
i
ii
giving a true and fair view of the consolidated entity's financial position as at 30 June 2013
and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
b.
the financial report also complies with International Financial Reporting Standards as disclosed
in Note 2.
Report on the remuneration report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June
2013. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of YTC Resources Limited for the year ended 30 June 2013,
complies with section 300A of the Corporations Act 2001.
Ernst & Young
Ryan Fisk
Partner
Sydney
3 September 2013
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
81
YTC RESOURCES LIMITED ANNUAL REPORT2013
Additional ASX Information
SHAREHOLDER INFORMATION
Distribution of Security Holders
Additional Information required by the Australia Stock
Exchange Limited Listing Rules and not disclosed
elsewhere in this report.
This additional information was applicable as at 18
September 2013.
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
101,000-
DISTRIBUTION OF SECURITY HOLDERS
Total on register
201
596
538
1,210
244
2,789
Analysis of numbers of listed equity security holders by
size of holding.
There are 295 holders of less than a marketable parcel
of shares.
Statement of Top 20 Shareholders
Holder Name
YUNNAN TIN AUSTRALIA
HSBC CUSTODY NOMINEES
PERSHING AUSTRALIA NOMINEES
YUNNAN TIN (YTC) HOLDINGS PTY
GLENCORE AUSTRALIA FINANCE
J P MORGAN NOMINEES AUSTRALIA
JP MORGAN NOMINEES AUSTRALIA
LUJETA PTY LTD
LION SELECTION GROUP LIMITED
1
2
3
4
5
6
7
8
9
10
1215 CAPITAL PTY LTD
11 WEST TRADE ENTERPRISES PTY LTD
12
13
SMIFF PTY LTD
BNP PARIBAS NOMS (NZ) LTD
14 MR BRIAN HENRY MCCUBBING &
15 WEST TRADE ENTERPRISES PTY
16
17
18
19
JOJO ENTERPRISES PTY LTD
B&M JACKSON PTY LTD
NEFCO NOMINEES PTY LTD
KIMBRIKI NOMINEES PTY LTD
20 MR IAN BRUCE COOPER
Top 20 Total
Other Shareholders
Total On Issue
82
Units
30,630,504
17,478,897
16,560,316
12,141,905
9,390,000
9,034,646
6,018,372
6,000,000
5,000,165
4,608,363
4,358,000
4,167,244
3,915,589
3,000,000
2,642,000
2,621,173
2,541,045
2,047,500
2,000,000
1,830,000
145,985,719
117,601,630
263,587,349
% of issued
11.62%
6.63%
6.28%
4.61%
3.56%
3.43%
2.28%
2.28%
1.90%
1.75%
1.65%
1.58%
1.49%
1.14%
1%
0.99%
0.96%
0.78%
0.76%
0.69%
55.38%
44.62%
100%
YTC RESOURCES LIMITED ANNUAL REPORT2013 The number of securities disclosed above is as per
substantial notices given to the Company. Substantial
Shareholder interests in securities may change without
requiring the holder to provide notice of the change,
therefore resulting in a difference between their
disclosure and other disclosures in this report.
STATEMENT OF RESTRICTED SECURITIES
There are no restricted securities.
SUBSTANTIAL SHAREHOLDERS
Substantial Shareholders of the Company are as follows:
Substantial Shareholders
Yunnan Tin Aust TDK Resources Pty Ltd*
24,237,433
Yunnan Tin YTC Holdings Pty Ltd**
Glencore Australia Finance Holdings
Pty Ltd***
9,761,905
25,930,316
* The holder is a wholly owned subsidiary of Yunnan Tin Company
Group Limited
** The holder is a wholly owned subsidiary of the Hong Kong listed
China Yunnan Tin Minerals Group Company Limited
*** The holder is a member of the Glencore International Group
UNQUOTED SECURITIES
Holder
# Options over
Ordinary Shares
Expiry Date
Exercise Price
Employee Options
Employee Options
Director Options
Director Options
Performance Rights
Performance Rights
Total Unlisted Securities on Issue
340,000
950,000
31 December 2014
31 December 2014
1,850,000
29 November 2015
1,850,000
29 November 2015
840,000
15 March 2016
1,670,000
7,500,000
18 June 2016
$0.40
$0.45
$0.35
$0.45
$Nil
$Nil
VOTING RIGHTS
The voting rights attached to each class of equity security are as follows;
Ordinary Shares
Each ordinary share is entitled to one vote when a poll is called otherwise each member present at a meeting or by
proxy has one vote on a show of hands.
Options
These securities have no voting rights.
83
YTC RESOURCES LIMITED ANNUAL REPORT2013 Additional ASX Information
Tenement
Project
Location
Holder
Size
Schedule of Tenement Interests
Nymagee, NSW
Nymagee, NSW
Nymagee, NSW
Nymagee, NSW
Nymagee, NSW
Nymagee, NSW
Nymagee, NSW
Nymagee, NSW
Nymagee, NSW
Nymagee Resources Pty Ltd
4.8ha
Nymagee Resources Pty Ltd
0.34km2
Nymagee Resources Pty Ltd
3339m2
Nymagee Resources Pty Ltd
1.5ha
Nymagee Resources Pty Ltd
12.2ha
Nymagee Resources Pty Ltd
14.5km2
Nymagee Resources Pty Ltd
11.6km2
Hera Resources Pty Ltd
13.08km2
Hera Resources Pty Ltd
130km2
YTC
Interest
95%
95%
95%
95%
95%
95%
95%
100%
100%
ML53
ML90
Nymagee
Nymagee
ML5295
Nymagee
ML5828
Nymagee
PLL847
Nymagee
EL4232
Nymagee
EL4458
Nymagee
ML1686
EL6162
Hera
Hera
EL6226
Kadungle
70km north west of Parkes,
central west NSW
Defiance Resources Pty Ltd
87km2
100%
EL6258
Doradilla
50km southeast of Bourke
Stannum Pty Ltd
232km2
100%
EL6673
Baldry
EL6699
Tallebung
EL7446
Linera
32km north east of Parkes, central
west NSW
70km north west of Condobolin,
central west NSW
60km south of Cobar, western
NSW
Defiance Resources Pty Ltd
69.6km2
100%
Stannum Pty Ltd
72.5km2
100%
Defiance Resources Pty Ltd
116km2
100%
EL7447
Box Creek
Nymagee, NSW
Defiance Resources Pty Ltd
232km2
100%
EL7254
Barrow
25km West North West of
Nymagee
Defiance Resources Pty Ltd
121.8km2
100%
EL7529
Lyell
20km west of Nymagee
Defiance Resources Pty Ltd
8.7km2
100%
EL7661
Crowie
Creek
70km north west of Condobolin,
central west NSW
Hera Resources Pty Ltd
133.4km2
100%
Nymagee Resources Pty Ltd, Hera Resources Pty Ltd, Defiance Resources Pty Ltd and Stannum Pty Ltd are 100% owned subsidiaries of YTC
Resources Ltd.
20
13
ANNUAL REPORT
2 Corporation Place, Orange NSW Australia 2800
T: (02) 6361 4700 • F: (02) 6361 4711
E: office@ytcresources.com • W: www.ytcresources.com
ASX Code: YTC • ABN 37 108 476 384