ACN 148 966 545
Annual Report for the Year Ended 30 June 2016
ABN
Directors
AUROCH MINERALS LIMITED
CORPORATE DIRECTORY
91 148 966 545
Mr Glenn Whiddon (Executive Chairman)
Mr Matthew Foy (Non-Executive Director)
Mr Ryan Gaffney (Non-Executive Director)
Company Secretary
Mr Matthew Foy
Registered office
Website
Share Registry
Bankers
Auditors
Stock Exchange
Solicitors
Level 2, Office J
1139 Hay St
WEST PERTH WA 6005
Telephone +61 8 9486 4699
Facsimile +61 8 9486 4799
www.aurochminerals.com
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross WA 6153
Telephone +61 8 9315 2333
Facsimile +61 8 9315 2233
National Australia Bank
7 Sandridge Road
Bunbury WA 6230
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco, WA 6008
Australian Securities Exchange Limited
ASX Code: AOU
GTP Legal
Level 1, 28 Ord Street
West Perth WA 6005
1
AUROCH MINERALS LIMITED
CONTENTS
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional information
Page
3
20
21
23
24
25
26
57
58
60
2
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
Your Directors present their report on Auroch Minerals Limited (Auroch, Company or the Group) for the period 1 July
2015 to 30 June 2016.
REVIEW OF OPERATIONS
Sale of Manica Gold Project
On 30 June 2015 the Company advised it had entered into a binding agreement to sell 100% of the Manica mining
Concession 3990C to AIM-listed Xtract Resources Plc (Xtract or XTR) for total sale consideration of US$10 million in a
combination of cash and equity in Xtract, plus the assumption of project related creditors of up to US$1.5 million
(Agreement).
The Agreement was conditional upon Auroch obtaining prior consent of the Government of Mozambique through the
Ministry of Mineral Resources and Energy to the extent required under the Mozambique Mining Act and other applicable
laws relating to the change of control of the Company’s subsidiary and communicating such change of control to the
Mozambican mining authorities. Completion of the Agreement was also subject to Auroch obtaining shareholder approval
under ASX Listing Rule 11.2 for the sale of the Manica Mining Concession and Xtract obtaining approval for the admission
of the Consideration Shares to trading on AIM.
On 2 March 2016 the Company advised that final approval had been received under the Mozambique Mining Act from
the Mozambique Mining Act from the Mozambican mining authorities in addition to the earlier approvals from the Central
Bank and the Ministry of Taxation, permitting the completion of the sale of 100% of the Manica Gold Project to Xtract
(Completion).
The final terms of the Agreement with Xtract are as follows:
- Cash payment at Completion of ~A$4.2 million1 (US$3.0 million); and
-
Issue of 1,137,258,065 XTR Shares (currently valued at ~A$4.22 million2) (Completion Consideration).
Consideration to be paid 3 months post Completion:
- Deferred cash consideration of ~A$3.5million3 (US$2.5 million) payable as follows:
US$1.3 million cash; and
the remaining US$1.2 million will be payable in cash or XTR Shares (at Auroch’s election), issued at a 20%
discount to the 10-day VWAP prior to Auroch’s election.
Xtract and the Company also agreed to extend the date for the fulfilment of all conditions regarding the Transaction from
29 February 2016 to 31 March 2016 to facilitate payment of the Completion Consideration and admission to trading on
AIM of the XTR shares.
Deed of Settlement with Xtract Resources Plc
Subsequent to the Period on 20 July 2016 the Company advised it had entered into a deed of settlement with Xtract
Resources Plc (Xtract) with respect to the US$2.5 million deferred consideration payable by Xtract to the Company
(Settlement Deed).
1 Assumes 1 US Dollar equals 1.40 Australian Dollars
2 Assumes 1 British Pound equals 1.95 Australian Dollars and an Xtract share price of £0.0019
3 Assumes 1 US Dollar equals 1.40 Australian Dollars
3
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
Pursuant to the Sale Agreement (refer ASX Announcement 2 March 2016), three months following Completion Xtract was
obliged to pay the Company Deferred Consideration totalling US$2.5 million comprising US$1.3 million cash and the
remaining US$1.2 million payable in cash or XTR Shares at the Company’s election. The Company elected to receive the
Deferred Consideration in cash.
Settlement Deed Terms
Subject to the Xtract’s compliance with the Settlement Deed, the Company has agreed to refrain from taking legal action
against Xtract to enforce its obligation under the Sale Agreement to pay the Deferred Consideration on the following
conditions:
-
-
Xtract to make a first instalment payment of US$750,000 by 19 July 2016 (this has been paid); and
Xtract to make a second and final payment of US$1,785,671 by 12 August 2016 (Second Instalment), which
includes interest over the period 1 June 2016 to 19 July 2016, and interest on the Second Instalment over the
period 20 July 2016 to 12 August 2016.
On 26 August 2016 the Company advised that pursuant to the Settlement Deeds terms, the Company received the first
instalment payment of US$750,000 and had also received $100,000 of the Second Instalment. On 26 May 2016 Xtract
announced it had entered into a conditional sale and purchase agreement to sell the Manica Gold Project to Nexus Capital
Limited (Nexus) and Mineral Technologies International Limited (MTI) for cash consideration of US$17,500,000. On 17
August 2016 Xtract advised that it was currently in discussions with Nexus and MTI in relation to re-structuring the sale of
the Manica Gold Project to Nexus and MTI. The Company is in discussions with Xtract in relation to settlement of the
remaining US$1,685,671 owed to it and envisages that following completion of the discussions between Xtract, Nexus and
MTI, a resolution will be reached on the Second Instalment.
Norseman Gold Projects, Western Australia
Following completion of the sale of the Manica Gold Project, Auroch retains 100% of two prospecting licenses in Western
Australia; the Beete Gold Project (P63/1646) and the Peninsula Gold Project (P63/1694) (Figure 1). In addition to focusing
its efforts on these two tenements the Company will continue to assess potential future opportunities to add value to
shareholders.
4
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
Figure 1: Location of the Peninsula and Beete Gold Projects Western Australia
During the Period the Company provided an update on its Norseman Gold Projects, Western Australia. A complete review
of existing data for P63/1646 (the Beete Gold Project) & P63/1694 (the Peninsula Gold Project) commenced in April 2016,
including a reconnaissance site visit to both tenements and surrounding areas by CEO Dr Andrew Tunks. The Beete Gold
Project (P63/1646) is located approximately 55 kilometres south of Norseman (Figure 2), with the Peninsula Gold Project
(P63/1694) located approximately 27 kilometres north of Norseman (Figure 3).
5
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
P63/1646 - Beete
Figure 2: P63/1646 - Beete Gold Project location map.
The historic mine workings at the Beete Gold Project were visited and hand specimens collected. Gold mineralisation is
hosted within a narrow quartz vein, and sometimes in the adjacent hanging and/or footwall shear. The vein conforms
closely to the attitude of the host lithology (quartz rich arenites and quartz feldspar amphibole schists), however
considerable local variations in dip can occur.
The Beete Gold Project recorded production post-1974 was 2,816 tonnes of ore at an average grade of 24.8g/t Au [2,300
ounces].
There is sufficient encouragement from reconnaissance activities and an initial review of the data to suggest there is a
possibility of discovering economic quantities of structural lode style mesothermal gold veins on the tenements. An initial
proposal for further mapping and additional surface sampling has been designed to assess the potential of mineralisation
at the Beete Gold Project extending within the tenement.
6
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
P63/1694 - Peninsula
Figure 3: P63/1694 - Peninsula Gold Project location map.
The mineralisation at the Peninsula Gold Project was observed to be associated with north-south trending quartz veins
which dip at angles of 60-80 degrees to the east. A major quartz reef extends for the length of the tenement and was
worked in the late 1800’s and intermittently throughout the 1900’s. Five historic shafts on this north-south trend were
visited within the project area. At the north end of the tenement the main reef appears to have been faulted, and the
geology is complicated by drag folding associated with faulting. Small scale open cut and underground mining previously
occurred with a trial open pit mining operation yielding 424 tonnes of ore grading at 2.14 g/t Au, and a decline producing
495 tonnes of ore at 1.62 g/t Au. Mining was stopped due to issues with continuity.
At the Peninsula Gold Project, a preliminary review of current data shows possible extensions of the known mineralisation
both along strike and at depth. A targeted scout drilling program will be planned to test the potential extensions of
mineralisation in a bid to expand its size within the tenement.
A review of all existing data on the tenements was completed covering:-
• Assembly of pertinent data from the Department of Mines and Petroleum (DMP) GIS data sets;
• Assembly, processing and/or integration of the best available magnetic and gravity data with the aim of
generating images that will facilitate definition of: alteration, faults, joint sets, and potential field associations
of known gold occurrences in the region;
7
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
• Assembly and integration of geochemical data sets generated from the open-file exploration records of the
region; and
• Assembly and integration of any data generated from prior exploration drill holes, rock chip sampling, soil
sampling, and other sampling in the region.
Exploration programs at the Beete Gold Project (P63/1646) and Peninsula Gold Project (P63/1694) commenced in
September 2016. The programs are designed to cover the entirety of both projects. In addition, surface sampling programs
(infill and step-out) will be conducted with up to 100 mulloch, soil, and rock chip samples planned.
CORPORATE
CEO & Board Appointments
During the Period the Company advised that Dr. Andrew Tunks had committed to a full-time role as Auroch CEO. Auroch
Chairman Glenn Whiddon remarked “Andrew has been working with the Company for more than 12 months now and was
involved in both the re-evaluation of the Manica Gold Project and its subsequent sale. We are excited to welcome Andrew
into a more fulsome role where his passion for the industry and close links to Capital Markets and technical expertise will
be of great value to the Company.”
Dr Tunks holds a B.Sc (Hons) Monash and a Ph.D UTAS in geology and has over 25 years’ experience in the minerals
industry. He previously held senior technical roles at North Limited, Paladin Resource, Ranger Minerals and Iamgold and
was CEO of A-Cap Resources, Botswana Metals and Ausgold. Over the last few years Andrew has successfully built a
bespoke geological consultancy providing highly targeted advice on technical mining issues.
The Company also advised that Mr Ryan Gaffney had been appointed to the Board as Non-Executive Director. Mr Gaffney
holds a BSBA in Finance and Economics from the Daniels College of Business, University of Denver, Colorado.
Mr Gaffney, based in London, UK, currently runs an independent advisory and consulting business focused on Mergers
and Acquisitions advisory and fundraising for small and medium-cap companies. He was previously a Managing Director
with Canaccord Genuity in London, where he focused on providing natural resources clients with mergers and acquisitions,
financing, and advisory services from 2002 to 2015.
Following the appointment of Mr Gaffney, the Company advised that Mr Nicholas Ong had resigned as Director of the
Company. The Company wishes to thank Mr Ong for his significant contribution to the Company over the past two years.
Shareholder Approval
The Company announced that all resolutions put to shareholders at the extraordinary general meeting held on 15 October
2015, including a resolution relating to the sale of the Manica Gold Project, had been approved by shareholders.
Shareholder approval for the sale of the Manica Gold Project amounted to a key condition precedent to completion of the
transaction with Xtract.
In addition, the Company sought and obtained shareholder approval for, the issue of up to 1,139,956 convertible note
securities (Convertible Notes). On 23 October 2015, Convertible Notes representing a face value of $250,000 were
converted into 3,350,723 ordinary shares and 1,675,361 attaching options exercisable at $0.08 on or before 31 December
2018. The Company also issued 1,850,000 ordinary shares and 1,000,000 options exercisable at $0.10 on or before 23
October 2018 in settlement of outstanding creditors and deferred payments.
8
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
Partly Paid Share Consolidation & Option Entitlement Offer
During the Period, the Company announced it had completed a reduction of its share capital by:
-
Extinguishing the uncalled amount of 19 cents per share on 21,800,000 partly paid shares; and
- Consolidating those shares on a 20:1 basis into 1,090,000 fully paid ordinary shares.
Following the consolidation and capital reduction and as at the date of this report the Company has 76,810,865 ordinary
shares on issue.
On 14 April 2016, the Company despatched an entitlement offer to issue the partly paid shareholders 19 new options with
an exercise price of $0.20 on or before 23 October 2018 at a subscription price of $0.005 per new option for every 20
partly paid shares held prior to the capital reduction and consolidation. The Company received subscription applications
totalling 13,844,650 new options pursuant to the Options Offer raising $69,223 before costs. On 23 June 2016 the
Company issued an additional 6,550,000 new options pursuant to the shortfall offer.
Settlement of Outstanding Loans
The Company announced on 18 April 2016 that it had repaid all loans and convertible notes outstanding representing
$496,723. The outstanding balances have been repaid via the settlement of 169,561,799 shares in Xtract.
Sale of Xtract Resources Plc shares
During the Period the Company realised the initial scrip consideration received from Xtract by disposing of 967,696,266
XTR shares at an average XTR share price of £0.001204 per share for total proceeds of £1,165,051 (A$2,250,507) to Auroch.
After adjusting for the loans settled in XTR shares (refer announcement 18 April 2016) the Company booked a loss of
A$1,230,413 following a decline in the XTR share price and announcement by XTR of the sale of the Manica Project to
Nexus Capital Limited and Mineral Technologies International Limited.
9
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
Appendix 1 - Interest in Exploration Tenements
Western Australia
Tenement
Tenement
ID
Status
Interest
Beete
P63/1646
Granted
Peninsula
P63/1694
Granted
100%
100%
Competent Persons Statement
The information in this report that relates to Exploration Results is based on information compiled by Dr. Andrew Tunks and represents an accurate representation of
the available data. Dr. Tunks (Member Australian Institute Geoscientists) is the CEO of the Company and has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Tunks consents to the inclusion in the report of the matters based on
his information in the form and context in which it appears.
DIRECTORS
The names of Directors who held office during or since the end of the period:
Mr Glenn Whiddon
Mr Matthew Foy
Mr Nicholas Ong (resigned 29 June 2016)
Mr Ryan Gaffney (appointed 29 June 2016)
All directors were in office for the entire duration unless otherwise stated.
INFORMATION ON DIRECTORS
Information on Directors as at the date of this report is as follows:
Mr Glenn Whiddon
Executive Chairman
Glenn has an extensive background in equity capital markets, banking and corporate advisory with specific focus on natural
resources, enabling project origination and financing. He has a significant contact network throughout the world which
has led to the development of a number of projects. Glenn holds an economics degree and has extensive corporate and
management experience. He has global banking experience with The Bank of New York in Australia, Europe and Russia.
Mr Whiddon is currently a director of Azonto Petroleum Ltd, Fraser Range Metals Group Ltd and Statesman Resources
Ltd.
In the past 3 years Mr Whiddon has been a director of Zyl Ltd, Sirocco Energy Ltd and Rialto Energy Ltd.
Equity interests: 9,634,627 ordinary shares, 1,818,147 options exercisable at $0.08 on or before 31 December 2018,
2,850,000 options exercisable at $0.20 on or before 23 October 2018.
10
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
Mr Ryan Gaffney (Appointed 29 June 2016)
Non-Executive Director
Ryan holds a BSBA in Finance and Economics from the Daniels College of Business, University of Denver, Colorado. Ryan,
based in London, UK, currently runs an independent advisory and consulting business focused on Mergers and Acquisitions
advisory and fundraising for small and medium-cap companies. He was previously a Managing Director with Canaccord
Genuity in London, where he focused on providing natural resources clients with mergers and acquisitions, financing, and
advisory services from 2002 to 2015.
Ryan is not currently a director of any other listed company and has not held any directorships in the last three years.
Equity interests in the Company: Nil.
Mr Matthew Foy
Non-Executive Director & Company Secretary
Matthew is an active member of the WA State Governance Council of the Governance Institute of Australia (GIA) and
spent four years at the ASX facilitating the listing and compliance of companies. Matthew is also currently Non-executive
Director of Minerals Corporation Ltd.
In the last 3 years, Matthew has been a Non-Executive Director of Segue Resources Ltd (resigned 1 September 2014),
Omni Market Tide Limited (resigned 22 July 2015) and MSM Corporation Ltd (resigned 12 Januay 2016).
Equity interests in the Company: 175,000 ordinary shares.
Mr Nicholas Ong
Non-Executive Director (resigned 29 June 2016)
Nicholas was a Principal Adviser at the Australian Securities Exchange (ASX) in Perth and brings ten years’ experience in
compliance and corporate governance to the Board. He has overseen the admission of over 100 companies on to the
official list of the ASX. Nicholas is a member of the Governance Institute of Australia and is Managing Director of Minerva
Corporate, a corporate advisory firm that specialises in providing transaction advisory, financial reporting and company
secretarial services. Nicholas holds a Bachelor of Commerce and a Master of Business Administration from the University
of Western Australia.
DIRECTORS MEETING
There were no formal Directors’ meetings held during the period. The Directors’ conducted formal business via
circulating resolution.
REMUNERATION REPORT (Audited)
The Remuneration Report is set out under the following main headings:
Remuneration policy
Details of remuneration
Share-based compensation
Equity instrument disclosures relating to Key Management Personnel
Loans to Key Management Personnel
Other transactions with Key Management Personnel
Service agreements
11
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
The information provided in this remuneration report has been audited as required by section 308 (3C) of the Corporations
Act 2001.
This report details the nature and amount of remuneration for each Director of Auroch Minerals Limited and key
management personnel of the group. Person who are considered key management personnel of the group during the
Period are as follows:
- Glenn Whiddon (Executive Chairman)
- Nicholas Ong (Non-Executive Director, resigned 29 June 2016)
- Matthew Foy (Non-Executive Director, Company Secretary)
- Andrew Tunks (Chief Executive Officer, appointed 9 January 2015)
- Ryan Gaffney (Non-Executive Director, appointed 29 June 2016)
1. Remuneration policy
The remuneration policy of Auroch has been designed to align director and management objectives with shareholder and
business objectives by providing a fixed remuneration component, and offering specific long-term incentives, based on
key performance areas affecting the Group’s financial results. Key performance areas of the Group include cash flow,
share price, exploration results and development of cash-generating business activities. The Board of Directors (the Board)
of Auroch believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best
management and directors to run and manage the Group, as well as create goal congruence between directors, executives
and shareholders.
Voting and comments made at the company’s 2015 Annual General Meeting
At the 2015 Annual general Meeting the Company remuneration report was passed by the requisite majority of
shareholders (100% by a show of hands).
Remuneration Governance
The Board’s policy for determining the nature and amount of remuneration for Board members and senior executives of
the Group is as follows:
The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was
developed and approved by the Board. All executives receive a base salary (which is based on factors such as length of
service and experience), superannuation, fringe benefits and the ability to receive options and performance-based
incentives. The remuneration committee, composed of the full Board, reviews executive packages annually by reference
to the Group’s performance, executive performance, and comparable information from industry sectors and other listed
companies in similar industries.
Executives are also entitled to participate in the employee share and option arrangements.
The employees of the Group receive a superannuation guarantee contribution required by the government, which is
currently 9.5%, and do not receive any other retirement benefits.
All remuneration paid to Directors and executives is valued at the cost to the Group and expensed. Options (if applicable)
given to Directors and Key Management Personnel are valued using an appropriate option pricing methodology.
The Board policy is to remunerate non-executive Directors at the lower end of market rates for comparable companies
for time, commitment, and responsibilities. The remuneration committee determines payments to the non-executive
Directors and reviews their remuneration annually based on market practice, duties, and accountability. Independent
external advice is sought when required. Fees for non-executive Directors are not linked to the performance of the Group.
However, to align Directors’ interests with shareholder interests, the Directors are encouraged to hold shares in the Group.
12
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
The maximum aggregate amount of fees that can be paid to non-executive Directors was approved by shareholders at a
General Meeting held on 11 February 2011. The maximum amount of fees payable to non-executive directors is
$250,000 per annum.
The Board expects that the remuneration structure implemented will result in the company being able to attract and
retain the best executives to run the Company. It will also provide executives with the necessary incentives to work to
grow long-term shareholder value.
The payment of bonuses, options and other incentive payments are reviewed by the Board as part of the review of
executive remuneration. All bonuses, options and incentives must be linked to predetermined performance criteria. The
Board can exercise its discretion in relation to approving incentives, bonuses and options. Any changes must be justified
by reference to measurable performance criteria. During the Period no performance based incentives, options or bonuses
were granted to any director or executive. As such, no pre-determined performance criteria have been outlined for the
existing Board.
During the year the company did not seek the advice of remuneration consultants.
Company performance, shareholder wealth and director and executive remuneration.
The following table shows gross revenue, profits/losses and share price of the Group at the end of the current and previous
financial years since incorporation. There is no link between company performance and remuneration given the current
nature of the Company’s operations.
Revenue from continuing operations (interest only)
Net profit/(loss)
Share price
30 June
2016
$
30 June
2015
$
1,178
2,510,541
$0.13
81,791
(1,003,116)
$0.12
30 June
2014
$
29,154
(921,051)
$0.05
30 June
2013
$
110,819
(1,093,562)
$0.09
The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives.
This will be achieved via offering performance incentives based on key performance indicators.
2. Details of remuneration
2016
Name
Short-term
benefits
Cash
Salary and
Fees
Post-
employment
benefits
Super-
annuation
Share-based Payment
Equity
Option
s
Total
%
perf. based
Glenn Whiddon
Matthew Foy
Nicholas Ong (i)
Ryan Gaffney (ii)
Other
Andrew Tunks
Total
171,800
-
-
-
114,785
286,585
(i) Nicholas Ong resigned 29 June 2016
(ii) Ryan Gaffney appointed 29 June 2016
-
-
-
-
-
-
-
16,450
-
-
40,000
56,450
13
-
-
-
-
-
-
171,800
16,450
-
-
154,785
343,035
-
-
-
-
-
-
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
2015
Name
Short-term
benefits
Cash
Salary and
Fees
Post-
employment
benefits
Super-
annuation
Share-based
Payment
Equity
Options
Total
%
perf. based
Glenn Whiddon
Matthew Foy (i)
Jan Nelson (ii)
Nicholas Ong
Other
Francisco Matos
Gordon Koll
Jim Porter
Andrew Tunks (iii)
Total
148,160
-
41,113
-
108,215
115,180
92,396
30,000
535,064
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
148,160
-
41,113
-
108,215
115,180
92,396
30,000
535,064
-
-
-
-
-
-
-
-
(i) Matthew Foy was appointed 3 December 2014
Jan Nelson resigned 28 November 2014
(ii)
(iii) Andrew Tunks was appointed on 9 January 2015
3. Share-based compensation
The Auroch Minerals Limited Employee Share Plan (the “Plan”) is used to reward Directors and employees for their
performance and to align their remuneration with the creation of shareholder wealth. Approved by Shareholders 4 April
2013 the Plan is designed to provide long-term incentives to deliver long-term shareholder returns. Participation in the
Plan is at the discretion of the Board and no individual has a contractual right to participate in the plan or to receive any
guaranteed benefits.
During the Period no shares were issued under the Plan.
Shares
There were no shares issued to Directors or employees by the Group under the Plan during the year (2015: Nil), refer to
the above table for details of share based payments to Directors and employees not under the Plan.
Options
There were no options issued to Directors or employees by the Group (2015: Nil) under the Plan during the year.
4. Equity Instrument Disclosures Relating to Key Management Personnel
(i) Options provided as remuneration and shares issued on any exercise of such options
There were no options provided as remuneration and shares issued on any exercise of such options issued during the
period.
(ii) Option holdings
At the end of the period, the Director’s option holdings are as follows:
14
2016
Fully Paid Shares
Directors
Glenn Whiddon
Nicholas Ong (i)
Matthew Foy
Ryan Gaffney (ii)
2016
Fully Paid Shares
Directors
Glenn Whiddon
Nicholas Ong (i)
Matthew Foy
Ryan Gaffney (ii)
Employees
Andrew Tunks
Total
(i)
(ii)
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
Balance at the
start of the period
Received during
the period
Other changes during the
period
Balance at the end
of the period
-
-
-
-
2,850,000
57,000
-
-
-
2,907,000
1,818,147
(57,000)
-
-
4,668,147
-
-
-
-
1,761,147
-
4,668,147
Employees
Andrew Tunks
Total
(i) Mr Ong resigned as Director on 29 June 2016
(ii) Mr Gaffney appointed as Director on 29 June 2016
-
-
(iii) Share holdings
Aggregate numbers of shares of the Group held directly, indirectly or beneficially by Directors or key management
personnel of the Group at the date of this report:
Balance at the
start of the period
Received during
the period
Other changes during the
period
Balance at the end
of the period
5,508,333
80,000
-
-
-
5,588,333
-
3,000
175,000
-
500,000
678,000
4,126,294
(83,000)
-
-
9,634,627
-
175,000
-
-
4,043,294
500,000
10,309,627
Mr Ong resigned as Director on 29 June 2016
Mr Gaffney appointed as Director on 29 June 2016
2016
Partly Paid Shares
Directors
Glenn Whiddon
Matthew Foy
Nicholas Ong
Balance at the start
of the period
Received during the
period
Other changes
during the period
Balance at the end of
the period
3,000,000
-
60,000
-
-
-
(3,000,000)
-
(60,000)
-
-
-
15
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
Employees
Andrew Tunks
Total
(i) Mr Ong resigned as Director on 29 June 2016
(ii) Mr Gaffney appointed as Director on 29 June 2016
-
3,060,000
5. Loans to Key Management Personnel
There were no loans to key management personnel during the year.
6. Other transactions with Key Management Personnel
-
-
-
(3,060,000)
-
-
Mr Nicholas Ong is a director of Minerva Corporate Pty Ltd. During the period ended 30 June 2016 the Company was
providing consultancy, company secretarial, accounting and administration and registered office services to Auroch
Minerals Limited. In accordance with the services agreement the monthly charge for these services is $8,000 per month.
Payments to Minerva Corporate Pty Ltd during the relevant period total $116,500 (2015: $99,000). The amounts owed to
Minerva Corporate Pty Ltd as at 30 June 2016 was $9,000 (2015: $132,061).
Loan received from Glenn Whiddon (Executive Director) during the period to fund the groups working capital
commitments. The loan was repayable within 7 business days’ following written notice by the Lender to the Borrower.
Interest was payable at 9.25% per annum on repayment date. Should interest not be paid then the interest rate increased
to 12%. This loan was repaid by the group in the form of Xtract shares.
During the period Mr Glenn Whiddon and his associated entities converted convertible loans totalling $300,000 into
3,636,294 ordinary shares and 1,818,147 options exercisable at $0.08 on or before 31 December 2018 pursuant to
shareholder approval obtained on 15 October 2015.
During the period Mr Matthew Foy was issued 175,000 ordinary shares in lieu of fees subject to shareholder approval
obtained 15 October 2015.
During the period Mr Andrew Tunks was issued 500,000 ordinary shares in lieu of fees.
7. Service Agreements
Mr Andrew Tunks has a consultancy agreement with the Company whereby Mr Tunks provides services in his capacity as
Chief Executive Officer. The consulting agreement commenced on 9 January 2015 and was amended on 29 June 2016 for
an indefinite term at $250,000 per annum. The Company or Mr Tunks may terminate the agreement by giving one months’
notice, or by the Company making one months’ payment in lieu of notice.
No other key management personnel have Service Agreements in place.
End of Audited Remuneration Report
OPERATING RESULTS
The net loss after providing for income tax amounted to $2,701,923 (2015: $1,003,116).
PRINCIPAL ACTIVITY
The principal activity of the Group is mineral exploration and development.
16
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
DIVIDENDS
There were no dividends paid or recommended during the financial year ended 30 June 2016 (2015: Nil).
FINANCIAL POSITION
The net assets of the Group at 30 June 2016 are $8,655,798 (2015: $4,123,489).
ENVIRONMENTAL REGULATIONS
In the normal course of business, there are no environmental regulations or requirements that the Group is subject to.
Greenhouse gas and energy data reporting requirements
The Company is not required to report under the Energy Efficiencies Opportunity Act 2006 or the National Greenhouse
and Energy Efficient Reporting Act 2007 (the Acts).
INDEMNIFYING OFFICERS OR AUDITOR
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001 every Officer of the
Company shall be indemnified out of the property of the Company against any liability incurred by him in his capacity as
Officer, auditor or agent of the Company or any related corporation in respect of any act or omission whatsoever and
howsoever occurring or in defending any proceedings, whether civil or criminal. During the period the Group paid
$10,250 in premiums for Directors and Officer Insurance.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Group, or to intervene in any proceedings to which the Group is a party, for the purposes of taking
responsibility on behalf of the Group for all or part of those proceedings.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
On 2 March 2016 the Company advised that final approval had been received under the Mozambique Mining Act from
the Mozambique Mining Act from the Mozambican mining authorities in addition to the earlier approvals from the Central
Bank and the Ministry of Taxation, permitting the completion of the sale of 100% of the Manica Gold Project to Xtract
(Completion).
Other than the above there has been no other significant changes in the state of affairs of the Group during the financial
year.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
In the opinion of the Directors, disclosure of any further information on likely developments in operations and expected
results would be prejudicial to the interests of the Group, the consolidated entity and shareholders.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
On 4 July 2016 the Company advised that it had conducted final due diligence investigations on the Hombolo Lithium
Project. Assay Results from due diligence sampling conducted in May across the Hombolo Ground package yielded
disappointing results and showed no significant anomalism across the tenement package outside the historic open pit
workings within the Primary Mining Licences.
Subsequent to the Period on 20 July 2016 the Company advised it had entered into a deed of settlement with Xtract
17
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
Resources Plc with respect to the US$2.5 million deferred consideration payable by Xtract to the Company.
Subject to the Xtract’s compliance with the Settlement Deed, the Company agreed to refrain from taking legal action
against Xtract to enforce its obligation under the Sale Agreement to pay the Deferred Consideration on the following
conditions:
- Xtract to make a first instalment payment of US$750,000 by 19 July 2016 (this has been paid); and
- Xtract to make a second and final payment of US$1,785,671.86 by 12 August 2016 (Second Instalment), which
includes interest over the period 1 June 2016 to 19 July 2016, and interest on the Second Instalment over the
period 20 July 2016 to 12 August 2016.
On 26 August 2016 the Company advised that pursuant to the Settlement Deeds terms, the Company received the first
instalment payment of US$750,000 and had also received $100,000 of the Second Instalment. The Company is in
discussions with Xtract with regards to final settlement of the remaining US$1,685,671.
NON AUDIT SERVICES
During the financial period the following fees were paid or payable for services provided by the auditor:
BDO Corporate Tax (WA) Pty Ltd, tax compliance
2016
$
34,454
34,454
2015
$
9,466
9,466
The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s
expertise and experience with the Group and/or the group are important.
The board of directors has considered the position and is satisfied that the provision of the non-audit services is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied
that the provision of non-audit services by the auditor did not compromise the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
all non-audit services have been reviewed by the board of directors to ensure they do not impact the impartiality
and objectivity of the auditor
none of the services undermine the general principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants.
18
AUDITOR’S INDEPENDENCE DECLARATION
AUROCH MINERALS LIMITED
DIRECTORS’ REPORT
A copy of the independence declaration by the lead auditor under section 307C of the Corporations Act 2001 is included
on page 20 of this financial report.
This report is signed in accordance with a resolution of the Board of Directors.
Glenn Whiddon
DIRECTOR
Dated this 30th day of September 2016
19
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY DEAN JUST TO THE DIRECTORS OF AUROCH MINERALS LIMITED
As lead auditor of Auroch Minerals Limited for the year ended 30 June 2016, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Auroch Minerals Limited and the entities it controlled during the
period.
Dean Just
Director
BDO Audit (WA) Pty Ltd
Perth, 30 September 2016
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN
77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK
company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under
Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
AUROCH MINERALS LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Revenue
Less Expenses:
Accounting fees
Audit fees
Borrowing Costs
Consulting fees
Corporate advisory
Directors expense
Employee Benefits Expense
Share buy back
Corporate and regulatory fees
Interest
Impairment expense
Legal costs
Share based payment expense
Travel & accommodation
Finance costs
Foreign exchange loss
Other expenses
(Loss) before income tax
Income tax expense
(Loss) after income tax
Note
3
2016
$
2015
$
43,893
81,791
(108,142)
(41,265)
(12,500)
(422,834)
(30,000)
(18,887)
(25,000)
-
(22,734)
(80,261)
(556,534)
(157,222)
(265,563)
(75,520)
(221,209)
(482,780)
(127,071)
(2,603,629)
(79,193)
(37,380)
-
(217,702)
(28,757)
(48,000)
-
42,630
(17,541)
(140,375)
(13,915)
-
-
(77,946)
(351,216)
-
(116,628)
(1,004,232)
5
(847,355)
(3,450,984)
-
(1,004,232)
Profit from sale of discontinued operations
Profit/(Loss) for the year
5,961,525
2,510,541
1,116
(1,003,116)
21
AUROCH MINERALS LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Other comprehensive income
Items that have been reclassified to the profit or loss
Exchange differences on disposal of controlled entities
Items that may be reclassified to the profit or loss
Exchange difference on translation of foreign operations
Other comprehensive income/(loss for the year net of tax
Total comprehensive income/(loss) for the year attributable to
the owners of Auroch Minerals Limited
Basic profit/loss per share (cents per share) from continuing
operations attributable to the ordinary equity holders of the
company
Diluted profit/loss per share (cents per share) attributable to the
ordinary equity holders of the company
Basic profit/loss per share (cents per share) attributable to the
ordinary equity holders of the company
Diluted profit/(loss) per share (cents per share) attributable to
the ordinary equity holders of the company
6
6
6
6
191,382
-
191,382
-
(828,689)
(828,689)
2,701,923
(1,831,805)
(5.27)
(5.27)
4.12
2.62
(1.79)
(1.79)
(1.79)
(1.79)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with
the accompanying notes.
22
AUROCH MINERALS LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
Note
2016
$
2015
$
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Assets held for sale
Total Current Assets
Non-current Assets
Mineral exploration and evaluation expenditure
Total Non-current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Borrowings
Financial liabilities
Total Current Liabilities
Non-current Liabilities
Financial liabilities
Total Non-current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
7
8
9
10
11
11
5,223,618
3,392,763
-
8,616,381
86,667
20,086
7,947,290
8,054,043
171,507
171,506
206,866
206,866
8,787,888
8,260,909
132,090
-
-
132,090
2,278,448
414,113
1,444,859
4,137,420
-
-
-
-
132,090
4,137,420
8,655,798
4,123,489
12
13
14
9,518,702
389,175
(1,252,079)
7,961,958
(75,849)
(3,762,620)
8,655,798
4,123,489
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
23
AUROCH MINERALS LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Contributed
Equity
Accumulated
Losses
Option
Reserve
$
$
$
$
Share Based
Payments
Reserve
Foreign
Currency
Translation
Reserve
$
Total Equity
$
Balance at 1 July 2015
Profit/Loss for year
Exchange difference on foreign
operations
Total comprehensive loss for year
Transactions with owners in their
capacity as owners:
Issue of shares
Issue of options
Share based payment reserve
Share capital raising costs
7,961,958
-
(3,762,620)
2,510,541
-
-
-
2,510,541
1,575,130
-
-
(18,386)
-
-
-
-
Balance at 30 June 2016
9,518,702
(1,252,079)
Balance at 1 July 2014
Loss for year
Exchange difference on foreign
operations
Total comprehensive loss for year
Transactions with owners in their
capacity as owners:
Issue of shares
Share buy-back
Share based payment reserve
Share capital raising costs
14,699,457
-
(2,759,504)
(1,003,116)
-
-
-
(1,003,116)
771,862
(7,500,000)
-
(9,361)
-
-
-
-
Balance at 30 June 2015
7,961,958
(3,762,620)
-
-
-
-
115,533
-
-
-
(191,382) 4,123,489
- 2,510,541
191,382
191,382
191,382 2,701,923
-
194,828
-
-
194,828
-
-
-
-
-
-
-
-
-
-
-
78,814
-
194,347
42,630
-
-
-
-
(42,630)
115,533
-
- 1,575,130
-
-
273,642
-
(18,386)
-
- 8,655,798
637,307 12,619,890
- (1,003,116)
(828,689)
(828,689)
(828,689) (1,831,805)
-
771,862
- (7,542,630)
115,533
-
(9,361)
-
115,533
(191,382) 4,123,489
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
24
AUROCH MINERALS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Other revenue
Interest received
Interest Paid
Other Payments GST
Net cash (outflow) from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for acquisitions
Payments for exploration expenditure
Proceeds from sale of prospects
Net cash (outflow) from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
Capital raising costs
Net cash inflow from financing activities
Net increase/decrease in cash and cash equivalents
Foreign exchange movement on cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Note
2016
$
2015
$
15
(1,382,359)
-
1,146
(179,442)
(55,796)
(1,616,451)
(218,413)
-
900
-
-
(217,513)
-
(999,811)
7,306,573
6,306,762
(350,000)
(890,224)
-
(1,240,224)
829,673
(21,505)
808,168
1,238,845
(26,011)
1,212,834
5,498,479
(361,528)
86,667
(244,903)
-
331,570
NET CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
7
5,223,618
86,667
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
25
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
In order to assist in the understanding of the accounts, the following summary explains the material accounting policies
that have been adopted in the preparation of the accounts.
(a) Basis of Preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards,
other authoritative pronouncements of the Australian Accounting Standards Board, Australian Accounting Interpretations
and the Corporations Act 2001. The Company is a for-profit entity for the purpose of preparing these financial statements.
Compliance with IFRS
The financial statements of the company also comply with International Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board (IASB)
Historical cost convention
These financial statements have been prepared on an accruals basis and are based on historical costs and do not take into
account changing money values or, except where stated, current valuations of non-current assets. Cost is based on the
fair values of the consideration given in exchange for assets.
Early adoption of new standards
The Group has elected not to early adopt any new standards issued not yet effective. Refer to note 1 (t) for an assessment
of the impact of these standards to the Group.
(b) Principles of Consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Auroch Minerals Limited
as at 30 June 2016 and the results of all subsidiaries for the year then ended. Auroch Minerals Limited and its subsidiaries
together are referred to in this financial report as the group or the consolidated entity.
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity
when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group.
Joint arrangements
Under AASB 11 Joint Arrangements investments in joint arrangements are classified as either joint operations or joint
ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal
structure of the joint arrangement.
Joint operations
The group recognises its direct right to the assets, liabilities, revenues and expenses of joint operations and its share of
any jointly held or incurred assets, liabilities, revenues and expenses.
26
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Joint ventures
Interests in joint ventures are accounted for using the equity method, after initially being recognised at cost in the
consolidated statement of financial position.
(c) Impairment of Assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset’s
recoverable amount.
An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an
individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets
or groups of assets and the asset’s values in use cannot be estimated to be close to its fair value. In such cases the asset
is tested for impairment as part of the cash generating unit to which it belongs.
When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-
generating unit is considered impaired and is written down to its recoverable amount. In assessing 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 relating to continuing operations are recognised in those expense categories consistent with the
function of the impaired asset unless the asset is carried at re-valued amount (in which case the impairment loss is treated
as a revaluation decrease).
As assessment is also made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is
estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to
determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying
amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount
that would have been determined, net of depreciation, had the impairment loss been recognised for the asset in prior
years. Such reversal is recognised in profit or loss unless the asset is carried at the re-valued amount, in which case the
reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to
allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
(d) Share Based Payment Transactions
Under AASB 2 Share Based Payments, the Group must recognise the fair value of shares and options granted to directors,
employees and consultants as remuneration as an expense on a pro-rata basis over the vesting period in the Statement
of Profit or Loss and Other Comprehensive Income with a corresponding adjustment to equity.
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The
total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions
are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected
to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any,
in profit or loss, with a corresponding adjustment to equity. No revision to original estimates is made in respect of options
issued with market based conditions.
The Group provides benefits to employees (including directors) of the Group in the form of share based payment
transactions, whereby employees render services in exchange for shares or rights over shares (“equity-settled
transactions”). The cost of these equity-settled transactions with employees (including directors) is measured by
reference to fair value at the date they are granted. The fair value is determined using an appropriate option pricing model.
In relation to the valuation of the share-based payments, these are valued using an appropriate option valuation method.
Once a valuation is obtained management use an assessment as to the probability of meeting non-market based
conditions. Market conditions are vested over the period in which management assess it will take for these conditions to
be satisfied.
27
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
(e) Segment Reporting
Operating segments are reported in a manner that is consistent with the internal reporting to the chief operating decision
maker (“CODM”), which has been identified by the Group as the Managing Director and other members of the Board of
directors.
(f) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
The carrying value less impairment provision of trade receivables and payables are assumed to approximately their fair
value due to their short-term nature. The fair value of financial liabilities for disclosure purposes is estimated by
discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar
financial instruments.
(g) Income Tax and Other Taxes
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of
the reporting period in the countries where the Group’s subsidiaries and associates operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provision where appropriate on the basis of amounts expected to be
paid to the tax authorities. Adjustments to current income tax are made to take into account any change in tax rates
between the Company and its subsidiaries.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are not
recognised if they arise from the initial recognition of goodwill.
Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction
other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end
of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax
bases of investments in foreign operations where the Group is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
Auroch Minerals Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation
legislation. As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of these
entities are set off in the financial statements.
28
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
(h) Exploration and Evaluation Expenditure
The Group’s policy with respect to exploration and evaluation expenditure is to use the area of interest method. Under
this method exploration and evaluation expenditure is carried forward on the following basis:
i.
ii.
Each area of interest is considered separately when deciding whether, and to what extent, to carry forward or
write off exploration and evaluation costs; and
Exploration and evaluation expenditure related to an area of interest is carried forward provided that rights to
tenure of the area of interest are current and that one of the following conditions is met:
such evaluation 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 of interest have not yet reached a stage which
permits a reasonable assessment of the existence or otherwise of economically recoverable reserves
and active and significant operations in relation to the area are continuing.
Exploration and evaluation costs accumulated in respect of each particular area of interest include only net direct
expenditure.
(i) Cash and Cash Equivalents
For the purposes of the statement of cash flows, cash and cash equivalents includes cash on hand, cash in bank accounts,
money market investments readily convertible to cash within two working days, and bank bills but net of outstanding bank
overdrafts.
(j) Investments and other financial assets
The Group classifies its financial assets in the following categories: loans and receivables. The classification depends on
the purpose for which the investments were acquired. Management determines the classification of its investments at
initial recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at each reporting
date.
(i) Loans and receivables
Loans and receivables are non-derivate financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for those with maturities greater than 12 months after the
statement of financial position date which are classified as non-current assets. Loans and receivable are included in trade
and other receivables in the statement of financial position.
Recognition and de-recognition
Investments are initially recognised at fair value plus transactions costs for all financial assets not carried at fair value
through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets
have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.
Subsequent measurement
Loans and receivables are carried at amortised cost using the effective interest method.
Impairment
The Group assesses at each reporting date whether there is objective evidence that a financial asset or Group of financial
assets is impaired.
29
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
(k) Earnings Per Share
(i) Basic Earnings Per Share
Basic earnings per share is determined by dividing the operating loss attributable to the equity holder of the Company
after income tax by the weighted average number of ordinary shares outstanding during the financial year.
(ii) Diluted Earnings Per Share
Diluted earnings per share adjusts the figures used in determination of basic earnings per share by taking into account
amounts unpaid on ordinary shares and any reduction in earnings per share that will arise from the exercise of options
outstanding during the year.
(l) Revenue recognition
Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net of
returns, trade allowances and duties and taxes paid. The following specific recognition criteria must also be met before
revenue is recognised:
Interest income is recognised as it accrues using the effective interest method.
(m) Trade and Other Receivables
Receivables are initially recognised at fair value and subsequently measured at amortised cost, less provision for doubtful
debts. Current receivables for GST are due for settlement within 30 days and other current receivables within 12 months.
Cash on deposit is not due for settlement until rights of tenure are forfeited or performance obligations are met.
(n) Trade and Other Payables
Trade payables and other payables are carried at cost and represent liabilities for goods and services provided to the
Group prior to the end of the financial period that are unpaid and arise when the Group becomes obliged to make future
payments in respect of the purchase of these goods and services. The amounts are unsecured and usually paid within 30
days of recognition.
(o) Borrowings Cost
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a
substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time
as the assets are substantially ready for their intended use of sale.
All other borrowing costs are recognised as expenses in the period in which they are incurred.
(p) Goods and Service Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
Where the GST incurred on the 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
Receivable and payable are stated with the amount of GST included.
The amount of GST recoverable from the taxation authority is included as part of the receivables in the Statement of
financial position. The amount of GST payable to the taxation authority is included as part of the payables in the Statement
of financial position.
Cash flows are included in the Statement of Cash Flows 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.
(q) Contributed Equity
Issued and paid up capital is recognised at the fair value of the consideration received by the Group. Any transaction costs
arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.
30
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
(r) Foreign currency translation
Functional and presentation currency
Items included in the financial statements of the Group are measured using the currency of the primary economic
environment in which the Group operates (‘the functional currency). The consolidated financial statements are presented
in Australian dollars, which is the Group’s functional and presentation currency.
Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as
follows:
assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the
date of that Statement of Financial Position.
income and expenses for each Statement of Profit or Loss and Other Comprehensive Income are translated at
average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates
prevailing on the transaction dates, in which case income and expenses are translated at the dates of the
transactions), and
all resulting exchange differences are recognised in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid,
a proportionate share of such exchange difference is reclassified to profit or loss, as part of the gain or loss on sale where
applicable.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of
the foreign operation and translated at the closing rate.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the dates of
the transactions. Foreign currency monetary assets and liabilities at the reporting date are translated at the exchange
rate existing at reporting date. Exchange differences are recognised in profit or loss in the period in which they arise.
No dividends were paid or proposed during the year.
(s) Parent entity information
The financial information for the parent entity, disclosed in note 27 has been prepared on the same basis as the
consolidated financial statements, except as set out below.
(i) Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries are accounted for at cost in the financial statements. Dividends received from associates are
recognised in the parent entity’s profit or loss when its right to receive the dividend is established.
(t) Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial report, a number of Standards and Interpretations including those Standards
and Interpretations issued by the IASB/IFRIC, where an Australian equivalent has not been made by the AASB, were in
issue but not yet effective for which the Entity has considered it unlikely for there to be a material impact on the financial
statements.
31
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
AASB reference
Title and
Affected
Standard(s):
Nature of Change
Application
Impact on Initial Application
date:
AASB 9 (issued
Financial
Amends the requirements for classification and
Annual
Adoption of AASB 9 is only
December 2009 and
Instruments
measurement of financial assets. The available-
reporting
mandatory for the year
amended December
for-sale and held-to-maturity categories of
periods
ending 30 June 2018.
2010)
financial assets in AASB 139 have been
beginning on
eliminated. Under AASB 9, there are three
or after 1
The entity does not currently
categories of financial assets:
Amortised cost
January
20171
have any financial
instruments.
Fair value through profit or loss
Fair value through other comprehensive
income.
The following requirements have generally been
carried forward unchanged from AASB 139
Financial Instruments: Recognition and
Measurement into AASB 9:
Classification and measurement of financial
liabilities; and
Derecognition requirements for financial
assets and liabilities.
However, AASB 9 requires that gains or losses on
financial liabilities measured at fair value are
recognised in profit or loss, except that the
effects of changes in the liability’s credit risk are
recognised in other comprehensive income.
1 The application date of AASB 9 has been deferred from annual periods beginning on or after 1 January 2015 to annual periods beginning on or after 1 January 2017
by AASB 2013-9 Amendments to Australian Accounting Standards - Conceptual Framework, Materiality and Financial Instruments.
32
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
AASB reference
Title and
Affected
Standard(s):
Nature of Change
Application
Impact on Initial Application
date:
AASB 15 Revenue from
Revenue
The standard provides a single standard for
Annual
The consolidated entity will
Contracts with
Customers
revenue recognition. The core principle of the
reporting
adopt this standard from 1
standard is that an entity will recognise revenue
periods
July 2017 but the impact of
to depict the transfer of promised goods or
beginning on
its adoption is yet to be
services to customers in an amount that reflects
or after 1
assessed by the consolidated
the consideration to which the entity expects to
January 2017
entity.
be entitled in exchange for those goods or
services. The standard will require: contracts
(either written, verbal or implied) to be
identified, together with the separate
performance obligations within the contract;
determine the transaction price, adjusted for the
time value of money excluding credit risk;
allocation of the transaction price to the separate
performance obligations on a basis of relative
stand-alone selling price of each distinct good or
service, or estimation approach if no distinct
observable prices exist; and recognition of
revenue when each performance obligation is
satisfied. Credit risk will be presented separately
as an expense rather than adjusted to revenue.
For goods, the performance obligation would be
satisfied when the customer obtains control of
the goods. For services, the performance
obligation is satisfied when the service has been
provided, typically for promises to transfer
services to customers. For performance
obligations satisfied over time, an entity would
select an appropriate measure of progress to
determine how much revenue should be
recognised as the performance obligation is
satisfied.
33
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
AASB reference
Title and
Nature of Change
Application
Impact on Initial
Affected
Standard(s):
date:
Application
Contracts with customers will be
presented in an entity's statement of
financial position as a contract liability, a
contract asset, or a receivable, depending
on the relationship between the entity's
performance and the customer's
payment. Sufficient quantitative and
qualitative disclosure is required to
enable users to understand the contracts
with customers; the significant judgments
made in applying the guidance to those
contracts; and any assets recognised from
the costs to obtain or fulfil a contract with
a customer.
AASB 2013-9 (issued
Amendments
Makes three amendments to AASB 9:
Annual reporting
The application date of AASB 9
December 2013)
to Australian
Adding the new hedge accounting
periods beginning
has been deferred to 1 January
Accounting
requirements into AASB 9
on or after 1
2017. The entity has not yet
Standards –
Deferring the effective date of AASB 9
January 2015
made an assessment of the
Conceptual
Framework,
Materiality
and Financial
Instruments
from 1 January 2015 to 1 January
impact of these amendments.
The entity does not currently
have any hedging
arrangements in place.
2017, and
Making available for early adoption
the presentation of changes in ‘own
credit’ in other comprehensive
income (OCI) for financial liabilities
under the fair value option without
early applying the other AASB 9
requirements.
Under the new hedge accounting
requirements:
• The 80-125% highly effective
threshold has been removed
34
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
AASB reference
Title and
Nature of Change
Application
Impact on Initial
Affected
Standard(s):
date:
Application
• Risk components of non-financial
items can qualify for hedge
accounting provided that the risk
component is separately identifiable
and reliably measurable
• An aggregated position (i.e.
combination of a derivative and a
non-derivative) can qualify for hedge
accounting provided that it is
managed as one risk exposure
•
When entities designate the
intrinsic value of options, the initial time
value is deferred in OCI and subsequent
changes in time value are recognised in
OCI
AASB 2015-1
Amendments
The changes affect two standards as
Effective for
The entity has not yet made an
to Australian
follows: AASB 5 Non-current Assets Held
periods beginning
assessment of the impact of
Accounting
for Sale and Discontinued Operations.
on or after 1
these amendments.
Standards -
The update clarifies that if assets/disposal
January 2016
Annual
groups are reclassified from being held
Improvements
for sale to being held for distribution to
to Australian
owner or vice versa, this is considered to
Accounting
be a continuation of the original plan for
Standards
disposal. It also clarifies that if assets
2012-2014
cease to be held for distribution to
Cycle (issued
owners, the usual AASB 5 requirements
January 2015)
for assets that cease to be held for sale
will apply. The update also affects AASB
119: Employee benefits by clarifying that
high quality corporate bonds or national
government bonds used to determine the
discount rate for long service leave and
defined benefit liabilities must be
denominated in the same currency as the
35
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
benefits that will be paid to the
employee.
AASB 16
Leases
This standard and its consequential
Effective for
The entity has not yet made an
amendments are applicable to annual
periods beginning
assessment of the impact of
reporting periods beginning on or
on or after 1 July
these amendments.
after 1 January 2019. This Standard
2019
sets out the principles for the
recognition, measurement,
presentation and disclosure of leases.
The objective is to ensure that lessees
and lessors provide relevant
information in a manner that
faithfully represents those
transactions. This information gives a
basis for users of financial statements
to assess the effect that leases have
on the financial position, financial
performance and cash flows of an
entity.
2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
In preparing these Financial Statements the Group has been required to make certain estimates and assumptions concerning future
occurrences. There is an inherent risk that the resulting accounting estimates will not equate exactly with actual events and results.
(a) Significant accounting judgements
In the process of applying the Group’s accounting policies, management has made the following judgements, apart from
those involving estimations, which have the most significant effect on the amounts recognised in the financial statements.
Capitalisation of exploration and evaluation expenditure
The Group has capitalised exploration and evaluation expenditure on the basis either that this is expected to be
recouped through future successful development (or alternatively sale) of the Areas of Interest concerned or on the
basis that it is not yet possible to assess whether it will be recouped. Refer to note 9 for further details.
Receivables
The Group expects to recover amounts included as receivables at the date of this report. This includes amounts
recognised as deferred consideration on the sale of the Manica asset.
(b) Significant accounting estimates and assumptions
The carrying amount of certain assets and liabilities are often determined based on estimates and assumptions of future
events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of certain assets and liabilities within the next annual reporting period are:
36
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors,
including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the
related exploration and evaluation asset through sale.
Factors that could impact the future recoverability include the level of reserves and resources, future technological
changes, costs of drilling and production, production rates, future legal changes (including changes to environmental
restoration obligations) and changes to commodity prices.
Share-based payment transactions
The Group 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 using the Black Scholes model. Should
the assumptions used in these calculations differ, the amounts recognised could significantly change. Details of estimates
used can be found in Note 21.
Estimated fair value of borrowings
The initial fair value of the liability portion of converting notes is determined as the proceeds less value of borrowing costs
and fees. The liability is subsequently recognised at fair value until extinguished on conversion or maturity of the notes,
with the fair value at maturity estimated based on management’s view of the most likely conversion outcome.
3. REVENUE
From continuing operations
Gain on settlement of liability
Interest received
Total
4. EXPENSES
Profit/Loss includes the following specific expenses:
Consultants and advisory fees
Advertising and Marketing
Share registry costs
Depreciation
5. TAXATION
The components of tax expense comprise:
Current tax
Deferred tax
37
2016
$
2015
$
-
1,178
1,178
80,891
900
81,791
2016
$
2015
$
452,834
1,768
10,335
-
217,702
1,462
6,367
1,157
2016
$
2015
$
847,355
-
847,355
-
-
-
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
5. TAXATION (continued)
The prima facie tax payable/(benefit) on profit/(loss) from ordinary activities before
income tax is reconciled to the income tax as follows:
Profit/(Loss) before income tax
Profit/(Loss) before income tax from discontinued operations
Prima facie tax benefit on loss from continuing activities before income tax at 30%
(2015: 30%)
Add/(subtract) tax effect of:
Expenditure not deductible
Other
Deferred tax assets relating to tax losses not recognised
Adjustments relating to Mozambique capital gains tax
Foreign tax rate differential
Total income tax expense
(2,603,629)
5,961,525
(989,201)
-
1,007,369
(296,760)
652,715
167,476
(1,033,165)
52,960
847,355
37,391
-
259,369
-
-
-
The franking account balance at year end was $nil.
Deferred tax assets and liabilities not recognised relate to the following:
Deferred tax assets
Tax losses
Other temporary differences
Capital loss
Exploration expenditure
Net deferred tax assets
6. PROFIT/LOSS PER SHARE
(a) Profit/(loss) per share
Profit/(loss) attributable to the ordinary equity holders of the Group
(b) Reconciliations of profit/loss used in calculated loss per share
Basic and diluted profit/loss per share
Diluted profit/loss per share
(c) Weighted average number of shares used as a denominator
Weighted average number of ordinary shares used as the denominator in calculating
basic loss per share
7. CASH AND CASH EQUIVALENTS
Deposits at call
Cash at bank
The Group’s exposure to interest rate risk is discussed in Note 17.
38
1,255,772
56,984
41,672
(50,851)
1,303,577
812,868
109,728
-
(50,389)
872,207
2016
$
2015
$
2,701,923
(1,003,116)
4.12
2.62
(1.79)
(1.79)
65,531,281
56,092,271
2016
$
31,514
5,192,104
5,223,618
2015
$
42,176
44,491
86,667
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
7. CASH AND CASH EQUIVALENTS (continued)
Financial Guarantees
The Group has provided no financial guarantees.
8. TRADE AND OTHER RECEIVABLES
Deferred consideration on sale of Manica asset 1
Prepayments
Other receivables
Ageing of receivables past due or impaired
2016
$
3,359,075
578
33,110
3,392,763
2015
$
-
-
20,086
20,086
As at 30 June 2016 deferred consideration was past due. Refer to Note 22 for further details of deferred consideration
receivable.
The Group’s exposure to credit risk is discussed in Note 17.
The deferred consideration receivable relates to the Groups disposal of the Manica gold project to Xtract Resources PLC.
Subsequent to year end, the company entered into a revised settlement deed with Xtract regarding the timing of payment.
Xtract paid the total of US$750,000 of the agreed first instalment and US$100,000 of the agreed value of US$1,785,671 of
the second instalment. The remaining balance is outstanding.
Xtract has announced it has entered into a conditional sale and purchase agreement to sell the Manica Gold Project to
Nexus Capital Limited (Nexus) and Mineral Technologies International Limited (MTI) for cash consideration of
US$17,500,000. Xtract have advised that it is currently in discussions with Nexus and MTI in relation to re-structuring the
sale of the Manica Gold Project to Nexus and MTI. The Company is in discussions with Xtract in relation to settlement of
the remaining US$1,685,671 owed to it and envisages that following completion of the discussions between Xtract, Nexus
and MTI, a resolution will be reached on the Second Instalment. The directors are satisfied that the the remaining
receivable is fully recoverable.
9. EXPLORATION AND EVALUATION EXPENDITURE
Balance at beginning of the year
Tenement acquisition costs cancelled
Exploration expenditure incurred
Exploration expenditure written off
Movement due to foreign exchange translation
Transfer to assets held for sale
Balance at the end of the year
1US$2,500,000 at 1.34363 AUD:USD due on 1 June 2016
39
2016
$
206,866
-
521,175
(556,534)
-
-
171,507
2015
$
16,371,887
(8,650,000)
1,005,683
(13,915)
(559,499)
(7,947,290)
206,866
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
9. EXPLORATION AND EVALUATION EXPENDITURE (continued)
The balance carried forward represents projects in the exploration and evaluation phase. Ultimate recoupment of
exploration expenditure carried forward is dependent on successful development and commercial exploitation, or
alternatively, sale of respective areas.
10. TRADE AND OTHER PAYABLES
Trade payables
Accruals
2016
$
88,565
43,525
132,090
2015
$
2,176,262
102,186
2,278,448
All current liabilities are expected to be settled within 12 months as they are generally due on 30-60 day terms.
The Group’s exposure to credit risk is discussed in Note 17.
11. BORROWINGS
Loans (held at amortised cost)
Convertible Notes (held at fair value)
Other financial liabilities
The Group does not have any existing borrowings.
12. CONTRIBUTED EQUITY
(a) Share Capital
Fully paid
Partly Paid
Equity raising costs
2016
$
-
-
-
-
2015
$
100,000
314,113
1,444,859
1,858,972
2016
Shares
76,810,865
-
-
76,810,865
2015
Shares
58,591,397
21,800,000
-
80,391,397
2016
$
2015
$
10,192,746 8,399,616
218,000
-
(674,044)
(655,658)
9,518,702 7,961,958
(b) Movements in ordinary shares (including equity raising costs)
2016
Date
01/07/15
03/07/15
Details
Balance at 01 July
Shares issued in lieu of corporate advisory
services
Number of
shares
58,591,397
Issue
price
2016
$
7,743,958
102,564
$0.11
11,282
40
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
12. CONTRIBUTED EQUITY (continued)
Issue of shares on conversion of debt and
shares issued to employees and unrelated
contractors in satisfacion of remuneration,
fees and employee entitlement forgone
Share issued upon conversion of Convertible
Note
Share issued upon conversion of Convertible
Note
Share issued to former employees and
unrelated contractors
Shares issued upon exercise of options
Shares issued upon exercise of options
Shares issued pursuant to share sale
agreement to acquire project
Shares issued in settlement of former
employee entitlements
Shares issued upon exercise of options
Equity raising costs
Balance at 30 June
23/10/15
23/10/15
18/03/16
18/03/16
29/04/16
23/05/16
25/05/16
14/06/16
30/06/16
(b) Movements in ordinary shares (including equity raising costs)
2015
Details
Date
01/07/14 Balance at 01 July
21/07/14
Issue of Facility Fee Shares
Shares issued in settlement of deferred
employment entitlement
17/12/14
22/12/14 Share cancellation
Share issued upon conversion of Convertible
Note
23/01/15
16/06/15 Share issued upon conversion of Convertible
Note including securities
Equity raising costs
30/06/15 Balance at 30 June
41
1,850,000
$0.09
173,900
3,350,723
$0.08
250,000
8,702,461
$0.09
750,000
1,660,000
1,090,000
125,000
$0.11
$0.20
$0.15
182,600
218,000
18,750
950,000
$0.15
142,500
250,000
138,720
$0.14
$0.08
76,810,865
35,000
11,098
(18,386)
9,518,702
Number of
shares
58,092,515
217,500
Issue price
$0.10
2015
$
14,481,457
21,750
1,015,766
(25,000,000)
$0.02
$0.30
20,315
(7,500,000)
23,658,328
$0.03
701,230
607,288
$0.05
58,591,397
28,567
(9,361)
7,743,958
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
12. CONTRIBUTED EQUITY (continued)
(c) Movements in partly paid shares
Each partly paid share is issued at a price of 20 cents of which $0.01 is paid on issue with the balance of the issue price
payable at the election of the holder at any time within 5 years of issue or the Directors may determine that the balance
may become payable at future times in satisfaction of all or part of the unpaid issued price. The partly paid shares were
consolidated on 4 April 2016 on a 20:1 basis into 1,090,001 ordinary shares.
2016
Details
Date
01/07/15 Balance at 01 July
30/04/16 Consolidation of Partly Paid shares
30/06/16 Balance at 30 June
2015
Date
Details
01/07/14 Balance at 01 July
30/06/15 Balance at 30 June
(d) Ordinary shares
Number of
shares
21,800,000
(21,800,000)
-
Issue price
-
-
Issue price
Number of
shares
21,800,000
21,800,000
2015
$
218,000
(218,000)
-
2014
$
218,000
218,000
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Group in proportion
to the number of shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote,
and upon a poll each share is entitled to one vote.
(e) Capital risk management
The Group’s objective when managing working capital is to safeguard the ability to continue as a going concern, so that it
can continue to provide returns for the shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the return of capital to shareholders, issue new
shares or sell assets to reduce debt. The Group defines capital as cash and cash equivalents plus equity.
The Board of Directors monitors capital on an ad-hoc basis. No formal targets are in place for return on capital, or
gearing ratios, as the Group has not derived any income from their mineral exploration and currently has no debt
facilities in place.
13. RESERVES
(a) Reserves
Share-based payments reserve
Foreign currency translation reserve
2016
$
2015
$
389,175
-
389,175
115,533
(191,382)
(75,849)
42
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
13. RESERVES (continued)
Share-based payments reserve
Balance 1 July
Share buy back
Share based payments
Balance 30 June
Option reserve
Balance 1 July
Options issued
Balance 30 June
Foreign currency translation reserve
Balance 1 July
Foreign currency translation difference on consolidation
Reclassification of exchange differences on disposal of controlled entities to Profit or
Loss
Balance 30 June
Nature and purpose of reserves
(i) Share-based payments reserve
The share based payments reserve is used to recognise:
The fair value of options issued to employees and consultants but not exercised
The fair value of shares issues to employees
(ii) Foreign currency translation reserve
2016
$
115,533
-
78,814
194,347
2016
$
-
194,828
194,828
2015
$
42,630
(42,630)
115,533
115,533
2015
$
-
-
-
2016
$
2015
$
(191,382)
637,307
(828,689)
191,382
-
-
(191,382)
Exchange differences arising on translation of foreign controlled entities are recognised in other comprehensive income
and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net
investment is disposed of.
(iii) Option reserve
The Share Option Reserve contains amounts received on the issue of options over unissued capital of the company.
14. ACCUMULATED LOSSES
Accumulated losses at the beginning of the period
Net profit/loss attributable to members of the Group
Accumulated losses at the end of the financial year
43
2016
$
(3,762,620)
2,510,541
(1,252,079)
2015
$
(2,759,504)
(1,003,116)
(3,762,620)
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
15. RECONCILATION OF LOSS AFTER INCOME TAX TO NET CASH INFLOW FROM OPERATING ACTIVITIES
Profit/Loss for the year
Gain on disposal of non-current asset
Depreciation and amortisation
Finance and interest expense
Non-cash employee benefits expense – share-based payments
Impairment of capitalised expenditure
Foreign exchange loss
Other (employee benefits)
(Increase)/Decrease in trade debtors and other receivables
Increase in trade creditors and other payables
Net cash outflow from operating activities
2016
$
2,510,541
(5,961,525)
-
130,205
265,563
556,534
482,780
-
2,589,426
(2,189,975)
(1,616,451)
2015
$
(1,003,116)
(80,891)
1,157
495,614
(42,630)
13,915
101,206
(1,693)
298,925
(217,513)
Non-cash investing and financing activities
-
-
16. REMUNERATION OF AUDITORS
Amounts received or due and receivable by the auditors for:
Audit services:
BDO Audit (WA) Pty Ltd Audit and review of financial reports under the
Corporations Act 2001
Non audit services
2016
$
49,425
34,454
83,879
2015
$
37,380
9,466
46,846
17. FINANCIAL RISK MANAGEMENT
Overview
The Group has exposure to the following risks from their use of financial instruments:
a) credit risk
b) liquidity risk
c) market risk
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and
processes for measuring and managing risk, and the management of capital.
The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.
Management monitors and manages the financial risks relating to the operations of the Group through regular reviews of
the risks.
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its
contractual obligations, and for the Group arises principally from cash and cash equivalents and receivables.
44
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
17. FINANCIAL RISK MANAGEMENT (continued)
All cash balances are held with recognised institutions limiting the exposure to credit risk. There are no formal credit
approval processes in place.
Exposure to credit risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum
exposure to credit risk at the reporting date was:
Cash and cash equivalents
Receivables
2016
$
5,223,618
3,392,185
8,615,803
2015
$
86,667
-
86,667
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit
ratings (if available) or to historical information about default rates.
Financial assets that are neither past due and not impaired are as follows:
Cash and cash equivalents
AA S&P rating
5,223,617
5,223,617
86,667
86,667
As disclosed in note 8, the company has a receivable due from Xtract Resources PLC that is past due as at 30 June 2016.
Subsequent to year end, revised payment terms have been agreed. The company is currently in discussions with Xtract
regarding the recovery of the balance as disclosed in note 8. The directors are satisfied that based on the credit quality of
the counterparty, the full balance will be received.
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation. The Group manages liquidity risk by maintaining adequate reserves by continuously
monitoring forecast and actual cash flows. The Group anticipates a need to raise additional capital in the next 12 months
to meet forecasted operational activities. The decision on how the Group will raise future capital will depend on market
conditions existing at that time.
Typically the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of
60 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that
cannot reasonably be predicted, such as natural disasters.
The Group has no access to credit standby facilities or arrangements for further funding or borrowings in place.
The financial liabilities the Group had at reporting date were trade payables incurred in the normal course of the business.
These were non interest bearing and were due within the normal 30-60 days terms of creditor payments.
Maturities of financial liabilities
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period
at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual
undiscounted cash flows.
45
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
17. FINANCIAL RISK MANAGEMENT (continued)
Less than
6 months
$
6-12
months
$
1-2 years
$
2-5
years
$
Over 5
years
$
Total
contractual
cash flows
$
Carrying
amount
(assets)/
liabilities
$
As at 30 June 2016
Trade and other payables
132,090
-
-
-
-
132,090
132,090
Less than
6 months
$
6-12
months
$
1-2 years
$
2-5
years
$
Over 5
years
$
Total
contractual
cash flows
$
Carrying
amount
(assets)/
liabilities
$
As at 30 June 2015
Trade and other payables
Loans
Convertible Notes
(c) Market Risk
2,278,448
-
100,000 1,444,859
314,113
-
-
-
-
-
-
-
-
-
-
2,278,448 2,278,448
1,544,859 1,544,859
314,113
314,113
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, while optimising the return.
(i) Currency risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated
in a currency that is not the entity’s functional currency.
The Group did not have any formal policies in place regarding currency risk during the year as it was not considered
significant. This will be monitored as appropriate going forward and introduced as necessary.
The groups exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollar, was as
follows:
Cash and cash equivalents
Deferred consideration
Trade and other receivables
Trade and other payables
2016
USD
$
2,154,705
2,500,000
-
7,040
2015
USD
$
7,507
-
-
623,533
46
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
17. FINANCIAL RISK MANAGEMENT (continued)
Cash and cash equivalents
Sensitivity analysis
Cash and cash equivalents
Trade and other payables
(ii) Cashflow and interest rate risk
2016
GBP
$
1,165,020
2015
GBP
$
-
2016
Foreign exchange risk
+ 1%
- 1%
21,547
70
(21,547)
(70)
2015
Foreign exchange risk
+ 1%
-
6,235
-1%
-
(6,235)
21,617
(21,617)
6,235
(6,235)
The Group’s only interest rate risk arises from cash and cash equivalents held. Term deposits and current accounts held
with variable interest rates expose the Group to cash flow interest rate risk. The Group does not consider this risk to be
material and has therefore not undertaken any further analysis of risk exposure for 2016.
(d) Fair values
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
The Fair value of financial instruments that are not traded in an active market (for example investments in unlisted
subsidiaries) is determined using valuation techniques.
The carrying value less impairment of trade receivables and payables are assumed to approximate their fair values due to
their short-term nature.
The carrying amounts are estimated to approximate fair values of financial assets and financial liabilities a as follows:
Financial Assets
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
Financial Liabilities
Trade and other payables
Borrowings
Financial liabilities
Total Financial Liabilities
2016
$
2015
$
5,223,618
3,392,185
8,615,803
86,667
20,086
106,753
132,090
-
-
132,090
2,278,448
1,858,972
-
4,137,420
The methods and assumptions used to estimate the fair value of financial instruments are outlined below:
47
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
17. FINANCIAL RISK MANAGEMENT (continued)
Cash/financial liabilities and loans
The carrying amount is fair value due to the liquid nature of these assets.
Receivables/payables
Due to the short term nature of these financial rights and obligations, their carrying amounts are estimated to
represent their fair values.
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes.
Due to their short term nature, the carrying amount of the current receivables and current payables is assumed to
approximate their fair value.
Refer to note 18 for further details.
18. FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS
The carrying values of financial assets and liabilities of the Group approximate their fair values. Fair values of financial
assets and liabilities have been determined for measurement and / or disclosure purposes.
Fair value hierarchy
The Group classifies assets and liabilities carried at fair value using a fair value hierarchy that reflects the significance of
the inputs used in determining that value. The following table analyses financial instruments carried at fair value by the
valuation method. The different levels in the hierarchy have been defined as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (as prices) or indirectly (derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Due to their short term nature, the carrying values of all of the Group’s financial assets and liabilities is assumed to be
their fair value. That is, there are no financial assets or financial liabilities measured using the fair value hierarchy.
19. SEGMENT INFORMATION
Management has determined that the Group has two reportable segments, being mineral exploration in Mozambique
and Western Australia, which is based on the internal reports that are reviewed and used by the Board of Directors (chief
operating decision makers) in assessing performance and determining the allocation of resources. As the Group is focused
on mineral exploration, the Board monitors the Group based on actual versus budgeted exploration expenditure incurred
by area of interest.
This internal reporting framework is the most relevant to assist the Board with making decisions regarding the Group and
its ongoing exploration activities, while also taking into consideration the results of exploration work that has been
performed to date.
Segment information relating to the reportable segment being mineral exploration in Mozambique and Western Australia
is outlined below.
48
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
19. SEGMENT INFORMATION (continued)
2016
Revenue from external sources
Reportable segment profit / (loss)
Reportable segment assets
Reportable segment liabilities
Reconciliation of reportable segment profit or loss
Reportable segment profit /(loss)
Other income
Unallocated:
Other income
Depreciation expense
Director benefits
Share buy-back
Employee benefits
Other expenses
Profit before tax
2015
Revenue from external sources
Reportable segment profit / (loss)
Reportable segment assets
Reportable segment liabilities
Reconciliation of reportable segment profit or loss
Reportable segment profit /(loss)
Other income
Unallocated:
Depreciation expense
Director benefits
Share buy-back
Employee benefits
Other expenses
Loss before tax
Mozambique
$
-
5,114,170
-
-
Western
Australia
$
-
-
169,502
-
-
-
Mozambique
$
-
-
7,986,196
(1,420,842)
Western
Australia
$
-
-
167,960
-
Total
$
-
5,114,170
169,502
-
5,114,170
-
43,893
-
(18,887)
-
(25,000)
(2,603,635)
2,510,541
Total
$
-
-
8,154,156
(1,420,842)
-
81,791
(1,157)
(48,000)
42,630
-
(1,078,380)
(1,003,116)
49
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
19. SEGMENT INFORMATION (continued)
Other Segment Information
Total segment revenue
Interest revenue
Total revenue from continuing operations
Segment assets are reconciled to total assets as follows:
Segment assets
Unallocated:
Cash and cash equivalents
Trade and other receivables
Mineral exploration and evaluation
Total assets as per the statement of financial position
Segment liabilities are reconciled to total liabilities as follows:
Segment Liabilities
Unallocated:
Trade and other payables
Borrowings
Total liabilities as per the statement of financial position
20. SHARE BASED PAYMENT TRANSACTIONS
Share Based Payments
(a) Options
2016
$
42,715
1,178
43,893
2015
$
80,891
900
81,791
169,505
8,154,156
5,223,618
3,392,763
2,001
8,787,887
86,667
20,086
-
8,260,909
-
1,420,842
132,090
-
132,090
857,606
1,858,972
4,137,420
There have been no options issued to current directors and executives as part of their remuneration.
On 23 October 2015 1,000,000 unlisted options were issued during the year to a third paty contractor as compensation
for extended payment terms. The options have an exercise price of 10 cents each and expire on 23 October 2018.
On 17 March 2016 300,000 options were issued during the year to a third paty contractor as settlement of fees
outstanding. The options have an exercise price of 10 cents each and expire on 17 March 2018.
The unlisted option reserve records items recognised on valuation of director, employee and contractor share options as
well as share options issued during the course of a business combination. Information relating to the details of options
issued, exercised and lapsed during the financial year and options outstanding at the end of the financial year, is set out
in note 13.
The assessed fair values of the options were determined using a Black-Scholes option pricing model, taking into account
the exercise price, term of option, the share price at grant date and expected price volatility of the underlying share,
expected dividend yield and the risk-free interest rate for the term of the option.
50
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
20. SHARE BASED PAYMENT TRANSACTIONS (continued)
The inputs to the model used were:
23 October 2015
Dividend Yield
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (years)
Option exercise price ($)
Share price at grant date ($)
Value of option ($)
17 March 2016
Dividend Yield
Expected volatility (%)
Risk-free interest rate (%)
Expected life of options (years)
Option exercise price ($)
Share price at grant date ($)
Value of option ($)
-
100
2.0
3.0
0.10
0.094
0.0576
-
100
2.0
3.0
0.10
0.11
0.070
The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may
occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which
may also not necessarily be the actual outcome.
Employee Share Plan
The Auroch Minerals Limited Employee Share Plan is used to reward Directors and employees for their performance and
to align their remuneration with the creation of shareholder wealth. There are no performance requirements to be met
before exercise can take place. The Plan is designed to provide long-term incentives to deliver long-term shareholder
returns. Participation in the Plan is at the discretion of the Board and no individual has a contractual right to participate in
the plan or to receive any guaranteed benefits.
21. DIVIDENDS (continued)
Share based payments transactions are recognised at fair value in accordance with AASB 2. The adoption of AASB 2 is
equity-neutral for equity-settled transactions.
Numbers of Employee Shares were issued this year is nil (2015: nil).
There were no dividends paid or declared by the Group during the year (2015: Nil).
51
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
22. EVENTS OCCURRING AFTER REPORTING DATE
On 4 July 2016 the Company advised that it had conducted final due diligence investigations on the Hombolo Lithium
Project. Assay Results from due diligence sampling conducted in May across the Hombolo Ground package yielded
disappointing results and showed no significant anomalism across the tenement package outside the historic open pit
workings within the Primary Mining Licences.
Subsequent to the Period on 20 July 2016 the Company advised it had entered into a deed of settlement with Xtract
Resources Plc (Xtract) with respect to the US$2.5 million deferred consideration payable by Xtract to the Company
(Settlement Deed).
Subject to the Xtract’s compliance with the Settlement Deed, the Company agreed to refrain from taking legal action
against Xtract to enforce its obligation under the Sale Agreement to pay the Deferred Consideration on the following
conditions:
- Xtract to make a first instalment payment of US$750,000 by 19 July 2016 (this has been paid); and
- Xtract to make a second and final payment of US$1,785,671.86 by 12 August 2016 (Second Instalment), which
includes interest over the period 1 June 2016 to 19 July 2016, and interest on the Second Instalment over the period
20 July 2016 to 12 August 2016.
On 26 August 2016 the Company advised that pursuant to the Settlement Deeds terms, the Company received the first
instalment payment of US$750,000 and had also received $100,000 of the Second Instalment. The Company is in
discussions with Xtract with regards to final settlement of the remaining US$1,685,671.86.
23. CONTINGENCIES
Contingent Liabilities
The Group had no other material contingent assets or liabilities at 30 June 2016.
Commitments
The Group had no material commitments at 30 June 2016.
24. SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries:
Name of entity
Country of
Incorporation
Class of
shares
Note
Australia
Mozambique
Auroch Minerals Mozambique
Pty Ltd1
Explorator Limitada2
Mistral Resource Development
Corporation Limited3
Auroch Minerals SA Proprietary
Limited4
1 Holding company for Mistral Development Corporation Ltd.
2 Holder of the Manica Mining Concession 3990C.
3 Holding company for 98% of Explorator Limitada.
4 Dormant subsidiary.
British Virgin Isles
South Africa
Ordinary
Ordinary
Ordinary
Ordinary
52
28
28
Equity
holding
2016
Equity
holding
2015
100%
-
-
100%
100%
100%
100%
100%
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
25. RELATED PARTY TRANSACTIONS
(a) Parent entities
The parent entity within the Group is Auroch Minerals Limited. The ultimate parent entity and ultimate controlling party
is Auroch Minerals Limited (incorporated in Australia) which at 30 June 2016 owns 100% of the issued ordinary shares of
the above subsidiaries.
(b) Subsidiaries
Interests in subsidiaries are set out in note 24.
(c) Key management personnel
(i) Key Management Personnel Compensation
Short-term employee benefits
Post-employment benefits
Share-based payments
2016
$
326,585
-
16,450
343,035
2015
$
535,064
-
-
535,064
(ii) Other transactions with Key Management Personnel
Mr Nicholas Ong is a director of Minerva Corporate Pty Ltd. During the period ended 30 June 2016 the Company was
providing consultancy, company secretarial, accounting and administration and registered office services to Auroch
Minerals Limited. In accordance with the services agreement the monthly charge for these services is $8,000 per month.
Payments to Minerva Corporate Pty Ltd during the relevant period total $116,500 (2015: $99,000). The amounts owed to
Minerva Corporate Pty Ltd as at 30 June 2016 was $9,000 (2015: $132,061).
Loan received from Glenn Whiddon (Executive Director) during the period to fund the groups working capital
commitments. The loan was repayable within 7 business days’ following written notice by the Lender to the Borrower.
Interest was payable at 9.25% per annum on repayment date. Should interest not be paid then the interest rate increased
to 12%. This loan was repaid by the group in the form of Xtract shares.
During the period Mr Glenn Whiddon and his associated entities converted convertible loans totalling $300,000 into
3,636,294 ordinary shares and 1,818,147 options exercisable at $0.08 on or before 31 December 2018 pursuant to
shareholder approval obtained on 15 October 2015.
During the period Mr Matthew Foy was issued 175,000 ordinary shares in lieu of fees subject to shareholder approval
obtained 15 October 2015.
During the period Mr Andrew Tunks was issued 500,000 ordinary shares in lieu of fees.
(d) Outstanding balances arising from sales/purchases of goods and services
There is an outstanding balance arising from services provided by Minerva Corporate Pty Ltd of $9,000. Mr Nicholas Ong
was a director of Auroch Minerals Limited and a director of Minerva Corporate Pty Ltd during the period.
53
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
26. PARENT ENTITY INFORMATION
The following details information related to the parent entity, Auroch Minerals Limited, at 30 June 2016. The information
presented here has been prepared using consistent accounting policies as presented in Note 1.
ASSETS
Current Assets
Non-Current Assets
TOTAL ASSETS
Current Liabilities
Non-Current Liabilities
TOTAL LIABILITIES
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Loss for the year
Other Comprehensive loss for the year
TOTAL COMPREHENSIVE LOSS FOR THE YEAR
2016
$
3,474,168
171,507
3,647,675
132,090
-
132,090
2015
$
96,380
8,397,946
8,494,326
4,137,420
-
4,137,420
9,518,702
253,937
(6,257,054)
3,515,585
7,961,958
115,533
(3,720,585)
4,356,906
(2,545,959)
-
(2,545,959)
(1,004,232)
-
(1,004,232)
At reporting date the parent entity has nil guarantees and contingent liabilities (2015: Nil).
27. DISCONTINUED OPERATIONS
Sale of Manica Gold Project
On 30 June 2015 the Company advised it had entered into a binding agreement to sell 100% of the Manica mining
Concession 3990C to AIM-listed Xtract Resources Plc (Xtract or XTR) for total sale consideration of US$10 million in a
combination of cash and equity in Xtract, plus the assumption of project related creditors of up to US$1.5 million
(Agreement).
The Agreement was conditional upon Auroch obtaining prior consent of the Government of Mozambique through the
Ministry of Mineral Resources and Energy to the extent required under the Mozambique Mining Act and other applicable
laws relating to the change of control of the Company’s subsidiary and communicating such change of control to the
Mozambican mining authorities. Completion of the Agreement was also subject to Auroch obtaining shareholder approval
under ASX Listing Rule 11.2 for the sale of the Manica Mining Concession and Xtract obtaining approval for the admission
of the Consideration Shares to trading on AIM.
On 2 March 2016 the Company advised that final approval had been received under the Mozambique Mining Act from
the Mozambique Mining Act from the Mozambican mining authorities in addition to the earlier approvals from the Central
Bank and the Ministry of Taxation, permitting the completion of the sale of 100% of the Manica Gold Project to Xtract
(Completion).
54
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
27. DISCONTINUED OPERATIONS (continued)
The final terms of the Agreement with Xtract are as follows:
- Cash payment at Completion of ~A$4.2 million1 (US$3.0 million); and
-
Issue of 1,137,258,065 XTR Shares (currently valued at ~A$4.22 million2) (Completion Consideration).
Consideration to be paid 3 months post Completion:
- Deferred cash consideration of ~A$3.5million3 (US$2.5 million) payable as follows:
US$1.3 million cash; and
the remaining US$1.2 million will be payable in cash or XTR Shares (at Auroch’s election), issued at a 20%
discount to the 10-day VWAP prior to Auroch’s election.
2016
$
2015
$
Results of discontinued operations
Revenue
Cost of sales
Other expenses
Results from operating activities
Income tax (expense)/benefit
Results from operating activities after tax
Gain on sale of subsidiary assets (i)
Profit on sale of discontinued operations
(i) Gain on sale of subsidiary assets
Assets and liabilities disposed of
Cash and cash equivalents
Exploration asset
Trade and other payables
Foreign exchange reserve
Sale consideration
Cash
Deferred consideration
Xtract Plc shares (net proceeds)
Gain on sale of subsidiary assets
1 Assumes 1 US Dollar equals 1.40 Australian Dollars
2 Assumes 1 British Pound equals 1.95 Australian Dollars and an Xtract share price of £0.0019
3 Assumes 1 US Dollar equals 1.40 Australian Dollars
55
-
-
(5,345)
(5,345)
-
(5,345)
5,966,870
5,961,525
-
-
1,116
1,116
-
1,116
-
1,116
2016
$
163,900
5,828,628
(132,459)
394,773
6,254,842
5,968,720
3,359,075
2,893,917
12,221,712
5,966,870
AUROCH MINERALS LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
27. DISCONTINUED OPERATIONS (continued)
Cashflows gained from/(used in) discontinued operations
Net cash gained from investing activities
Net cash flow for the year
2016
$
2015
$
4,480,717
4,480,717
-
-
56
AUROCH MINERALS LIMITED
DIRECTORS’ DECLARATION
AUROCH MINERALS LIMITED
ACN 119 267 391
DECLARATION BY DIRECTORS
The directors of the Group declare that:
1. The financial statements, comprising the consolidated statement of profit or loss and other comprehensive
income, consolidated statement of financial position, consolidated statement of cash flows, consolidated
statement of changes in equity and accompanying notes, are in accordance with the Corporations Act 2001 and:
a) comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
b) give a true and fair view of the financial position as at 30 June 2016 and of the performance for the year
ended on that date of the consolidated Group.
2.
In the directors’ opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as
and when they become due and payable.
3. The remuneration disclosures included in the directors’ report (as part of the audited Remuneration Report), for
the year ended 30 June 2016, comply with section 300A of the Corporations Act 2001.
4. The Group has included in the notes to the financial statements and explicit an unreserved statement of
compliance with International Financial Reporting Standards.
5. The directors have been given the declarations by the chief executive officer and chief financial officer required
by section 295A.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
directors by:
Glenn Whiddon
Chairman
Perth, Western Australia
30 September 2016
57
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of Auroch Minerals Limited
Report on the Financial Report
We have audited the accompanying financial report of Auroch Minerals Limited, which comprises the
consolidated statement of financial position as at 30 June 2016, the consolidated statement of profit or
loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, 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 control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error. In Note 1, 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 judgement, 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 control relevant to the company’s
preparation of the financial report that gives a true and fair view 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 company’s internal control. 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.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN
77 050 110 275, an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK
company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under
Professional Standards Legislation, other than for the acts or omissions of financial services licensees.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of Auroch Minerals Limited, would be in the same terms if given to the
directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a)
the financial report of Auroch Minerals Limited is 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 2016
and of its performance for the year ended on that date; and
(ii) 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 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 11 to 16 of the directors’ report for the
year ended 30 June 2016. 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 Auroch Minerals Limited for the year ended 30 June 2016
complies with section 300A of the Corporations Act 2001.
BDO Audit (WA) Pty Ltd
Dean Just
Director
Perth, 30 September 2016
AUROCH MINERALS LIMITED
ADDITIONAL INFORMATION
The following additional information is required by the ASX in respect of listed public companies.
Information as at 14 September 2016
(a) Distribution of Shareholders
Category (size of holding)
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 – 100,000
100,001 and above
Total
Number
Ordinary
9
29
63
366
102
569
(b) The number of shareholdings held in less than marketable parcels is 30.
(c) 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.
(d) 20 Largest Shareholders — Ordinary Shares as at 14 September 2016.
Rank
Holder Name
Designation
Securities
%
1 MED BRAVO SA
2 6466 INV PL
3 HSBC CUSTODY NOM AUST LTD
4 MIMO STRATEGIES PL
5 NORTON MATTHEW J + R F
6 CELTIC CAP PL
7 WHIDDON GLENN ROSS
8
9 SMITH PETER S + D P
10 BROWN BRICKS PL
11 KOBIA HLDGS PL
12 RAINMAKER HLDGS WA PL
13 GREGORACH PL
14 TYCHE INV PL
IBT HLDGS PL
12,707,432
5,048,333
3,494,177
2,961,318
2,938,121
2,000,000
1,534,976
1,500,000
1,308,333
1,277,227
1,150,000
1,140,000
1,000,000
1,000,000
MIMO A/C
NORTON FAM SUPER A
CELTIC CAP A/C
IBT HLDGS FAM A/C
MONTARA S/F A/C
HM A/C
MACRI INV A/C
60
16.54%
6.57%
4.55%
3.86%
3.83%
2.60%
2.00%
1.95%
1.70%
1.66%
1.50%
1.48%
1.30%
1.30%
15 REID BRENDAN HENRY + M M
16 KABUNGA HLDGS PL
17 ENDEAVOUR FINCL LTD CAYMA
18 TURNILL JUSTIN PAUL
19 BLU BONE PL
JDK NOM PL
20
AUROCH MINERALS LIMITED
ADDITIONAL INFORMATION
REID FAM S/F A/C
KABUNGA FAM A/C
KENNY CAP A/C
1,000,000
950,000
750,000
600,000
574,610
574,610
Top 20 Total 43,509,137
Total Remaining Balance 33,301,728
Grand Total 76,810,865
1.30%
1.24%
0.98%
0.78%
0.75%
0.75%
56.64%
43.36%
100.00%
(e) Subtantial Shareholders (i.e. shareholders who hold 5% or more of the issued capital):
Name
Number of Shares Held
Percentage
Med Bravo SA
12,707,432
Glenn Ross Whiddon
6,673,309
16.54%
8.69%
(f) The name of the Company Secretary is Mr Matthew Foy.
(g) The address of the principal registered office is Office J, Level 2, 1139 Hay St West Perth WA 6005 Telephone (08)
9486 4036.
(h) Registers of securities are held at Security Transfer Registrars Ltd, 770 Canning Highway, Applecross WA 6153.
(i) Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the Company on the Australian Securities Exchange Ltd.
(j) Unquoted Securities
Number
300,000
1,000,000
20,394,650
5,295,402
Terms
Options exercisable at $0.10 on or before 17 March 2018
Options exercisable at $0.10 on or before 23 October 2018
Options exercisable at $0.20 on or before 23 October 2018
Options exercisable at $0.08 on or before 31 December 2018
(k) Securities Subject to Escrow
Nil.
(l) Unquoted Equity Securities Holders with Greater than 20% of an Individual Class
Options exercisable at $0.10 on or before 17 March 2018
Percentage Held
100%
Name
S3 Consortium Pty Ltd
Number of Securities held
300,000
61
AUROCH MINERALS LIMITED
ADDITIONAL INFORMATION
Options exercisable at $0.10 on or before 23 October 2018
Percentage Held
100%
Name
Titan Drilling International Limited
Number of Securities held
1,000,000
Options exercisable at $0.08 on or before 31 December 2018
Percentage Held
22%
Name
Celtic Capital Pty Ltd
22%
MIMO Strategies Pty Ltd
Number of Securities held
1,149,220
1,180,659
(m) Corporate Governance Statement
The Company’s Corporate Governance Statement is available on the Company’s website at:
http://www.aurochminerals.com/about-us/corporate-governance/
62