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ANNUAL REPORT
Contents
Corporate Directory ......................................................................................................................... 2
Chairman’s Letter ............................................................................................................................. 3
Review of Activities .......................................................................................................................... 5
Director’s Report ............................................................................................................................ 11
Financial Statements ...................................................................................................................... 20
Notes to the Financial Statements................................................................................................. 24
Director’s Declaration .................................................................................................................... 56
Additional Information .................................................................................................................. 59
1
Corporate Directory
Directors:
Chairman & Non-Executive Director
Eduardo Elsztain
Non-Executive Director
Saul Zang
Pablo Vergara del Carril Non-Executive Director
Stabro Kasaneva
Wayne Hubert
Robert Trzebski
Ben Jarvis
Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director
Company Secretary:
Catherine Lloyd
Registered Principal Office:
Antofagasta, Chile Office:
Buenos Aires, Argentina Office:
Share Registry:
Suite 206, 80 William Street
Sydney NSW 2011
Tel: +61 (02) 9380 7233
Fax: +61 (02) 8354 0992
Email: info@australgold.com.au
Web: www.australgold.com.au
14 de Febrero 2065, of. 1103
Antofagasta, Chile
Tel: +56 (55) 2892 241
Fax: +56 (55) 2893 260
Bolivar 108
Buenos Aires (1066) Argentina
Tel: +54 (11) 4323 7500
Fax: +54 (11) 4323 7591
Computershare
GPO Box 2975
Melbourne VIC 3001
Tel: 1300 850 505 (within Australia)
Tel: +61 3 9415 5000 (outside Australia)
Auditors:
BDO East Coast Partnership
www.bdo.com.au
Principal Bankers:
National Australia Bank Limited
www.nab.com.au
Solicitors:
Listed:
Addisons Lawyers
www.addisonslawyers.com.au
Australian Stock Exchange
ASX: AGD
Place of Incorporation:
Western Australia
2
Chairman’s Letter
Dear Shareholders
By every measure, Financial Year 2013 has been a transformational year for Austral Gold Limited. The
company has delivered record gold and silver production, achieved significant exploration success, and
delivered on its corporate objectives. All these achievements underpin Austral Gold’s continued growth
for the 2014 financial year and beyond.
Production at record levels
It is encouraging to note that Austral Gold has again delivered record production at the company’s
flagship Guanaco project in Chile. Gold production for the year was 39,847 ounces of gold, and 77,404
ounces of silver which equates to 41,446 gold equivalent ounces.
This is a pleasing development for Austral Gold and reflects the hard work and commitment of our very
dedicated and talented operations team whom are to be commended for their efforts. As we enter the
2014 financial year, we are witnessing continued growth in production which gives Austral Gold the
financial flexibility to pursue additional growth prospects.
Adding value through exploration success
Whilst production growth is an important value driver for the company, exploration results, particularly
at Guanaco, have been equally impressive. During the year, our exploration team implemented an active
exploration program targeting two vein systems at Guanaco – Cachinalito and Despreciada – with
previously unidentified mineralised systems discovered. We are confident that this exploration success
will translate to an increased resource as more gold and silver ounces are defined.
Expanding our portfolio
During the year, Austral Gold took advantage of depressed equity markets to advance its strategy of
building a leading South American focused precious metals company. We took the next step in this
strategy by announcing a C$5 million investment in Argentex Mining Corporation which is listed on the
TSX Venture Exchange. This investment was completed in July 2013.
Argentex is developing the 23.6 million ounce silver-equivalent indicated resource at the Pinguino Silver-
Gold Project in Santa Cruz, Argentina. With Austral Gold’s strong technical team and funding support,
we are confident that we can add significant value to this project. As a first step, Austral Gold will hold a
19.9% stake in Argentex, and we have indicated that it is our intention to pursue some form of business
combination with Argentex. Negotiations are ongoing.
Our growth strategy was further enhanced when in September 2013, we announced that Austral Gold
entered into a Subscription Agreement with Goldrock Mines Corp Limited (TSX-V: GRM) (“Goldrock”) for
up to 11,560,000 new shares (representing a 15% interest) for a total investment of C$9.3 million.
Goldrock holds 100% of the Lindero gold project in the northwest of Argentina which has proven
mineral reserves of 641,000 ounces of gold. We are encouraged by this investment and believe it
represents compelling value. Argentina is an important focus for Austral Gold, and it is a market where
we have considerable expertise and influence.
The year ahead
As we enter financial year 2014, Austral Gold is in its strongest position in the company’s history, and we
are confident that we now have the platform in place to create the next leading South American
precious metals focused company. Your Board is committed to this vision, and we have a number of
new and exciting opportunities that we are pursuing. Our objective is to unlock the significant unrealised
value in Austral Gold and deliver favourable returns for our committed shareholders.
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Whilst precious metals markets have been volatile in 2013, we remain encouraged by the longer term
prospects for gold and silver, and we believe the fundamentals for precious metals are still sound.
I would like to take this opportunity to thank shareholders for their continuing support for Austral Gold.
Your company is well placed for success.
Eduardo Elsztain
Chairman
4
Review of Activities
Austral Gold Limited (the Company, (“Austral Gold”) remains committed to maximising shareholder
value through the development of mineral deposits in which the Company has an interest.
The Company continues to explore and invest in its Guanaco gold and silver mine (“Guanaco”) in
northern Chile to expand the mineral resource, increase the mine’s annual production and mine life, and
improve its financial viability. This is our primary focus. Complementing the Company’s operations in
South America are its investments in Canadian TSX-V listed companies, Argentex Mining Corporation
(“Argentex”) and Goldrock Mines Corp (“Goldrock”).
Austral finalised a private placement in Argentex in July 2013 in which Austral acquired a 19.9% interest
at a total cost of C$5 million. Argentex’s primary asset is the Pinguino project in Southern Argentina with
an indicated resource of 23,685,000 silver equivalent ounces. This investment makes Austral the largest
shareholder in Argentex. Austral Gold and Argentex have also announced their intention to consider
some form of business combination and negotiations around this are ongoing.
In September 2013 Austral signed a subscription agreement with Goldrock to acquire a 15% interest in
the TSX-V listed company for a total cost of C$9.3 million. Goldrock owns 100% of the Lindero gold
project in the northwest of Argentina which has proven mineral reserves of 641,000 ounces of gold.
Guanaco Gold and Silver Mine, Chile
(100% interest)
Background
In January 2003 Austral Gold Limited obtained, through its subsidiary
Golden Rose International Limited (GRIL), an option to acquire the
Guanaco Project in Chile from Compañia Minera Kinam Guanaco
Limitada, a wholly-owned subsidiary of Kinross Gold Corporation.
At the General Meeting of the Company held on 14 March 2003, the
Shareholders approved this acquisition and the Guanaco Project was
acquired by Guanaco Compañía Minera Limitada - a company wholly
owned by Guanaco Mining Company Limited (GMC) and incorporated
in Chile.
Project and Mine Description
The 100% owned Guanaco mine has been operated by Austral since
September 2009 and remains the company’s flagship asset. Guanaco is
located approximately 220km SE of Antofagasta in Northern Chile at an
elevation of 2,700m and 45km from the Pan American Highway.
Guanaco is located in the Palaeocene/Eocene belt, a structural trend
which runs north/south down the centre of Chile, and hosts several
large gold and copper mining operations including: Zaldivar, El Penon
and Escondida.
The Guanaco operation includes the mining of ore from the Quillota
open pit, however, the majority of the ore processed comes from the
Cachinalito underground and nearby vein systems with higher average
grades. Gold mineralisation at Guanaco is controlled by pervasively
silicified, E/NE trending sub-vertical zones with related hydrothermal
5
breccias. Silicification grades outward into advanced argillic alteration and further into zones with
propylitic alteration. In the Cachinalito vein system most of the gold mineralisation is concentrated
between the 75m and 200m levels and is contained in long shoots. High grade ore shoots (up to 180 g/t
Au), 0.5 to 3.0m wide, have been mined out, but the lower grade halos, below 3 g/t, can reach up to
20m in width. The alteration pattern and the mineralogical makeup of the Guanaco ores have led to its
classification as a high sulfidation epithermal deposit.
Late in 2012 the high-grade Despreciada vein system was identified with a new strike trend of NNW
which opens up the potential for additional vein systems with a similar NNW strike to be identified in
the area.
Production
A number of factors have contributed to
strengthening
from
production
Guanaco in recent months. These include an
increased proportion of ore with higher gold
grades coming from the underground mine
operations and the commissioning of the
increased capacity carbon regeneration kiln.
figures
Guanaco Gold produced a record 13,702oz of
gold (Au) and 21,325oz of silver (Ag) in the
quarter ended June 2013 representing a
monthly average of 4,704 gold-equivalent-
ounces (“GEO”). The record June production
demonstrated a 55% increase on the previous
quarter and 113% increase on the same period last
year.
Based on production results for July 2013 and
August 2013, another production record of over
15,000oz Au is anticipated for the September 2013
quarter. In light of these strong production figures
the company is confident in its c a l e n d a r 2013
forecast of 43,000oz Au.
Guanaco Operational Performance:
Jan – June 2013
Total Ore Mined (t)
Ore from Open Pits (t)
Open Pit Grade (Au g/t)
Ore from Underground (t)
Underground Grade (Au g/t)
Weighted Average Recovery (%)
Gold Produced (oz)
Silver Produced (oz)
Cash operating cost (US$/oz)
356,77
265,676
1.4
91,101
5.91
74.2
22,474
39,540
727
Gold and Silver Production:
Production
Gold (Au Oz)
Silver (Ag Oz)
2011
Cal Year
2012
Cal Year
12,373
37,511
28,907
74,829
2013
6 mths
22,468
39,522
Gold Produced (oz)
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
-
Mar-11
Jun-11
Sep-11
Dec-11 Mar-12
Jun-12
Sep-12
Dec-12 Mar-13
Jun-13
Sep-13
6
Safety
Four (4) lost time incidents (LTIs) and 24 nil‐lost time accidents (NLTAs) were reported involving
employees of the Company and its subsidiaries during the year ended 30 June 2013. These incidents
have been thoroughly investigated and in all cases corrective actions have been identified and
implemented to prevent recurrence. Safety and environmental protection are core values of the
Company and the implementation of strategies to identify and manage risks in our workplaces is a key
priority.
Exploration Program
The exploration program during the first half of 2013 was restricted to exploring areas adjacent to the
mine development. This strategy resulted in the discovery of the Despreciada vein. During the fourth
quarter of 2012, new and encouraging results have been achieved at Guanaco. Both the Cachinalito
trend (ENE) and the Despreciada vein system (NNW) are showing a greater mineralised potential than
previously presumed.
The Cachinalito vein trend was intersected during drift development. The new ore shoot is currently
represented by two intercepts spaced more than 70 metres apart. The first cross cut intersected 3.2
metres grading 4.4 g/t Au and 6.3 g/t Ag, and the second intercept was 2.9 metre wide grading 43.8 g/t
Au and 25.8 g/t Ag. Currently, mine activity is being focused in this drift to explore the potential of the
ore shoots.
Several surface trenches and geological mapping of the Despreciada vein recognised the vein more than
250 metres to the northwest of the current underground drift of the vein, which is hosted by dacitic
porphyry units. Ore material coming from old waste dumps show grades varying from 4.37 g/t Au and
19 g/t Ag up to 6.8 g/t Au and 53 g/t Ag.
During the third quarter of 2013, a new RC drilling program was designed with the objective to study the
extension of the Despreciada vein and also a new ore shoot called Cachinalito extension. In addition, the
Quillota structure will be explored considering the positive reconciliation between the resource model
and the actual ore mined to date.
The following map shows the location of the Cachinalito trend with the eastern new mineralised zone
extension and the Despreciada vein.
Cachinalito Trend and
Despreciada Vein
7
Reserves & Resources
Guanaco’s resource inventory is outlined in the table below. The resource inventory was last updated in
December 2012.
Total Resources
Resources
Measured (Me)
Indicated (Ind)
Total (Me + Ind)
Inferred (Inf)
Gold (Au)
Ton
(kt)
Grade
(g/t)
Ounces
Au
Ton
(kt)
Grade
(g/t)
Ounces
Au
Ton
(kt)
Grade
(g/t)
Ounces
Au
Ton
(kt)
Grade
(g/t)
Ounces
Au
Underground
(>1.0 g/t Au)
Open Pit
(>0.4 g/t Au)
Heap Leach
(>0.4 g/t Au)
1,199
3.66
140,918
2,797
2.86
257,488
3,996
3.10
398,406
2,548
2.42
197,918
360
1.80
20,883
419
1.52
20,460
779
1.65
41,343
15
1.67
798
7,988
0.53
136,620
7,988
0.53
136,620
2,777
0.55
49,261
Total
9,547
0.97
298,421
3,216
2.69
277,948
12,763
1.40
576,369
5,340
1.44
247,977
Silver(Ag)
Ton
(kt)
Grade
(g/t)
Ounces
Ag
Ton
(kt)
Grade
(g/t)
Ounces
Ag
Ton
(kt)
Grade
(g/t)
Ounces
Ag
Ton
(kt)
Grade
(g/t)
Ounces
Ag
Underground
1,199
8.18
315,115
2,797
10.81
972,492
3,996
10.02
1,287,607
2,548
11.35
929,748
Open Pit
360
18.48
213,790
419
13.38
180,268
779
15.73
394,058
15
10.59
5,074
Heap Leach
7,988
2.66
681,892
7,988
2.66
681,892
2,77
2.63
234,946
Total
9,547
3.94
1,210,797
3,216
11.15
1,152,760
12,763
5.76
2,363,557
5,340
6.81
1,169,768
Perseverancia Open Pit Guanaco Mine - Chile
8
Copper Porphyry System
The Porphyry Copper exploration program undertaken in June and in October 2012 consists of 5 deep
drill holes with depths around 1,000 meters. The objective was not achieved as the geological evidence
recognized in the core represents distal facies of the traditional porphyry copper models. Their
characteristics are quartz-sericite alteration, abundant pyrite and very common blende-sphalerite
mineralization.
DDH probing provides sufficient evidence to potentially discover porphyry copper in the Guanaco area,
but rather bound to the North and Northwest of the property. These observations are further supported
by moderate illite-sericite intercepts in DDH-1000 and abundant quartz-sericite in DDH-999 and DDH-
1016.
Jumbo blast drilling operation in
Cachinalito underground mine.
View from Cachinalito underground mine.
Two miners working on scaling activity
9
8 de Julio Project - Santa Cruz, Argentina
In southern Patagonia, Austral Gold has nine tenement applications totalling almost 85,000 hectares in
the Macizo el Deseado area in the Province of Santa Cruz.
During the year important results were received
from the trench program developed in the Campo
Barroso Grande of the Estancia 8 de Julio. A
comprehensive strategy is being designed in order
to more aggressively advance with the exploration
of this prospect.
A geophysics consulting company will perform a
resistivity study and the geochemical sampling
program
in the area will be expanded. The
following figure reflects the level of progress with
the latest results and the next activities considered
for the projects.
Expansion of the 100x100m geochemical
mesh for silica and quartz vein float, to the entire
Barroso Grande field.
Development of a new geophysical
program corresponding to a resistivity gradient in
the Barroso Grande field where important gold
values were obtained.
Start with the systematic sampling of the
other sectors/targets identified in the geological
mapping.
Planned drilling of holes that will test the
vertical extension of the mineralized column.
In April 2013 Austral Gold renegotiated terms with AMINSA which released it from future commitments
totalling US $8.7 million under the earn-in agreement for US $350,000. US $100,000 of this remains
unpaid at 30 June 2013. Austral has recorded a $1.6 million impairment expense in the year ended 30
June 2013 (2012: $4.9 million) to reduce the carrying amount of this investment to nil. However, the
renegotiated terms provide Austral with a royalty on the San Juan project to recover funds invested to
date as well as the potential for an on-going revenue stream.
10
Director’s Report
Austral Gold Limited and its Subsidiaries
For the year ended 30 June 2013
Your Directors present the following report for the financial year ended 30 June 2013 together with the
financial report of Austral Gold Limited (“the Company”) and the consolidated financial report of the
economic entity, being the Company and its subsidiaries, (referred to hereafter as the Group) for the
year ended 30 June 2013 and the auditors’ report thereon.
Principal Activities
The principal activities of the Company during the course of the financial year were exploration,
evaluation of mineral properties, and gold and silver production as described in preceding sections of
this report.
The Company is a company limited by shares and incorporated and domiciled in Australia.
Detailed information on the Company’s operations during the year ended 30 June 2013 has been
released through the Company’s announcements and reports to the Australian Stock Exchange. This
information can also be accessed from the Company’s website at www.australgold.com.au.
Review and Results of Operations
Operating Results and Dividends
The Group’s net loss attributable to members for the year ended 30 June 2013 was $7,422,188 (2012:
loss $15,923,280). Due to depreciation of the Australian dollar against the American dollar, foreign
exchange loss on translation of the parent entity’s liabilities denominated in USD totalled $6,207,093 for
the year ended 30 June 2013 (2012 loss: $2,432,577).
No dividends of the Company or its subsidiaries have been paid, declared or recommended since the
end of the financial year. Subject to shareholder approval at the November 2013 Annual General
Meeting, the directors propose to make a payment to shareholders in the form of a return of capital.
Financial Position
The net assets of the Group have decreased by $466,186 since 30 June 2012 to $31,614,067 at 30 June
2013.
The Company has the support of its substantial shareholder, Inversiones Financieras del Sur S.A. (IFISA)
and associates, who confirm that they will continue to support Austral Gold Limited by providing
adequate financial assistance in accordance with the details contained in the Funding Agreements
between Austral Gold Limited and IFISA.
The Directors are confident the Company is in a position to maintain its current operations.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Future Developments, Prospects and Business Strategies
Since its incorporation, Austral Gold has been an explorer for gold. First production of gold and silver
from Guanaco occurred in late 2010, with gold production steadily increasing since this time. The
Guanaco gold and silver mine remains the company’s key asset a focus of management. During the
11
financial year ended June 2013, Austral exited its earn-in agreement with AMINSA and has replaced this
investment with a royalty agreement over the project with regard to future production from the project.
Events Subsequent to Balance Date
On 4 July 2013 Austral announced that it had finalised a private placement in Argentex in July 2013 in
which Austral acquired a 19.9% interest at a total cost of C$5 million. This investment makes Austral the
largest shareholder in Argentex. Austral has one position on the Board of Argentex and has one position
on the Technical Committee. Austral Gold and Argentex have also announced their intention to consider
some form of business combination and negotiations around this are ongoing. Argentex’s primary asset
is the 100,000 hectare Pinguino project in Southern Argentina which includes an indicated resource of
23.6 million silver-equivalent-ounces with grades of 102.8 g/t Ag and 0.59 g/t Au.
On 27 August 2013 Austral Gold repaid US$973,863 to IFISA reducing the interest component of the
liability outstanding.
On 18 September 2013 Austral signed a subscription agreement with Goldrock to acquire a 15% interest
in the TSX-V listed company for a total cost of C$9.3 million. This investment is scheduled to close on 31
October 2013 and will make Austral the largest shareholder of Goldrock. The agreement entitles Austral
to nominate one position on the Board of Goldrock and one position on the Technical Committee.
Goldrock owns 100% of the Lindero gold project in the northwest of Argentina which has proven
mineral reserves of 641,000 ounces of gold.
Performance In Relation To Environmental Regulation
The Group’s exploration activities are subject to environmental regulations.
In relation to the Group’s mineral exploration operations in Chile, licence requirements relating to
“Bases Generales de Medio Ambiente” exist under the Chilean Law No. 19,300. The Directors are not
aware of any significant breaches during the period covered by this report. Moreover, all the exploration
activities performed so far have been approved by the Environmental Authority, Comisión Nacional de
Medio Ambiente (CONAMA).
Dr Robert Trzebski is a Director of Austral Gold Limited. He has a Degree in Geology, a PhD in
Geophysics, a Masters in International Project Management and has over 17 years professional
experience in mineral exploration, project management and research and development.
Dr Robert Trzebski is a member of the Australian Institute of Mining and Metallurgy (AUSIMM) and
qualifies as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves.’ Dr Robert Trzebski consents
to the inclusion of the resources noted in this Annual Report.
12
Directors and Officers
The Directors and Officers of the Company at any time during or since the end of the financial year are:
Name and Qualifications
Experience and Special Responsibilities
Eduardo Elsztain
Chairman
Appointed 2 Jun 11
Non-Executive Director
Appointed 29 Jun 07
Re-elected by shareholders 28 Nov 12
Wayne Hubert
Non-Executive Director
Appointed 18 Oct 11
Re-elected by shareholders 30 Nov 11
Mr Elsztain is the Chairman of:
(i)
IRSA (NYSE: IRSA): Argentina´s largest real estate company, operating a
diversified portfolio of shopping centres, office buildings, luxury hotels and
residential properties in Argentina and United States;
(ii) Cresud (NASDAQ: CRESY): a leading agri-business company, with presence in
Argentina, Bolivia, Paraguay and Uruguay, involved in activities such as crop
production, beef cattle raising and milk production;
(iii) BrasilAgro (NYSE: LND): Companhia Brasileira de Propriedades Agrícolas,
engaged in crop production such as soybean, corn and sugarcane, cattle
raising and forestry activities in Brazil;
(iv) Banco Hipotecario (BA: BHIP), one of Argentina’s largest commercial Banks,
engaged in the personal banking and corporate banking sectors and
Mr Elsztain is a member of the World Economic Forum, the Group of 50 and he
has been an attendee of the G20 Business Summits.
He is a member of Argentina’s Association of Corporations (AEA) and the Board of
Directors of the Buenos Aires Stock Exchange.
Mr Elsztain is Chairman of Fundación Irsa, a foundation that promotes education
for children and young adults, and a member of Endeavor, an organization that
helps high-impact entrepreneurs in emerging countries to promote economic
growth and development.
Mr Elsztain is also Vice-President of the World Jewish Congress and President of
Hillel Argentina and Taglit Birthright Argentina.
Mr Elsztain has not held any other Directorships with listed entities in the last
three years.
Mr Hubert is a highly experienced and accomplished mining executive with over
15 years’ experience working in the South American resources sector. From 2006
until 2010 he was the Chief Executive Officer of ASX-listed Andean Resources
Limited, and led the team that increased Andean’s value from $70 million to $3.5
billion in four years. Andean was developing a world-class silver and gold mine in
Argentina with a resource of over 5 million ounces of gold when it was acquired
by Goldcorp Inc. of Canada.
Mr Hubert, who holds a Bachelor degree in Engineering and a Master of Business
Administration and has held executive roles for Meridian Gold with experience in
operations, finance and investor relations. Currently he is a Director of: Samco
Gold Limited [TSX], a company focused on gold exploration in Argentina; Midas
Gold Corp [TSX], a Canadian company with a 5.7 million ounce gold resource,
Lithic Resources [TSX] and Argentex Mining Corporation (ATX).
Other than stated above, Mr Hubert has not held any other Directorships with
listed entities in the last three years.
Stabro Kasaneva
Executive Director
Appointed 7 Oct 09,
Re-elected by shareholders 28 Nov 12
Mr Kasaneva is also the Chief Operating Officer for Austral Gold Limited. Mr
Kasaneva holds a degree in Geology from the Universidad Católica del Norte,
Chile. He has more than 20 years’ experience in geology and exploration of gold
deposits, mainly focused on the Paleocene belt in Northern Chile, where Guanaco
Austral Gold’s flagship gold/copper project is located.
Mr Kasaneva has not held any other Directorships with listed entities in the last
three years.
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Name and Qualifications
Experience and Special Responsibilities
Saul Zang
Non-Executive Director
Appointed 29 Jun 07
Re-elected by shareholders 30 Nov 11
Pablo Vergara del Carril
Non-Executive Director
Appointed 18 May 06
Re-elected by shareholders 29 Nov 10
Robert Trzebski
Non-Executive Director
Appointed 10 Apr 07
Re-elected by shareholders 30 Nov 11
Mr Zang obtained a law degree from Universidad de Buenos Aires. He is a
member of the International Bar Association and the Interamerican Federation of
Lawyers and is a founding member of the law firm Zang, Bergel Vi es.
Mr Zang currently holds Vice-Chairmanships on the Boards of IRSA, Shopping Alto
Palermo SA, and Alto Palermo and holds Directorships with Cresud [Nasdaq /
BASE], Alto Palermo [Nasdaq / BASE], Banco Hipotecario [BASE], BrasilAgro
[Bovespa], Puerto Retiro and Fibesa; Nuevas Fronteras SA, Tarshop and Palermo
Invest SA.
Mr Zang is an adviser and Member of the Board of Directors of BASE and provides
legal advice to national and international companies, including the privatisation
process of YPF SA and the Province of Buenos Aires’ electricity company.
Mr Zang has not held any other Directorships with listed entities in the last three
years.
Mr Vergara del Carril is a lawyer and is professor of Postgraduate Degrees for
Capital Markets, Contracts, Corporate Law and Business Law at the Argentine
Catholic University.
He is a director of Banco Hipotecario SA. [BASE: BHIP], Milkaut SA (an Argentine
leading dairy company), Nuevas Fronteras (owner of the Intercontinental Hotel in
Buenos Aires) Alto Palermo [Nasdaq / BASE] and Emprendimiento Recoleta SA
(owner of the Buenos Aires Design Shopping Centre). Mr Vergara del Carril is also
a director of Guanaco Mining Company Limited and Guanaco Capital Holding
Corp.
Mr Vergara del Carril has not held any other Directorships with listed entities in
the last three years.
Dr Trzebski holds a degree in Geology, PhD in Geophysics, Masters in Project
Management and has over 20 years of professional experience in mineral
exploration, project management and mining services. He is currently Executive
Officer of Austmine Ltd and Executive Director of Australia-Latin America Business
Council Ltd.
As a fellow of the Australian Institute of Mining and Metallurgy, Dr Trzebski has
acted as the Competent Person (CP) for the Company’s ASX releases.
Dr Trzebski has not held a Directorship of any other listed company in the last
three years.
Ben Jarvis
Non-Executive Director
Appointed 2 Jun 11
Re-elected by shareholders 30 Nov 11
Mr Jarvis is the Managing Director and co-founder of Six Degrees Investor
Relations, an Australian advisory firm that provides investor relations and
communication services to a range of resources and industrial services companies
listed on the Australian Securities Exchange.
Mr Jarvis is also a Director of ASX-listed Eagle Nickel Limited, and South American
Tin Limited, an unlisted public company focused on tin exploration and project
development in Bolivia. Mr Jarvis was educated at the University of Adelaide
where he majored in Politics.
In the last three years, Mr Jarvis also held a Directorship with Connxion Limited.
14
Directors’ Meetings
The number of Directors’ meetings (including meetings of committees of Directors) and number of
meetings attended by each of the Directors of the Group during the financial year are:
Director
Attended
Held during Office
Attended
Held during Office
Directors’ meetings
Audit Committee meetings
Pablo Vergara del Carril
Robert Trzebski
Eduardo Elsztain
Saul Zang
Stabro Kasaneva
Ben Jarvis
Wayne Hubert
3
3
2
2
3
3
3
3
3
3
3
3
3
3
2
2
N/A
N/A
N/A
N/A
N/A
2
2
N/A
N/A
N/A
N/A
N/A
Options
During or since the end of the financial year, the Company has not granted options over unissued
ordinary shares to any Director or to any employee.
Unissued Shares Under Option
At the date of this report there are 140,949 unissued shares under option with an exercise price of $0.30
expiring 15 November 2016.
Indemnity of Officers
The Company has not, during or since the end of the financial year, in respect of any person who is or
has been an officer or auditor of the Company or a related body corporate:
Indemnified or made any relevant agreement for indemnifying against a liability incurred as an
officer, including costs and expenses in successfully defending legal proceedings; or
Paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an
officer for the costs or expenses to defend legal proceedings.
Interests of Directors
The relevant interest of each director (directly or indirectly) in the share capital of the Company, as
notified by the Directors to the Australian Stock Exchange in accordance with S205G(1) of the
Corporations Act 2001, at the date of this report is as follows:
Director
Ordinary Shares
It is also noted:
P Vergara del Carril
R Trzebski
E Elsztain
S Zang
S Kasaneva
B Jarvis
W Hubert
1. P Vergara del Carril, E Elsztain and S Zang are
directors of Guanaco Capital Holding Corp which
holds 24,289,330 shares according to the last
substantial holder notice lodged in September 2013.
2. E Elsztain and S Zang are directors of IFISA which
holds 115,492,415 shares according to the last
substantial holder notice lodged in September 2013.
68,119
-
144,467,951
1,435,668
-
-
1,750,000
15
Remuneration Report (Audited)
Remuneration Policy
The Company has a Remuneration Policy that aims to ensure the remuneration packages of directors
and senior executives properly reflect the person’s duties, responsibilities and level of performance, as
well as ensuring that remuneration is competitive in attracting, retaining and motivating people of the
highest quality.
The Company reviews information about remuneration levels in the various labour markets in which it
competes. Total fixed compensation for a particular grade of employee is aimed at the median level of
the relevant market.
Remuneration of executive director and Chief Operating Officer (COO) Stabro Kasaneva is made up of a
fixed component and a variable component equal to 50% of the fixed component. Performance against
pre-determined targets are used to determine the portion of the variable component paid. The targets
are based on financial and non financial indicators and include production, safety and new business. The
bonus (variable component) paid in the year ended 30 June 2013 represents 100% achievement of these
targets.
Non-executive directors’ remuneration
Non-executive directors that are associates of the Company’s major shareholder (Eduardo Elsztain, Saul
Zang and Pablo Vergara del Carril) do not receive any fees or payments from the Group. Independent
non-executive directors (Robert Trzebski, Ben Jarvis and Wayne Hubert) receive between $40,000 and
$50,000 pa which reflects the demands and responsibilities of their position.
Details of Remuneration
PRIMARY
POST-EMPLOYMENT
SHARE-BASED
TOTAL
Cash Salary
& Fees
$
Cash
Bonus
$
Non-monetary
Benefits
$
Super-
annuation
$
Retirement
Benefits
$
YEAR ENDED 30 JUNE 2013
S Kasaneva
W Hubert
R Trzebski
B Jarvis
P Vergara delCarril
322,548
163,030
48,124
38,125
38,125
1,428
-
-
-
-
Total Directors
448,350
163,030
One gold coin gifted in May 2013 to each director listed above
OTHER KEY MANAGEMENT PERSONNEL
C Lloyd
Total KMP
Total 2013
119,266
119,266
-
-
567,616
163,030
-
-
-
-
-
-
-
-
-
-
-
3,303
3,303
-
6,606
10,734
10,734
17,340
-
-
-
-
-
-
-
-
-
Shares
Options
$
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
$
485,579
48,124
41,428
41,428
1,428
617,987
130,000
130,000
747,987
16
Details of Remuneration (prior year)
PRIMARY
POST-EMPLOYMENT
SHARE-BASED
TOTAL
Cash Salary
& Fees
$
Cash
Bonus
$
YEAR ENDED 30 JUNE 2012
S Kasaneva
W Hubert
R Trzebski
B Jarvis
308,135
*310,184
35,150
36,697
36,697
-
-
-
Total Directors
416,679
310,184
OTHER KEY MANAGEMENT PERSONNEL
C Lloyd
Total KMP
Total 2011
123,089
123,089
-
-
539,768
310,184
Non-
monetary
Benefits
Super-
annuation
Retirement
Benefits
Shares
Options
$
$
$
-
-
-
-
-
-
-
-
-
-
3,303
3,303
6,606
11,078
11,078
17,684
$
-
-
-
-
-
$
$
-
-
-
-
-
-
-
-
618,319
35,150
40,000
40,000
733,469
134,167
134,167
867,636
-
-
-
-
-
-
-
-
*$165,765 of this bonus relates to the years ended 30 June 2011 and 30 June 2010.
Service Agreements
Further to his responsibilities as a Director of Austral Gold Limited, Stabro Kasaneva is employed by the
Group as Chief Operating Officer. His employment contract commenced in September 2009 and has no
fixed termination date. The termination period is 30 days notice by either party. His salary is paid in
Chilean pesos and is subject to a 6-monthly review. Details of payments made for the year ended 30
June 2013 are contained in the table above.
Share Based Payments
There were no share based payments made to Directors or key management personnel during the year.
This concludes the Remuneration Report which has been audited.
Auditors
BDO continues in office as auditors in accordance with the requirements of the Corporations Act 2001.
Non-audit services
The company may decide to employ the auditors on
assignments additional to their statutory audit
duties where
the auditors’ expertise and
experience with the Company are important.
Details of amounts paid or payable to the auditors
of the Company (BDO) and its subsidiaries (Nexia
and PKF) for audit and non-audit services provided
during the year are set out in the adjacent table.
2013
$
2012
$
Audit Services and
review of financial reports
144,691
101,476
Non-audit services
21,628
2,585
Total auditors fees
166,319
104,061
17
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
auditors, as set out below, did not compromise the auditors independence requirements of the
Corporations Act 2001 for the following reasons:
All non-audit services have been reviewed by the audit committee to ensure they do not impact the
impartiality and objectivity of the auditors.
None of the services undermine the general principles relating to auditors independence as set out
in APES 110 Code of Ethics for Professional Accountants.
Proceedings on Behalf of the Company
Other than stated below, no person has applied for leave of Court to bring proceedings on behalf of the
Company or intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
Auditors Independence Declaration
The lead auditors’ independence declaration for the year ended 30 June 2013 has been received and is
included in this report.
Signed in accordance with a resolution of Directors at Sydney
Ben Jarvis
Director
26 September 2013
18
Tel: 61 2 9251 4100
Fax: 61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
DECLARATION OF INDEPENDENCE BY TIM SYDENHAM TO THE DIRECTORS OF AUSTRAL GOLD
LIMITED
As lead auditor of Austral Gold Limited for the year ended 30 June 2013, 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 Austral Gold Limited and the entities it controlled during the
period.
Tim Sydenham
Partner
BDO East Coast Partnership
Sydney, 26 September 2013
BDO East Coast Partnership ABN 83 236 985 726 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 East Coast Partnership 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) in each State or Territory other than
Tasmania.
Financial Statements
Statement of Profit or Loss and other Comprehensive Income
Austral Gold Limited and its Subsidiaries
For the year ended 30 June 2013
Notes
Consolidated
2013
$
2012
$
CONTINUING OPERATIONS
Revenue
Total revenue
Cost of sales
Finance costs
Administration expenses
Impairment
Loss before income tax
Income tax expense
Loss after income tax
Loss after tax attributable to outside equity interest
Net Loss for the year
OTHER COMPREHENSIVE INCOME – ITEMS THAT MAY BE
RECLASSIFIED SUBSEQUENTLY TO PROFIT OR LOSS
Foreign currency translation
Total comprehensive income for the year
LOSS PER SHARE (cents per share):
Basic loss per share
Diluted loss per share
4
5
5
5
5
7
8
8
62,877,362
30,389,567
62,877,362
30,389,567
(52,058,852)
(28,283,475)
(8,155,875)
(5,615,830)
(1,600,668)
(7,089,396)
(4,916,528)
(4,917,831)
(4,553,863)
(14,817,663)
(2,868,325)
(1,105,617)
(7,422,188)
(15,923,280)
-
-
(7,422,188)
(15,923,280)
6,956,016
2,093,363
(466,712)
(13,829,917)
(4.4)c
(4.4)c
(9.4)c
(9.4)c
The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
20
Statement of Financial Position
Austral Gold Limited and its Subsidiaries
as at 30 June 2013
Notes
Consolidated
2013
$
2012
$
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total current assets
Non-current assets
Other receivables
Financial assets
Intangible assets
Plant and equipment
Exploration and evaluation expenditure
Total non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Borrowings
Total current liabilities
Non-current liabilities
Provisions
Borrowings
Deferred tax liability
Total non-current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Accumulated losses
Reserves
Outside equity interest
TOTAL EQUITY
10
12
11
12
13
14
15
16
17
18
19
18
19
7
20
21
23
22
5,021,694
11,303,441
3,737,221
20,062,356
1,800,442
51,465
59,124,056
24,041,595
379,610
85,397,168
105,459,524
5,669,985
26,729
1,882,429
7,579,143
910,215
60,893,911
4,462,188
66,266,314
73,845,457
31,614,067
44,400,742
(13,527,348)
740,629
44
469,876
3,088,005
3,555,662
7,113,543
3,828,225
340,111
66,332,753
20,185,655
171,822
90,858,566
97,972,109
5,924,731
22,047
721,988
6,668,766
742,752
57,352,048
1,128,290
59,223,090
65,891,856
32,080,253
44,400,742
(6,105,160)
(6,215,387)
58
31,614,067
32,080,253
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
21
Statement of Changes in Equity
Austral Gold Limited and its Subsidiaries
For the year ended 30 June 2013
Consolidated
Retained
earnings/
(Accumulated
losses)
$
Issued
capital
$
Reserves
$
Minority
interest
$
Total
$
44,400,742
9,818,120
(8,323,247)
56
45,895,671
Notes
21
Balance at 30 June 2011
Loss for the year
Other comprehensive income
Total comprehensive income for the
year
Increase in minority interest
attributable to foreign exchange
Options issued
Balance at 30 June 2012
Loss for the year
23
21
Other comprehensive income
Total comprehensive income for the
year
Increase in minority interest
attributable to foreign exchange
(15,923,280)
-
-
2,093,363
(15,923,280)
2,093,363
-
-
-
14,497
(7,422,188)
-
-
6,956,016
(7,422,188)
6,956,016
-
-
-
-
-
-
-
-
-
44,400,742
(6,105,160)
(6,215,387)
TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS:
-
-
-
2
-
58
-
-
-
(15,923,280)
2,093,363
(13,829,917)
2
14,497
32,080,253
(7,422,188)
6,956,016
(466,712)
-
-
(14)
(14)
Balance at 30 June 2013
44,400,742
(13,527,348)
740,629
44
31,614,067
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes
22
Statement of Cash Flows
Austral Gold Limited and its Subsidiaries
For the year ended 30 June 2013
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Consolidated
Notes
2013
$
2012
$
62,776,259
30,112,158
(42,753,502)
(22,581,080)
Net cash provided through operating activities
28
20,022,757
7,531,078
Cash flows from investing activities
Proceeds from sale of plant and equipment
73,713
Purchase of property, plant and equipment
15
(1,291,159)
Investment in shares
Deposit for investment in Argentex
Payment for exploration and evaluation expenditure
(469,418)
(2,637,140)
(153,210)
10,738
(1,946,477)
(1,216,219)
-
(63,572)
Investment in development assets
14
(6,866,171)
(4,016,475)
Interest received
Net cash used in investing activities
Cash flows from financing activities
Loans from related party
Repayment to related party
5,131
1,787
(11,338,254)
(7,230,218)
-
2,595,002
(4,307,069)
(2,353,664)
Net cash (used in)/provided through financing activities
(4,307,069)
241,338
Movement attributable to foreign currency translation
174,384
(1,381,467)
Net (decrease) / increase in cash held
Cash at beginning of financial year
Cash at end of financial year
10
4,551,818
469,876
5,021,694
(839,269)
1,309,145
469,876
The above Statement of Cash Flows should be read in conjunction with the accompanying notes
23
Notes to the Financial Statements
1 CORPORATE INFORMATION
The financial report of Austral Gold Limited (“the Company”) for the year ended 30 June 2013 was
authorised for issue in accordance with a resolution of the Directors on 25 September 2013.
Austral Gold Limited is a company limited by shares that is incorporated and domiciled in Australia,
whose shares are publicly traded on the Australian Securities Exchange.
The nature of the operations and principal activities of the Group are described in the Directors’
Report.
2 SUMMARY OF ACCOUNTING POLICIES
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards
Board and the Corporations Act 2001, as appropriate for profit oriented entities.
The financial report covers the Consolidated Entity of Austral Gold Limited and its subsidiaries (“the
Group”) and is presented in English.
The financial report of Austral Gold Limited and its subsidiaries complies with International
Financial Reporting Standards (IFRS) issued by the International Accouting Standards Board (IASB).
Parent entity information
In accordance with the Corporations Act, these financial statements present the results of the
consolidated entity only. Supplementary information about the parent entity is disclosed in note
29.
The following is a summary of the material accounting policies adopted by the Group in the
preparation of the financial report. The accounting policies have been consistently applied, unless
otherwise stated.
2.1
Basis of preparation
The financial report has been prepared on a historical cost basis, except for certain financial
assets and liabilities which are stated at fair value.
2.2
Statement of compliance
The accounting policies set out below have been consistently applied to all years presented.
2.3
Presentation currency
The financial report is presented in Australian dollars which is the presentation currency of
the Group.
2.4 Use of estimates and judgements
The Group makes estimates and assumptions concerning the future. The resulting accounting
estimates will by definition, seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of the assets and liabilities with the next financial year are discussed below:
24
Estimated impairment / reversal of impairment of development assets
Where indicators of impairment or reversal of impairment are identified the recoverable
amounts of the assets are determined. The recoverable amounts of the assets have been
determined using reports from independent experts. The calculations require the use of
assumptions. Refer to note 14 for details of these assumptions.
Estimated impairment of exploration and evaluation assets
The Group tests at each reporting date whether there are any indicators of impairment as
identified by AASB 6 “Exploration for and Evaluation of Mineral Resources”. Where indicators
of impairment are identified the recoverable amounts of the assets are determined. No
indicators of impairment were identified in the current year.
2.5
Basis of consolidation
A subsidiary is any entity that Austral Gold Limited has the power to control the financial and
operating policies of so as to obtain benefits from its activities.
A list of subsidiaries is contained in note 27 to the financial statements. The financial
statements of the subsidiaries are prepared for the same reporting periods as the parent
company using consistent accounting policies.
All inter-company balances and transactions between entities in the Group, including any
unrealised profits or losses, have been eliminated on consolidation.
Outside equity interests in the equity and results of the entities that are controlled are shown
as a separate item in the consolidated financial report.
The financial statements of subsidiaries are included from the date control commences until
the date control ceases.
2.6
Revenue recognition
Revenue from the sale of goods is recognised when control of the goods has passed to the
buyer, the amount of revenue can be measured reliably and it is probable that it will be
received by the Group.
Sale of minerals
Sale of minerals is recognised at the point of sale, which is when the customer has taken
delivery of the goods, the risks and rewards have been transferred to the customer and there
is a valid contract.
Interest revenue
Interest revenue is recognised as it accrues, using the effective interest method. This is a
method of calculating the amortised cost of a financial asset and allocating the interest
income over the relevant period using the effective interest rate, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial
asset to the net carrying amount of the financial asset.
2.7 Goods and services tax/ Value added tax
Revenues, expenses and assets are recognised net of the amount of GST/VAT, except where
the amount of GST/VAT incurred is not recoverable from the Tax Office. In these
circumstances the GST/VAT is recognised as part of the cost of acquisition of the asset or as
part of the expense.
Receivables and payables in the Statement of Financial Position are shown inclusive of
GST/VAT.
25
Cash flows are presented in the Statement of Cash Flows on a gross basis, except for the
GST/VAT component of investing and financing activities, which are disclosed as operating
cash flows.
2.8
Intangibles
Development assets
When the technical and commercial feasibility of an undeveloped mining project has been
demonstrated the project enters the development phase. The cost of the project assets are
transferred from exploration and evaluation expenditure and reclassified into development
phase and include past exploration and evaluation costs, development drilling and other
subsurface expenditure. When full commercial operation commences, the accumulated costs
are transferred into producing assets.
2.9
Exploration and evaluation expenditure
Exploration and evaluation expenditure incurred is accumulated in respect of each
identifiable area of interest and are carried forward in the Statement of Financial Position
where:
2.9.1
rights to tenure of the area of interest are current; and
2.9.2 one of the following conditions is met:
i
such costs are expected to be recouped through successful development and
exploitation of the area of interest or alternatively, by its sales; or
ii exploration and/or evaluation activities in the area of interest have not, at
reporting date, yet reached a stage which permits a reasonable assessment of
the existence or otherwise of economically recoverable reserves and active and
significant operations in, or relation to, the areas are continuing.
Expenditure relating to pre-exploration activities is written off to the Statement of
Profit or Loss during the period in which the expenditure is incurred.
A regular review
is undertaken of each area of interest to determine the
appropriateness of continuing to carry forward costs in relation to that area of
interest.
Accumulated expenditure on areas that have been abandoned, or are considered to
be of no value, are written off in the year in which such a decision is made.
When production commences, the accumulated costs for the relevant area of
interest are amortised over the life of the area according to the rate of depletion of
the economically recoverable reserves.
2.10
Investments
Investments in subsidiaries are carried in the Parent Entity’s financial statements at the lower
of cost and recoverable amount.
2.11 Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated
impairment losses.
Depreciation
Items of plant and equipment have limited useful lives and are depreciated on a straight line
basis over their estimated useful lives.
26
Depreciation and amortisation rates and methods are reviewed annually for appropriateness.
When changes are made, adjustments are reflected prospectively in current and future
periods only. Depreciation and amortisation are expensed, except to the extent that they are
included in the carrying amount of another asset as an allocation of production overheads.
The depreciation rate used is between 5% - 33%.
De-recognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further
future economic benefits are expected from its use or disposal.
Any gain or loss arising on de-recognition of the asset (calculated as the difference between
net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the
year the asset is de-recognised.
2.12 Translation of foreign currency items
The functional and presentation currency of Austral Gold Limited is Australian dollars ($).
The functional currency of Guanaco Mining Company is American dollars (US$) and its
presentation currency is Australian dollars ($).
The functional currency of Austral Gold Argentina is American dollars ($US) and its
presentation currency is Australian dollars ($).
Transactions in foreign currencies are initially recorded in the functional currency at the
exchange rates ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the rate of exchange ruling at
Statement of Financial Position date.
Exchange differences are recognised as revenues or expenses in net profit or loss in the
period in which exchange rates change except for qualifying assets and hedge transactions.
Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rate as at the date of the initial transaction.
The results and financial position of all Group entities that have a functional currency
different from the parent’s functional currency are translated into Australian Dollars as
follows:
i 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.
ii
Income and expenses for Profit or Loss are translated at the average rate of exchange.
iii All resulting exchange differences are recognised as a separate component of equity.
2.13 Cash and cash equivalents
For the purpose of the Statement of Cash Flows, cash includes:
i
cash on hand and at call deposits with banks or financial institutions; and
ii other short-term highly liquid investments with original maturities of three month or
less, and bank overdrafts.
2.14
Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the taxation authorities. The tax rates and
27
tax laws used to compute the amount are those that are enacted or substantively enacted by
reporting date.
Deferred income tax is provided on all temporary differences at reporting date between the
tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except :
i when the deferred income tax liability arises from the initial recognition of goodwill or of
an asset or liability in a transaction that is not a business combination and that, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
ii when the taxable temporary difference is associated with investments in subsidiaries,
associates, or interests in joint ventures, and the timing of the reversal of the temporary
difference can be controlled and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-
forward of unused tax assets and unused tax losses, to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences and the
carry-forward of unused tax credits and unused tax losses can be utilised, except:
iii when the deferred income tax asset relating to the deductible temporary difference
arises from the initial recognition of an asset or liability in a transaction that is not a
business combination and, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; or
iv when the deductible temporary difference is associated with investments in subsidiaries,
associates, or interests in joint ventures, in which case a deferred tax asset is only
recognised to the extent that it is probable that the temporary difference will reverse in
the foreseeable future and taxable profit will be available against which the temporary
difference can be utilised.
The carrying amount of any deferred income tax assets recognised is reviewed at each
reporting date and reduced to the extent that it is no longer probable that sufficient taxable
profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to
apply for the year when the asset is realised or the liability is settled, based on the tax rates
and tax laws that have been enacted or substantively enacted at reporting date.
Income taxes relating to items recognised directly to equity are recognised in equity and not
in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right
exists to set off current tax assets against current tax liabilities and the deferred tax assets
and liabilities relate to the same taxable entity and the same taxation authority.
2.15
Inventories
Raw materials and work in progress are stated at the lower of cost and net realisable value
on a 'first in first out' basis. Cost comprises direct materials and delivery costs, direct labour,
import duties and other taxes, an appropriate proportion of variable and fixed overhead
expenditure based on normal operating capacity. Finished goods are stated at net realisable
value. Net realisable value is determined using the prevailing metal prices.
28
2.16 Trade and other receivables
Trade accounts receivable, amounts due from related parties and other receivables represent
the principal amounts due at balance date plus accrued interest and less, where applicable,
any unearned income and provisions for doubtful accounts.
2.17 Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the
end of the financial year and which are unpaid. The amounts are unsecured and are usually
paid within 30 days of recognition.
Trade payables and other payables are carried at amortised costs and represent liabilities for
goods and services provided to the Group prior to the end of the financial year that are
unpaid and arise when the Group becomes obliged to make future payments in respect of
the purchase of these goods and services.
2.18
Interest bearing liabilities
All loans and borrowings are initially recognised at cost, being the fair value of consideration
received net of issue costs associated with the borrowing.
After initial recognition, interest bearing loans and borrowings are subsequently measured at
amortised cost using the effective interest method. Amortised cost is calculated by taking
into account any issue costs, and any discount or premium on settlement.
Gains and losses are recognised in the Profit or Loss when the liabilities are derecognised and
as well as through the amortisation process.
2.19 Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of
past events, for which it is probable that an outflow of economic benefits will result and that
outflow can be reliably measured.
If the effect of the time value of money is material, provisions are determined by discounting
the expected future cash flows at a pre-tax rate that reflects current market assessments of
the time value of money and where appropriate, the risks specific to the liability. Where
discounting is used, the increase in the provision due to the passage of time is recognised as
a finance cost.
2.20 Leases
Lease payments for operating leases, where all the risks and benefits remain with the lessor,
are recognised as an expense in the Profit or Loss on a straight line basis over the lease term.
2.21
Impairment of assets
At each reporting date, the Group reviews the carrying values of its tangible and intangible
assets to determine whether there is any indication that those assets have been impaired. If
such an indication exists, the recoverable amount of the asset, being the higher of the asset’s
fair value less costs to sell or value in use, is compared to the asset’s carrying value. Any
excess of the asset’s carrying value over its recoverable amount is expensed to the Profit or
Loss. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax rate.
29
Impairment testing is performed annually for goodwill and intangible assets with indefinite
lives or more frequently if events or circumstances indicate that the carrying value may be
impaired.
Where it is not possible to estimate the recoverable amount of an individual asset, the group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
2.22 De-recognition of financial assets and financial liabilities
Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is derecognised when:
i
ii
the rights to receive cash flows from the asset have expired;
the Group retains the right to receive cash flows from the asset, but has assumed an
obligation to pay them in full without material delay to a third party under a ‘pass-
through’ arrangement; or
iii the Group has transferred its rights to receive cash flows from the asset and either:
iv
has transferred substantially all the risks and rewards of the asset, or
v has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset and has neither
transferred nor retained substantially all the risks and rewards of the asset nor transferred
control of the asset, the asset is recognised to the extent of the Group’s continuing
involvement in the asset. Continuing involvement that takes the form of a guarantee over the
transferred asset is measured at the lower of the original carrying amount of the asset and
the maximum amount of consideration received that the Group could be required to repay.
Available-for-sale financial assets
The Group’s investments in equity securities are classified as available-for-sale financial
assets. Subsequent to initial recognition available-for-sale investments are measured at fair
value with gains or losses being recognised as a separate component of equity until the
investment is derecognised or determined to be impaired, at which time the accumulative
gain or loss previously reported in equity is recognised in profit or loss. Where the value of
available-for-sale financial assets cannot be reliably estimated the asset is carried at cost.
Financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled or expires.
When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified,
such an exchange or modification is treated as a de-recognition of the original liability and
the recognition of a new liability, and the difference in the respective carrying amounts is
recognised in profit or loss.
2.23 Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
30
2.24 Earnings per share
Basic earnings per share
Basic earnings per share is determined by dividing net profit after income tax attributable to
members of the parent, excluding any costs of servicing equity other than ordinary shares, by
the weighted average number of ordinary shares outstanding during the financial year,
adjusted for bonus elements in ordinary shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in determination of basic earnings per
share to take into account the after income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares and weighted average number of shares
assumed to have been issued for no consideration in relation to dilutive potential ordinary
shares.
2.25 Borrowing costs
Borrowing costs are recognised as an expense when incurred unless they are capitalised for
qualifying assets.
2.26 Employee leave benefits
Wages and salaries, annual leave and sick leave
Liabilities for employees’ entitlements to wages and salaries, annual leave and other
employee entitlements expected to be settled within 12 months of the reporting date are
recognised in the current provisions in respect of employees’ services up to reporting date
and are measured at the amounts expected to be paid when the liabilities are settled.
Liabilities for non-accumulating sick leave are recognised when the leave is taken and
measured at the rates paid or payable.
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and
measured as the present value of expected future payments to be made in respect of
services provided by employees up to the reporting date using the projected unit credit
method. Consideration is given to expected future wage and salary levels, experience of
employee departures, and periods of service. Expected future payments are discounted using
market yields at the reporting date on national government bonds with terms to maturity
and currencies that match, as closely as possible, the estimated cash outflows.
Superannuation
The Company contributes to employee superannuation funds. Contributions made by the
in accordance with the
Company are
requirements of the Superannuation Guarantee Legislation.
legally enforceable. Contributions are made
31
2.27 Going concern
At the reporting date the Group had net current assets of $12,483,213 (2012: $444,777) and
had net cash inflows from operations of $20,022,757 (2012: net cash inflows of $7,531,078)
for the year ended 30 June 2013. In addition:
i
production from Guanaco yielded revenue from operations of $62,776,259 in the 12
months to 30 June 2013 (2012: $30,112,061);
ii draw downs on the loan from IFISA ceased in February 2012. $4,307,069 were repaid in
the 12 months to 30 June 2013 (2012: $2,353,664);
iii At 30 June 2013 the Group is able to draw down an additional $15,844,609 on the loan
from IFISA should it be necessary;
iv the interest rate applicable to the loan from IFISA is 4%; and
v
the Company has the support of its substantial shareholder, Inversiones Financieras del
Sur S.A. (IFISA) and associates, who confirm that they will continue to support Austral
Gold Limited by providing adequate financial assistance in accordance with the details
contained in the Funding Agreements between Austral Gold Limited and IFISA.
Based on the above, the directors believe the going concern basis of preparation of the
financial report is appropriate.
2.28 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided
to the chief operating decision maker. The chief operating decision maker, who is responsible
for allocating resources and assessing performance of the operating segments, has been
identified as the Board of Directors.
3 NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED
The following standards, amendments to standards and interpretations have been identified as
those which may impact the entity in the period of initial application. They are available for early
adoption at 30 June 2013 but have not been applied in preparing this financial report. They are not
expected to have a material impact on the Group when they are adopted.
AASB 9 Financial Instruments
international equivalent to AASB 139
This standard and its consequential amendments are applicable to annual reporting periods
beginning on or after 1 January 2015 and completes phase I of the IASB's project to replace IAS 39
(being the
'Financial Instruments: Recognition and
Measurement'). This standard introduces new classification and measurement models for financial
assets, using a single approach to determine whether a financial asset is measured at amortised
cost or fair value. The accounting for financial liabilities continues to be classified and measured in
accordance with AASB 139, with one exception, being that the portion of a change of fair value
relating to the entity’s own credit risk is to be presented in other comprehensive income unless it
would create an accounting mismatch. The consolidated entity will adopt this standard from 1 July
2015 but the impact of its adoption is yet to be assessed by the consolidated entity.
AASB 10 Consolidated Financial Statements
This standard is applicable to annual reporting periods beginning on or after 1 January 2013. The
standard has a new definition of 'control'. Control exists when the reporting entity is exposed, or
has the rights, to variable returns (e.g. dividends, remuneration, returns that are not available to
32
other interest holders including losses) from its involvement with another entity and has the ability
to affect those returns through its 'power' over that other entity. A reporting entity has power
when it has rights (e.g. voting rights, potential voting rights, rights to appoint key management,
decision making rights, kick out rights) that give it the current ability to direct the activities that
significantly affect the investee’s returns (e.g. operating policies, capital decisions, appointment of
key management). The consolidated entity will not only have to consider its holdings and rights but
also the holdings and rights of other shareholders in order to determine whether it has the
necessary power for consolidation purposes. The adoption of this standard from 1 July 2013 may
have an impact where the consolidated entity has a holding of less than 50% in an entity, has de
facto control, and is not currently consolidating that entity.
AASB 11 Joint Arrangements
This standard is applicable to annual reporting periods beginning on or after 1 January 2013. The
standard defines which entities qualify as joint ventures and removes the option to account for
joint ventures using proportional consolidation. Joint ventures, where the parties to the agreement
have the rights to the net assets will use equity accounting. Joint operations, where the parties to
the agreements have the rights to the assets and obligations for the liabilities will account for the
assets, liabilities, revenues and expenses separately, using proportionate consolidation. The
adoption of this standard from 1 July 2013 will not have a material impact on the consolidated
entity.
AASB 12 Disclosures of Interests in Other Entities
This standard is applicable to annual reporting periods beginning on or after 1 January 2013. It
contains the entire disclosure requirement associated with other entities, being subsidiaries,
associates and joint ventures. The disclosure requirements have been significantly enhanced when
compared to the disclosures previously located in AASB 127 'Consolidated and Separate Financial
Statements', AASB 128 'Investments in Associates', AASB 131 'Interests in Joint Ventures' and
Interpretation 112 'Consolidation - Special Purpose Entities'. The adoption of this standard from 1
July 2013 will significantly increase the amount of disclosures required to be given by the
consolidated entity such as significant judgements and assumptions made in determining whether
it has a controlling or non-controlling interest in another entity and the type of non-controlling
interest and the nature and risks involved.
AASB 13 Fair Value Measurement
This standard and its consequential amendments are applicable to annual reporting periods
beginning on or after 1 January 2013. The standard provides a single robust measurement
framework, with clear measurement objectives, for measuring fair value using the 'exit price' and it
provides guidance on measuring fair value when a market becomes less active. The 'highest and
best use' approach would be used to measure assets whereas liabilities would be based on transfer
value. As the standard does not introduce any new requirements for the use of fair value, its impact
on adoption by the consolidated entity from 1 July 2013 should be minimal, although there will be
increased disclosures where fair value is used.
AASB 127 Separate Financial Statements (Revised)
AASB 128 Investments in Associates and Joint Ventures (Reissued)
These standards are applicable to annual reporting periods beginning on or after 1 January 2013.
They have been modified to remove specific guidance that is now contained in AASB 10, AASB 11
and AASB 12. The adoption of these revised standards from 1 July 2013 will not have a material
impact on the consolidated entity.
33
AASB 119 Employee Benefits (September 2011) and AASB 2011-10 Amendments to
Australian Accounting Standards arising from AASB 119 (September 2011)
This revised standard and its consequential amendments are applicable to annual reporting periods
beginning on or after 1 January 2013. The amendments make changes to the accounting for
defined benefit plans and the definition of short-term employee benefits, from 'due to' to
'expected to' be settled within 12 months. The later will require annual leave that is not expected
to be wholly settled within 12 months to be discounted allowing for expected salary levels in the
future period when the leave is expected to be taken. The adoption of the revised standard from 1
July 2013 is expected to reduce the reported annual leave liability of the consolidated entity.
AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key
Management Personnel Disclosure Requirement
These amendments are applicable to annual reporting periods beginning on or after 1 July 2013,
with early adoption not permitted. They amend AASB 124 'Related Party Disclosures' by removing
the disclosure requirements for individual key management personnel ('KMP'). The adoption of
these amendments from 1 July 2014 will remove the duplication of information relating to
individual KMP in the notes to the financial statements and the directors report. As the aggregate
disclosures are still required by AASB 124 and during the transitional period the requirements may
be included in the Corporations Act or other legislation, it is expected that the amendments will not
have a material impact on the consolidated entity.
AASB 2011-7 Amendments to Australian Accounting Standards arising from the
Consolidation and Joint Arrangements Standards
The amendments are applicable to annual reporting periods beginning on or after 1 January 2013.
The amendments make numerous consequential changes to a range of Australian Accounting
Standards and Interpretations, following the issuance of AASB 10, AASB 11, AASB 12 and revised
AASB 127 and AASB 128. The adoption of these amendments from 1 July 2013 will not have a
material impact on the consolidated entity.
Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine and AASB
2011-12 Amendments to Australian Accounting Standards arising from Interpretation 20
This interpretation and its consequential amendments are applicable to annual reporting periods
beginning on or after 1 January 2013 The Interpretation clarifies when production stripping costs
should lead to the recognition of an asset and how that asset should be initially and subsequently
measured. The Interpretation only deals with waste removal costs that are incurred in surface
mining activities during the production phase of the mine. The adoption of the interpretation and
the amendments from 1 July 2013 will not have a material impact on the consolidated entity.
AASB 2012-2 Amendments to Australian Accounting Standards - Disclosures - Offsetting
Financial Assets and Financial Liabilities
The amendments are applicable to annual reporting periods beginning on or after 1 January 2013.
The disclosure requirements of AASB 7 'Financial Instruments: Disclosures' (and consequential
amendments to AASB 132 'Financial Instruments: Presentation') have been enhanced to provide
users of financial statements with information about netting arrangements, including rights of set-
off related to an entity's financial instruments and the effects of such rights on its statement of
financial position. The adoption of the amendments from 1 July 2013 will increase the disclosures
by the consolidated entity.
AASB 2012-3 Amendments to Australian Accounting Standards - Offsetting Financial
Assets and Financial Liabilities
34
The amendments are applicable to annual reporting periods beginning on or after 1 January 2014.
The amendments add application guidance to address inconsistencies in the application of the
offsetting criteria in AASB 132 'Financial Instruments: Presentation', by clarifying the meaning of
"currently has a legally enforceable right of set-off"; and clarifies that some gross settlement
systems may be considered to be equivalent to net settlement. The adoption of the amendments
from 1 July 2014 will not have a material impact on the consolidated entity.
AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual
Improvements 2009-2011 Cycle
The amendments are applicable to annual reporting periods beginning on or after 1 January 2013.
The amendments affect five Australian Accounting Standards as follows: Confirmation that repeat
application of AASB 1 (IFRS 1) 'First-time Adoption of Australian Accounting Standards' is permitted;
Clarification of borrowing cost exemption in AASB 1; Clarification of the comparative information
requirements when an entity provides an optional third column or is required to present a third
statement of financial position in accordance with AASB 101 'Presentation of Financial Statements';
Clarification that servicing of equipment is covered by AASB 116 'Property, Plant and Equipment', if
such equipment is used for more than one period; clarification that the tax effect of distributions to
holders of equity instruments and equity transaction costs in AASB 132 'Financial Instruments:
Presentation' should be accounted for in accordance with AASB 112 ‘Income Taxes’; and
clarification of the financial reporting requirements in AASB 134 'Interim Financial Reporting' and
the disclosure requirements of segment assets and liabilities. The adoption of the amendments
from 1 July 2013 will not have a material impact on the consolidated entity.
AASB 2012-9 Amendment to AASB 1048 arising from the Withdrawal of Australian
Interpretation 1039
This amendment is applicable to annual reporting periods beginning on or after 1 January 2013. The
amendment removes reference in AASB 1048 following the withdrawal of Interpretation 1039. The
adoption of this amendment will not have a material impact on the consolidated entity.
AASB 2012-10 Amendments to Australian Accounting Standards – Transition Guidance
and Other Amendments
These amendments are applicable to annual reporting periods beginning on or after 1 January
2013. They amend AASB 10 and related standards for the transition guidance relevant to the initial
application of those standards. The amendments clarify the circumstances in which adjustments to
an entity’s previous accounting for its involvement with other entities are required and the timing
of such adjustments. The adoption of these amendments will not have a material impact on the
consolidated entity.
4
REVENUE
Operating activities
Consolidated
2013
$
2012
$
Revenue from gold and silver sales
62,776,259
30,112,061
Interest revenue
Other
Total revenue
5,131
95,972
1,787
275,719
62,877,362
30,389,567
35
5
LOSS FOR THE YEAR
Expenses
Depreciation of plant and equipment
Amortisation of intangible assets
Total depreciation and amortisation
(included in cost of sales)
Loss from foreign exchange
Finance costs - related parties
Finance costs - other
Total finance costs
Rental expense on operating leases
Impairment of financial assets
Defined contribution plan expense
6
AUDITORS’ REMUNERATION
Remuneration of the auditors of the parent entity (BDO)
for:
Auditing or reviewing the financial reports
Other services/taxation
Total auditors’ remuneration – parent entity (BDO)
Remuneration of auditors of subsidiaries (Nexia & PKF)
for:
Auditing or reviewing the financial reports
Other services/taxation
Total auditors’ remuneration – subsidiaries (Nexia &
PKF)
Consolidated
2013
$
5,416,821
11,124,935
16,541,756
6,020,955
1,834,395
300,525
8,155,875
15,400
1,600,668
20,550
Consolidated
2013
$
71,280
-
71,280
73,411
21,628
95,039
2012
$
2,496,319
2,914,505
5,410,824
2,229,932
4,859,464
-
7,089,396
30,755
4,917,831
21,094
2012
$
66,000
-
66,000
35,476
2,585
38,061
36
7
INCOME TAX EXPENSE
Loss before tax
Prima facie income tax (benefit) / expense calculated at
30% on the (loss)/profit
Difference due to overseas tax rate
Non-deductible expenses / (exempt revenue)
Temporary differences previously not brought into
account
Temporary differences not brought into account
Income tax expense
Deferred tax asset
Tax loss carried forward
Accrual for mine closure
Accrual for vacations
Total deferred tax assets
Deferred tax liabilities
Mining concessions
Other receivables
Consolidated
2013
$
2012
$
(4,553,863)
(14,817,663)
(1,366,159)
(4,445,299)
455,386
5,564,301
-
(1,785,203)
2,868,325
764,852
165,238
99,900
150,031
2,573,186
1,273,011
1,554,688
1,105,617
4,094,913
137,409
48,480
1,029,990
4,280,802
(5,492,178)
(4,440,821)
-
(968,271)
Total deferred tax liabilities
(5,492,178)
(5,409,092)
Net deferred tax liabilities
(4,462,188)
(1,128,290)
NET DEFERRED TAX LIABILITIES
Opening balance
Charged to profit or loss
Movement attributable to foreign currency translation
(1,128,290)
(2,868,325)
(465,573)
-
(1,105,617)
(22,673)
Closing balance
(4,462,188)
(1,128,290)
37
8 LOSS PER SHARE
Classification of securities as ordinary shares
Ordinary shares have been included in basic loss per share.
Earnings reconciliation
Net loss
Consolidated
2013
$
2012
$
(7,422,188)
(15,923,280)
Net loss attributable to outside equity interests
-
-
Net loss
(7,422,188)
(15,923,280)
Weighted average number of shares used as the
denominator
Number for basic earnings per share
169,139,739
169,139,739
Number for diluted earnings per share
169,139,739
169,139,739
Basic loss per ordinary share (cents)
Diluted loss per ordinary share (cents)
(4.4)
(4.4)
(9.4)
(9.4)
9 SEGMENTS
Management have determined the operating segments based on reports reviewed by the Chief
Operating Decision Maker (“CODM”). The CODM considers the business from both an operations
and geographic perspective and has identified two reportable segments, Australia and South
America. The CODM monitors the performance in these two regions separately.
2013
2012
Australia
$
South America
$
Consolidated
$
Australia
$
South America
$
Consolidated
$
-
62,776,259
62,776,259
-
30,112,061
30,112,061
Revenue from
gold and silver
sales
Interest revenue
1,931
3,200
5,131
1,787
-
1,787
Other
Total segment
revenue
Cost of sales
Amortisation
-
95,972
95,972
-
275,719
275,719
1,931
62,875,431
62,877,362
1,787
30,387,780
30,389,567
-
-
(35,517,096)
(35,517,096)
(11,124,935)
(11,124,935)
-
-
(22,872,651)
(22,872,651)
(2,914,505)
(2,914,505)
Depreciation
(1,545)
(5,415,276)
(5,416,821)
(1,545)
(2,494,774)
(2,496,319)
Impairment
-
(1,600,668)
(1,600,668)
-
(4,917,831)
(4,917,831)
Finance costs
(1,834,395)
(300,525)
(2,134,920)
(4,859,464)
-
(4,859,464)
(Loss)/gain from
foreign exchange
Income tax
expense
Other
(6,207,093)
186,138
(6,020,955)
(2,432,577)
202,645
(2,229,932)
-
(2,868,325)
(2,868,325)
-
(1,105,617)
(1,105,617)
(948,218)
(4,667,612)
(5,615,830)
(6,580,282)
1,663,754
(4,916,528)
38
2013
2012
Australia
$
South America
$
Consolidated
$
Australia
$
South America
$
Consolidated
$
Segment
(loss)/profit
(8,989,320)
1,567,132
(7,422,188)
(13,872,081)
(2,051,199)
(15,923,280)
Segment assets
2,767,633 102,691,890 105,459,523
68,457
97,903,652
97,972,109
Segment
liabilities
61,026,195
12,819,259
73,845,454
57,572,254
8,319,602
65,891,856
10 CASH AND CASH EQUIVALENTS
Cash at call and in hand
Short-term bank deposits
Total cash and cash equivalents
Consolidated
2013
$
3,051,845
1,969,849
5,021,694
2012
$
462,855
7,021
469,876
Reconciliation of Cash
Cash at the end of the financial year as shown in the Statement of Cash Flows, is reconciled to
items in the Statement of Financial Position as follows:
Cash and cash equivalents
5,021,694
469,876
Risk Exposure
The Group’s exposure to interest rate risk is discussed in note 24. The maximum exposure to
credit risk at the reporting date is the carrying amount of each class of cash and cash equivalents
mentioned above.
11 INVENTORIES
Raw materials – at cost
Work in progress – at cost
Finished goods – at net realisable value
Total inventories
Consolidated
2013
$
1,045,339
729,182
1,962,700
3,737,221
2012
$
462,932
629,246
2,463,484
3,555,662
39
12 TRADE AND OTHER RECEIVABLES
CURRENT
Trade receivables
Other current receivables
Pre-payments
GST/VAT receivable
Total current receivables
NON CURRENT
GST/VAT receivable
Pre-payments
Total non-current receivables
TRADE DEBTORS
Consolidated
2013
$
5,449,082
3,245,626
2,019,690
589,043
11,303,441
103,265
1,697,177
1,800,442
2012
$
384,749
627,897
1,486,330
589,029
3,088,005
63,092
3,765,133
3,828,225
The ageing of trade receivables is 0 – 30 days
5,449,082
384,749
12.1 Past due but not impaired
There were no receivables past due at 30 June 2013 (2012: nil).
12.2 Fair value and credit risk
Due to the short term nature of trade receivables, their carrying amount is assumed to
approximate their fair value.
The maximum exposure to credit risk at the reporting date is the carrying amount of each
class of receivables mentioned above. Refer to note 24 for more information on the risk
management policy of the Group and the credit quality of the receivables.
12.3 Key Customers
The Company is not reliant on any one customer to sell gold and silver produced from the
Guanaco mine.
Consolidated
13 FINANCIAL ASSETS
Investment in shares – opening balance
Additions
Loss on adjustment to market price
Movement attributable to foreign currency translation
Impairment
Total investment in shares
2013
$
340,111
469,418
(80,649)
923,253
(1,600,668)
51,465
2012
$
4,306,285
1,216,219
-
(264,562)
(4,917,831)
340,111
40
These financial assets are carried at cost less accumulated impairment losses. There are no fixed
returns or fixed maturity date attached to these investments. Refer to note 24 for detailed
information on financial instruments.
Impairment
In April 2013 Austral Gold exited the AMINSA earn-in agreement and as a result the carrying value
of its investment in AMINSA has been reduced to nil.
14 INTANGIBLE ASSETS
Guanaco
Cost
Accumulated amortisation
Development assets – Guanaco
Consolidated
2013
$
2012
$
73,325,282
(14,201,226)
59,124,056
69,409,044
(3,076,291)
66,332,753
64,083,041
4,016,475
-
(2,914,505)
1,147,742
66,332,753
MOVEMENTS IN CARRYING VALUE
Reconciliations of the carrying amounts for intangible assets are set out below:
Carrying amount at beginning of year
Additions
Reclassification to plant and equipment
Amortisation
Movement attributable to foreign currency translation
Carrying amount at end of year
66,332,753
6,866,171
(5,745,085)
(11,124,935)
2,795,152
59,124,056
Impairment - Guanaco
The Guanaco project has been determined by Management to be a single cash generating unit
("CGU"). The intangible assets noted above and the plant and equipment as included in note 15
below are included in determining the carrying value of the CGU for the purposes of assessing for
impairment.
Management have assessed the fair value and book value of the Guanaco project to be $81.4
million. The fair value is based on an independent valuation using a discounted cash flow model
and the following assumptions:
Gold price: US$1,498/oz – US$1,230/oz
Life of Mine: 7 years
Discount Rate: 7.2%
41
15 PLANT AND EQUIPMENT
Plant and equipment - at cost
Accumulated depreciation
Carrying amount at end of year
MOVEMENTS IN CARRYING VALUE
Carrying amount at beginning of year
Additions
Transfer from intangibles
Disposals
Depreciation
Movement attributable to foreign currency translation
Carrying amount at end of year
Consolidated
2013
$
33,215,003
(9,173,408)
24,041,595
20,185,655
1,291,159
5,745,085
(25,271)
(5,416,821)
2,261,788
24,041,595
2012
$
23,942,242
(3,756,587)
20,185,655
20,021,794
1,946,477
-
(50,655)
(2,496,319)
764,358
20,185,655
Plant and equipment has been included in the Guanaco cash generating unit. Refer note 14 for
discussion on impairment.
EXPLORATION AND
EVALUATION EXPENDITURE
16
Costs carried forward in respect of areas of interest in:
Opening balance
Additions for the year
Movement attributable to foreign currency translation
Carrying amount at end of year
Consolidated
2013
$
171,822
153,210
54,578
379,610
2012
$
116,215
63,572
(7,965)
171,822
The ultimate recoupment of costs carried forward for exploration and evaluation phases is
dependent on the successful development and commercial exploration or sale of the respective
areas.
17 TRADE AND OTHER PAYABLES
CURRENT
Consolidated
2013
$
2012
$
Trade creditors and accruals
5,669,985
5,924,731
Refer to note 24 for detailed information on financial instruments.
42
18 PROVISIONS
CURRENT
Employee entitlements
MOVEMENT IN CURRENT PROVISIONS
Opening balance
Charged to the profit or loss
Movement attributable to foreign currency translation
Closing balance
Consolidated
2013
$
2012
$
26,729
22,047
22,047
3,660
1,022
26,729
12,179
9,868
-
22,047
Amounts not expected to be settled within the next 12 months
The current provision for leave includes all unconditional entitlements in accordance with the
applicable legislation. The entire amount is presented as current, since the Group does not have
an unconditional right to defer payment.
NON CURRENT
Mine closure
MOVEMENT IN NON CURRENT PROVISIONS
Opening balance
Charged to the profit or loss
Movement attributable to foreign currency translation
Closing balance
910,215
742,752
742,752
75,143
92,320
910,215
639,755
102,997
742,752
The restoration provision relates to the estimated costs of dismantling and restoring mining sites
and exploration tenements to their original condition at the end of the life of the mine or
exploration drilling program. The provision at year end represents the present value of the
Directors' best estimate of the future sacrifice of economic benefits that will be required for
meeting environmental obligations for existing tenements after activities have been completed.
The provision is reviewed annually by the Directors.
The present value of the restoration provision was determined based on the following
assumptions:
Undiscounted rehabilitation costs: US$1,099,870;
Life of Mine: 5 years; and
Discount rate of 12%
43
19 BORROWINGS
CURRENT
Royalty payable
Total current borrowings
NON-CURRENT
Loan – IFISA
Total non-current borrowings
LOAN IFISA
Balance at beginning of year
Funds drawn
Repayments
Interest
Movement attributable to foreign currency translation
Balance at end of year
Consolidated
2013
$
1,882,429
1,882,429
60,893,911
60,893,911
57,352,048
-
(4,307,069)
1,834,395
6,014,537
60,893,911
2012
$
721,988
721,988
57,352,048
57,352,048
49,818,669
2,604,522
(2,353,664)
4,859,464
2,423,057
57,352,048
19.1 Loan Inversiones Financieras del Sur SA (IFISA)
The borrowings are unsecured. Interest is charged at 4%. The loan comprises principal of
$48,756,290 and capitalised interest of $12,137,621. The loan is repayable as follows:
i when sufficient cash flows of the Group allow;
ii at the election of IFISA to subscribe for shares in the Group (contingent on shareholder
approval);
iii on successful completion of an equity raising by the Group; or
iv
failing all of the above by 30 September 2014.
The Company has the support of its substantial shareholder, Inversiones Financieras del Sur
S.A. (IFISA) and associates, who confirm that they will continue to support Austral Gold
Limited by providing adequate financial assistance in accordance with the details contained
in the Funding Agreements between Austral Gold Limited and IFISA.
19.2 Royalty payable
In accordance with the signed agreement with Compania Minera Kinam Guanaco, the
Company is required to pay quarterly amounts determined as the greater between;
i
The equivalent of USD75,000 or
ii The “NPI”, that is approximately 5% of the income from the sale of concentrate less the
necessary costs to produce the concentrate.
The Company can decide to cease to pay these quarterly amounts at any time with the
payment of the local currency equivalent of USD 7,500,000 (without deducting royalties
already paid).
The balance of $1,882,429 corresponds to the amount accrued up to 30 June 2013, that
remains unpaid.
44
Risk exposure
The Group’s risk exposure is currency risk, as the Group is responsible for repaying the loans in
American dollars. Further details of this risk exposure is provided in note 24.
Fair value
The carrying value of the loan approximates its fair value.
20 ISSUED CAPITAL
Consolidated
2013
$
2012
$
Fully paid ordinary shares
44,400,742
44,400,742
ORDINARY SHARES*
2013
Number of shares
2012
Number of shares
Balance at the beginning of the year
169,139,739
169,139,739
Balance at end of year
169,139,739
169,139,739
* Ordinary shares participate in dividends and the proceeds on winding up of the Parent Entity in
proportion to the number of shares held. At shareholders meetings each ordinary share is
entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of
hands. The ordinary shares do not have any par value.
RETAINED EARNINGS /
(ACCUMULATED LOSSES)
21
Consolidated
2013
$
2012
$
Retained earnings / (accumulated losses) at beginning of
year
(6,105,160)
9,818,120
Net loss for the year
(7,422,188)
(15,923,280)
Accumulated losses at end of year
(13,527,348)
(6,105,160)
22 OUTSIDE EQUITY INTERESTS
Outside equity interests in subsidiaries comprise:
Acquired as part of subsidiary
Consolidated
2013
$
44
2012
$
58
45
23 RESERVES
FOREIGN CURRENCY TRANSLATION RESERVE
Consolidated
2013
$
2012
$
Balance at beginning of year
(6,229,884)
(8,323,247)
Movement attributable to translation of foreign
subsidiaries
6,956,016
2,093,363
Balance at end of year
726,132
(6,229,884)
SHARE OPTION RESERVE
Balance at beginning of year
Options issued November 2011
Balance at end of year
Total Reserves
Nature and purpose of reserves
14,497
-
14,497
740,629
-
14,497
14,497
(6,215,387)
Foreign Currency Translation Reserve
Exchange differences arising on translation of the foreign subsidiaries are recognised in the
foreign currency translation reserve. The reserve is recognised in profit or loss when the net
investment is disposed of.
Share Option Reserve
Options granted / issued as share-based payments are recognised in the share option
reserve. No options were granted during the year ended 30 June 2013.
24 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s principal financial instruments comprise borrowings, receivables, cash and short-term
deposits. These activities expose the Group to a variety of financial risks: market risk (including
currency risk and interest rate risk), credit risk and liquidity risk.
Although the Group does not have documented risk policies and procedures, the Directors manage
the different types of risks to which it is exposed by considering risk and monitoring levels of
exposure to interest rate and foreign exchange risk and by being aware of market forecasts for
interest rates, foreign exchange and commodity prices. The Group does not have significant
exposure to credit risk and liquidity risk is monitored through general business budgets and
forecasts.
46
The Group holds the following financial instruments:
vi
FINANCIAL ASSETS
Cash and cash equivalents
Trade and other receivables
Investment in shares
Total financial assets
FINANCIAL LIABILITIES
Trade and other payables
Other financial liabilities
Total financial liabilities
Net exposure
24.1 Fair value estimation
Consolidated
2013
$
5,021,694
8,694,708
51,465
13,767,867
2012
$
469,876
1,012,646
340,111
1,822,633
(5,597,351)
(6,620,103)
(60,893,911)
(57,352,048)
(66,491,262)
(63,972,151)
(52,723,395)
(62,149,518)
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 such as
investments in unlisted subsidiaries is determined using valuation techniques. The Group
uses a variety of methods and makes assumptions that are based on market conditions
existing at each balance date.
The carrying value less impairment provision of receivables and payables are assumed to
approximate their fair values 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.
24.2 Risk Exposures and Responses
24.2.1 Interest Rate Risk
The Group’s main interest rate risk arises from long term borrowings. The Group’s
borrowings are at a fixed rate of 4% (2012: 4%) and therefore do not carry any
variable interest rate risk.
47
24.2.2 Currency Risk
At 30 June 2013 the Group had the following exposure to US dollars:
FINANCIAL ASSETS
Cash and cash equivalents
Trade and other receivables
Investment in shares
FINANCIAL LIABILITIES
Trade and other payables
Other financial liabilities
Net exposure
Consolidated
2013
AUD $
4,904,617
8,657,893
51,465
2012
AUD $
428,869
1,008,296
340,111
(5,554,666)
(6,421,293)
(60,893,911)
(57,352,048)
(52,834,602)
(61,996,065)
Sensitivity analysis
The net exposure from financial assets and liabilities subject to exchange rate risk has
been calculated using an exchange rate of USD/AUD 0.9133.
Based on the financial instruments held at 30 June 2013, had the Australian Dollar
weakened/strengthened by 10% against the US Dollar with all other variables held
constant, the Group’s post tax profit would have been $4,825,384 lower/higher
(2012: $6,298,180). The movement is mainly due to foreign exchange gains/losses on
translation of US Dollar denominated financial instruments as detailed above.
24.2.3 Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other
security, at balance date to recognised financial assets is the carrying amount of
those assets, net of any allowance for doubtful debts, as disclosed in the Statement
of Financial Position and notes to the financial report.
The Group trades only with recognised, creditworthy third parties, and as such
collateral is not requested nor is it the Group's policy to securitize its other
receivables.
In addition, receivable balances are monitored on an ongoing basis with the result
that the Group's exposure to bad debts is not significant. There are no significant
concentrations of credit risk.
24.2.4 Price Risk
The Group’s revenues are exposed to fluctuations in the gold and other prices. Gold
and silver produced is sold at prevailing market prices in American dollars.
The Group has resolved that for the present time the production should remain
unhedged. The Group considers exposure to commodity price fluctuations within
reasonable boundaries to be an integral part of the business.
24.2.5 Liquidity Risk
The liquidity of the Group is managed to ensure sufficient funds are available to meet
financial commitments in a timely and cost effective manner.
48
Management continuously reviews the Group’s liquidity position through cash flow
projections based upon the current life of mine plan to determine the forecast
liquidity position and maintain appropriate liquidity levels.
Financing arrangements
Under the funding agreement with IFISA, the Group had access to the following
undrawn United States dollar denominated borrowing facilities at the reporting date:
Total facility
Total used
Amount available
Consolidated
2013
USD
59,000,000
44,529,119
14,470,881
2012
USD
59,000,000
49,051,002
9,948,998
These loans may be drawn at any time and are repayable on the terms and
conditions as set out in note 19.
Maturities of financial liabilities
The tables below analyse 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.
Consolidated
< 6
months
$
6-12
months
$
1 -5 years
$
>5 years
$
Total
$
YEAR ENDED 30 JUNE 2013
FINANCIAL LIABILITIES
Trade and other payables
5,597,351
Borrowings
-
Total 2013 liabilities
5,597,351
YEAR ENDED 30 JUNE 2012
FINANCIAL LIABILITIES
Trade and other payables
6,620,103
Borrowings
-
Total 2012 liabilities
6,620,103
-
-
-
-
-
-
-
-
5,597,351
64,015,926*
- 64,015,926
64,015,926
- 69,613,277
-
-
6,620,103
62,477,732*
- 62,477,732
62,477,732
- 69,097,835
*This amount is based on the following assumptions:
i
ii
there are no additional draw downs on the IFISA loan facility;
the loan is held to 30 September 2014 and is not repaid or converted into equity
by IFISA; and
interest of $3,122,015 (2012: $5,125,684) calculated using rates disclosed in note
19.
iii
49
Defaults and breaches
During the current and prior years, there were no defaults or breaches on any of the
loans.
Capital management
The Group’s policy is to maintain a strong and flexible capital base to maintain
investor, creditor and market confidence and to sustain future development of the
business. The Group monitors the return on capital which the Group defines as total
shareholders’ equity attributable to the members of Austral Gold Limited. The Group
monitors financial position strength and flexibility using cash flow forecast analysis
and a detailed budget process. There were no changes in the Group’s approach to
capital management during the year.
25 DIVIDENDS
No dividends were paid or proposed during the year.
Subject to shareholder approval at the November 2013 Annual General Meeting, the directors
propose to make a payment to shareholders in the form of a return of capital.
26 COMMITMENTS
26.1 AMINSA Earn-in commitments
In April 2012 Austral Gold renegotiated terms with AMINSA which released it from future
commitments under the earn-in agreement. The obligations set out below are not provided for in
the accounts and are payable:
Within one year – AMINSA Earn-in commitments
One year or later and no later than five years
Total commitments
Consolidated
2013
$
-
-
-
2012
$
3,000,000
-
3,000,000
27 SUBSIDIARIES
PARENT ENTITY
Country of
Incorporation
2013
% owned
2012
% owned
Austral Gold Limited
Australia
SUBSIDIARIES
Guanaco Mining Company
British Virgin Islands
Guanaco Compañía Minera
Chile
Austral Gold Argentina
Argentina
100.000
99.998
99.852
100.000
99.998
99.750
50
28 CASH FLOW INFORMATION
Consolidated
2013
$
2012
$
Reconciliation of cash flow from operations with loss after income tax:
Loss after income tax
(7,422,188)
(15,923,280)
Non-cash flows in loss
Interest expense capitalised
Impairment loss
Interest received
Foreign exchange translation loss
Depreciation and amortisation
Net cash from operating activities
before change in assets and liabilities
Changes in assets and liabilities:
Decrease/ (increase) in inventory
Decrease / (increase) in trade and other receivables
Increase in trade and other payables
Movement attributable to foreign currency translation
Cash flow from operations
1,834,395
1,600,668
(5,131)
6,020,955
16,541,756
4,859,464
4,917,831
(1,787)
2,229,932
5,410,824
18,559,455
1,492,984
217,883
(2,856,101)
3,392,852
708,668
20,022,757
(2,055,251)
5,049,174
834,315
2,209,855
7,531,078
51
29 PARENT ENTITY INFORMATION
Information relating to Austral Gold Limited:
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Accumulated losses
Reserves
Consolidated
2013
$
2,762,624
82,278,143
4,545,821
65,439,731
16,838,412
44,400,742
(27,576,827)
14,497
2012
$
61,905
83,886,037
706,257
58,058,306
25,827,731
44,400,742
(18,587,508)
14,497
Total shareholders’ equity
16,838,412
25,827,731
Loss of the parent entity
Total comprehensive income of the parent entity
Details of any guarantees entered into by the parent
entity in relation to the debts of its subsidiaries
Details of any contingent liabilities of the parent
entity
Details of any contractual commitments by the parent
entity for the acquisition of property, plant or
equipment.
(8,989,320)
(8,989,320)
(13,872,081)
(13,886,578)
None
None
None
None
None
None
30 SUBSEQUENT EVENTS
30.1 On 4 July 2013 Austral announced that it had finalised a private placement in Argentex in July
2013 in which Austral acquired a 19.9% interest at a total cost of C$5m. This investment
makes Austral the largest shareholder in Argentex and provides Austral with one position on
the Board of Argentex and one position on the Technical Comittee. Austral Gold and
intention to consider some form of business
Argentex have also announced their
combination and negotiations around this are ongoing. Argentex’s primary asset is the
100,000 hectare Pinguino project in Southern Argentina which includes an indicated resource
of 23.6 million silver-equivalent-ounces with grades of 102.8 g/t Ag and 0.59 g/t Au.
30.2 On 17 August 2013 Austral Gold repaid US$973,863 to IFISA reducing the interest component
of the liability outstanding.
30.3 On 18 September 2013 Austral signed a subscription agreement with Goldrock to acquire a
15% interest in the TSX-V listed company for a total cost of C$9.3 million. This investment is
scheduled to close on 31 October 2013 and will make Austral the largest shareholder of
Goldrock. The agreement entitles Austral to nominate one position on the Board of Goldrock
and one position on the Technical Committee. Goldrock owns 100% of the Lindero gold
project in the northwest of Argentina which has proven mineral reserves of 641,000 ounces
of gold.
52
31 RELATED PARTIES AND KEY MANAGEMENT PERSONNEL
31.1 Directors
The names of each person holding the position of Director during the year are; Eduardo
Elsztain, Saul Zang, Wayne Hubert, Pablo Vergara del Carril, Robert Trzebski, Stabro Kasaneva
and Ben Jarvis. Amounts paid to Directors are set out in the table below.
31.2 Directors’ holdings of shares and share options
The parent company, IFISA holds 68% interest in Austral Gold Limited.
Mr Eduardo Elsztain is a Director of Austral Gold Limited, Guanaco Capital Holding, Guanaco
Mining Company, IFISA and President of Austral Gold Argentina SA. He holds 144,467,951
shares indirectly in Austral Gold Limited.
Mr Saul Zang is a Director of Austral Gold Limited, Guanaco Capital Holding, Guanaco Mining
Company, Austral Gold Argentina SA and IFISA and he holds 1,435,668 shares indirectly in
Austral Gold Limited.
Mr Pablo Vergara del Carril is a Director of Austral Gold Limited, Guanaco Capital Holding
and of Guanaco Mining Company. He holds 68,119 shares directly in Austral Gold Limited.
E Elsztain and S Zang are directors of IFISA which holds 115,492,415 shares according to the
last substantial holder notice lodged in September 2012.
P Vergara del Carril, E Elsztain and S Zang are directors of Guanaco Capital Holding Corp
which holds 24,289,330 shares according to the last substantial holder notice lodged in
September 2012.
Mr Stabro Kasaneva is a Director of Austral Gold Limited and does not hold any shares either
directly or indirectly in Austral Gold Limited
Dr Robert Trzebski is a Director of Austral Gold Limited and does not hold any shares either
directly or indirectly in Austral Gold Limited.
Mr Ben Jarvis is a Director of Austral Gold Limited and does not hold any shares either
directly or indirectly in Austral Gold Limited.
Mr Wayne Hubert is a Director of Austral Gold Limited. He holds 1,750,000 shares indirectly
in Austral Gold Limited.
53
31.3 Directors and Key Management Personnel Remuneration
PRIMARY
POST-EMPLOYMENT
SHARE-BASED
TOTAL
Cash
Salary &
Fees
$
Cash
bonus
$
Non
monetary
benefits
$
Super-
annuation
Retirement
benefits
Shares
Options
$
$
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
485,579
48,124
41,428
41,428
1,428
617,987
130,000
130,000
747,987
618,319
35,150
40,000
40,000
733,469
134,167
134,167
867,636
YEAR ENDED 30 JUNE 2013
DIRECTORS
S Kasaneva
W Hubert
R Trzebski
B Jarvis
P Vergara del Carril
322,548
163,030
48,124
38,125
38,125
1,428
-
-
-
-
Total Directors
448,350
163,030
-
-
-
-
-
-
One gold coin gifted in May 2013 to each director listed above
$
-
-
3,303
3,303
-
6,606
OTHER KEY MANAGEMENT PERSONNEL
C Lloyd
Total KMP
Total 2012
119,266
119,266
-
-
567,616
163,030
YEAR ENDED 30 JUNE 2012
DIRECTORS
S Kasaneva
W Hubert
R Trzebski
B Jarvis
308,135 *310,184
35,150
36,697
36,697
-
-
-
Total Directors
416,679
310,184
-
-
-
-
-
-
-
-
10,734
10,734
17,340
-
-
3,303
3,303
6,606
*$165,765 of this bonus relates to the years ended 30 June 2011 and 30 June 2010.
OTHER KEY MANAGEMENT PERSONNEL
C Lloyd
Total KMP
Total
123,089
123,089
-
-
539,768
310,184
-
-
-
11,078
11,078
17,684
-
-
-
54
31.4 Borrowings from majority shareholder
IFISA
2013 $
IFISA
2012 $
Amount payable at end of year
60,893,911
57,352,048
Interest incurred
Funds received
Funds repaid
1,834,395
-
4,859,464
2,595,002
(4,307,069)
(2,353,664)
31.5 Ultimate parent entity
The Parent Entity is controlled by IFISA which is incorporated in Uruguay. The ultimate
beneficial owner of IFISA is Eduardo Elsztain.
55
Director’s Declaration
The Directors of Austral Gold Limited declare that:
1) The financial statements, comprising the statement of profit or loss and other comprehensive
income, statement of financial position, statement of cash flows, statement of changes in equity,
accompanying notes, are in accordance with the Corporations Act 2001 and:
i
comply with Accounting Standards and the Corporations Act 2001; and
ii give a true and fair view of the consolidated entity’s financial position as at 30 June 2013 and of
its performance for the year ended on that date.
2) The company has included in the notes to the financial statements an explicit and unreserved
statement of compliance with International Financial Reporting Standards
3) In the directors’ opinion, there are reasonable grounds to believe that the company will be able to
pay its debts as and when they become due and payable
The Directors have received the declarations required by section 295A of the Corporations Act 2001.
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:
Ben Jarvis
Director
Sydney
26 September 2013
56
Tel: 61 2 9251 4100
Fax: 61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of Austral Gold Limited
Report on the Financial Report
We have audited the accompanying financial report of Austral Gold Limited, which comprises
the statement of financial position as at 30 June 2013, the statement of profit or loss and
other comprehensive income, the statement of changes in equity and the 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 2, the directors also state, in
accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the
financial statements comply with International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards
require that we comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance about whether the financial report
is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
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.
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 Austral Gold Limited, would
be in the same terms if given to the directors as at the time of this auditor’s report.
BDO East Coast Partnership ABN 83 236 985 726 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 East Coast Partnership 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) in each State or Territory other than
Tasmania.
Opinion
In our opinion:
(a) the financial report of Austral Gold 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 2013 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 2.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 16 to 17 of the directors’ report
for the year ended 30 June 2013. The directors of the company are responsible for the
preparation and presentation of the Remuneration Report in accordance with section 300A of
the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration
Report, based on our audit conducted in accordance with Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Austral Gold Limited for the year ended 30 June
2013 complies with section 300A of the Corporations Act 2001.
BDO East Coast Partnership
Tim Sydenham
Partner
Sydney, 26 September 2013
Additional Information
Included in accordance with the Listing Rules of the Australian
Stock Exchange Ltd and as required by Australian Securities Exchange Ltd.
Corporate Governance Statement
FOR THE YEAR ENDED 30 JUNE 2013
This statement outlines the main corporate governance practices in place throughout the financial year,
which comply with the ASX Corporate Governance Council recommendations, unless otherwise stated.
Board of Directors and its Committees
Your board is responsible for the overall Corporate Governance of the Group including its strategic
direction, establishing goals for management and monitoring the achievement of these goals.
Composition of the Board
The names of the Company directors in office at the date of this Statement are set out in the Directors’
Report.
Audit Committee
The Audit Committee has a documented Charter, approved by the Board. The role of the Committee is
to advise on the establishment and maintenance of a framework of internal controls and appropriate
ethical standards for the management of the Group.
It also gives the Board of Directors additional assurance regarding the quality and reliability of financial
information prepared for use by the Board in determining policies or for inclusion in the financial report.
The members of the Audit Committee during the year were:
Mr Pablo Vergara del Carril (Non-Executive Director)
Dr Robert Trzebski (Non-Executive Director)
Audit Committee Meetings are also attended by the external auditors and management representatives
as required.
The responsibility of the Aud it Committee includes:
Reviewing the financial report and other financial information distributed externally;
Reviewing any new accounting policies to ensure compliance with Australian Accounting Standards
and generally accepted accounting principles;
Considering whether non-audit services provided by the external auditor are consistent with
maintaining the external auditors’ independence;
Liaising with the external auditors and ensuring that the annual and half year statutory audits are
conducted in an effective manner and;
Monitoring the procedure in place to ensure compliance with the Corporation Act 2001 and Stock
Exchange Listing Rules and all other regulatory requirements.
The Audit Committee reviews the performance of the external auditors on an annual basis and normally
meets with them during the following:
59
Prior to announcements of results:
To review the half yearly and preliminary final report prior to lodgement of these documents with
ASX, and any significant adjustments required as a result of the audit; and
To make the necessary recommendations to the Board for the approval of these documents.
Annual reporting:
To review the results and findings of the auditor, the adequacy of accounting and financial controls,
and to monitor the implementation of any recommendations made;
To review the draft financial report and audit report and to make the necessary recommendations
to the Board for the approval of the financial report.
Remuneration Committee
All remuneration decisions are made by the Board.
The Board is cognisant of the objectives concerning remuneration and they are:
to appropriately reward and thereby encourage excellent performance by management and
directors, as measured by growth of the Company;
to devise and/or approve appropriate incentives to facilitate growth;
to take into account the requirements and expectations of all stakeholders, including shareholders,
so that remuneration is balanced by expectations concerning profitability of the Company.
The Board will review:
policies for the annual remuneration of directors and senior management;
the basis of calculation of remuneration of those persons to ensure the appearance of
reasonableness;
current industry practice in the remuneration of directors and senior executives of similar size and
industry entities;
different methods of remuneration, including:
bonus schemes;
employee Share Option Scheme;
fringe benefits;
superannuation;
retirement and termination packages.
The Board will also review:
professional indemnity policies;
related party disclosures in the financial statements;
communication with major stakeholders to gauge their views on remuneration packages.
The Board’s objectives concerning remuneration are to devise appropriate criteria for Board
membership, and identify specific individuals for Board membership.
The Board takes into account:
the skill sets of current Board members;
the current and future requirements of the Company for skills in particular areas which it lacks;
60
the value to stakeholders of a Board comprising individuals with high levels of independence and
stature.
The Board fosters open and confidential communications at its meetings.
The Board will initiate an annual review of Board and individual director performance, including a review
of Board size, committee structures, and effectiveness of Board meetings.
Internal Control Framework
The Board acknowledges that it is responsible for the overall internal control framework, but recognises
that no cost effective internal control system will preclude all errors and irregularities. To assist in
discharging this responsibility, the Board has instigated an internal control framework that can be
described as follows:
Financial reporting – an annual budget is prepared by management and approved by the directors.
Monthly actual results are reported against budget and revised forecasts for the year are prepared
as required. The Company reports to shareholders quarterly. Procedures are also in place to ensure
that price sensitive information is reported to the ASX in accordance with Continuous Disclosure
Requirements.
Investment appraisal – the Group has clearly defined guidelines for capital expenditure. These
include annual budgets, detailed appraisal and review procedures, and levels of authority.
Gender Diversity
Austral Gold does not have a documented gender diversity policy. The Board is cognisant of the benefits
that come with gender diversity in the workforce, but are unable to make this objective a priority at this
stage.
Whilst Austral Gold no longer has any female Directors following the resignation of Natalia Zang in
December 2009, Austral Gold is proud to have a female CFO and Company Secretary to support the
Board of Directors.
The Role of Shareholders
The Board of Directors aims to ensure that the shareholders are informed of all major developments
affecting the consolidated entities state of affairs. Information is communicated to shareholders as
follows:
The Annual Report is available to all shareholders (through the Company web site). The Board
ensures that the annual report includes relevant information about the operations of the Group
during the year, changes in the state of affairs of the Group and details of future developments, in
addition to the other disclosures required by the Corporations Act 2001;
the quarterly report contains summarised financial information and a review of the operations of
the Group during the period.
These reports are posted on the Company’s website at www.australgold.com.au as are announcements
made to the ASX.
The shareholders are responsible for voting on the appointment of directors.
The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high
level of accountability and identification with the Groups strategy and goals. Important issues are
presented to the shareholders as single resolutions.
61
Securities Trading Policy
The Group’s share trading policy restricts the times and circumstances in which directors, employees
and parties legally related to them, may trade in shares of the Company or its listed controlled entity.
Trading is not permitted when directors or employees possess price sensitive information which has not
yet been disclosed to the market.
Principles of Good Corporate Governance and Best Practice Recommendations
In June 2010 the ASX Corporate Governance Council released its Corporate Governance Principals and
Recommendations with 2010 Amendments 2nd Edition which came into effect on 1 January 2011.
Listing Rule 4.10.3 requires a company to disclose the extent to which the entity has followed the
Recommendations during the reporting period. The entity must identify those recommendations it has
not followed and give reasons for not following them. If a recommendation has only been followed for
part of the period, the entity must state the period during which it had been followed.
In accordance with Listing Rule 4.10.3 the Company states that it has complied with each of the Eight
Essential Corporate Governance Principles and the corresponding Recommendations as published by
the ASX Corporate Governance Council.
No
Recommendation
Compliance or Explanation for Non-compliance
A formal policy document outlining board and
management functions has not been established.
The directors have determined that given the size and
direction of the Company, hands on day-to-day
management and supervision by directors is currently in its
best interests.
Delegation of specific responsibilities to senior
management is agreed and documented in Board
Meetings.
The Board reviews senior management performance and
assesses remuneration in line with this review annually.
Four of the six non-executive directors are not considered
independent due to their relationship with IFISA, the
Company’s major shareholder. From August 2012 Wayne
Hubert becomes independent.
The Chairman is Eduardo Elsztain, the ultimate beneficial
holder of the Company’s majority shareholder.
The role of chair is held by Eduardo Elsztain.
The Company has not appointed a chief executive officer
rather they have appointed director, Stabro Kasaneva as
the Chief Operating Officer.
The Board has not established a nomination committee. In
the directors’ view, a company of this size and stage of
development can best operate with the functions of a
nomination committee undertaken by the full Board.
The Board intends to review its overall performance and
performance of individual directors within the next 12
months.
The Company’s code of conduct is published on the
Company’s website under Corporate Governance.
1.1
Establish the functions reserved to the board
and those delegated to senior executives and
disclose those functions
1.2 Disclose the process for evaluating the
performance of senior executives
A majority of the Board should be
independent directors.
2.1
2.2
2.3
The chair should be an independent director.
The roles of chair and chief executive officer
should not be exercised by the same
individual.
2.4
The Board should establish a nomination
committee.
2.5 Disclose the process for evaluating the
3.1
performance of the board, its committees
and individual directors.
Establish a code of conduct and disclose a
summary addressing the practices necessary
to:
maintain confidence
in the company’s
integrity
take into account their legal obligations and
the reasonable expectations of
stakeholders;
the responsibility and accountability of
62
No
Recommendation
Compliance or Explanation for Non-compliance
individuals for reporting and investigating
reports of unethical behaviour.
3.2
Establish a policy concerning diversity
including:
measurable objectives for achieving gender
diversity
an annual process for assessing diversity
objectives and the company’s progress in
achieving them.
Disclose the measurable objectives for
achieving gender diversity set by the board
and its progress towards achieving them.
3.4 Disclose in each annual report the proportion
4.1
4.2
4.3
5.1
of women employees in the whole
organisation, women in senior executive
positions and women on the board
The board should establish an audit
committee
Structure the audit committee so that it:
consists only of non-executive directors
consists of a majority of independent
directors
is chaired by an independent chair, who is
not chair of the board
has at least three members
The Audit Committee should have a formal
charter.
Establish and disclose written policies
designed to ensure compliance with ASX
Listing Rule disclosure requirements and to
ensure accountability at a senior executive
level for that compliance.
6.1 Design and disclose a communications policy
for promoting effective communication with
shareholders and encouraging their
participation at general meetings.
Establish and disclose policies for the
oversight and management of material
business risks.
7.1
7.2 Design and implement a risk management
and internal control system to manage the
company’s material business risks and report
on whether those risks are being managed
effectively.
7.3
8.1
The board should disclose whether it has
received assurance from the chief executive
officer (or equivalent) and the chief financial
officer (or equivalent) that the declaration
provided in accordance with section 295A of
the Corporations Act is founded on a sound
system of risk management and internal
control and that the system is operating
effectively in all material respects in relation
to financial reporting risks
Establish a remuneration committee
Austral Gold does not have a documented gender diversity
policy. The Board is cognisant of the benefits that come
with gender diversity in the workforce, but are unable to
make this objective a priory at this stage.
Austral Gold does not have a documented gender diversity
policy.
Whilst Austral Gold no longer has any female Directors
following the resignation of Natalia Zang in December
2009, Austral is proud to have a female CFO and Company
Secretary to support the Board of Directors.
The Company has an audit committee.
The Audit Committee comprises Robert Trzebski (as
Chairman) and Pablo Vergara del Carril. Both are non-
executive directors.
The committee lacks a majority of independent directors
which is a reflection of the composition of the Board and
influence of the major shareholder.
The members of the Audit Committee possess the requisite
financial expertise and industry experience necessary to
effectively carry out the Committee's mandate.
The Audit Committee has a documented charter approved
by the Board. The charter is published on the Company’s
website under Corporate Governance.
The Company’s Continuous Disclosure Policy is available on
the Company’s website.
The Company’s Shareholder Communications Policy is
available on the Company’s website under Corporate
Governance.
The Company’s Risk Management and Internal Control
Policy is available on the Company’s website.
The Company’s system of risk management and internal
control is basic, yet appropriate for the size and nature of
transactions incurred.
The Board seeks external advice when considering new or
significant transactions to ensure risks are identified and
addressed in a timely manner.
The sign-off received by the Board from the CFO relates to
financial reporting. It is limited by knowledge and belief
and provides a reasonable, but not absolute level of
assurance with regards to the system of risk management
and internal control.
The Company cannot justify the operation of a
Remuneration Committee. All remuneration decisions are
63
No
Recommendation
Compliance or Explanation for Non-compliance
8.2
Remuneration committee structure so that it:
consists of a majority of independent
directors
is chaired by an independent chair
has at least three members
8.3 Distinguish the structure of non-executive
directors’ remuneration from that of
executive directors and senior management.
made by the Board.
The Company cannot justify the operation of a
Remuneration Committee. All remuneration decisions are
made by the Board.
The Board is cognisant of the objectives concerning
remuneration of directors and senior management and is
committed to the design of appropriate structures to fulfil
these objectives. Details of remuneration are set out in the
remuneration report contained in the Directors Report.
The Board aspires to the highest standards of corporate governance and is fully supportive of and
committed to the aims, spirit and letter of the Recommendations and to their implementation as
appropriate for a company of its size.
Statement of Issued Capital
As at 31 August 2013 the total issued capital of Austral Gold Limited was 169,139,739 ordinary shares.
169,139,739 shares were quoted on the Australian Securities Exchange under the code AGD. The only
shares of the Company on issue are ordinary shares. None of these shares are restricted securities
within the meaning of the Listing Rules of the Australian Securities Exchange.
There are no restrictions on the voting rights attached to the fully paid ordinary shares. On a show of
hands, every member present in person shall have one vote and upon a poll, every member present in
person or by proxy shall have one vote for every share held.
As at 31 August 2013, there exist 140,949 unlisted options as set out below:
No of options
Exercise Price
Expiry Date
No of Holders
140,949
$0.30
15 Nov 2016
1
Distribution of fully paid ordinary shares
as at 31 August 2013
Size of Holding
Holders
Shares held
1 - 100
101 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 50,000
50,001 - 100,000
>100,001
190
439
279
78
57
16
9,369
242,880
753,441
640,615
1,272,436
1,083,220
25
165,137,778
1,084 169,139,739
64
Substantial Shareholders
In accordance with substantial holder notice lodged on 18 September 2012
Registered Holder
Beneficial Holder
Shares Held
Citicorp Nominees
Inversiones Financieras Del SUR SA (IFISA)
114,716,915
HSBC Custody Nominees
Inversiones Financieras Del SUR SA (IFISA)
775,500
HSBC Custody Nominees Guanaco Capital Holding Corp
Citicorp Nominees
Eduardo Sergio Elsztain
24,289,330
4,686,206
144,467,951
Top twenty shareholders as at 31 August 2013
Rank Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
JP MORGAN NOMINEES AUSTRALIA LIMITED
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ASOCIACION ISRAELITA ARGENTINA TZEIRE AGUDATH JABAD
FORSYTH BARR CUSTODIANS LTD
HAZLAHA INVESTMENTS LIMITED
JP MORGAN TRUST COMPANY LTD
LIMOL TRADING CORP
MR RODNEY DAVID JACKSON
MOSHE AMBARCHI
JOAMEL HOLDINGS PTY LTD
BIRCHALL PROJECTS LTD
MR CARLOS PERALTA TORREJON
MR PHILIP DOUGLAS CHISHOLM
MR MARCUS EINFELD
GREENFORD INVESTMENTS LIMITED
MOUNTAIN SIDE HOLDINGS LTD
Total
Other
Total shares on issue
No. of shares
123,956,923
25,064,830
3,190,954
3,107,974
2,305,420
1,433,876
1,158,265
849,557
770,416
297,445
297,445
270,000
250,000
250,000
230,000
227,614
202,186
200,000
200,000
194,800
% of issued
capital
73.29
14.82
1.89
1.84
1.36
0.85
0.68
0.50
0.46
0.18
0.18
0.16
0.15
0.15
0.14
0.13
0.12
0.12
0.12
0.12
164,457,705
4,682,034
167,139,739
97.26
2.74
100.00
65
Austral Gold Limited
ABN 30 075 860 472 ASX:AGD
Suite 206, 80 William St,
Sydney NSW 2011
T +61 2 9380 7233
F +61 2 8354 0992
E info@australgold.com.au
W www.australgold.com.au