annual Financial RepoRt
for the year ended 30 June 2017
01
Chairman’s address
02
Chief exeCutive OffiCers repOrt
03
direCtOrs’ repOrt
auditOr’s independenCe
deClaratiOn
COnsOlidated statement Of
prOfit Or lOss and Other
COmprehensive inCOme
COnsOlidated statement Of
finanCial pOsitiOn
COnsOlidated statement Of
Changes in equity
COnsOlidated statement Of
Cash flOws
nOtes tO the
COnsOlidated finanCial
statements
09
21
22
23
24
25
26
58
59
63
CORPORATE DIRECTORY
Black Rock Mining Limited
ABN: 59 094 551 336
Directors
Stephen Copulos
chairman Non- executive
John de Vries
chief executive officer, executive Director
Gabriel Chiappini
Non-executive Director
Gabriel Chiappini
compaNy
secretary
priNcipal place of BusiNess
aND registereD office
level 1, 35 Havelock street,
West perth Western australia, 6005
telephone: (+61 8) 9320 7550
fax: (+61 8) 9320 7501
Website: www.blackrockmining.com.au
direCtOrs’ deClaratiOn
auDitor
Deloitte Touche Tohmatsu
independent auditOr’s repOrt
tower 2, Brookfield place
123 st georges terrace
perth Western australia, 6000
telephone: (08) 9365 7000
fax: (08) 9365 7001
additiOnal asx infOrmatiOn
sHare registry
Computershare Investor Services Pty Ltd
level 11, 172 st georges terrace
perth Western australia, 6000
telephone: 1300 787 272
facsimile: (08) 9323 2033
email: web.queries@computershare.com.au
the company’s shares are quoted on the
australian securities exchange (asx).
the Home exchange is perth.
stock excHaNge listiNg
asx coDe
BKT - ordinary shares
BKTOD - listed options
Black Rock Mining liMited 2017 AnnuAl report ChaIrMan’S addreSS
Dear Fellow Shareholder,
It is my pleasure to present Black Rock Mining
Limited’s (ASX: BKT) Annual Report for the year ended
30 June 2017. Black Rock has achieved several important
milestones in the development of its Mahenge Graphite
Project in Tanzania, Africa, as we position Mahenge as
an important resource in the production of lithium-ion
batteries, seen as the energy of the future and necessary
to the electric vehicle and energy storage markets.
Our achievements included delivering a
positive optimised Pre-Feasibility Study
(“PFS”) for Mahenge which confirmed
the project’s outstanding potential as
a long life, low capex, high margin
operation. The optimised PFS released
August 2017,built on the Scoping
Study completed in March 2016, and
demonstrated the technical viability
of the project and its ability to deliver
robust financial returns under various
financial and operating scenarios.
Highlights of the optimised PFS included:
- Post-tax unlevered project NPV10
of US$905m (NPV8 of US$798m)
- Allows for 16% free carry at project
level by Tanzanian Government and
extra 1% royalty for inspection fee
- Post-tax unlevered IRR of 45.1%
- EBITDA in first full year of production
of US$220 million (EBITDA margin
of 66%)
- Three 83ktpa staged modules to deliver
a maximum of 250k tonnes per annum,
with the second and third module to be
self-funded a 31-year life of mine with
average grade of 8.9% TGC
- Pre-production capital expenditure
(“capex”) estimated at US$90.1
million including 15% contingency
This is an integral step for Mahenge,
and Black Rock has followed up on this
result by achieving industry-leading
spheronising graphite yields and battery
test results, as well as an optimised
flowsheet for Mahenge which achieved
results of 99.6% purity.
We also signed two significant
Memorandums of Understanding
regarding working with joint venture
partner in a spherical graphite
production facility in China, to evaluate
viability of a long-term commercial
relationship, and a Chinese spherical
graphite manufacturing and marketing
company with manufacturing capability.
02
We look forward to further advancing
these relationships over the coming year.
Unfortunately, in the face of such
great progress, our share price has not
performed well in a market that has been
somewhat tough on mining companies
in our stage of development, combined
with the perceived investment risk of
operating in Africa. The changes to
Tanzanian legislation relating to mining,
which were announced just after the
year end, also did not help our share
price, and we are yet to fully understand
how these changes will impact the
Company regarding our agreement with
the Tanzania government, royalties and
beneficiation requirements. We look
forward to consulting with the Tanzanian
government on these changes.
We completed a $5m placement to
institutional and sophisticated investors
in September last year which helped
fund the completion of our PFS and
other testwork needed to progress
Mahenge, and during the March quarter,
Black Rock received applications from
option holders to exercise 39,675,000,
$0.05 options which were due to expire
on 25 March 2017, raising a further $2m
which will help us continue Mahenge’s
development. I thank our shareholders
for their continued support.
As a further step in moving Mahenge
forward, Steven Tambanis agreed to step
down from the CEO role to allow Black
Rock to identify a suitably experienced
CEO with construction, production and
marketing experience. In August 2017,
John de Vries, a highly-respected mining
professional with more than 30 years
of industry experience, became Black
Rock’s permanent CEO. John de Vries
originally joined the Company as the
Chief Operating officer to manage the
PFS. I thank Steven for his efforts and
leadership in his time as CEO.
I take this opportunity to thank all
members of Black Rock’s management
team and staff, as well as my fellow
directors, for their efforts over the past
year. I also thank our Shareholders for
continuing on this journey with us as
we work to develop this high-grade
graphite resource at Mahenge to its full
potential, and I hope that your support
will continue in 2018, which will see
Black Rock take further important steps
forward in this process.
Stephen Copulos
CHAIRMAN
Black Rock Mining liMited 2017 AnnuAl report
03
Throughout the 2016/17
Financial Year, Black Rock
Mining continued to
advance the Mahenge
Graphite Project, and
in so doing, commence
our transition from
an exploration to a
development company
and ultimately a graphite
producer. The completion
of a Pre-Feasibility Study
for Black Rock’s Mahenge
Graphite Project, Tanzania,
was the priority for the
Company over the past 12
months. The Pre-Feasibility
was delivered by Black
Rock on 24 April 2017,
and subsequently updated
with an Optimised
Pre-Feasibility on the
8th of August 2017.
LefT: LOCATION OF BLACK ROCK’S
MAHENGE GRAPHITE PROJECT
WITHIN TANzANIA
Chief executive
officer’s report
T a n z a nIa
Tanga
ZanZIbar
Morogoro
Ifakara
DaR eS SaLaaM
Mbeya
Mahenge
gRaphite
pRoject
MTwara
250 kM
ChIef exeCutIve offICer’S report
04
The Pre-Feasibility Study, and the subsequent Optimised Pre-Feasibility Study are
defined by a staged development approach, described as “Crawl, Walk Run”.
This approach uses cash flow from the first stage to self-fund or bootstrap subsequent
stages. Importantly this approach limits the company’s maximum financial exposure
to the first stage only, while still achieving significant magnitude. The approach also
allows the company to increase operational magnitude in response to market growth
at a time of our choosing.
Several key items completed as part of the PFS preparations included:
- Test work results from the primary composite samples of Ulanzi and Epanko North,
which achieved industry leading, 99% TGC purities for all size fractions greater than
75 microns. The results indicated that exceptionally high purities in the 99% range
can be achieved from both oxide and fresh portions of Ulanzi and Epanko North
through a straightforward processing circuit while preserving flake size.
- Excellent first-stage expandable graphite test results for its flake concentrates in
August. The program, completed by German group Dorfner Anzaplan, concluded
that Mahenge concentrate was superior to Chinese sourced expandable graphite,
and confirmed the potential of Mahenge graphite to supply products with excellent
expansion characteristics into the established market, presenting diversification
opportunities to Black Rock Mining in a premium market segment.
- Initial spherical graphite testing conducted in Europe by an independent test
laboratory using the Company’s early generation 95.86% bulk concentrates
exceeded high quality battery grade spherical graphite specifications. Samples were
sent for evaluation in May 2016, prior to the Company achieving higher 99% TGC
purity concentrates.
- The JORC Mineral Resource Estimate increased by 56% to 211.9Mt at 7.8% TGC
due to the completion of infill drilling at Ulanzi and Cascades, with a higher grade
portion of 44.2Mt @ 10.6% TGC
- A JORC Ore Reserve estimate for the Optimised Pre-Feasibility Study was completed,
with a Probable Ore Reserve estimate encompassing Ulanzi and Cascades of 69.6Mt
at 8.5%. This estimate covers 80% of the planned plant feed for the Optimised
Pre-Feasibility Study.
- Graphite concentrate test work saw the production of 99.2% concentrates that
were distributed to end users for evaluation with confirmation of high tap density
for concentrate due to the thick nature of the graphite flakes. Chemical purification
test work produced 99.95% TGC spherical graphite and thermal purification
produced up to 99.999% pure concentrate. Significant progress was made
manufacturing spherical graphite for battery test work with test cells currently
under evaluation and test results to be reported in the first half of 2017.
The PFS for the Mahenge Graphite Project was prepared by independent engineering
firm Battery Limits Ltd, a project development and consulting engineering group
with significant experience in the graphite sector. The PFS confirmed the project’s
outstanding potential as a long life, low capex, high margin operation.
Black Rock Mining liMited 2017 AnnuAl report ChIef exeCutIve offICer’S report
Table 1: Mahenge key investment parameters
PaRaMeTeR
UNITS
STAGE 1
STAGE 2
STAGE 3
TOTaL
Commence operation
Nominal Mine Life
Process Throughput
Nominal Ore Treated
per stage
Average Feed Grade
Y
Y
KT/Y
MT
TGC%
Nominal strip ratio
WASTE : ORE
Recovery
%
1
31
3
29
5
27
32
1,000
1,000
1,000
3,000
31
8.1
0.4
93
29
8.1
0.4
93
26
8.5
1.1
93
86
8.3
0.7
93
Nominal Design Basis
Concentrate Grade
Nominal Design Basis
Graphite Production
TGC %
98 - 99
98 - 99
98-99
98 - 99
KT/Y
83
83
83
250
Table 2: Mahenge key project financial parameters
05
The Optimsed PFS built on the initial PFS
released in June 2017 and the Scoping
Study in 2016, also by BatteryLimits,
confirming the technical viability of the
project and its ability to deliver robust
financial returns under various financial
and operating scenarios.
Financial Highlights of the optimised
PFS included:
- Post-tax unlevered project NPV10 of
US$1.11bn (increasing from April
2017 PFS of US$624m)
- Post-tax, unlevered IRR of 50.1%
(increasing from April 2017 of 48.2%)
- EBITDA in first full year of production
US$220 million (EBITDA margin of
66%) (increasing from April 2017 PFS
of US$135 million)
- Revised financial metrics incorporating
a 16% Government free carry and
increased royalty rate include:
- Post-tax unlevered project NPV10
of US$905m
KeY fInanCIaL
PaRaMeTeRS
Commencement
Capital Cost
IRR - after tax
NPV @ 10% - after tax
NPV @ 10% - after tax
16% free carried,
1% inspection fee
(YEAR)
(US$ M,
REAL)
(%,
NOMINAL)
(US$ M,
NOMINAL)
(US$ M,
NOMINAL)
Total Concentrate Sales
(‘000 T)
Cash Costs
(US$/T, REAL)
SINGLE
MODULE
TWO
MODULES
THREE
MODULES
LOM
1 & 2
3+
5
90.7
72.2
81.7
243.7
35.3%
48.7%
50.1%
48.7%
- Post-tax, unlevered IRR of 45.1%
361
864
1,114
1114
- Pre-production capex remains
291
3,265
513
592
5,142
382
905
6,738
378
905
6,738
378
US$90.1m
- Steady state opex reduced to
US$378 per tonne
- Realistic basket price assumption
of US$1,241 per tonne
delivering an operating margin
of US$863 per tonne
- Total capex estimated at US$244m
including a 15% contingency
- Construction on track to commence in
2018 with initial production in 2019
Black Rock Mining liMited 2017 AnnuAl report
ChIef exeCutIve offICer’S report
Table 3: Mahenge global resource summary reporting table
CaTeGORY
Measured
Indicated
Inferred
TOTAL
TOnneS
(MILLIONS)
25.5
88.1
98.3
211.9
Table 4: resource breakdown by prospect
PROSPeCT
CaTeGORY
TOnneS
Ulanzi
Epanko
Cascades
CoMbIneD
Measured
Indicated
Inferred
Sub-total
Measured
Indicated
Inferred
Sub-total
Measured
Indicated
Inferred
Sub-total
MEASURED
INDICATED
INFERRED
TOTAL
(MILLIONS)
13.3
49.7
50.2
113.3
12.1
20.8
27.3
60.2
17.6
20.8
38.4
25.5
88.1
98.3
211.9
TGC
(%)
8.6
7.9
7.6
7.8
TGC
(%)
8.9
8.2
8.1
8.2
8.3
8.3
7.9
8.1
6.4
5.9
6.1
8.6
7.9
7.6
7.8
COnTaIneD
TGC
(MILLIONS
TONNES)
2.2
6.9
7.4
16.6
COnTaIneD
TGC
(MILLIONS
TONNES)
1.2
4.1
4.1
9.3
1.0
1.7
2.2
4.9
1.1
1.2
2.4
2.2
6.9
7.4
16.6
06
Mining will be by conventional
open-cut mining techniques.
Waste will primarily be used for
tailings dam wall construction,
or will be stacked in waste dumps
to form integrated landforms.
Processing will be by well-proven
crushing, grinding and flotation
methods, with the plant development
in two stages, comprising:
Stage
one
Stage
Two
Stage
Three
processing plant and
infrastructure at a nominal
design basis rate of 1 Mt/y
to produce up to 83 kt/y
graphite concentrate in the
first two years of production.
Plant is based at Ulanzi pit.
a second 1Mt/y plant
and associated additional
infrastructure doubling
throughput to 2Mt/y and
graphite concentrate
production to 167kt/y
from Year 3 of operation.
Plant is based at Ulanzi pit.
a third 1Mt/y plant and
associated additional
infrastructure increasing
throughput to 3Mt/y and
graphite concentrate
production of up to 250 kt/y
from Year 3 of operation.
Plant is based at Cascades
pit and includes dedicated
tailings management system.
The Ore Reserve used in the PFS for
mine design is based upon the updated
Mineral Resource estimate (“MRE”),
calculated by Trepanier Pty Ltd and
released to the ASX in June 2017.
The total mineral resource is 212Mt
@ 7.8% TGC, including a high grade
proportion of 46.6Mt @ 10.6% TGC.
The Ulanzi mineral resource is
estimated to be 111Mt @ 8.2% TGC.
The Cascades mineral resource is
estimated to be 46.6 @ 10.6% TGC.
In summary, total Resource includes
16.6Mt of contained graphite,
with 12% of resource tonnes in
the Measured and 42% in the
Indicated categories.
On the basis of these results,
the Mahenge Project is the fourth
largest JORC-compliant graphite
mineral resource in the world.
(Refer ASX Announcement
6 October 2016).
Black Rock Mining liMited 2017 AnnuAl report ChIef exeCutIve offICer’S report
07
Black Rock achieved several other important results in 2017 following release
of the PFS. These included:
- Flowsheet optimisation, which achieved up to 99.6% purity, validating the Mahenge
PFS (which cited 98%-99% concentrated grade) and recovery of coarser flake;
excellent results achieving purity of 99.6%C(t), and 98.5% C(t) for Ulanzi oxide ore
with an increase in very coarse flake retention; and improved flotation results were
achieved with a simplified flowsheet, potentially lowering Mahenge capital and
operating costs.
- Industry-leading spheronising graphite yields, with flake concentrates from Mahenge
delivered an optimised 60% spheronising yield - almost double the yield of current
spheronising operations on tests completed by Dorfner Anzaplan on samples from
99% purity concentrates from Black Rock’s optimised processing. This excellent
result, which included shape, specific surface area and tap densities that exceeded
battery maker specifications, indicated significant cost savings could be achieved by
using Mahenge graphite as a feed stock. Black Rock plans to trial an adaptation to
the current spheronising process which has potential to significantly improve yields
yet again.
- Industry-leading battery test results from a US ISO-accredited test facility, with
130-cycle battery cell tests demonstrating superior performance characteristics,
and testing increased to 500 cycles. Over a 130-cycle charge/discharge programme,
Black Rock’s test cells demonstrated consistently higher charge capacity and flatter
performance curves than a leading coated spherical graphite used as a comparison.
This is believed to occur due to the purer and thicker Mahenge graphite flakes which
are more stable in cell use than thin flakes. The results of battery testing confirmed
Mahenge graphite has the potential to enable battery manufacturers to produce
more stable lithium-ion batteries (LIBs) at a lower cost and longer cycle life, and it
has the potential to displace synthetic graphite in LIBs.
- Signing a partnering Memorandum of Understanding (“MOU”) with Meiwa
Corporation of Japan, a joint venture partner in a spherical graphite production
facility in China, to evaluate viability of a long-term commercial relationship.
- Signing a MOU with Yingkou Botian Material Technology Limited Company
(“Botian”), a Chinese spherical graphite manufacturing and marketing company
with manufacturing capability in Liaoning Province, China, which has significant
experience in marketing and manufacturing spherical graphite and expressed
interest in purchasing 50,000 tonnes per annum of graphite concentrates from the
Mahenge Graphite Project, contingent upon demonstrating acceptable concentrate
quality for battery grade spherical graphite. The MOU establishes a framework
for Black Rock and Botian to evaluate the commercial viability of a long-term
commercial arrangement for the sale of graphite concentrates to Botian,
the production and marketing of spherical graphite, and working together
on research and development.
The PFS contemplates an initial mine
life of 31 years, based on Probable Ore
Reserves and an assumed conversion of
Inferred Resource to ore.
The Ore Reserve is based on a processing
cut-off which varies by deposit (based
on the different financial parameters for
each). The processing cut-off grades are
7.0% TGC for Ulanzi and 3.8% TGC
for Cascade. Cut off grades have been
determined from an analysis determining
that 8.9% total feed grade delivering the
maximum NPV for the project. Economic
cut off grades are significantly lower, and
lower than the cut-off grades used in
reporting the Mineral Resource.
The Ore Reserve estimate is based on
the conversion of the total resource
inventory contained within the pit as
either Measured or Indicated converting
to Probable Ore Reserve, subject to the
application of modifying factors. Pit
shells used in Reserve estimation, have
all Inferred material reclassified as waste.
Irrespective of the geological confidence
expressed in the Resource estimate, the
Ore Reserve estimate will continue to be
classified as Probable, until mining and
export licences are granted, and firm
sales contracts are in place.
The Ore Reserve estimate, is based upon
a basket price of US$1,174 per tonne
of graphite concentrate averaged over
graphite products as in Table 7. The
basket price selected for Ore Reserve
determination has referenced the basket
price selected for project evaluation, that
being the three-year trailing price FOB
China with a freight normalisation of
$40/tonne applied. A conservative price
modification has been applied to the
fines fraction as a provision should the
purity price premium not fully translate
to the fines fraction. This is considered
conventional practice, where an Ore
Reserve estimate references a lower price
protocol relative to the business valuation.
The Company progressed an Optimisation
Study of the Mahenge PFS during the
Financial Year, that considered the impact
of additional drilling at Cascades, and
continued expansion through a third
module (Crawl, Walk, Run strategy).
Black Rock Mining has completed a
non-exhaustive assessment of key aspects
of potential financing and operational
impacts of the proposed legislation, based
on the legislation and accompanying
information currently available and
understood. This assessment is subject
to further interpretation through the
consultation phase and when regulations
become available.
Black Rock Mining liMited 2017 AnnuAl report ChIef exeCutIve offICer’S report
08
Subsequent to year-end, significant
reforms have been made to the laws
governing the Mining industry in
Tanzania and investments in mining
projects. The Tanzanian Parliament
passed three bills through Parliament
being the Natural Wealth and Resources
(Permanent Sovereignty) Act 2017,
the Natural Wealth and Resources
Contracts (Review and Re-Negotiation
of Unconscionable Terms) Act 2017
and the Written Laws (Miscellaneous
Amendments) Act 2017.
All bills have passed the legislature,
and have been promulgated by the
President of Tanzania, His Excellency
Dr John Magufuli.
The Company is keen to work with
the Government to implement these
reforms and continue development of
the Mahenge Project. The company’s
understanding of the Government’s
objectives behind the reforms,
are as follows:
• provide transparency in the
agreements reached between
the Government and mining
companies for the development
of mining projects;
• provide clarity in relation to the
basis on which mining projects are
developed in Tanzania;
• provide for fair and reasonable
terms for the development of
mining projects;
• provide opportunities for
participation and investment in
mining projects in Tanzania by
Tanzanian citizens;
• provide certainty for customers,
lenders and sponsors of projects
in relation to the legal framework
governing the development of
projects through the mechanism of
entering binding agreements for the
development of projects approved
by Parliament.
The company has engaged with
the government on resolving how
to implement the reforms.
We remain confident that a
workable resolution will be
available within the medium term.
John de Vries
CHIEF EXECUTIVE OFFICER
Black Rock Mining liMited 2017 AnnuAl report dIreCtorS’ report
09
The Directors of Black Rock Mining Limited (“Company” or “Black Rock Mining”)
submit herewith the annual report of the Company and its subsidiary entities for
the financial year ended 30 June 2017. In order to comply with the provisions of
the Corporations Act 2001, the directors report as follows:
INFORMATION ABOUT THE DIRECTORS
The names and details of the Directors of Black Rock Mining Limited during the financial year are:
naMe
PaRTICuLaRS
Stephen Copulos
(Non-Executive
Chairman)
Mr Copulos is Black Rock Mining Non-Executive Chairman and is the Company’s major shareholder and
financial supporter. Mr Copulos has over thirty years’ experience in a variety of businesses and investments
across a wide range of industries including mining, manufacturing, property development, food and
hospitality. He has been the Managing Director of the Copulos Group of companies, a private investment
group, since 1997 and has extensive experience as a company director of both listed and unlisted public
companies in Australia, the UK and USA.
Mr Copulos held directorships with the following listed companies in the 3 years immediately prior to the
date of this report.
NAME
Collins Foods Limited
Crusader Resources Limited
Consolidated zinc Limited
Restaurant Brands Limited
DATE APPOINTED
April 2013
March 2013
June 2015
April 2016
DATE RESIGNED
October 2014
Current
Current
Current
Mr de Vries has over 30 years’ experience in the mining industry. He started his career in 1984 working
for WMC Resources and held operational roles such as Underground Manager, Senior Mining Engineer
and Manager Mining. In 1998, he moved to AMC Consultants to become a Principal Mining Engineer
responsible for Mine Optimisation. In 2003, he joined Orica Mining Services as Global Business Manager,
Advanced Mining Solutions, before moving to BHP Billiton in 2007 as the Manager Strategic Mine Planning.
Most recently from 2011 to 2015, he was General Manager Technical Services for St Barbara. After his
success with St Barbara, Mr de Vries took an 18 month sabbatical before joining Black Rock Mining.
Mr de Vries holds a Bachelor of Engineering, Mining, a Masters of Science in Mineral Economics,
a Graduate Diploma in Economic Geology, a Graduate Diploma in Financial Markets and is Advisory
Committee Member-Mining of MRIWA. Mr de Vries holds a WA First Class Mine Managers Certificate
of Competency. He is a member of the AusIMM, a fellow of FINSIA and a member of SME.
Mr Chiappini is a Chartered Accountant and member of the Australian Institute of Company Directors
with over 20 years’ experience in the commercial sector. Over the last 15 years’ Gabriel has held positions
of Director, Company Secretary and Chief Financial Officer in both public and private companies with
operations in Australia, the United Kingdom and the United States. He has assisted a number of companies
list on the ASX and been involved with equity and debt raisings exceeding AUD$400 million. Gabriel has a
sound understanding of the Australian Stock Exchange (ASX) Listing Rules and in-depth knowledge of the
Corporations Act.
Mr Chiappini currently managers his own consulting firm specialising in providing Director, company
secretarial, corporate governance, compliance and investor relation services. He currently acts as a Director
and Company Secretary for several companies listed on the ASX.
Mr Chiappini held directorships with the following listed companies in the 3 year immediately prior to the
date of this report.
NAME
DATE APPOINTED
DATE RESIGNED
Fastbrick Robotics Limited - Non-Executive Director
15 December 2011
Current
- Non-Executive Chairman
21 March 2012
18 November 2015
Interpose Holdings Limited
Scotgold Resources Limited
Global Geoscience Limited
12 August 2015
27 May 2016
3 November 2015
Current
20 May 2017
23 May 2017
Mr Tambanis was the previous Managing Director of the Company until his resignation on 24 April 2017.
John de Vries
(Executive Director
CEO)
gabriel Chiappini
(Non-Executive
Director and
Company Secretary)
Steven Tambanis
(Previous Director)
Black Rock Mining liMited 2017 AnnuAl report dIreCtorS’ report
10
INFORMATION ABOUT THE DIRECTORS (continued)
The above named directors held office during the whole of the financial year and since the end of the financial year except for:
naMe
John de Vries
Steven Tambanis
ReSIGnaTIOn/aPPOInTMenT DaTe
Appointed: 24 April 2017
Resigned: 24 April 2017
PRINCIPAL ACTIVITIES
Black Rock Mining Limited is an Australian-based company listed on the Australian Securities Exchange. The Company owns graphite
tenure in the Mahenge region of Tanzania.
The Company announced a JORC compliant Mineral Resource Estimate of 211.9m tonnes at 7.8% TGC for 16.6m tonnes of
contained Graphite, making this one of the largest JORC compliant flake graphite Mineral Resource Estimates globally. Over 50%
of the Mineral Resource is in the Measured and Indicated categories. In April 2017, Black Rock announced results of a Preliminary
Feasibility Study (PFS) and followed this up with an optimised PFS on 8 August 2017 for its Mahenge Graphite Project which
confirmed its potential as a long-life, low capex, high margin operation.
The optimised PFS estimated a post-tax, unlevered, internal rate of return (“IRR”) for the Project of 45.1%; and a net present
value (NPV) using a discount rate of 10% (NPV10) of US$905m. Black Rock confirms, the key assumptions used in the PFS have not
materially changed and that the material assumptions continue to apply per the Optimised study.
PFS announcement released to the ASX on 8 August 2017. Black Rock confirms that it’s optimised PFS has allowed for the proposed
Tanzanian legislative changes relating to 16% free carry position of the Tanzanian Government and the royalty fee increasing to
4.3%. Subject to clarification on Tanzanian legislative changes, Black Rock is moving towards commencing a Definitive Feasibility
Study (DFS). With a successful DFS and associated financing, construction could commence in 2018 with first production in 2019.
For further information on the company’s development pathway, please refer to the company’s website at the following link:
http://www.blackrockmining.com.au and the corporate video presentation at http://www.blackrockmining.com.au/#video
REVIEW AND RESULTS OF OPERATIONS AND ACTIVITIES
ReSuLTS Of OPeRaTIOnS
The consolidated loss after accounting after tax for the year ended 30 June 2017 was $2,590,371 (2016: $1,349,305). During 2017,
the Company focused its objectives into developing its graphite assets. In FY16, Black Rock Mining was focused on exploration
activities to establish an economic resource. In FY17 the company’s main objective was to move into a development and strategic
pathway to allow the company to then look to the establishment of mine. Some of the milestones achieved in FY17 and to the date
of this report include;
• Optimised Pre Feasibilty Study – results of PFS includes an unlevered IRR of 45% with an NPV of US$905m using a discount rate
of 10%, refer ASX announcement on 8 August 2017. The Optimised PFS also includes and allows for a 16% free carry in the
project by the Governament of Tanzania and an increase in the royalty rate from 3.3% to 4.3%.
•
Increase in Global Resource - making Mahenge one of the largest JORC compliant flake graphite Mineral Resource Estimates
globally, refer ASX announcement 20 July 2017. The total Mahenge Graphite Project Mineral Resource increased to
211.9Mt @ 7.8% TGC with a high-grade portion of 46.6Mt @ 10.6% TGC
• Recruitment of Key Executive John de Vries as Chief Executive – appointed CEO in August 2017
• Customer discovery into battery supply chain with key memorandum of understandings with Miewa and Botian
• Peer leading battery cycle testing - potential to enable battery manufacturers to produce more stable lithium-ion batteries (LIBs)
at a lower cost with a longer cycle life and our 200-cycle testing indicates it strongly outperforms commercially available products
CORPORaTe anD fInanCIaL POSITIOn
Consolidated net assets at year-end were $15,541,101 against $10,046,769 at the close of the prior year. Total cash held at year-end
was $2,139,779: (2016: $2,359,185).
Black Rock Mining liMited 2017 AnnuAl report dIreCtorS’ report
11
REVIEW AND RESULTS OF OPERATIONS AND ACTIVITIES (continued)
GRaPhITe ReSOuRCe, TanzanIa
In July 2017, Black Rock Mining announced an upgraded JORC compliant Mineral Resource Estimate of 211.9m tonnes at 7.8% TGC
for 16.6m tonnes of contained Graphite, making this one of the largest JORC compliant flake graphite Mineral Resource Estimates
globally. Over 50% of the Mineral Resource is in the Measured and Indicated categories.
PROSPeCT
Ulanzi
Cascades
Epanko
CoMbIneD
CaTeGORY
Measured
Indicated
Inferred
Sub-total
Measured
Indicated
Inferred
Sub-total
Measured
Indicated
Inferred
Sub-total
MeaSUreD
InDICaTeD
InferreD
ToTaL
TOnneS
(MILLIONS)
13.3
49.7
50.2
113.3
12.1
20.8
27.3
60.2
17.6
20.8
38.4
25.5
88.1
98.3
211.9
TGC
(%)
8.9
8.2
8.1
8.2
8.3
8.3
7.9
8.1
6.4
5.9
6.1
8.6
7.9
7.6
7.8
COnTaIneD TGC
(MILLION TONNES)
1.2
4.1
4.1
9.3
1.0
1.7
2.2
4.9
1.1
1.2
2.4
2.2
6.9
7.4
16.6
PRe feaSIBILITY STuDIeS
In April 2017, Black Rock Mining announced results of a Preliminary Feasibility Study (PFS) and followed this up with an optimised
PFS on 8 August 2017 for its Mahenge Graphite Project. These studies confirmed that the company’s flagship graphite project has
the potential as a long-life, low capex, high margin operation.
The optimised PFS estimated a post-tax, unlevered, internal rate of return (“IRR”) for the Project of 45.1%; and a net present
value (NPV) using a discount rate of 10% (NPV10) of US$905m. Black Rock confirms, the key assumptions used in the PFS have not
materially changed and that the material assumptions continue to apply per the Optimised study. For further information on the
optimised study please refer to the ASX announcement on 8 August 2017.
The Company is now focused on development of the project and working with all stakeholders to achieve the goal of getting
Mahenge into production.
DIVIDENDS
No dividend has been paid since the end of the previous financial year and no dividend is recommended for the current year.
CHANGES IN THE STATE OF AFFAIRS
There have not been any significant changes in the State of Affairs of the Company. Black Rock Mining remains focused on
developing its Graphite Mahenge Project in Tanzania. The Company is now moving into its development phase and looks forward to
executing on its strategy to develop and bring Mahenge into production and in parallel penetrate the battery materials supply chain.
Black Rock Mining liMited 2017 AnnuAl report dIreCtorS’ report
12
SUBSEQUENT EVENTS
Other than the above, the Directors are not aware of any matter or circumstance that has significantly or may significantly affect the
operation of the Company or the results of those operations, or the state of affairs of the Company in subsequent financial years.
- On 24 August 2017, Black Rock Mining confirmed the appointment of Mr John de Vries as Chief Executive Officer. Mr de Vries
had previously been the Chief Operating Officer and Interim Chief Executive Officer.
- On 8 August 2017, Black Rock Mining released to the ASX its Optimised Pre Feasibility Study (PFS). Results of the PFS includes
an unlevered IRR of 45% with an NPV of US$905m using a discount rate of 10%, refer ASX announcement on 8 August 2017.
The Optimised PFS also includes and allows for a 16% free carry in the project by the Governament of Tanzania and an increase
in the royalty rate from 3.3% to 4.3%.
- On 20 July 2017, Black Rock Mining announced an increase in its Global Resource, making Mahenge one of the largest JORC
compliant flake graphite Mineral Resource Estimates globally. The total Mahenge Graphite Project Mineral Resource increased
to 211.9Mt @ 7.8% TGC with a high-grade portion of 46.6Mt @ 10.6% TGC
- On 12 July 2017, the Company provided the ASX with an update on the legislative changes to the mining sector in Tanzania.
The changes are yet to be formalised by way of a new mining code and set of regulations. Some of the changes passed by the
Tanzanian Parliament include, the right to a free carried position of 16%, an increase in royalty rate to 4.3%, claw back of any
tax concessions provided to the mining sector and requirement to investigate a listing on the Dar es Salaam Securities Exchange.
For further details please refer to the ASX announcement on 12 July 2017. The company is presently working through the
changes and awaits further updates from the Government of Tanzania and in particular the updated mining code and regulations.
- On 22 September the Company announced that it had cancelled 5,000,000 unlisted options with a vesting date of
30 November 2019 at $0.20 and replaced them with a new issue of 5,000,000 unlisted options with a vesting date of
31 August 2020 $0.10. The Options may only be exercised where the following vesting conditions have been satisfied:
(a) in relation to the first 1,250,000 Options - the Company’s shares have traded at 10c or over for 10 trading days;
(b) in relation to the next 1,250,000 Options - the Company´s share have traded at 20c or over for 10 trading days;
(c) in relation to the next 1,250,000 Options - the Company´s share have traded at 30c or over for 10 trading days; and
(d) in relation to the last 1,250,000 Options - the Company´s share have traded at 40c or over for 10 trading days.
FUTURE DEVELOPMENTS
Black Rock Mining remains focused on developing its Graphite Mahenge Project in Tanzania. The Company is now moving into its
development phase and looks forward to executing on its strategy to develop and bring Mahenge into production and in parallel
penetrate the battery materials supply chain. For further details on the strategy please refer to the Company’s Optimised PFS
announcement on 8 August 2017.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The exploration activities of entities in the consolidated entity are subject to environmental regulations imposed by various regulatory
authorities, particularly those relating to ground disturbance and the protection of rare and endangered flora and fauna.
Entities in the consolidated entity have complied with all environmental requirements up to the date of this report.
SHARE OPTIONS
ShaRe OPTIOnS GRanTeD TO DIReCTORS
During the year no share options were granted to the directors of the Company.
ShaRe OPTIOnS On ISSue
The details of the options as at the date of this report are as follows:
Listed options
Expiring 30 November 2018 at $0.075
CLOSING BALANCE
AT DATE OF SIGNING
33,966,655
33,966,655
Black Rock Mining liMited 2017 AnnuAl report dIreCtorS’ report
SHARE OPTIONS (continued)
ShaRe OPTIOnS On ISSue (Continued)
Unlisted options
Expiring 19 January 2018 at $0.20
Expiring 12 April 2020 at $0.20
Expiring 31 August 2020 at $0.10
13
CLOSING BALANCE
AT DATE OF SIGNING
3,300,003
5,000,000
5,000,000
13,300,003
Option holders do not have any right by virtue of the option to participate in any share issue of the Company or any related body corporate.
PERFORMANCE RIGHTS
PeRfORManCe RIGhTS GRanTeD TO DIReCTORS
During and since the end of the financial year, a total of 8,400,000 performance rights were granted to directors of the Company
in November 2016 and March 2017.
DIReCTOR
NO. OF PERFORMANCE
RIGHTS GRANTED
ISSUING ENTITY
Gabriel Chiappini
Stephen Copulos
John de Vries
Steven Tambanis
1,800,000
1,800,000
2,400,000
2,400,000
8,400,000
Black Rock Mining
Black Rock Mining
Black Rock Mining
Black Rock Mining
NO. OF ORDINARY
SHARES PER
PERFORMANCE
RIGHTS
1,800,000
1,800,000
2,400,000
2,400,000
8,400,000
For full particulars of performance rights issued to directors as remuneration, refer to the Remuneration Report.
PeRfORManCe RIGhTS On ISSue
As at the date of this report, no performance rights are on issue.
INFORMATION ABOUT THE DIRECTORS
The following table sets out each Director’s relevant interest in shares or options over shares of the Company as at the date of
this report:
DIReCTOR
NUMBER OF
ORDINARY SHARES
NUMBER OF
OPTIONS GRANTED
GRANT DATE
EXPIRY DATE
EXERCISE PRICE
gabriel Chiappini
5,025,000
- Listed Options
John de Vries
-
Stephen Copulos
93,796,003
266,666
9 May 2016
30 Nov 2018
$0.075
- Listed Options
6,666,666
9 May 2016
30 Nov 2018
$0.075
Steven Tambanis
10,186,315
- Listed Options
400,000
9 May 2016
30 Nov 2018
$0.075
PERFORMANCE
RIGHTS
1,800,000
2,400,000
1,800,000
2,400,000
Black Rock Mining liMited 2017 AnnuAl report dIreCtorS’ report
14
INDEMNIFICATION OF OFFICERS AND AUDITOR
The Company gave indemnity and held the following liability cover in place during the course of the financial year:
1. Agreements to indemnify Mr Stephen Copulos (Non-Executive Chairman), Mr John de Vries (Executive Director), Mr Gabriel
Chiappini (Non-Executive Director) and Mr Steven Tambanis (former Managing Director), in respect of any liabilities incurred by
them while acting in the normal course of business as a director of the entity and to insure them against certain risks they are
exposed to as directors of the Company.
2. Pursuant to the above the Company has paid premiums to insure the directors and executive management against liabilities
incurred in the conduct of the business of the Company and has provided right of access to the Company records.
3. In accordance with common commercial practice, the insurance policy prohibits disclosure of the premium and the nature of the
liability insured against.
The Company has not provided any insurance for an auditor of the Company.
DIRECTORS’ MEETINGS
The following table sets out the number of Directors’ meetings (including meetings of committees of directors) held during
the financial year and the number of meetings attended by each Director (while they were director or committee member).
During the financial year nine (9) Board meetings were held:
DIReCTOR
Stephen Copulos
Gabriel Chiappini
John de Vries
Steven Tambanis (former director)
NUMBER ELIGIBLE
TO ATTEND
NUMBER ATTENDED
12
12
3
9
11
12
3
8
NON-AUDIT SERVICES
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in note
19 to the financial statements.
The directors are satisfied that the provision of non-audit services, during the previous year, by the auditor (or by another person
or firm on the auditor’s behalf) is compatible with the general standard of independence for auditors imposed by the Corporations
Act 2001.
The Directors are of the opinion that the services as disclosed in note 19 to the financial statements do not compromise the external
auditor’s independence for the following reasons:
• all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the
auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in Code of Conduct APES
110 ‘Code of Ethics for Professional Accountants’ issued by the Accounting Professional & Ethical Standards Board, including
reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company,
acting as advocate for the Company or jointly sharing economic risks and rewards.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration is included after this report.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which
the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.
The Company was not party to any such proceedings during the year.
Black Rock Mining liMited 2017 AnnuAl report dIreCtorS’ report
15
REMUNERATION REPORT
This remuneration report, which forms part of the directors’ report, sets out information about the remuneration of Black Rock
Mining Limited’s key management personnel for the financial year ended 30 June 2017. The term ‘key management personnel’
refers to those persons having authority and responsibility for planning, directing and controlling the activities of the consolidated
entity, directly or indirectly, including any director (whether executive or otherwise) of the consolidated entity. The prescribed details
for each person covered by this report are detailed below under the following headings:
• key management personnel
•
•
•
remuneration policy
relationship between the remuneration policy and company performance
remuneration of key management personnel
• key terms of employment contracts
• other information
KeY ManaGeMenT PeRSOnneL
The Directors of the consolidated entity during or since the end of the financial year were:
Stephen Copulos
John de Vries
Gabriel Chiappini
Non-Executive Chairman
Appointed 22 January 2015
Executive Director
Appointed 24 April 2017
Non Executive Director
Appointed 21 March 2012
Company Secretary
Appointed 12 July 2013
Steven Tambanis
Former Managing Director
Appointed 22 January 2015
Resigned 24 April 2017
Except as noted, the named persons held their current positions for the whole of the financial year and since the end of the
financial year.
ReMuneRaTIOn POLICY
The Board of Directors is responsible for determining and reviewing compensation arrangements for directors and the executive
team. The Board assesses the appropriateness of the nature of the amount of remuneration of such officers on a periodic basis by
reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the
retention of a high quality Board and Executive team and that each staff member’s remuneration package properly reflects that
person’s duties and responsibilities.
The Board may, however, exercise its discretion in relation to approving incentive bonuses, options and performance rights.
eLeMenTS Of DIReCTOR anD exeCuTIVe ReMuneRaTIOn
Remuneration packages contain the following key elements:
• Short term benefits – salaries / fees
• Annual leave benefits
• Post-employment benefits - superannuation
• Share based payments
Black Rock Mining liMited 2017 AnnuAl report dIreCtorS’ report
16
REMUNERATION REPORT (continued)
eLeMenTS Of DIReCTOR anD exeCuTIVe ReMuneRaTIOn (Continued)
No non-monetary short-term benefits, prescribed retirement benefits or other post-employment benefits were paid. The following
table discloses the remuneration of the Directors and executives of the Company:
2017
Stephen Copulos
John de Vries (i)
Gabriel Chiappini
Steven Tambanis (ii)
ShORT TeRM
eMPLOYee
BenefITS -
SaLaRY
anD feeS
$
108,333
130,023
67,500
261,667
567,523
OTheR (iii)
POST
eMPLOYMenT
BenefITS -
SuPeR-
annuaTIOn
ShaRe BaSeD
PaYMenT
TOTaL
% LInKeD TO
PeRfORManCe
-
7,696
-
16,016
23,712
$
-
12,352
-
26,167
38,519
$
$
90,547
56,806
90,546
128,066
365,965
198,880
206,877
158,046
431,916
995,719
45.5%
27.5%
57.3%
29.7%
2016
SHORT TERM
EMPLOYEE BENEFITS
- SALARY AND FEES
OTHER (iii)
POST EMPLOYMENT
BENEFITS -
SUPERANNUATION
SHARE BASED
PAYMENT
TOTAL
% LINKED TO
PERFORMANCE
Stephen Copulos
Steven Tambanis
Gabriel Chiappini
$
100,000
237,500
66,000
403,500
-
$
-
21,164
24,250
-
-
21,164
24,250
$
$
118,888
195,279
118,888
433,055
218,888
478,193
184,888
881,969
54.3%
40.8%
64.3%
(i) Mr John de Vries remuneration package consists of an annual salary of $300,000 plus statutory superannuation and 2.4 million performance
rights subject to satisfaction of milestones and continuous employment.
(ii) Mr Steven tambanis resigned as director of the Company 24 April 2017. Prior to his resignation in September 2016, he renegotiated his contract
to an annual salary of $330,000 plus 10% superannuation.
(iii) other relates to accrual of annual leave benefits.
KeY TeRMS Of eMPLOYMenT COnTRaCTS
The Directors and executive are employed under contracts, which have no fixed term.
The contract binding the Chairman may be terminated by the individual or the Board by giving three months’ notice in writing to
terminate the Consultancy Agreement under which his services are contracted.
The contract binding the Executive Director may be terminated by the individual or the Board by giving six months’ notice in writing
to terminate the Employment Agreement under which his services are contracted.
The Non-Executive Director is bound by contract. The contract of the Non-Executive Director may be terminated at any time by him
by notice in writing or by shareholders acting by majority vote.
ShaRe BaSeD PaYMenTS aRRanGeMenTS
options
There were no options issued during the year, affecting key management personnel remuneration.
Black Rock Mining liMited 2017 AnnuAl report 17
dIreCtorS’ report
REMUNERATION REPORT (continued)
ShaRe BaSeD PaYMenTS aRRanGeMenTS (Continued)
Performance rights
Performance rights issued to directors in the financial Year 2017:
The aggregate number of performance rights issued during the year and held directly, indirectly or beneficially by specified Directors
and other Key Management Personnel of the Company or their personally related entities are as follows:
DIReCTORS
E
C
N
A
M
R
O
F
R
E
P
F
O
R
E
B
M
U
N
S
T
H
G
R
I
E
C
N
A
M
R
O
F
R
E
P
F
O
E
U
L
A
V
–
S
t
h
G
R
I
B
&
A
E
H
C
N
A
R
T
$
Stephen Copulos
1,800,000
162,000
Gabriel Chiappini
1,800,000
162,000
E
C
N
A
M
R
O
F
R
E
P
F
O
E
U
L
A
V
C
E
H
C
N
A
R
T
–
S
t
h
G
R
I
$
64,800
64,800
E
C
N
A
M
R
O
F
R
E
P
F
O
E
U
L
A
V
D
E
H
C
N
A
R
T
–
S
t
h
G
R
I
$
E
C
N
A
M
R
O
F
R
E
P
F
O
E
U
L
A
V
E
E
H
C
N
A
R
T
–
S
t
h
G
R
I
$
E
C
N
A
M
R
O
F
R
E
P
A
E
H
C
N
A
R
T
S
T
H
G
R
I
E
C
N
A
M
R
O
F
R
E
P
B
E
H
C
N
A
R
T
S
T
H
G
R
I
E
C
N
A
M
R
O
F
R
E
P
C
E
H
C
N
A
R
T
S
T
H
G
R
I
-
-
- 600,000 600,000 600,000
- 600,000 600,000 600,000
E
C
N
A
M
R
O
F
R
E
P
D
E
H
C
N
A
R
T
S
T
H
G
R
I
-
-
E
C
N
A
M
R
O
F
R
E
P
E
E
H
C
A
R
T
S
T
H
G
R
I
-
-
John de Vries
2,400,000
-
-
150,000
139,200
-
-
- 1,200,000 1,200,000
Steven Tambanis
2,400,000
216,000
86,400
-
- 800,000 800,000 800,000
-
-
PeRfORManCe RIGhT
GRANT DATE
EXPIRY DATE
FAIR VALUE
AT GRANT DATE
EXERCISE PRICE
Tranche A
Tranche B
Tranche C
Tranche D (400,000)
Tranche D (400,000)
Tranche D (400,000)
Tranche E (400,000)
Tranche E (400,000)
Tranche E (400,000)
30 November 2016
30 November 2016
30 November 2016
1 March 2017
1 March 2017
1 March 2017
1 March 2017
1 March 2017
1 March 2017
31 December 2018
31 December 2018
31 December 2018
1 March 2018
1 March 2019
1 March 2020
1 March 2018
1 March 2020
1 March 2020
$0.135
$0.135
$0.108
$0.125
$0.125
$0.125
$0.125
$0.125
$0.098
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
The Performance Rights will vest upon satisfaction of the following milestones:
(i) Tranche A : The Company announces a binding offtake agreement or aggregate binding offtake agreement totalling 50%
or more of the current targeted production as outlined in the Company’s scoping study, as announced on 22 March 2016,
on or before 31 December 2016;
(ii) Tranche B : The delivery of a positive definitive feasibility study by the Company on its Mahenge project in Tanzania that matches
or exceeds the economic model as disclosed in the scoping study released 22 March 2016; and
(iii) Tranche C : The Company achieving a target share prices of $0.30 based on a 10 day VWAP.
(iv) Tranche D : Subject to the Executive’s continuous employment and will vest over 3 years.
(v) Tranche E : 400,000 will vest upon the Company delivering a Definitive Feasibility Study in relation the Company’s Mahenge
project on or before 1 March 2018; 400,000 will vest upon, to the satisfaction of the Board, the establishment of a development
team to take the Mahenge project into construction; and 400,000 will vest upon the Company achieving a closing share price of
$0.45 based on a 10 day VWAP.
OPENING
BALANCE
GRANTED
IN PERIOD
CONVERTED
IN PERIOD
EXPIRED
IN PERIOD
CLOSING
BALANCE
NO. OF ORDINARY
SHARES ISSUED
AMOUNT
PAID
VALUE OF
SHARES ISSUED
Tranche A
Tranche B
Tranche C
Tranche D
Tranche E
-
-
-
-
2,000,000
2,000,000
2,000,000
1,200,000
1,200,000
8,400,000
-
-
-
-
-
-
(2,000,000)
-
-
-
-
-
2,000,000
2,000,000
1,200,000
1,200,000
(2,000,000)
6,400,000
-
-
-
-
-
-
Nil
Nil
Nil
Nil
Nil
Nil
-
-
-
-
-
-
Black Rock Mining liMited 2017 AnnuAl report
18
dIreCtorS’ report
REMUNERATION REPORT (continued)
ShaRe BaSeD PaYMenTS aRRanGeMenTS (Continued)
Performance rights (continued)
Performance rights issued to directors in the financial Year 2016:
The aggregate number of performance rights issued during the year and held directly, indirectly or beneficially by specified Directors
and other Key Management Personnel of the Company or their personally related entities are as follows:
DIReCTORS
NUMBER OF
PERFORMANCE
RIGHTS
VALUE OF
PERFORMANCE
RIGhtS –
TRANCHE A & B
VALUE OF
PERFORMANCE
RIGhtS –
TRANCHE C
TRANCHE A
PERFORMANCE
RIGHTS
TRANCHE B
PERFORMANCE
RIGHTS
TRANCHE C
PERFORMANCE
RIGHTS
Stephen Copulos
Steven Tambanis
Gabriel Chiappini
1,475,000
1,950,000
1,475,000
$59,000
$78,000
$59,000
$19,470
$25,740
$19,470
491,667
650,000
491,667
491,667
650,000
491,667
491,666
650,000
491,666
PeRfORManCe RIGhT
GRANT DATE
EXPIRY DATE
FAIR VALUE
AT GRANT DATE
EXERCISE PRICE
Tranche A
Tranche B
Tranche C
30 November 2015
31 December 2018
30 November 2015
31 December 2018
30 November 2015
31 December 2018
$0.060
$0.060
$0.0396
Nil
Nil
Nil
The Performance Rights will vest upon satisfaction of the following milestones:
(i) Tranche A : The Company announces a JORC Code compliant resource of not less than 3,000,000 tonnes of contained graphite
at 8% or more total graphite from its Graphite Projects;
(ii) Tranche B : The Company announces a JORC compliant resource of greater than 4,000,000 tonnes of contained graphite at 8%
or more total graphite contents from its Graphite Projects; and
(iii) Tranche C : From the date of receipt of the Performance Rights, the Company’s 10 day VWAP is equal to or greater than $0.1275
for a period of 10 consecutive trading days.
In August 2016, the Company announced its achievement of the 10 day VWAP milestone for Tranche C of these Performance Rights
(see below).
OPENING
BALANCE
GRANTED
IN PERIOD
CONVERTED
IN PERIOD
EXPIRED
IN PERIOD
CLOSING
BALANCE
Tranche A
Tranche B
Tranche C
-
-
1,633,333
1,633,333
-
-
-
-
-
-
(1,633,333)
(1,633,333)
-
-
-
-
-
-
-
-
NO. OF
ORDINARY
SHARES ISSUED
-
-
1,633,333
1,633,333
AMOUNT
PAID
VALUE OF
SHARES ISSUED
Nil
Nil
Nil
Nil
-
-
$66,000
$66,000
other information
financial transactions with KeY management Personnel
During the financial year the following amounts were paid to Key Management Personnel for services in addition to those shown
elsewhere in this note:
DIReCTOR
VALUE
DESCRIPTION
$
Gabriel Chiappini
$105,000
Payments to Laurus Corporate Services for financial services provided during
the reporting period includes but not limited to management of the Company
Secretarial function, Company’s Corporate and Administration function,
Accounting and Finance function, Capital Markets & Investor Relations,
Compliance & Corporate Governance and ASX and ASIC requirements.
Black Rock Mining liMited 2017 AnnuAl report dIreCtorS’ report
19
RELATIONSHIP BETWEEN COMPANY PERFORMANCE
AND REMUNERATION POLICY
Remunerations levels are not dependent upon any performance criteria as the nature of the consolidated entity’s operations is
exploration and they are not generating profit.
The table below sets out summary information about the Company’s earnings and movements in shareholder wealth for the 5 years
to 30 June 2017:
Revenue ($’s)
Net loss before tax ($’s)
Net loss after tax ($’s)
Share Price at start of year
Share Price at year end
Loss per share
2017
187,548
(2,590,371)
(2,590,371)
$0.066
$0.066
$0.0384
2016
11,602
(1,349,305)
(1,349,305)
$0.028
$0.066
$0.005
2015
80,616
(995,121)
(995,121)
$0.02
$0.03
$0.007
2014
29,681
2013
33,539
(2,428,562)
(2,428,562)
(6,060,248)
(5,970,061)
$0.02
$0.02
$0.026
$0.04
$0.02
$0.060
All share price and loss per share disclosures for 2014 – 2012 above are calculated following the 20-for-1-share consolidation
during 2015.
Movement in shares
The aggregate number of shares of the Company held directly, indirectly or beneficially by Directors and other Key Management
Personnel of the Company or their personally related entities are as follows:
2017
ORDInaRY ShaReS
1 JuLY 2016
PuRChaSeS
ReCeIVeD
On exeRCISe
Of OPTIOnS/
PeRfORManCe
RIGhTS
SaLeS
OTheR
ChanGeS (i)
30 June 2017
Stephen Copulos
71,480,172
6,265,833
16,049,998
John de Vries
Gabriel Chiappini
Steven Tambanis
-
3,383,335
7,219,649
650,000
266,667
210,000
-
1,374,998
2,766,666
-
-
-
-
-
-
-
93,796,003
650,000
5,025,000
(10,186,315)
-
(i) Balance at time of ceasing to be a Key Management Personnel.
Movement in unlisted options
The aggregate numbers of unlisted options of the Company held directly, indirectly or beneficially by specified Directors and other
Key Management Personnel of the Company or their personally related entities are as follows:
2017
6
1
0
2
Y
L
u
J
1
Stephen Copulos
1,291,080
John de Vries
-
Gabriel Chiappini
75,000
Steven Tambanis
-
e
e
R
f
D
e
T
n
a
R
G
I
G
n
h
C
a
T
T
a
S
n
O
I
T
P
O
-
-
-
-
n
O
I
T
a
R
e
n
u
M
e
R
S
a
D
e
T
n
a
R
G
S
n
O
I
T
P
O
-
-
-
-
D
e
S
P
a
L
S
n
O
I
T
P
O
-
-
-
-
S
e
G
n
a
h
C
R
e
h
T
O
7
1
0
2
e
n
u
J
0
3
T
a
e
L
B
a
S
I
C
R
e
x
e
7
1
0
2
e
n
u
J
0
3
D
n
a
D
e
T
S
e
V
- 1,291,080 1,291,080
-
(75,000)
-
-
-
-
-
-
-
G
n
I
R
u
D
D
e
T
S
e
V
R
a
e
Y
e
h
T
-
-
-
-
Black Rock Mining liMited 2017 AnnuAl report
dIreCtorS’ report
20
RELATIONSHIP BETWEEN COMPANY PERFORMANCE
AND REMUNERATION POLICY (continued)
Movement in listed options
The aggregate number of listed options of the Company held directly, indirectly or beneficially by specified Directors and other Key
Management Personnel of the Company or their personally related entities are as follows:
2017
1 JuLY 2016
OPTIOnS
GRanTeD fRee
aTTaChInG
OPTIOnS
exeRCISeD
SaLeS
OTheR
ChanGeS (i)
30 June 2017
Stephen Copulos
21,666,666
John de Vries
Gabriel Chiappini
Steven Tambanis
-
516,666
1,400,000
-
-
-
-
(15,000,000)
-
(250,000)
(1,000,000)
-
-
-
-
-
-
-
(400,000)
6,666,666
-
266,666
-
(i) Balance at time of ceasing to be a Key Management Personnel.
Movement in performance rights
The aggregate number performance rights of the Company held directly, indirectly or beneficially by specified Directors and other
Key Management Personnel of the Company or their personally related entities are as follows:
2017
Stephen Copulos
John de Vries
Gabriel Chiappini
Steven Tambanis
1 JuLY 2016
PeRfORManCe
RIGhTS GRanTeD
PeRfORManCe
RIGhTS exeRCISeD
OTheR
ChanGeS (i)
30 June 2017
1,049,998
1,800,000
(1,049,998)
-
2,400,000
-
1,049,998
1,766,666
1,800,000
(1,049,998)
2,400,000
(1,766,666)
(2,400,000)
-
-
-
1,800,000
2,400,000
1,800,000
-
(i) Balance at time of ceasing to be a Key Management Personnel
enD of reMUneraTIon rePorT
The director’s report is signed in accordance with a resolution of directors made pursuant to s. 298(2) of the Corporations Act 2001.
On behalf of the Directors.
Stephen Copulos
CHAIRMAN
28 September 2017
Black Rock Mining liMited 2017 AnnuAl report audItor’S IndependenCe deClaratIon
21
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
The Board of Directors
Black Rock Mining Limited
Level 1, 35 Havelock Street
WEST PERTH WA 6005
28 September 2017
Dear Board Members
Black Rock Mining Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Black Rock Mining Limited.
As lead audit partner for the audit of the consolidated financial statements of Black Rock
Mining Limited for the financial year ended 30 June 2017, I declare that to the best of my
knowledge and belief, there have been no contraventions of:
(i)
audit; and
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the
any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Ian Skelton
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
Black Rock Mining liMited 2017 AnnuAl report
ConSolIdated StateMent of profIt or loSS
and other CoMprehenSIve InCoMe
for the year ended 30 June 2017
22
Continuing operations
Interest income
Government Grants
Administration expenses
Employee benefit expense
Consulting expense
Depreciation and amortisation expense
Net foreign currency exchange differences
Other expenses from ordinary activities
Impairment of investments
Deferred exploration written off
Loss before tax
Income tax benefit
Loss for the year from continuing operations
Discontinued operations
Profit for the year from discontinued operations
LOSS fOR The YeaR
Other comprehensive income, net of income tax
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences for foreign operations
Income tax on other comprehensive income
TOTaL COMPRehenSIVe InCOMe fOR The YeaR aTTRIBuTaBLe TO
MeMBeRS Of BLaCK ROCK MInInG LIMITeD
Loss for the year attributable to owners of the Company
Total comprehensive income attributable to the owners of the Company
Loss per share
From continuing and discontinuing operations
Basic and diluted loss per share
From continuing operations
Basic and diluted loss per share
fOR The
YeaR enDeD
30/06/2017
$
FOR THE
YEAR ENDED
30/06/2016
$
NOTE
8,081
179,467
(901,015)
(445,071)
(1,258,721)
(3,442)
(34,510)
(361,270)
(1,030,856)
11,602
-
(536,278)
(178,959)
(458,488)
-
15,703
(160,947)
-
-
(274,816)
(3,847,337)
(1,582,183)
-
-
(3,847,337)
(1,582,183)
1,256,966
232,878
(2,590,371)
(1,349,305)
27,144
(100,623)
-
-
(2,563,227)
(1,449,928)
(2,590,371)
(2,563,227)
(1,349,305)
(1,449,928)
($0.1176)
($0.0055)
($0.0794)
($0.0064)
6
7
6
22
22
the above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
Black Rock Mining liMited 2017 AnnuAl report ConSolIdated StateMent
of fInanCIal poSItIon
aS at 30 June 2017
aSSeTS
Current assets
Cash and bank balances
Trade and other receivables
Assets classified as held for sale
Total current assets
non-current assets
Exploration & evaluation asset
Property, plant and equipment
Other financial assets
Total non-current assets
Total assets
LIaBILITIeS
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
net assets
equity
Issued capital
Reserves
Accumulated losses
Total equity
23
NOTE
aS aT
30/06/2017
$
AS AT
30/06/2016
$
9
8
11
12
13
14
15
16
2,139,779
2,359,185
37,880
2,177,659
-
2,177,659
24,628
2,383,813
428,462
2,812,275
13,540,833
7,639,211
26,425
477,357
3,887
105,300
14,044,615
7,748,398
16,222,274
10,560,673
628,600
52,573
485,043
28,861
681,173
513,904
681,173
513,904
15,541,101
10,046,769
47,925,610
40,253,116
2,378,713
1,966,504
(34,763,222)
(32,172,851)
15,541,101
10,046,769
the above consolidated statement of financial position should be read in conjunction with the accompanying notes.
Black Rock Mining liMited 2017 AnnuAl report ConSolIdated StateMent
of ChangeS In equIty
for the year ended 30 June 2017
24
ISSUED
CAPITAL
ACCUMULATED
LOSSES
SHARE BASED
PAYMENT
RESERVE
NOTE
$
$
$
FOREIGN
CURRENCY
RESERVE
$
TOTaL
equITY
$
Balance at 30 June 2015
36,274,617
(30,846,306)
871,015
(58,657)
6,240,669
Loss for the year
Other comprehensive income
for the year, net of tax
Total comprehensive
income for the year
Issue of ordinary shares
Reallocation of option reserve
of free attaching options
Share based payment relating
to capital raising costs
Cost of share capital issued
Issue of shares following
vesting of performance rights
Options expired during the year
Fair value of
share based payment
-
-
-
(1,349,305)
-
(1,349,305)
5,212,317
(1,198,592)
(68,790)
(387,636)
421,200
-
-
-
-
-
-
22,760
-
-
-
-
1,198,592
68,790
-
(421,200)
(22,760)
-
431,347
-
(1,349,305)
(100,623)
(100,623)
(100,623)
(1,449,928)
-
-
-
-
-
-
5,212,317
-
-
(387,636)
-
-
431,347
Balance at 30 June 2016
14,15,16
40,253,116
(32,172,851)
2,125,784
(159,280)
10,046,769
Loss for the year
Other comprehensive income
for the year, net of tax
Total comprehensive
income for the year
Issue of ordinary shares
Reallocation of option reserve
of free attaching options
Cost of share capital issued
Issue of shares following
vesting of performance rights
Options exercised
during the year
Options expired during the year
Fair value of
share based payment
-
-
-
(2,590,371)
-
(2,590,370)
7,170,248
-
(329,711)
150,867
681,090
-
-
-
-
-
-
-
-
-
-
-
-
-
680,667
-
(150,867)
(681,090)
(682)
537,036
-
(2,590,371)
27,145
27,145
27,145
(2,563,226)
-
-
-
-
-
-
-
7,170,248
680,667
(329,711)
-
-
(682)
537,036
Balance at 30 June 2017
14,15,16
47,925,610
(34,763,222)
2,510,848
(132,135)
15,541,101
the above consolidated statement of changes in equity should be read in conjunction with accompanying notes.
Black Rock Mining liMited 2017 AnnuAl report ConSolIdated StateMent
of CaSh flowS
for the year ended 30 June 2017
25
Cash flow from operating activities
Payments to suppliers and employees
Government grants received
fOR The
YeaR enDeD
30/06/2017
$
FOR THE
YEAR ENDED
30/06/2016
$
NOTE
(1,614,295)
(879,491)
179,467
-
Net cash flows used in operating activities
9
(1,434,828)
(879,491)
Cash flow from investing activities
Exploration expenditure
Interest received
Payments for property, plant and equipment
Proceeds on sale of investment
Proceeds on sale of equity investments
(5,860,569)
(4,017,515)
8,081
(25,980)
4,791
305,300
11,602
(3,887)
238,450
-
Net cash flows used in investing activities
(5,568,377)
(3,771,350)
Cash flows from financing activities
Proceeds from issue of shares and options
Payment of share issue costs
7,130,250
(329,711)
5,000,115
(393,502)
Net cash flows provided by financing activities
6,800,539
4,606,613
Net increase/(decrease) in cash held
Cash at the beginning of the financial year
Effect of exchange movement on cash balances
(202,666)
(44,228)
2,359,185
2,489,586
(16,740)
(86,173)
Cash and cash equivalents at the end of the year
9
2,139,779
2,359,185
the above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Black Rock Mining liMited 2017 AnnuAl report noteS to the
ConSolIdated fInanCIal StateMentS
for the year ended 30 June 2017
26
1 GENERAL INFORMATION
STaTeMenT Of COMPLIanCe
These financial statements are general purpose financial statements, which have been prepared in accordance with the
Corporations Act 2001, Accounting Standards and Interpretations, and comply with other requirements of the law.
The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing the
consolidated financial statements, the Company is a for-profit entity.
Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that
the financial statements and notes of the Company and the Group comply with International Financial Reporting Standards (‘IFRS’).
The financial statements were authorised for issue by the directors on 28 September 2017.
GOInG COnCeRn
The financial report has been prepared on the going concern basis which assumes continuity of normal business activities
and the realisation of assets and settlement of liabilities in the ordinary course of business.
The consolidated entity has incurred net losses of $2,590,369 (30 June 2016: $1,349,305) and experienced net cash
outflows from operating activities of $1,434,828 (30 June 2016: $879,491) and cash outflows from exploration and
evaluation expenditure of $5,860,569 (30 June 2016: $4,017,515) for the year ended 30 June 2017.
During the financial period the consolidated entity deployed its working capital into its graphite prospects in Mahenge,
Tanzania which resulted in the Company announcing an optimized pre-feasibility study. The Company has stated that
its 2018 strategic objectives includes moving into its development phase to execute on its strategy to develop and bring
Mahenge into production and in parallel penetrate the battery materials supply chain. In addition the Company plans to
continue optimising its metallurgical analysis and testing on its graphite to produce high quality and high yielding battery
grade concentrates.
The Directors have prepared a cash flow forecast modelling the Company’s key objectives, which indicated the consolidated
entity has a requirement for additional capital to invest in the Company’s stated strategic objectives. As a result of the
Tanzanian Government announced legislative changes to the mining industry, the Company reduced its operating cash
outflows to a minimum which has allowed it to reduce its operating costs until it receives further clarity on the Tanzanian
mining regulations and mining code.
The cash flow forecast for the period ending 30 September 2018 indicates that the consolidated entity is required to raise
additional funding in order to continue its planned exploration and evaluation programme on its graphite prospects in
Tanzania and to fund working capital.
The Directors are satisfied the going concern basis of preparation is appropriate through a continued focus on maintaining
a tight control over its working capital outflows and the Company being able to secure funding sufficient to meet the
company’s requirements to continue as a going concern from the following sources:
• Capital & Equity Markets
• Current Shareholders
• Alternative financing sources
Based on the company’s history of raising capital and subject to the general market conditions, the Directors are confident
of the company’s ability to raise additional capital, as required. Based on this and on the cash flow forecasts, the Directors
believe that the going concern basis of preparation is appropriate.
Should the consolidated entity be unable to achieve the matters set out above, or otherwise reduce its operational spending
in line with available cash resources, there is a material uncertainty whether the consolidated entity will be able to continue
as a going concern and therefore, whether it will realise its assets and extinguish its liabilities as and when they fall due.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset
amounts, or to the amounts and classification of liabilities that might be necessary should the consolidated entity not
continue as a going concern.
Black Rock Mining liMited 2017 AnnuAl report
27
2 APPLICATION OF NEW AND REVISED ACCOUNTING STANDARDS
2.1
aMenDMenTS TO aCCOunTInG STanDaRDS ThaT aRe ManDaTORILY effeCTIVe fOR The
CuRRenT RePORTInG PeRIOD
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting
Standards Board (the AASB) that are relevant to their operations and effective for an accounting period that begins on or
after 1 July 2016.
New and revised standards and amendments thereof and Interpretations effective for the current year end that are relevant
to the Group include:
• AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation
and Amortisation
• AASB 2014-9 Amendments to Australian Accounting Standards – Equity Method in Separate Financial Statements
• AASB 2015-1 Amendments to Australian Accounting Standards – Annual Improvement to Australian Accounting
Standards 2012-2014 Cycle
• AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101
The application of these amendments has not had a material presentation impact on the financial performance or financial
position of the Group.
2.2
STanDaRDS anD InTeRPReTaTIOnS ISSueD nOT YeT aDOPTeD
At the date of authorisation of the financial statements, the Standards and Interpretations that were issued but not yet
effective are listed below.
STanDarD/InTerPreTaTIon
effeCTIVe for annUaL
rePorTIng PerIoDS
begInnIng on or afTer
aPPLICabILITy
for year enDeD
AASB 9 Financial Instruments, and the relevant amending standards
1 January 2018
30 June 2019
AASB 15 Revenue from Contracts with Customers, AASB 2014-5
Amendments to Australian Accounting Standards arising from AASB 15,
AASB 2015-8 Amendments to Australian Accounting Standards – Effective
Date of AASB 15, and AASB 2016-3 Amendments to Australian Accounting
Standards – Clarifications to AASB 15
AASB 16 Leases
AASB 2014-10 Amendments to Australian Accounting Standards – Sale
or Contribution of Assets between an investor and its Associate or Joint
Venture and AASB 2015-10 Amendments to Australian Accounting
Standards – Effective Date of Amendments to AASB 10 and AASB 128
AASB 2016-1 Amendments to Australian Accounting Standards –
Recognition of deferred tax Assets for unrealised Losses
1 January 2018
1 January 2019
30 June 2019
30 June 2020
1 January 2018
30 June 2019
1 January 2017
30 June 2018
AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure
Initiative: Amendments to AASB 107
1 January 2017
30 June 2018
AASB 2016-5 Amendments to Australian Accounting Standards –
Classification and Measurement of Share-based Payment Transactions
AASB 2017-1 Amendments to Australian Accounting Standards –
Transfers of Investment Property, Annual Improvements 2014–2016 Cycle
and other Amendments
AASB 2017-2 Amendments to Australian Accounting Standards – Further
Annual Improvements 2014-2016 Cycle
AASB Interpretation 22 Foreign Currency Transactions and Advance
Consideration
1 January 2018
30 June 2019
1 January 2018
30 June 2019
1 January 2017
30 June 2018
1 January 2018
30 June 2019
At the date of authorisation of the financial statements, the following IASB Standards and IFRIC Interpretations (for which
Australian equivalent Standards and Interpretations have not yet been issued) were on issue but not yet effective:
The impact of these recently issued or amended standards and interpretations have not yet been determined by the Group.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 28
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1
BaSIS Of PRePaRaTIOn
The consolidated financial statements have been prepared on the basis of historical cost, except for certain properties and
financial instruments that are measured at revalued amounts or fair values at the end of each reporting period, as explained
in the accounting policies below.
Historical cost is generally based on the fair values of the consideration given in exchange for goods and services.
All amounts are presented in Australian dollars, unless otherwise noted.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date, regardless of whether that price is directly observable or estimated using
another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the
characteristics of the asset or liability if market participants would take those characteristics into account when pricing the
asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated
financial statements is determined on such a basis, except for share-based payment transactions that are within the scope
of AASB 2, leasing transactions that are within the scope of AASB 117, and measurements that have some similarities to
fair value but are not fair value, such as net realisable value in AASB 102 ‘Inventories’ or value in use in AASB 136
‘Impairment of Assets’.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the
degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value
measurement in its entirety, which are described as follows:
•
•
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access
at the measurement date;
Level 2 inputs are inputs, other than quoted prices included in Level 1, that are observable for the asset or liability,
either directly or indirectly; and
•
Level 3 inputs are unobservable inputs for the asset or liability.
The principal accounting policies are set out below.
3.2
BaSIS Of COnSOLIDaTIOn
The consolidated financial statements incorporate the financial statements of the Company and entities (including structured
entities) controlled by the Company and its subsidiaries. Control is achieved when the Company:
• has power over the investee;
•
• has the ability to use its power to affect its returns.
is exposed, or has rights, to variable returns from its involvement with the investee; and
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to
one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company
loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are
included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains
control until the date when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the
non-controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the
non-controlling interests even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line
with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
3.3 nOn-CuRRenT aSSeTS heLD fOR SaLe
Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use. This condition is regarded as met only when the asset
(or disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary
for sales for such asset (or disposal group) and its sale is highly probable. Management must be committed to the sale,
which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
When the Group is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that
subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Group will
retain a non-controlling interest in its former subsidiary after the sale.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 29
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.3 nOn-CuRRenT aSSeTS heLD fOR SaLe (Continued)
When the Group is committed to a sale plan involving disposal of an investment, or a portion of an investment, in an
associate or joint venture, the investment or the portion of the investment that will be disposed of is classified as held for
sale when the criteria described above are met, and the Group discontinues the use of the equity method in relation to the
portion that is classified a held for sale. Any retained portion of an investment in an associate or a joint venture that has
not been classified as held for sale continues to be accounted for using the equity method. The Group discontinues the use
of the equity method at the time of disposal when the disposal results in the Group losing significant influence over the
associate or joint venture.
After the disposal takes place, the Group accounts for any retained interest in the associate or joint venture in accordance
with AASB 139 unless the retained interest continues to be an associate or a joint venture, in which case the Group uses the
equity method (see the accounting policy regarding investments in associates or joint ventures above).
Non-current assets and disposal groups classified as held for sale are measured at the lower of cost, their previous carrying
amount and fair value less costs to sell.
3.4
ReVenue ReCOGnITIOn
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue
can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
3.4.1
Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group
and the amount of revenue can be measured reliably. Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.
3.5
fOReIGn CuRRenCIeS
The individual financial statements of each group entity are presented in the currency of the primary economic environment
in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results
and financial position of each group entity are expressed in Australian dollars (‘$’), which is the functional currency of the
Company and the presentation currency for the consolidated financial statements.
In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions.
At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates
prevailing at that date. Non- monetary items carried at fair value that are denominated in foreign currencies are retranslated
at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for:
• exchange differences on foreign currency borrowings relating to assets under construction for future productive use,
which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign
currency borrowings;
• exchange differences on transactions entered into in order to hedge certain foreign currency risks; and
• exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither
planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised
initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.
For the purpose of presenting these consolidated financial statements, the assets and liabilities of the Group’s foreign operations
are translated into Australian dollars using exchange rates prevailing at the end of the reporting period. Income and expense
items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that
period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are
recognised in other comprehensive income and accumulated in equity (and attributed to non-controlling interests as appropriate).
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal
involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint
arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset),
all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the
Company are reclassified to profit or loss.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 30
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.5
fOReIGn CuRRenCIeS (Continued)
In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not result in the
Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed
to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. partial disposals
of associates or joint arrangements that do not result in the Group losing significant influence or joint control),
the proportionate share of the accumulated exchange differences is reclassified to profit or loss.
Goodwill and fair value adjustments to identifiable assets acquired and liabilities assumed through acquisition of a foreign
operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the
end of each reporting period. Exchange differences arising are recognised in other comprehensive income.
3.6
eMPLOYee BenefITS
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and long service
leave in the period the related service is rendered.
Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the
remuneration rate expected to apply at the time of the settlement.
Liabilities recognised in respect of long term benefits are measured as the present value of the estimated future cash
outflows to be made by the Group in respect of services provided by employees up to reporting date.
3.7
ShaRe-BaSeD PaYMenT TRanSaCTIOnS
The Company provides benefits to employees and others (i.e. consultants) of the Company in the form of share- based
payment transactions, whereby employees and others render services in exchange for shares or rights over shares
(“Equity–settled transactions”).
There is currently one plan in place to provide these benefits being an Employee Share Option Plan (“ESOP”), which provides
benefits to Directors, senior executives and staff.
The cost of these equity-settled transactions is measured by reference to fair value at the date at which they are granted.
An external valuer using the Black-Scholes model determines the fair value.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the
price of the shares of Black Rock Mining Limited (“market conditions”).
The cost of equity settled securities is recognised, together with a corresponding increase in equity, over the period in which
the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the
award (“vesting date”).
3.8
TaxaTIOn
Income tax expense represents the sum of the tax currently payable and deferred tax.
3.8.1 Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in
the consolidated statement of profit or loss and other comprehensive income because of items of income or expense that
are taxable or deductible in other years and items that are never taxable or deductible. The Group’s current tax is calculated
using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 31
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.8
TaxaTIOn (Continued)
3.8.2 Deferred Tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the
consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax
liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is probable that taxable profits will be available against which those
deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary
difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction
that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the
temporary difference arises from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and
associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference
and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments and interests are only recognised to the extent that it is
probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and
they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it
is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is
settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of
the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow
from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of
its assets and liabilities.
Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against
current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis.
3.8.3 Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case the current and deferred tax are also recognised in other
comprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from the initial accounting
for a business combination, the tax effect is included in the accounting for the business combination.
Black Rock Mining Limited and its wholly owned Australian controlled entities have implemented the tax consolidation legislation.
The head entity, Black Rock Mining Limited, and the controlled entities in the tax-consolidation group account for their own
current and deferred tax amounts. These tax amounts are measured as if each entity in the tax-consolidation group continues
to be a stand-alone entity in its own right.
In addition to its own current and deferred tax amounts, Black Rock Mining Limited also recognises the current tax liabilities
(or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities
in the tax-consolidation group.
3.9
PROPeRTY, PLanT anD equIPMenT
Each class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and
impairment losses.
Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any impairment in value.
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances indicate
the carrying value may not be recoverable. For an asset that does not generate largely independent cash inflows, the
recoverable amount is determined for the cash-generating unit to which the asset belongs. If any such indication exists
where the carrying values exceed the estimated recoverable amount, the assets or cash generating units are written down
to their recoverable amount.
Depreciation
Depreciable non-current assets are depreciated over their expected economic life using the straight-line method.
Profits and losses on disposal of non-current assets are taken into account in determining the operating loss for the year.
The depreciation rate used for each class of assets is as follows:
Plant and equipment: 7.5% - 40%
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017
32
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.10 exPLORaTIOn exPenDITuRe
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of interest.
These costs are only carried forward to the extent that they are expected to be recouped through the successful development
of the area or where activities in the area have not yet reached a stage that permits reasonable assessment of the existence
of economically recoverable reserves, otherwise costs are expensed.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to
abandon the area is made.
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.
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.
Costs of site restoration are provided over the life of the facility from when exploration commences and are included in
the costs of that stage. Site restoration costs include the dismantling and removal of mining plant, equipment and building
structures, waste removal, and rehabilitation of the site in accordance with clauses of the permits. Such costs have been
determined using estimates of future costs, current legal requirements and technology on a discounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site restoration,
there is uncertainty regarding the nature and extent of the restoration due to community expectations and future legislation.
Accordingly the costs have been determined on the basis that the restoration will be completed within one year of
abandoning the site.
3.11
IMPaIRMenT Of TanGIBLe anD InTanGIBLe aSSeTS OTheR Than GOODwILL
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When 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. When a reasonable and consistent basis of allocation can be identified,
corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group
of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least
annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows
have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised
immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is
treated as a revaluation decrease.
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased
to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit)
in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried
at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
3.12 fInanCIaL InSTRuMenTS
Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions
of the instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable
to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at
fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 33
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.12 fInanCIaL InSTRuMenTS (Continued)
3.12.1 financial assets
Financial assets are classified into the following specified categories, financial assets ‘at fair value through profit or loss’
(FVTPL), ‘held to maturity’ investments, ‘available-for-sale’ (AFS) financial assets and ‘loans and receivables’. The classification
depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular
way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or
sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation
or convention in the marketplace.
3.12.1.1 effective interest method
The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest
income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts
(including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and
other premiums or discounts) through the expected life of the debt instrument, or (where appropriate) a shorter period,
to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified
as at FVTPL.
3.12.1.2 loans and receivables
Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active
market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective
interest method, less any impairment. Interest income is recognised by applying the interest rate, except for short-term
receivables when the effect of discounting is immaterial.
3.12.1.3 imPairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period.
Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events
that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have
been affected.
For certain categories of financial assets, such as trade receivables, assets that are assessed for impairment on a collective
basis even if they were assessed not to be impaired individually. Objective evidence of impairment for a portfolio of
receivables could include the Group’s past experience of collecting payments, an increase in the number of delayed payments
in the portfolio past the average credit period of 60 days, as well as observable changes in national or local economic
conditions that correlate with default on receivables.
For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the
asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original
effective interest rate.
For financial assets that are carried at cost, the amount of the impairment loss is measured as the difference between the
asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of
return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception
of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade
receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts
previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account
are recognised in profit or loss.
For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and
the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised
impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the
impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 34
3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.12 fInanCIaL InSTRuMenTS (Continued)
3.12.1 financial assets (continued)
3.12.1.4 derecognition of financial assets
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when
it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the
transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have
to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group
continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the
consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive
income and accumulated in equity is recognised in profit or loss.
On derecognition of a financial asset other than in its entirety (e.g. when the Group retains an option to repurchase part of
a transferred asset), the Group allocates the previous carrying amount of the financial asset between the part it continues
to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of
those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer
recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss
allocated to it that had been recognised in other comprehensive income is recognised in profit or loss. A cumulative gain or
loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised
and the part that is no longer recognised on the basis of the relative fair values of those parts.
3.12.2 financial liabilities
Financial liabilities are classified as either financial liabilities or ‘FVTPL’ or ‘other financial liabilities’.
3.12.2.1 other financial liabilities
Other financial liabilities, including borrowings and trade and other payables, are initially measured at fair value, net of
transaction costs.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest
expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments
through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on
initial recognition.
3.12.2.2 derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or have
expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid and
payable is recognised in profit or loss.
3.13 GOODS anD SeRVICeS Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”), except:
i. where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense.
ii.
for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.
Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from
investing and financing activities, which is recoverable from, or payable to, the taxation authority is classified within
operating cash flows.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 35
4 CRITICAL ACCOUNTING JUDGEMENTS IN APPLYING ACCOUNTING POLICIES
In the application of the Group’s accounting policies, which are described in note 3, the directors of the Company are
required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the
revision and future periods if the revision affects both current and future periods.
4.1
CRITICaL JuDGeMenTS In aPPLYInG aCCOunTInG POLICIeS
The following are the critical judgements, apart from those involving estimations, that the directors have made in the process
of applying the Group’s accounting policies and that have the most significant effect on the amounts recognised in the
consolidated financial statements.
4.1.1 Classification and measurement of assets held for sale
Note 8 details that the consolidated entity entered into the binding agreement for the sale of its Ocean Hill
Hydrocarbon Assets.
4.2
KeY SOuRCeS Of eSTIMaTIOn unCeRTaInTY
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end
of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year.
4.2.1
Impairment
The consolidated entities assess impairment at each reporting date by evaluating conditions specific to the consolidated
entities that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is
determined. The Group’s policy on the capitalisation of exploration and evaluation expenditure is detailed in note 3.10 and
Impairment at note 3.11. In considering if an impairment event has been triggered the Company took into account positive
results from its exploration programme and successful completion of the recent Optimisation Study , a JORC compliant
resource and market capitalisation being well in excess of capitalised exploration costs.
4.2.2 Share based payments
The consolidated entities measure the cost of equity settled transactions with employees by reference to the fair value
of the equity instruments at the date at which they are granted. The fair value is determined using the Black Scholes model.
One of the inputs into the option valuation model is volatility of the underlying share price, which is estimated on the
one-year history of the share price and has been estimated as approximately 80% to 122%.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 36
5 SEGMENT REPORTING
Information reported to the chief operating decision maker (CODM) for the purpose of resource allocation and
assessment of segment performance focuses on the geographical location of resources being explored for and evaluated.
During the prior reporting period, the consolidated group changed its principal activity and focus to that of Graphite in
Tanzania. It’s geothermal and hydrocarbon activities in Hungary and Australia continue to be discontinued operations.
5.1
SeGMenT ReVenueS anD ReSuLTS
2017
GRaPhITe
CORPORaTe
fROM
DISCOnTInueD
OPeRaTIOnS
COnSOLIDaTeD
Interest
Total revenue
-
179,467
8,081
8,081
-
-
8,081
187,548
Profit (Loss) before tax (continuing operations)
51,406
(3,898,742)
272,609
(3,574,727)
Fixed asset additions
Depreciation
Impairment
2017
13,208
2,181
12,773
1,261
-
1,030,856
GRaPhITe
CORPORaTe
-
-
-
fROM
DISCOnTInueD
OPeRaTIOnS
25,981
3,442
1,030,856
COnSOLIDaTeD
Total segment assets
Total segment liabilities
10,304,495
5,912,824
4,955
16,227,229
442,011
239,161
1
681,174
2016
Interest
Total revenue
GRAPHITE
CORPORATE
CONSOLIDATED
-
-
11,602
11,602
11,602
11,602
Loss before tax (continuing operations)
(376,197)
(1,205,986)
(1,582,183)
Fixed asset additions
Depreciation
Impairment
2016
Total segment assets
Total segment liabilities
5.2 GeOGRaPhICaL SeGMenTS
-
-
274,816
3,887
-
-
GRAPHITE
CORPORATE
3,887
-
274,816
FROM
DISCONTINUED
OPERATIONS
CONSOLIDATED
7,641,555
411,560
2,386,140
97,434
532,978
10,560,673
4,910
513,904
2017
TanzanIa
auSTRaLIa
hunGaRY
(DISCOnTInueD)
auSTRaLIa
(DISCOnTInueD)
COnSOLIDaTeD
Interest
Total revenue
-
179,467
8,081
8,081
Non-current assets
10,291,646
3,752,969
-
-
-
-
-
-
2016
TANzANIA
AUSTRALIA
HUNGARY
(DISCONTINUED)
AUSTRALIA
(DISCONTINUED)
8,081
187,548
14,044,615
CONSOLIDATED
Interest
Total revenue
-
-
11,602
11,602
Non-current assets
7,639,211
3,887
-
-
-
-
-
11,602
11,602
105,300
7,748,398
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 37
6
INCOME TAXES RELATING TO CONTINUING OPERATIONS
(a) Income tax (benefit)/expense
Current tax
Deferred tax
(b) numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations
Profit from discontinuing operations
Loss from operations
Prima facia tax benefit at 27.5% (2016: 30%)
Share based payments
Non-deductible expenditure
Research and development tax rebate
Movement in unrecognised temporary differences
Unused tax losses for which no deferred tax asset has been recognised
Income tax benefit
(c) recognised deferred tax assets and liabilities
recognised deferred tax assets comprise:
Other temporary differences
Tax losses available for offset against future taxable income
Deferred tax assets on temporary differences not recognised
recognised deferred tax liabilities comprise:
Exploration and evaluation
Unrealised foreign exchange movements
fOR The
YeaR enDeD
30/06/2017
FOR THE
YEAR ENDED
30/06/2016
$
-
-
-
$
-
-
-
(3,847,335)
(1,582,183)
1,256,966
232,878
(2,590,369)
(1,349,305)
(712,352)
147,685
313,550
(49,353)
(31,622)
332,092
-
150,148
746,411
-
896,559
896,559
-
896,559
(404,791)
130,551
86,452
-
38,839
148,950
-
202,403
-
(198,062)
4,341
-
4,341
4,341
Unrecognised deferred tax assets
Unused tax losses for which no deferred tax asset has been recognised are $15,613,416 (2016: $16,829,644).
Potential tax benefit is $4,293,689 (2016: $5,048,893). The Company is still in the process of reviewing the continuity
of ownership test and same business test in determining whether these unrecognised tax losses can be utilised in future
financial reporting periods.
(d) franking credits
The Company has no franking credits available as at 30 June 2017 (2016: Nil).
(e) Tax consolidation
The Company and its wholly owned Australian resident entities have formed a tax-consolidated group with effect from
1 July 2004 and are therefore taxed as a single entity from that date. The head Company of the consolidated group is
Black Rock Mining Limited.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017
38
7 DISCONTINUED OPERATIONS
7.1
DISPOSaL Of OIL anD GaS PeRMIT
On 22 October 2014, the consolidated group announced that it had entered into an binding agreement to divest its
Ocean Hill Hydrocarbon asset. The disposal represents the final oil and gas asset held by the Company. Refer to Note 8
for further details.
7.2 anaLYSIS Of PROfIT fOR The YeaR fROM DISCOnTInueD OPeRaTIOnS
The combined results of the discontinued operations (i.e. hydrocarbon) included in the profit/(loss) for the year are set out
below. The comparative profit/(loss) and cash flows from discontinued operations have been re-presented to include those
operations classified as discontinued in the current year.
Loss for the year from discontinued operations
Revenue
Administration expense
Consulting expense
Net foreign exchange loss
Gain on disposal of interest in former associate
Profit / (Loss) for the year from discontinued operations
(attributable to owners of the Company)
Cash flows from discontinued operations
Net cash inflows/(outflows) from operating activities
Net cash inflows/(outflows) from investing activities
Net cash inflows/(outflows) from financing activities
fOR The
YeaR enDeD
30/06/2017
$
1,268,236
(422)
(29,539)
17,770
FOR THE
YEAR ENDED
30/06/2016
$
-
(2,080)
(2,241)
(1,251)
920
238,450
1,256,965
232,878
fOR The Y
eaR enDeD
30/06/2017
$
FOR THE
YEAR ENDED
30/06/2016
$
(18,918)
-
-
(1,105)
222,371
-
(18,918)
221,266
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 39
8 ASSETS CLASSIFIED AS HELD FOR SALE
Ocean Hill Hydrocarbon
fOR The
YeaR enDeD
30/06/2017
$
-
-
FOR THE
YEAR ENDED
30/06/2016
$
428,462
428,462
On 26 August 2016, the Company announced that the divestment of the Ocean Hill permit to Eneabba Gas Limited
(“Eneabba Gas”) was completed. The contracted consideration from the sale consists of a combination of cash shares in
Eneabba Gas and payment of costs on behalf of the Company. The breakdown of the consideration amount is as follows:
• Upfront payment of $30,000 on signing of the binding agreement (received during the year ended 2015);
• Cash payment of $200,000 (reduced from the previously agreed amount of $300,000); and
• 40,000,000 Eneabba Gas Ordinary Shares.
The Agreement is subject to the following conditions precedent and at reporting date all of the conditions had been satisfied
following the extension that was granted to October 2016:
• Execution of the Amangu Native title Claimants of the Amangu Native title Agreement to the satisfaction of Eneabba
Gas (completed in November 2015);
• All conditions required by the Department of Minerals and Petroleum being met to enable the grant of the Permit
(completed in May 2016); and
• Obtaining any consent or approval (including any consent or approval under the Act) required to transfer the Permit from
the Vendor to Eneabba Gas or its newly incorporated subsidiary, Ocean Hill Pty Ltd (outstanding as at 30 June 2016).
On 26 August 2016, the sale of the Ocean Hill Permit was completed and funds of $200,000 together with 40 million
ordinary shares in Eneabba Gas were received on 31 August 2016. Eneabba Gas satisfied the one remaining condition
precedent for the sale of its Perth Basin Permits, which includes the Ocean Hill Permit to UIL Energy Limited during
September 2016. As a result the Company received 7,309,504 fully paid ordinary shares and 4,651,515 Class B Convertible
Redeemable Preference Shares (“CPRS”) in UIL Energy Limited on 20 September 2016. These CRPS are convertible to
ordinary shares in UIL Energy on the event of successful results from drilling Ocean Hill #2 well. Success is defined to include
testing a flow of natural gas at commercial rates and sufficient long term gas flow rates to support development of a gas
operation. The Company can also redeem these shares at face value of $0.000001 per CRPS if the performance milestone
for conversion is not satisfied by 31 December 2019. The 7,309,504 fully paid ordinary shares are held in voluntary escrow
for a period of 6 months from issue.
On completion of the sale, the Company has recognised a profit on disposal of $1,268,236.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 40
9 CASH AND CASH EQUIVALENTS
For the purposes of the consolidated statement of cash flows, cash and cash equivalents include cash on hand and in
banks, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the reporting period as shown in the
consolidated statement of cash flows can be reconciled to the related items in the consolidated statement of financial
position as follows:
Cash and bank balances
fOR The
YeaR enDeD
30/06/2017
$
2,139,779
2,139,779
FOR THE
YEAR ENDED
30/06/2016
$
2,359,185
2,359,185
9.1
ReCOnCILIaTIOn Of LOSS fOR The YeaR TO neT CaSh fLOwS fROM OPeRaTInG aCTIVITIeS
Loss after income tax
Depreciation and amortisation of non-current assets
Share based payments to key management personnel
Share based payments to consultants
Net foreign exchange gain/(loss)
Investment revenue recognised in profit or loss
Exploration expenditure paid in shares
Gain on disposal of investment
Impairment of investments
Movements in working capital:
Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables
Increase/(decrease) in employee entitlements provision
Net cash used in operating activities
9.2 nOn CaSh TRanSaCTIOnS
Investing activity
Payment for acquisition of tanzanian Graphite Assets – through the issue of shares
Payment for services rendered by consultants through the issue of shares
Receipt of shares in exchange for sale of asset
financing activity
Payment for services rendered by consultants – issue of share
Performance rights exercised into shares
fOR The
YeaR enDeD
30/06/2017
$
FOR THE
YEAR ENDED
30/06/2016
$
(2,590,370)
(1,349,305)
3,442
-
-
(17,770)
(8,081)
40,000
(920)
1,030,856
-
431,347
124,200
(14,452)
(11,602)
86,000
(238,450)
-
(1,542,843)
(972,262)
(13,252)
97,556
23,711
55,400
16,206
21,165
(1,434,828)
(879,491)
fOR The
YeaR enDeD
30/06/2017
$
-
(720,667)
1,030,856
FOR THE
YEAR ENDED
30/06/2016
$
(86,000)
-
-
-
(537,036)
(124,200)
(421,200)
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 41
10 SUBSIDIARIES
Details of the Group’s material subsidiaries at the end of the reporting period are as follows:
naMe Of SuBSIDIaRY
PLACE OF INCORPORATION
AND OPERATION
PROPORTION OF OWNERSHIP INTEREST AND
VOTING POWER HELD BY THE GROUP
Green Rock Energy International Pty Ltd
Green Rock (Vulcan) Energy Kft
Mahenge Resources Limited
GRE Geothermal 1 Pty Ltd (i)
Green Rock Geothermal Pty Ltd (i)
Green Heat Resources Pty Ltd (ii)
Australia
Hungary
Tanzania
Australia
Australia
Australia
(i) these Companies were deregistered on 21 August 2016.
(ii) this Company was deregistered on 17 May 2017.
11 EXPLORATION AND EVALUATION ASSET
In the exploration phase
Balance at beginning of year
Expenditure incurred during the year (at cost)
Exploration and evaluation expenditure written off
Balance at end of year
fOR The
YeaR enDeD
30/06/2017
FOR THE
YEAR ENDED
30/06/2016
100%
100%
100%
0%
0%
0%
100%
100%
100%
100%
100%
100%
fOR The
YeaR enDeD
30/06/2017
$
7,639,211
5,901,622
-
13,540,833
FOR THE
YEAR ENDED
30/06/2016
$
3,404,600
4,509,427
(274,816)
7,639,211
The ultimate recoupment of capitalised exploration expenditure is dependent upon the successful development and/or
commercial exploitation or, alternatively through the sale of the respective underlying licences.
The remaining balance of $13,540,833 (2016: $7,639,211) at reporting date represents the carrying value of its Graphite
assets in Tanzania.
12 OTHER FINANCIAL ASSETS (NON-CURRENT)
Other financial assets
Shares in Eneabba Gas Limited (at fair value)
Shares in UIL Energy Limited (at fair value)
fOR The
YeaR enDeD
30/06/2017
$
-
280,000
197,357
477,357
FOR THE
YEAR ENDED
30/06/2016
$
105,300
-
-
105,300
During the reporting period, the Group received investments in two entities (as detailed in note 8) with a fair value of
$1,508,213. At 30 June 2017, these financial assets have been fair valued and assessed for impairment and an impairment
loss of $1,030,856 has been recognised in the Statement of Profit or Loss.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 13 TRADE AND OTHER PAYABLES
Trade creditors
Accruals
Other liabilities
42
fOR The
YeaR enDeD
30/06/2017
$
93,684
466,260
68,655
628,599
FOR THE
YEAR ENDED
30/06/2016
$
202,709
281,334
1,000
485,043
Included in trade creditors and accruals is an amount of $425,960 (2016: $233,175) relating to exploration expenditure.
14 ISSUED CAPITAL
364,734,701 ordinary shares issued and fully paid (30 June 2016: 285,404,703)
fOR The
YeaR enDeD
30/06/2017
$
FOR THE
YEAR ENDED
30/06/2016
$
47,925,610
47,925,610
40,253,116
40,253,116
Changes to the then Corporations Law abolished the authorised capital and par value concept in relation to share capital
from 1 July 1998. Therefore, the Company does not have a limited amount of authorised capital and issued shares do not
have a par value.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 43
NUMBER OF SHARES
SHARE CAPITAL
$
207,835,612
36,274,616
21,116,894
36,316,427
1,800,000
5,233,333
5,002,433
7,800,004
300,000
1,200,536
2,095,362
108,000
302,500
289,128
421,200
16,200
-
(456,426)
285,404,703
40,253,116
250,000
1,666,667
2,233,333
833,332
30,000
300,000
33,333
500,000
40,000
66,000
84,867
62,500
1,500
15,000
2,500
37,500
31,833,333
4,775,000
150,000
100,000
150,000
75,000
1,500,000
180,000
2,345,026
1,798,000
965,170
200,000
26,916,804
7,270,000
-
-
9,000
5,000
9,000
4,500
225,000
9,000
117,251
89,900
48,259
10,000
1,345,840
363,500
681,088
(329,711)
364,734,701
47,925,610
14 ISSUED CAPITAL (continued)
14.1 fuLLY PaID ORDInaRY ShaReS
Balance at 1 July 2015
Shares issued 6 November 2015 (0.075 cents per share) (i)
Shares issued 30 December 2015 ($0.075 cents per share) (i)
Shares issued 30 December 2015 ($0.060 cents per share)
Shares issued 18 January 2016 ($0.075 cents per share
Shares issued 28 January 2016 ($0.075 cents per share)
Shares issued 9 May 2016 ($0.054 cents per share
Shares issued 17 June 2016 ($0.054 cents per share)
Less: Capital raising costs
Balance at 30 June 2016
Shares issued 1 August 2016 (0.16 cents per share)
Shares issued 1 August 2016 (0.0396 cents per share) (i)
Shares issued 1 August 2016 (0.038 cents per share) (i)
Shares issued 5 August 2016 (0.075 cents per share)
Shares issued 5 August 2016 (0.05 cents per share)
Shares issued 17 August 2016 (0.05 cents per share)
Shares issued 23 August 2016 (0.075 cents per share)
Shares issued 13 September 2016 (0.075 cents per share)
Shares issued 21 September 2016 (0.15 cents per share)
Shares issued 17 November 2016 (0.075 cents per share)
Shares issued 17 November 2016 (0.05 cents per share)
Shares issued 17 November 2016 (0.06 cents per share)
Shares issued 28 November 2016 (0.06 cents per share)
Shares issued 19 December 2016 (0.15 cents per share)
Shares issued 21 February 2017 (0.05 cents per share)
Shares issued 6 March 2017 (0.05 cents per share)
Shares issued 10 March 2017 (0.05 cents per share)
Shares issued 17 March 2017 (0.05 cents per share)
Shares issued 20 March 2017 (0.05 cents per share)
Shares issued 24 March 2017 (0.05 cents per share)
Shares issued 31 March 2017 (0.05 cents per share)
Transfer to option premium reserve
Less: Capital raising costs
Balance at 30 June 2017
(i) Shares were issued on conversion of performance rights.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 44
14 ISSUED CAPITAL (continued)
14.2 OPTIOnS
Listed options
Expiring 25 March 2017
at $0.05
Expiring 30 November
2018 at $0.075
Unlisted options
Expiring 28 November
2016 at $0.06
Expiring 19 January 2018
at $0.20
Expiring 30 November
2019 at $0.20
Expiring 12 April 2020
at $0.20
OPENING BALANCE
EXERCISED IN YEAR
GRANTED IN YEAR
EXPIRED IN YEAR
CLOSING BALANCE
40,145,000
(40,105,000)
35,333,320
75,478,320
(1,366,665)
41,471,665
-
-
-
(40,000)
-
-
33,966,655
(40,000)
33,966,655
OPENING BALANCE
EXERCISED IN YEAR
GRANTED IN YEAR
EXPIRED IN YEAR
CLOSING BALANCE
375,000
(375,000)
3,300,003
-
-
-
-
-
-
-
5,000,000
5,000,000
3,675,003
(375,000)
10,000,000
-
-
-
-
-
-
3,300,003
5,000,000
5,000,000
13,300,003
Weighted average
exercise price
$0.20
The weighted average remaining contractual life of options as at 30 June 2017 is 701 days (2016: 554 days).
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 15 RESERVES (NET OF INCOME TAX)
reserves
Share based payments reserve (i)
Foreign translation reserve (ii)
45
fOR The
YeaR enDeD
30/06/2017
$
2,510,849
(132,136)
2,378,713
FOR THE
YEAR ENDED
30/06/2016
$
2,125,784
(159,280)
1,966,504
(i) Share based Payments reserve
The share based payments reserve comprises any equity settled share based payment transactions and other options
transactions. The reserve will be reversed against share capital when the underlying rights are exercised.
Balance at the beginning of the year
Add: Reallocation from share capital for free attaching options
Add: Share based payment relating to capital raising costs
Add: Share based payments to consultants
Add: Amounts expensed in the current year
Less: Options expired in the current year
Less: Options vested during the period
Less: Performance rights vested and exercised
fOR The
YeaR enDeD
30/06/2017
$
2,125,784
-
-
680,667
537,036
-
(681,771)
(150,867)
2,510,849
FOR THE
YEAR ENDED
30/06/2016
$
871,015
1,198,592
68,790
-
431,347
(22,760)
-
(421,200)
2,125,784
(ii) foreign Translation reserve
The foreign translation reserve arises on the consolidation of the Group’s overseas subsidiary companies,
Green Rock (Vulcan) Energy Kft and Mahenge Resources Limited.
16 ACCUMULATED LOSSES
Balance at beginning of the year
Net loss attributable to members
Transfer to share option reserve
Balance at end of year
fOR The
YeaR enDeD
30/06/2017
$
FOR THE
YEAR ENDED
30/06/2016
$
32,172,851
30,846,306
2,590,370
1,349,305
-
(22,760)
34,763,221
32,172,851
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 46
17 SHARE BASED PAYMENTS
(a) eMPLOYee ShaRe InCenTIVe SCheMe
The establishment of the Black Rock Mining Limited Employee Share Incentive Option Plan (“the Plan”) was initially approved
by special resolution at a General Meeting of shareholders of the Company held on 21 November 2006 and approval
renewed by shareholders on 18 November 2009 and 28 November 2013. All eligible Directors, executive officers and
employees of Black Rock Mining Limited are eligible to participate in the Plan.
The Plan allows the Company to issue free options to eligible persons. The options can be granted free of charge and are
exercisable at a fixed price calculated in accordance with the Plan.
The fair value of the equity-settled share options granted is estimated as at the date of grant using a Black-Scholes model
taking into account the terms and conditions upon which the options were granted.
The share based payment arrangements that were in existence during current and prior-reporting periods is detailed in note
14.1. During the year, the shared based payment expense recognised in the consolidated statement of profit and loss totaled
$537,036 (2016: $431,347).
Share based payment arrangements relating to employees and directors:
GRanT DaTe
EXPIRY DATE
EXERCISE
PRICE
NUMBER
OF OPTIONS
AT THE
BEGINNING
OF THE YEAR
OPTIONS
GRANTED THIS
YEAR
OPTIONS
EXERCISED
THIS YEAR
NUMBER OF
OPTIONS AT
THE END OF
THE YEAR
OPTIONS
EXERCISABLE
AT THE END
OF THE YEAR
FAIR VALUE AT
GRANT DATE
04/01/2013
28/11/2016
$0.06
375,000
-
(375,000)
-
-
$0.017
The following reconciles the outstanding share options granted under the Plan at the beginning and end of the
financial year.
2017
nuMBeR Of
OPTIOnS
Balance at the beginning of the financial year
375,000
Granted during the financial year:
weIGhTeD
aVeRaGe
exeRCISe PRICe
(CenTS)
6.00
- Directors
- Employees
Forfeited/Expired
Exercised
Balance at the end of the financial year
Vested and Exercisable at the end of the year
-
-
-
-
-
-
(375,000)
3.00
-
-
-
-
2016
NUMBER OF
OPTIONS
570,000
-
-
(195,000)
-
375,000
375,000
WEIGHTED
AVERAGE
EXERCISE PRICE
(CENTS)
13.00
-
-
3.00
-
6.00
6.00
Expected volatility is based on the movement of the underlying share price around its average price over the expected term
of the option.
balance at end of the financial year
The share options outstanding and exercisable at the end of the financial year under the Plan had an exercise price of
$0.03 and a weighted average remaining contractual life of 0 days (2016: 151 days).
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017
47
17 SHARE BASED PAYMENTS (continued)
(b) ShaRe BaSeD PaYMenTS – OTheR
DaTe Of ISSue
nO. Of ShaReS
faIR VaLue
aT ISSue DaTe
1 August 2016
250,000
$0.16
Issued to vendor of Mahenge North tenement Tanzania
PL 7802/2012 as part of meeting milestone hurdles.
DaTe Of ISSue
nO. Of OPTIOnS
faIR VaLue
aT ISSue DaTe
20 January 2017
5,000,000
$0.20 Unlisted options issued as part of the consultant
incentive plan (JAWAF Enterprises)
12 April 2017
5,000,000
$0.20 Unlisted options issued as part of the Corporate
Mandate (Fosters Stockbroking)
(c) PeRfORManCe RIGhTS
Expiring
31 December 2017
Expiring
31 December 2018
Expiring
31 December 2018
Expiring 1 March 2018
Expiring 1 March 2019
Expiring 1 March 2020
OPENING BALANCE
GRANTED IN PERIOD
EXERCISED IN PERIOD
EXPIRED IN PERIOD
CLOSING BALANCE
2,233,333
1,666,667
-
-
-
-
3,900,000
-
-
(2,233,333)
(1,666,667)
6,000,000
400,000
400,000
1,600,000
8,400,000
-
-
-
-
(3,900,000)
-
-
-
-
-
-
-
-
-
6,000,000
400,000
400,000
1,600,000
8,400,000
Performance rights issued during the period:
The aggregate number of performance rights issued during the year and held directly, indirectly or beneficially by specified
Directors and other Key Management Personnel of the Company or their personally related entities are as follows:
DIReCTORS
E
C
N
A
M
R
O
F
R
E
P
F
O
R
E
B
M
U
N
S
T
H
G
R
I
E
C
N
A
M
R
O
F
R
E
P
F
O
E
U
L
A
V
–
S
t
h
G
R
I
B
&
A
E
H
C
N
A
R
T
$
E
C
N
A
M
R
O
F
R
E
P
F
O
E
U
L
A
V
C
E
H
C
N
A
R
T
–
S
t
h
G
R
I
$
E
C
N
A
M
R
O
F
R
E
P
F
O
E
U
L
A
V
D
E
H
C
N
A
R
T
–
S
t
h
G
R
I
$
E
C
N
A
M
R
O
F
R
E
P
F
O
E
U
L
A
V
E
E
H
C
N
A
R
T
–
S
t
h
G
R
I
$
E
C
N
A
M
R
O
F
R
E
P
A
E
H
C
N
A
R
T
S
T
H
G
R
I
E
C
N
A
M
R
O
F
R
E
P
B
E
H
C
N
A
R
T
S
T
H
G
R
I
E
C
N
A
M
R
O
F
R
E
P
C
E
H
C
N
A
R
T
S
T
H
G
R
I
Stephen Copulos
1,800,000 162,000
64,800
Gabriel Chiappini
1,800,000 162,000
64,800
-
-
- 600,000 600,000 600,000
- 600,000 600,000 600,000
E
C
N
A
M
R
O
F
R
E
P
D
E
H
C
N
A
R
T
S
T
H
G
R
I
-
-
E
C
N
A
M
R
O
F
R
E
P
E
E
H
C
A
R
T
S
T
H
G
R
I
-
-
John de Vries
2,400,000
-
- 150,000 139,200
-
-
- 1,200,000 1,200,000
Steven Tambanis
2,400,000 216,000
86,400
-
- 800,000 800,000 800,000
-
-
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017
48
17 SHARE BASED PAYMENTS (continued)
(c) PeRfORManCe RIGhTS (Continued)
Performance rights issued during the period: (continued)
PeRfORManCe RIGhT
GRANT DATE
EXPIRY DATE
FAIR VALUE
AT GRANT DATE
EXERCISE PRICE
Tranche A
Tranche B
Tranche C
Tranche D (400,000)
Tranche D (400,000)
Tranche D (400,000)
Tranche E (400,000)
Tranche E (400,000)
Tranche E (400,000)
30 November 2016
30 November 2016
30 November 2016
1 March 2017
1 March 2017
1 March 2017
1 March 2017
1 March 2017
1 March 2017
31 December 2018
31 December 2018
31 December 2018
1 March 2018
1 March 2019
1 March 2020
1 March 2018
1 March 2020
1 March 2020
$0.135
$0.135
$0.108
$0.125
$0.125
$0.125
$0.125
$0.125
$0.098
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
The Performance Rights will vest upon satisfaction of the following milestones:
(i) Tranche A : The Company signing a binding offtake agreement or aggregate binding offtake agreement totalling
50% or more of the current targeted production as outlined in the Company’s scoping study, as announced on
22 March 2016, on or before 31 December 2016;
(ii) Tranche B : The delivery of a positive feasibility study by the Company on its Mahenge project in Tanzania that matches
or exceeds the economic model as disclosed in the scoping study released on 22 March 2016;
(iii) Tranche C : The Company achieving a target share price of $0.30 based on a 10 day WVAP;
(iv) Tranche D: Subject to the Executive’s continuous employment and will vest over 3 years;
(v) Tranche E: 400,000 performance rights will vest upon the Company delivering a Definitive Feasibility Study in relation
to the Company’s Mahenge project on or before March 2018; 400,000 will vest upon, to the satisfaction of the Board,
the establishment of a development team to take the Mahenge project into construction; and 400,000 will vest upon
the Company achieving a closing share price of $0.45 based on a 10 day VWAP.
Grant date
Number of performance rights:
- S Copulos
- G Chiappini
- S Tambanis
MeThOD
Tranches
Grant date share price (cents)
Exercise prices (cents)
Expected volatility
Rights life
Dividend yield
Risk-free interest rate
MeSSRS COPuLOS,
ChIaPPInI & TaMBanIS
30 November 2016
1,800,000
1,800,000
2,400,000
BLaCK & SChOLeS
MOnTe CaRLO SIMuLaTIOn
A and B
13.7
C
13.7
Nil – subject to milestone
hurdles (above)
Nil – subject to milestone
hurdles (above)
100%
2 years
Nil
1.78%
100%
2 years
Nil
1.78%
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017
49
17 SHARE BASED PAYMENTS (continued)
(c) PeRfORManCe RIGhTS (Continued)
Performance rights issued during the period: (continued)
Grant date
Number of performance rights:
- J de Vries
MeThOD
MR De VRIeS
1 March
2017
2,400,000
hOaDLeY
TRaDInG anD
InVeSTMenT
MODeL
hOaDLeY
TRaDInG anD
InVeSTMenT
MODeL
hOaDLeY
TRaDInG anD
InVeSTMenT
MODeL
hOaDLeY
TRaDInG anD
InVeSTMenT
MODeL
MOnTe
CaRLO
SIMuLaTIOn
Tranches
D (400,000)
D (400,000)
D (400,000)
E (800,000)
E (400,000)
Grant date share price (cents)
Exercise prices (cents)
Expected volatility
Rights life
Dividend yield
Risk-free interest rate
12.5
12.5
12.5
12.5
12.5
Nil – subject
to milestone
hurdles
(above)
Nil – subject
to milestone
hurdles
(above)
Nil – subject
to milestone
hurdles
(above)
Nil – subject
to milestone
hurdles
(above)
Nil – subject
to milestone
hurdles
(above)
105%
1 year
Nil
1.79%
105%
2 years
Nil
1.79%
105%
3 years
Nil
1.93%
105%
3 years
Nil
1.93%
105%
3 years
Nil
1.79%
OPENING
BALANCE
GRANTED
IN PERIOD
EXERCISED
IN PERIOD
EXPIRED
IN PERIOD
CLOSING
BALANCE
ORDINARY
SHARES ISSUED
ISSUED SHARE
VALUE
Tranche A
Tranche B
Tranche C
Tranche D
Tranche E
-
-
-
-
-
-
2,000,000
2,000,000
2,000,000
1,200,000
1,200,000
8,400,000
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
2,000,000
2,000,000
1,200,000
1,200,000
8,400,000
-
-
-
-
-
-
-
-
-
-
-
-
Performance rights issued to directors in the financial year 2016:
The aggregate number of performance rights issued during the prior reporting period and held directly, indirectly or
beneficially by specified Directors and other Key Management Personnel of the Company or their personally related entities
are as follows:
DIReCTORS
NUMBER OF
PERFORMANCE
RIGHTS
VALUE OF
PERFORMANCE
RIGhtS –
TRANCHE A & B
VALUE OF
PERFORMANCE
RIGhtS –
TRANCHE C
TRANCHE A
PERFORMANCE
RIGHTS
TRANCHE B
PERFORMANCE
RIGHTS
TRANCHE C
PERFORMANCE
RIGHTS
Stephen Copulos
Gabriel Chiappini
Steven Tambanis
1,475,000
1,475,000
1,950,000
$59,000
$59,000
$78,000
$19,470
$19,470
$25,740
491,667
491,667
650,000
491,667
491,667
650,000
491,666
491,666
650,000
eMPLOYee
Alan Till
100,000
$4,000
$1,320
33,333
33,333
33,333
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017
50
17 SHARE BASED PAYMENTS (continued)
(c) PeRfORManCe RIGhTS (Continued)
Performance rights issued to directors in the financial year 2016: (continued)
PeRfORManCe RIGhT
GRANT DATE
EXPIRY DATE
FAIR VALUE
AT GRANT DATE
EXERCISE PRICE
Tranche A
Tranche B
Tranche C
30 November 2015
31 December 2018
30 November 2015
31 December 2018
30 November 2015
31 December 2018
$0.060
$0.060
$0.0396
Nil
Nil
Nil
The Performance Rights will vest upon satisfaction of the following milestones:
(i) Tranche A : The Company announces a JORC Code compliant resource of not less than 3,000,000 tonnes of contained
graphite at 8% or more total graphite from its Graphite Projects;
(ii) Tranche B : The Company announces a JORC compliant resource of greater than 4,000,000 tonnes of contained graphite
at 8% or more total graphite contents from its Graphite Projects; and
(iii) Tranche C : From the date of receipt of the Performance Rights, the Company’s 10 day VWAP is equal to or greater then
$0.1275 for a period of 10 consecutive trading days.
Grant date
Number of performance rights:
- S Copulos
- G Chiappini
- S Tambanis
- A Till
MeThOD
Tranches
Grant date share price (cents)
Exercise prices (cents)
Expected volatility
Rights life
Dividend yield
Risk-free interest rate
MeSSRS COPuLOS,
TaMBanIS & ChIaPPInI
30 November 2015
1,475,000
1,475,000
1,950,000
100,000
BLaCK & SChOLeS
MOnTe CaRLO SIMuLaTIOn
A and B
5
C
5
Nil – subject to milestone
hurdles (above)
Nil – subject to milestone
hurdles (above)
100%
3 years
Nil
2.05%
100%
3 years
Nil
2.05%
In August 2016, the Company vested the remaining Tranche C performance rights following achievement of the 10 day
VWAP milestone.
OPENING
BALANCE
GRANTED
IN PERIOD
EXERCISED
IN PERIOD
EXPIRED
IN PERIOD
CLOSING
BALANCE
ORDINARY
SHARES ISSUED
ISSUED SHARE
VALUE
Tranche C
1,666,666
1,666,666
-
-
(1,666,666)
(1,666,666)
-
-
-
-
1,666,666
1,666,666
$66,000
$66,000
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017
51
17 SHARE BASED PAYMENTS (continued)
(c) PeRfORManCe RIGhTS (Continued)
Performance rights issued to directors in the financial year 2015:
The aggregate number of performance rights issued during the prior reporting period and held directly, indirectly or
beneficially by specified Directors and other Key Management Personnel of the Company or their personally related entities
are as follows:
DIReCTORS
NUMBER OF
PERFORMANCE
RIGHTS
VALUE OF
PERFORMANCE
RIGhtS –
TRANCHE A & B
VALUE OF
PERFORMANCE
RIGhtS –
TRANCHE C
TRANCHE A
PERFORMANCE
RIGHTS
TRANCHE B
PERFORMANCE
RIGHTS
TRANCHE C
PERFORMANCE
RIGHTS
Stephen Copulos
Gabriel Chiappini
Steven Tambanis
1,675,000
1,675,000
3,350,000
$55,833
$55,833
$111,667
$21,217
$21,217
$42,433
558,334
558,334
558,333
558,333
558,333
558,333
1,116,667
1,116,667
1,116,666
PeRfORManCe RIGhT
GRANT DATE
EXPIRY DATE
FAIR VALUE
AT GRANT DATE
EXERCISE PRICE
Tranche A
Tranche B
Tranche C
19 February 2015
31 December 2017
19 February 2015
31 December 2017
19 February 2015
31 December 2017
$0.050
$0.050
$0.038
Nil
Nil
Nil
The Performance Rights will vest upon satisfaction of the following milestones:
(iv) Tranche A : The Company announces a JORC Code compliant resource of not less than 1,000,000 tonnes of contained
graphite at 9% or more total graphite content from the Mahenge Project;
(v) Tranche B : The Company announces a JORC compliant resource of greater than 2,000,000 tonnes of contained graphite
at 9% or more graphite content from the Mahenge Project; and
(vi) Tranche C : From the date of receipt of the Performance Rights, the Company’s 10 day VWAP is equal to or greater than
$0.0875 for a period of 10 consecutive trading days.
Grant date
Number of performance rights:
- S Copulos
- G Chiappini
- S Tambanis
MeThOD
Tranches
Grant date share price (cents)
Exercise prices (cents)
Expected volatility
Rights life
Dividend yield
Risk-free interest rate
MeSSRS COPuLOS,
TaMBanIS & ChIaPPInI
31 March 2015
1,675,000
1,675,000
3,350,000
BLaCK & SChOLeS
MOnTe CaRLO SIMuLaTIOn
A and B
5
C
5
Nil – subject to milestone
hurdles (above)
Nil – subject to milestone
hurdles (above)
80%
3 years
Nil
2.48%
80%
3 years
Nil
2.48%
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017
52
17 SHARE BASED PAYMENTS (continued)
(c) PeRfORManCe RIGhTS (Continued)
Performance rights issued to directors in the financial year 2015: (continued)
In August 2016, the Company vested the remaining Tranche C performance rights following achievement of the 10 day
VWAP milestone.
OPENING
BALANCE
GRANTED
IN PERIOD
EXERCISED
IN PERIOD
EXPIRED
IN PERIOD
CLOSING
BALANCE
ORDINARY
SHARES ISSUED
ISSUED SHARE
VALUE
Tranche C
2,233,333
2,233,333
-
-
(2,233,333)
(2,233,333)
-
-
-
-
2,233,333
2,233,333
$84,867
$84,867
18 KEY MANAGEMENT PERSONNEL COMPENSATION
The key management personnel of Black Rock Mining Limited during the year were:
Stephen Copulos
John de Vries
Gabriel Chiappini
Non-Executive Chairman
Appointed 22 January 2015
Executive Director
Appointed 24 April 2017
Non Executive Director
Appointed 21 March 2012
Company Secretary
Appointed 12 July 2013
Steven Tambanis
Former Managing Director
Appointed 22 January 2015
Resigned 24 April 2017
Details of the remuneration of key management personnel are set out as follows:
Short-term employee benefit
Post-employment benefits
Share-based payments
Other
fOR The
YeaR enDeD
30 June 2017
$
FOR THE
YEAR ENDED
30 JUNE 2016
$
567,523
38,519
365,966
23,712
995,719
403,500
24,250
433,055
21,164
881,969
19 REMUNERATION OF AUDITORS
auditor of the parent entity
During the year the following fees were paid or were payable for services provided by the auditor of the Company,
its related practices and non-related audit firms:
Audit or review of the financial statements (Parent auditor)
Audit or review of the financial statements (Other group entities auditor)
The auditor of Black Rock Mining Limited is Deloitte Touche Tohmatsu.
fOR The
YeaR enDeD
30/06/2017
$
40,488
13,269
53,757
FOR THE
YEAR ENDED
30/06/2016
$
49,780
-
49,780
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017
53
20 RELATED PARTY TRANSACTIONS
Remuneration details for Directors and Executives are included in the Remuneration Report and have been audited.
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and are not disclosed in this note.
During the reporting period the following amounts were paid to Key Management Personnel for services in addition
to those shown elsewhere in this note:
DIReCTOR
VALUE
DESCRIPTION
$
Gabriel Chiappini
$105,000
Payments to Laurus Corporate Services for financial services provided
during the reporting period including but not limited to Company Secretary,
Capital Markets and Investor Relations, Accounting, Bookkeeping,
Management of Tax and Audit requirements and administration.
21 EXPENDITURE COMMITMENTS
(a) exPLORaTIOn
As part of the Company’s license conditions with the Tanzanian Energy and Minerals Department, the Company is obliged
to pay USD$150 per square kilometer to maintain the license in good standing.
The license costs per annum are as follows:
PROJeCT naMe
LICENSE TYPE
LICENSE NUMBER
AREA KM²
RATE PER KM²
TOTAL
Mahenge North Project
Makonde Project
Mahenge East Project
Mahenge Southwest Project
Graphite
Graphite
Graphite
Graphite
PL 7802/2012
PL 10111/2014
PL 10426/2014
PL 10427/2014
144.10
24.83
154.96
208.67
USD$150
USD$150
USD$150
USD$150
USD$21,615
USD$3,725
USD$23,244
USD$31,301
As part of the original conditions to acquire the exploration licences there were minimum exploration expenditure
commitments. These have all been met by 30 June 2017.
As part of the contract to acquire the graphite exploration licences, under certain milestone conditions the Company will be
obliged to make additional payments. These payments are subject to the following conditions:
exploration licence PL7802/2012
There are no milestone vendor payments or commitments remaining with PL7802/2012.
exploration licence PL10111/2014, PL10426/2014 and PL10427/2014
$250,000 cash or equivalent number of fully paid Black Rock Mining shares (at the election of the vendor) upon
announcement of a JORC compliant resource of greater than 250,000 tonnes of contained graphite at >9% TGC is
announced. Issue price of shares to be calculated based on the preceding seven (7) day VWAP; and
$375,000 cash and the equivalent value ($375,000) in Black Rock Mining Shares to be paid when a JORC compliant
Resource with greater than 1,000,000 tonnes of contained graphite at >9% total graphite content at any of the Projects
is announced by Black Rock Mining on the ASX. The issue price of GRK Shares is to be calculated based on the VWAP of
Black Rock Mining Shares in the 5 days prior to the release of the announcement.
exploration Programme
There are no commitments to exploration as at the date of this report.
(b) CaPITaL COMMITMenTS
The Group has no capital commitments (2016: Nil).
(c) OPeRaTInG LeaSe COMMITMenTS
As at 30 June 2017 and at the date of this report, there are no operating lease commitments (2016: Nil).
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017
54
22 LOSS PER SHARE
The following reflects the profit/ (loss) and share details used in the calculation of basic and diluted profit/ (loss) per share:
Profit/(Loss) used in calculating basic and diluted loss per share
From continuing operations
From discontinued operations
fOR The
YeaR enDeD
30/06/2017
$
FOR THE
YEAR ENDED
30/06/2016
$
(3,847,336)
(1,582,183)
1,256,966
232,878
(2,590,370)
(1,349,305)
Weighted average number of ordinary shares used in calculating
basic and diluted profit/(loss) per share:
327,284,460
247,023,437
basic and diluted profit/(loss) per share
From continuing operations
From discontinuing operations
Total basic and diluted profit/ (loss) per share
($0.1176)
$0.0382
($0.0794)
($0.0064)
$0.0009
($0.0055)
The consolidated entity’s options and performance rights potentially dilute basic earnings per share in the future.
However they have been excluded from the calculations of diluted earnings per share because they are anti-dilutive
and out of the money for the years presented.
23 FINANCIAL INSTRUMENTS
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while
maximizing the return to stakeholders through the optimization of the debt and equity balance. The Group’s overall strategy
remains unchanged from 2016.
The capital structure of the Group consists of net debt (borrowings offset by cash and bank balances as detailed in note 9)
and equity of the Group (comprising issued capital, reserves and accumulated losses as detailed in notes 14, 15 and 16).
(a) Capital Management
The main focus of the Group’s capital management policy is to ensure adequate working capital to fund the exploration and
development activities of its various geothermal projects. This is done through the close monitoring of cash flow projections.
The Group’s working capital as at balance date was:
Cash and bank balances
Trade and other receivables
Trade and other payables
fOR The
YeaR enDeD
30/06/2017
$
FOR THE
YEAR ENDED
30/06/2016
$
2,139,799
2,359,185
37,880
24,627
(628,600)
1,549,079
(485,043)
1,898,769
23.1 fInanCIaL RISK ManaGeMenT
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk and interest rate),
credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group does not
use derivative financial instruments.
Risk management is the responsibility of the Board of Directors.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 55
23 FINANCIAL INSTRUMENTS (continued)
23.2 MaRKeT RISK
23.2.1 foreign exchange risk
The Group transacts in US Dollars in relation to its Tanzanian operations and has a minority interest in a Geothermal
operation in Hungary and is exposed to foreign exchange currency movements arising from various currency exposures,
primarily with respect to the US Dollar and the Hungarian Forint.
Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the entity’s functional
currency and net investments in foreign operations.
The Group’s exposure to foreign currency risk at the reporting date was as follows:
grouP sensitivitY
The parent entity advances funds to the Tanzanian subsidiary in US Dollars. The foreign exchange is recognised in the
parent entity. The parent entity also advances funds to the Hungarian subsidiary in Australian Dollars. In practical terms the
Australian Dollar is converted to the Euro and the Hungarian Forint (“HUF”). The foreign exchange risk is recognized by the
Hungarian subsidiary.
The consolidated entity’s pre-tax profit for the year would have been $130,545 higher/lower (2016: $209,853 higher/
$222,776 lower) had the Australian dollar strengthened/weakened by 10% against the US Dollar and the Hungarian Forint.
23.2.2 Cash flow and fair value interest rate risk
The Group is exposed to interest rate risk through cash and cash equivalents $2,135,144 (2016: $2,359,185).
At 30 June 2017, if the interest rates had weakened/strengthened by 100 basis points from the year-end rates with all
other variables held constant, post-tax profit for the year would have been $508 lower/higher (2016: $1,063 lower/higher)
mainly as a result of interest income deceases/increases.
(a) credit risK
Credit risk is managed on a group basis. Credit risk arises from cash and cash equivalents as well as credit exposures
to customers, including outstanding receivables and committed transactions.
Cash and cash equivalents are held with recognisable banking and financial institutions. The maximum exposure to
credit risk for cash and cash equivalents is the carrying value.
Other receivables are due from third parties considered credit worthy. The maximum exposure to credit risk for other
receivables at the reporting date is the carrying amount. The ageing analysis of receivables is as follows:
DeBTOR
Trade receivable
< 30 DAYS
39,697
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit
ratings (if available) or to historical information about counterparty default rates.
23.3 LIquIDITY RISK
Prudent liquidity risk management implies maintaining sufficient cash to ensure that the Group’s liabilities can be settled as
and when they become due.
23.3.1 Maturities of financial liabilities
The tables below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the
reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
CReDITOR
Trade payables
23.4 faIR VaLue eSTIMaTIOn
<1 MONTH
96,889
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure
purposes. The carrying values less impairment provision of trade receivables and payables are assumed to approximate their
fair values due to their short-term nature.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017
56
24 CONTINGENT LIABILITIES
There were no material contingent liabilities as at 30 June 2017.
25 EVENTS AFTER THE REPORTING DATE
- On 24 August 2017, Black Rock Mining confirmed the appointment of Mr John de Vries as Chief Executive Officer.
Mr de Vries had previously been the Chief Operating Officer and Interim Chief Executive Officer.
- On 8 August 2017, Black Rock Mining released to the ASX its Optimised Pre Feasibility Study (PFS). Results of the PFS
includes an unlevered IRR of 45% with an NPV of US$905m using a discount rate of 10%, refer ASX announcement on
8 August 2017. The Optimised PFS also includes and allows for a 16% free carry in the project by the Governament of
Tanzania and an increase in the royalty rate from 3.3% to 4.3%.
- On 20 July 2017, Black Rock Mining announced an increase in its Global Resource, making Mahenge one of the largest
JORC compliant flake graphite Mineral Resource Estimates globally. The total Mahenge Graphite Project Mineral Resource
increased to 211.9Mt @ 7.8% TGC with a high-grade portion of 46.6Mt @ 10.6% TGC
- On 12 July 2017, the Company provided the ASX with an update on the legislative changes to the mining sector in
Tanzania. The changes are yet to be formalised by way of a new mining code and set of regulations. Some of the
changes passed by the Tanzanian Parliament include, the right to a free carried position of 16%, an increase in royalty
rate to 4.3%, claw back of any tax concessions provided to the mining sector and requirement to investigate a listing
on the Dar es Salaam Securities Exchange. For further details please refer to the ASX announcement on 12 July 2017.
The company is presently working through the changes and awaits further updates from the Government of Tanzania
and in particular the updated mining code and regulations.
- On 22 September the Company announced that it had cancelled 5,000,000 unlisted options with a vesting date of
30 November 2019 at $0.20 and replaced them with a new issue of 5,000,000 unlisted options with a vesting date of
31 August 2020 $0.10. The Options may only be exercised where the following vesting conditions have been satisfied:
(a) in relation to the first 1,250,000 Options - the Company’s shares have traded at 10c or over for 10 trading days;
(b) in relation to the next 1,250,000 Options - the Company´s share have traded at 20c or over for 10 trading days;
(c) in relation to the next 1,250,000 Options - the Company´s share have traded at 30c or over for 10 trading days; and
(d) in relation to the last 1,250,000 Options - the Company´s share have traded at 40c or over for 10 trading days.
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017 57
26 PARENT ENTITY INFORMATION
The accounting policies of the parent entity, which have been applied in determining the financial information
shown below, are the same as those applied in the consolidated financial statements. Refer to note 3 for a summary
of significant account policies.
financial Position
assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
equity
Issued capital
Retained earnings
Reserves
Total equity
financial performance
Loss for the year
Other comprehensive income
Total comprehensive loss
fOR The
YeaR enDeD
30/06/2017
$
FOR THE
YEAR ENDED
30/06/2016
$
2,159,855
2,810,057
13,812,187
15,972,042
7,439,423
10,249,480
239,161
97,433
-
239,161
-
97,433
47,925,610
40,253,116
(34,703,578)
(32,226,852)
2,510,849
2,125,784
15,732,881
10,152,048
fOR The
YeaR enDeD
30/06/2017
$
FOR THE
YEAR ENDED
30/06/2016
$
4,754,800
1,344,479
-
-
4,754,800
1,344,479
Black Rock Mining liMited 2017 AnnuAl reportNotes to the coNsolidated fiNaNcial statemeNtsfor the year eNded 30 JuNe 2017
dIreCtorS’ deClaratIon
58
The directors declare that:
(a) 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;
(b) in the directors’ opinion, the attached financial statements are in compliance with International Financial Reporting standards,
as stated in note 1 to the financial statements;
(c) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001,
including compliance with accounting standards and giving a true and fair view of the financial position and performance of the
consolidated entity; and
(d) the directors have been given the declarations required by s.295A of the Corporations Act 2001.
Signed in accordance with a resolution of the directors made pursuant to s. 295(5) of the Corporations Act 2001.
On behalf of the Directors
Stephen Copulos
CHAIRMAN
Perth, 28 September 2017
Black Rock Mining liMited 2017 AnnuAl report Independent audIt report
59
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Tower 2, Brookfield Place
123 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 8 9365 7001
www.deloitte.com.au
Independent Auditor’s Report to the members of
Black Rock Mining Limited
Report on the Audit of the Financial Report
We have audited the consolidated financial report of Black Rock Mining Limited (the “Company”) and
its subsidiaries (the “consolidated entity”) which comprises the consolidated statement of financial
position as at 30 June 2017, the consolidated statement of profit or loss and other comprehensive
income, the consolidated statement of changes in equity and the consolidated statement of cash
flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies and other explanatory information, and the directors’ declaration.
In our opinion, the accompanying financial report of the consolidated entity 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 2017
and of its financial performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the consolidated entity in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has
been given to the directors of the Company, would be in the same terms if given to the directors as
at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the financial report, which indicates that the consolidated entity
incurred a net loss of $2,590,369 and had a net cash outflow from operating activities of $1,434,828
during the year ended 30 June 2017. As stated in Note 1, these events or conditions, along with
other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast
significant doubt on the consolidated entity’s ability to continue as a going concern. Our opinion is
not modified in respect of this matter.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
Black Rock Mining liMited 2017 AnnuAl report Independent audIt report
60
Our procedures in relation to going concern included, but were not limited to:
•
•
•
•
inquiring of management and the directors as to knowledge of events and conditions that may
impact the assessment on the consolidated entity’s ability to continue as a going concern
challenging the assumptions contained in management’s forecast in relation to the
consolidated’s ability to continue as a going concern
comparing the cash flow forecasts with the Board approved budget, and
assessing the adequacy of the disclosures related to going concern in Note 1.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter described in the Material
Uncertainty Related to Going Concern section, we have determined the matters described below to
be the key audit matters to be communicated in our report.
Key Audit Matter
How the scope of the audit responded to the
Key Audit Matter
Accounting for Exploration and
Evaluation Assets
As at June 2017 the consolidated entity
has $13,540,833 of capitalised
exploration and evaluation expenditure as
disclosed in Note 11.
Significant judgement is applied in
determining the treatment of exploration
and evaluation expenditure focusing on:
Whether the conditions for
capitalisation are satisfied;
Which elements of exploration and
evaluation expenditures qualify for
recognition; and
Whether the facts and circumstances
indicate that the exploration and
expenditure assets should be tested
for impairment.
Our procedures included, but were not limited to:
Obtaining a schedule of the areas of
interest held by the consolidated entity
and assessing whether the rights to
tenure of those areas of interest remained
current at balance date;
Holding discussions with management as
to the status of ongoing exploration
programmes in the respective areas of
interest;
Assessing whether any such areas of
interest had reached a stage where a
reasonable assessment of economically
recoverable reserves existed;
Testing on a sample basis, exploration
and evaluation expenditure capitalised
during the year for compliance with the
recognition and measurement criteria of
the applicable accounting standard; and
Assessing whether any facts or
circumstances existed to suggest
impairment testing was required.
We also assessed the appropriateness of the
disclosures in Note 11 to the financial
statements.
Black Rock Mining liMited 2017 AnnuAl report Independent audIt report
61
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the consolidated entity’s annual report for the year ended 30 June 2017, but
does not include the financial report and our auditor’s report thereon.
Our opinion on the consolidated financial report does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial report, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to
report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of Black Rock Mining Limited are responsible for the preparation of the consolidated
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 consolidated financial report that gives a true and fair view and is
free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial report, the directors are responsible for assessing the ability
of the consolidated entity to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless the directors either intend
to liquidate the consolidated entity or to cease operations, or has no realistic alternative but to do
so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the consolidated financial report
as a whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of this consolidated financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as
intentional omissions,
involve collusion,
fraud may
misrepresentations, or the override of internal control.
forgery,
Obtain an understanding of internal control relevant to the audit 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 consolidated entity’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the consolidated entity’s
ability to continue as a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial report or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the consolidated entity to cease to
continue as a going concern.
Black Rock Mining liMited 2017 AnnuAl report Independent audIt report
62
Evaluate the overall presentation, structure and content of the consolidated financial report,
including the disclosures, and whether the financial report represents the underlying
transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the consolidated entity to express an opinion on the
consolidated financial report. We are responsible for the direction, supervision and
performance of the consolidated entity’s audit. We remain solely responsible for our audit
opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 15 to 20 of the Directors’ Report for
the year ended 30 June 2017.
In our opinion, the Remuneration Report of Black Rock Mining Limited, for the year ended 30 June
2017, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
Ian Skelton
Partner
Chartered Accountants
Perth, 28 September 2017
Black Rock Mining liMited 2017 AnnuAl report addItIonal aSx InforMatIon
63
ORDINARY FULLY PAID SHARES
RanGe Of ShaReS AS oF 31 AuguST 2017
RanGe
TOTaL hOLDeRS
ShaReS
% Of ISSueD
CaPITaL
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - 9,999,999,999
rounding
Total
133
180
137
716
312
54,520
539,657
1,103,236
27,809,805
335,227,479
1,478
364,734,697
0.01
0.15
0.30
7.62
91.91
0.01
100.00
unMaRKeTaBLe PaRCeLS
Minimum $ 500.00 parcel at $ 0.0460 per unit
10870
464
1842524
MInIMuM
PaRCeL SIze
hOLDeRS
ShaReS
TOP 20 ShaRehOLDeRS
RanK naMe
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
CITYWEST CORP PTY LTD
Continue reading text version or see original annual report in PDF format above