Annual
Financial
Report
FOR THE YEAR ENDED 30 JUNE 2018
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CHIEF EXECUTIVE
OFFICER'S REPORT
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE
DECLARATION
CONSOLIDATED STATEMENT
OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT
OF CASH FLOWS
NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS
DIRECTORS’
DECLARATION
INDEPENDENT
AUDITOR’S REPORT
ADDITIONAL
ASX INFORMATION
Corporate directory
Black Rock Mining Limited
ABN: 59 094 551 336
DIRECTORS
Richard Crookes
Chairman Non-Executive
John de Vries
Chief Executive Officer, Executive Director
Stephen Copulos
Non- Executive Director
Gabriel Chiappini
Non-Executive Director
COMPANY SECRETARY
Gabriel Chiappini
PRINCIPAL PLACE
OF BUSINESS AND
REGISTERED OFFICE
AUDITOR
SHARE REGISTRY
Level 1, 35 Havelock Street,
West Perth Western Australia, 6005
(+61 8) 9320 7550
(+61 8) 9320 7501
Tel:
Fax:
Web: www.blackrockmining.com.au
Deloitte Touche Tohmatsu
Tower 2, Brookfield Place
123 St Georges Terrace
Perth Western Australia, 6000
(08) 9365 7000
Tel:
(08) 9365 7001
Fax:
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth Western Australia, 6000
1300 787 272
Tel:
Fax:
(08) 9323 2033
Email: web.queries@computershare.com.au
STOCK EXCHANGE LISTING
The Company’s shares are quoted on
the Australian Securities Exchange (ASX)
The Home Exchange is Perth.
ASX CODE
BKT - ordinary shares
BKTOD – listed options
CHIEF EXECUTIVE
OFFICER’S REPORT
01
Black Rock Mining Limited (ASX: BKT) has
made significant progress in the development
of our Mahenge graphite project in Tanzania
over the past year. I am particularly pleased
with the very significant contribution made by
all our staff, management and advisors.
Completion of optimisation of
our Pre-Feasibility Study (PFS) for
Mahenge early in the year confirmed
the strong economics of the project.
The Optimisation Study successfully
built out our “crawl, walk, run”
strategy, ultimately delivering a
world-class mine based on any
metrics. We continue to be highly
confident we have the most
compelling development-stage
graphite project globally. Based on
the compelling economics identified
in the Optimised Pre-Feasibility your
Board elected to commence the
Definitive Feasibility Study (DFS).
The Board selected CPC Engineering
to be our DFS contractor. CPC’s
selection was made on the basis of
CPC’s involvement with Syrah’s Balama
project. Our view is this provides
access to the most current graphite
experience available in the industry.
Over the course of the DFS the
company has delivered a number of
industry leading outcomes. We have
run the largest pilot scale graphite
plant in the sector, processing 90
tonnes of ore at SGS’s Lakefield
facility in Ontario, Canada. We have
demonstrated significant logistics
capability by rail hauling 530 tonnes
of ore from Ifakara to the Port of
Dar es Salaam. We have delivered
industry leading +99% purity graphite
concentrate at scale. We have
successfully engaged with over 22
customers on the basis of having large
samples of concentrate to submit for
testing. By September 2018 we had
secured our Environmental Permit,
and had confirmed the Definitive
Feasibility Study was on schedule for
delivery at the end of the September
quarter 2018.
While completing studies supporting
the DFS, Black Rock has undertaken
significant product development
research aimed at establishing the
significant Value in Use of the unique
Mahenge graphite. Our work during
the year has seen us produce graphite
concentrate with industry-leading ease
of processing, grade and flake size
which progressed into the Company
delivering an Ultra-high grade graphite
concentrate of more than 99% purity,
and doing so, at scale.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT CHIEF EXECUTIVE
OFFICER’S REPORT
02
250 KM
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT During 2018, we received
Tanzanian Investment Centre
(TIC) registration to accelerate
development of Mahenge and
post year-end in September
2018, our application received
an Environmental Impact
Assessment Certificate (“EIA”)
from the National Environment
Management Council of
Tanzania (“NEMC”).
03
In an industry where grade is key to
securing price and market share for
product, delivering a world first, Ultra
purity 99%+ graphite concentrate,
is a significant demonstration of
the compelling product properties
of Mahenge. Importantly this result
was obtained using a conventional
flotational circuit in our pilot
plant, leaving no refining chemical
residue on the flake. Minimal flake
degradation of the 200kg sample
processed, reinforces the mechanical
strength of the flake, further
supporting the compelling Value in
Use of Mahenge flake.
Operation of the pilot plant by
SGS Lakefield Labs, allowed us to
place significant volumes of real
product with potential customers.
The availability of product validates
product representations, and
demonstrates what we are capable of
producing at Mahenge. Black Rock has
since shipped finished product to 22
potential customers and partners for
testing and feedback. Initial feedback,
has conformed ASTM mesh screen
targets, purity targets and application
targets including pH levels, moisture
and halogen limits. This is a significant
step as we continue to refine our
processes and we now know that we
are on the right track to delivering the
highest value product possible.
During the year, we completed
battery testing using concentrate
from Mahenge, and achieved results
that exceeded industry standards
in 300-cycle battery testing. We
achieved a recharge rate of 94% in
independent testing. This is important
as the 300 cycles test is a benchmark
for consumer products. Representing
a two-year product life with an
assumed full discharge and recharge
cycle every second day. In a market
where performance is critical, Black
Rock believes it is the only graphite
developer to have comprehensively
demonstrated product performance.
We believe we simply have the best
natural flake graphite, and we have
proven it through our research.
While there has been some uncertainty
in the mining industry in Tanzania over
the past year due to the introduction
of a new Mining Code, we continue
to work closely with the Tanzania
government to develop Mahenge
as a project that can benefit all our
stakeholders. During 2018, we received
Tanzanian Investment Centre (TIC)
registration to accelerate development
of Mahenge and post year-end in
September 2018, our application
received an Environmental Impact
Assessment Certificate (“EIA”) from the
National Environment Management
Council of Tanzania (“NEMC”).
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT CHIEF EXECUTIVE
OFFICER’S REPORT
Using rail haulage
in the development of
Mahenge could deliver
considerable cost savings
of up to US$40 per tonne.
Rail haulage also significantly
simplifies logistics by
providing rail access directly
to the wharf with customs
clearance completed at an
“in land port” at Ifakara.
04
I look forward to
the outcome of our
DFS and moving
into the next stage
of developing our
Mahenge project
in 2019.
John de Vries
CHIEF EXECUTIVE OFFICER
In another positive step, we
completed Proof of Concept for rail
haulage by exporting a 530-tonne
sample from Ifakara, north of
its Mahenge Graphite Project in
Tanzania, to the port at Dar es
Salaam, demonstrating the viability
of Tazara (Tanzania Zambia Railway
Authority) as a logistics partner.
A ceremony held to recognise
significant project milestone was
attended by a representative of
Deputy Minister of Mines, The
Honorable Dotto Biteko, Deputy
Minister for Mines and Australian
High Commissioner for Tanzania
Alison Chartres. Using rail haulage in
the development of Mahenge could
deliver considerable cost savings of
up to US$40 per tonne. Rail haulage
also significantly simplifies logistics
by providing rail access directly to
the wharf with customs clearance
completed at an “in land port”
at Ifakara. This milestone will be
incorporated into our DFS estimates.
The bulk sample shipment is
comprised of 500 tonnes of surface
samples and 30 tonnes of core from
an 1800 metre infill drill program.
The program significantly de-risks the
project, and is designed to inform plant
design, and support representation of
product characteristics for the first five
years of production.
During the year, Black Rock
completed a $4.75 million capital
raising and we followed this
post year-end with a $3.0 million
placement, raising nearly $8 million
in total to fund the completion of our
DFS and move into the permitting
stage. We are thankful to our new
and existing shareholders who
supported us in these placements,
as well as Black Rock directors,
management and advisors who also
invested about $1 million through
these placements. Black Rock
is at such an important stage of
developing Mahenge and this funding
is integral to us making progress as
rapidly as possible.
We saw a change to our Board
of Directors during the year with
respected mining industry veteran
Richard Crookes appointed Chairman
and Stephen Copulos moving
into Non-Executive Director role.
This followed my own appointment
as Black Rock’s Chief Executive
Officer and marked the Company’s
transition from an Explorer to
Developer. I would like to thank the
Board of Directors for their support
over the past year and thank our
staff and management for their
contributions during what was an
extremely busy and productive
12 months.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT 05
DIRECTORS’ REPORT
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 2018.
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
Richard
Crookes
Stephen
Copulos
John de
Vries
Gabriel
Chiappini
(Non-Executive Chairman)
Mr Crookes has over 30 years’ experience in the resources and investments industries. He is a geologist by
training having worked in the industry most recently as the Chief Geologist and Mining Manager of Ernest
Henry Mining in Australia (now Glencore). Prior to Mr Crookes joining EMR Capital as an Investment Director
he was an Executive Director in Macquarie Bank’s Metals Energy Capital (MEC) division where he managed
all aspects of the Bank’s principal investments in mining and metals companies as well as the origination of
numerous project finance transactions. Mr Crookes has extensive experience in deal origination, evaluation,
structuring, post-acquisition management, client relationship management, marketing and execution of
investment entry and exits for both private and public resource companies in Australia and overseas.
Mr Crooks held directorships with the following listed companies in the 3 years immediately prior to the
date of this report.
NAME
Highfield Resources Limited
DATE APPOINTED
April 2013
DATE RESIGNED
Current
(Non-Executive Director)
Mr Copulos a Non-Executive Director of Black Rock Mining and is the Company’s major shareholder
and financial supporter. Mr Copulos has over thirty-five 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
Crusader Resources Limited
Consolidated Zinc Limited
Restaurant Brands Limited
DATE APPOINTED
March 2013
June 2015
April 2016
DATE RESIGNED
April 2018
Current
Current
(Executive Director and CEO)
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 Master 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.
(Non-Executive Director and Company Secretary)
Mr Chiappini is an experienced ASX director and has been active in the capital markets for 17 years.
Mr Chiappini has assisted in raising in excess of AUD $400m in funding and has provided investment and
divestment guidance to a number of companies. Mr Chiappini specialises in start-up companies and assists
companies with their growth and strategic direction. Mr Chiappini is a member of the Australian Institute of
Company Directors and Chartered Accountants Australia & New Zealand.
Mr Chiappini held directorships with the following listed companies in the 3 year immediately prior to the
date of this report.
NAME
Invictus Energy Limited
Eneabba Gas Limited
Fastbrick Robotics Limited: - Non-Executive Director
- Non-Executive Chairman
Scotgold Resources Limited
Global Geoscience Limited
DATE APPOINTED
DATE RESIGNED
Current
12 August 2015
26 September 2016 Current
15 December 2011
21 March 2012
27 May 2016
3 November 2015
9 August 2018
18 November 2015
20 May 2017
23 May 2017
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT DIRECTORS’ REPORT
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
Richard Crookes
Principal activities
RESIGNATION/APPOINTMENT DATE
Appointed: 16 October 2017
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.
06
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%. Black Rock is well advanced to
completing its Definitive Feasibility Study (DFS) and in September 2018 received approval of its Environmental and Social
Impact Assessment.
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 tax for the year ended 30 June 2018 was $2,053,080 (2017: $2,590,371). During 2018, the
Company focused its objectives on an optimized PFS, completion of pilot plant, marketing its high premium graphite
and working towards completion of Definitive Feasibility Study. The Company is also dealing with new Tanzanian mining
legislation introduced in July 2017 that allows for 16% Government free carry and increased royalty rate. In FY18 the
company’s main objective was to move into a development and strategic pathway to allow the company to look to the
establishment of the mine. Some of the milestones achieved in FY18 and to the date of this report include:
• Optimised Pre Feasibility 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 Government 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. 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 Officer
• Pilot Plant processing, world first 99%+ purity graphite concentrate in a conventional flotation circuit at scale
• Positive feedback received from potential Mahenge customers from its 90-tonne pilot plant operation
• 530-tonne export shipment of ore from Mahenge validates logistics route via rail haulage to Dar es Salaam
• Commencement of DFS which is on track for completion in September 2018
• Tanzanian Environmental and Social Impact Assessment lodged for approval in 2018 and in September 2018,
the Company was awarded the Environmental Assessment certificate.
Corporate and Financial Position
Consolidated net assets at year-end were $18,283,485 against $15,541,101 at the close of the prior year. Total cash held
at year-end was $1,788,150 (2017: $2,139,779).
Dividends
No dividend has been paid since the end of the previous financial year and no dividend is recommended for the current year.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT 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.
Subsequent events
Other than the below, the Directors are not aware of any matter or circumstance that has significant 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.
07
• On 24 August 2018 the Company announced it successful placement of 78,125,000 ordinary shares raising $3.0 million
to be used to continue project development, marketing of Black Rock’s graphite to offtake partners, permitting and
mining licence process and for general working capital.
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.
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 20 million 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
Unlisted options
Expiring 12 April 2020 at $0.20
Expiring 31 August 2020 at $0.10
Expiring 31 August 2020 at $0.10
Expiring 31 August 2020 at $0.10
Expiring 31 August 2020 at $0.10
CLOSING BALANCE
AT DATE OF SIGNING
33,966,655
33,966,655
5,000,000
6,250,000
6,250,000
6,250,000
6,250,000
30,000,000
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.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT DIRECTORS’ REPORT
Performance rights
Performance rights granted to directors
During and since the end of the financial year, no new performance rights were granted to directors of the Company.
During the financial year, performance rights on issue to directors and former directors totalling 6,400,000 were cancelled.
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
08
NUMBER OF
ORDINARY
SHARES
NUMBER OF
OPTIONS
GRANTED
GRANT DATE
EXPIRY DATE
EXERCISE PRICE
PERFORMANCE
RIGHTS
Richard Crookes
- Unlisted Options
John de Vries
- Unlisted Options
Stephen Copulos
- Listed Options
- Unlisted Options
Gabriel Chiappini
- Listed Options
- Unlisted Options
500,000
1,650,000
97,396,336
5,625,000
5,000,000
17-Oct-17
31-Aug-20
$0.10
5,000,000
28-Nov-17
31-Aug-20
$0.10
6,666,666
09-May-16
30-Nov-18
5,000,000
28-Nov-17
31-Aug-20
$0.075
$0.10
266,666
09-May-16
30-Nov-18
5,000,000
28-Nov-17
31-Aug-20
$0.075
$0.10
-
-
-
-
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), and
Mr Gabriel Chiappini (Non-Executive 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.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT 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
Richard Crookes
John de Vries
Stephen Copulos
Gabriel Chiappini
Non-audit services
NUMBER ELIGIBLE TO ATTEND
NUMBER ATTENDED
7
8
8
8
7
8
8
8
09
Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are
outlined in note 18 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 18 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 2018 ANNUAL REPORT DIRECTORS’ REPORT
Remuneration Report (Audited)
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 2018. 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
10
The Directors of the consolidated entity during or since the end of the financial year were:
Richard Crookes
John de Vries
Stephen Copulos
Gabriel Chiappini
Chairman Non-Executive
Appointed 16 October 2017
Chief Executive Officer & Executive Director
Appointed 16 March 2017
Non-Executive Director
Non-Executive Director
& Company Secretary
Appointed 22 January 2015
Appointed 21 March 2012
Appointed 12 July 2013
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 2018 ANNUAL REPORT Remuneration Report (Audited) (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:
2018
Richard Crookes (i)
John de Vries (ii)
Stephen Copulos
Gabriel Chiappini
2017
Stephen Copulos
John de Vries (ii)
Gabriel Chiappini
Steven Tambanis (iv)
SHORT TERM
EMPLOYEE
BENEFITS -
SALARY AND FEES
$
OTHER (iii)
POST
EMPLOYMENT
BENEFITS -
SUPERANNUATION
SHARE BASED
PAYMENT
TOTAL
% LINKED TO
PERFORMANCE
$
$
$
62,634
300,000
58,333
39,000
-
23,089
-
-
6,359
20,040
-
-
68,375
89,250
89,250
89,250
459,967
23,089
26,399
336,125
137,368
432,379
147,583
128,250
845,580
49.8%
20.6%
60.5%
69.6%
11
SHORT TERM
EMPLOYEE
BENEFITS -
SALARY AND FEES
$
OTHER (iii)
POST
EMPLOYMENT
BENEFITS -
SUPERANNUATION
SHARE BASED
PAYMENT
TOTAL
% LINKED TO
PERFORMANCE
108,333
130,023
67,500
261,667
567,523
-
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%
28.5%
57.3%
30.8%
(i) Mr Richard Crookes remuneration package consists of an annual salary of $100,000 plus statutory superannuation.
(ii) Mr John de Vries remuneration package consists of an annual salary of $300,000 plus statutory superannuation.
(iii) Other relates to accrual of annual leave benefits.
(iv) Mr Steven Tambanis resigned as director of the Company 24 April 2017.
Key Terms of Employment Contracts
The Directors and executive are employed under contracts, which have no fixed term.
The contract binding the Executive Director may be terminated by the individual or the Board by giving three months’
notice in writing to terminate the Employment Agreement under which his services are contracted.
The Non-Executive Directors are bound by letter of appointments. 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 payment arrangements
Options
The following options were issued during the year, affecting key management personnel remuneration:
Richard Crookes
John de Vries
Stephen Copulos
Gabriel Chiappini
NUMBER OF
SHARE OPTIONS -
TRANCHE A
NUMBER OF
SHARE OPTIONS -
TRANCHE B
NUMBER OF
SHARE OPTIONS -
TRANCHE C
NUMBER OF S
HARE OPTIONS -
TRANCHE D
TOTAL
1,250,000
1,250,000
1,250,000
1,250,000
5,000,000
1,250,000
1,250,000
1,250,000
1,250,000
5,000,000
1,250,000
1,250,000
1,250,000
1,250,000
5,000,000
1,250,000
1,250,000
1,250,000
1,250,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
20,000,000
The options will vest subject to the following conditions:
(i)
In relation to Tranche A: the Company’s shares have traded at 10c or over for 10 consecutive trading days;
(ii) In relation to Tranche B: the Company’s shares have traded at 20c or over for 10 consecutive trading days;
(iii) In relation to Tranche C: the Company’s shares have traded at 30c or over for 10 consecutive trading days;
(iv) In relation to Tranche D: the Company’s shares have traded at 40c or over for 10 consecutive trading days.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT DIRECTORS’ REPORT
Remuneration Report (Audited) (CONTINUED)
Elements of director and executive remuneration (CONTINUED)
Details of unissued shares or interests under option at the date of this report are:
ISSUING ENTITY
Black Rock Mining
Black Rock Mining
Black Rock Mining
Black Rock Mining
NUMBER OF SHARES
UNDER OPTION
CLASS OF SHARES
EXERCISE PRICE OF
OPTION
EXPIRY DATE OF
OPTIONS
5,000,000
5,000,000
5,000,000
5,000,000
Ordinary
Ordinary
Ordinary
Ordinary
$0.10
31 August 2020
$0.10
31 August 2020
$0.10
31 August 2020
$0.10
31 August 2020
The holders of these options do not have the right, by virtue of the option, to participate in any share issue or interest
issue of the company.
The options above (20 million) pertain only to those issued to key management personnel during the year and represent
only a portion of the total options issued during the year which are disclosed above.
Performance rights
No new performance rights were issued during the reporting period.
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
126,000
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.
12
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 2018:
2018
2017
2016
2015
2014
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
24,183
(2,053,080)
(2,053,080)
$0.066
$0.04
$0.0547
187,548
(2,590,371)
(2,590,371)
$0.066
$0.066
$0.1176
11,602
(1,349,305)
(1,349,305)
$0.028
$0.066
$0.005
80,616
(995,121)
(995,121)
$0.02
$0.03
$0.007
29,681
(2,428,562)
(2,428,562)
$0.02
$0.02
$0.026
Share price and loss per share disclosures for 2014 above are calculated following the 20-for-1-share consolidation
during 2015.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT Relationship between Company Performance and Remuneration Policy (CONTINUED)
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:
Ordinary Shares
2018
1 JULY 2017
PURCHASES
RECEIVED ON
EXERCISE OF
OPTIONS/
PERFORMANCE
RIGHTS
SALES
OTHER
CHANGES
30 JUNE 2018
13
Richard Crookes
John de Vries
Stephen Copulos
Gabriel Chiappini
-
500,000
650,000
1,000,000
93,796,003
3,583,333
5,125,000
500,000
-
-
-
-
-
-
-
-
-
-
-
-
500,000
1,650,000
97,379,336
5,625,000
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:
2018
1 JULY 2017
OPTIONS
GRANTED
FREE
ATTACHING
OPTIONS
GRANTED AS
REMUNERATION
OPTIONS
LAPSED
OTHER
CHANGES
30 JUNE 2018
VESTED AND
EXERCISABLE
AT 30 JUNE
2018
VESTED
DURING
THE YEAR
Richard Crookes
John de Vries
-
-
Stephen Copulos
1,291,080
Gabriel Chiappini
-
-
-
-
-
5,000,000
5,000,000
-
-
5,000,000 (1,291,080)
5,000,000
-
-
-
-
-
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
5,000,000
-
-
-
-
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:
2018
Richard Crookes
John de Vries
Stephen Copulos
Gabriel Chiappini
1 JULY 2017
OPTIONS
GRANTED FREE
ATTACHING
OPTIONS
EXERCISED
SALES
OTHER
CHANGES
30 JUNE 2018
-
-
6,666,666
266,666
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,666,666
266,666
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:
2018
Richard Crookes
John de Vries
Stephen Copulos
Gabriel Chiappini
1 JULY 2017
PERFORMANCE
RIGHTS GRANTED
PERFORMANCE
RIGHTS EXERCISED
OTHER
CHANGES (i)
30 JUNE 2018
-
2,400,000
1,200,000
1,200,000
-
-
-
-
-
-
-
-
-
(2,400,000)
(1,200,000)
(1,200,000)
-
-
-
-
(i) Other changes represent performance rights cancelled during the year by mutual consent.
END OF REMUNERATION REPORT
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT DIRECTORS’ 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.
Richard Crookes
CHAIRMAN
Perth, 20th September 2018
14
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT AUDITOR’S INDEPENDENCE DECLARATION
The Board of Directors
Black Rock Mining Limited
Level 1, 35 Havelock Street
WEST PERTH WA 6005
20 September 2018
Dear Board Members
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
15
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 2018, I declare that to the best of my knowledge and belief, there
have been no contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) 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 2018 ANNUAL REPORT
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Continuing operations
Interest income
Government Grants
Other revenue
Administration expenses
Employee benefit expense
Exploration expenditure
Consulting expense
Depreciation and amortisation expense
Net foreign currency exchange differences
Other expenses from ordinary activities
Impairment of investments
Loss on sale of investment
16
Loss before tax
Income tax benefit
Loss for the year from continuing operations
Discontinued operations
Profit for the year from discontinued operations
FOR THE
YEAR ENDED
30/06/2018
$
FOR THE
YEAR ENDED
30/06/2017
$
NOTE
11,111
-
13,073
(579,468)
(404,799)
(374)
8,081
179,467
-
(901,015)
(445,071)
-
(715,239)
(1,258,721)
(9,845)
(23,998)
(291,541)
-
(52,000)
(3,442)
(34,510)
(361,270)
(1,030,856)
-
(2,053,080)
(3,847,337)
-
-
(2,053,080)
(3,847,337)
-
1,256,966
6
7
LOSS FOR THE YEAR
(2,053,080)
(2,590,371)
Other comprehensive income, net of income tax
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences for foreign operations
Gain on revaluation of investments
16,880
87,714
27,144
-
TOTAL COMPREHENSIVE INCOME FOR THE YEAR ATTRIBUTABLE TO
MEMBERS OF BLACK ROCK MINING LIMITED
(1,948,486)
(2,563,227)
Loss for the year attributable to owners of the Company
Total comprehensive income attributable to the owners of the Company
(2,053,080)
(1,948,486)
(2,590,371)
(2,563,227)
Loss per share
From continuing and discontinuing operations
Basic and diluted loss per share
From continuing operations
Basic and diluted loss per share
21
21
(0.0547)
(0.1176)
(0.0547)
(0.0794)
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 2018 ANNUAL REPORT CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
Assets
Current assets
Cash and bank balances
Trade and other receivables
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
FOR THE
YEAR ENDED
30/06/2018
$
FOR THE
YEAR ENDED
30/06/2017
$
NOTE
8
10
11
12
1,788,150
141,059
2,139,779
37,880
1,929,209
2,177,659
17
16,574,559
13,540,833
19,077
285,071
26,425
477,357
16,878,707
14,044,615
18,807,916
16,222,274
502,877
21,554
628,600
52,573
524,431
681,173
524,431
681,173
18,283,485
15,541,101
13
14
15
52,371,878
2,372,792
47,925,610
2,378,713
(36,461,185)
(34,763,222)
18,283,485
15,541,101
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
D
E
U
S
S
I
L
A
T
I
P
A
C
NOTE
$
S
E
S
S
O
L
D
E
T
A
L
U
M
U
C
C
A
$
T
E
S
S
A
E
V
R
E
S
E
R
N
O
I
T
A
U
L
A
V
E
R
E
V
R
E
S
E
R
T
N
E
M
Y
A
P
D
E
S
A
B
E
R
A
H
S
E
V
R
E
S
E
R
N
G
I
E
R
O
F
Y
C
N
E
R
R
U
C
L
A
T
O
T
Y
T
I
U
Q
E
$
$
$
Balance at 30 June 2016
13,
14,
15
40,253,116
(32,172,851)
-
-
-
(2,590,371)
-
(2,590,370)
7,170,248
-
(329,711)
150,867
681,090
-
-
-
-
-
-
-
-
-
47,925,610
(34,763,222)
-
-
-
(2,053,081)
-
87,714
(2,053,081)
87,714
4,740,000
(293,732)
-
-
-
-
-
-
-
355,118
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,125,784
(159,280)
10,046,769
-
-
-
-
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
2,510,848
(132,135)
15,541,101
-
-
-
-
-
414,601
(169,998)
(355,118)
-
(2,053,081)
16,880
104,594
16,880
(1,948,487)
-
-
-
-
-
4,740,000
(293,732)
414,601
(169,998)
-
18
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
Cost of share based payments
Balance at 30 June 2017
Loss for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income
for the year
Issue of ordinary shares
Cost of share capital issued
Cost of share based payments
Performance rights expired not
vested during the period
Options cancelled during the year
Balance at 30 June 2018
13,
14,
15
13,
14,
15
The above consolidated statement of changes in equity should be read in conjunction with accompanying notes.
52,371,878
(36,461,185)
87,714
2,400,333
(115,255)
18,283,485
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
Cash flow from operating activities
Payments to suppliers and employees
FOR THE
YEAR ENDED
30/06/2018
$
FOR THE
YEAR ENDED
30/06/2017
$
NOTE
(1,740,077)
(1,614,295)
Net cash flows used in operating activities
8
(1,740,077)
(1,614,295)
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
Government grants received
19
(3,584,304)
(5,860,569)
11,111
(7,288)
-
228,000
359,505
8,081
(25,980)
4,791
305,300
179,467
Net cash flows used in investing activities
(2,992,976)
(5,388,910)
Cash flows from financing activities
Proceeds from issue of shares and options
Payment of share issue costs
4,740,000
(293,732)
7,130,250
(329,711)
Net cash flows provided by financing activities
4,446,268
6,800,539
Net increase/(decrease) in cash held
Cash at the beginning of the financial year
Effect of exchange movement on cash balances
(286,785)
2,139,779
(64,844)
(202,666)
2,359,185
(16,740)
Cash and cash equivalents at the end of the year
8
1,788,150
2,139,779
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT 20
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
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 20 September 2018.
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 $2,053,080 (30 June 2017: $2,590,371), experienced net cash
outflows from operating activities of $1,740,077 (30 June 2017: $1,434,828) and cash outflows from exploration and
evaluation expenditure of $3,584,304 (30 June 2017: $5,860,569) for the year ended 30 June 2018.
During the financial year the consolidated entity deployed its working capital into its graphite prospects in Mahenge,
Tanzania, which resulted in the consolidated entity completing its optimized pre-feasibility study during August 2017,
and the completion of a Pilot Plant; processing a world first 99%+ purity graphite concentrate in a conventional
flotation circuit at scale. Additionally, the consolidated entity commenced its Definitive Feasibility Study on the
project, and the submission of the Tanzanian Environmental and Social Impact Assessment. The consolidated
entity’s key FY19 objectives are to deliver a Definitive Feasibility Study and secure offtake supply agreements.
The Directors have prepared a base case cash flow forecast, which indicates the consolidated entity has a
requirement for additional capital. During September 2018, the consolidated entity completed a share placement
with institutional and sophisticated investors of 78,125,000 shares at $0.032 per share raising $2,350,000
(after capital raising cost). In addition to the capital raised, the Company will be required to raise no less than
$2,400,000 by February 2019 to meet its base case cash flow forecast and continue its activities.
Based on the consolidated entity’s history of raising capital as and when required, and subject to the general
market conditions, the Directors are confident in the consolidated entity’s ability to raise additional capital.
Therefore, the financial report is prepared on the going concern basis.
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 asset and extinguish its liabilities in
the normal course of business.
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.
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 2017.
New and revised standards and amendments thereof and Interpretations effective for the current year end that
are relevant to the Group include:
• AASB 2016-1 Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for
Unrealised Losses
• AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107
• AASB 2017-2 Amendments to Australian Accounting Standards – Further Annual Improvements 2014-2016 Cycle
The application of these amendments has not had a material presentation impact on the financial performance or
financial position of the Group.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT
2
APPLICATION OF NEW AND REVISED ACCOUNTING STANDARDS (CONTINUED)
2.2
Standards and Interpretations issued not yet effective
At the date of authorisation of the financial statements, the Standards and Interpretations that were issued but not
yet effective are listed below.
21
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 2016-5 Amendments to Australian Accounting Standards –
Classification and Measurement of Share-based Payment Transactions
1 January 2018
30 June 2019
1 January 2019
30 June 2020
1 January 2018
30 June 2019
AASB Interpretation 22 Foreign Currency Transactions and Advance Consideration
1 January 2018
30 June 2019
AASB Interpretation 23 Uncertainty Over Income Tax Treatments,
AASB 2017- 4 Amendments to Australian Accounting Standards –
Uncertainty over Income Tax Treatments
Annual Improvements to IFRS Standards 2015–2017 Cycle
1 January 2019
30 June 2020
1 January 2019
30 June 2020
The Group has reviewed the new Accounting Standards and Interpretations which have been released but are not
yet effective and assessed their impact as follows:
• AASB 9 will have an impact as the Group has asset revaluation reserve. Based on the Group’s initial
assessments, the asset revaluation reserves is required to be reclassified into its statement of profit or loss and
other comprehensive income under AASB 9.
• AASB 15 is not likely to have a material impact on the financial statements under the new standard.
• AASB 16 is not likely to have a material impact as the Group currently has no operating leases.
All other standards summarised in the table above are not considered to have a material impact on the Group’s
results as they are not relevant to the Group’s current activities or transactions.
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.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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;
•
is exposed, or has rights, to variable returns from its involvement with the investee; and
• has the ability to use its power to affect its returns.
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.
22
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
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:
3.3.1
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.
3.4
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).
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT 3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.4
Foreign currencies (CONTINUED)
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.
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.
23
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.
3.5
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.
3.6
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 an appropriate
valuation 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”).
3.7
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
3.7.1 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.
3.7.2 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.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT 24
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.7
Taxation (CONTINUED)
3.7.2 Deferred Tax (CONTINUED)
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.
3.7.3 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.
3.8
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% - 67%
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT
3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.9
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.
25
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.
3.10
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.
3.11 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 2018 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.11 Financial Instruments (CONTINUED)
3.11.1 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.
3.11.1.1 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.
26
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified
as at FVTPL.
3.11.1.2 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.
3.11.1.3 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 2018 ANNUAL REPORT 3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
3.11 Financial Instruments (CONTINUED)
3.11.1 Financial Assets (CONTINUED)
3.11.1.4 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.
27
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.
3.11.2 Financial liabilities
Financial liabilities are classified as either financial liabilities or ‘FVTPL’ or ‘other financial liabilities’.
3.11.2.1 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.
3.11.2.2 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.
3.12 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 2018 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
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.
4.2
Key sources of estimation uncertainty
28
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 3.9 and Impairment at note 3.10. 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 and a JORC compliant resource.
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 an appropriate
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 2018 ANNUAL REPORT 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. The Group’s principal activity and focus is that of Graphite in Tanzania. It’s geothermal and hydrocarbon
activities in Hungary continues to be discontinued operations.
5.1
Segment revenues and results
2018
GRAPHITE
CORPORATE
FROM
DISCONTINUED
OPERATIONS
CONSOLIDATED
29
Interest
Total revenue
-
-
11,111
24,184
Loss before tax (continuing operations)
(178,197)
(1,874,883)
Fixed asset additions
Depreciation
Impairment
2018
-
2,598
-
8,832
7,247
-
GRAPHITE
CORPORATE
-
-
-
-
-
-
11,111
24,184
(2,053,080)
8,832
9,845
-
FROM
DISCONTINUED
OPERATIONS
CONSOLIDATED
Total segment assets
Total segment liabilities
12,705,698
6,097,263
4,955
18,807,916
107,708
416,722
1
524,431
2017
GRAPHITE
CORPORATE
FROM
DISCONTINUED
OPERATIONS
CONSOLIDATED
Interest
Total revenue
Profit (Loss) before tax
(continuing operations)
Fixed asset additions
Depreciation
Impairment
2017
-
179,467
8,081
8,081
-
-
8,081
187,548
51,406
(3,898,742)
272,609
(3,574,727)
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
442,011
5,912,824
239,161
4,955
16,227,229
1
681,174
5.2
Geographical segments
2018
Interest
Total revenue
TANZANIA
AUSTRALIA
HUNGARY
(DISCONTINUED)
CONSOLIDATED
-
-
11,111
24,184
Non-current assets
12,682,270
4,196,436
2017
Interest
Total revenue
TANZANIA
AUSTRALIA
HUNGARY
(DISCONTINUED)
-
179,467
8,081
8,081
Non-current assets
10,291,646
3,752,969
-
-
-
-
-
-
11,111
24,184
16,878,707
CONSOLIDATED
8,081
187,548
14,044,615
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
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
30
Loss from continuing operations
Profit from discontinuing operations
Loss from operations
Prima facia tax benefit at 27.5% (2017: 27.5%)
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
Other financial assets
FOR THE
YEAR ENDED
30/06/2018
FOR THE
YEAR ENDED
30/06/2017
$
-
-
-
$
-
-
-
(2,053,080)
-
(2,053,080)
(3,847,335)
1,256,966
(2,590,369)
(564,597)
230,640
65,990
-
(76,441)
344,408
-
(712,352)
147,685
313,550
(49,353)
(31,622)
332,092
-
106,028
997,634
-
150,148
746,411
-
1,103,662
896,559
1,079,541
896,559
-
24,121
1,103,662
-
-
896,559
Unrecognised deferred tax assets
Unused tax losses for which no deferred tax asset has been recognised are $15,878,433 (2017: $15,613,416)
all of which originate within Australia. Potential tax benefit is $4,366,569 (2017: $4,293,689). 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 2018 (2017: 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 2018 ANNUAL REPORT
7
DISCONTINUED OPERATIONS
7.1
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
30/06/2018
$
-
-
-
-
-
-
FOR THE
YEAR ENDED
30/06/2018
$
-
-
-
-
FOR THE
YEAR ENDED
30/06/2017
$
31
1,268,236
(422)
(29,539)
17,770
920
1,256,965
FOR THE
YEAR ENDED
30/06/2017
$
(18,918)
-
-
(18,918)
8
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
30/06/2018
$
1,788,150
1,788,150
FOR THE
YEAR ENDED
30/06/2017
$
2,139,779
2,139,779
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
8
CASH AND CASH EQUIVALENTS (CONTINUED)
8.1
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
Net foreign exchange gain/(loss)
Investment revenue recognised in profit or loss
Exploration expenditure paid in shares
Loss/(gain) on disposal of investment
(Reversal)/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
32
FOR THE
YEAR ENDED
30/06/2018
$
FOR THE
YEAR ENDED
30/06/2017
$
(2,053,081)
(2,590,370)
9,845
263,208
32,243
(11,111)
31,250
52,000
-
(1,675,646)
(103,179)
69,767
(31,019)
3,442
-
(17,770)
(8,081)
40,000
(920)
1,030,856
(1,542,843)
(13,252)
97,556
23,711
Net cash used in operating activities
(1,740,077)
(1,434,828)
8.2 Non Cash transactions
Investing activity
Payment for services rendered by consultants through the issue of shares
Receipt of shares in exchange for sale of asset
Financing activity
Performance rights exercised into shares
FOR THE
YEAR ENDED
30/06/2018
$
-
-
-
FOR THE
YEAR ENDED
30/06/2017
$
(720,667)
1,030,856
(537,036)
9
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
Australia
Hungary
Tanzania
FOR THE
YEAR ENDED
30/06/2018
FOR THE
YEAR ENDED
30/06/2017
100%
100%
100%
100%
100%
100%
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT 10
EXPLORATION AND EVALUATION ASSET
IN THE EXPLORATION PHASE
Balance at beginning of year
Expenditure incurred during the year (at cost)
Foreign exchange effect
Balance at end of year
Reconciliation of Expenditure incurred during the year (at cost):
Cash paid for exploration and evaluation
Accruals in prior year
Accruals in current year
Research and development offset received
FOR THE
YEAR ENDED
30/06/2018
$
FOR THE
YEAR ENDED
30/06/2017
$
13,540,833
7,639,211
3,245,186
(211,459)
5,901,622
-
16,574,559
13,540,833
33
FOR THE
YEAR ENDED
30/06/2018
$
FOR THE
YEAR ENDED
30/06/2017
$
3,584,305
5,767,938
(214,501)
235,262
(359,880)
(233,414)
367,098
-
Total expenditure incurred during the year (at cost)
3,245,186
5,901,622
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 balance of $16,574,559 (2017: $13,540,833) at reporting date represents the carrying value of its Graphite
assets in Tanzania.
11
OTHER FINANCIAL ASSETS (NON-CURRENT)
Shares in Eneabba Gas Limited (at fair value)
Shares in UIL Energy Limited (at fair value)
FOR THE
YEAR ENDED
30/06/2018
$
-
285,071
285,071
FOR THE
YEAR ENDED
30/06/2017
$
280,000
197,357
477,357
The UIL Energy shares have been fair valued and assessed for impairment reversal in 2018 of $87,714
(2017: impairment loss of $1,030,856) which has been recognised in the Other Comprehensive Income.
12
TRADE AND OTHER PAYABLES
Trade creditors
Accruals
Other liabilities
FOR THE
YEAR ENDED
30/06/2018
$
FOR THE
YEAR ENDED
30/06/2017
$
246,140
230,176
26,561
502,877
93,684
466,260
68,655
628,599
Included in trade creditors and accruals is an amount of $235,262 (2017: $425,960) relating to exploration expenditure.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
13
ISSUED CAPITAL
443,734,701 ordinary shares issued and fully paid (30 June 2017: 364,734,701)
FOR THE
YEAR ENDED
30/06/2018
$
FOR THE
YEAR ENDED
30/06/2017
$
52,371,878
52,371,878
47,925,610
47,925,610
34
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.
13.1 Fully paid ordinary shares
NUMBER
OF SHARES
SHARE
CAPITAL
$
Balance at 30 June 2016
285,404,703
40,253,116
Shares issued 1 August 2016 (0.16 cents per share) (ii)
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) (ii)
Shares issued 5 August 2016 (0.05 cents per share) (ii)
Shares issued 17 August 2016 (0.05 cents per share) (ii)
Shares issued 23 August 2016 (0.075 cents per share) (ii)
Shares issued 13 September 2016 (0.075 cents per share) (ii)
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
Shares issued 21 September 2016 (0.15 cents per share) (ii)
31,833,333
4,775,000
Shares issued 17 November 2016 (0.075 cents per share) (ii)
Shares issued 17 November 2016 (0.05 cents per share) (ii)
Shares issued 17 November 2016 (0.06 cents per share) (ii)
Shares issued 28 November 2016 (0.06 cents per share) (ii)
Shares issued 19 December 2016 (0.15 cents per share)
Shares issued 21 February 2017 (0.05 cents per share) (ii)
Shares issued 6 March 2017 (0.05 cents per share) (ii)
Shares issued 10 March 2017 (0.05 cents per share) (ii)
Shares issued 17 March 2017 (0.05 cents per share) (ii)
Shares issued 20 March 2017 (0.05 cents per share) (ii)
Shares issued 24 March 2017 (0.05 cents per share) (ii)
Shares issued 31 March 2017 (0.05 cents per share) (ii)
Transfer to option premium reserve
Less: capital raising costs
Balance at 30 June 2017
Shares issued 13 November 2017 (0.06 cents per share)
Shares issued 11 January 2018 (0.06 cents per share)
Less: capital raising costs
(i) Shares were issued on conversion of performance rights.
(ii) Shares issued on exercise of options
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
70,000,000
9,000,000
-
4,200,000
540,000
(293,732)
443,734,701
52,371,878
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT 13
ISSUED CAPITAL (CONTINUED)
13.2 Options
OPENING
BALANCE
NO.
EXERCISED
IN YEAR
NO.
GRANTED
IN YEAR
NO.
EXPIRED
IN YEAR
NO.
CLOSING
BALANCE
NO.
Listed options
Expiring 30 November 2018 at $0.075
33,966,655
33,966,655
-
-
-
-
-
-
33,966,655
33,966,655
35
OPENING
BALANCE
NO.
EXERCISED
IN YEAR
NO.
GRANTED
IN YEAR
NO.
EXPIRED
IN YEAR
NO.
CLOSING
BALANCE
NO.
Unlisted options
Expiring 19 January 2018 at $0.20
Expiring 30 November 2019 at $0.20
Expiring 12 April 2020 at $0.20
Expiring 31 August 2020 at $0.10
Expiring 31 August 2020 at $0.10
Expiring 31 August 2020 at $0.10
Expiring 31 August 2020 at $0.10
Weighted average exercise price
3,300,003
5,000,000
5,000,000
-
-
-
-
13,300,003
$0.24
-
-
-
-
-
-
-
-
-
6,250,000
6,250,000
6,250,000
6,250,000
(3,300,003)
(5,000,000)
-
-
-
-
-
-
-
5,000,000
6,250,000
6,250,000
6,250,000
6,250,000
25,000,000
(8,300,003)
30,000,000
The weighted average remaining contractual life of options as at 30 June 2018 is 723 days (2017: 701 days).
14
RESERVES (NET OF INCOME TAX)
Reserves
Share based payments reserve (i)
Foreign translation reserve (ii)
Asset revaluation reserve (iii)
FOR THE
YEAR ENDED
30/06/2018
$
FOR THE
YEAR ENDED
30/06/2017
$
2,400,333
(115,255)
87,714
2,510,849
(132,136)
-
2,372,792
2,378,713
(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: 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 expired not vested during the year
Less: Performance rights vested and exercised
FOR THE
YEAR ENDED
30/06/2018
$
FOR THE
YEAR ENDED
30/06/2017
$
2,510,849
2,125,784
-
414,601
(355,118)
680,667
537,036
-
-
(681,771)
(169,999)
-
2,400,333
-
(150,867)
2,510,849
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
14
RESERVES (NET OF INCOME TAX) (CONTINUED)
(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.
(iii) Asset Revaluation Reserve
The asset revaluation reserve arises from the revaluation of the Group’s listed equity investment in UIL Energy Limited.
15 ACCUMULATED LOSSES
36
Balance at beginning of the year
Net loss attributable to members
Transfer to share option reserve
Balance at end of year
16
SHARE BASED PAYMENTS
(a)
Employee Share Incentive Scheme
FOR THE
YEAR ENDED
30/06/2018
$
34,763,222
2,053,081
(355,118)
FOR THE
YEAR ENDED
30/06/2017
$
32,172,852
2,590,370
-
36,461,185
34,763,222
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 binomial/
trinomial lattice 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 13.1. During the year, the shared based payment expense recognised in the consolidated
statement of profit and loss totaled $256,125 (2017: $537,036).
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
17/10/2017
31/8/2020
$0.10
17/10/2017
31/8/2020
17/10/2017
31/8/2020
17/10/2017
31/8/2020
28/11/2017
31/8/2020
28/11/2017
31/8/2020
28/11/2017
31/8/2020
28/11/2017
31/8/2020
$0.10
$0.10
$0.10
$0.10
$0.10
$0.10
$0.10
-
-
-
-
-
-
-
-
1,250,000
1,250,000
1,250,000
1,250,000
3,750,000
3,750,000
3,750,000
3,750,000
-
-
-
-
-
-
-
-
1,250,000
1,250,000
$0.0191
1,250,000
1,250,000
$0.0044
1,250,000
1,250,000
$0.0015
1,250,000
1,250,000
$0.0006
3,750,000
3,750,000
$0.0259
3,750,000
3,750,000
$0.0193
3,750,000
3,750,000
$0.0140
3,750,000
3,750,000
$0.0122
The options may only be exercised where the following vesting conditions have been satisfied:
(i) In relation to the first 5,000,000 Options – the Company’s shares have traded at 10c or over for 10 trading days;
(ii) In relation to the next 5,000,000 Options – the Company’s shares have traded at 20c or over for 10 trading days;
(iii) In relation to the next 5,000,000 Options – the Company’s shares have traded at 30c or over for 10 trading days; and
(iv) In relation to the last 5,000,000 Options – the Company’s shares have traded at 40c or over for 10 trading days.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT
16
SHARE BASED PAYMENTS (CONTINUED)
(a)
Employee Share Incentive Scheme (CONTINUED)
Messrs de Vries, Copulos & Chiappini
TRANCHE
TRANCHE A
TRANCHE B
TRANCHE C
TRANCHE D
Grant date
28 November 2017
28 November 2017
28 November 2017
28 November 2017
Number of options
Method
Grant date share price
(cents)
Exercise price (cents)
Expected volatility
Option life
Dividend yield
Risk-free interest rate
Mr Crookes
TRANCHE
Grant date
Number of options
Method
Grant date share price
(cents)
Exercise price (cents)
Expected volatility
Option life
Dividend yield
Risk-free interest rate
3,750,000
Trinomial
3,750,000
Trinomial
3,750,000
Trinomial
3,750,000
Trinomial
37
7.4
10
100%
7.4
20
100%
7.4
30
100%
7.4
40
100%
2.75 years
2.75 years
2.75 years
2.75 years
Nil
1.89%
Nil
1.89%
Nil
1.89%
Nil
1.89%
TRANCHE A
TRANCHE B
TRANCHE C
TRANCHE D
17 October 2017
17 October 2017
17 October 2017
17 October 2017
1,250,000
Trinomial
6
10
100%
2.83 years
Nil
1.92%
1,250,000
Trinomial
6
20
100%
2.83 years
Nil
1.92%
1,250,000
Trinomial
6
30
100%
2.83 years
Nil
1.92%
1,250,000
Trinomial
6
40
100%
2.83 years
Nil
1.92%
The following reconciles the outstanding share options granted under the Plan at the beginning and end of the
financial year.
Balance at the beginning of
the financial year
Granted during the financial year:
- Directors
- Employees
Forfeited/Expired
Exercised
Balance at the end of the financial year
20,000,000
Vested and Exercisable at
the end of the year
20,000,000
2018
NUMBER
OF OPTIONS
WEIGHTED
AVERAGE
EXERCISE PRICE
(CENTS)
2017
NUMBER
OF OPTIONS
WEIGHTED
AVERAGE
EXERCISE PRICE
(CENTS)
-
-
375,000
6.00
20,000,000
10.00
-
-
-
-
-
-
10.00
10.00
-
-
-
-
-
-
(375,000)
3.00
-
-
-
-
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 exercise price of
$0.10 and a weighted average remaining contractual life of 723 days (2017: 0 days).
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
16
SHARE BASED PAYMENTS (CONTINUED)
(b)
Share Based Payments – Other
During the period share options were issued to a consultant of the company as follows in lieu of mandated monthly
fees as part of a strategic consulting agreement:
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
29/8/2017
31/8/2020
$0.10
29/8/2017
31/8/2020
29/8/2017
31/8/2020
29/8/2017
31/8/2020
$0.10
$0.10
$0.10
-
-
-
-
1,250,000
1,250,000
1,250,000
1,250,000
-
-
-
-
1,250,000
1,250,000
$0.0191
1,250,000
1,250,000
$0.0044
1,250,000
1,250,000
$0.0015
1,250,000
1,250,000
$0.0006
38
The options may only be exercised where the following vesting conditions have been satisfied:
(i) In relation to the first 1,250,000 Options – the Company’s shares have traded at 10c or over for 10 trading days;
(ii) In relation to the next 1,250,000 Options – the Company’s shares have traded at 20c or over for 10 trading days;
(iii) In relation to the next 1,250,000 Options – the Company’s shares have traded at 30c or over for 10 trading days;
and
(iv) In relation to the last 1,250,000 Options – the Company’s shares have traded at 40c or over for 10 trading days.
TRANCHE
Grant date
Number of options
Method
Grant date share price
(cents)
Exercise price (cents)
Expected volatility
Option life
Dividend yield
Risk-free interest rate
TRANCHE A
TRANCHE B
TRANCHE C
TRANCHE D
29 August 2017
29 August 2017
29 August 2017
29 August 2017
1,250,000
Trinomial
1,250,000
Trinomial
1,250,000
Trinomial
1,250,000
Trinomial
4
10
100%
3 years
Nil
1.96%
4
10
100%
3 years
Nil
1.96%
4
10
100%
3 years
Nil
1.96%
4
10
100%
3 years
Nil
1.96%
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT 16
SHARE BASED PAYMENTS (CONTINUED)
(c)
Performance rights
OPENING
BALANCE
GRANTED
IN PERIOD
EXERCISED
IN PERIOD
EXPIRED
IN PERIOD
CANCELLED
IN PERIOD
CLOSING
BALANCE
Expiring 31 December 2018
Expiring 1 March 2018
Expiring 1 March 2019
Expiring 1 March 2020
6,000,000
400,000
400,000
1,600,000
8,400,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,000,000)
(400,000)
(400,000)
(1,600,000)
(8,400,000)
-
-
-
-
-
39
Performance Rights issued during 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
S
T
H
G
R
I
F
O
R
E
B
M
U
N
E
C
N
A
M
R
O
F
R
E
P
–
S
T
H
G
R
I
F
O
E
U
L
A
V
E
C
N
A
M
R
O
F
R
E
P
B
&
A
E
H
C
N
A
R
T
–
S
T
H
G
R
I
C
E
H
C
N
A
R
T
F
O
E
U
L
A
V
E
C
N
A
M
R
O
F
R
E
P
–
S
T
H
G
R
I
D
E
H
C
N
A
R
T
F
O
E
U
L
A
V
E
C
N
A
M
R
O
F
R
E
P
S
T
H
G
R
I
E
E
H
C
N
A
R
T
F
O
E
U
L
A
V
E
C
N
A
M
R
O
F
R
E
P
S
T
H
G
R
I
A
E
H
C
N
A
R
T
E
C
N
A
M
R
O
F
R
E
P
S
T
H
G
R
I
B
E
H
C
N
A
R
T
E
C
N
A
M
R
O
F
R
E
P
S
T
H
G
R
I
C
E
H
C
N
A
R
T
E
C
N
A
M
R
O
F
R
E
P
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
S
T
H
G
R
I
D
E
H
C
N
A
R
T
E
C
N
A
M
R
O
F
R
E
P
-
-
S
T
H
G
R
I
E
E
H
C
A
R
T
E
C
N
A
M
R
O
F
R
E
P
-
-
John de Vries
2,400,000
-
-
$150,000
$139,200
-
-
-
1,200,000
1,200,000
PERFORMANCE RIGHTS
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 (800,000)
Tranche E (400,000)
30 November 2016
31 December 2018
30 November 2016
31 December 2018
30 November 2016
31 December 2018
1 March 2017
1 March 2017
1 March 2017
1 March 2017
1 March 2017
1 March 2018
1 March 2019
1 March 2020
1 March 2020
1 March 2020
$0.135
$0.135
$0.108
$0.125
$0.125
$0.125
$0.125
$0.098
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. The Trance A performance rights expired during the prior
reporting period.
(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.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
16
SHARE BASED PAYMENTS (CONTINUED)
(c)
Performance rights (CONTINUED)
Messrs Copulos & Chiappini
Grant date
Number of performance rights:
40
- S Copulos
- G Chiappini
METHOD
Tranches
Grant date share price (cents)
Exercise prices (cents)
Expected volatility
Rights life
Dividend yield
Risk-free interest rate
Mr de Vries
Grant date
Number of performance rights:
- J de Vries
METHOD
30 November 2016
1,200,000
1,200,000
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%
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
CANCELLED
IN PERIOD
CLOSING
BALANCE
ORDINARY
SHARES
ISSUED
ISSUED
SHARE
VALUE
Tranche B
Tranche C
Tranche D
Tranche E
1.200,000
1.200,000
1,200,000
1,200,000
4,800,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,200,000)
(1,200,000)
(1,200,000)
(1,200,000)
(4,800,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Tranche A performance rights expired during the prior reporting period.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT
17
KEY MANAGEMENT PERSONNEL COMPENSATION
The key management personnel of Black Rock Mining Limited during the year were:
Richard Crookes
Non-Executive Chairman
Appointed – 16 October 2017
John de Vries
Stephen Copulos
Gabriel Chiappini
Chief Executive Officer & Executive Director
Appointed – 16 March 2017
Non-Executive Director
Non-Executive Director
Company Secretary
Appointed – 22 January 2015
Appointed – 21 March 2012
Appointed – 12 July 2013
41
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 2018
$
FOR THE
YEAR ENDED
30 JUNE 2017
$
459,967
26,399
336,125
23,089
845,580
567,523
38,519
365,966
23,712
995,720
18
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
30/06/2018
$
FOR THE
YEAR ENDED
30/06/2017
$
33,705
16,078
49,783
40,488
13,269
53,757
19
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
$126,000
Payments to Laurus Corporate Services for financial services provided during
the reporting period including but not limited to Director fees, Company
Secretary, Capital Markets and Investor Relations, Accounting, Bookkeeping,
Management of Tax and Audit requirements and administration.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
20 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 7802/2012 license and USD$100 per square
kilometer for the remaining tenements to keep them 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
Graphite
PL 7802/2012
Makonde Project
Graphite
PL 10111/2014
Mahenge East Project
Graphite
PL 10426/2014
Mahenge Southwest Project
Graphite
PL 10427/2014
144.10
24.83
154.96
208.67
USD$150
USD$100
USD$100
USD$100
USD$21,615
USD$2,483
USD$15,496
USD$20,867
42
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 2018.
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 BKT 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 (2017: Nil).
c.
Operating Lease Commitments
As at 30 June 2018 and at the date of this report, there are no operating lease commitments (2017: Nil).
d.
Contractual Commitments
As at 30 June 2018, the Group had an expenditure commitment to complete the Definitive Feasibility Study with
$787,520 remaining to finalise the study.
During the year, the Group entered a contract for Pilot Programme to process 550 tonnes of Graphite Ore from
its Mahenge Graphite project. The maximum value of the contract is CAD$1,273,567 (AUD$1,303,415). At the date
of this report, the Group has not initiated the contract. The group has the ability and discretion to defer, cancel or
amend the contract without penalty.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT
21
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
30/06/2018
$
FOR THE
YEAR ENDED
30/06/2017
$
(2,053,080)
-
(2,053,080)
(3,847,336)
1,256,966
(2,590,370)
43
Weighted average number of ordinary shares used in calculating
basic and diluted profit/(loss) per share:
375,330,191
327,284,460
Basic and diluted profit/(loss) per share
From continuing operations
From discontinuing operations
Total basic and diluted profit/ (loss) per share
($0.0547)
-
($0.0547)
($0.1176)
$0.0382
($0.0794)
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.
22 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 balances. The Group’s
overall strategy remains unchanged from 2018.
The capital structure of the Group consists of net debt (borrowings offset by cash and bank balances as detailed in
note 8) and equity of the Group (comprising issued capital, reserves and accumulated losses as detailed in notes
13, 14 and 15).
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
30/06/2018
$
1,788,150
141,059
FOR THE
YEAR ENDED
30/06/2017
$
2,139,799
37,880
(502,877)
1,426,332
(628,600)
1,549,079
22.1 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 2018 ANNUAL REPORT
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
22 FINANCIAL INSTRUMENTS (CONTINUED)
22.2 Market risk
22.2.1 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, Tanzanian Shilling 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 loss for the year would have been $58,845 higher/lower (2017: $130,545
higher/ lower) had the Australian dollar strengthened/weakened by 10% against the US Dollar, and the
Hungarian Forint.
44
22.2.2 Cash flow and fair value interest rate risk
The Group is exposed to interest rate risk through cash and cash equivalents $1,788,150 (2017: $2,135,144).
At 30 June 2018, 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 $894 lower/higher
(2017: $508 lower/higher) mainly as a result of interest income deceases/increases.
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
64,425
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.
22.3 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.
22.3.1 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
22.4 Fair value estimation
<1 MONTH
246,140
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 2018 ANNUAL REPORT
23 CONTINGENT LIABILITIES
There were no material contingent liabilities as at 30 June 2018.
24 EVENTS AFTER THE REPORTING DATE
On 6 September 2018 the Company announced it allotted 78,125,000 ordinary shares at $0.032 per share raising
$2.5 million to be used to continue project development, marketing of Black Rock’s graphite to offtake partners,
permitting and mining licence process and for general working capital. As a part of the equity raise board and
management will subscribe to $500,000 in the Company’s shares on the same terms and conditions. The issue of
shares to the board is subject to shareholder approval.
45
25 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
30/06/2018
$
FOR THE
YEAR ENDED
30/06/2017
$
1,900,827
2,159,855
16,854,145
18,754,972
13,812,187
15,972,042
388,339
239,161
-
-
388,339
239,161
52,371,879
47,925,610
(36,462,165)
(34,703,578)
2,456,919
18,366,633
2,510,849
15,732,881
FOR THE
YEAR ENDED
30/06/2018
$
FOR THE
YEAR ENDED
30/06/2017
$
4,670,408
4,754,800
-
-
4,670,408
4,754,800
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT
DIRECTORS’ DECLARATION
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
46
Richard Crookes
CHAIRMAN
Perth, 20th September 2018
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT INDEPENDENT AUDIT REPORT
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
47
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 2018, 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 2018
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 $2,053,080 (30 June 2017: $2,590,371), experienced net cash outflow from
operating activities of $1,740,077 (30 June 2017: $1,434,828) and cash outflows from exploration
and evaluation expenditure of $3,584,304 (30 June 2017: $5,860,569) during the year ended 30
June 2018. 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 2018 ANNUAL REPORT INDEPENDENT AUDIT REPORT
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
Entity’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 matter described below to
be the key audit matter to be communicated in our report.
Key Audit Matter
How the scope of the audit responded to the
Key Audit Matter
48
Accounting for Exploration and
Evaluation Assets
As at June 2018 the Consolidated Entity
has $16,574,559 of capitalised
exploration and evaluation expenditure as
disclosed in Note 10.
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 10 to the financial
statements.
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 2018, 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.
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT 49
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 the Company 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.
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
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT INDEPENDENT AUDIT REPORT
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 10 to 13 of the Directors’ Report for
the year ended 30 June 2018.
In our opinion, the Remuneration Report of Black Rock Mining Limited, for the year ended 30 June
2018, 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.
50
DELOITTE TOUCHE TOHMATSU
Ian Skelton
Partner
Chartered Accountants
Perth, 20 September 2018
BLACK ROCK MINING LIMITED 2018 ANNUAL REPORT ADDITIONAL ASX INFORMATION
AS AT 17 SEPTEMBER 2018
Ordinary fully paid shares
Range of shares
RANGE
TOTAL HOLDERS
SHARES
% OF SHARE
CAPITAL
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 Over
141
170
157
867
472
54,413
505,232
1,296,932
35,693,605
484,309,515
Total
1,807
521,859,697
0.01
0.10
0.25
6.84
92.80
100.00
51
Unmarketable parcel
Minimum $ 500.00 parcel at $ 0.0300 per unit
16,667
652
4,326,029
MINIMUM
PARCEL SIZE
HOLDERS
SHARES
Top 20 shareholders
RANK NAME
SHARES
% SHARES
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
COPULOS SUPERANNUATION PTY LTD
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