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2018 ANNUAL REPORT
BANNERMAN RESOURCES LIMITED
Corporate Office
Suite 7, 245 Churchill Avenue, Subiaco WA 6008
PO Box 1973, Subiaco WA 6904
Telephone +61-8 9381 1436
Facsimile +61-8 9381 1068
www.bannermanresources.com
CORPORATE DIRECTORY
NON-EXECUTIVE CHAIRMAN
Ronnie Beevor
CHIEF EXECUTIVE OFFICER & MANAGING DIRECTOR
Brandon Munro
NON-EXECUTIVE DIRECTORS
Ian Burvill
Clive Jones
Mike Leech
PRINCIPAL & REGISTERED OFFICE
Suite 7, 245 Churchill Avenue
SUBIACO WA 6008
Australia
Telephone: +61 (8) 9381 1436
Facsimile: +61 (8) 9381 1068
AUDITORS
Ernst & Young
11 Mounts Bay Road
PERTH WA 6000
Telephone: +61 (8) 9429 2222
Facsimile: +61 (8) 9429 2432
SHARE REGISTRAR
Computershare (Australia)
Level 11
172 St George’s Terrace
PERTH WA 6000
Telephone from within Australia:
Telephone from outside Australia:
Facsimile:
1300 850 505
+61 (3) 9415 4000
+61 (8) 9323 2033
STOCK EXCHANGE LISTINGS
Australian Securities Exchange (ASX Code: BMN)
Namibian Stock Exchange (NSX Code: BMN)
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
I
CORPORATE DIRECTORY
NON-EXECUTIVE CHAIRMAN
Ronnie Beevor
CHIEF EXECUTIVE OFFICER & MANAGING DIRECTOR
Brandon Munro
NON-EXECUTIVE DIRECTORS
Ian Burvill
Clive Jones
Mike Leech
PRINCIPAL & REGISTERED OFFICE
Suite 7, 245 Churchill Avenue
SUBIACO WA 6008
Australia
Telephone: +61 (8) 9381 1436
Facsimile: +61 (8) 9381 1068
AUDITORS
Ernst & Young
11 Mounts Bay Road
PERTH WA 6000
Telephone: +61 (8) 9429 2222
Facsimile: +61 (8) 9429 2432
SHARE REGISTRAR
Computershare (Australia)
Level 11
172 St George’s Terrace
PERTH WA 6000
Telephone from within Australia:
Telephone from outside Australia:
Facsimile:
1300 850 505
+61 (3) 9415 4000
+61 (8) 9323 2033
STOCK EXCHANGE LISTINGS
Australian Securities Exchange (ASX Code: BMN)
Namibian Stock Exchange (NSX Code: BMN)
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
I
TABLE OF CONTENTS
Chairman’s Letter to Shareholders .......................................................................................................... 1
Board of Directors and Executives ........................................................................................................... 3
Directors’ Report ...................................................................................................................................... 6
Remuneration Report .............................................................................................................................16
Financial Statements ..............................................................................................................................28
Directors’ Declaration ............................................................................................................................67
Independent Auditor’s Report to the Members ....................................................................................68
ASX Additional Information ....................................................................................................................74
ABOUT BANNERMAN RESOURCES LIMITED
interests
About Bannerman - Bannerman Resources Limited is an ASX and NSX listed exploration and development company
with uranium
is a premier uranium mining
jurisdiction. Bannerman’s principal asset is its 95%-owned Etango Project situated near Rio Tinto’s Rössing uranium
mine, Paladin’s Langer Heinrich uranium mine and CGNPC’s Husab uranium mine. A definitive feasibility study and
an optimisation study has confirmed the viability of a large open pit and heap leach operation at one of the world’s
largest undeveloped uranium deposits.
in Namibia, a southern African country which
From 2015 to 2017, Bannerman conducted a large scale heap leach demonstration program to provide further
assurance to financing parties, generate process information for the detailed engineering design phase and build
and
at
www.bannermanresources.com.
available on Bannerman’s website
capability. More
information
enhance
internal
is
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
II
CHAIRMAN’S LETTER TO SHAREHOLDERS
Dear Fellow Shareholder,
As a result of a productive and disciplined year in which both the Etango Project and your Company’s balance sheet
has strengthened, I am pleased to report that Bannerman is very well positioned to benefit from the early stages of
a recovery in the uranium sector.
The uranium sector has benefitted from several significant developments over the last year, precipitated by decade
low prices caused by persistent annual surpluses in the uranium market. Cameco’s MacArthur River (the world’s
largest uranium mine) was placed into indefinite care and maintenance shortly after Paladin Energy put the Langer
Heinrich Mine into care and maintenance. KazAtomProm, the world’s largest uranium producer, announced a 20%
reduction in forecast production. Further, Orano announced supply reductions in Niger and domestic uranium
production in the United States has declined dramatically. The combined effect is forecast to put the uranium
market into a deficit in 2019 and is expected to have a significant impact on uranium prices in the next year as the
reduction in supply starts to take effect.
Demand for uranium continues to strengthen with Japan restarting further reactors and China announcing the
intention to commence construction of 6-8 additional reactors during 2018. In the short term, demand has
strengthened as financial buyers enter the market, the most notable of which was Yellow Cake plc listing on
London’s Alternative Investment Market and using the proceeds to acquire 8.1.million pounds of U308 from
KazAtomProm.
Your Company has remained productive, further enhancing the quality and value of the Etango Project through the
ongoing Definitive Feasibility Study (DFS) Update. The Company identified, through its Processing Optimisation
Study, estimated capital cost savings of US$73m, along with significant potential operating cost savings enabling a
DFS Improvement target of US$3+/lb U3O8, compared with the operating costs published in the 2015 Optimisation
Study.
The DFS Update will continue in the next year. A number of optimisation opportunities are being prioritised and the
Company will progressively undertake enhancement studies that have the potential to be NPV accretive through
reducing anticipated capital expenditure and/or operating costs. The first of these studies was the Membrane
Study, successfully completed in January 2018. Once the optimisation phase is completed, the Company will
conclude the DFS Update by undertaking definitive level engineering to incorporate identified project enhancements
and update the procurement process.
Our Etango project continued to enjoy the support of the Namibian Ministry of Mines and Energy. Exclusive
Prospecting Licence 3345 was renewed during the year and in October 2017 we announced the grant of Mineral
Deposit Retention Licence 3345 with a five year, extendable term. The Retention Licence provides long term
security of tenure and covers the Etango Deposit, all future mine infrastructure and our two satellite deposits at
Hyena and Ondjamba.
Your Company has also remained disciplined, eliminating unnecessary costs and successfully undertaking a capital
raising which saw more than a dozen new institutions enter the register. The offer, which raised $8 million before
costs, was undertaken at more than a 50% premium to our previous raising in 2016. The institutional presence on
Bannerman’s register grew further as a result of private equity substantial shareholder, Resource Capital Funds,
disposing in full of its shareholding to Australian and overseas institutions, including specialist uranium investor
Tribeca Investment Partners.
Bannerman has operated without incurring a lost time injury since 2009, a record that culminated in Bannerman
winning the relevant category of the Namibian Chamber of Mines 2018 Safety Competition. The health and safety of
all persons operating at our various places of work continue to be of the highest priority to Bannerman's directors
and management.
I am proud to say that your Company has a remarkable reputation for corporate social responsibility and effective
community engagement, which continues to add value to the Company’s assets. Highlights of the year include
endorsement by the Namibian Chamber of Environment for the highest environmental standards and transparency,
and reaching a milestone of 2,000 school children benefitting from the Bannerman Learner Assistance Scheme.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
1
CHAIRMAN’S LETTER TO SHAREHOLDERS
My sincere thanks to all of our stakeholders including the Namibian government, the One Economy Foundation (who
hold a 5% ownership of the Etango Project) and our supportive host community in Namibia. Finally, I would like to
recognise the exceptional talent and dedication of the people in Australia and Namibia working on behalf of the
Company.
I look forward to meeting with you at the upcoming Annual General Meeting.
Yours sincerely,
Ronnie Beevor
Chairman
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
2
BOARD OF DIRECTORS AND EXECUTIVES
BOARD OF DIRECTORS
Ronald (Ronnie) Beevor
B.A. (Hons)
Non-Executive Chairman
Term of Office
Director since 27 July 2009, Chairman since 21
November 2012
Independent: Yes
Skills, experience and expertise
Ronnie has more than 30 years of experience in
investment banking, including being the Head of
Investment Banking at NM Rothschild & Sons
(Australia) Limited between 1997 and 2002. During
his career, Ronnie has had an extensive involvement
in the natural resources industry, both in Australia
and internationally. Amongst a broad range of
former mining company directorships, Ronnie was a
director of Oxiana Limited which successfully
developed the Sepon gold-copper project in Laos as
well as the Prominent Hill copper-gold project in
South Australia.
Ronnie has an Honours Degree in Philosophy, Politics
and Economics from Oxford University (UK) and
qualified as a chartered accountant in London in
1972.
Special Responsibilities
Member of the Audit Committee
Member of the Remuneration, Nomination and
Corporate Governance Committee
Current ASX listed directorships
Wolf Minerals Limited (appointed 20 September
2013)
MZI Resources Limited (appointed 15 April 2016)
Former ASX listed directorships over the past three
years
Unity Mining Limited (1 November 2002 to 18
November 2015)
Brandon Munro
LLB, B.Econ, GAICD, F Fin
Chief Executive Officer (CEO) and Managing Director
Term of Office:
CEO and Managing Director since 9 March 2016
Independent: No
Skills, experience and expertise
Brandon is a quantitative economist and lawyer with 20
years of experience as a corporate
lawyer and
resources executive, including serving as Bannerman’s
in
General Manager between 2009-2011, based
Namibia. Before joining Bannerman as CEO/Managing
Director, Brandon was Managing Director of ASX-listed
Kunene Resources Ltd, a base metals explorer that
discovered the Opuwo Cobalt Project in Namibia.
Brandon lived in Namibia between 2009-2015, where
he served as Governance Advisor to the Namibian
Uranium Association and Strategic Advisor – Mining
Charter to the Namibian Chamber of Mines. Brandon’s
voluntary roles include as Trustee of Save the Rhino
Trust Namibia, a high profile Namibian NGO, and Board
member of the Murdoch University Art Collection. He
is a non-executive director of ASX-listed Novatti Group
Ltd
Special Responsibilities
Managing Director
Current ASX listed directorships
Novatti Group Limited (appointed 12 October 2015)
Former ASX listed directorships over the past three
years
Kunene Resources Limited (4 April 2014 to 18
December 2015)
Rewardle Holdings Limited (25 March 2014 to 30 May
2017)
Ian Burvill
BEng (Mech), MBA, MIEAust, CPEng, M.AusIMM, GAICD
Non-Executive Director
Term of Office
Director since 14 June 2012
Independent Yes
has
years
of mining
Skills, experience and expertise
Ian
industry
over 30
experience. He started his career as a mechanical
engineer, then worked as a merchant banker before
becoming a senior executive in private equity. He is a
former Partner of Resource Capital Funds (RCF) and a
past Associate Director of Rothschild Australia
Limited. Ian has sat on the boards of nine mining
companies, two mining services groups, a mining
venture capital firm and a leading mining private equity
firm. He was nominated to Bannerman’s board by RCF.
Ian is classified as an Independent Director as RCF
reduced its shareholding to nil in September 2018.
Special Responsibilities
Chairman of the Remuneration, Nomination and
Corporate Governance Committee
Member of the Audit Committee
Current ASX listed directorships
Nil
Other current listed directorships
Nil
Former ASX listed directorships over the past three
years
Nil
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
3
BOARD OF DIRECTORS AND EXECUTIVES (CONTINUED)
Clive Jones
B.App.Sc(Geol), M.AusIMM
Non-Executive Director
Term of Office
Director since 12 January 2007
Independent No
Skills, experience and expertise
Clive has more than 25 years of experience in mineral
exploration, across a diverse range of commodities
including gold, base metals, mineral sands, uranium
and iron ore. Clive is the original vendor of the
Company’s Etango Project in Namibia.
Special Responsibilities
Chairman of the Health, Safety, Environment and
Community Committee
Member of the Remuneration, Nomination and
Corporate Governance Committee
Current ASX listed directorships
Cazaly Resources Limited (Joint Managing Director)
(appointed 15 September 2003)
Corazon Mining Limited (Chairman) (appointed 10
February 2005)
Former ASX listed directorships over the past three
years
Unity Mining Limited (Chairman) (10 January 2013 to
1 June 2016)
David Tucker
BSc.Geol
Geology), M.AusIMM, FAICD
Non-Executive Director
(Hons), MSc(Mining and Exploration
Term of Office
18 March 2008 to 23 November 2017
Independent Yes
Skills, experience and expertise
David has more than 40 years of experience in mining
and exploration, including 20 years working as an
exploration geologist, the first 10 years of which were
in the uranium sector with United Uranium NL,
Noranda Australia, the Australian Atomic Energy
Commission and Esso Australia Limited. David was
formerly responsible
for business development,
public affairs and investor relations at Homestake
Gold of Australia, Director of Corporate Affairs at
Barrick Australia Pacific and a director of Homestake's
Australian subsidiaries, Barrick Mining Company
(Australia) and Barrick Gold of Australia.
Special Responsibilities
Chairman of the Health, Safety, Environment and
Community Committee
Chairman of the Audit Committee
Current ASX listed directorships
Nil
Former ASX listed directorships over the past three
years
Nil
Mike Leech
FCIS (Accountancy)
Non-Executive Director
Term of Office
Director since 12 April 2017
Independent Yes
Skills, experience and expertise
Mike is a respected statesman of the Namibian
mining industry. He is a former Managing Director of
Rössing Uranium Ltd, past president of the Namibian
Chamber of Mines and past Chairman of the
Namibian Uranium Association. His career with Rio
Tinto started in 1982 when he joined Rössing as an
accountant and included a posting as Administration
Director of Anglesey Aluminium before returning to
Rössing in 1997 as Chief Financial Officer. Mike was
Managing Director of Rössing, then the largest open
pit uranium mine in the world, for 6 years until he
retired in 2011. Since retirement Mike has consulted
to the uranium sector and served as a non-executive
director of ASX-listed Kunene Resources Ltd, a base
metals explorer that discovered the Opuwo Cobalt
Project in Namibia.
Mike’s commitment to corporate social responsibility
in Namibia is well known, including as Trustee of Save
the Rhino Trust Namibia and having served for 18
years as Trustee of the Rössing Foundation.
Mike was named an honorary life member of the
Namibian Uranium Association in recognition of his
singular service to the uranium industry.
Special Responsibilities
Chairman of Bannerman’s 95% owned Namibian
subsidiary, Bannerman Mining Resources (Namibia)
(Pty) Ltd
Chairman of the Audit Committee
Member of the Health, Safety, Environment and
Community Committee
Current ASX listed directorships
Nil
Former ASX listed directorships over the past three
years
Kunene Resources Limited (4 November 2013 to 17
September 2015)
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
4
BOARD OF DIRECTORS AND EXECUTIVES (CONTINUED)
COMPANY SECRETARY
Robert Dalton
BA (Hons), FCCA, AGIA, ACIS, ATI
Term of Office
Company Secretary since 17 September 2014
Skills, experience and expertise
Robert has more than 15 years of experience in
He
auditing, accounting and secretarial roles.
commenced his career at an international accounting
firm and has had significant exposure to the
resources sector. His most recent appointment was
that of Chief Financial Officer and Company Secretary
at Tangiers Petroleum Ltd.
EXECUTIVE
Werner Ewald
BSc (Elect), MBA (Stellenbosch)
Managing Director, Bannerman Mining Resources
(Namibia) (Pty) Ltd
Term of Office
Since 24 June 2010
Skills, experience and expertise
Werner joined Bannerman in June 2010 as the Etango
Project Co-ordinator following 22 years with Rio Tinto
which included 20 years at the Rössing Uranium Mine
in Namibia and 2 years at the Tarong Coal Mine in
Queensland,
numerous
operational roles at Rössing including Engineering
Manager, Mine Operations Manager and Business
Improvement Manager. Prior to Rio Tinto he worked
with the De Beers Group at their underground
operations near Kimberly, South Africa and the
Namdeb alluvial operations in Namibia.
Australia.
held
He
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
5
DIRECTORS’ REPORT
FOR THE YEAR ENDED 30 JUNE 2018
The directors present their report on the consolidated entity comprising Bannerman Resources Limited
(“Bannerman” or the “Company”) and its controlled entities (the “Group”) for the year ended 30 June 2018 (“the
financial year”). Bannerman is a company limited by shares that is incorporated and domiciled in Australia.
BOARD OF DIRECTORS
The directors of Bannerman in office during the financial year and up to the date of this report were:
Name
Ronnie Beevor
Brandon Munro
Ian Burvill
Clive Jones
David Tucker
Mike Leech
Position
Independent
Appointed / Resigned
Non-Executive Chairman
Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Yes
No
Yes(i)
No
Yes
Yes
27 July 2009
9 March 2016
14 June 2012
12 January 2007
Resigned 23 November 2017
12 April 2017
(i)
Ian Burvill is classified as an Independent Director. Until September 2018 he was a nominee of RCF and therefore was not independent at
30 June 2018 (RCF had the right to appoint up to two nominee directors whilst the shareholding of each of RCFIV and RCFVI each remained
above 5%). RCF’s appointment right fell away when RCF sold its entire shareholding on 5 September 2018. Ian wishes to remain on the
board in an independent capacity, with the full support of the other members of the Board.
COMPANY SECRETARY
The company secretary of Bannerman in office during the financial year and up to the date of this report was:
Name
Appointed
Robert Dalton
17 September 2014
INFORMATION ON DIRECTORS AND COMPANY SECRETARY
Particulars on the skills, experience, expertise and responsibilities of each director and the company secretary at the
date of this report, including all directorships of other companies listed on the Australian Securities Exchange, held or
previously held by a director at any time in the past three years, are set out on pages 2 to 5 of this report.
BOARD MEETING ATTENDANCE
Particulars of the number of meetings of the Board of directors of Bannerman and each Board committee of
directors held and attended by each director during the 12 months ended 30 June 2018 are set out in Table 1 below.
Table 1. Directors in Office and attendance at Board and Board Committee Meetings during 2017/2018
Board meetings
Board committee meetings
Remuneration,
Nomination & Corp.
Governance
Committee
HSEC
Committee
Audit Committee
A
9
9
9
9
4
9
B
9
9
9
9
4
9
A
3
3*
3
3*
2
3
B
3
-
3
-
2
3
A
3
3*
3
3
1*
1*
B
3
-
3
3
-
-
A
1*
2*
-
2
1
2
B
-
-
-
2
1
2
Ronnie Beevor
Brandon Munro
Ian Burvill
Clive Jones
David Tucker
Mike Leech
A = Number of meetings attended
B = Number of meetings held during the time the director held office or was a member of the relevant committee during the year.
Indicates that a Director attended some or all meetings by invitation whilst not being a member of a specific committee.
*
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
6
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
DIRECTORS’ INTERESTS IN SECURITIES IN BANNERMAN
As at the date of this report, the relevant interests of each director in the ordinary shares and share options in
Bannerman, as notified to the Australian Securities Exchange in accordance with s205G(1) of the Corporations Act
2001, are as follows:
Fully Paid Ordinary Shares
Share Options
Performance Rights
Beneficial,
private
company or
trust
Own name
Beneficial,
private
company or
trust
Own name
Beneficial,
private
company or
trust
Own name
Ronnie Beevor
1,601,543
719,100
-
16,475,200
-
Brandon Munro
2,000,000
Ian Burvill
Clive Jones
Mike Leech
-
77,207,668
-
-
-
-
-
20,000,000
-
14,378,800
-
5,194,800
8,237,600
-
-
3,839,000
-
-
-
-
-
-
-
-
PRINCIPAL ACTIVITIES
Bannerman Resources Limited is an exploration and development company with uranium interests in Namibia, a
southern African country which is a premier uranium mining jurisdiction. Bannerman’s principal asset is its 95%-
owned Etango Project situated southwest of Rio Tinto’s Rössing uranium mine and CGNPC’s Husab Mine and to the
north west of Paladin Energy’s Langer-Heinrich mine. Etango is one of the world’s largest undeveloped uranium
deposits. Bannerman is focused on the development of a large open pit uranium operation at Etango.
OPERATING AND FINANCIAL REVIEW
CORPORATE
Successful A$8 million Capital Raising
In June 2018, Bannerman successfully completed a heavily oversubscribed A$8 million private placement to
institutional and sophisticated investors, through the issue of 173,913,043 new Bannerman shares at an issue price
of A$0.046 per share.
Funds raised from the Placement will be used to progress the current Definitive Feasibility Study (DFS) Update by
furthering optimisation opportunities at the Etango Project, continue product marketing and for general working
capital and corporate purposes (including financing and offtake initiatives).
Director Resignation
Mr David Tucker stepped down as a Non-Executive Director at the Company’s Annual General Meeting in November
2017. Mr Tucker has served Bannerman in this role since March 2008. Over this time his combined 40 years of
experience as an exploration geologist and in senior corporate affairs roles has provided critical insights for the
Company to the benefit of all stakeholders. Mr Tucker was also instrumental in laying a strong foundation for the
Company in Namibia by providing hands-on assistance with community relations and instilling the open and
transparent approach to community engagement for which Bannerman remains well regarded.
Issued Securities
At the date of this report, the Company has on issue 1,030,805,705 ordinary shares, 35,319,739 performance and
share rights and 69,875,400 unlisted share options. The share rights and share options are subject to various
performance targets and continuous employment periods.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
7
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
ETANGO URANIUM PROJECT (BANNERMAN 95%)
Overview
The Etango Project is one of the world’s largest
undeveloped uranium deposits, located in the Erongo
uranium mining region of Namibia which hosts the
Rössing, Husab and Langer-Heinrich mines. Etango is
73km by road from Walvis Bay, one of southern
Africa’s busiest deep-water ports through which
uranium has been exported for over 35 years. Road,
rail, electricity and water networks are all located
nearby.
DFS (completed in 2012)
Bannerman completed the DFS and Environmental and
Social Impact Assessment (“ESIA”) on the Etango
project in 2012. The respective studies, as announced
to the market on 10 April 2012, confirmed the
technical, economic and environmental viability of the
project at historical term uranium prices.
Figure 1 – The Etango Project showing MDRL 3345 and EPL 3345
DFS Update Progressed – Processing Optimisation Study Successfully completed
Bannerman’s 95%-owned Etango Project is one of the largest and most advanced uranium projects globally. Etango
is located within the Erongo uranium province of Namibia, which also hosts the Rössing (Rio Tinto), Langer Heinrich
(Paladin Energy) and Husab (China General Nuclear) uranium mines.
Bannerman commenced the Etango Processing Optimisation Study (Processing OS) in the March 2017 quarter with
the objective of incorporating the favourable results obtained in the Heap Leach Demonstration Plant Program and
evaluating the application of recent processing technological advances since the 2012 Definitive Feasibility Study
(DFS) was completed. The results and recommendations from the Processing OS will be incorporated into the DFS
Update, in conjunction with definitive level procurement aimed at capturing the broader cost deflation that has
occurred in the resources sector since 2012.
In November 2017 AMEC Foster Wheeler issued a detailed report following completion of the Processing OS. The
announcement in November 2017 demonstrated the success of the study, the potential for nano-filtration to benefit
the project (discussed below) and identified a number of areas where further potential capital and operating cost
savings may be confirmed by the work to be undertaken during completion of the DFS Update.
Estimated Capital Cost Savings of US73m (+/-30%)
The Processing OS was undertaken with the primary objective of reducing the capital cost associated with the
comminution circuit and processing plant design, without simply “trading off” reduced capital costs against
increased operating costs. In addition to substantially reducing estimated pre-production capital by US$73 million
without an operating cost trade-off, the Processing OS identified further capital and operating cost reduction
opportunities that can be evaluated during definitive level engineering and procurement to be completed under the
DFS Update.
Identified capital savings were supported by revised budget quotations for new equipment and revised layouts and
basic arrangements layouts. Civil, structural, electrical and instrument costs were benchmarked against current
projects.
The most significant estimated capital cost savings resulted from the following:
Simplifying the crushing, stockpiling and screening circuit;
Confirmation that Ion Exchange is favourable to Solvent Exchange for both economic and operational reasons;
Removing pinned bed clarifiers after the Heap Leach Demonstration Plant program confirmed the low
suspended solids content of the PLS in the Etango solution; and
The use of a single agglomeration unit.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
8
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
The aggregate impact is an overall simplification of the Etango flowsheet that delivers an estimated US$73 million
savings, with a level of accuracy of +/- 30%.
Improvement in Operating Cost
The Processing OS identifies significant potential operating cost savings and has led to the Company formulating a
DFS Update improvement target of US$3+/lb U3O8, compared with the operating costs published in the 2015
Optimisation Study. The most significant estimated operating cost savings resulted from the following:
Testwork confirmed a 40% reduction in the binder required for the agglomeration process. Stacking tests and
hydrodynamic column tests were performed at Mintek laboratories in South Africa with varying binder levels.
The testwork concluded that a binder dosage of 150 grams per tonne of ore (as compared to the 250 g/t in the
DFS) is sufficient for the target heap height and irrigation flow. This reduction in binder reduces the forecast
operating cost by approximately US$0.75/lb.
The Heap Leach Demonstration Plant testwork over two years has consistently shown a final recovery of
approximately 93% against the DFS projection for a scaled-up heap of 86.9%. The testwork results, which
included 280 tonnes of ore, were used by AMEC Foster Wheeler to project a scaled-up processing recovery of
87.8%. This improved recovery reduces the forecast operating cost by approximately US$0.40/lb.
The Heap Leach Demonstration Plant testwork also consistently showed acid consumption averaging
14.4kg/tonne compared to the DFS projection of 17.6 kg/tonne. The scaled-up acid consumption was reduced
to a level of 16.8 kg/tonne. Further detailed engineering work will be done in the DFS Update to accurately
reflect the operating savings achieved with this lower acid consumption and other opportunities to reduce acid
costs such as membrane acid recovery.
The operating savings obtained from the simplified comminution circuit will also be reflected in the DFS Update.
A range of further potential operating cost saving opportunities, such as reduced maintenance assumptions
associated with capital reductions and the operating benefits of a simplified processing circuit, will be considered
during the definitive level engineering and procurement to be conducted under the DFS Update.
Accordingly, further operating cost improvements are anticipated and the Company targets improvements of
US$3+/lb U3O8 across the life of mine.
Continued technical enhancement of Etango
The Processing OS identified the opportunity to incorporate nano-filtration technology in the processing circuit. A
subsequent desk-top study by the Australian equipment vendors confirmed this potential after reviewing analytical
data from the Etango Heap Leach Demonstration Plant. A membrane pilot test rig was mobilised to site to
undertake an initial test work program, under the supervision of Bannerman’s technical team and the equipment
vendors. The test work used significant volumes of pregnant leach solution obtained from operation of two cribs at
the Demonstration Plant. An IX process was then used to make concentrated eluate solution which was also used in
the test work. The initial test work was completed by April 2018.
The membrane test work undertaken successfully demonstrated the ability of the nano-technology to recover acid
for re-use and upgrade the uranium concentration in the solution almost ten-fold. The testwork on solution coming
from the ion-exchange (IX) circuit demonstrated that a volumetric recovery of 90% was achievable. This further
resulted in over 80% of the acid being recovered, along with a corresponding decrease in the volume of
neutralisation chemicals required. This confirms that Ion Exchange (IX) with nano-filtration (NF) is favourable to
Solvent Extraction (SX) at Etango for both economic and operational reasons. The data obtained through the
Membrane Study also provides valuable input into the DFS Update.
The bulk of the potential savings achieved from using membrane technology are from recovering the majority of the
acid for re-use, the consequential reduction in neutralisation chemicals and the reduced equipment size following
the membrane plant (given downstream solution volumes are now reduced by around 90%).
The continued technical enhancement since the 2012 DFS repositions Etango and has confirmed the technical
robustness of the project metrics. The Mining and Processing Optimisation studies and the extensive confirmatory
testwork conducted at the Etango Demonstration Plant and external laboratories places Etango at the forefront of
the global development pipeline of projects with targeted annual production at or above 2 Mlbs U3O8 per annum.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
9
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
DFS Update to continue with funding for optimisation opportunities
With a strong cash balance (A$8.3 million at year end), the Company is well funded to continue the Etango Project
Definitive Feasibility Study (DFS) Update. A number of optimisation opportunities are being prioritised and the
Company will progressively undertake optimisation studies that have the potential to be NPV accretive through
reducing anticipated capital expenditure and/or operating costs. Once the optimisation phase is completed, the
Company will conclude the DFS Update by undertaking definitive level engineering to incorporate identified project
enhancements and update the procurement process.
Regulatory Approvals
On 2 October 2017, Bannerman announced that the Namibian Ministry of Mines and Energy had granted a Mineral
Deposit Retention Licence with a five year extendable term (Retention Licence) over Bannerman’s 95%-owned
Etango Uranium Project.
The Retention Licence covers an area of 7,295 hectares, which includes the Etango ore body, two satellite deposits
at Hyena and Ondjamba and all planned mine infrastructure (see Figure 2 below). Accordingly, 100% of the project’s
uranium resources are now secured under long term tenure.
The Retention Licence provides strong and exclusive rights to tenure and the right (without obligation) to continue
with exploration or development work, enabling the DFS Update work program to continue.
Under the Namibian Minerals (Prospecting and Mining) Act 1992, a Mineral Deposit Retention Licence may be
granted to a project where all feasibility and other work has been completed to enable mining, however the
commodity price does not currently support the profitable development of the project. The applicant must
demonstrate that the relevant commodity price is expected to improve sufficiently to enable profitable mining.
Figure 2 - MDRL 3345 (outline shown in black) covers an area of 7,295 hectares and, as can be seen above, the Licence area includes all planned
mine infrastructure.
Bannerman also holds Exclusive Prospecting Licence 3345 in Namibia (see Figure 1), which is valid until 25 April 2019
and thereafter subject to renew by the Namibian Ministry of Mines and Energy.
The Ministry of Environment and Tourism granted Bannerman initial Environmental Clearances for the Etango
Project in 2010 and for the project’s Linear Infrastructure in 2012, both of which are important pre-requisites for a
Mining Licence. A renewal for the Etango Project Environmental Clearance was granted in November 2015 for a
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
10
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
further 3 years while the renewal for the project’s Linear Infrastructure Environmental Clearance was granted in
May 2016 also for a further 3 years.
The Company also announced on 4 July 2016 that correspondence had been received from the MME stating that the
Honourable Minister intends to refuse the application for the Etango project Mining Licence, which was applied for
in December 2009, citing the current low uranium price. The refusal was communicated formally on 3 September
2018. The Honourable Minister’s decision was not unexpected and Bannerman retains the right to re-apply for a
mining licence when the uranium market recovers.
CONSOLIDATED RESULTS
The consolidated net loss after tax for the 12 months ending 30 June 2018 was $2,478,000 (2017: $2,696,000) was
attributable primarily to corporate and administrative expenses, and non-cash share-based compensation expenses.
Corporate, administration, personnel and other expenses for the reporting period were $2,511,000 (2017:
$3,092,000), including employee and director share-based payment expense of $769,000 (2017 expense: $785,000).
Refer to the Remuneration Report and Note 20 of the financial report for further details on share-based payments.
Income for the reporting period included interest income of $31,000 (2017: $41,000).
Capitalised exploration and evaluation expenditure was $54,933,000 as at 30 June 2018 (2017: $54,883,000)
reflecting the capitalisation of costs relating to the Etango Project heap leach demonstration plan construction and
operation, feasibility study, resource definition drilling and assaying, and other exploration and evaluation costs, net
of foreign currency translation movements and sale of a royalty. Total additions for the year amounted to $900,000
(2017: $1,215,000). A foreign exchange translation reduction of $850,000 (2017: increase of $4,909,000), resulting
in an increase in carrying value, was also recorded for the year. This adjustment reflects the strengthening of the
Australian $ against the Namibian $ over the year.
Cash Position
Cash and cash equivalents were $8,325,000 as at 30 June 2018 (2017: $3,420,000).
Cash outflow from operating activities during the year amounted to $1,590,000 (2017: $1,371,000).
Cash outflow from investing activities during the year amounted to $1,018,000 (2017: $651,000), related primarily to
the operation heap leach demonstration plant and DFS update expenditure.
Cash inflow from financing activities during the year amounted to $7,508,000 (2017: $3,841,000), related to the
$8,000,000 share placements undertaken during the year.
Issued Capital
Issued capital at the end of the financial year amounted to $140,983,000 (2017: $133,475,000). The increase of
$7,508,000 (2017: $3,841,000) related to the issue of 173,913,043 shares in relation to the $8,000,000 share
placements (2017: $4,060,000).
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
Other than items already noted elsewhere in this report, there were no additional significant changes in the state of
affairs of the Group during the financial year.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Likely developments in the operations of the Group are set out in the “Etango Uranium Project” on page 8 - 11 of
this report.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
11
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
Disclosure of any further information has not been included in this report, because, in the reasonable opinion of the
Directors, to do so would be likely to prejudice the business activities of the Group.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
No other matters or circumstances have arisen since the end of the financial period which significantly affected or
may significantly affect the operations of the Consolidated Entity, the results of those operations, or the state of
affairs of the Consolidated Entity in future financial years.
SHARE OPTIONS / PERFORMANCE RIGHTS
Share Options / Performance Rights on Issue
Details of share options and performance rights in Bannerman as at the date of this report are set out below:
Security Type
Number
Exercise price
Expiry date
Share Options
Share Options
Share Options
Share Options
Share Options
Share Options
7,846,000
8,300,000
10,200,000
10,200,000
19,598,200
13,731,200
$0.044
$0.045
$0.057
$0.07
$0.042
$0.069
Security Type
Number
Exercise price
Performance Rights
Performance Rights
Performance Rights
8,432,121
16,300,218
10,587,400
n/a
n/a
n/a
Share Options and Performance Rights issued
15 November 2018
25 July 2019
25 July 2019
25 July 2019
15 November 2019
15 November 2020
Vesting date
15 November 2018
15 November 2019
15 November 2020
During the financial year 16,931,200 share options (2017: 25,098,200) and 14,973,900 performance rights (2017:
25,000,700) were issued.
No share option or performance rights holder has any right under the share options or rights to participate in any
other share issue of the Company or any other entity.
Share options exercised
During or since the end of the financial year, no share options (2017: nil) were exercised.
Performance Rights vested
During or since the end of the financial year, 7,265,040 performance rights (2017: 5,319,896) vested.
Share Options and Performance Rights forfeited or cancelled
During or since the end of the financial year, no share options (2017: nil) and 10,295,214 performance rights (2017:
9,328,740) were forfeited or cancelled.
Share Options expired or lapsed
During or since the end of the financial year, 3,664,400 share options (2017: 4,504,000) have expired or lapsed.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
12
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
ENVIRONMENTAL DISCLOSURE
The Group is subject to various laws governing the protection of the environment in matters such as air and water
quality, waste emission and disposal, environmental impact assessments, mine rehabilitation and access to, and the
use of, ground water. In particular, some activities are required to be licensed under environmental protection
legislation of the jurisdiction in which they are located and such licenses include requirements specific to the subject
site.
So far as the directors are aware, there have been no material breaches of the Company’s licence conditions, and all
exploration activities have been undertaken in compliance with the relevant environmental regulations.
INDEMNITIES AND INSURANCE OF DIRECTORS AND OFFICERS
During the financial year, the Company paid a premium to insure the directors and officers of the Group against
liabilities incurred in the performance of their duties. Under the terms and conditions of the insurance contract, the
nature of liabilities insured against and the premium paid cannot be disclosed.
The officers of the Group covered by the insurance policy include any person acting in the course of duties for the
Group who is, or was, a director, executive officer, company secretary or a senior manager within the Group.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be
brought against the officers, in their capacity as officers, of entities in the Group, and any other payments arising
from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities
that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their
position or of information to gain advantage for themselves or someone else or to cause detriment to the Group. It
is not possible to apportion the premium between amounts relating to the insurance against legal costs and those
relating to other liabilities.
INDEMNIFICATION OF AUDITORS
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst & Young during or since the financial year.
PROCEEDINGS ON BEHALF OF THE GROUP
At the date of this report, there are no leave applications or proceedings brought on behalf of the Group under s237
of the Corporations Act 2001.
DIVIDENDS
No dividend has been declared or paid during the year (2017: nil).
ROUNDING
The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where
rounding is applicable and where noted ($’000)) under the option available to the Company under ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument 2016/191. The Company is an entity to which the Class Order
applies.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
13
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
NON-AUDIT SERVICES
In accordance with the Company’s External Auditor Policy, the Company may decide to engage the external audit
firm on assignments additional to its statutory audit duties where the auditor’s expertise and experience with the
Group are important.
Details of the amounts paid or payable to the auditor, Ernst & Young, for audit and non-audit services provided
during the financial year are set out in Note 5 of the financial report.
The Board of directors, in accordance with advice received from the Audit Committee, is satisfied that the provision
of the non-audit services detailed in Note 5 of the financial report is compatible with the general standard of
independence for auditors imposed by the Corporations Act 2001. The directors are also satisfied that the provision
of these non-audit services did not compromise the auditor independence requirements of the Corporations Act
2001 because:
they have no reason to question the veracity of the auditor’s independence declaration referred to in the
section immediately following this section of the report; and
the nature of the non-audit services provided is consistent with those requirements.
AUDITOR’S INDEPENDENCE DECLARATION
Ernst & Young continues as external auditor in accordance with s327 of the Corporations Act 2001. The auditor’s
independence declaration as required under s307C of the Corporations Act 2001 is set out below and forms part of
this report.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
14
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s independence declaration to the Directors of Bannerman
Resources Limited
As lead auditor for the audit of Bannerman Resources Limited for the year ended 30 June 2018, I declare
to the best of my knowledge and belief, there have been:
a.
b.
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Bannerman Resources Limited and the entities it controlled during the
financial period.
Ernst & Young
Robert A Kirkby
Partner
28 September 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
RK:DA:BANNERMAN:053
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
REMUNERATION REPORT (AUDITED)
INTRODUCTION AND REMUNERATION STRATEGY
The Board of Bannerman is committed to providing a remuneration framework that is designed to attract, motivate
and maintain appropriately qualified and experienced individuals whilst balancing the expectations of shareholders.
The Company’s remuneration policies are structured to ensure a link between Company performance and
appropriate rewards, and remuneration for executives involves a combination of both fixed and variable (“at risk”)
remuneration, including long term incentives to drive the Company’s desired results.
In developing the Company’s remuneration policy, the Board remains focussed on competitive remuneration
packages and long term equity plans, which reward executives for delivering satisfactory performance to
shareholders. In this regard, Bannerman has developed equity rewards based on performance hurdles that deliver
returns for shareholders.
SUMMARY
The remuneration report summarises the remuneration arrangements for the reporting period 1 July 2017 to
30 June 2018 for the directors and executives of Bannerman and the Group in office during the financial year.
The information provided in this remuneration report has been audited as required by s308(3C) of the Corporations
Act 2001.
KEY MANAGEMENT PERSONNEL
For the purpose of this report, key management personnel of the Group (as defined in AASB 124 Related Party
Disclosures) are those persons identified in this section who have authority and responsibility for planning, directing
and controlling the activities of the Group, whether directly or indirectly, including any director (whether executive
or otherwise) of the parent entity.
The directors and executives considered to be key management personnel of the Group up to the date of this report
are the directors and executives set out in Table 1 below.
Period
Full
Full
Full
Up to 23 November 2017
Full
Table 1 - Key management personnel
Name
Position
Non-Executive Directors
Ronnie Beevor
Ian Burvill
Clive Jones
David Tucker
Mike Leech
Executive Director
Brandon Munro
Other Executive Personnel
Werner Ewald
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive Officer and Managing Director
Managing Director - Namibia
Full
Full
1. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
Board Remuneration, Nomination and Corporate Governance Committee
The Remuneration Committee assists the Board to fulfil its responsibilities to shareholders by ensuring the Group
has remuneration policies that fairly and competitively reward executives and the broader Bannerman workforce.
The Remuneration Committee’s decisions on reward structures are based on the current competitive environment,
remuneration packages for executives and employees in the resources industry and the size and complexity of the
Group.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
16
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
The Remuneration Committee’s responsibilities include reviewing the Company’s remuneration framework and
evaluating the performance of the CEO and monitoring the performance of the executive team.
Independent remuneration consultants are engaged by the Remuneration Committee from time to time to ensure
the Company’s remuneration system and reward practices are consistent with market practices. No remuneration
consultants were used in the current year.
Directors’ remuneration policy and structure
Bannerman’s non-executive director remuneration policy aims to reward non-executive directors fairly and
responsibly having regard to the:
level of fees paid to directors relative to other comparatively sized exploration and mining companies;
size and complexity of Bannerman’s operations; and
responsibilities and work requirements of individual Board members.
Fees paid to the non-executive directors of Bannerman are usually reviewed annually by the Remuneration
Committee, and based on periodic advice from external remuneration consultants. The Board decided that in light
of the operating environment it was appropriate that non-executive director remuneration remained unchanged for
the current year.
Directors’ remuneration limits
Non-executive directors’ fees are determined within an aggregated directors’ annual fee limit of $750,000, which
was last approved by shareholders on 17 September 2008.
Directors’ remuneration framework
Non-executive directors’ remuneration consists of base fees (inclusive of superannuation); annual grants of share
rights or share options; and audit committee chairman fees, details of which are set out in Table 2 below. Non-
executive directors may also receive an initial grant of share rights or share options at the time of joining the Board.
Board fees are not paid to the executive director as the time spent on Board work and the responsibilities of Board
membership are considered in determining the remuneration package provided as part of his normal employment
conditions. In April 2016 the Board decided to introduce a temporary measure whereby 40% of cash board fees
would be paid in Share Options/Share Rights in order to preserve the Company’s cash in an environment where
capital raising was challenging. From 1 July 2018 the Board remuneration structure has reverted to the fees payable
prior to April 2016, as shown in Table 2.
Table 2 – Annual Board and committee fees payable to non-executive directors
Year ended
30 June 2018
Year ended
30 June 2017
Year ending
30 June 2019
Position
Chairman of the Board
Non-Executive Director
Additional fees for:
Chairman of the Audit Committee
Cash
$
60,000
30,000
Share Options /
Share Rights
$
90,000
45,000
Cash
$
60,000
30,000
Share Options /
Share Rights
$
Share Options /
Share Rights
$
Cash
$
90,000
45,000
100,000
50,000
50,000
25,000
6,000
4,000
6,000
4,000
10,000
-
Note:
Share options and rights issued to non-executive directors vest after a 12 month period.
No fees are payable for being a member of a committee or for being the Chairman of a committee other than the Chairman
of the Audit Committee.
No retirement benefits are paid other than the statutory superannuation contributions of 9.5% required under
Australian superannuation guarantee legislation.
The Non-Executive Director Share Incentive Plan (“NEDSIP”), as approved by shareholders on 23 November 2017,
allows for the provision of either share rights or share options to non-executive directors. Under the NEDSIP, the
Company’s non-executive directors will receive 60% of their FY18 director's fees in the form of either share rights or
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
17
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
share options. The directors consider that the issue of share rights or share options to non-executive directors as
part of their remuneration package is reasonable and appropriate given:
(a)
(b)
it is a cost effective and efficient reward for service. The issue of share rights or share options in lieu of cash
payments preserves the Company’s cash resources and reduces on-going costs which is a significant aspect
while the Company remains in a development phase; and
in part, it aligns remuneration with the future growth and prospects of the Company and the interests of
shareholders by encouraging non-executive director share ownership.
Refer to Table 7 in Section 4 for details of the number and value of share options and share rights issued to non-
executive directors during the year.
As part of the Company’s Securities Trading Policy, the Company prohibits directors from entering into
arrangements to protect the value of unvested incentive awards. This includes entering into contracts to hedge
exposure to share options, share rights or shares granted as part of their remuneration packages.
The Board assesses the appropriateness, nature and amount of remuneration paid to non-executive directors on a
periodic basis, including the granting of equity based payments, and considers it appropriate to grant share options
or share rights to non-executive directors with the overall objective of retaining a high quality Board whilst
preserving cash reserves.
Executive remuneration policy and structure
Bannerman’s executive remuneration policy is designed to reward the CEO and other senior executives. The main
principles underlying Bannerman’s executive remuneration policy are to:
provide competitive rewards to attract, retain and motivate executives;
set levels of performance which are clearly linked to an executive’s remuneration;
structure remuneration at a level which reflects the executive’s duties and accountabilities;
set a competitive level of remuneration that is sufficient and reasonable;
align executive incentive rewards with the creation of value for shareholders; and
comply with applicable legal requirements and appropriate standards of governance.
Executive remuneration structure
Bannerman’s remuneration structure for the CEO and senior executives for the year ended 30 June 2018 was
divided into two principal components:
base pay and benefits, including superannuation; and
variable annual reward, or “at risk” component, by way of the issue of long term share-based incentives.
Performance reviews for all senior executives are conducted on an annual basis. The performance of each senior
executive is measured against pre-determined key performance indicators. The most recent performance reviews
were completed in June 2018.
Base pay
The base pay component of executive remuneration comprises base salary, statutory superannuation contributions
and other allowances where applicable. It is determined by the scope of each executive’s role, working location,
level of knowledge, skill and experience along with the executive’s individual performance. There is no guarantee of
base pay increases included in any executive’s contract.
Bannerman benchmarks this component of executive remuneration against appropriate market comparisons using
information from similar companies and, where applicable, advice from external consultants.
Short-term incentive component (STI)
During the year there were no STI awards granted.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
18
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
Long-term incentive component (LTI)
The LTI awards are aimed specifically at creating long term shareholder value and the retention of employees. The
Company has implemented an Employee Incentive Plan (“EIP”) which enables the provision of share options or
performance rights to executives and employees.
During the 2018 financial year, performance rights which will vest subject to pre-defined performance hurdles were
allocated to all executives. The grant of performance rights aims to reward executives in a manner that aligns
remuneration with the creation of shareholder wealth. Refer to Table 7 in Section 4 for the number and value of
performance rights issued to executives during the year.
Performance measures to determine vesting
The vesting of half of the performance rights is subject to the Company’s relative Total Shareholder Return (“TSR”)
as measured by share price performance (allowing for the reinvestment of dividends) over the life of the
performance rights, versus a comparator group of uranium development companies. The vesting of the other half is
subject to the attainment of defined individual and group performance criteria, chosen to align the interests of
employees with shareholders, representing key drivers for delivering long term value. Group and individual
performance measures are weighted and specify performance required to meet or exceed expectations. The
performance measures for the 2018 performance rights related to:
Safety - total recordable incidents and significant environmental incidents.
Operational – execution of company development and operational plans.
Regulatory - obtaining timely renewal of licences.
Corporate - execution of transactions mandated by the Board.
Capital - maintaining adequate working capital and achieving operating budgets.
Relative TSR was selected as a LTI performance measure given it ensures an alignment between comparative
shareholder return and reward for executives, and minimises the effects of market cycles and commodity price
changes.
The comparator group includes the following uranium development companies:
A-Cap Resources
Deep Yellow Limited
Mega Uranium Limited
U3O8 Corp.
Azarga Uranium Corp.
Energy Fuels Inc.
Peninsula Energy Limited
Ur-Energy Inc.
Berkeley Resources Limited
Forsys Metals Corp.
Toro Energy Limited
Vimy Resources Limited
Boss Resources Limited
Laramide Resources Limited
The Board has updated, in 2018, the members of the comparator group to ensure it is reflective of the Company’s
peers. The limitation to uranium-focused development companies seeks to ensure that the TSR calculation is not
materially impacted by price movements of other commodities.
The comparator group is composed of Australian and foreign uranium development companies chosen to reflect the
Group's competitors for capital and talent. The Group's performance against the measure is determined according
to Bannerman's ranking against the companies in the TSR group over the performance period. The vesting schedule
is as follows:
Table 3 – TSR Vesting Schedule
Relative TSR performance outcome
Below or at the 25th percentile
Between the 25th and 75th percentile
At or above the 75th percentile
Termination and change of control provisions
Percentage of award that will vest
0%
Scale applicable whereby every 1 percentile equates to 2% vesting
100%
Where an executive ceases employment prior to the vesting of an award, the incentives are forfeited unless the
Board applies its discretion to allow vesting at or post cessation of employment in appropriate circumstances.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
19
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
In the event of a change of control of the Group, the performance period end date will generally be brought forward
to the date of the change of control and the share options and rights will vest in full, subject to ultimate Board
discretion.
No hedging of LTIs
As part of the Company’s Securities Trading Policy, the Company prohibits executives from entering into
arrangements to protect the value of unvested LTI awards. This includes entering into contracts to hedge exposure
to share options, performance rights or shares granted as part of their remuneration package.
2. DETAILS OF REMUNERATION
Non-Executive Directors’ Remuneration
Details of the nature and amount of remuneration of Bannerman’s non-executive directors for the year ended 30
June 2018 are as follows:
Table 4 – Non-executive director remuneration
Non-Executive Directors
Ronnie Beevor
Ian Burvill (i)
Clive Jones
David Tucker (ii)
Mike Leech (iii)
Total
Year
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
Short-term
Post
Employment
Sub-total
Base
Fees
$
60,000
60,000
4,800
2,800
27,397
27,397
9,077
22,800
66,136
14,489
167,410
127,486
Other
$
Superannuation
$
$
-
-
-
-
-
-
2,333
6,000
3,667
-
6,000
6,000
-
-
25,200
14,700
2,603
2,603
2,944
7,200
-
-
30,747
24,503
60,000
60,000
30,000
17,500
30,000
30,000
14,354
36,000
69,803
14,489
204,157
157,989
Share
Based
Payments
Options /
Rights
$
117,547
83,218
52,618
33,835
58,177
41,619
51,731
33,835
65,549
-
345,622
192,507
Total
Performance
Related
$
%
177,547
143,218
82,618
51,335
88,177
71,619
66,085
69,835
135,352
14,489
549,779
350,496
-
-
-
-
-
-
-
-
-
-
-
-
(i) Mr Ian Burvill elected to receive the cash component of his fee effective 1 December 2016.
(ii) Mr David Tucker resigned on 23 November 2017.
(iii) Mr Mike Leech receives remuneration for his role as a Non-Executive Director of Bannerman and for his role as Chairman of
Bannerman’s 95% owned Namibian subsidiary, Bannerman Mining Resources (Namibia) (Pty) Ltd and therefore his
remuneration is split between Australian (A$33,660) and Namibian dollars (N$360,000), which are received for his role as
Chairman of Bannerman’s Namibian subsidiary.
The category of “Other” includes payments for Chairman of the Audit Committee as well as extra services and
consultancy fees for specific duties, as approved by the Board.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
20
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
Executive Remuneration
Details on the nature and amount of remuneration of Bannerman’s executives for the year ended 30 June 2018 are
as follows.
Table 5 – Executive remuneration
Short–term
Post
Employment
Sub-total
Year
Salary &
Fees
$
Accrued
Annual
Leave (ii)
$
Other
$
Superannuation
$
$
Share
Based
Payments
Options /
Performance
Rights
$
$
Total
Performance
Related
Executive Director
Brandon Munro
2018
2017
Other Executive Personnel
2018
Werner Ewald (i)
2017
2018
2017
Total
251,141
223,683
14,016
694
199,935
186,195
451,076
409,878
(1,801)
(30,861)
12,215
(30,167)
-
-
52,866
52,864
52,866
52,864
23,858
21,250
47,535
41,498
71,393
62,747
289,015
245,627
298,535
249,696
587,550
495,323
121,295
173,975
410,310
419,602
147,847
125,236
269,142
299,211
446,382
374,932
856,692
794,534
%
29.6
41.5
33.1
33.4
(i) Mr Ewald’s contract is denominated in Namibian dollars.
(ii) Annual leave has been separately categorised and is measured on an accrual basis and reflects the movement in the accrual
over the twelve-month period. Any reduction in accrued leave reflects more leave taken or cashed out than that which
accrued in the period.
3. SERVICE AGREEMENTS
On appointment to the Board, all non-executive directors enter into a service agreement with the Company in the
form of a letter of appointment. The letter summarises the Board policies and terms, including compensation.
Remuneration and other terms of employment for the CEO and the other executives are also formalised in service
agreements. Major provisions of the agreements relating to remuneration are summarised below.
Remuneration of the Chief Executive Officer(s)
Mr Munro was appointed on 9 March 2016 as CEO and Managing Director. Under the employment contract with Mr
Munro, he is entitled to receive an annual salary, superannuation, and LTI awards (grant of share options or
performance rights, which are subject to performance hurdles). Details of Mr Munro’s contract and remuneration
are follows:
Annual Salary
Mr Munro’s annual salary is $300,000 per annum inclusive of 9.5% superannuation. Prior to 9 March 2017, Mr
Munro’s annual salary was $220,000 per annum inclusive of 9.5% superannuation.
Short term incentives
No short term incentive is payable.
Long term incentives
During the year, Mr Munro was granted 6,521,700 performance rights subject to shareholder approval, which was
obtained in November 2017. The performance rights were offered and the terms and conditions were agreed to
and accepted by Mr Munro. The rights were subject to performance hurdles and lapsed if Mr Munro left the
employment of the Group and immediately vest in the event of a change of control. Refer to Table 7 in section 4.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
21
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
Termination Benefits
Mr Munro is entitled to 6 months’ annual salary if his employment is terminated other than for cause, plus statutory
entitlements for annual leave. The contract also provides that Mr Munro’s employment may be terminated with
three months’ notice by either party.
Contracts for executives – employed in the Group as at 30 June 2018
A summary of the key contractual provisions for each of the current key management personnel is set out in Table 6
below.
Table 6 - Contractual provisions for executives engaged as at 30 June 2018
Name and job title
Brandon Munro –
CEO & Managing
Director
Werner Ewald –
Managing Director
Namibia
Employing
company
Bannerman
Resources
Limited
Bannerman
Mining
Resources
(Namibia)
(Pty) Ltd
Contract
duration
Notice
period
company
Notice
period
employee
No fixed term
3 months
3 months
No fixed term
3 months
3 months
Termination provision
6 months base salary and
accrued leave entitlements
if terminated by the
Company.
6 months base salary and
accrued leave entitlements
if terminated by the
Company.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
22
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B
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
Other remuneration information
Further details relating to share options and rights and the proportion of key management personnel remuneration
related to equity compensation during the year are tabulated below.
Table 8 – Value of share options and performance rights issued and exercised during the year ended 30 June 2018
Type
Share Options
Share Options
Share Options
Share Options
Share Options
Share Options
Directors
Ronnie Beevor
Brandon Munro
Ian Burvill
Clive Jones
David Tucker
Mike Leech
Executives
Werner Ewald
Performance Rights
Proportion of
remuneration
consisting of options /
rights for the year(1)
%
Value of options /
rights granted during
the year(2)
$
Value of options
exercised / rights
vested during the
year(3)
$
66%
30%
64%
66%
78%
48%
33%
127,058
361,954
63,529
63,539
28,800
109,795
-
-
-
-
-
-
202,055
73,699
(1)
(2)
(3)
Calculated based on Tables 4 and 5 as the share-based expense for the year as a percentage of total remuneration. The percentage of total
remuneration varies among each director given the impact of consulting or other fees paid during the financial year.
Based on fair value at time of grant per AASB 2. For details on the valuation of the options and rights, including models and assumptions
used, refer to Note 20.
Calculated based on the fair value of the Company’s shares on date of vesting.
Other than detailed above in Table 7 there were no other alterations to the terms and conditions of the share
options / rights awarded as remuneration since their award date.
Table 9 – Share options and performance rights holdings of key management personnel (i)
30 June 2018
Type
Opening
Balance
1 July 2017
Granted as
Remuneration
Exercised /
converted /
lapsed
Net Change
Other
Closing
Balance
30 June
2018
Vested at 30 June 2018
Total
Exercisable
Not
exercisable
Directors
Ronnie Beevor
Brandon Munro
Ian Burvill (ii)
Options 13,864,800
Options/
Rights
Options
27,857,100
5,851,100
4,442,600
(1,832,200)
- 16,475,200
12,032,600
12,032,600
6,521,700
-
- 34,378,800
20,000,000
20,000,000
2,221,300
(916,100)
Clive Jones
Options
6,932,400
2,221,300
(916,100)
David Tucker
Options
4,460,300
1,007,000
Mike Leech
Options
-
3,839,000
-
-
-
-
-
-
7,156,300
4,935,000
4,935,000
8,237,600
6,016,300
6,016,300
5,467,300
5,467,300
5,467,300
3,839,000
-
-
58,965,700
20,252,900
(3,664,400)
- 75,554,200
48,451,200
48,451,200
Executives
Werner Ewald
Rights
11,785,071
3,514,000
(1,568,081)
(541,974) 13,189,016
11,785,071
3,514,000
(1,568,081)
(541,974) 13,189,016
-
-
-
-
(i)
(ii)
Includes share options and performance rights held directly, indirectly and beneficially by key management personnel.
1,961,500 of these share options are held by Resource Capital Funds Management Pty Ltd, and are noted above against the
relevant RCF representative director during the year. Until September 2018 he was a nominee of RCF and therefore was not
independent at 30 June 2018 (RCF had the right to appoint up to two nominee directors whilst the shareholding of each of RCFIV
and RCFVI each remained above 5%). RCF’s appointment right fell away when RCF sold its entire shareholding on 14 September
2018.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
25
-
-
-
-
-
-
-
-
-
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
Table 10 – Shareholdings of key management personnel (i)
30 June 2017
Directors
Ronnie Beevor
Brandon Munro
Ian Burvill
Clive Jones
David Tucker
Mike Leech
Executives
Werner Ewald
Opening
Balance
1 July 2017
Granted as
Remuneration
Received on Exercise
of Share options /
conversion of rights
(Sales)
Purchases
Net Change
Other
Closing
Balance
30 June 2018
2,320,643
2,000,000
-
77,207,668
3,175,375
-
4,545,202
89,248,888
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,568,081
1,568,081
(4,545,202)
(4,545,202)
-
-
-
-
-
-
-
-
2,320,643
2,000,000
-
77,207,668
3,175,375
-
1,568,081
86,271,767
(i) Includes shares held directly, indirectly and beneficially by key management personnel.
All equity transactions with key management personnel other than those arising from the exercise of remuneration
share options or asset acquisition share options have been entered into under terms and conditions no more
favourable than those the Group would have adopted if dealing at arm’s length
Table 11 – Shares issued on exercise of performance rights during the year ended 30 June 2018
Shares
issued
#
Paid per
share
$
Unpaid per
share
$
Executives
Werner Ewald
1,568,081
-
-
5. ADDITIONAL INFORMATION
Performance over the Past 5 Years
The objective of the LTI program is to reward and incentivise non-executive directors and executives in a manner
which aligns with the creation of shareholder wealth. Bannerman’s performance during 2017/18 and the previous
four financial years are tabulated in Table 12 below:
Table 12 – Bannerman’s performance for the past five years
Year ended 30 June
Net loss after tax ($’000)
Net assets ($’000)
Market capitalisation ($ ‘000’s) at 30 June
Closing share price ($)
2018
(2,478)
62,776
56,000
$0.054
2017
(2,696)
57,847
26,000
$0.03
2016
(152)
50,610
19,000
$0.027
2015
(4,241)
53,117
19,000
$0.049
2014
(2,421)
51,086
23,000
$0.07
END OF REMUNERATION REPORT (AUDITED)
This report is made in accordance with a resolution of the directors.
Brandon Munro
CEO and Managing Director
Perth, 28 September 2018
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
26
DIRECTORS’ REPORT (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
TECHNICAL DISCLOSURES
Certain disclosures in this report, including management's assessment of Bannerman’s plans and projects, constitute
forward looking statements that are subject to numerous risks, uncertainties and other factors relating to
Bannerman’s operation as a mineral development company that may cause future results to differ materially from
those expressed or implied in such forward-looking statements. Full descriptions of these risks can be found in
Bannerman’s various statutory reports, including its Annual Information Form available on the SEDAR website,
sedar.com. Readers are cautioned not to place undue reliance on forward-looking statements. Bannerman
expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a
result of new information, future events or otherwise.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
27
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
Interest revenue
Other income
Employee benefits
Compliance and regulatory expenses
Depreciation expense
Other expenses
Loss before income tax
Income tax benefit
Net loss for the year
Note
2
3
4(a)
4(b)
6
Consolidated
2018
$'000
2017
$'000
31
2
(1,617)
(172)
(23)
(699)
(2,478)
-
41
96
(1,574)
(179)
(38)
(1,301)
(2,955)
259
(2,478)
(2,696)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
14(b)
Other comprehensive income for the year
Total comprehensive income/(loss)
Loss is attributable to:
Equity holders of Bannerman Resources Limited
Non-controlling interest
Total comprehensive income/(loss) is attributable to:
Equity holders of Bannerman Resources Limited
Non-controlling interest
Basic and diluted loss per share to the ordinary equity
holders of the Company (cents per share):
26
17
(870)
(870)
(3,348)
(2,446)
(32)
(2,478)
(3,314)
(34)
(3,348)
4,927
4,927
2,231
(2,687)
(9)
(2,696)
2,237
(6)
2,231
(0.29)
(0.34)
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
28
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
CURRENT ASSETS
Cash and cash equivalents
Other receivables
Other
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Other receivables
Property, plant and equipment
Exploration and evaluation expenditure
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
NON CURRENT LIABILITIES
Provisions
TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL PARENT ENTITY INTEREST
Non-controlling interest
Consolidated
Note
2018
$'000
2017
$'000
7
8
8
9
10
11
12
13
14
26
8,325
124
43
8,492
8
127
54,933
55,068
63,560
143
167
310
474
474
784
3,420
57
54
3,531
15
149
54,883
55,047
58,578
158
133
291
440
440
731
62,776
57,847
140,983
28,080
(105,993)
63,070
(294)
133,475
28,179
(103,547)
58,107
(260)
TOTAL EQUITY
62,776
57,847
The above statement of financial position should be read in conjunction with the accompanying notes.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
29
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
Note
Consolidated
2018
$'000
2017
$'000
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
R&D tax incentive received
Net cash flows used in operating activities
18
Cash Flows From Investing Activities
Payments for exploration and evaluation
Purchase of property, plant & equipment
Proceeds from disposal of property, plant & equipment
Net cash flows used in investing activities
Cash Flows from Financing Activities
Proceeds from issue of shares
Transaction costs of financing
Net cash flows provided by financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Net foreign exchange differences
Cash and cash equivalents at end of year
7
(1,621)
31
-
(1,590)
(1,016)
(3)
1
(1,018)
8,000
(492)
7,508
4,900
3,420
5
8,325
(1,671)
41
259
(1,371)
(1,339)
(12)
700
(651)
4,060
(219)
3,841
1,819
1,600
1
3,420
The above cash flow statement should be read in conjunction with the accompanying notes.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
30
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
Issued
Capital
Note 13
Share Based
Foreign
Asset
Convertible
Accumulated
Losses
Payment
Reserve
Currency
Reserve
Revaluation
Reserve
Note
Reserve
Note 14(a)
Note 14(b)
Note 14(c)
Note 14 (d)
Equity
Reserve
Note 14 (e)
Non-
controlling
Interest
Note 26
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Balance at 1 July 2017
133,475
(103,547)
55,383
(26,274)
Loss for the period
Other comprehensive
income
Total comprehensive income
for the period
-
-
-
(2,446)
-
(2,446)
Shares issued during the
period
Cost of share issue
Share-based payments
8,000
(492)
-
-
-
-
-
-
-
-
-
769
-
(868)
(868)
-
-
-
Total Equity at 30 June 2018
140,983
(105,993)
56,152
(27,142)
-
-
-
-
-
-
-
-
4,038
(4,968)
(260)
57,847
-
-
-
-
-
-
-
-
-
-
-
-
(32)
(2,478)
(2)
(870)
(34)
(3,348)
-
-
-
8,000
(492)
769
4,038
(4,968)
(294)
62,776
Issued
Capital
Note 13
Share Based
Foreign
Asset
Convertible
Accumulated
Losses
Payment
Reserve
Currency
Reserve
Revaluation
Reserve
Note
Reserve
Note 14(a)
Note 14(b)
Note 14(c)
Note 14 (d)
Equity
Reserve
Note 14 (e)
Non-
controlling
Interest
Note 26
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Balance at 1 July 2016
129,634
(101,027)
54,598
(31,198)
167
4,038
(5,602)
Loss for the period
Other comprehensive
income
Total comprehensive income
for the period
Disposal of Non-controlling
interest
Sale of Land and Buildings
Shares issued during the
period
Cost of share issue
Share-based payments
-
-
-
-
-
4,060
(219)
-
(2,687)
-
(2,687)
-
167
-
-
-
-
-
-
-
-
-
-
785
-
4,924
4,924
-
-
-
-
-
Total Equity at 30 June 2017
133,475
(103,547)
55,383
(26,274)
-
-
-
-
(167)
-
-
-
-
-
(9)
50,610
(2,696)
3
4,927
(6)
2,231
-
-
-
254
(254)
-
-
-
380
-
-
-
-
-
-
4,060
(219)
1,165
-
-
-
-
-
-
-
-
4,038
(4,968)
(260)
57,847
The above statement of changes in equity should be read in conjunction with the accompanying notes.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
31
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
Corporate Information
This financial report of Bannerman for the year ended 30 June 2018 was authorised for issue in accordance with
a resolution of the directors on 25 September 2018.
Bannerman is a company limited by shares incorporated in Australia whose shares are publicly traded on the
Australian Securities Exchange and the Namibian Stock Exchange.
Basis of Preparation and Accounting Policies
The financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of
the Australian Accounting Standards Board and the Corporations Act 2001. The financial report has also been
prepared on an historical cost basis, except for land and buildings which has been measured at fair value.
The financial report covers the consolidated entity comprising Bannerman and its controlled entities (the
“Group”).
The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars
($'000) unless otherwise stated under the option available to the Company under Australian Securities and
Investments Commission (ASIC) Class Order 2016/191. The Company is an entity to which the Class Order
applies.
For the purposes of preparing the consolidated financial statements, the Company is a for-profit entity.
Statement of Compliance
The financial report complies with Australian Accounting Standards as issued by the Australian Accounting
Standards Board and International Financial Reporting Standards ("IFRS") as issued by the International
Accounting Standards Board.
New Accounting Standards and Interpretations
The accounting policies adopted are consistent with those of the previous financial year except as follows:
From 1 July 2017, the Group has adopted all the Standards and Interpretations mandatory for annual periods
beginning on 1 July 2017. Adoption of these Standards and Interpretations did not have any effect on the
financial position or performance of the Group.
The Group has not elected to early adopt any new Standards or Interpretations.
The Group has adopted the following new and amended Australian Accounting Standards and AASB
Interpretations as of 1 July 2017:
Reference
Title
Summary
AASB 2016-1
Amendments to
Australian Accounting
Standards –
Recognition of
Deferred Tax Assets
for Unrealised Losses
[AASB 112]
This Standard amends AASB 112 Income Taxes to clarify the requirements on recognition of
deferred tax assets for unrealised losses on debt instruments measured at fair value.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
32
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
AASB 2016-2
AASB 2017-2
Amendments to
Australian Accounting
Standards – Disclosure
Initiative:
Amendments to AASB
107
Amendments to
Australian Accounting
Standards – Further
Annual Improvements
2014-2016 Cycle
The amendments to AASB 107 Statement of Cash Flows are part of the IASB’s Disclosure
Initiative and help users of financial statements better understand changes in an entity’s debt.
The amendments require entities to provide disclosures about changes in their liabilities arising
from financing activities, including both changes arising from cash flows and non-cash changes
(such as foreign exchange gains or losses).
This Standard clarifies the scope of AASB 12 Disclosure of Interests in Other Entities by specifying
that the disclosure requirements apply to an entity’s interests in other entities that are classified
as held for sale or discontinued operations in accordance with AASB 5 Non-current Assets Held
for Sale and Discontinued Operations.
Australian Accounting Standards and interpretations which have recently been issued or amended but are not
yet effective and have not been early-adopted by the Group for the annual reporting period ending 30 June
2018. These standards and interpretations are tabulated below:
Impact on Group
Accounting
Policies
The amendments
to this standard
are not expected
to have a
significant impact
on the Group’s
financial results
or balance sheet
in the initial year
of application.
Reference
Title
Summary
AASB 9
Financial
Instruments
AASB 9 replaces AASB 139 Financial Instruments:
Recognition and Measurement.
Application
date of
standard
1 Jan 2018
Application
date for
Group
1 Jul 2018
Except for certain trade receivables, an entity initially
measures a financial asset at its fair value plus, in the case
of a financial asset not at fair value through profit or
loss(FVTPL), transaction costs. Debt instruments are
subsequently measured at FVTPL, amortised cost, or fair
value through other comprehensive income (FVOCI), on
the basis of their contractual cash flows and the business
model under which the debt instruments are held.
There is a fair value option (FVO) that allows financial
assets on initial recognition to be designated as FVTPL if
that eliminates or significantly reduces an accounting
mismatch.
Equity instruments are generally measured at FVTPL.
However, entities have an irrevocable option on an
instrument-by-instrument basis to present changes in the
fair value of non-trading instruments in other
comprehensive income (OCI) without subsequent
reclassification to profit or loss.
For financial liabilities designated as FVTPL using the FVO,
the amount of change in the fair value of such financial
liabilities that is attributable to changes in credit risk must
be presented in OCI. The remainder of the change in fair
value is presented in profit or loss, unless presentation in
OCI of the fair value change in respect of the liability’s
credit risk would create or enlarge an accounting
mismatch in profit or loss.
All other AASB 139 classification and measurement
requirements for financial liabilities have been carried
forward into AASB9, including the embedded derivative
separation rules and the criteria for using the FVO.
The incurred credit loss model in AASB 139 has been
replaced with an expected credit loss model in AASB 9.
The requirements for hedge accounting have been
amended to more closely align hedge accounting with risk
management, establish a more principle-based approach
to hedge accounting and address inconsistencies in the
hedge accounting model in AASB 139.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
33
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
Reference
Title
Summary
AASB 15
Revenue from
Contracts with
Customers
AASB 2016-5
AASB 2017-1
AASB
Interpretation
22
Amendments to
Australian
Accounting
Standards –
Classification
and
Measurement
of Share-based
Payment
Transactions
Amendments to
Australian
Accounting
Standards –
Transfers of
Investments
Property,
Annual
Improvements
2014-2016
Cycle and Other
Amendments
Foreign
Currency
Transactions
and Advance
Consideration
AASB 15 replaces all existing revenue requirements in
Australian Accounting Standards (AASB 111 Construction
Contracts, AASB 118 Revenue, AASB Interpretation 13
Customer Loyalty Programmes, AASB Interpretation 15
Agreements for the Construction of Real Estate, AASB
Interpretation 18 Transfers of Assets from Customers and
AASB Interpretation 131 Revenue – Barter Transactions
Involving Advertising Services) and applies to all revenue
arising from contracts with customers, unless the contracts
are in the scope of other standards, such as AASB 117 (or
AASB 16 Leases, once applied).
The core principle of AASB 15 is that an entity recognises
revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the
consideration to which an entity expects to be entitled in
exchange for those goods or services. An entity recognises
revenue in accordance with the core principle by applying
the following steps:
Step 1: Identify the contract(s) with a customer
Step 2: Identify the performance obligations in the
contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the
performance obligations in the contract
Step 5: Recognise revenue when (or as) the entity
satisfies a performance obligation.
This Standard amends AASB 2 Share-based Payment,
clarifying how to account for certain types of share-based
payment transactions. The amendments provide
requirements on the accounting for:
The effects of vesting and non-vesting conditions on the
measurement of cash-settled share-based payments
Share-based payment transactions with a net
settlement feature for withholding tax obligations
A modification to the terms and conditions of a share-
based payment that changes the classification of the
transaction from cash-settled to equity-settled.
The amendments clarify certain requirements in:
AASB 1 First-time Adoption of Australian Accounting
Standards – deletion of exemptions for first-time
adopters and addition of an exemption arising from
AASB Interpretation 22 Foreign Currency Transactions
and Advance Consideration
AASB 12 Disclosure of Interests in Other Entities –
clarification of scope
AASB 128 Investments in Associates and Joint Ventures –
measuring an associate or joint venture at fair value
AASB 140 Investment Property – change in use.
The Interpretation clarifies that in determining the spot
exchange rate to use on initial recognition of the related
asset, expense or income (or part of it) on the
derecognition of a non-monetary asset or non-monetary
liability relating to advance consideration, the date of the
transaction is the date on which an entity initially
recognises the non-monetary asset or non-monetary
liability arising from the advance consideration. If there are
multiple payments or receipts in advance, then the entity
must determine a date of the transactions for each
payment or receipt of advance consideration.
Application
date of
standard
1 Jan 2018
Application
date for
Group
1 Jul 2018
Impact on Group
Accounting
Policies
The amendments
to this standard
are not expected
to have a
significant impact
on the Group’s
financial results
or balance sheet
in the initial year
of application.
1 Jan 2018
1 Jul 2018
1 Jan 2018
1 Jul 2018
1 Jan 2018
1 Jul 2018
The amendments
to this standard
are not expected
to have a
significant impact
on the Group’s
financial results
or balance sheet
in the initial year
of application.
The amendments
to this standard
are not expected
to have a
significant impact
on the Group’s
financial results
or balance sheet
in the initial year
of application.
The amendments
to this standard
are not expected
to have a
significant impact
on the Group’s
financial results
or balance sheet
in the initial year
of application.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
34
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
Reference
Title
Summary
AASB 16
Leases
AASB 2017-6
AASB 2017-7
AASB 2018-1
Amendments to
Australian
Accounting
Standards –
Prepayment
Features with
Negative
Compensation
Amendments to
Australian
Accounting
Standards –
Long-term
Interests in
Associates and
Joint Ventures
Annual
Improvements
to IFRS
Standards
2015- 2017
Cycle
AASB 16 requires lessees to account for all leases under a
single on-balance sheet model in a similar way to finance
leases under AASB 117 Leases. The standard includes two
recognition exemptions for lessees – leases of ’low-value’
assets (e.g., personal computers) and short-term leases
(i.e., leases with a lease term of 12 months or less). At the
commencement date of a lease, a lessee will recognise a
liability to make lease payments (i.e., the lease liability)
and an asset representing the right to use the underlying
asset during the lease term (i.e., the right-of-use asset).
Lessees will be required to separately recognise the
interest expense on the lease liability and the depreciation
expense on the right-of-use asset.
Lessees will be required to remeasure the lease liability
upon the occurrence of certain events (e.g., a change in
the lease term, a change in future lease payments resulting
from a change in an index or rate used to determine those
payments). The lessee will generally recognise the amount
of the remeasurement of the lease liability as an
adjustment to the right-of-use asset.
Lessor accounting is substantially unchanged from today’s
accounting under AASB 117. Lessors will continue to
classify all leases using the same classification principle as
in AASB 117 and distinguish between two types of leases:
operating and finance leases.
This Standard amends AASB 9 Financial Instruments to
permit entities to measure at amortised cost or fair value
through other comprehensive income particular financial
assets that would otherwise have contractual cash flows
that are solely payments of principal and interest but do
not meet that condition only as a result of a prepayment
feature. This is subject to meeting other conditions, such
as the nature of the business model relevant to the
financial asset. Otherwise, the financial assets would be
measured at fair value through profit or loss.
The Standard also clarifies in the Basis for Conclusion that,
under AASB 9, gains and losses arising on modifications of
financial liabilities that do not result in derecognition
should be recognised in profit or loss.
This Standard amends AASB 128 Investments in Associates
and Joint Ventures to clarify that an entity is required to
account for long term interests in an associate or joint
venture, which in substance form part of the net
investment in the associate or joint venture but to which
the equity method is not applied, using AASB 9 Financial
Instruments before applying the loss allocation and
impairment requirements in AASB 128.
The amendments clarify certain requirements in:
AASB3 Business Combinations and AASB11 Joint
Arrangements-previously held interest in a joint
operation
AASB112 Income Taxes-income tax consequences of
payments on financial instruments classified as equity
AASB123 Borrowing Costs-borrowing costs eligible for
capitalisation.
Application
date of
standard
1 Jan 2019
Application
date for
Group
1 Jul 2019
Impact on Group
Accounting
Policies
The amendments
to this standard
are not expected
to have a
significant impact
on the Group’s
financial results
or balance sheet
in the initial year
of application.
1 Jan 2019
1 Jul 2019
1 Jan 2019
1 Jul 2019
1 Jan 2019
1 Jul 2019
The amendments
to this standard
are not expected
to have a
significant impact
on the Group’s
financial results
or balance sheet
in the initial year
of application.
The amendments
to this standard
are not expected
to have a
significant impact
on the Group’s
financial results
or balance sheet
in the initial year
of application.
The amendments
to this standard
are not expected
to have a
significant impact
on the Group’s
financial results
or balance sheet
in the initial year
of application.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
35
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
Reference
Title
Summary
AASB 2018-2
Amendments to
Australian
Accounting
Standards –Plan
Amendment,
Curtailment or
Settlement
Uncertainty
over Income Tax
Treatments
AASB
Interpretation
23, and
relevant
amending
standards
AASB 2014-10 Amendments to
Australian
Accounting
Standards –
Sale or
Contribution of
Assets between
an Investor and
its Associate or
Joint Venture
This Standard amends AASB 119 Employee Benefits to
specific how an entity accounts for defined benefit plans
when a plan amendment, curtailment or settlement occurs
during a reporting period. The amendments:
Require entities to use the updated actuarial
assumptions to determine current service cost and net
interest for the remainder of the annual reporting
period after such an event occurs
Clarify that when such an event occurs, an entity
recognises the past service cost or a gain or loss on
settlement separately from its assessment of the asset
ceiling.
The Interpretation clarifies the application of the
recognition and measurement criteria in IAS 12 Income
Taxes when there is uncertainty over income tax
treatments. The Interpretation specifically addresses the
following:
Whether an entity considers uncertain tax treatments
separately
The assumptions an entity makes about the
examination of tax treatments by taxation authorities
How an entity determines taxable profit (tax loss), tax
bases, unused tax losses, unused tax credits and tax
rates
How an entity considers changes in facts and
circumstances.
The amendments clarify that a full gain or loss is
recognised when a transfer to an associate or joint venture
involves a business as defined in AASB 3 Business
Combinations. Any gain or loss resulting from the sale or
contribution of assets that does not constitute a business,
however, is recognised only to the extent of unrelated
investors’ interests in the associate or joint venture. AASB
2015-10 deferred the mandatory effective date
(application date) of AASB2014-10 so that the
amendments were required to be applied for annual
reporting periods beginning on or after 1 January 2018
instead of 1 January 2016. AASB 2017-5further defers the
effective date of the amendments made in AASB 2014-10
to periods beginning on or after 1 January 2022
Accounting Policies
a)
Basis of Consolidation
Application
date of
standard
1 Jan 2019
Application
date for
Group
1 Jul 2019
1 Jan 2019
1 Jul 2019
1 Jan 2022
1 Jul 2022
Impact on Group
Accounting
Policies
The amendments
to this standard
are not expected
to have a
significant impact
on the Group’s
financial results
or balance sheet
in the initial year
of application.
The Group has
yet to fully assess
the impact of
these
amendments on
the financial
statements.
The amendments
to this standard
are not expected
to have a
significant impact
on the Group’s
financial results
or balance sheet
in the initial year
of application.
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at
30 June 2018. Control is achieved when the Group is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to affect those returns through its power over the investee.
Specifically, the Group controls an investee if and only if the Group has:
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of
the investee);
Exposure, or rights, to variable returns from its involvement with the investee, and
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee, including:
The contractual arrangement with the other vote holders of the investee
Rights arising from other contractual arrangements
The Group’s voting rights and potential voting rights
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
36
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
The Group re-assesses 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. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of
comprehensive income from the date the Group gains control until the date the Group ceases to control the
subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the equity holders of the
parent of the Group 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 intra-group assets and liabilities,
equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated
in full on consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it:
De-recognises the assets (including goodwill) and liabilities of the subsidiary
De-recognises the carrying amount of any non-controlling interests
De-recognises the cumulative translation differences recorded in equity
Recognises the fair value of the consideration received
Recognises the fair value of any investment retained
Recognises any surplus or deficit in profit or loss
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained
earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or
liabilities.
b)
Income and Other Taxes
Income taxes
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities based on the current period’s taxable income. The tax rates
and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting
date.
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
when the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit
nor taxable profit or loss; and
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests
in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is
probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available, against which
the deductible temporary differences, the carry-forward of unused tax assets and unused tax losses can be
utilised, except:
when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
37
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is recognised only to the extent that it is
probable that the temporary differences will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST/VAT except:
when the GST/VAT incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST/VAT is recognised as part of the cost of acquisition of the asset or as part of
the expenses item as applicable; and
receivables and payables, which are stated with the amount of GST/VAT included.
The net amount of GST/VAT recoverable from, or payable to, the relevant taxation authority is included as part
of receivables or payables in the statement of financial position.
Cash flows are included in the Cash Flow Statement on a gross basis and the GST/VAT component of cash flows
arising from investing and financing activities which is recoverable from, or payable to, the relevant taxation
authority is classified as part of operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST/VAT recoverable from, or payable to,
the relevant taxation authority.
c)
Exploration and Evaluation Expenditure
Exploration and evaluation expenditure is accumulated in respect of each identifiable area of interest. These
costs are carried forward only if they relate to an area of interest for which rights of tenure are current and in
respect of which:
(i)
(ii)
such costs are expected to be recouped through successful development, exploitation or sale of the
area; or
exploration and evaluation activities in the area have not, at balance date, reached a stage which permit
a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active
operations in, or relating to, the area are continuing.
Accumulated costs in respect of areas of interest which are abandoned or assessed as not having economically
recoverable reserves are written off in full against profit in the year in which the decision to abandon the area is
made.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
38
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
A periodic 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.
d)
Property, Plant and Equipment
Plant and equipment are measured at historical cost less accumulated depreciation and any accumulated
impairment costs.
The carrying amount of plant and equipment is reviewed annually to ensure it is not in excess of the recoverable
amount from these assets. External factors, such as changes in expected future processes, technology and
economic conditions, are also monitored to assess for indicators of impairment. If any indication of impairment
exists, an estimate of the asset’s recoverable amount is calculated.
Land and buildings are measured at fair value less accumulated depreciation on buildings and impairment losses
recognised at the date of revaluation. Valuations are performed with sufficient frequency to ensure that the fair
value of a revalued asset does not differ materially from its carrying amount.
A revaluation surplus is recorded in other comprehensive income and credited to the asset revaluation reserve in
equity. However, to the extent that it reverses a revaluation deficit of the same asset previously recognised in
profit or loss, the increase is recognised in profit and loss. A revaluation deficit is recognised in the income
statement, except to the extent that it offsets an existing surplus on the same asset recognised in the asset
revaluation reserve.
Depreciation
The depreciable amount of all fixed assets is depreciated on a diminishing value basis over the useful lives to the
Group commencing from the time the asset is held ready for use. The depreciation rates used for each class of
depreciable assets are:
Class of Fixed Asset
Buildings
Plant and equipment
Office Furniture & Equipment
Vehicles
Depreciation Rate
2018
2.0%
33.3%
33.3%
33.3%
2017
2.0%
33.3%
33.3%
33.3%
An asset’s residual value, useful life and amortisation method are reviewed, and adjusted if appropriate, at each
financial year end.
Gains or losses on disposals are determined by comparing proceeds with the net carrying amount. These are
included in the statement of comprehensive income.
e)
Fair value measurement
The Group measures non-financial assets such as land and buildings at fair value less accumulated depreciation
on buildings at each balance sheet date.
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. The fair value measurement is based on the
presumption that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability, or
In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible to by the Group. The fair value of an asset or
a liability is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming that market participants act in their economic best interest.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
39
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant that
would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2
Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
Level 3
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group
determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each
reporting period.
External valuers are involved for valuation of significant assets, such as properties. Involvement of external
valuers is decided upon annually by management. Selection criteria include market knowledge, reputation,
independence and whether professional standards are maintained. Valuers are normally rotated every three
years. The valuation committee decides, after discussions with the Group’s external valuers, which valuation
techniques and inputs to use for each case.
At each reporting date, management analyses the movements in the values of assets and liabilities which are
required to be re-measured or re-assessed as per the Group’s accounting policies. For this analysis, management
verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation
to contracts and other relevant documents.
Management, in conjunction with the Group’s external valuers, also compares each the changes in the fair value
of each asset and liability with relevant external sources to determine whether the change is reasonable.
On an interim basis, Management and the Group’s external valuers present the valuation results to the audit
committee and the Group’s independent auditors. This includes a discussion of the major assumptions used in
the valuations.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of
the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained
above.
f)
Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but
not the legal ownership are transferred to the lessee, are classified as finance leases. Finance leases are
capitalised, recording an asset and a liability equal to the present value of the minimum lease payments,
including any guaranteed residual values. Lease payments are apportioned between the finance charges and
reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the
liability. Finance charges are recognised as an expense in the statement of comprehensive income.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
40
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
Leased assets are depreciated on a diminishing value basis over their estimated useful lives where it is likely that
the Group will obtain ownership of the asset or over the term of the lease.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are
charged as expenses in the periods in which they are incurred.
g)
Basic Earnings/Loss Per Share
Basic earnings/loss per share is calculated by dividing the net profit / loss attributable to members of the parent
for the reporting period, after excluding any costs of servicing equity, by the weighted average number of
ordinary shares of the Group, adjusted for any bonus issue.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares.
h)
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is
recognised:
Interest
Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial instrument) to the net
carrying amount of the financial asset.
i)
Cash and Cash Equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and on hand, cash on call
and short-term deposits with an original maturity of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value. For the purposes of the Cash
Flow Statement, cash and cash equivalents consist of cash and cash equivalents as described, net of outstanding
bank overdrafts.
j)
Impairment of Assets
At each reporting date, the Group assesses whether there is any indication that an asset may be impaired.
Where an indication of impairment exists, the Group makes a formal estimate of recoverable amount. Where the
carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount.
Recoverable amount is the greater of fair value (less costs to sell) and value-in-use. It is determined for an
individual asset, unless the asset’s value-in-use cannot be estimated to be close to its fair value (less costs to sell)
and it does not generate cash inflows that are largely independent of those from other assets or groups of assets,
in which case, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset.
k)
Payables
Trade and other payables are carried at amortised cost. Due to their short term nature they are not discounted.
They represent liabilities for goods and services provided to the Group prior to the end of the financial year that
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
41
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
are unpaid and arise when the Group becomes obliged to make future payments in the respect of the purchase
of these goods and services. The amounts are unsecured and usually paid within 30 days of recognition.
l)
Provisions
General
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outlay of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract,
the reimbursement is recognised as a separate asset but only when a reimbursement is virtually certain. The
expense relating to any provision is presented in the statement of comprehensive income net of any
reimbursement.
Provisions are measured at the present value of management’s best estimate of the expenditure required to
settle the present obligation at the reporting date using a discounted cash flow methodology. If the effect of the
time value of money is material, provisions are discounted using a current pre-tax rate that reflects the time
value of money and the risks specific to the liability. Any increase in the provision due to the passage of time is
recognised as a finance cost.
Rehabilitation Provision
Rehabilitation costs will be incurred by the Group either while operating, or at the end of the operating life of,
the Group’s facilities. The Group assesses its rehabilitation provision at each reporting date. The Group
recognises a rehabilitation provision where it has a legal and constructive obligation as a result of past events,
and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of
the amount of obligation can be made. The nature of these restoration activities includes: dismantling and
removing structures; dismantling operating facilities; closing plant and waste sites; and restoring, reclaiming and
revegetating affected areas.
The obligation generally arises when the asset is installed or the ground/environment is disturbed at the
operation’s location. When the liability is initially recognised, the present value of the estimated costs is
capitalised by increasing the carrying amount of the related assets to the extent that it was incurred. Additional
disturbances which arise due to further development/construction at the mine are recognised as additions or
charges to the corresponding assets and rehabilitation liability when they occur.
Changes in the estimated timing of rehabilitation or changes to the estimated future costs are dealt with
prospectively by recognising an adjustment to the rehabilitation liability and a corresponding adjustment to the
asset to which it relates, if the initial estimate was originally recognised as part of an asset measured in
accordance with AASB 6.
Any reduction in the rehabilitation liability and, therefore, any deduction from the asset to which it relates, may
not exceed the carrying amount of that asset. If it does, any excess over the carrying value is taken immediately
to the statement of profit or loss and other comprehensive income.
If the change in estimate results in an increase in the rehabilitation liability and, therefore, an addition to the
carrying value of the asset, the Group considers whether this is an indication of impairment of the asset as a
whole, and if so, tests for impairment. If, for mature mines, the estimate for the revised mine assets net of
rehabilitation provisions exceeds the recoverable value that portion of the increase is charged directly to
expense.
Over time, the discounted liability is increased for the change in present value based on the discount rates that
reflect current market assessments and the risks specific to the liability.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
42
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
m) Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by employees to
balance date.
Contributions are made by the Group to employee superannuation and pension funds and are charged as
expenses when incurred.
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within
12 months of the reporting date are recognised in respect of employees’ services up to the reporting date. They
are measured at the amounts expected to be paid when the liabilities are settled.
n)
Contributed Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
share options are shown in equity as a deduction, net of tax, from the proceeds.
o)
Share-based Payment Transactions
The Group provides benefits to employees and directors of the Group, acquires assets and settles expenses
through consideration in the form of share-based payment transactions, whereby employees render services,
assets are acquired and expenses are settled in exchange for shares or rights over shares (“equity-settled
transactions”).
There is currently a Non-Executive Director Share Option Plan and an Employee Incentive Plan which enables the
provision of benefits to directors, executives and staff.
The cost of these equity-settled transactions with employees and directors is measured by reference to the fair
value at the date at which they are granted. The fair value is determined using the Black Scholes option pricing
model. A Monte Carlo simulation is applied to fair value the Total Shareholder Return element of the EIP
incentives. Further details of which are disclosed in Note 20.
In valuing equity-settled transactions, no account is taken of any vesting condition, other than (if applicable):
Non-vesting conditions that do not determine whether the Group or Company receives the services that
entitle the employees to receive payment in equity or cash; or
Conditions that are linked to the price of the shares of Bannerman Resources Limited (market
conditions).
The cost of equity settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled (the vesting period), ending on the date
on which the relevant employees become fully entitled to the award (the vesting date).
At each subsequent report date until vesting, the cumulative charge to the statement of comprehensive income
is the product of:
(i) The grant date fair value of the award;
(ii) The current best estimate of the number of the awards that will vest, taking into account such factors as the
likelihood of employee turnover during the vesting period and the likelihood of non-market performance
conditions being met; and
(iii) The expired portion of the vesting period.
The charge to the statement of comprehensive income for the period is the cumulative amount as calculated
above, less the amounts already charged in previous periods. There is a corresponding entry to equity.
Equity-settled awards granted by Bannerman to employees of subsidiaries are recognised in the parent’s
separate financial statements as an additional investment in the subsidiary with the corresponding credit to
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
43
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
equity. As a result, the expense recognised by Bannerman in relation to equity-settled awards only represents
the expenses associated with grants to employees of the parent. The expense recognised by the Group is the
total expense associated with all such awards.
Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer awards
vest than were originally anticipated to do so. Any award subject to a market conditions or non-vesting
conditions is considered to vest irrespective of whether or not that market condition or non-vesting is fulfilled,
provided that all other conditions are satisfied.
p)
Foreign Currency Translation
(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the
primary economic environment in which the entity operates (“functional currency”). The consolidated financial
statements are presented in Australian dollars, which is Bannerman’s functional and presentation currency.
(ii) Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the reporting date and any gains or losses are recognised in the
statement of comprehensive income.
(iii) Group companies
For all Group entities with a functional currency other than Australian dollars, the functional currency has been
translated into Australian dollars for presentation purposes. Assets and liabilities are translated using exchange
rates prevailing at the reporting date; revenues and expenses are translated using average exchange rates
prevailing for the statement of comprehensive income year; and equity transactions are translated at exchange
rates prevailing at the dates of transactions. The resulting difference from translation is recognised in a foreign
currency translation reserve.
(iv) Subsidiary company loans
All subsidiary company loans from the parent company are translated into Australian dollars, on a monthly basis,
using the exchange rates prevailing at the end of each month. The resulting difference from translation is
recognised in the statement of comprehensive income of the parent company and on consolidation the foreign
exchange differences are recognised in a foreign currency translation reserve as the loan represents a net
investment in a foreign entity.
q)
Receivables
Receivables, which generally have 30-60 day terms, are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less an allowance for impairment. VAT
receivables relating to Namibian expenditure generally have a 90+ day term.
Collectability of receivables is reviewed on an on-going basis. Individual debts that are known to be uncollectible
are written off when identified. An impairment allowance is recognised when there is objective evidence that the
Group will not be able to collect the receivable. Financial difficulties of the debtor, and default payments or
debts more than 90 days overdue (apart from GST/VAT), are considered objective evidence of impairment. The
amount of the impairment loss is the receivable carrying amount compared to the present value of estimated
future cash flows, discounted at the original effective interest rate.
r)
Segment Reporting
An operating segment is a component of an entity that engages in business activities from which it may earn
revenues and incur expenses (including revenues and expenses relating to transactions with other components
of the same entity), whose operation results are regularly reviewed by the entity's chief operating decision
maker to make decisions about resources to be allocated to the segment and assess its performance and for
which discrete financial information is available. This includes start-up operations which are yet to earn
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
44
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
revenues. Management will also consider other factors in determining operating segments such as the existence
of a line manager and the level of segment information presented to the board of directors.
Operating segments have been identified based on the information provided to the chief operating decision
makers being the executive management team.
The operations of the Group represent one operating segment under AASB 8 Operating Segments. The
accounting policies applied for internal reporting purposes are consistent with those applied in the preparation
of the financial report.
s)
Financial Risk Management Objectives and Policies
The Group’s principal financial instruments comprise cash, receivables, payables, convertible instruments,
finance leases, cash and short term deposits.
The Group manages its exposure to key financial risks, including interest rate and currency risk in accordance
with the Group’s financial risk management strategy. The objective of the strategy is to support the delivery of
the Group’s financial targets whilst protecting future financial security.
t)
Significant Accounting Judgements, Estimates and Assumptions
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually evaluates its
judgements and estimates in relation to assets, liabilities, contingent liabilities, revenues and expenses.
Management bases its judgements and estimates on historical experience and on other various factors believed
to be reasonable under the circumstances, the results of which form the basis of the carrying values of assets
and liabilities that are not readily apparent from other sources.
Management has identified the critical accounting policies detailed below for which significant judgements,
estimates and assumptions are made. Actual results may differ from these estimates under different
assumptions and conditions and may materially affect financial results or the financial position reported in future
periods. Further details of the nature of these assumptions and conditions may be found in the relevant notes to
the financial statements. The carrying amounts of certain assets and liabilities are often determined based on
judgements, estimates and assumptions of future events. The key estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within
the next annual reporting period are:
Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of
factors, including whether the Group decides to exploit the related mineral title itself or, if not, whether it
successfully recovers the related exploration and evaluation asset through sale.
Factors which could impact the future recoverability include the level of measured, indicated and inferred
mineral resources, proven and probable ore reserves, future technological changes which could impact the cost
of mining, future legal changes (including changes to environmental restoration obligations), changes to
commodity prices, ability to finance, renewal of the exclusive prospecting licence and the issue of a mining
licence.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the
future, this will reduce profits and net assets in the period in which this determination is made.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted and taking into consideration the likelihood of non-
market based conditions occurring. Estimating fair value for share-based payment transactions requires
determining the most appropriate valuation model, which is dependent on the terms and conditions of the
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
45
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
grant. This estimate also requires determining the most appropriate inputs to the valuation model including the
expected life of the share option, volatility and dividend yield and making assumptions about them. The
assumptions and models used for estimating fair value for share-based payment transactions are disclosed in
Note 20.
Rehabilitation provision
The ultimate rehabilitation costs are uncertain, and cost estimates can vary in response to many factors,
including estimates of the extent and costs of rehabilitation activities, technological changes, regulatory changes,
cost increases as compared to the inflation rates, and changes in discount rates. These uncertainties may result
in future actual expenditure differing from the amounts currently provided. Therefore, significant estimates and
assumptions are made in determining the provision for rehabilitation. As a result, there could be significant
adjustments to the provisions established which would affect future financial result. The provision at reporting
date represents management’s best estimate of the present value of the future rehabilitation costs required.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
46
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
Consolidated
2018
$'000
2017
$'000
2. INTEREST REVENUE
Interest revenue
3. OTHER INCOME
Profit on disposal of land and buildings
Other
4. EXPENSES
(a) Employee Benefits
Salaries and wages
Superannuation
Employee share-based payment expense
Other
Directors’ fees
Directors’ share-based payment expense
(b) Other Expenses
Corporate and overheads
Consulting – fees
Legal
Travel
Employer related taxes
Occupancy
Insurance
Share-based payment expense
Included in the above expenses are operating lease payments of
the following amounts:
Minimum lease payments
31
31
-
2
2
594
42
423
8
204
346
1,617
302
170
40
21
5
108
53
-
699
54
41
41
90
6
96
573
43
592
15
158
193
1,574
285
260
50
98
54
121
53
380
1,301
61
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
47
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
5. AUDITOR'S REMUNERATION
The auditor of the Group is Ernst & Young.
Amounts received or due and receivable by Ernst & Young (Australia) for:
Auditing or reviewing the financial report
Audit related
Taxation services
Consolidated
2018
2017
$
$
41,000
-
15,990
56,990
Amounts received or due and receivable by related practices of Ernst & Young (Australia) for:
46,516
-
40,000
86,516
10,326
2,164
12,490
20,787
4,451
25,238
$’000
$’000
-
-
-
-
(2,478)
(681)
195
(49)
-
535
-
(259)
-
(259)
-
(2,955)
(886)
569
(63)
(259)
380
(259)
Auditing or reviewing the financial report
Taxation services
6. INCOME TAX BENEFIT
The components of income tax benefit comprise:
Current income tax benefit
Deferred income tax benefit
Income tax benefit reported in the consolidated statement
of comprehensive income
Income tax expense recognised in equity
Accounting loss before tax
At the parent company statutory income tax rate of 27.5%
Other non-deductible expenditure for income tax purposes
Effect of different tax rate for overseas subsidiary
Prior year adjustment – current tax on R&D tax offset
(Recognised) / Unrecognised tax losses
Income tax benefit reported in the consolidated statement of
comprehensive income
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
48
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
Carried forward revenue losses
Share issue costs
Provisions and accruals
Other
Gross deferred tax asset
Offset against deferred tax liability
Unrecognised deferred tax assets
Deferred tax liabilities
Other
Gross deferred tax liability
Offset against deferred tax asset
Net deferred tax liability
Consolidated
2018
$’000
2017
$’000
11,852
152
246
-
12,250
(6)
12,244
6
6
(6)
-
12,201
70
181
-
12,452
(6)
12,446
6
6
(6)
-
The carried forward tax losses for Bannerman Resources Limited at 30 June 2018 are $40,298,505. The carried
forward tax losses for Bannerman Mining Resources (Namibia) (Pty) Ltd at 30 June 2018 are $3,472,748. These
tax losses do not expire and may not be used to offset taxable income elsewhere in the Group. The Group
neither has any taxable temporary differences nor any tax planning opportunities available that could partly
support the recognition of these losses as deferred tax assets. On this basis, the Group has determined that it
cannot recognise deferred tax assets on the tax losses carried forward.
The Group has not elected to form a tax consolidated group.
7. CASH AND CASH EQUIVALENTS
Cash at bank and on call (interest bearing)
Short-term deposits (interest bearing)
8,305
20
8,325
3,400
20
3,420
The effective interest rate on short-term bank deposits was 2.30% (2017: 1.90%). These deposits have an
average maturity of 90 days (2017: 90 days).
8. OTHER RECEIVABLES
Current
GST/VAT
Non-Current
Restricted cash
124
124
8
8
57
57
15
15
Restricted cash reflects collateral for a third party bank guarantee for the occupancy of office premises.
Fair value and credit risk
Due to the short term nature of current receivables, their carrying value is assumed to approximate their fair
value.
The maximum exposure to credit risk is the fair value of the receivables. Collateral is not held as security, nor is it
the Group’s policy to transfer (on-sell) receivables to special purpose entities.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
49
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
As at 30 June 2018, the ageing analysis of trade receivables is as follows:
Total
$'000
124
57
2018
2017
Neither past due nor
impaired
$'000
124
57
Past due but not impaired
61-90 days
$'000
91-120 days
$'000
>120 days
$'000
-
-
-
-
-
-
Foreign exchange and interest rate risk
Detail regarding foreign exchange and interest rate risk exposure is disclosed in Note 15(a) and (b).
9. PROPERTY, PLANT AND EQUIPMENT
30 June 2018
Opening net book value
Additions
Disposals
Exchange difference
Depreciation charge
Closing net book value
At 30 June 2018
Cost or fair value
Accumulated depreciation
and impairment
Net book value
Office
Equipment
$'000
Lab & Field
Equipment
Sundry
Vehicles
$'000
$'000
$'000
Land &
Buildings (i)
$'000
Total
$'000
62
3
(1)
(1)
(9)
54
335
(281)
54
17
-
-
-
-
17
40
-
-
-
(8)
32
30
-
-
-
(6)
24
129
451
198
(112)
17
(419)
32
(174)
24
0
-
-
-
-
-
-
-
-
149
3
(1)
(1)
(23)
127
1,113
(986)
127
30 June 2017
$'000
$'000
$'000
$'000
$'000
$'000
Opening net book value
Additions
Disposals
Exchange difference
Depreciation charge
Closing net book value
At 30 June 2017
Cost or fair value
Accumulated depreciation
and impairment
Net book value
64
11
-
4
(17)
62
336
(274)
62
16
-
-
1
-
17
50
-
-
2
(12)
40
34
-
-
3
(7)
30
130
453
201
(113)
17
(413)
40
(171)
30
558
-
(609)
53
(2)
-
-
-
-
722
11
(609)
63
(38)
149
1,120
(971)
149
In December 2016, the Group sold its Land and Buildings in Swakopmund for approximately A$700,000, net of selling costs.
Land and Buildings had a net book value of A$609,000 at the date of disposal, and therefore the Group recognised a profit on
disposal of A$90,000 (refer Note 3).
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
50
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
10. EXPLORATION AND EVALUATION EXPENDITURE
Opening balance
Expenditure incurred during the year
Foreign currency translation movements
Closing balance
Consolidated
2018
$'000
2017
$'000
54,883
900
(850)
54,933
48,759
1,215
4,909
54,883
Expenditure incurred during the period comprises expenditure on geological, feasibility and associated activities.
The value of the Company’s interest in exploration and evaluation expenditure is dependent upon:
the continuance of the Company’s rights to tenure of the areas of interest;
the results of pre-development activities; and
the recoupment of costs through successful development and exploitation of the areas of interest, or
alternatively, by their sale.
Etango Uranium Project – Bannerman 95%
The Etango Uranium Project is situated near Rio Tinto’s Rössing uranium mine, Paladin’s Langer Heinrich uranium
mine and CGNPC’s Husab uranium mine. Bannerman, in 2012, completed a Definitive Feasibility Study (“DFS”) on
a 7-9 million pounds U3O8 per annum open pit mining and heap leach processing operation at Etango. The DFS
confirmed the viability of a large open pit and heap leach operation at one of the world’s largest undeveloped
uranium deposits. From 2015 to 2017, Bannerman conducted a large scale heap leach demonstration program to
provide further assurance to financing parties, generate process information for the detailed engineering design
phase and build and enhance internal capability.
Bannerman announced on 2 February 2017 that it had commenced DFS Update in conjunction with our key
consultants, AMEC Foster Wheeler.
is targeting substantial capital and operating cost
improvements through incorporating the results from the Etango Demonstration Plant and evaluating other
value accretive opportunities in processing, mining and infrastructure that have been developed through internal
engineering undertaken by the Bannerman team.
This process
The DFS update is focussing on the key results obtained from the Demonstration Plant and other processing
optimisation opportunities.
Bannerman currently holds Exclusive Prospecting Licence 3345 (EPL 3345) in Namibia, which is valid until 25 April
2019 and thereafter subject to renew by the Namibian Ministry of Mines and Energy. Bannerman also holds a
Mineral Deposit Retention Licence 3345 (MDRL 3345) in Namibia, which is valid until 6 August 2022 and
thereafter subject to renewal by the Namibian Ministry of Mines and Energy.
Exploration & Evaluation Expenditure for the Etango Project
Consolidated
30 June 2018
$’000
30 June 2017
$’000
Opening balance
Assays and freight
Salaries and wages
Consultants and contractors
Demonstration plant construction cost
Demonstration plant change in rehabilitation provision
Demonstration plant operational cost
Other
Total expenditure for the period
Foreign currency translation movements
Closing balance
54,883
-
496
95
10
27
205
67
900
(850)
54,933
48,759
1
692
142
10
35
266
69
1,215
4,909
54,883
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
51
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
11. TRADE AND OTHER PAYABLES
Trade payables
Other payables and accruals
Consolidated
30 June 2018
$’000
30 June 2017
$’000
105
38
143
120
38
158
Trade payables are non-interest bearing and are normally settled on 30 day terms (or less). Other payables are
non-interest bearing and have an average term of 60 days.
Fair value
Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value.
12. PROVISIONS – NON-CURRENT
Rehabilitation provision
Opening balance
Unwinding of discount
Foreign exchange translation movements
Closing balance
Consolidated
2018
$’000
2017
$’000
440
440
27
7
474
440
370
35
35
440
The Group makes full provision for the future cost of the environmental rehabilitation obligations relating to the
heap leach demonstration plant on a discounted basis at the time of the activity.
The rehabilitation provision, based on the Group’s internal estimates, represents the present value of the future
rehabilitation costs relating to the heap leach demonstration plant. Assumptions based on the current economic
environment have been made, which management believes are a reasonable basis upon which to estimate the
future liability. These estimates are reviewed regularly to take into account any material changes to the
assumptions. However, actual rehabilitation costs will ultimately depend upon future market prices for the
necessary rehabilitation works required that will reflect market conditions at the relevant time. Furthermore,
the timing of the rehabilitation is likely to depend on when the pre-development activities cease.
13. CONTRIBUTED EQUITY
(a)
Issued and outstanding:
Ordinary shares
Issued and fully paid
Movements in ordinary shares on issue
Balance 1 July 2016
-
-
-
-
-
Issue of shares (i)
Issue of shares (ii)
Issue of shares (iii)
Issue of shares (iv)
Cost of share issues
Balance 30 June 2017
Balance 1 July 2017
-
-
-
Issue of shares (v)
Issue of shares (vi)
Cost of share issues
Balance 30 June 2018
June 2018
June 2017
June 2018
June 2017
Number of Shares
Amount
‘000
‘000
$’000
$’000
1,029,871
849,627
140,983
133,475
Number of Shares
’000
Amount
$’000
709,974
2,000
116,666
16,667
3,320
-
849,627
849,627
6,331
173,913
-
1,029,871
129,634
60
3,500
500
-
(219)
133,475
133,475
-
8,000
(492)
140,983
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
52
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
(i)
(ii)
(iii)
(iv)
(v)
On 15 August 2016, 2,000,000 shares were issued to Brandon Munro pursuant to a A$60,000 placement at $0.03 per
share.
On 3 November 2016, 116,666,666 shares were issued to sophisticated and professional investors pursuant to a A$3.5
million placement at $0.03 per share.
On 2 February 2017, 16,666,667 shares were issued RCFVI pursuant to a A$0.5 million placement at $0.03 as
approved by shareholders on 10 January 2017.
The following shares were issued upon vesting of performance rights
a.
On 24 November 2016, 3,569,896 ordinary shares were issued upon vesting of share and performance rights in
accordance with the terms of the Non-Executive Director Share Incentive Plan and Employee Incentive Plan.
b. On 2 February 2017, 500,000 ordinary shares were issued upon vesting of performance rights in accordance
c.
with the terms of the Employee Incentive Plan.
On 24 March 2017, 250,000 ordinary shares were issued upon vesting of performance rights in accordance with
the terms of the Employee Incentive Plan.
The following shares were issued upon vesting of performance rights
a.
On 10 November 2017, 1,000,000 ordinary shares were issued upon vesting of performance rights in
accordance with the terms of the Employee Incentive Plan.
b. On 24 November 2017, 4,730,682 ordinary shares were issued upon vesting of performance rights in
c.
accordance with the terms of the Employee Incentive Plan.
On 16 March 2018, 600,000 ordinary shares were issued upon vesting of performance rights in accordance with
the terms of the Employee Incentive Plan.
(vi)
On 18 June 2018, 173,913,043 shares were issued to sophisticated and professional investors pursuant to a A$8
million placement at $0.046 per share.
(b)
Share options on issue:
The movements in share options during the year were as follows:
Expiry Dates
Exercise
Price
Balance
1 Jul 17
Granted
Exercised
15 November 2017
A$0.089
15 November 2018
A$0.044
25 July 2019
A$0.045
3,664,400
7,846,000
7,500,000
-
-
800,000
25 July 2019
A$0.057
9,000,000
1,200,000
25 July 2019
A$0.07
9,000,000
1,200,000
15 November 2019
A$0.042
19,598,200
-
15 November 2020
A$0.069
-
13,731,200
Weighted average exercise price ($)
Average life to expiry (years)
56,608,600
16,931,200
0.05
1.77
0.07
2.45
-
-
-
-
-
-
-
-
-
-
Expired /
Cancelled
(3,664,400)
-
-
-
-
-
-
Balance
30 Jun 18
Vested
30 Jun 18
-
-
7,846,000
7,846,000
8,300,000
8,300,000
10,200,000
10,200,000
10,200,000
10,200,000
19,598,200
19,598,200
13,731,200
1,007,000
(3,664,400)
69,875,400
57,151,000
0.089
-
0.05
1.42
0.05
1.11
The remaining unvested share options above have performance hurdles linked to minimum service periods.
Directors held 60,168,400 share options as at 30 June 2018 with an average exercise price of $0.05 per share and
an average life to expiry of 1.55 years.
Performance Rights on issue
(c)
The performance rights on issue as at 30 June 2018 were as follows:
Vesting Dates
1 July 2017
15 November 2017
1 January 2018
1 July 2018
15 November 2018
15 November 2019
15 November 2020
Balance
1 Jul 17
750,000
6,623,793
-
-
12,540,500
17,741,800
Granted
Vested
Cancelled /
Forfeited
Balance
30 Jun 18
-
-
(750,000)
-
(4,730,682)
(1,893,111)
600,000
276,000
245,900
3,264,600
-
10,587,400
(600,000)
-
-
-
-
-
(276,000)
(3,218,085)
(3,853,082)
-
-
-
-
-
9,568,315
17,153,318
10,587,400
Average life to vesting (years)
0.45
1.48
-
-
0.96
37,656,093
14,973,900
(6,080,682)
(9,240,278)
37,309,033
Note: Performance rights have no exercise price.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
53
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
The performance rights have been issued in accordance with the shareholder-approved EIP and NEDSIP, and vest
into shares for no consideration on the completion of minimum service periods and, in certain cases, the
achievement of specified vesting hurdles related to the Company’s relative share price performance, internal
business targets and/or personal performance.
Directors held 14,378,800 performance rights as at 30 June 2018 with an average life to vesting of 1.88 years.
Terms of Ordinary Shares
Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the
number of shares held and in proportion to the amount paid up on the shares held. At shareholders’ meetings,
each ordinary share is entitled to one vote in proportion to the paid up amount of the share when a poll is called,
otherwise each shareholder has one vote on a show of hands.
Capital Management
For the purpose of the Group’s capital management, capital includes issued capital and all other equity reserves
attributable to the equity holders of the parent. When managing capital, management’s objective is to ensure
the entity continues as a going concern as well as to obtain optimal returns to shareholders and benefits for
other stakeholders. Management also aims to maintain a capital structure which assists to ensure the lowest
appropriate cost of capital available to the Company.
14. RESERVES
Share-based payment reserve
Foreign currency translation reserve
Asset revaluation reserve
Convertible note reserve
Equity reserve
TOTAL RESERVES
Consolidated
2018
$'000
2017
$'000
(a)
(b)
(c)
(d)
(e)
56, 152
(27,142)
-
4,038
(4,968)
55,383
(26,274)
-
4,038
(4,968)
28,080
28,179
(a) Share-based Payment Reserve
Balance at the beginning of the reporting period
Share-based payment vesting expense during the period
Balance at the end of the reporting period
55,383
769
56,152
54,598
785
55,383
The Share-based Payment Reserve is used to recognise the value of equity-settled share-based payment
transactions for the acquisition of project interests and the provision of share-based incentives to directors,
employees and consultants.
(b) Foreign Currency translation reserve
Reserves at the beginning of the reporting period
Currency translation differences arising during the year
Balance at the end of the reporting period
(26,274)
(868)
(27,142)
(31,198)
4,924
(26,274)
The Foreign Currency Translation Reserve is used to record exchange differences arising on translation of the
Group entities that do not have a functional currency of Australian dollars and have been translated into
Australian dollars for presentation purposes.
As per the Statement of Comprehensive Income, the foreign currency translation difference arising for the year
ended 30 June 2018 amounted to $870,000 (2017: $4,927,000), allocated between non-controlling interests of
$2,000 (2017: $3,000) and the Group of $868,000 (2016: $4,924,000). Over the year, the Australian dollar
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
54
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
strengthened against the Namibian dollar, with a movement of approximately 1% from the rate as at 30 June
2017 (A$1.00:N$10.04) to the rate as at 30 June 2018 (A$1.00:N$10.19).
(c) Asset Revaluation reserve
Reserves at the beginning of the reporting period
Sale of Land and Buildings
Balance at the end of the reporting period
-
-
-
167
(167)
-
The Asset Revaluation Reserve is used to record increases and decreases (to the extent that such decrease
relates to an increase on the same asset previously recognised in equity) in the fair value of land and buildings.
The Land and Buildings, which the asset revaluation reserve was attributable to, was sold in December 2016.
(d) Convertible Note reserve
Reserves at the beginning of the reporting period
Balance at the end of the reporting period
4,038
4,038
4,038
4,038
The convertible note reserve records the equity portion of the RCFIV convertible note issued on 16 December
2008, refinanced on 31 March 2012 and 22 November 2013, and the RCFVI convertible note issued on 19 June
2014. The convertible notes were extinguished on 31 December 2015.
(e) Equity reserve
Reserves at the beginning of the reporting period
Non-controlling interest disposed of during the period
Balance at the end of the reporting period
(4,968)
-
(4,968)
(5,602)
634
(4,968)
In March 2017, the Company entered into a Subscription Agreement with the One Economy Foundation to
become a 5% loan-carried shareholder in the Etango Project. As part of the Subscription Agreement, Bannerman
Mining Resources (Namibia) (Pty) Ltd (BMRN) issued 5% of its ordinary share capital to the One Economy
Foundation for par (nominal) value. The One Economy Foundation will be loan carried for all future project
expenditure including pre-construction and development expenditure, with the loan capital and accrued interest
repayable from future dividends.
The issue of shares to the One Economy Foundation has been treated as a share based payment in accordance
with the accounting standards. The shares were fair valued as at the date of signing the Subscription Agreement
at the market price of the Company’s shares. The valuation took into consideration other input parameters
including the effect on current intercompany loans. The fair value of the shares was recognised in the profit and
loss account
The group recognised an increase in non-controlling interests of A$254,000, and an increase in equity
attributable to the owners of the parent of A$634,000. The effect on the equity attributable to the owners of the
Group during the prior period is summarised as follows:
Carrying amount of non-controlling interest acquired
Fair value of share based payment to non-controlling interests
Excess of consideration paid recognised in equity
$’000
254
380
634
As part of the Agreement and structure of the loan funding to BMRN, BMRN is required to issue 5% of its share
capital to One Economy Foundation and 95% to Bannerman Resources Nominees (UK) Limited for each
intercompany loan payment made by the Company to BMRN.
The issue of shares to the One Economy Foundation are treated as a share based payment in accordance with
the accounting standards. The fair value of the shares is recognised in the profit and loss account. The shares
issued during the year were fair valued as at the date that each intercompany loan payment is made by the
Company to BMRN. The shares were valued using an option pricing model, which takes into account future
dividends that One Economy Foundation will forego until the loan funding provided by the Group is settled. The
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
55
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
key input is the share price which is based on the Company’s market capitalisation and then adjusted to take into
effect the difference between the intercompany loan balance and the market capitalisation of the Company.
Seven intercompany loan payments were made during the year, and at each time the intercompany loan balance
was higher than the market capitalisation of the Company which resulted in the share based payments being
valued at nil.
15. FINANCIAL INSTRUMENTS
The Group’s principal financial instruments comprise cash and short term deposits, receivables, payables,
convertible notes and finance leases.
Set out below is an overview of financial instruments, other than cash and short-term deposits, held by the
Group as at 30 June 2018.
Financial assets
Trade and other receivables
Total non-current
Cash and cash equivalents
Trade and other receivables
Total current
Total
Financial liabilities
Trade and other payables
Total
Fair Values
Consolidated
2018
$'000
2017
$'000
8
8
8,325
124
8,449
8,457
143
143
15
15
3,420
57
3,477
3,492
158
158
The carrying value and net fair values of financial assets and liabilities at balance date are:
2018
2017
Carrying
Amount
$'000
Net fair
Value
$'000
Carrying
Amount
$'000
Net fair
Value
$'000
8
8
8,325
124
8,449
8,457
143
143
143
8
8
8,325
124
8,449
8,457
143
143
143
15
15
3,420
57
3,477
3,492
158
158
158
15
15
3,420
57
3,477
3,492
158
158
158
Financial assets
Trade and other receivables
Total non-current
Cash and cash equivalents
Trade and other receivables
Total current
Total
Financial liabilities
Trade and other payables
Total current
Total
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The
following methods and assumptions were used to estimate the fair values:
Management assessed that cash and short-term deposits, trade receivables, other current receivables,
trade payables, and other current liabilities approximate their carrying amounts largely due to the short-
term maturities of these instruments.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
56
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
Long-term fixed-rate and variable-rate receivables/borrowings are evaluated by the Group based on
parameters such as interest rates, specific country risk factors, individual creditworthiness of the customer
and the risk characteristics of the financed project. Based on this evaluation, allowances are taken into
account for the expected losses of these receivables. As at 30 June 2018, the carrying amounts of such
receivables, net of allowances, were not materially different from their calculated fair values.
Financial risk management objectives and policies
The Group uses different methods to measure and manage different types of risks to which it is exposed. These
include the monitoring of levels of exposure to interest rates and foreign exchange risk and assessments of
market forecasts for interest rate and foreign exchange prices. Liquidity risk is monitored through the
development of future rolling cash flow forecasts and financing plans.
The Board reviews and agrees policies for managing each of the above risks and they are summarised below:
(a)
Interest Rate Risk
Interest rate risk is managed by obtaining competitive commercial deposit interest rates available in the
market from major Australian financial institutions.
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as
a result of changes in market interest rates, and the effective weighted average interest rate for each class of
financial assets and financial liabilities, comprises:
Consolidated
2018
Financial assets
Cash
Weighted average interest rate
Consolidated
2017
Financial assets
Cash
Weighted average interest rate
Floating
Interest Rate
$'000
Fixed Interest
maturing in 1
year or less
$'000
Fixed Interest
maturing over 1
to 5 years
$'000
Total
$'000
8,305
8,305
20
20
-
-
8,325
8,325
0.3%
Floating
Interest Rate
$'000
Fixed Interest
maturing in 1
year or less
$'000
Fixed Interest
maturing over 1
to 5 years
$'000
Total
$'000
3,400
3,400
20
20
-
-
3,420
3,420
0.3%
The following table summarises the impact of reasonably possible changes in interest rates for the Group at
30 June 2018. The sensitivity analysis is based on the assumption that interest rates change by 1% with all
other variables remaining constant. The 1% sensitivity is based on reasonably possible changes over a
financial year, using the observed range of actual historical rates for the preceding 5 year period and
management’s expectation of short term future interest rates.
Consolidated
Impact on post-tax gain/(loss):
1% increase
1% decrease
There is no impact on other reserves in equity for the Group.
2018
$'000
83
(83)
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
2017
$'000
32
(32)
57
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
(b) Foreign Currency Risk
Foreign exchange risk arises from future commitments, assets and liabilities that are denominated in a
currency that is not the functional currency of the relevant Group company.
The Group’s deposits are largely denominated in Australian dollars. Currently there are no foreign exchange
hedge programs in place. The Group manages the purchase of foreign currency to meet operational
requirements.
The impact of reasonably possible changes in foreign exchange rates for the Group is not material.
(c) Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group. The Group has adopted the policy of dealing only with creditworthy counterparties and
obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of
financial loss from defaults.
The carrying amount of financial assets recorded in the financial statements, net of any provisions for losses,
represents the Group’s maximum exposure to credit risk. For the remaining financial assets, there are no
significant concentrations of credit risk within the Group and financial instruments are being spread amongst
highly rated financial institutions and related parties to minimise the risk of default of counterparties.
(d) Liquidity
Liquidity is monitored through the development of monthly expenditure and rolling cash flow forecasts. Short
term liquidity is managed on a day to day basis by the finance management team including the use of weekly
cash forecasts.
The risk implied from the values shown in the table below reflects a balanced view of cash outflows:
Financial Liabilities
2018
Trade and other payables
Interest bearing liabilities
Total
2017
Trade and other payables
Interest bearing liabilities
Total
<6 months
$’000
6-12 months
$’000
1– 5 years
$’000
Total
$’000
143
-
143
158
-
158
-
-
-
-
-
-
-
-
-
-
-
-
143
-
143
158
-
158
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
58
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
16. FAIR VALUE MEASUREMENT
The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities.
Quantitative disclosures fair value measurement hierarchy for assets as at 30 June 2018 and 30 June 2017:
Fair value measurement using
Date of
valuation
Total
Quoted prices in
active markets
(Level 1)
Significant
observable
inputs
(Level 2)
Significant
unobservable
inputs
(Level 3)
Assets for which fair values are disclosed
(Note 15)
Trade and other receivables
-
Current
- Non-current
-
Current
- Non-current
30 June 2018
30 June 2018
30 June 2017
30 June 2017
Liabilities measured at fair value
Liabilities for which fair values are
disclosed (Note 15)
Trade and other payables
Trade and other payables
30 June 2018
30 June 2017
124
8
57
15
143
158
17. LOSS PER SHARE
Basic and diluted loss per share to the ordinary equity holders of the
Company (cents per share)
Loss used in the calculation of weighted average basic and dilutive
loss per share
Weighted average number of ordinary shares outstanding during the
period used in the calculation of basic loss per share
-
-
-
-
-
-
-
-
-
-
-
-
124
8
57
15
143
158
2018
(0.29)
$'000
(2,478)
2017
(0.34)
$'000
(2,696)
Number of
Shares
'000
859,474
Number of
Shares
'000
802,723
Number of share options / performance rights issued that could be
potentially dilutive but are not included in diluted EPS as they are
anti-dilutive for the periods presented.
69,875
56,646
There have been no other conversions to or subscriptions for ordinary shares or issues of potential ordinary
shares since the balance date and before the completion of this report.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
59
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
18. CASH FLOW INFORMATION
Consolidated
2018
$'000
2017
$'000
(a)
Reconciliation from the net loss after tax to the net cash flow
from operating activities
Loss after income tax
(2,478)
(2,696)
Non-cash flows in operating loss
Depreciation
Share-based payments
(Loss)/profit on sale of land and buildings
Changes in assets and liabilities
(Increase) / decrease in receivables and prepayments
Increase / (decrease) in trade and other creditors and accruals
Increase in provisions
23
769
(2)
(59)
89
68
38
1,165
90
57
(138)
113
Net cash outflows from Operating Activities
(1,590)
(1,371)
19. COMMITMENTS
a)
Exploration and evaluation expenditure
Bannerman currently holds Exclusive Prospecting Licence 3345 (EPL 3345) in Namibia, which is valid until 25 April
2019 and thereafter subject to renew by the Namibian Ministry of Mines and Energy. Bannerman also holds a
Mineral Deposit Retention Licence 3345 (MDRL 3345) in Namibia, which is valid until 6 August 2022 and
thereafter subject to renewal by the Namibian Ministry of Mines and Energy.
In order to maintain current rights of tenure to mineral licences, the Group has exploration and evaluation
expenditure obligations up until the expiry of those licences. The following stated obligations, which are subject
to renegotiation upon expiry of the current licences, are not provided for in the financial statements and
represent a commitment of the Group:
Not longer than one year
Longer than one year, but not longer than five years
Longer than five years
Consolidated
2018
$'000
2017
$'000
171
-
-
171
82
166
-
248
If the Group decides to relinquish certain mineral licences and/or does not meet these minimum expenditure
obligations or obtain appropriate waivers, assets recognised in the Statement of Financial Position may require
review to determine the appropriateness of carrying values. The sale, transfer or farm-out of exploration rights
to third parties will reduce or extinguish these obligations.
b) Operating lease commitments
The Group has entered into a lease for office premises. This lease has an initial lease term of 2 years.
Not longer than one year
Longer than one year, but not longer than five years
Longer than five years
47
20
-
67
85
17
-
102
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
60
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
20. SHARE-BASED PAYMENT PLANS
Recognised employee share-based payment expenses
The expense recognised for employee services received during the year are shown in the table below:
Total expense arising from employee and director share-based
payment transactions
Types of share-based payment plans
Employee Incentive Plan ("EIP")
Consolidated
2018
$'000
2017
$'000
769
785
Performance rights are granted to all employees. The EIP is designed to align participants' interest with those of
shareholders by enabling employees to access the benefits of an increase in the value of the Company's shares.
For grants of performance rights under the EIP, the vesting of half of the performance rights is subject to the
Company’s relative TSR as measured by share price performance (allowing for the reinvestment of dividends),
versus a comparator group of uranium development companies, and the vesting of the other half is subject to
the attainment of defined individual and group performance criteria as assessed by the Board in line with the
work schedules under the Company’s operating plans. The performance measurement date is two years from
date of grant for employees and three years from the date of grant for executives.
In assessing whether the relative TSR hurdle for each grant has been met, the Group's TSR growth from the
commencement of each grant and that of the pre-selected peer group are ranked. The peer group chosen for
comparison is a group of Australian and foreign uranium development companies at the date of grant. This peer
group reflects the Group's competitors for capital and talent.
The Group's performance against the hurdle is determined according to Bannerman’s ranking against the peer
group TSR growth over the performance period:
When Bannerman is ranked at the 75th percentile, 100% of the performance rights will vest.
When Bannerman is ranked below the 25th percentile, the performance rights are forfeited.
For rankings between the 25th and 75th percentile, a sliding scale applies whereby every 1 percentile
equates to 2% vesting.
When a participant ceases employment prior to the vesting of their rights, the rights are generally forfeited
unless cessation of employment is due to termination initiated by the Group (except for termination with cause)
or death. In the event of a change of control, the performance period end date will be bought forward to the
date of change of control and rights will vest. The Company prohibits executives from entering into
arrangements to protect the value of unvested EIP awards.
Non-Executive Director Share Incentive Plan ("NEDSIP")
Non-executive directors' remuneration includes initial and annual grants of share options or share rights (under
the NEDSIP). Share options and share rights granted to non-executive directors are not subject to performance
hurdles. They have been issued as an incentive to attract experienced and skilled personnel to the Board.
Summary of share options granted under NEDSIP and EIP arrangements
2018
#
2018
WAEP1
2017
#
Outstanding at beginning of the year
Granted during the year
31,108,600
13,731,200
0.05
0.07
16,014,400
19,598,200
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
2017
WAEP1
0.06
0.04
61
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
Exercised during the year
Expired during the year
Forfeited during the year
Outstanding at end of the year
-
(3,664,400)
-
41,175,400
-
0.09
-
0.05
-
(4,504,000)
-
31,108,600
-
0.07
-
0.05
1 Weighted Average Exercise Price ($/share)
Summary of share options granted outside of NEDSIP and EIP arrangements
Outstanding at beginning of the year
Granted during the year
Outstanding at end of the year
1 Weighted Average Exercise Price ($/share)
2018
#
25,500,000
3,200,000
28,700,000
2018
WAEP1
2017
#
2017
WAEP1
0.06
0.06
0.06
20,000,000
5,500,000
25,500,000
0.06
0.06
0.06
Summary of performance rights granted under NEDSIP and EIP arrangements
Outstanding at beginning of the year
Granted during the year
Vested during the year
Forfeited during the year
Outstanding at end of the year
Weighted average remaining contractual life
2018
#
37,656,093
14,973,900
(6,080,682)
(9,240,278)
37,309,033
2017
#
19,585,658
25,000,700
(4,569,896)
(2,360,369)
37,656,093
The weighted average remaining contractual life as at 30 June 2018 was:
Share options
Performance rights
1.42 years (2017: 1.77 years).
0.96 years (2017: 0.45 years).
Range of exercise price
The range of exercise prices for share options outstanding as at 30 June 2018 was $0.042 - $0.069 (2017: $0.042 -
$0.089). The weighted average exercise price for share options outstanding as at 30 June 2018 was $0.05 (2017:
$0.05) per share option.
Weighted average fair value
The weighted average fair value for the share options granted during the year was $0.03 (2017: $0.04) per share
option. The weighted average fair value for the performance rights granted during the year was $0.03 (2017:
$0.03) per performance right.
Share options / performance rights pricing model
Equity-settled transactions
The fair value of the equity-settled share options granted under the NEDSIP and EIP is estimated as at the date of
grant using a Black-Scholes option price calculation method taking into account the terms and conditions upon
which the share options/rights were granted. A Monte Carlo simulation is applied to fair value the TSR element.
In accordance with the rules of the EIP, the model simulates the Company's TSR and compares it against the peer
group over the two year period of each grant made to employees and the three year period of each grant made
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
62
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
to executives. The model takes into account the historic dividends, share price volatilities and co-variances of the
Company and each comparator company to produce a theoretical predicted distribution of relative share
performance. This is applied to the grant to give an expected value of the TSR element.
Pricing model inputs used for the year ended 30 June 2018:
NEDSIP
Annual Grant
Share Options
OTHER (i)
Annual Grant
Rights
EIP
Annual
Grant Rights
OTHER (i)
Options
Dividend Yield (%)
Expected volatility (%)
Risk- Free interest rate (%)
0%
82%
1.75%
0%
82%
1.75%
0%
85%
1.91% -
2.04%
0%
83%
1.98%
Expected life of Share Options /
Rights (years)
3 years
1 year
2 - 3 years
2 year
Share price at measurement date ($)
0.058
0.058
0.058 - 0.06
0.058
(i)
Share Options/Rights issued under separate terms and conditions and not issued as part of any formal plan.
Pricing model inputs used for the year ended 30 June 2017:
NEDSIP
Annual Grant
Share Options
OTHER (i)
Annual Grant
Rights
EIP
Annual
Grant Rights
OTHER (i)
Options
Dividend Yield (%)
Expected volatility (%)
Risk- Free interest rate (%)
0%
82%
1.75%
0%
82%
1.75%
0%
85%
1.88% -
2.00%
0%
83%
1.72%
Expected life of Share Options /
Rights (years)
3 years
1 year
2 - 3 years
3 year
Share price at measurement date ($)
0.028
0.028
0.026 - 0.031
0.026
(ii)
Share Options/Rights issued under separate terms and conditions and not issued as part of any formal plan.
21. SEGMENT INFORMATION
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
CEO and the management team in assessing performance and in determining the allocation of resources.
The Group is undertaking development studies and exploring for uranium resources in southern Africa, and
hence the operations of the Group represent one operating segment.
The accounting policies applied for internal reporting purposes are consistent with those applied in the
preparation of the financial statements. The Group considers the segment assets and liabilities to be consistent
with those disclosed in the financial statements.
The analysis of the location of non current assets other than financial instruments is as follows:
Australia
Namibia
Total Non-current Assets
Consolidated
2018
$'000
39
55,029
55,068
2017
$'000
43
54,989
55,032
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
63
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
22. EVENTS SUBSEQUENT TO REPORTING DATE
No other matters or circumstances have arisen since the end of the financial period which significantly affected
or may significantly affect the operations of the Consolidated Entity, the results of those operations, or the state
of affairs of the Consolidated Entity in future financial years.
23. RELATED PARTY INFORMATION
Subsidiaries
The consolidated financial statements include the financial statements of Bannerman Resources Limited and the
subsidiaries listed in the following table:
Name
Bannerman Mining Resources (Namibia) (Pty) Ltd
Elfort Nominees Pty Ltd
Bannerman Resources Nominees (UK) Limited
Country of
incorporation
Namibia
Australia
United Kingdom
% Equity Interest
2018 2017
95
100
100
95
100
100
Ultimate Parent
Bannerman Resources Limited is the ultimate Australian parent entity and the ultimate parent of the Group.
Compensation of Key Management Personnel by Category:
Short-term employee benefits
Post-employment benefits
Share-based payments
2018
$'000
689,567
101,940
614,764
1,406,271
2017
$'000
566,062
87,250
491,718
1,145,030
Transactions with related entities:
Transactions between related parties are on commercial terms and conditions, no more favourable than those
available to other parties unless otherwise stated.
24. CONTINGENCIES
On 17 December 2008, the Company entered into a settlement agreement with Savanna Marble CC (“Savanna”)
relating to Savanna’s legal challenge to the Company’s rights to the Etango Project Exclusive Prospecting Licence.
Under the terms of the Savanna settlement agreement, in consideration for the termination of proceedings,
Savanna was entitled to receive $3.5 million cash and 9.5 million fully paid ordinary shares in Bannerman. The
first tranche payment of $3.0 million and 5.5 million shares was made in early 2009. The second and final
tranche payment of $500,000 and 4.0 million ordinary shares is due to Savanna upon receipt of the Etango
Project mining licence. The mining licence application was lodged in December 2009, and further supplementary
information has since been lodged in support of the application. In July 2016, the Company announced that it
had received correspondence from the MME stating the Honourable Minster intends to refuse the application
for the Etango Project Mining Licence, citing the current low uranium price. Bannerman retains the right to re-
apply for a mining licence when the uranium market recovers. As at 30 June 2018, the probability and timing of
the grant of a mining licence is uncertain. Due to this uncertainty, the second tranche payment has been
disclosed as a contingent liability and not as a provision as at 30 June 2018.
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
64
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
25. PARENT ENTITY INFORMATION
a.
Information relating to Bannerman Resources Limited:
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Accumulated loss
Option Reserve
Convertible Note Reserve
Total shareholders’ equity
(Loss)/profit of the parent entity
Total comprehensive (loss)/income of the parent entity
2018
$’000
2017
$’000
8,321
12,138
266
279
140,983
(189,314)
56,152
4,038
11,859
(3,168)
(3,168)
3,300
7,021
271
271
133,475
(186,146)
55,383
4,038
6,750
(3,049)
(3,049)
b. Details of any guarantees entered into by the parent entity in relation to the debts of its subsidiaries
There are no guarantees entered into to provide for debts of the Company's subsidiaries. The parent entity has
provided a letter to BMRN evidencing the parent’s intent to meet the financial obligations of BMRN for the
period 1 July 2017 to 30 June 2018.
c. Details of any contingent liabilities of the parent entity
Refer to Note 24 for details relating to contingent liabilities.
d. Details of any contractual commitments by the parent entity for the acquisition of property, plant or
equipment
There are no contractual commitments by the parent entity for the acquisition of property, plant and equipment
as at reporting date.
26. MATERIAL PARTLY-OWNED SUBSIDIARIES
Financial information of subsidiaries that have material non-controlling interests are provided below:
Proportion of equity interest held by non-controlling interests:
Name
Country of
incorporation
Bannerman Mining Resources (Namibia) (Pty) Ltd
Namibia
Accumulated balances of material non-controlling interest:
Bannerman Mining Resources (Namibia) (Pty) Ltd
Loss allocated to material non-controlling interest:
Bannerman Mining Resources (Namibia) (Pty) Ltd
2018
5%
$’000
(294)
(34)
2017
5%
$’000
(260)
(6)
In March 2017, the Company entered into a Subscription Agreement with the One Economy Foundation to
become a 5% loan-carried shareholder in the Etango Project. As part of the Subscription Agreement, Bannerman
Mining Resources (Namibia) (Pty) Ltd (BMRN) issued 5% of its ordinary share capital to the One Economy
Foundation for par (nominal) value. The One Economy Foundation will be loan carried for all future project
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
65
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
(EXPRESSED IN AUSTRALIAN DOLLARS)
expenditure including pre-construction and development expenditure, with the loan capital and accrued interest
repayable from future dividends.
The summarised financial information of the subsidiary is provided below. This information is based on amounts
before inter-company eliminations and up to the date of acquisition of the non-controlling interest.
Bannerman Mining Resources (Namibia) (Pty) Ltd
Summarised statement of comprehensive income:
Other income
Administrative expenses
Loss before tax
Income tax
Loss for the year
Total comprehensive loss
Attributable to non-controlling interests
Summarised statement of financial position:
Cash and bank balances and receivables (current)
Property, plant and equipment (non current)
Exploration and evaluation expenditure (non current)
Trade and other payables (current)
Other payables (non current)
Total equity
Attributable to:
Equity holders of parent
Non-Controlling interest
Summarised cash flow information:
Operating
Investing
Financing
Net (decrease) / increase in cash and cash equivalents
2018
$’000
2017
$’000
15
(672)
(657)
-
(657)
(657)
-
239
96
54,602
(152)
(45,402)
9,383
8,914
469
(421)
(789)
1,113
(97)
111
(977)
(866)
-
(866)
(866)
-
231
106
54,635
(128)
(60,155)
(5,311)
(5,060)
(254)
(397)
(104)
661
160
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
66
DIRECTORS’ DECLARATION
FOR THE YEAR ENDED 30 JUNE 2018
DIRECTORS' DECLARATION
In accordance with a resolution of the directors of Bannerman Resources Limited, I state that:
1. In the opinion of the directors:
(a) The financial statements, notes and additional disclosures included in the directors’ report designated as
audited, of the Group are in accordance with the Corporations Act 2001, including:
i)
ii)
Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2018 and
its performance for the year ended on that date.
Complying with Accounting Standards and Corporations Regulations 2001.
(b) The financial statements and notes also comply with International Financial Reporting Standards as disclosed
in Note 1; and
2. This declaration has been made after receiving the declarations required to be made to the directors in
accordance with s295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
On behalf of the Board
Brandon Munro
Managing Director & CEO
Perth, 28 September 2018
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
67
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor’s report to the members of Bannerman Resources
Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Bannerman Resources Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30 June
2018, the consolidated statement of comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the year then ended, notes to the financial statements,
including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:
a)
b)
giving a true and fair view of the consolidated financial position of the Group as at 30 June 2018
and of its consolidated financial performance for the year ended on that date; and
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 Group 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial report of the current year. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate
opinion on these matters. We have determined the matters described below to be the key audit matters to
be communicated in our report. For each matter below, our description of how our audit addressed the
matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying
financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
RK:DA:BANNERMAN:052
1.
Carrying value of capitalised exploration and evaluation
Why significant
How our audit addressed the key audit matter
The carrying value of exploration and evaluation
assets is assessed for impairment by the Group when
facts and circumstances indicate that an exploration
and evaluation asset may exceed its recoverable
amount.
The determination as to whether there are any
indicators to require an exploration and evaluation
asset to be assessed for impairment, involves a
number of judgments including whether the Group
will be able to maintain tenure, perform ongoing
expenditure and whether there is sufficient
information for a decision to be made that the area of
interest is not commercially viable. During the year
the Group determined that there had been no
indicators of impairment.
Refer to Note 10 – Exploration and evaluation assets
to the financial report for the amount recognised on
the consolidated statement of financial position as at
30 June 2018 and related disclosure.
We evaluated the Group’s assessment as to whether there
were any indicators of impairment to require the carrying
value of exploration and evaluation assets to be tested for
impairment. In performing our audit procedures, we:
• Considered the Group’s right to explore in the relevant
exploration area which included obtaining and
assessing supporting documentation such as license
agreements and correspondence with relevant
government agencies;
• Considered the Group’s intention to carry out
significant exploration and evaluation activities in the
relevant exploration area which included assessing
whether the Group’s cash-flow forecasts provided for
expenditure for planned exploration and evaluation
activities, and enquiring with senior management and
Directors as to the intentions and strategy of the
Group; and
• Considered the Group’s assessment of whether the
commercial viability of extracting mineral resources
had been demonstrated and whether it was
appropriate to continue to classify the capitalised
expenditure for the area of interest as an exploration
and evaluation asset.
We also assessed the adequacy of the disclosure in Note
10
2.
Share based payments - Performance rights and share options
Why significant
How our audit addressed the key audit matter
In the current year the Group granted share based
payments in the form of performance rights and share
options. The awards vest subject to the achievement
of certain vesting conditions.
Due to the complex and judgmental estimates used in
determining the valuation of the share based payments
and vesting expense, we considered the Group’s
calculation of the share based payment expense to be a
key audit matter.
In determining the fair value of the awards and related
expense the Group uses assumptions in respect of
future market and economic conditions.
The Group used the Black Scholes and Monte Carlo
Simulation models in valuing the share-based payment
awards.
Refer to Note 20 to the financial report for the share
based payment expenses recognised for the year ended
30 June 2018 and related disclosure.
For awards granted during the year, we performed the
following audit procedures:
•
Involved our valuation specialists to assess the
assumptions used in the Group’s calculation being
the share price of the underlying equity, interest
rate, volatility, dividend yield, time to maturity
(expected life) and grant date; and
• Assessed the use of third party experts engaged by
the Group for the purposes of performing an
independent actuarial valuation on the performance
rights that have total shareholder return vesting
conditions. This included assessing the
independence, objectivity and capability of the third
party expert.
We also assessed the adequacy of the disclosure in Note
20.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
RK:DA:BANNERMAN:052
3.
Recognition of settlement obligations
Why significant
How our audit addressed the key audit matter
In December 2008, the Group entered into a settlement
agreement in respect of the Etango project. As part of
the settlement, the Group is required to make a final
settlement payment of $500,000 and issue 4 million
ordinary shares if a mining license is issued for the
Etango project which has been disclosed as a contingent
liability, in Note 24 to the financial report.
Determining whether a liability needs to be recognised
for the final settlement amount involves judgment,
particularly in assessing the probability and timing of
whether a mining license will be granted, triggering the
settlement amount becoming due and payable. As a
result, the assessment of whether liability needs to be
recognised at 30 June 2018 is considered a key audit
matter.
4.
One Economy Loan Funding
We evaluated the Group’s assessment as to whether a
liability should be recognised for the final settlement
payment at 30 June 2018. In performing our audit
procedures, we:
• Considered the current status of the Etango project; and
• Considered the Group’s strategy to obtain a mining
license which included obtaining and assessing
supporting documentation such as recent
correspondence with relevant government agencies.
We also assessed the adequacy of the disclosure in Note
24.
Why significant
How our audit addressed the key audit matter
We evaluated the Group’s assessment that the transaction
with One Economy was a share based payment
arrangement and considered the calculation of the resulting
share based payment expense for the financial year ended
30 June 2018. In performing our audit procedures, we:
• Understood the key terms and conditions of the loan
agreement; and
• Assessed the key assumptions and inputs in the Group’s
valuation of the shares issued.
We also assessed the adequacy of the disclosure in Note
14.
A loan agreement with One Economy has been entered
in which the Group provides loan funding to One
Economy for One Economy’s 5% share of exploration,
evaluation and development expenditure incurred by
subsidiary Bannerman Mining Resources (Namibia)
(Pty) Ltd (“Bannerman Namibia”).
The Group has determined this transaction to be a share
based payment arrangement. Therefore, any additional
loan funding provided to Bannerman Namibia on behalf
of One Economy during the financial year was being
capitalised and shares were issued to One Economy.
The Group determined the fair value of the share issued
by Bannerman Namibia based on market capitalisation
of the Bannerman Group after deducting the
intercompany loans. Due to determining the fair value
of the shares issued by Bannerman Namibia to One
Economy involves judgment, we considered the Group’s
calculation to be a key audit matter.
Refer to Note 14 to the financial report for the related
disclosure.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
RK:DA:BANNERMAN:052
5.
Going Concern assessment
Why significant
How our audit addressed the key audit matter
The Group is not currently generating revenue and is in
the exploration and evaluation stage. Accordingly
assessing whether the Group has sufficient available
funding for the Group to meet its obligations as and
when they fall due is a key part of our going concern
assessment and therefore a significant aspect of our
audit.
This assessment is largely based on the expectations of
and the estimates made by the Group of future cash
flows. The expectations and estimates can be influenced
by subjective elements such as estimates of amounts
and timing of future cash outflows.
The financial report has been prepared on a going
concern basis.
Our audit procedures included the following:
• Analysed the Group’s cash flow forecast and enquired
with management to gain an understanding of the
inputs and process underpinning the cash flow model
prepared for the purpose of the going concern
assessment;
• Assessed whether the cash flow model accurately
reflects the budget that was approved by the Directors;
and
• Assessed the future cash outflows from exploration
expenditure and corporate expenses taking into
account our knowledge of the Group’s operations,
historical spend and future plans.
Information other than the financial report and auditor’s report
The directors are responsible for the other information. The other information comprises the information
included in the Company’s 2018 Annual Report other than the financial report and our auditor’s report
thereon. We obtained the Directors’ Report that is to be included in the Annual Report, prior to the date of
this auditor’s report, and we expect to obtain the remaining sections of the Annual Report after the date
of this auditor’s report.
Our opinion on the financial report does not cover the other information and we do not and will not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our
related assurance opinion.
In connection with our audit of the 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 on the other information obtained prior to the date of this
auditor’s report, 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.
Directors’ responsibilities for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
RK:DA:BANNERMAN:052
In preparing the financial report, the directors are responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Company or to cease
operations, or have 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 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 financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment 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 fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
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 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 in
the preparation of the financial report. We also conclude, based on the audit evidence obtained,
whether a material uncertainty exists related to events and conditions that may cast significant
doubt on the entity’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in the auditor’s report to the disclosures in the
financial report about the material uncertainty or, if such disclosures are inadequate, to modify the
opinion on the financial report. However, future events or conditions may cause an entity to cease
to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the consolidated financial statements represent 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 Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for
our audit opinion.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
RK:DA:BANNERMAN:052
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 to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year 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 Audit of the Remuneration Report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 16 to 26 of the directors' report for the year
ended 30 June 2018.
In our opinion, the Remuneration Report of Bannerman Resources 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.
Ernst & Young
Robert A Kirkby
Partner
Perth
28 September 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
RK:DA:BANNERMAN:052
ADDITIONAL SHAREHOLDER INFORMATION (CONTINUED)
FOR THE YEAR ENDED 30 JUNE 2018
ADDITIONAL SHAREHOLDER INFORMATION
Additional information required by the Australian Securities Exchange Listing Rules and not disclosed
elsewhere in this report is set out below. The information was applicable as at 2 October 2018.
Distribution of Equity Securities
There were 561 holders of less than a marketable parcel of ordinary shares. The number of shareholders by
size of holding is set out below:
Fully Paid Ordinary Shares
Size of Holding
Number of holders
Number of shares
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
TOTALS
229
189
268
1,504
785
2,995
63,371
586,873
2,490,517
62,530,006
965,134,638
1,030,805,705
Unlisted Share options and Performance Rights
Share options
Number of
holders
-
Number of
share options
-
Performance Rights
Number of
holders
-
Number of
performance rights
-
-
-
-
10
10
-
-
-
69,875,400
69,875,400
-
-
1
8
9
-
-
37,891
35,281,848
35,319,739
Size of Holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
TOTALS
Substantial Shareholders
An extract of the Company’s register of substantial shareholders (who held 5% or more of the issued capital) is
set out below:
Shareholder
Tribeca Investment Partners
Clive Jones
Optionholders
Number of
shares
90,000,000
77,207,668
Percentage
Held
8.73%
7.5%
Date of last
lodgement
27 August 2018
7 November 2016
An extract of the Company’s register of optionholders (who held 20% or more of the issued options not issued
under an employee incentive scheme) is set out below:
Shareholder
Brandon Munro
Number of options
20,000,000
Percentage Held
49.9%
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
74
ADDITIONAL SHAREHOLDER INFORMATION
FOR THE YEAR ENDED 30 JUNE 2018
Top 20 Shareholders
The top 20 largest shareholders are listed below:
Name
Number of
Shares
Percentage
Held %
Citicorp Nominees Pty Limited
J P Morgan Nominees Australia Limited
UBS Nominees Pty Ltd
Mr Clive Jones
National Nominees Limited
Neon Capital Ltd
Widerange Corporation Pty Ltd
BNP Paribas Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited
Retzos Executive Pty Ltd
Mrs Alexandra Maidment Jubber
CS Fourth Nominees Pty Limited
CS Third Nominees Pty Limited
Regent Pacific Group Ltd
HSBC Custody Nominees (Australia) Limited – A/C 2
Tierra De Suenos SA
BT Portfolio Services Limited
BNP Paribas Noms Pty Ltd
Motte & Bailey Pty Ltd
Morgan Stanley Australia Securities (Nominee) Pty Limited
TOTAL TOP 20 HOLDERS
TOTAL NON-TOP 20 HOLDERS
TOTAL
120,814,677
77,002,194
61,805,799
53,212,267
51,361,140
39,726,236
23,995,401
23,288,557
19,854,356
15,000,000
11,822,487
11,184,476
10,962,800
10,854,568
8,373,390
7,905,005
7,000,000
6,953,505
6,614,779
6,614,165
574,345,802
456,459,903
1,030,805,705
11.72
7.47
6.00
5.16
4.98
3.85
2.33
2.26
1.93
1.46
1.15
1.09
1.06
1.05
0.81
0.77
0.68
0.67
0.64
0.64
55.72
44.28
100
Voting Rights
Ordinary Shares
For all ordinary shares, voting rights are on a show of hands whereby every member present in person or by
proxy shall have one vote and upon a poll, each share shall have one vote.
Share options and Performance Rights
There are no voting rights attached to share options and performance rights.
Stock Exchanges
Bannerman has a primary listing of its ordinary shares on the Australian Securities Exchange (ASX code: BMN)
and has additional listings of its ordinary shares on the Namibian Stock Exchange (NSX code: BMN).
Mineral Licence Schedule
The mineral licence schedule for the Group is tabulated below:
Licence
Type/No.
Grant
Date
Expiry
Date
Holder
Area
(Ha)
Country in which the
Licence is held
EPL 3345 27-Apr-2006
26-Apr-2019
MDRL
3345
7-Aug-2017
6-Aug-2022
Bannerman Mining Resources
(Namibia) (Pty) Ltd
Bannerman Mining Resources
(Namibia) (Pty) Ltd
24,326
Namibia
7,295
Namibia
BANNERMAN RESOURCES LIMITED
2018 ANNUAL REPORT
75
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2018 ANNUAL REPORT
BANNERMAN RESOURCES LIMITED
Corporate Office
Suite 7, 245 Churchill Avenue, Subiaco WA 6008
PO Box 1973, Subiaco WA 6904
Telephone +61-8 9381 1436
Facsimile +61-8 9381 1068
www.bannermanresources.com