ABN 98 006 640 553
ANNUAL REPORT
30 June 2018
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Corporate directory
Managing Director
Non‐executive Chairman
Non‐executive Director
Non‐executive Director
Current Directors
David Reeves
Mark Connelly
Keith Coughlan
Adam Miethke
Company Secretary
James Carter
Registered Office
Street:
Suite 12, 11 Ventnor Avenue
Share Registry
Automic Pty Ltd
WEST PERTH WA 6005
Street:
Level 3, 50 Holt Street
SURRY HILLS NSW 2010
Telephone:
+61 (0)8 6245 2050
Postal:
PO Box 1156
Email:
info@calidus.com.au
NEDLANDS WA 6909
Website:
http://www.calidus.com.au
Telephone:
1300 288 664
Securities Exchange
Australian Securities Exchange
Email:
hello@automic.com.au
Website:
http://automic.com.au
Level 40, Central Park, 152‐158 St Georges Terrace
Solicitors to the Company
Perth WA 6000
Bellanhouse
Telephone:
131 ASX (131 279) (within Australia)
Level 19, Alluvion
58 Mounts Bay Road
Perth WA 6000
Telephone:
+61 (0)2 9338 0000
Facsimile:
Website:
ASX Code
+61 (0)2 9227 0885
www.asx.com.au
CAI
Auditors
Moore Stephens
Level 15, Exchange Tower, 2 Esplanade
Perth WA 6000
Telephone:
+61 (0)8 9225 5355
Website:
www.moorestephens.com.au
P a g e | 1
ANNUAL REPORT
30 June 2018
Contents
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Chairman’s Letter ................................................................................................................................................................... 3
Operations Review ................................................................................................................................................................. 4
Mineral Resource and Ore Reserve Statement .................................................................................................................... 14
Directors' report ................................................................................................................................................................... 16
Remuneration report ........................................................................................................................................................... 22
Auditor's independence declaration .................................................................................................................................... 33
Consolidated statement of profit or loss and other comprehensive income ....................................................................... 34
Consolidated statement of financial position ...................................................................................................................... 35
Consolidated statement of change in equity ........................................................................................................................ 36
Consolidated statement of cash flows .................................................................................................................................. 37
Notes to the consolidated financial statements ................................................................................................................... 38
Directors' declaration ........................................................................................................................................................... 75
Independent auditor's report ............................................................................................................................................... 76
Corporate governance statement ........................................................................................................................................ 80
Additional ASX Information .................................................................................................................................................. 87
P a g e | 2
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Chairman’s Letter
Dear Shareholder
ANNUAL REPORT
30 June 2018
On behalf of the Board of Directors of Calidus Resources Limited, I am pleased to provide the following summary of what has
been a transformational year for your Company. Following our admission to the ASX in June 2017, we are pleased to have
demonstrated that the Warrawoona Gold Project is shaping up as a world class asset, and our aggressive exploration
programme continues into the new financial year.
A major highlight was the announcement in December 2017 of a 74% increase in the high grade Warrawoona resources to 10.5
million tonnes at 2.11 g/t for 712,000 ounces. This resource spans a continuous strike length of 2.6km and is open in all
directions to an average depth of 180m. This resource provides a solid base for resource expansion and we plan to make
further positive resource announcements during 2018.
As outlined in last year’s letter, the Warrawoona Gold Field first commenced production in 1897 and faced ongoing issues with
fragmented ownership, which resulted in limited exploration and no modern development in the region. The area has been
consolidated for the first time by Calidus, allowing the project to be viewed in its entirety and removing previous impediments
to potential development. During 2018, we continued our strategy for further consolidation and expansion around the region,
including finalising due diligence and the commencement of the Novo Joint Venture. As of June 2018 , Calidus now has 550km2
under control, application or option, covering the entirety of the Warrawoona Gold Belt.
Over the past 12 months, we have focused drilling on Klondyke and high‐grade satellite opportunities being Copenhagen,
Fieldings Gully and Coronation. These satellite deposits have seen limited work but show a higher‐grade tenor, such as the
6.1g/t Copenhagen resource. Additionally, the team completed a regional target generation study during the year identifying
over 45 high‐priority targets. This now enables our geologists to follow‐up the highest priority targets conducting mapping and
geochemistry programs in advance of the commencement of drilling.
In August 2017 we announced the appointment to our team of Jane Allen, a highly experienced geologist who was most
recently head of brownfields exploration for Anglo Ashanti for all continental Africa. Ms Allen’s extensive experience serves to
further strengthen our position to capitalise on the opportunity presented to us. The ability to attract someone of Jane’s calibre
reinforces the attractiveness of the Project.
Looking forward the Company is well funded as we continue with the resource drilling campaign commenced in May 2018. The
purpose of this drilling programme is to not only significantly expand the existing gold resource base of 712,000 ounces but also
verify new targets that lie adjacent to the existing resource. In parallel with this drilling, we are completing works associated
with a pre‐feasibility study such metallurgical testwork, environmental studies and heritage clearances.
Recently we were deeply saddened by the sudden passing of one of our non‐executive directors Mr Peter Hepburn‐Brown.
Peter was an inaugural director of Calidus when listing on the ASX in June 2017 and was also previously a director of Calidus’
major shareholder Keras Resources plc. Peter was a close friend and mentor to senior members of the Calidus team. His sudden
passing was a great shock and tragic loss and he is sorely missed.
Finally, I would like to take this opportunity to thank all staff, advisors, contractors and our shareholders who have allowed us
to continue this exciting journey together.
Mark Connelly
Non‐executive Chairman
P a g e | 3
ANNUAL REPORT
30 June 2018
Operations Review
Overview
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Calidus Resources Limited (ASX: CAI) (Calidus or the Company) is pleased to present its results for the period between 1 July
2017 to 30 June 2018 (FY18).
After Calidus’ successful reinstatement to the ASX and fundraising in June 2017, the Company embarked upon on a maiden and
aggressive drill campaign at the wholly owned Warrawoona Gold Project in the Pilbara region of Western Australia.
Key Activities and Achievements for the 12 months ended 30 June 2018
74% increase in the Warrawoona resources to 712,000 ounces @ 2.11 g/t
o
Completed a total 25,704 metres drilling at Klondyke, Copenhagen, Coronation and Fielding’s Gully
Completed a heavily oversubscribed capital raising of $10 million in October 2017
o As at 30 June 2018 Calidus held $6.1 million in cash
Strengthened the Group’s board and management team with appointments of Mark Connelly as Non‐executive Chairman
and Jane Allen as Geology Manager
Further consolidation and expansion of the Warrawoona project;
Commencement of a Joint Venture with Novo Corporation
Exercise of the Haoma option and acquisition of associated tenements
o
o
o Acquisition of a 50% interest in a further two exploration licences through exercise of the Epminex option.
Work program and funding in place to undertake a substantial drill program in 2018, aiming to increase the resources
base and test multiple resource targets.
Re‐cap on what has been achieved and the outlook for 2018 and 2019
P a g e | 4
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Warrawoona Gold Projects
Overview and Background on Company’s Projects
ANNUAL REPORT
30 June 2018
Calidus Resources is a gold exploration company that controls the Warrawoona Gold Project in the East Pilbara district of the
Pilbara Goldfield in Western Australia (see Figure 1 below). It is located approximately 150km south east of Port Hedland and
approximately 25km south east of the town of Marble Bar.
Calidus has consolidated the Warrawoona Gold Project by acquiring a 100% interest in the Klondyke Prospect and securing
arrangements with respect to adjacent tenements to form a contiguous package of highly prospective gold tenements.
Figure 1: Location of the Warrawoona Gold Project
Composed largely of high‐Mg basaltic lavas with lesser tholeiite, andesite, sodic dacite, potassic rhyolite, chert and banded iron
formation (BIF), all metamorphosed to greenschist facies, the Warrawoona Gold Project is sandwiched between the Mount Edgar
granitoid complex to the north and the Corunna Downs granitoid complex to the south.
Previous Work
Gold mineralisation was discovered in the Marble Bar area in the 1880s with small scale mining taking place at Warrawoona
from a number of auriferous reefs. Historical records from small scale artisanal mines reported to have produced 744.5kg of
gold from 25,191t of ore at an average grade of approximately 30g/t.
Modern exploration has been undertaken by the Geological Survey of Western Australia (GSWA) followed by a number of
explorers in the mid‐1980s and then from 1993. During this period, Aztec Mining Company Limited, Conzinc Rio Tinto of
Australia Limited, Lynas Corporation Limited and Jupiter Mines Limited all conducted exploration in the Klondyke area, which
primarily consisted of surface mapping, sampling and shallow drilling, with limited information below 100m vertical depth.
P a g e | 5
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
The Warrawoona Gold Project:
Warrawoona Gold Project Location and tenements
has a global resource of 10.5Mt @ 2.11g/t Au for 712,000 ounces
mineralisation outcrops at surface at all deposits and is open along strike and down dip at all deposits
the majority of the resource is located at the Klondyke Prospect where the resource is defined from just 2.6km of the
main 7.5km strike length identified;
over 38km of untested outcropping shears provides large blue sky upside;
the Klondyke Prospect has a current Inferred Resource of 9.9Mt at 2.06g/t Au for 654,000 ounces and includes 532,000
ounces in the Indicated Category, reported in accordance with the guidelines of the JORC Code (2012);
the Copenhagen Prospect has a current Inferred Resource of 180,000t @ 6.1g/t Au for 36,000 ounces, reported in
accordance with the guidelines of the JORC Code (2012);
the Fieldings Gully Prospect has a current Inferred plus Indicated Resource of 400,000t @ 1.65g/t Au for 22,000 ounces,
reported in accordance with the guidelines of the JORC Code (2012);
mineralisation generally comprises thick sub‐vertical shear zones potentially amenable to low cost open‐pit mining with
mineralisation outcropping at surface.
Klondyke Prospect
The mining leases comprising the Klondyke Prospect lie within the Warrawoona Gold Project, one of the oldest greenstone
belts within the Pilbara Craton.
The Klondyke Prospect is located approximately 70km from Bamboo Creek and 90km from Millennium Minerals (see Figure 1
above), where excess processing capacity may be available if a tolling option is pursued and agreed.
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CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
ANNUAL REPORT
30 June 2018
Independent consultant Widenbaar and Associates completed a resource update in December 2017 to derive a 2012 JORC
compliant total Resource of 9.9Mt @ 2.06g/t Au for 712,000 ounces and includes 532,000 ounces in the Indicated Category
(announced by the Company on 18 December 2017).
The resource is currently defined over 2.6km of strike and is open along strike and down dip. Drilling in 2018 has and continues
to target both the along strike extensions and down dip potential of this large mineralised system that outcrops at surface.
The main Klondyke shear hosts extensive old workings and has been traced for over 12.5km in length highlighting the large
upside of this structure.
Klondyke Prospect – Location of deposits and tenements
Exploration Upside
The Company controls numerous other tenements to the west of the Klondyke prospect that contain numerous historic
workings and known prospects. The tenements are largely untested and contain highly prospective geology. Key targets are
centred on the historical Fieldings Gully, Coronation and Copenhagen mines.
Historical deposits that require follow up include:
Copenhagen – High grade near surface resource
Historical mine located 10km from the Klondyke Prospect hosting a 2012 JORC Code compliant Inferred Resource of 0.2Mt @
6.1 g/t Au for 36,000 ounces. The prospect remains open along strike and down dip.
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ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Coronation
Historical mine located 12.5km from the Klondyke Prospect 3km along strike from Copenhagen, resource drilling planned for
the coming years. Significant intercepts by Calidus include:
Copenhagen Cross Section
10m @ 3.84g/t Au (incl1 1m @ 30.4g/t Au) from 27m in 18CRRC007
10m @3.31g/t Au from 108m in (17CRDD01)
8m @ 2.22g/t Au from 71m in 18CRR008
Fieldings Gully
The Fieldings Gully historical mine is located 15km from the centre of the Klondyke area hosts a 2012 JORC Code compliant
Resource of 0.4Mt @ 1.65 g/t for 22,000 ounces. The prospect remains open along strike and down dip.
Grants Patch gold tribute
Tribute allowing access to mine certain defined gold deposits on Zijin Mining Group Ltd’s (Zijin) leases;
30km north of Kalgoorlie in the heart of Western Australian goldfields;
Agreement covers historic resources of more than 350,000 ounces of gold at a grade of 2 g/t;
Mining leases granted – deposits comprised of remnant resources below historic pits and previously unmined near‐
surface deposits;
Production commenced in Q1 2016, currently on hold and reviewing options;
Ore to be treated at Zijin’s nearby Paddington processing plant, 25km away; and
Calidus to pay processing costs plus 22% royalty on gold recovered to Zijin.
Discussion on key activities during the Year Ended 30 June 2018
74% Increase in High Grade Warrawoona Resource to 712,000 Ounces at 2.11 g/t Gold
In the Quarter ended 31 December 2017, Calidus announced a substantial increase in the Company’s Mineral Resource with a
high conversion to Indicated Mineral Resources at the Warrawoona Gold Project located in the Pilbara of Western Australia.
The total Mineral Resource, reported and classified in accordance with the JORC Code (2012) is 10.5 Mt at 2.11 g/t for 712,000
ounces, an increase of 74% over the previous estimate with a Maiden Indicated Mineral Resource of 8.4 Mt @ 2.01 g/t for
541,000 ounces.
Drilling Extends Klondyke Mineralisation a further 2km East
In April 2018 the Company announced the results from 12 RC holes along a reconnaissance traverse directly East of the
company’s Klondyke Gold Deposit, located in the Pilbara of Western Australia.
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CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
ANNUAL REPORT
30 June 2018
A selection of assays from the RC holes above a 10gm (gram/meter) include:
• 16m @ 2.34g/t Au from 136m in 18KLRC095;
• 10m @ 3.67g/t Au from 58m in 18KLRC099;
• 7m @ 4.58g/t Au from 175m in 18KLRC095;
• 6m @ 3.32g/t Au from 167m in 18KLRC096;
• 13m @ 1.24g/t Au from 104m in 18KLRC104 and
• 2m @ 5.44g/t Au from 39m in 18KLRC104.
An initial broad‐spaced RC drilling programme has successfully outlined the continuation of the main Klondyke mineralised
shear zone up to 2km further East from where the current 654koz resource ends (refer Figure three).
The drilling was designed to target eastern strike extension of the low‐to intermediate‐chrome Archaean basalt units known to
host gold mineralisation within the Klondyke Main shear resource zone as defined by earlier detailed field mapping, pXRF
sampling and RC drilling.
With exploration of the along strike resource corridor still at an early stage, the tenor of mineralisation observed within the
Klondyke East system mirrors the early exploration drilling results in the major Klondyke Shear itself.
Figure Three: Klondyke East drillhole plan showing the single broad‐spaced reconnaissance traverse of 12 RC holes along strike
and to the east of the current 712koz resource extent shown in red
Initial Metallurgical Results at Klondyke
During the June quarter initial results were received from its metallurgical testwork programmes being conducted on
mineralised samples obtained from the Klondyke gold deposit. The Klondyke deposit forms part of the Warrawoona Gold Belt
which was the initial focus for Calidus and hosts a current JORC resource of 654Koz @ 2.06g/t Au and forms part of the global
resource 712Koz @ 2.12g/t Au.
These metallurgical testwork results are consistent with Calidus’ expectations as it continues to advance the Warrawoona
Project towards a pre‐feasibility study.
Samples were taken from three diamond drill holes at the Klondyke deposit. Samples collected represent both geological
domains (oxide and fresh) as well as testing 1.2km of the 2km defined strike. The results that have been completed at Klondyke
confirm excellent recovery in both the oxide and the fresh ore.
The tests have demonstrated excellent gravity and leach results for each of the samples, and overall leach recovery of between
96.1% and 97.2% (average of 96.7% at a 150 micron grind) after 24 hours, and an extremely high gravity gold recovery of 63%.
P a g e | 9
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
The extremely low reagent consumption to achieve the recoveries outlined above is a favourable outcome of the initial
metallurgical testwork. Cyanide consumption is one of the highest reagent costs in a processing plant, so confirmation of a low
cyanide consumption, therefore cyanide consumption of only 0.17 kg/t are an exciting prospect as Calidus continue to progress
towards the project development.
Further consolidation and expansion of the Warrawoona project
On 6 November 2017 the Company announced that it completed its due diligence on the Novo Tenements that are included in the
previously announced binding Term Sheet (ASX: 20 September 2017) and had notified Novo Resources Corp. (TSX.V:NVO) that
all conditions precedent have been satisfied or waived and it would proceed with the transaction. In addition, based on the
exceptional drill results that have been recorded largely on the ground the subject of the Haoma option, the Company has
exercised its option to acquire these tenements ensuring 100% ownership of this rapidly developing gold development project.
A summary of the Novo Joint Venture and Haoma Option terms is set out below;
Novo JV Commencement
Due diligence and site visits completed on Novo Tenements
Initial review highlights multiple soil anomalies both along the main Klondyke trend and in alternate geological settings that
have not been previously investigated by Calidus
Calidus commenced heritage surveys with the traditional owners to facilitate drilling on the Novo Tenements during 2017
Issue of 20 million shares to Novo as consideration for an earn‐in right as approved by shareholders at the 2017 annual
general meeting
Calidus may earn a 70% interest in the Novo Tenements by expending $2 million on the tenements over the next 3 years
Funds have been received by Novo for the recent placement taking Novo's total holding in the Company to approximately
5.5%
Haoma Option
As disclosed in section 3.3(c) of the Company’s Prospectus dated 5 May 2017, Keras was granted an option to acquire
certain tenements from Haoma Mining NL (ASX: HOA) which has now been exercised.
The 7 Haoma tenements include the historical Fieldings Gully, Coronation and Copenhagen deposits
Recently announced ‘Klondyke Gap’ drilling occurred on one of the tenements covered by the option agreement and will
form a key part of the resource upgrade due later this year
Provides 100% ownership of the Klondyke trend and with the Novo Joint Venture, provides majority ownership of the entire
Warrawoona greenstone belt
Issue of 37.5 million shares and $500,000 cash to Haoma as consideration
Epminex Option
On 31 July 2017, Calidus announced further consolidation of the Warrawoona project through the acquisition of a 50% interest in
exploration licenses E45/4555 and E45/4843 located in the Warrawoona Gold Belt under the terms of the Epminex Agreement
previously disclosed in the Calidus Resources Ltd Prospectus dated 8 May 2017.
This acquisition increases Calidus’ ground position along strike of existing tenements on the known shear zones that host the
current Klondyke Mineral Resource. The tenements contain numerous high‐grade historic gold mines.
Consideration for the acquisition is $18,000 and the issue of 30,000 shares to Epminex. Calidus retains an option to purchase
the remaining 50% of these tenements.
Regional target Generation Study Program
The Company announced on 8 March 2018 the completion of a Regional Target Generation Study over the Company’s East
Pilbara greenstone assets. Geologists are now rapidly following up the highest priority targets conducting mapping and
geochemistry programs. Over 45 high‐priority exploration targets were identified across Calidus’ Warrawoona Project area that
will be ranked and evaluated in 2018. The Warrawoona tenements have had limited to no regional exploration in the last 30
years and in addition to expanding the current resources this provides the Company with targeted focus of high conviction
exploration targets to evaluate during 2018 and beyond.
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CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
ANNUAL REPORT
30 June 2018
Fieldwork has commenced on high‐priority regional targets and an experienced contractor engaged to commence a regional
soil geochemistry program in March 2018. This work, in conjunction with Company mapping and field reconnaissance teams, is
designed to provide drill targets.
Corporate
Completion of Heavily Oversubscribed Placement to Raise $10 million
The Company successfully finalised the second tranche of a placement of approximately 243.9 million shares at an issue price of
4.1 cents per share to both new and existing institutional and sophisticated investors in Australia, Asia and North America to
raise $10 million.
The capital raising ensures Calidus is well funded to accelerate exploration programs and remains consistent with the Company’s
strategy of strengthening its institutional shareholder base and increasing its profile in global financial markets. Funding allows
the acceleration of exploration at Warrawoona to build on Calidus' current resource base of 712,000 ounces at the Warrawoona
Gold Project.
Senior Management and Board Appointments
In August 2017 Calidus appointed Jane Allen as geology manager. Jane has a proven track record in successfully managing
brownfields exploration programs globally. Jane manages all aspects of the geological works at Warrawoona with a particular
emphasis on rapidly expanding the current resources to allow a sufficient base to be defined that will allow economic studies to
commence.
Jane has over 30 years’ experience in managing greenfields, brownfields and near mine exploration in gold and base metals.
Jane has previously been employed by Anglogold Ashanti, Resolute Mining Limited, Avion Gold Corporation and Great Central
Mines. She most recently headed up Brownfields Exploration for Anglogold Ashanti for all continental African Operations.
In February 2018, Calidus announced the appointment of Mark Connelly as an Independent Non‐executive Chairman. Mr.
Connelly has extensive board and leadership experience in companies across a variety of commodities and jurisdictions
including Australia, West Africa, North America and Europe. Mark’s appointment to the Board has significantly bolstered the
corporate and industry experience in our Company as Calidus continues the expansion and development of our flagship
Warrawoona gold project.
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ANNUAL REPORT
30 June 2018
2018 Drilling Programme
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
The 2018 resource definition drilling programme commenced onsite at the Warrawoona Gold Project in the June 2018 quarter.
The current programme has multiple objectives, including:
to grow the current Mineral Resource inventory at Klondyke and satellite deposits;
to investigate the geology underneath the high‐grade historic Klondyke Queen workings located at the Western edge
of the current Klondyke Resource;
to collect geotechnical data for a pre‐feasibility study;
to provide sample material for metallurgical testwork; and
to complete an initial wide‐spaced exploratory line of drillholes along the highly prospective St Georges Shear.
The Company’s ranking of Exploration targets for ongoing exploration;
This initial Phase One programme is planned to drill test along strike to the West and East of the current Klondyke resource
area. The major St George’s Shear structural corridor, which lies parallel to and approximately 150m to the North of the
Klondyke Main Shear, will be drill tested by the Company for the first time this year over the adjacent 4km of strike. The St
Georges Shear has the potential to complement the existing defined resource.
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CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
ANNUAL REPORT
30 June 2018
Resource Drilling areas at Klondyke Shear and reconnaissance drilling at St George Shear.
A second rig will be mobilised in Q3 to commence not only in‐fill drilling behind this phase one programme but also allow for
testing down dip and along strike of the high grade (6g/t) Copenhagen Resource and test the priority targets defined by the
recently completed soil geochemistry programme.
Drillholes are being geologically logged and samples despatched to Nagrom Laboratories for gold analysis in Perth.
P a g e | 13
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Mineral Resource and Ore Reserve Statement
Warrawoona Gold Project Mineral Resource reported at a 0.50 g/t Au cut‐off
Deposit
Klondyke
Copenhagen
Fieldings Gully
Total
Cut‐off
Au g/t
0.5
0.5
0.5
Mt
8.2
0.2
8.4
Indicated
Inferred
Total
g/t Au
Ozs
Mt
g/t Au
Ozs
Mt
g/t Au
Ozs
2.02
532,000
1.7
2.25
122,000
9.9
2.06
654,000
1.65
9,000
0.2
0.2
6.12
1.65
36,000
13,000
0.2
0.4
6.12
36,000
1.65
22,000
2.01
541,000
2.1
2.51
171,000 10.5
2.11
712,000
CORPORATE GOVERNANCE ‐ RESERVES AND RESOURCES CALCULATIONS
Due to the nature, stage and size of the Company’s existing operations, Calidus is of the opinion there would be no efficiencies
gained by establishing a separate Mineral Reserves and Resources committee responsible for reviewing and monitoring the
Company’s processes for calculating Mineral Reserves and Resources and for ensuring that the appropriate internal controls are
applied to such calculations. However, the Company ensures that all Mineral Reserve and Resource calculations are prepared by
competent, appropriately experienced geologists and are reviewed and verified independently by a qualified person.
COMPETENT PERSONS STATEMENT
The information in this announcement that relates to exploration targets and exploration results is based on information
compiled by Jane Allen a competent person who is a member of the AusIMM. Jane Allen is employed by Calidus Resources
Limited. Jane has sufficient experience that is relevant to the style of mineralisation and type of deposits under consideration and
to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the JORC Code. Jane Allen
consents to the inclusion in this announcement of the matters based on her work in the form and context in which it appears.
The information in this report that relates to Copenhagen Mineral Resources is based on information compiled or reviewed by
Mr. Daniel Saunders, Principal of GeoServ Consulting Pty Ltd., who is a Member of the Australian Minerals Institute. Mr. Daniel
Saunders is a full‐time employee of GeoServ Consulting Pty Ltd. and has sufficient experience, which is relevant to the style of
mineralisation and types of deposit under consideration and to the activities undertaken, to qualify as a Competent Person as
defined in the 2012 Edition of the “Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves”.
Mr. Daniel Saunders consents to the inclusion of the report of the matters based on the information in the form and context in
which it appears.
The information in this report that relates to Klondyke and Fieldings Gully Mineral Resources is based on information compiled or
reviewed by Mr. Lynn Widenbar, Principal Consultant of Widenbar and Associates Pty Ltd., who is a Member of the AusIMM and
the AIG. Mr. Lynn Widenbar is a full‐time employee of Widenbar and Associates Pty Ltd. and has sufficient experience, which is
relevant to the style of mineralisation and types of deposit under consideration and to the activities undertaken, to qualify as a
Competent Person as defined in the 2012 Edition of the “Australasian Code of Reporting of Exploration Results, Mineral
Resources and Ore Reserves”. Mr. Lynn Widenbar consents to the inclusion of the report of the matters based on the information
in the form and context in which it appears.
P a g e | 14
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
TENEMENT SCHEDULE AS AT 30 June 2018
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES & SUBSIDAIRIES
TENEMENT SCHEDULE
Holder
Size (ha)
Renewal
Ownership/
Interest
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
Keras (Pilbara) Gold Pty Ltd
2,554.05
14,681.95
3,513.73
958.25
638.86
319.46
18.11
17.72
9.71
242.05
101.95
113.10
118.65
116.20
121.30
235.95
6.07
20/05/2023
20/05/2023
22/11/2020
19/10/2019
29/11/2022
29/11/2022
10/03/2034
2/05/2035
18/01/2035
28/12/2037
28/12/2037
29/12/2037
29/11/2037
1/08/2037
8/04/2017
17/04/2038
17/11/2028
Keras (Pilbara) Gold Pty Ltd
6,067.13
APPLICATION
Keras (Pilbara) Gold Pty Ltd
29.45
APPLICATION
Epminex WA Pty Ltd
Epminex WA Pty Ltd
Epminex WA Pty Ltd
1,917.75
5,115.94
942.15
1/03/2022
APPLICATION
2/07/2022
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Note 1
100%
100%
100%
100%
100%
100%
50%
0%
50%
Beatons Creek Gold Pty Ltd
7,965.06
16/03/2021
Earning to 70%
Beatons Creek Gold Pty Ltd
2,972.38
23/11/2021
Earning to 70%
Beatons Creek Gold Pty Ltd
4,222.07
4/05/2022
Earning to 70%
Grant's Hill Gold Pty Ltd
1,278.29
14/07/2019
Earning to 70%
Beatons Creek Gold Pty Ltd
2.42
10/06/2020
Earning to 70%
Beatons Creek Gold Pty Ltd
150.00
4/12/2016
Earning to 70%
Beatons Creek Gold Pty Ltd
55.00
4/12/2016
Earning to 70%
Beatons Creek Gold Pty Ltd
1,596.99
22/01/2023
Earning to 70%
Tenement ID
GRANTED
E45/4856
E45/4857
E45/3615
E45/4236
E45/4905
E45/4906
M45/0521
M45/0547
M45/0552
M45/0668
M45/0669
M45/0670
M45/0671
M45/0672
M45/0679
M45/0682
M45/0240
Applications
E45/5178
P45/3065
Option to Acquire
E45/4555
E45/5172
E45/4843
Joint Venture
E45/3381
E45/4666
E45/4622
E45/4194
P45/2781
P45/2661
P45/2662
E45/4934
Note 1: Transfer pending from Haoma Mining
P a g e | 15
ANNUAL REPORT
30 June 2018
Directors' report
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Your directors present their report on the consolidated entity, consisting of Calidus Resources Limited (Calidus or the
Company) and its controlled entities (collectively the Group), for the period between 1 July 2017 to 30 June 2018.
1. Directors
The names of Directors in office at any time during or since the end of the year are:
Mr David Reeves
Mr Mark Connelly
Mr Keith Coughlan
Mr Peter Hepburn‐Brown
Mr Adam Miethke
Managing Director
Non‐executive Chairman (Appointed 20 February 2018)
Non‐executive Chairman
Non‐executive Director (Passed away 2 September 2018)
Non‐executive Director
Directors have been in office since the start of the period to the date of this report unless otherwise stated. For additional
information of Directors including details of the qualifications of Directors please refer to paragraph 7 Information
relating to the Directors of this Directors Report.
2.
Company secretary
Mr James Carter (Chief Financial Officer) is the company secretary of the Company. Mr Carter is a CPA and Chartered
Company Secretary with over 20 years international experience in the resources industry.
3. Dividends paid or recommended
There were no dividends paid or recommended during the financial year ended 30 June 2018.
4.
Significant changes in the state of affairs
The following significant changes in the state of affairs of the Group occurred during the financial year:
a.
b.
c.
d.
e.
On 28 July 2017 the Company issued 30,000 shares in consideration for the acquisition of a 50% interest in the
exploration licenses 45/4555 and 45/4843.
On 18 August 2017 the Company announced the adoption of an employee securities incentive plan. The Company
issued 7,500,000 shares to Jane Allen (Geologist) and 5,000,000 shares to James Carter (CFO & Company
Secretary).
On 20 September 2017 the Company announced that it had entered into a binding term sheet with Novo
Resources Corp to form a Joint Venture under which the Company will have the right to acquire 70% interest in
Exploration Licences 45/3381, 45/4194, 45/4622, 45/4666 and Prospecting Licences 45/2661, 45/2662, 45/2781
and all related technical information held by Novo. On 6 November 2017, the Company announced it had
completed its due diligence on the Novo Tenements that are included in the Term Sheet and has notified Novo
Resources that all conditions precedent have been satisfied or waived and it will proceed with the transaction. As
consideration for the earn‐in right, the Company issued 20,000,000 shares to Novo Resources Corp.
On 27 September 2017, the Company announced that it intended to raise up to $10 million via a two‐tranche
placement to sophisticated and professional investors. On 5 October 2017, the Company issued 95,061,405 shares
at an issue price of $0.041 per share to raise a total of $3,897,517, being Tranche 1. On 6 November 2017, the
Company issued 148,841,045 shares at an issue price of $0.041 per share to raise a total of $6,102,483 being
Tranche 2.
As previously disclosed in the Company’s Prospectus dated 5 May 2017, Keras was granted an option to acquire
certain tenements from Haoma Mining NL. On 6 November 2017 the Company announced it had exercised this
option to acquire the tenements. In consideration for the tenements the Company issued 37,500,000 shares and
paid $500,000 in cash to Haoma Mining NL.
P a g e | 16
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Directors' report
ANNUAL REPORT
30 June 2018
f.
g.
h.
i.
On 18 December 2017, the Company announced that the performance milestones for the Class A Performance
Shares had been achieved and therefore 250,000,000 Class A Performance Shares were converted into Ordinary
Shares in the Company. These shares are escrowed until 23 June 2019.
On 20 February 2018, the Company announced the appointment of experienced mining executive Mark Connelly
to the Board as an independent, Non‐Executive Chairman. Mr Connelly will receive a fee of $60,000 per annum
exclusive of superannuation and 5,000,000 loan funded ordinary shares in the capital of the Company at 4 cents
per share under the Calidus employee securities incentive plan. The shares will be subject to a voluntary holding
lock to expire 20 February 2019.
On 29 March 2018, the Company announced that it has entered into an agreement with Gardner Mining Pty Ltd
to purchase tenements E45/3615 and E45/4236 outright through the issue of 1,785,000 shares in the Company.
On 13 June 2018, the Company issued to eligible employees 12,000,000 performance rights under the Calidus
employee securities incentive plan. The Rights can be converted into ordinary shares after 12 months and expire
on 13 June 2021.
5.
Significant changes in principal activities
There were no significant changes to the state of affairs of the Group during the financial year.
6. Operating and financial review
6.1
Nature of Operations Principal Activities
Calidus is a gold exploration company that controls the Warrawoona Gold Project in the East Pilbara district of the
Pilbara Goldfields in Western Australia.
6.2
Operations review (refer Operations Review on page 4)
6.3
Financial review
a.
Operating results
For the 2018 financial period the Group delivered a loss before tax of $2,874,136 (2017: $2,460,463 loss),
representing a decline in profitability.
The financial statements have been prepared on a going concern basis, which contemplates the continuity
of normal business activity and the realisation of assets and the settlement of liabilities in the ordinary
course of business.
b.
Financial position
The net assets of the Group have increased from 30 June 2018 by $9,050,226 to $15,032,334 at 30 June
2018 (2017: $5,982,108).
As at 30 June 2018, the Group's cash and cash equivalents increased from 30 June 2017 by $1,700,362 to
$6,142,247 at 30 June 2018 (2017: $4,441,885) and had working capital of $5,237,490 (2017: $3,488,518
working capital), as noted in Note 16e.
P a g e | 17
ANNUAL REPORT
30 June 2018
Directors' report
6.4
Events subsequent to reporting date
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
On 28 August 2018, the Company announced that it had entered into a binding letter of intent to dispose of the
Conglomerate Gold Rights over a portfolio of eight exploration licenses. In consideration the Company will receive
a non‐refundable payment of CDN$10,000 and will be issued 7,000,000 common shares of Pacton Gold Inc that at
the time of writing were valued at approximately CDN$3.5million.
All shares will be subject to a 4‐month escrow period, with 25% of the shares subject to further escrow pending
grant of the exploration licence application. Calidus may be entitled to the issue of up to 3,000,000 additional
common shares in the capital of Pacton Gold Inc during the period 12 months after the date of execution of the
definitive agreement dependent on the performance of Pactons Gold Inc share price.
There are no other significant after balance date events that are not covered in this Directors' Report or within
the financial statements at Note 26 Events subsequent to reporting date.
6.5
Future developments, prospects and business strategies
A 30,000‐metre drilling program continues at the Warrawoona project to continue the resource definition
programme. The purpose of the drilling programme is to not only significantly expand the existing gold resource
base of 712,000 ounces but also verify new targets that lie adjacent to the existing resource.
Main highlights of the programme:
A large resource drilling programme has commenced onsite at Klondyke with the objective of growing
the Mineral Resource by the end of 2018 at Warrawoona;
Targets ranked in accordance with proximity to existing Klondyke Mineral Resource including shallow
strike extensions and potential for high grade shoot geometries;
Reconnaissance drilling to be undertaken along 4km of the St George's Shear that lies 150m to the
north of, and is geologically similar to, the Klondyke Shear.
The Company has commenced detailed environmental, heritage, metallurgical and hydrological studies to assist in
the upcoming pre‐feasibility study that is planned to commence in early 2019. In addition, internal Scoping
Studies with experienced engineering companies have commenced to assist in defining the scope of the pre‐
feasibility study.
6.6
Environmental regulations
The consolidated entity will comply with its obligations in relation to environmental regulation on its projects
when it undertakes exploration. The Directors are not aware of any breaches of any environmental regulations
during the period covered by this Report.
P a g e | 18
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Directors' report
7.
Information relating to the Directors
ANNUAL REPORT
30 June 2018
Managing Director (Appointed 13 June 2017)
Mining Engineer Bachelor of Engineering (1st Class honours), Grad Dip Applied Finance, WA
Mine Managers Certificate
Mr Reeves is a Perth‐based, qualified mining engineer with 30 years of experience in the
mining industry and is currently the Non‐executive Chairman of European Metals Holdings
Limited (ASX and AIM). Mr Reeves has extensive experience in international capital markets
through his involvement with various listed London and Australia companies.
Mr Reeves was the Project Manager of Zimplats and Afplats prior to their sale for a combined
US$1 billion and prior to this, worked with Delta Gold in Zimbabwe and various gold
companies in Western Australia in which he assumed various roles, including the position of
Mine Manager.
None
16,647,903 Fully Paid Ordinary Shares
1,110,000 Listed Options, 2.5 cents, exp 13 June 2019
5,000,000 Unlisted Option, 3 cents, exp 13 June 2020
Non‐executive Chairman of European Metals Holdings Limited (ASX)
Non‐executive director of Keras Resources Plc (AIM)
Independent Non‐executive Chairman (Appointed on 20 February 2018)
Bachelor of Business, ECU, MAICD, AIMM, Member of SME
Mr Connelly was previously Managing Director of Papillion Resources and was instrumental in
the US$570m takeover of Papillion by B2Gold Corp in October 2014. Prior to Papillon, Mr
Connelly was Chief Operating Officer of Endeavour Mining Corporation, following its merger
with Adamus Resources Limited where he was Managing Director and CEO. Mark was
instrumental in not only the merger, but procurement of project finance and the development
of the Nzema Mine in Ghana into a +100Koz pa mining operation.
Chairman of Audit Committee
5,000,000 Fully Paid Ordinary Shares
Non‐executive Chairman of West African Resources Ltd (ASX)
Non‐executive Chairman of Tao Commodities Ltd (ASX)
Non‐executive Chairman of Primero Group (ASX)
Non‐executive director of Ausdrill Limited, (ASX) from July 2012 to June 2018
Non‐executive director of Tiger Resources Ltd (ASX) from December 2015 to June 2018
Non‐executive director of Saracen Mineral Holdings Limited (ASX) from May 2015 to
November 2017
Non‐executive Chairman of Cardinal Resources Ltd (ASX) from September 2015 to October
2017
Non‐executive director of B2 Gold Corp (TSX) from October 2014 to June 2016
Non‐executive Director (Appointed on 13 June 2017)
BA
Mr Coughlan has almost 30 years’ experience in stockbroking and funds management. He has
been largely involved in the funding and promoting of resource companies listed on ASX, AIM
and TSX, has advised various companies on the identification and acquisition of resource
projects and was previously employed by one of Australia’s then largest funds.
Chairman of the Remuneration Committee
4,440,000 Fully Paid Ordinary Shares
1,110,000 Listed Options, 2.5 cents, exp 13 June 2019
5,000,000 Unlisted Options, 3 cents, exp 13 June 2020
Managing Director of European Metals Holdings Limited (ASX & AIM)
Non‐executive Director of Southern Hemisphere Mining Limited (ASX)
Non‐executive Chairman of Talga Resources Limited (ASX)
Mr David Reeves
Qualifications
Experience
Special responsibilities
Interest in Shares and
Options
Directorships held in other
listed entities
Mr Mark Connelly
Qualifications
Experience
Special responsibilities
Interest in Shares and
Options
Directorships held in other
listed entities
Past directorships in the last
3 years
Mr. Keith Coughlan
Qualifications
Experience
Special responsibilities
Interest in Shares and
Options
Directorships held in other
listed entities
Past directorships in the last
3 years
P a g e | 19
ANNUAL REPORT
30 June 2018
Directors' report
Mr Peter Hepburn‐Brown
Qualifications
Experience
Special responsibilities
Interest in Shares and
Options
Directorships held in other
listed entities
Past directorships in the last
3 years
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Non‐executive Director (Appointed on 13 June 2017. Passed away 2 September 2018)
Bachelor of Applied Science (Mining Engineering), Graduate Diploma in Human Resources
Mr Hepburn‐Brown was a qualified mining engineer with over 35 years’ international mining
experience.
Member of Remuneration Committee
1,333,334 Fully Paid Ordinary Shares
333,334 Listed Options, 2.5 cents, exp 13 June 2019
3,000,000 Unlisted Options, 3 cents, exp 13 June 2020
Non‐executive Director of Focus Minerals Limited (ASX)
Non‐executive Director of Medusa Mining Limited (ASX)
Non‐executive Director of Keras Resources Plc (AIM)
Mr Adam Miethke
Qualifications
Experience
Special responsibilities
Interest in Shares and
Options
Directorships held in other
listed entities
Non‐executive Director (Appointed on 7 March 2017)
Bachelor of Applied Science with First Class Honours in Geology & MBA
Mr Miethke is a geologist with over extensive experience in the metals and mining industry,
funds management and as a corporate advisor.
Mr Miethke initially worked for Rio Tinto’s iron ore division before joining Snowden Mining
Consultants where he worked across all commodities in Australia, Africa, Eastern Europe and
South America. After completing an MBA in 2008, he joined Regent Pacific Group in Hong Kong
as technical director, overseeing the group’s investment portfolio. Between 2011 and 2016,
Mr Miethke was a director of a corporate finance team at Argonaut Capital Limited and led
Argonaut’s metals and mining division.
Member of Audit Committee
6,000,000 Unlisted Options, 3 cents, exp 13 June 2020
None
8. Meetings of directors and committees
The number of Directors’ Meetings (including meetings of Committees of Directors) held during the year, and the number
of meetings attended by each Director is as follows;
DIRECTORS'
MEETINGS
AUDIT
COMMITTEE
REMUNERATION
COMMITTEE
Number
eligible to
attend
1
4
4
4
4
Number
Attended
1
4
4
4
3
Number
eligible to
attend
1
‐
1
‐
‐
Number
Attended
1
‐
1
‐
‐
Number
eligible to
attend
‐
‐
‐
1
1
Number
Attended
‐
‐
‐
1
1
Mark Connelly
Dave Reeves
Adam Miethke
Keith Coughlan
Peter Hepburn‐Brown
P a g e | 20
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Directors' report
9.
Indemnifying officers or auditor
ANNUAL REPORT
30 June 2018
During or since the end of the financial period the Company has given an indemnity or entered into an agreement to
indemnify, or paid or agreed to pay insurance premiums as follows:
The Company has entered into agreements to indemnify all Directors and provide access to documents, against
any liability arising from a claim brought by a third party against the Company. The agreement provides for the
Company to pay all damages and costs which may be awarded against the Directors.
The Company has paid premiums to insure each of the Directors against liabilities for costs and expenses incurred
by them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director of
the Company, other than conduct involving a willful breach of duty in relation to the Company. Under the terms
and conditions of the insurance contract, the nature of the liabilities insured against and the premium paid cannot
be disclosed.
No indemnity has been paid to auditors.
10. Options
10.1 Unissued shares under option
At the date of this report, the un‐issued ordinary shares of Calidus Resources Limited under option (listed and
unlisted) are as follows:
Grant Date
Date of Expiry
Exercise Price
Number under Option
9 June 2017
9 June 2017
22 June 2017
22 June 2017
9 June 2019
9 June 2020
22 June 2021
22 June 2020
$0.025
$0.025
$0.020
$0.030
87,500,000
30,500,000
50,000,000
16,000,000
184,000,000
No person entitled to exercise the option has or has any right by virtue of the option to participate in any share issue of
any other body corporate.
10.2
Shares issued on exercise of options
During or since the end of the financial year, the Company issued ordinary shares as a result of the exercise of options as
follows (there were no amounts unpaid on the shares issued):
Grant Date
9 June 2018
22 June 2018
Issued price of
the shares
Number of
shares issued
$0.025
$0.030
500,000
5,000,000
11. Non‐audit services
No non‐audit services were provided to the Company during or since the end of the financial period.
P a g e | 21
ANNUAL REPORT
30 June 2018
Directors' report
12. Proceedings on behalf of company
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings
to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of
those proceedings.
The Company was not a party to any such proceedings during the period.
13. Auditor’s independence declaration
The lead auditor's independence declaration under section 307C of the Corporations Act 2001 (Cth) for the period ended
30 June 2018 has been received and can be found on page 33 of the annual report.
14. Remuneration report (audited)
The information in this remuneration report has been audited as required by s308(3C) of the Corporations Act 2001.
14.1
Key management personnel (KMP)
KMP have authority and responsibility for planning, directing and controlling the activities of the Group. KMP
comprise the directors of the Company and key executive personnel:
Managing Director
Non‐executive Chairman (Appointed 20 February 2018)
Non‐executive Director
Mr David Reeves
Mr Mark Connelly
Mr Keith Coughlan
Mr Peter Hepburn‐Brown Non‐executive Director (Passed away 2 September 2018)
Mr Adam Miethke
Ms Jane Allen
Mr James Carter
Non‐executive Director
Geology Manager
Chief Financial Officer and Company Secretary
14.2
Principles used to determine the nature and amount of remuneration
The remuneration policy of the Company has been designed to ensure reward for performance is competitive and
appropriate to the result delivered. The framework aligns executive reward with the creation of value for
shareholders, and conforms to market best practice. The Board ensures that Director and executive reward
satisfies the following key criteria for good reward government practices:
Competitiveness and reasonableness;
Acceptability to the shareholder;
Performance;
Transparency; and
Capital management.
The remuneration policy has been tailored to increase the direct positive relationship between shareholders'
investment objectives and Directors' and Executives' performance. Currently, this is facilitated through the issues
of options to the majority of Directors and Executives to encourage the alignment of personal and shareholder
interests. The Company believes this policy will be effective in increasing shareholder wealth. The Board's policy
for determining the nature and amount of remuneration for Board members and Senior Executive of the
Company is as follows:
a.
Executive Directors and other Senior Executives
The Company’s remuneration policy for executive directors and senior management is designed to
promote superior performance and long‐term commitment to the Company. Executives receive a base
remuneration which is market related, and may receive performance based remuneration. The Board
reviews Executive packages annually by reference to the Company's performance, executive performance,
and comparable information from industry sectors and other listed companies in similar industries.
Executives are also entitled to participate in employee share and option schemes. There is no scheme
currently approved by shareholders.
P a g e | 22
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Directors' report
b.
Non‐Executive Directors
ANNUAL REPORT
30 June 2018
The Company's Constitution provides that Directors are entitled to be remunerated for their services as
follows:
The total aggregate fixed sum per annum to be paid to the Directors (excluding salaries of
executive Directors) from time to time will not exceed the sum determined by the Shareholders in
general meeting and the total aggregate fixed sum will be divided between the Directors as the
Directors shall determine and, in default of agreement between them, then in equal shares.
The Directors' remuneration accrues from day to day.
The Directors are entitled to be paid reasonable travelling, accommodation and other expenses incurred
by them respectively in or about the performance of their duties as Directors.
c.
Fixed Remuneration
Other than statutory superannuation contribution, no retirement benefits are provided for Executive
and Non‐Executive Directors of the Company. To align Directors' interests with shareholder interests,
the Directors are encouraged to hold shares in the company.
d.
Performance Based Remuneration – Short‐term and long‐term incentive structure
The Board will review short‐term and long‐term incentive structures from time to time. Any incentive
structure will be aligned with shareholders' interests.
Short‐term incentives
No short‐term incentives in the form of cash bonuses were granted during the period.
Long‐term incentives
The Board has a policy of granting incentive options to executives with exercise prices above market
share price. As such, incentive options granted to executives will generally only be of benefit if the
executives perform to the level whereby the value of the Group increases sufficiently to warrant
exercising the incentive options granted.
The executive Directors will be eligible to participate in any short term and long‐term incentive arrangements
operated or introduced by the Company (or any subsidiary) from time to time.
e.
Service Contracts
Remuneration and other terms of employment for the directors, KMP and the company secretary are
formalised in contracts of employment.
f.
Engagement of Remuneration Consultants
During the financial period, the Company did not engage any remuneration consultants.
g.
Relationship between Remuneration of KMP and Earnings
The Board does not consider earnings during the current and previous financial years when determining
the nature and amount of remuneration of KMP.
P a g e | 23
ANNUAL REPORT
30 June 2018
Directors' report
14.3 Directors and KMP remuneration
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Details of the remuneration of the Directors and KMP of the Group (as defined in AASB 124 Related Party
Disclosures) are set out in the following table.
The amounts disclosed for the 2018 financial year in the table represents remuneration paid to the Group over
the period 1 July 2017 to 30 June 2018.
As a result of the Reverse acquisition of Calidus Resources Limited by Keras (Gold) Australia Pty Limited on 13 June
2017, the disclosures contained in the table represent those calculated in accordance with AASB 124 Related
Party Disclosures in combination with applying AASB 3 Business Combinations and in particular, the reverse
acquisition provisions of that standard.
The amounts disclosed for the 2017 financial period in the table represent remuneration paid by Keras (Gold)
Australia Pty Limited (the accounting acquirer) to KMP and Directors of the accounting acquirer over the period 1
July 2016 to 13 June 2017 (the acquisition date) and remuneration paid by the Group following the completion of
the acquisition on 13 June 2017 (The Post‐acquisition Group) to KMP and Directors of the Post‐acquisition Group
from 13 June 2017 to 30 June 2017. This ensures that the remuneration report disclosures are calculated on a
basis that is consistent with that applied in reporting the results and balances of the Group and related party
disclosures in the Financial Statements under the reverse acquisition rules of AASB 3 Business Combinations.
2018 – Group
Group KMP
Short‐term benefits
David Reeves
Mark Connelly
Keith Coughlan
Peter Hepburn‐Brown
Adam Miethke
Jane Allen
James Carter
2017 – Group
Group KMP
David Reeves
Keith Coughlan
Peter Hepburn‐Brown
Adam Miethke
Nicholas Young
Brendan de Kauwe
Jane Allen
James Carter
Salary, fees
and leave
$
204,000
21,750
32,000
24,000
25,250
51,000
‐
358,000
Salary, fees
and leave
$
17,000
789
526
10,192
9,667
‐
‐
‐
38,174
Profit share
and bonuses
$
‐
‐
‐
‐
‐
‐
‐
‐
Non‐
monetary
$
‐
‐
‐
‐
‐
‐
‐
‐
Short‐term benefits
Profit share
and bonuses
$
‐
‐
‐
‐
‐
‐
‐
‐
‐
Non‐
monetary
$
‐
‐
‐
‐
‐
‐
‐
‐
‐
Other
$
‐
‐
‐
‐
6,044
‐
26,547
9,772
42,363
Post‐
employment
benefits
Super‐
annuation
$
‐
2,066
‐
‐
‐
Other
$
‐
‐
‐
‐
‐
140,355
4,845
76,000
‐
216,355
6,911
Long‐term
benefits
Termination
benefits
Equity‐settled share‐
based payments
Total
Other
Equity
Options
$
‐
‐
‐
‐
‐
‐
‐
‐
$
‐
‐
‐
‐
‐
‐
‐
‐
$
‐
69,194
‐
‐
‐
$
$
79,349
283,349
‐
39,674
23,805
47,609
93,010
71,674
47,805
72,859
206,901
137,934
‐
‐
403,101
213,934
414,029
190,437
1,185,732
Post‐
employment
benefits
Super‐
annuation
$
‐
‐
‐
‐
‐
‐
‐
‐
‐
Long‐term
benefits
Termination
benefits
Equity‐settled share‐
based payments
Total
Other
Equity
Options
$
‐
‐
‐
‐
‐
‐
‐
‐
‐
$
‐
‐
‐
‐
‐
‐
‐
‐
‐
$
‐
‐
‐
‐
‐
‐
‐
‐
‐
$
3,811
1,905
1,143
2,286
‐
‐
‐
‐
$
20,811
2,694
1,669
12,478
15,711
‐
26,547
9,772
9,145
89,682
P a g e | 24
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Directors' report
14.4
Service agreements
a.
Executive Consultancy Agreement (ECA) with Mr Reeves
ANNUAL REPORT
30 June 2018
The Company has entered into an ECA with Wilgus Investments (Consultant) pursuant to which Mr Reeves
will provide the following consultancy services commencing from 22 June 2017 (admission date):
Serve the Company in the capacity as Managing Director responsible for the overall management
and supervision of the activities, operations and affairs of the Company, subject to the overall
control and direction of the Board;
Provide the Company with information and reports as to the business and affairs of the Company
as reasonably requested by the Board, and generally so as to keep the Company fully informed of
all material developments in or relevant to the Company’s affairs within the scope of the Mr
Reeves’ duties; and
In providing the services, comply with the Listing Rules, Corporations Act, Constitution and the
Company’s policies and procedures generally (Consulting Services).
The total consultancy fee payable to Mr Reeves for the Consultancy Services is $17,000 per month plus
GST (Consultancy Fee). Mr Reeves was also issued with 10,000,000 Options. The Company will also
reimburse Mr Reeves for reasonable expenses necessarily incurred in the performance of the Consultancy
Services. The Consultancy Fee will be reviewed annually by the Board.
In the event of a change in control (which occurs when a person’s voting power in the Company increases
above 50%), Mr Reeves will receive a bonus payment equal to 12 months Consultancy Fee. However, this
bonus will not be payable if, within 6 months after the change of control, either the Consultant or the
Company terminates the consultancy in accordance with the ECA.
The ECA commences upon the Company gaining successful re‐admission to the Official List and is for an
indefinite term, continuing until terminated by either the Company or the Consultant.
The Consultant can terminate the ECA by giving not less than three months’ written notice to the
Company.
The Company can immediately terminate the ECA for any reason by written notice in which case the
Company must make a termination payment equivalent to 3 months’ consultancy fee. The Company is not
required to make any termination payment in the event the consultancy is terminated summarily by the
Company.
Mr Reeves is also subject to the standard obligations in relation to the protection of confidential
information of the Company. The ECA contains additional provisions considered standard for agreements
of this nature.
P a g e | 25
ANNUAL REPORT
30 June 2018
Directors' report
b.
Non‐executive Director Agreements
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
The Company entered into separate Non‐executive Director letter agreement with each of Mr Connelly,
Mr Coughlan, Mr Hepburn‐Brown and Mr Miethke.
The Company has agreed to pay Mr Connelly a director fee of $60,000 plus superannuation per year for
services provided to the Company as Non‐executive Chairman. Mr Connelly was also granted 5,000,000
loan funded ordinary shares in the Company at 4 cents per share.
Effective March 2018 , the Company has agreed to pay Mr Coughlan a director fee of $24,000 including
superannuation per year for services provided to the Company as Non‐executive Director. Previously Mr
Coughlan was paid a director fee of $36,000 as Non‐executive Chairman of the Company.
The Company has agreed to pay Mr Hepburn‐Brown a director fee of $24,000 including superannuation
per year for services provided to the Company as Non‐executive Director.
The Company has agreed to pay Mr Miethke a director fee of $24,000 including superannuation per year
for services provided to the Company as Non‐executive Director.
c.
Bedrock Consulting Agreement
The Company has entered into a consulting agreement with Bedrock Consulting (WA) Pty Ltd on 23 May
2017 pursuant to which Ms. Allen will provide all the geological aspects of the Company’s assets,
including, but not limited to:
Managing greenfields exploration and supervising the Company’s consulting in this area
Designing and managing all drilling on the Company’s tenements
Managing all resources reporting
Build a geological model for the Companies tenements
Provide budgets and schedules for the above activities in consultation with the Managing Director
Assist the Managing Director in writing releases and presentation and ensuring they are JORC,
ASIC and ASX compliant
Acting as the Competent Person for all exploration results
The Company will pay Ms Allen a fee of $850 per day worked (exclusive of GST), payable monthly upon
receipt of an invoice. The Company will also reimburse Ms Allen for reasonable expenses necessarily
incurred in the performance of the geological services.
d.
Jane Allen Employment Contract
Effective 1 April 2018 Ms Allen was engaged under an employment agreement. Ms Allen’s base salary is
$204,000 per annum plus compulsory superannuation entitlements.
e.
James Carter’s Consulting Agreement
Mr Carter is engaged through Stillwater Resource Group Pty Ltd (Stillwater) to provide Chief Financial
Officer and Company Secretarial services to the Company. The annual payment to Stillwater for these
services is $120,000 per annum from 31 December 2017.
P a g e | 26
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Directors' report
14.5
Share‐based compensation
ANNUAL REPORT
30 June 2018
In consideration of retaining key quality employees of Calidus, the Company issued 17,500,000 fully paid ordinary
shares under the Employee Securities Incentive Plan during the year ended 30 June 2018.
The Directors of the Company were issued 24,000,000 Options during the period between 1 October 2016 to 30
June 2017.
There were 5,500,000 equity instruments issued during the period to KMPs as a result of options exercised that
had previously been granted as compensation.
a.
Securities Received that are not performance‐related
No members of KMP are entitled to receive securities that are not performance‐based as part of their
remuneration package.
b.
Employee Securities Incentive Plan
Key quality employees of Calidus were issued 17,500,000 fully paid ordinary shares under the Employee
Securities Incentive Plan. The terms of the employee securities were as follows:
Employee securities had the following issue price:
$0.03 per share for 12,500,000 shares
$0.04 per share for 5,000,000 shares
o
o
The employee must remain employed by a member of the Group for one year after the date the
employee securities are issued
The employee securities are held in a voluntary holding lock for a period of 12 months from the
date of issue
An interest free loan for the full amount to purchase the employee securities will be made
available to the employee. The terms of the loan were as follows:
o
o
o
o
The company agrees to lend the amount equal to the issue price multiplied by the
number of employee securities
The employee can repay the balance outstanding on the loan at any time
The loan is interest free
The outstanding amount of the loan will become payable on the earliest of:
The repayment date ‐ 15 years from the date of loan advance
The employee securities being sold
The employee becoming insolvent
The employee ceasing to be an employee
The employee securities being acquired by a third party by way of an
amalgamation, arrangement or formal takeover bid
o
The employee may not repay the balance outstanding on the loan in respect of the
employee securities which are in voluntary holding lock.
P a g e | 27
ANNUAL REPORT
30 June 2018
Directors' report
c.
Options and Rights Granted as Remuneration
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
No options or rights were granted as were granted as remuneration during the financial year ended 30
June 2018
The Directors were issued 24,000,000 Options during the period ended 1 October 2016 to 30 June 2017.
The terms of the options were as follows:
Tranche 1
12,000,000 options issued to Directors that have an exercise price of $0.03 and expire on the date
that is 3 years after their issue. Any Option not exercised before the Expiry Date will automatically
lapse on the Expiry Date.
Options can be exercised 12 months after their issue.
At the time of exercise, the Directors must still be a director of the Company, otherwise the
Options shall lapse
Tranche 2
12,000,000 options issued to Directors that have an exercise price of $0.03 and expire on the date
that is 3 years after their issue. Any Option not exercised before the Expiry Date will automatically
lapse on the Expiry Date.
Options can be exercised 24 months after their issue.
At the time of exercise, the Directors must still be a director of the Company, otherwise the
Options shall lapse
P a g e | 28
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Directors' report
14.6
KMP equity holdings
ANNUAL REPORT
30 June 2018
a.
Fully paid ordinary shares of Calidus resources Limited held by each KMP
2018 – Group
Group KMP
David Reeves
Mark Connelly
Keith Coughlan
Peter Hepburn‐Brown
Adam Miethke
Jane Allen
James Carter
2017 – Group
Group KMP
David Reeves
Keith Coughlan
Peter Hepburn‐Brown
Adam Miethke
Nicholas Young
Brendan de Kauwe
Jane Allen
James Carter
Balance at
start of year
No.
5,640,000
‐
4,440,000
1,333,334
‐
‐
500,000
11,913,334
Balance at
start of year
No.
‐
‐
‐
‐
‐
‐
‐
‐
‐
Received during
the year as
compensation
No.
Received during
the year on
the exercise of
options
No.
Other changes
during the year
No.
Resignation of
director
No.
Balance at
end of year
No.
‐
5,000,000
‐
‐
‐
7,500,000
5,000,000
17,500,000
Held at the
date of
reverse
acquisition
No.
4,440,000
4,440,000
1,333,334
‐
‐
3,800,000
‐
500,000
14,513,334
5,000,000
‐
‐
‐
‐
‐
500,000
5,500,000
4,025,000
‐
‐
‐
‐
‐
219,511
4,244,511
‐
‐
‐
‐
‐
‐
‐
‐
14,665,000
5,000,000
4,440,000
1,333,334
‐
7,500,000
6,219,511
39,157,845
Received during
the year as
compensation
No.
Received during
the year on
the exercise of
options
No.
Other changes
during the year
No.
Resignation of
director
No.
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
1,200,000
‐
‐
‐
‐
‐
‐
‐
1,200,000
(3,800,000)
(3,800,000)
Balance at
end of year
No.
5,640,000
4,440,000
1,333,334
‐
‐
‐
‐
500,000
11,913,334
Other changes during the year relate to acquisitions and disposals for Directors and their related parties.
b.
Options in Calidus Resources Limited held by each KMP
2018 – Group
Group KMP
David Reeves
Mark Connelly
Keith Coughlan
Peter Hepburn‐Brown
Adam Miethke
Jane Allen
James Carter
Balance at
start of year
No.
11,110,000
‐
6,110,000
3,333,334
6,000,000
‐
500,000
27,053,334
Granted as
Remuneration
during the year
No..
Exercised
during the year
No.
Other changes
during the year
No.
Resignation of
director
No.
‐
‐
‐
‐
‐
‐
‐
‐
(5,000,000)
‐
‐
‐
‐
‐
(500,000)
(5,500,000)
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Balance at
end of year
No.
6,110,000
‐
6,110,000
3,333,334
6,000,000
‐
‐
21,553,334
Vested and
Exercisable
No.
6,110,000
‐
6,110,000
3,333,334
6,000,000
‐
‐
21,553,334
Not Vested
No.
‐
‐
‐
‐
‐
‐
‐
‐
P a g e | 29
ANNUAL REPORT
30 June 2018
Directors' report
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
2017 – Group
Group KMP
David Reeves
Keith Coughlan
Peter Hepburn‐Brown
Adam Miethke
Nicholas Young
Brendan de Kauwe
Jane Allen
James Carter
Balance at
start of year
No.
Granted as
Remuneration
during the year
No..
Exercised
during the year
No.
Other changes
during the year
No.
Resignation of
director
No.
‐
‐
‐
‐
‐
‐
‐
‐
‐
10,000,000
5,000,000
3,000,000
6,000,000
‐
‐
‐
‐
24,000,000
‐
‐
‐
‐
‐
‐
‐
‐
‐
1,110,000
1,110,000
333,334
‐
‐
950,000
‐
500,000
4,003,334
‐
‐
‐
‐
‐
(950,000)
‐
‐
(950,000)
Balance at
end of year
No.
11,110,000
6,110,000
3,333,334
6,000,000
‐
‐
‐
500,000
27,053,334
Vested and
Exercisable
No.
‐
‐
‐
‐
‐
‐
‐
‐
‐
Not Vested
No.
11,110,000
6,110,000
3,333,334
6,000,000
‐
‐
‐
500,000
27,053,334
14.7 Other equity related KMP transactions
There have been no other transactions involving equity instruments other than those described in the tables
above relating to options, rights and shareholdings.
14.8 Other transactions with KMP and or their related parties
During the 2018 financial year, the Group incurred the following amounts to related parties:
Office Rent – Wilgus Investments Pty Ltd
$60,000 (30 June 2017: $52,300)
Keras Australia and Wilgus Investments Pty Ltd are party to a sub‐lease agreement dated on or about 1
September 2015 in respect of a portion of the office space at 12/11 Ventnor Avenue, West Perth. The
sub‐lease agreement commenced on 1 September 2015 and ends on 30 June 2018.
The rent payable by Keras Australia under the agreement is $48,000 per annum (Rent). The Rent is subject
to annual review on 1 July each year commencing 1 July 2016, at which the rent will increase by the
greater of market rent review and CPI review as provided for in the Head Lease.
On 1 June 2017, the rent was increased from $48,000 per annum to $51,600 per annum due to an
increase in space required by the Company.
On 1 January 2018, Keras Australia and Wilgus Investments Pty Ltd terminated the sub‐lease agreement
and Calidus and Wilgus Investments Pty Ltd entered into a new sub‐lease agreement in respect of a
portion of the office space at 12/11Ventnor Avenue, West Perth (Office Lease Agreement).
Mr Reeves (Managing Director of the Company) is a director of Wilgus Investments Pty Ltd.
The Office Lease Agreement commenced on 1 January 2018 and ends on 31 December 2018.
The rent payable by Calidus under the Office Lease Agreement is $5,700 per month payable in advance.
P a g e | 30
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Directors' report
ANNUAL REPORT
30 June 2018
Discovery Capital Partners Pty Ltd Engagement
$207,585 (30 June 2017: $Nil)
The Company has entered into a corporate and financial advisor engagement with Discovery Capital
Partners Pty Ltd (Discovery Capital) on 19 June 2017. The engagement commenced on execution of the
agreement and continues for a period of at least twelve months. Discovery Capital has been engaged to
provide the following services:
Management support and board services;
Promotion of Calidus;
Providing the Company with continuing support and advise as necessary; and
Such other services as are mutually agreed to be appropriate in the circumstances.
The Company will pay the following fees to Discovery Capital:
An agreement has been made whereby Mr. Adam Miethke has agreed to provide consulting
services to the Company on an agreed rate of $1,000 per day.
The Company will pay to Discovery Capital a monthly corporate advisory fee of $5,000.
The Company will also pay to Discovery Capital a capital advisory fee of 1% of all capital raised by
the Company during term of the engagement.
The Company acknowledges and agrees that should the Company raise at least $5 million during
the following 12 months or engagement term, then it shall appoint Discovery Capital as corporate
advisor for a period of at least 12 months at $10,000 per month.
The Company will also reimburse Discovery Capital for all out‐of‐pocket expense.
Mr Miethke is a Director and 50% shareholder of Discovery Capital. The Board considers that the
Discovery Capital engagement to be on arms’ length and commercial terms.
Management fee ‐ Keras Resources Plc
$Nil (30 June 2017: $377,066)
Keras Australia and Keras Resources Plc (Keras Resources) were parties to a corporate and technical
services agreement dated on 1 December 2015 (Corporate Service Agreement). This agreement was
terminated in June 2017 as part of the Company’s reinstatement to trading on the ASX.
Discovery Capital & Otsana Mandate – Joint Lead Manager Fee
$Nil (30 June 2017: $575,541)
Discovery Capital Partners Pty Ltd (Discovery) and Otsana Pty Ltd (Otsana) entered into an agreement with
the Company dated 1 May 2017 to provide lead manager and related services for the Company in relation
to potential strategic acquisitions, structuring and restructuring and capital raising including to act as joint
lead managers in connection with the public offer as detailed in the Prospectus lodged on 8 May 2017
(Joint Lead Manager Mandate).
Otsana and Discovery were entitled to a 6% capital raising fee on all capital raised under the public offer.
Any third party brokerage fees shall be payable by the joint lead managers out of this fee.
The Joint Lead Manager Mandate otherwise contains terms standard for a mandate of this nature.
Mr. Miethke is a director and a 50% shareholder of Discovery Capital. Dr de Kauwe is a director of Otsana
and Mr. Young is an authorized representative of Otsana. The Directors consider the mandate to be on
arm’s length and commercial terms.
P a g e | 31
ANNUAL REPORT
30 June 2018
Directors' report
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Discovery Capital Mandate
$Nil (30 June 2017: $150,000)
Keras Resources Plc entered into an agreement with Discovery Capital Partners Pty Ltd (Discovery) on 17
April 2017 to engage Discovery as their exclusive corporate and financial advisor in relation to the
acquisition of Keras Australia by Calidus and the public offer detailed in the prospectus dated 8 May 2017
(Discovery Capital Mandate).
The term of the Discovery Capital Mandate is for a period of 4 months from date of execution. The
Discovery Capital Mandate will terminate on 17 August 2017, unless otherwise agreed.
Keras Australia shall pay Discovery Capital the following fees upon the Company’s re‐listing on the ASX:
(a) 3.5% of shares to be issued to Keras Resources Plc pursuant to the consideration offer (being
7,875,000 shares)
(b) 3.5% of shares issued on conversion of the Performance Shares to be issued to Keras Resources Plc
pursuant to the consideration offer (being a maximum of 18,375,000 shares); and
a cash fee of $150,000.
(c)
Mr Miethke is a director and a 50% shareholder of Discovery Capital. The Discovery Capital Mandate
otherwise contains terms standard for a mandate of this nature.
Otsana Mandate – Corporate advisory fee
$Nil (30 June 2017: $1,800,000)
Otsana entered into an agreement with the Company dated 1 April 2017 to act as a corporate advisor to
the Company in connection with the public offer and acquisition of Keras Australia by Calidus (Ostana
Mandate). In consideration for these services, Otsana, on successful completion of the acquisition of Keras
Australia and re‐listing of the Company, shall be issued 90,000,000 Shares under the facilitator offer in lieu
of corporate advisory and success fee.
The Otsana Mandate otherwise contains terms standard for a mandate of this nature. Dr de Kauwe is a
director of Otsana and Mr Young is an authorised representative of Otsana. The Board considers the
Otsana Mandate to be on arms’ length commercial terms.
Refer also Note 22 Related party transactions.
END OF REMUNERATION REPORT
This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of directors
made pursuant to s.298(2) of the Corporations Act 2001 (Cth).
MARK CONNELLY
Non‐executive Chairman
Dated this Tuesday, 11 September 2018
P a g e | 32
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
ANNUAL REPORT
30 June 2018
Auditor's independence declaration
Under Section 307c Of The Corporations Act 2001 (Cth)
To The Directors Of Calidus Resources Limited
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2018 there have been:
i. No contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the
audit; and
ii. No contraventions of any applicable code of professional conduct in relation to the audit.
TO BE REPLACED BY AUDITORS
(insert date)
P a g e | 33
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Consolidated statement of profit or loss and other comprehensive income
for the period between 1 July 2017 to 30 June 2018
Continuing operations
Revenue
Costs of Sales
Acquisition premium expensed to statement of profit and loss
Compliance costs
Corporate transaction accounting expense
Depreciation and amortisation
Employment costs
Exploration Expenditure
Finance costs
Insurance fees
Impairment of exploration expenditure
Impairment of property plant and equipment
Keras PLC management fee
Legal and consulting fees
Occupancy costs
Share‐based payments
Share registry and listing fees
Travel and accommodation
Other expenses
Foreign exchange loss
Loss before tax
Income tax benefit / (expense)
Net (loss) / profit for the period
Other comprehensive income, net of income tax
Note 1 July 2017 to 30
June 2018
$
1 October 2016 to
30 June 2017
$
5
4c
3d
6
22
19
105,479
105,479
1,679,266
1,679,266
‐
(1,860,465)
105,479
‐
(354,188)
‐
(32,587)
(380,202)
(676,004)
(1,992)
(44,348)
(12,500)
(39,692)
(181,199)
(680,064)
(135,134)
(713,099)
(3,659)
(45,105)
‐
(99,199)
(61,645)
‐
‐
‐
(377,066)
(463,389)
(64,321)
(630,282)
(122,211)
(101,359)
(54,200)
(2,340)
(77,955)
(64,756)
(9,145)
(27,409)
(24,370)
72,114
(32,772)
(2,874,136)
(2,460,463)
7
‐
‐
(2,874,136)
(2,460,463)
‐
‐
Other comprehensive income for the period, net of tax
(2,874,136)
(2,460,463)
Total comprehensive income attributable to members of the parent entity
(2,874,136)
(2,460,463)
Profit/(loss) for the period attributable to:
Non‐controlling interest
Owners of the parent
Total comprehensive income/(loss) attributable to:
Non‐controlling interest
Owners of the parent
Earnings per share:
Basic and loss per share (cents per share)
‐
‐
(2,874,136)
(2,460,463)
‐
‐
(2,874,136)
(2,460,463)
₵
(0.27)
8
₵
(1.94)
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.
P a g e | 34
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Consolidated statement of financial position
as at 30 June 2018
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Total current assets
Non‐current assets
Plant and equipment
Exploration and evaluation assets
Other non‐current assets
Total non‐current assets
Total assets
Current liabilities
Trade and other payables
Short‐term provisions
Total current liabilities
Non‐current liabilities
Long‐term financial liabilities
Total non‐current liabilities
Total liabilities
Net assets
Equity
Issued capital
Performance shares
Employee shares
Reserves
Accumulated losses
Total equity
ANNUAL REPORT
30 June 2018
Note
30 June 2018
30 June 2017
$
$
9
10
11
12
13
11
6,142,247
4,441,885
301,898
‐
188,439
10,078
6,444,145
4,640,402
175,377
56,360
9,985,029
2,781,809
24,993
24,993
10,185,399
2,863,162
16,629,544
7,503,564
14
15
1,206,655
1,141,806
390,555
379,650
1,597,210
1,521,456
‐
‐
‐
‐
1,597,210
1,521,456
15,032,334
5,982,108
16a
16c
16d
16b
21,712,043
10,363,420
‐
414,029
170,855
‐
‐
9,145
(7,264,593)
(4,390,457)
15,032,334
5,982,108
The consolidated statement of financial position is to be read in conjunction with the accompanying notes.
P a g e | 35
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Consolidated statement of change in equity
for the period between 1 July 2017 to 30 June 2018
Note
Balance at 1 October 2016
Loss for the year attributable owners of the parent
Other comprehensive income for the period
attributable owners of the parent
Total comprehensive income for the year attributable
owners of the parent
Transaction with owners, directly in equity
Shares issued during the year
Options issued during the period
Transaction costs
Balance at 30 June 2017
Balance at 1 July 2017
Loss for the period attributable owners of the parent
Other comprehensive income for the period
attributable owners of the parent
Total comprehensive income for the period
attributable owners of the parent
Transaction with owners, directly in equity
Shares issued during the period
Options issued during the period
Options exercised during the period
Employee shares issued during the period
Transaction costs
Balance at 30 June 2018
16a
18a
16a
16a
18a
18a
17a
16a
Issued
Capital
$
308,650
‐
‐
‐
12,397,033
‐
(2,342,263)
10,363,420
10,363,420
‐
‐
‐
11,667,475
‐
217,043
Employee
Shares
$
Option
Reserve
$
Accumulated
Losses
$
Total
$
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
9,145
‐
(1,929,994)
(1,621,344)
(2,460,463)
(2,460,463)
‐
‐
(2,460,463)
(2,460,463)
‐
‐
‐
12,397,033
9,145
(2,342,263)
9,145
(4,390,457)
5,982,108
9,145
‐
(4,390,457)
5,982,108
(2,874,136)
(2,874,136)
‐
‐
‐
216,253
(54,543)
‐
‐
‐
‐
(2,874,136)
(2,874,136)
‐
‐
‐
‐
‐
11,667,475
216,253
162,500
414,029
(535,895)
‐
414,029
(535,895)
‐
21,712,043
414,029
170,855
(7,264,593)
15,032,334
The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes.
P a g e | 36
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Consolidated statement of cash flows
for the period between 1 July 2017 to 30 June 2018
Cash flows from operating activities
Receipts from customers
Payments for suppliers and employees
Interest received
Interest and borrowings costs
ANNUAL REPORT
30 June 2018
Note 1 July 2017 to 30
June 2018
1 October 2016 to
30 June 2017
$
$
76,353
1,691,476
(1,801,130)
(2,498,238)
29,126
(1,992)
‐
(7,713)
Net cash used in operating activities
9d.i
(1,697,643)
(814,475)
Cash flows from investing activities
Sale/ (purchase) of plant and equipment
Net cash acquired on acquisition of subsidiary net of cash consideration paid
9g.ii,
9h
Payments for exploration expenditure
Sale/(purchase) of tenements
Proceeds from Bank Guarantee
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments for capital raising costs
Proceeds from borrowings
Repayment of borrowings
(191,296)
(1,863)
‐
7,510,148
(5,242,293)
(244,207)
(613,749)
‐
‐
25,000
(6,047,338)
7,289,078
10,162,500
‐
(717,157)
(491,513)
‐
‐
2,198,136
(3,813,504)
Net cash provided by financing activities
9,445,343
(2,106,881)
Net increase in cash held
1,700,362
4,367,722
Cash and cash equivalents at the beginning of the period
4,441,885
74,163
Cash and cash equivalents at the end of the period
9b
6,142,247
4,441,885
The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.
.
P a g e | 37
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Statement of significant accounting policies
Note 1
These are the consolidated financial statements and notes of Calidus Resources Limited (Calidus or the Company) and
controlled entities (collectively the Group). Calidus is a company limited by shares, domiciled and incorporated in Australia.
The separate financial statements of Calidus, as the parent entity, have not been presented with this financial report as
permitted by the Corporations Act 2001 (Cth).
The financial statements were authorised for issue on 7 September 2018 by the directors of the Company.
a. Basis of preparation
The financial statements comprise the consolidated financial statements of the Group. For the purposes of preparing the
consolidated financial statements, the Company is a for‐profit entity. Material accounting policies adopted in the preparation
of these financial statements are presented below. They have been consistently applied unless otherwise stated.
i. Statement of compliance
These financial statements are general purpose financial statements which have been prepared in accordance with
Australian Accounting Standards and Interpretations of the Australian Accounting Standards Board (AAS Board) and
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), and
the Corporations Act 2001 (Cth).
Australian Accounting Standards (AASBs) set out accounting policies that the AAS Board has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions to which they apply.
Compliance with AASBs ensures that the financial statements and notes also comply with IFRS as issued by the IASB.
ii. Reverse acquisition
Calidus (formerly Pharmanet Group Ltd) is listed on the Australian Securities Exchange. The Company completed the legal
acquisition of Keras (Gold) Australia Pty Limited (Keras (Gold) Australia Pty) on 13 June 2017.
Keras (Gold) Australia Pty Limited (the legal subsidiary) was deemed to be the acquirer for accounting purposes as it has
obtained control over the operations of the legal acquirer Calidus (accounting subsidiary). Accordingly, the consolidated
financial statements of Calidus have been prepared as a continuation of the financial statements of Keras (Gold) Australia
Pty Limited. Keras (Gold) Australia Pty Limited (as the deemed acquirer) has accounted for the acquisition of Calidus from
13 June 2017. The comparative information presented in the consolidated financial statements is that of Keras (Gold)
Australia Pty Limited.
The impact of the reverse acquisition on each of the primary statements is as follows:
The consolidated statement of comprehensive income:
for the period between 1 July 2017 to 30 June 2018 comprises results for both Keras (Gold) Australia Pty Limited
and Calidus; and
for the comparative period between 1 October 2016 to 30 June 2018 comprises 9 months of Keras (Gold) Australia
Pty Limited and the period from 13 June 2016 to 30 June 2017 for Calidus.
The consolidated statement of financial position:
as at 30 June 2018 represents both Keras (Gold) Australia Pty Limited and Calidus as at that date; and
as at 30 June 2017 represents both Keras (Gold) Australia Pty Limited and Calidus as at that date.
The consolidated statement of changes in equity:
for the period between 1 July 2017 to 30 June 2018 comprises 1 July 2017 to 30 June 2018 of Keras (Gold) Australia
Pty Limited's and Calidus changes in equity.
for the comparative period between 1 October 2016 to 30 June 2017 comprises Keras (Gold) Australia Pty Limited's
balance at 1 July 2017, its loss for the period and transactions with equity holders for 9 months. It also comprises
Calidus transactions within equity from 13 June 2017 to 30 June 2017 and the equity value of Keras (Gold) Australia
Pty Limited and Calidus at 30 June 2017. The number of shares on issue at period end represent those of Calidus.
P a g e | 38
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 1
Statement of significant accounting policies
The consolidation statement of cash flows:
ANNUAL REPORT
30 June 2018
for the period between 1 July 2017 to 30 June 2018 of Keras (Gold) Australia Pty Limited’s and Caldius’ cash
transactions.
for the comparative period between 1 October 2016 to 30 June 2017 comprises:
o
o
o
the cash balance of Keras (Gold) Australia Pty Limited as at 1 October 2016;
the cash transactions for the 9 months of Keras (Gold) Australia Pty Limited and the period from 13 June 2017
to 30 June 2017 of Calidus; and
the cash balances of Keras (Gold) Australia Pty Limited and Calidus at 30 June 2017.
iii. Use of estimates and judgments
The preparation of consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses.
These estimates and associated assumptions are based on historical experience and various factors that are believed to be
reasonable under the circumstances, the results of which form the basis of making the judgements about carrying values of
assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised and in any future periods affected.
Judgements made by management in the application of AASBs that have significant effect on the consolidated financial
statements and estimates with a significant risk of material adjustment in the next year are discussed in note 1m.
iv. Comparative figures
Where required by AASBs comparative figures have been adjusted to conform with changes in presentation for the current
financial year.
Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies items in its
financial statements, an additional (third) statement of financial position as at the beginning of the preceding period in
addition to the minimum comparative financial statements is presented.
b. Accounting Policies
The Group has consistently applied the following accounting policies to all periods presented in the financial statements. The
Group has considered the implications of new and amended Accounting Standards applicable for annual reporting periods
beginning after 1 July 2017 but determined that their application to the financial statements is either not relevant or not
material.
c. Principles of consolidation
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial
statements as well as their results for the year then ended. Where controlled entities have entered (left) the Consolidated
Group during the year, their operating results have been included (excluded) from the date control was obtained (ceased).
i. Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on
which control is transferred to the Group. Control exists when the Group is exposed to variable returns from another entity
and has the ability to affect those returns through its power over the entity.
The Group measures goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
the recognised amount of any non‐controlling interests in the acquire; plus
if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree;
less
the net recognised amount of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
The consideration transferred does not include amounts related to settlement of pre‐existing relationships. Such amounts
are generally recognised in profit or loss.
P a g e | 39
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 1
Statement of significant accounting policies
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group
incurs in connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is
classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to
the fair value of the contingent consideration are recognised in profit or loss.
ii. Subsidiaries
Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the
Group. Losses applicable to the non‐controlling interests in a subsidiary are allocated to the non‐controlling interests even
if doing so causes the non‐controlling interests to have a deficit balance.
A list of controlled entities is contained in Note 20 Controlled Entities of the financial statements.
iii. Loss of control
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non‐controlling interests
and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is
recognised in profit or loss. If the Group retains any interest in the previous subsidiary, than such interest is measured at
fair value at the date control is lost. Subsequently it is accounted for as an equity‐accounted investee or as an available‐for‐
sale financial asset depending on the level of influence retained.
iv. Transactions eliminated on consolidation
All intra‐group balances and transactions, and any unrealised income and expenses arising from intra‐group transactions,
are eliminated in preparing the consolidated financial statements.
d. Exploration and evaluation expenditure
i. Recognition and measurement
Exploration and evaluation costs, including the costs of acquiring licenses, are capitalised as exploration and evaluation
assets on an area of interest basis. Costs incurred before the Group has obtained the legal rights to explore an area are
recognised in the income statement.
Exploration and evaluation costs are recognised as an asset if the rights of the area of interest are current and either:
The expenditures are expected to be recouped through successful development and exploitation of the areas of
interest; or
Activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active and significant
operations in, or in relation to, the area of interest are continuing.
P a g e | 40
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 1
Statement of significant accounting policies
ii. Subsequent measurement
ANNUAL REPORT
30 June 2018
Exploration and evaluation assets are assessment for impairment if:
Sufficient data exists to determine technical feasibility and commercial viability.
Facts and circumstances suggest that the carrying amount exceeds the recoverable amount (see accounting policy
Impairment of non‐financial assets)
For the purpose of the impairment testing, exploration and evaluation assets are allocated to cash‐generating units to
which the exploration activity relates. The cash‐generating unit shall not be larger than the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are
demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and
then reclassified from exploration and evaluation assets to mine properties within property, plant and equipment.
The value of the Group’s interest in exploration expenditure is dependent upon:
The continuance of the Group’s right to tenure of the areas of interest;
The result of future exploration; and
The recoupment of costs through successful development and exploitation of the areas of interest, or
alternatively, by their sale.
The Group’s exploration properties may be subjected to claim(s) under Native Title (or jurisdictional equivalent), or
contain sacred sites, or sites of significance to the indigenous people of Australia.
As a result, exploration properties or areas within the tenement may be subject to exploration restrictions, mining
restrictions and/or claims for compensation. At this time, it is not possible to quantify whether such claims exist, or the
quantum to such claims.
e. Taxation
Income tax
i.
The income tax expense / (income) for the year comprises current income tax expense/(income) and deferred tax
expense/(income).
Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable
income tax rates enacted, or substantially enacted, as at reporting date. Current tax liabilities (assets) are therefore
measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as
well unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax relates to
items recognised outside profit or loss.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have
been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial
recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable
profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is
realised or the liability is settled, based on tax rates enacted or substantively enacted at reporting date. Their measurement
also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or
liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be
controlled and it is not probable that the reversal will occur in the foreseeable future.
P a g e | 41
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 1
Statement of significant accounting policies
Current tax assets and liabilities are offset where a legally enforceable right of set‐off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are offset where a legally enforceable right of set‐off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it
is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in
future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
Where the Group receives the Australian Government's Research and Development Tax Incentive, the Group accounts for
the refundable tax offset under AASB 112. Funds are received as a rebate through the parent company's income tax return
and disclosed as such in Note 7 Income Tax.
f. Revenue and other income
Interest revenue is recognised in accordance with note 1l. ix. Finance income and expenses.
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and
allowances. Revenue is recognised in the income statement when the significant risks and rewards of ownership have been
transferred to the buyer. No revenue is recognised if there are significant uncertainties regarding recovery of the
consideration due or there is a risk of return of goods or there is continuing management involvement with the goods.
All revenue is stated net of the amount of value added taxes (note 1g Goods and Services Tax).
g.
Goods and Services Tax (GST)
Revenues, expenses, and assets are recognised net of the amount of GST, except where the amount of GST incurred is not
recoverable from the taxation authority. In these circumstances the GST is recognised as part of the cost of acquisition of
the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown
inclusive of GST.
The net amount of GST recoverable from, or payable to, the Australian Taxation Office is included as a current asset or
liability in the balance sheet.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash flows.
P a g e | 42
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 1
Statement of significant accounting policies
h. Plant and Equipment
i. Recognition and measurement
ANNUAL REPORT
30 June 2018
Items of property, plant and equipment are measured at cost less accumulated depreciation (see below) and impairment
losses (see accounting policy Impairment of non‐financial assets and note 12 Property, plant, and equipment)
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self‐constructed assets
includes the cost of materials and direct labour, any other costs directly attributable to bringing the asset to a working
condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are
located, and appropriate proportion of production overheads.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from
disposal with the carrying amount of property, plant and equipment and are recognised net within “other income” in profit
or loss.
The carrying amount of plant and equipment is reviewed annually by Directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that
will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted
to their present values in determining recoverable amounts.
ii. Subsequent costs
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it
is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured
reliably. The costs of the day‐to‐day servicing of property, plant and equipment are recognised in the income statement as
an expense as incurred.
iii. Depreciation
With the exception of exploration and evaluation assets, depreciation is charged to the income statement on a diminishing
value basis over the estimated useful lives of each part of an item of property, plant and equipment, except to the extent
that they are included in the carrying amount of another asset as an allocation of production overheads.
Depreciation rates and methods are reviewed annually for appropriateness. The depreciation rates used for the current and
comparative period are:
Plant and Equipment
33%‐66%
33%‐66%
2018
$
2017
$
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
i. Financial instruments
Initial recognition and measurement
i.
A financial instrument is recognised if the Group becomes party to the contractual provisions of the instrument. Financial
assets are derecognised if the Group's contractual rights to the cash flows from the financial assets expire or if the Group
transfers the financial asset to another party without retaining control or substantially all risks and rewards of the asset.
Financial liabilities are derecognised if the Group's obligations specified on the contract expire or are discharged or
cancelled.
ii. Non‐derivative financial instruments
Non‐derivative financial instruments comprise investments in equity securities, trade and other receivables, cash and cash
equivalents and trade and other payables.
Non‐derivative financial instruments are recognised initially at fair value plus, for instruments not at fair value through
profit or loss, any directly attributable transactions costs. Subsequent to initial recognition non‐derivative financial
instruments are measured as described below.
P a g e | 43
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 1
Statement of significant accounting policies
iii. Classification and Subsequent Measurement
Cash and cash equivalents
(i)
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short‐term highly liquid
investments with original maturities of nine months or less, and bank overdrafts. Bank overdrafts are shown within
short‐borrowings in current liabilities on the Statement of financial position.
Loans
(ii)
Loans are non‐derivative financial assets with fixed or determinable payments that are not quoted in an active market
and are subsequently measured at amortised cost.
Loans are included in current assets, except for those which are not expected to mature within 12 months after the end
of the reporting period.
(iii) Trade and other receivables
Trade and other receivables are stated at amortised costs. Receivables are usually settled within 60 days.
Collectability or trade and other debtors is reviewed on an ongoing basis. An impairment loss is recognised for debts
which are known to be uncollectible. An impairment provision is raised for any doubtful amounts.
Trade and other payables
(iv)
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
which are unpaid and stated at their amortised cost. The amounts are unsecured and are generally settled on 30 day
terms.
Share capital
(v)
Ordinary issued capital is recorded at the consideration received. Incremental costs directly attributable to the issue of
ordinary shares and share options are recognised as a deduction from equity, net of any related income tax benefit.
Ordinary issued capital bears no special terms or conditions affecting income or capital entitlements of the
shareholders.
iv. Amortised cost
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at initial recognition
less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the
difference between that initial amount and the maturity amount calculated using the effective interest method.
v. Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to
determine the fair value for all unlisted securities, including recent arm's length transactions, reference to similar
instruments and option pricing models.
vi. Effective interest method
The effective interest method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and
other premiums or discounts) over the expected life (or when this cannot be reliably predicted, the contractual term) of the
financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net
cash flows will necessitate an adjustment to the carrying amount with a consequential recognition of an income or expense
item in profit or loss.
vii. Impairment
A financial asset is assessed at each reporting date to determine whether there is any objective evidence that it is impaired.
A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative
effect on the estimated future cash flows of that asset.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its
carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest rate.
Financial assets are tested for impairment on an individual basis.
All impairment losses are recognised in the income statement.
P a g e | 44
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 1
Statement of significant accounting policies
ANNUAL REPORT
30 June 2018
An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was
recognised. For financial assets measured at amortised cost the reversal is recognised in the income statement.
viii. Derecognition
Financial assets are derecognised where the contractual rights to cash flow expires or the asset is transferred to another
party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the
asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expired. The
difference between the carrying value of the financial liability extinguished or transferred to another party and the fair
value of consideration paid, including the transfer of non‐cash assets or liabilities assumed, is recognised in profit or loss.
ix. Finance income and expenses
Finance income comprises interest income on funds invested (including available‐for‐sale financial assets), gains on the
disposal of available‐for‐sale financial assets and changes in the fair value of financial assets at fair value through profit or
loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method.
Financial expenses comprise interest expense on borrowings calculated using the effective interest method, unwinding of
discounts on provisions, changes in the fair value of financial assets at fair value through profit or loss and impairment
losses recognised on financial assets. All borrowing costs are recognised in profit or loss using the effective interest
method.
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a
substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as
the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in income in the
period in which they are incurred.
j.
Impairment of non‐financial assets
The carrying amounts of the Group’s non‐financial assets, other than deferred tax assets (see accounting policy 1e
Taxation) are reviewed at each reporting date to determine whether there is any indication of impairment. If any such
indication exists then the asset’s recoverable amount is estimated.
An impairment loss is recognised if the carrying amount of an asset or its cash‐generating unit exceeds its recoverable
amount. A cash‐generating unit is the smallest identifiable asset group that generates cash flows that largely are
independent from other assets and groups. Impairment losses are recognised in the income statement, unless the asset has
previously been revalued, in which case the impairment loss is recognised as a reversal to the extent of that previous
revaluation with any excess recognised through the income statement. Impairment losses recognised in respect of cash‐
generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce
the carrying amount of the other assets in the unit on a pro rata basis.
The recoverable amount of an asset or cash‐generating unit is the greater of its fair value less costs to sell and value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre‐tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that
does not generate largely independent cash inflows, the recoverable amount is determined for the cash‐generating unit to
which the asset belongs.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to
determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount
does not exceed the carrying amount that would have been determined, net of depreciation and amortisation, if no
impairment loss had been recognised.
k. Employee benefits
i. Short‐term benefits
Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled within 12 months of
the reporting date represent present obligations resulting from employees' services provided to the reporting date and are
calculated at undiscounted amounts based on remuneration wage and salary rates that the Group expects to pay at the
reporting date including related on‐costs, such as workers compensation insurance and payroll tax.
Non‐accumulating non‐monetary benefits, such as medical care, housing, cars and free or subsidised goods and services,
are expensed based on the net marginal cost to the Group as the benefits are taken by the employees.
P a g e | 45
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 1
Statement of significant accounting policies
ii. Other long‐term benefits
The Group's obligation in respect of long‐term employee benefits other than defined benefit plans is the amount of future
benefit that employees have earned in return for their service in the current and prior periods plus related on‐costs; that
benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The discount rate
is the Reserve Bank of Australia's cash rate at the report date that have maturity dates approximating the terms of the
Company's obligations. Any actuarial gains or losses are recognised in profit or loss in the period in which they arise.
iii. Retirement benefit obligations: Defined contribution superannuation funds
A defined contribution plan is a post‐employment benefit plan under which an entity pays fixed contributions onto a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to
defined contribution superannuation funds are recognised as an expense in the income statement as incurred.
iv. Equity‐settled compensation
The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair
value is measured at grant date and spread over the period during which the employees become unconditionally entitled
to the options. The fair value of the options granted is measured using the Black‐Scholes pricing model, taking into account
the terms and conditions upon which the options were granted. The amount recognised is adjusted to reflect the actual
number of share options that vest except where forfeiture is only due to market conditions not being met.
l. Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is
probable that an outflow of economic benefits will results and that outflow can be reliably measured.
Provisions are determined by discounting the expected future cash flows at a pre‐tax rate that reflects current market
assessments of the time value of money and, when appropriate, the risks specific to the liability.
m. 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 entities in the Group are classified as finance leases.
Leased assets are depreciated on a straight‐line 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 recognised in the
income statement on a straight‐line basis over the term of the lease.
Lease incentives under operating leases are recognised as a liability and amortised on a straight‐line basis over the life of the
lease term.
n. Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and
incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. All
operating segments' results are regularly reviewed by the Group's Managing Director to make decisions about resources to be
allocated to the segment and assess its performance, and for which discrete financial information is available.
o. Critical Accounting Estimates and Judgments
Management discusses with the Board the development, selection and disclosure of the Group's critical accounting policies and
estimates and the application of these policies and estimates. The estimates and judgements that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed
below.
i. Key judgements and estimates – Business Combinations
Refer note 3 Business combinations.
ii. Key Estimate – Exploration and evaluation expenditure
Exploration and evaluation costs are carried forward where right of tenure of the area of interest is current. These costs are
carried forward in respect of an area that has not at reporting date reached a stage that permits reasonable assessment of
the existence of economically recoverable reserves, refer to accounting policy stated in note 13 Exploration and evaluation
assets. The carrying value of capitalised expenditure at reporting date is $10,047,559.
P a g e | 46
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 1
Statement of significant accounting policies
ANNUAL REPORT
30 June 2018
The ultimate recoupment of the value of the exploration and evaluation assets and mine properties is dependent on
successful development and commercial exploitation or alternatively, sale, of the underlying mineral exploration
properties. The Group undertakes at lease on an annual basis a comprehensive review for indicators of impairment of these
assets. There is significant estimation and judgement in determining the inputs and assumptions used in determining the
recoverable amounts.
The key areas of estimation and judgement that are considered in this review include:
Recent drilling results and reserves and resource estimates;
Environmental issues that may impact the underlying tenements;
The estimated market value of assets at the review date;
Independent valuations of underlying assets that may be available;
Fundamental economic factors such as diamond prices, exchange rates and current and anticipated operating costs in
the industry; and
The Group’s market capitalisation compared to its net assets.
Information used in the review process is rigorously tested to externally available information as appropriate.
iii. Key Estimate —Environmental Issues
Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted
environmental legislation, and the directors understanding thereof. At the current stage of the company’s development
and its current environment impact, the directors believe such treatment is reasonable and appropriate.
iv. Key judgements and estimates – Taxation
Balances disclosed in the financial statements and the notes thereto, related to taxation, are based on the best estimates of
directors. These estimates take into account both the financial performance and position of the company as they pertain to
current income taxation legislation, and the directors understanding thereof. No adjustment has been made for pending or
future taxation legislation. The current income tax position represents that directors' best estimate, pending an assessment
by tax authorities in relevant jurisdictions. Refer Note 7 Income Tax.
p. New Accounting Standards and Interpretations not yet mandatory or early adopted
A number of new standards, amendments to standards and interpretations issued by the AASB which are not yet mandatorily
applicable to the Group have not been applied in preparing these financial statements. Those which may be relevant to the
Group are set out below. The Group does not plan to adopt these standards early.
i. AASB 9 Financial Instruments and associated Amending Standards (applicable for annual reporting period beginning on
or after 1 July 2018)
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting outlined below) and includes
revised requirements for the classification and measurement of financial instruments requirements for financial
instruments and hedge accounting.
The key changes that may affect the Group on initial application include certain simplifications to the classification of
financial assets, simplifications to the accounting of embedded derivatives, upfront accounting for expected credit loss, and
the irrevocable election to recognise gains and losses on investments in equity instruments that are not held for trading in
other comprehensive income. AASB 9 also introduces a new model for hedge accounting that will allow greater flexibility
in the ability to hedge risk, particularly with respect to hedges of non‐financial items. Should the entity elect to change its
hedge policies in line with the new hedge accounting requirements of the Standard, the application of such accounting
would be largely prospective.
The Directors anticipate that the adoption of AASB 9 will not have a material impact on the Group’s financial instruments.
ii. AASB 15 Revenue from Contracts with Customers (applicable to annual reporting periods beginning on or after 1 July
2018, as deferred by AASB 2015‐8: Amendments to Australian Accounting Standards – Effective Date of AASB 15).
AASB 15 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with
customers.
P a g e | 47
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 1
Statement of significant accounting policies
When effective, this Standard will replace the current accounting requirements applicable to revenue with a single,
principles‐based model. Except for a limited number of exceptions, including leases, the new revenue model in AASB 15 will
apply to all contracts with customers as well as non‐monetary exchanges between entities in the same line of business to
facilitate sales to customers and potential customers.
The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods or
services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange
for the goods or services. To achieve this objective, AASB 15 provides the following five‐step process:
(1)
(2)
Identify the contract(s) with a customer;
Identify the performance obligations in the contract(s);
(3) Determine the transaction price;
(4) Allocate the transaction price to the performance obligations in the contract(s); and
(5) Recognise revenue when (or as) the performance obligations are satisfied.
Based on preliminary assessment performed, the effects of AASB 15 are not expected to have a material effect on the
Group.
iii. AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 July 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB 117: Leases
and related Interpretations. AASB 16 introduces a single lessee accounting model that eliminates the requirement for
leases to be classified as operating or finance leases.
The main changes introduced by the new Standard are as follows:
(1)
recognition of a right‐of‐use asset and lease liability for all leases (excluding short‐term leases with a lease term 12
months or less of tenure and leases relating to low‐value assets);
(2) depreciation of right‐of‐use assets in line with AASB 116: Property, Plant and Equipment in profit or loss and
unwinding of the liability in principal and interest components;
(3)
(4)
inclusion of variable lease payments that depend on an index or a rate in the initial measurement of the lease liability
using the index or rate at the commencement date;
application of a practical expedient to permit a lessee to elect not to separate non‐lease components and instead
account for all components as a lease; and
(5)
inclusion of additional disclosure requirements.
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to comparatives in line
with AASB 108 or recognise the cumulative effect of retrospective application as an adjustment to opening equity on the
date of initial application.
The Directors anticipate that the adoption of AASB 16 will not have a material impact on the Group’s recognition of leases
and disclosures.
iv. Other standards not yet applicable
There are no other standards that are not yet effective and that would be expected to have a material impact on the entity
in the current or future reporting periods and on foreseeable future transactions.
Note 2
Company details
The registered office of the Company is:
Address:
Street:
Postal:
Telephone:
Suite 12, 11 Ventnor Avenue, WEST PERTH WA 6005
PO Box 1240, WEST PERTH WA 6847
+61 (0)8 6245 2050
P a g e | 48
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 3
Business combinations
a. Keras (Gold) Australia Pty Limited (Keras)
ANNUAL REPORT
30 June 2018
On 13 June 2017, Calidus Resources Limited (formerly Pharmanet Group Ltd) (Calidus), acquired 100% of the ordinary share
capital and voting rights of (Keras) as described in the prospectus issued 5 May 2017.
Under AASB 3 Business Combinations (AASB 3) this is treated as a 'reverse acquisition', whereby the accounting acquirer is
deemed to be Keras and Calidus is deemed to be the accounting acquiree. Refer to the effect upon the basis of preparation
at note i.a.ii Reverse acquisition.
b. Acquisition consideration
As consideration for the issued capital of Keras (Gold) Australia Pty Limited, issued 250,000,000 ordinary shares to the
vendors of Keras (Gold) Australia Pty Limited.
c. Fair value of consideration transferred
Under the principles of AASB 3, the transaction between Calidus and Keras (Gold) Australia Pty Limited is being treated as a
reverse acquisition. As such, the assets and liabilities of the legal subsidiary (the accounting acquirer), being Keras (Gold)
Australia Pty Limited, are measured at their pre‐combination carrying amounts. The assets and liabilities of the legal parent
(accounting acquiree), being Calidus are measured at fair value on the date of acquisition.
The consideration in a reverse acquisition is deemed to have been incurred by the legal subsidiary (Keras (Gold) Australia
Pty Limited) in the form of equity instruments issued to the shareholders of the legal parent entity (Calidus). The
acquisition‐date fair value of the consideration transferred has been determined by reference to the fair value of the
number of shares the legal subsidiary (Keras (Gold) Australia Pty Limited) would have issued to the legal parent entity
Calidus to obtain the same ownership interest in the combined entity.
d. Goodwill (Corporate transaction accounting expense)
Goodwill is calculated as the difference between the fair value of consideration transferred less the fair value of the
identified net assets of the acquired. Details of the transaction are as follows:
Fair value of consideration transferred
Fair value of assets and liabilities held at acquisition date:
Cash
Other current assets
Trade and other payables
Provisions
Fair value of identifiable assets and liabilities assumed
Goodwill (Corporate transaction accounting expense)
2017
Fair value
$
8,053,521
8,207,573
44,968
(532,469)
(379,650)
7,340,422
713,099
The goodwill calculated above represents goodwill in Calidus, however this has not been recognised as Calidus (the
accounting acquiree) is not a business. Instead the deemed fair value of the interest in Keras (Gold) Australia Pty Limited
issued to existing Calidus shareholders to effect the combination (the consideration for the acquisition of the public shell
company) was recognised as an expense in the income statement. This expense has been presented as a "Corporate
transaction accounting expense" on the face of the consolidated statement of profit or loss and comprehensive income".
P a g e | 49
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 4
Business combinations
a. Keras (Pilbara) Gold Pty Ltd
On 10 October 2016, Keras acquired 100% of the ordinary share capital and voting rights in its subsidiary Keras (Pilbara)
Gold Pty Ltd (Keras Pilbara) (Formerly known as Arcadia Minerals Pty Ltd).
b. Acquisition consideration
As consideration for the issued capital of Keras Pilbara, Keras paid $700,000 in cash and issued 100,000,000 shares in Keras
Resources PLC valuated at $1,046,126. Keras also assumed the liabilities in Keras Pilbara of $702,406 and repaid these
amounts in full.
c. Acquisition premium
The identifiable net assets of the acquiree are remeasured to their fair value on the date of acquisition (i.e. the date that
control passes). Acquisition premium is calculated as the difference between the fair value of consideration transferred less
the fair value of the identified net assets of the acquired. Details of the transaction are as follows:
Fair value of:
Cash consideration to acquire 100% of Keras Pilbara
Share consideration to acquire 100% of Keras Pilbara
Fair value of assets and liabilities held at acquisition date:
Cash
Property, plant and equipment
Exploration assets
Other non‐current assets
Trade and other payables
Loans (net of loans deemed to form part of consideration 2a.i)
Fair value of identifiable assets and liabilities assumed
Acquisition premium expensed to statement of Profit and Loss
2017
Fair value
$
700,000
1,046,126
1,746,126
2,576
15,000
1,750,000
840
52
(702,406)
1,066,062
680,064
P a g e | 50
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 5
Revenue and other income
a. Revenue
Revenue
Reimbursements
Interest
Note 6
Profit / (loss) before income tax
The following significant revenue and expense items are relevant in explaining
the financial performance:
a. Employment costs:
Directors fees
Superannuation expenses / (reimbursement)
Wages and salaries
Other employment related costs
ANNUAL REPORT
30 June 2018
2018
$
‐
‐
105,479
2017
$
1,569,735
109,379
152
105,479
1,679,266
2018
$
2017
$
306,250
8,654
65,298
‐
380,202
25,706
1,777
17,622
‐
45,105
P a g e | 51
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 7
Income tax
a.
Income tax expense / (benefit)
Current tax
Deferred tax
Deferred income tax expense included in income tax expense comprises:
Increase / (decrease) in deferred tax assets
7e
(Increase) / decrease in deferred tax liabilities
Note
2018
$
2017
$
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
b. Reconciliation of income tax expense to prima facie tax payable
The prima facie tax payable / (benefit) on loss from ordinary activities before
income tax is reconciled to the income tax expense as follows:
Prima facie tax on operating loss at 30% (2017: 27.5%)
(862,241)
(676,627)
Add / (Less)
Tax effect of:
Non‐deductible share‐based payments
Non‐deductible expenses
Deferred tax asset not brought to account
Income tax expense / (benefit) attributable to operating loss
c. The applicable weighted average effective tax rates attributable to operating
profit are as follows
d. Balance of franking account at year end of the legal parent
189,084
1,583
671,574
2,515
‐
674,112
‐
%
‐
$
nil
‐
%
‐
$
nil
P a g e | 52
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 7
Income tax (cont.)
e. Deferred tax assets
Tax losses
Inventory
Provisions and accruals
Capital raising costs
Set‐off deferred tax liabilities
Net deferred tax assets
Less deferred tax assets not recognised
Net tax assets
f. Deferred tax liabilities
Exploration expenditure
g. Tax losses and deductible temporary differences
Unused tax losses and deductible temporary differences for which no
deferred tax asset has been recognised:
ANNUAL REPORT
30 June 2018
Note
2018
$
2017
$
6,446,151
1,851,116
‐
119,895
166,669
‐
177,651
2,475
6,732,715
2,031,242
7f
(1,717,517)
(217,173)
5,015,198
1,814,069
(5,015,198)
(1,814,069)
‐
‐
1,717,517
1,717,517
217,173
217,173
21,487,169
7,386,335
21,487,169
7,386,335
Potential deferred tax assets attributable to tax losses have not been brought to account at 30 June 2018 because the directors
do not believe it is appropriate to regard realisation of the deferred tax assets as probable at this point in time. These benefits
will only be obtained if:
i.
the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit from the
deductions for the loss to be realised;
ii. the company continues to comply with conditions for deductibility imposed by law; and
iii. no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for the loss.
P a g e | 53
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 8
Earnings per share (EPS)
a. Reconciliation of earnings to profit or loss
(Loss) / profit for the year
Less: loss attributable to non‐controlling equity interest
Note
2018
$
2017
$
(2,874,136)
(2,460,463)
‐
‐
(Loss) / profit used in the calculation of basic and diluted EPS
(2,874,136)
(2,460,463)
b. Weighted average number of ordinary shares outstanding during the year
used in calculation of basic EPS
8e
1,054,187,623
126,754,199
2018
No.
2017
No.
c. Earnings per share
Basic EPS (cents per share)
2018
₵
2017
₵
8d
(0.27)
(1.94)
d. At the end of the 2018 financial year, the Group has 199,000,000 unissued shares under options (2017: 192,500,000), 12,000,000
performance rights on issue (2017: nil) and 275,000,000 performance shares on issue (2017: 525,000,000). The Group does not
report diluted earnings per share on annual losses generated by the Group. During the 2018 financial year the Group's unissued
shares under option and partly‐paid shares were anti‐dilutive.
e. As noted in 1a.ii, the equity structure in these consolidated financial statements following the reverse acquisition reflects the
equity structure of Calidus, being the legal acquirer (the accounting acquiree), including the equity interests issued by Calidus to
effect the business combination.
i. The basic EPS for the period ended 30 June 2018 shall be calculated by dividing:
(1) the profit or loss of the Calidus attributable to ordinary shareholders in each of those periods by
(2) the Calidus’s historical weighted average number of ordinary shares outstanding multiplied by the exchange ratio
established in the acquisition agreement.
ii.
In calculating the weighted average number of ordinary shares outstanding (the denominator of the EPS calculation) for the
year ended 30 June 2017:
(1) the number of ordinary shares outstanding from 1 October 2016 to 13 June 2017 ( deemed acquisition date) are
computed on the basis of the weighted average number of ordinary shares of Keras (Gold) Australia Pty Limited, (legal
acquiree / accounting acquirer) outstanding during the period multiplied by the exchange ratio established in the
acquisition agreement; and
(2) the number of ordinary shares outstanding from 13 June 2017 to the end of year shall be the actual number of ordinary
shares of Calidus outstanding during that period.
P a g e | 54
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 9
Cash and cash equivalents
a. Current
Cash at bank
b. Reconciliation of cash
Cash at the end of the financial year as shown in the statement of cash flows
is reconciled to items in the statement of financial position as follows:
Cash and cash equivalents
ANNUAL REPORT
30 June 2018
Note
2018
$
2017
$
6,142,247
4,441,885
6,142,247
4,441,885
6,142,247
4,441,885
6,142,247
4,441,885
c. The Group's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note 25
Financial risk management.
d. Cash Flow Information
Note
2018
$
2017
$
i. Reconciliation of cash flow from operations to (loss)/profit after income tax
Loss after income tax
(2,874,136)
(2,460,463)
Cash flows excluded from (loss)/profit attributable to operating activities
‐
‐
Non‐cash flows in (loss)/profit from ordinary activities:
Depreciation and amortisation
Corporate transaction accounting expense
Non‐cash finance costs
Exploration expenditure expensed
Acquisition premium expensed to statement of profit and loss
Foreign exchange loss
Share‐based payments
Impairment expense
Other expenses
3d
4c
19
Changes in assets and liabilities, net of the effects of purchase and disposal of
subsidiaries:
(Increase)/decrease in receivables
(Increase)/decrease in other assets and prepayments
(Increase)/decrease in inventories
(Increase)/decrease in tenement assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Cash flow from operations
32,587
‐
‐
676,003
‐
‐
630,282
53,032
3,659
713,099
91,486
‐
680,064
35,724
9,145
‐
‐
(17,793)
(113,458)
(158,948)
10,078
‐
‐
62,111
1,025,970
(1,085)
(122,936)
(797,444)
10,905
‐
(1,697,643)
(814,475)
P a g e | 55
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 9
Cash and cash equivalents (cont)
e. Credit standby facilities
The Group has no credit standby facilities.
f. Non‐cash investing and financing activities
2016
$
2014
$
Refer to note 9g below.
During the current and prior period Keras (Gold) Australia Pty Limited did not have a bank account and as such the sole
Director’s and Calidus Resources Limited’s (formerly Pharmanet Group) bank accounts were used to facilitate the
transactions of the entity pre‐settlement (14 June 2017).
These transactions have been treated as cash flows of Keras (Gold) Australia Pty Limited for the purposes of disclosure in
this financial report.
g. Acquisition of Calidus
Note
2017
$
On 13 June 2017, Calidus, acquired 100% of the ordinary share capital and voting rights of Keras
(Gold) Australia Pty Limited as described in Note 3 Business combinations:
i. Purchase consideration:
Theoretical equity consideration issued under a reverse acquisition
3d
8,053,521
Total consideration
ii. Cash acquired:
Cash held by Calidus at date of acquisition
Cash in‐flow on acquisition
iii. Assets and liabilities held at acquisition date (excluding cash) excluded from the consolidated
statement of cash flow:
Other current assets
Trade and other payables
Provisions
8,053,521
3d
8,207,572
8,207,572
3d
3d
3d
44,968
(532,469)
(379,650)
P a g e | 56
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 9
Cash and cash equivalents (cont)
h. Acquisition of Keras Pilbara
On 10 October 2016. Keras (Gold) Australia Pty Ltd, acquired 100% of the ordinary shares and
voting rights of Keras (Pilbara) Gold Pty Ltd as described in Note 3 Business combinations:
i.
Purchase consideration:
Cash consideration
Share consideration
Total consideration
ii.
Cash acquired:
Cash held by Keras Pilbara at date of acquisition
Cash in‐flow on acquisition
iii.
Assets and liabilities held at acquisition date (excluding cash) excluded from the
consolidated statement of cash flow:
Property, plant and equipment
Exploration assets
Other non‐current assets
Trade and other payables
Loans (net of loans deemed to form part of consideration 2a.i)
Note 10
Trade and other receivables
a. Current
Trade Receivables
Sundry Debtors
GST Receivable
4c
4c
4c
4c
4c
4c
4c
4c
2018
$
‐
2,400
299,498
301,898
ANNUAL REPORT
30 June 2018
2016
$
2017
$
700,000
1,046,126
1,746,126
2,576
‐
15,000
1,750,000
840
52
(702,406)
2017
$
977
27,318
160,144
188,439
b. The Group's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note 25
Financial risk management.
P a g e | 57
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 11 Other assets
a. Current
Prepayments
b. Non‐current
Performance guarantee
Note 12
Property, plant, and equipment
a. Non‐current
Motor Vehicles
Accumulated depreciation
Computer and Software
BAccumulated depreciation
Mining equipment
BAccumulated depreciation
Total plant and equipment
2018
$
‐
‐
24,993
24,993
2018
$
76,104
(15,098)
61,006
32,575
(8,080)
24,495
97,618
(7,742)
89,876
175,377
2017
$
10,078
10,078
24,993
24,993
2017
$
‐
‐
‐
17,770
(12,124)
5,646
51,782
(1,068)
50,714
56,360
b. Movements in Carrying Amounts
Carrying amount at the beginning of year
Additions
Disposals
Impairment
Depreciation expense
Carrying amount at the end of year
Motor Vehicles
$
Computer and
software
$
‐
76,104
‐
‐
(15,098)
61,006
5,646
32,575
‐
(4,307)
(9,419)
24,495
Mining equipment
$
50,714
82,617
‐
(35,385)
(8,070)
Total
$
56,360
191,296
‐
(39,692)
(32,587)
89,876
175,377
P a g e | 58
0
1
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 13
Exploration and evaluation assets
a. Non‐current
Exploration expenditure capitalised:
Exploration and evaluation phase at cost
Net carrying value
b. Movements in carrying amounts
Balance at the beginning of year
Expenditure during the period
Business acquisition
Carrying amount at the end of year
Note 14
Trade and other payables
a. Current
Unsecured
Trade payables
Accruals
Employment related payables
Other payables
ANNUAL REPORT
30 June 2018
2018
$
2017
$
9,985,029
2,781,809
9,985,029
2,781,809
2,781,809
7,203,220
250,000
781,809
4c
‐
1,750,000
9,985,029
2,781,809
Note
2018
$
2017
$
14b
1,141,171
20,500
44,984
‐
873,701
266,352
1,674
79
1,206,655
1,141,806
b. Trade payables are non‐interest bearing and usually settled within the lower of terms of trade or 30 days.
c. The Group's exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities are disclosed in note 25
2018
$
379,650
10,905
2017
$
379,650
‐
390,555
379,650
Financial risk management.
Note 15
Provision
a. Current
Provision for Stamp Duty
Provision for Annual Leave
P a g e | 59
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 16
Issued capital
Note
2018
No.
2017
No.
2018
$
2017
$
Fully paid ordinary shares at no par value
1,276,453,495
717,736,035
21,657,500
10,363,420
a. Ordinary shares
At the beginning of the period
717,736,035
9,000,000
10,363,420
308,650
Shares issued during the year:
Issue of shares to Keras Resources
PLC
Balance before reverse acquisition
Elimination of existing legal
acquiree (Keras (Gold) Australia Pty
Limited) shares
Shares of legal acquirer (Calidus) at
acquisition date
Issue of shares to Keras (Gold)
Australia Pty vendors
Issue of Lead Manager shares
Issue of Epminex shares
Issue of Epminex shares
Tranche 1 – Capital raising
Issue of Novo shares
Issue of Haoma shares
Tranche 2 – Capital raising
Conversion of performance shares
into ordinary shares
Exercise of options
Exercise of options
Issue of Gardner shares
Transaction costs relating to share
issues
‐
‐
‐
‐
‐
‐
‐
11,687,669
20,687,669
(20,687,669)
402,676,035
225,000,000
90,000,000
60,000
‐
‐
‐
‐
‐
‐
‐
2,542,312
2,850,962
‐
‐
8,053,521
1,800,000
1,200
30,000
95,061,415
20,000,000
37,500,000
148,841,045
250,000,000
500,000
5,000,000
1,785,000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
720
3,897,517
840,000
750,000
6,102,483
‐
12,500
204,543
76,755
(535,895)
(2,342,263)
At reporting date
1,276,453,495
717,736,035
21,712,043
10,363,420
b. Options
At the beginning of the period
192,500,000
‐
Options of legal acquirer (Calidus) at
acquisition date
Issue of options to directors
Issue of Performance Rights
Options Exercised
At reporting date
‐
‐
168,500,000
24,000,000
12,000,000
(5,500,000)
‐
199,000,000
192,500,000
c. Performance shares
Performance Shares (Milestone 1)
‐
250,000,000
Performance Shares (Milestone 2)
275,000,000
275,000,000
At reporting date
275,000,000
525,000,000
9,145
‐
190,437
25,816
(54,543)
170,855
‐
‐
‐
‐
‐
9,145
9,145
‐
‐
‐
P a g e | 60
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 16
Issued capital (continued)
ANNUAL REPORT
30 June 2018
Note
2018
No.
2017
No.
2018
$
2017
$
d. Employee shares
Employee Securities Incentive Plan
At reporting date
17,500,000
17,500,000
‐
‐
414,029
414,029
‐
‐
The Company has 275,000,000 performance shares on issue with the following milestones:
Milestone
Milestone 2: The performance shares will convert into fully paid shares upon the earlier of:
The announcement of a positive pre‐feasibility study which demonstrates the project is
commercially viable; or
Sale of all or part of the Warrawoona Gold Project for a cash consideration of at least
$50,000,000.
This must be achieved on or before 5:00pm (WST) on the date, which is 36 months after the issue
date.
Number to be
converted
No.
275,000,000
275,000,000
No value has been allocated to the performance shares due to the significant uncertainty of meeting the performance
milestones which are based on future events. To date, none of the Milestones have been met.
e. Capital Management
The Directors' objectives when managing capital are to ensure that the Group can maintain a capital base so as to maintain
investor, creditor and market confidence and to sustain future development of the business. The Board of Directors
monitors the availability of liquid funds in order to meet its short term commitments.
The focus of the Group's capital risk management is the current working capital position against the requirements of the
Group in respect to its operations, software developments programmes, and corporate overheads. The Group's strategy is
to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating
appropriate capital raisings as required.
The working capital position of the Group were as follows:
Note
9
10
14
2018
$
2017
$
6,142,247
301,898
4,441,885
188,439
(1,206,655)
(1,141,806)
5,237,490
3,488,518
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Working capital position
P a g e | 61
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 17
Employee Shares
2018
$
Employee Shares
19a
414,029
a. Employee shares
Balance at the beginning of the financial year
Equity based payments
Balance at the end of the financial year
414,029
2018
$
‐
414,029
414,029
19
2017
$
‐
‐
2017
$
‐
‐
‐
The Employee Shares note records items recognised as expenses on the value of employee shares issued under the Employee
Shares Incentive Plan.
Note 18 Reserves
2018
$
Option reserve
18a
170,855
a. Options Reserve
Balance at the beginning of the financial year
Equity based payments
Options exercised
Balance at the end of the financial year
170,855
2018
$
9,145
216,253
(54,543)
170,855
19
2017
$
9,145
9,145
2017
$
‐
9,145
‐
9,145
The option reserve records items recognised as expenses on the value of directors and employee equity issues.
At 30 June 2018 the following options are outstanding:
87,500,000 listed options exercisable at 2.5 cents expiring on or before 13 June 2019 were issued as part of the
prospectus dated 5 May 2017.
30,500,000 unlisted options exercisable at 2.5 cents expiring on or before 13 June 2020.
50,000,000 unlisted options exercisable at 2 cents expiring on or before 18 April 2021 were issued to the lead
manager as detailed in the prospectus dated 5 May 2017.
7,000,000 unlisted options exercisable 12 months from issue date at 3 cents expiring on or before 13 June 2020 were
issued to key management personnel.
12,000,000 unlisted options exercisable 24 months from issue date at 3 cents expiring on or before 13 June 2020
were issued to key management personnel.
12,000,000 performance rights convert into fully paid ordinary shares based on the difference between the market
price at the time of exercise and 4.1 cents per ordinary shares. Rights must be held for 12 month before conversion
and expire 13 June 2021.
P a g e | 62
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 19
Share‐based payments
Share‐based payment expense
Net share‐based payment recognised in Profit or Loss
Note
18a
Share‐based payment expense recognised in exploration and evaluation
assets
19e.ii(i) to
19e.ii(iv)
Gross share‐based transactions
a. Share‐based payment arrangements in effect during the period
i. Share‐based payments recognized in profit or loss
(i)
Employee Securities Incentive Plan – Employee Shares
ANNUAL REPORT
30 June 2018
2018
$
630,282
630,282
2017
$
9,145
9,145
1,667,475
‐
2,297,757
9,145
In consideration for retaining key quality employee of Calidus, the Company has issued 17,500,000 fully paid
ordinary shares under the Employee Securities Incentive
Number of Shares
Vesting Date
Issue Price
Holding Lock Period
7,500,000
5,000,000
5,000,000
18 August 2018
18 August 2018
20 February 2019
$0.03
$0.03
$0.04
12 months from issue date
12 months from issue date
12 months from issue date
The fair value of the employee shares issued is deemed to represent the value of the employee services received
over the vesting period. The employees shares were valued using the Black‐Scholes option pricing model,
applying the following inputs:
Grant date:
Grant date share price:
Option exercise price:
18 August 2017
18 August 2017
20 February 2018
$0.034
$0.030
$0.034
$0.030
$0.041
$0.040
Number of options issued:
7,500,000
5,000,000
5,000,000
Term (years):
Expected share price volatility:
Risk‐free interest rate:
Value per option
15.00
89.96%
2.54%
15.00
89.96%
2.54%
$0.0319
$0.0319
15
95.16%
2.74%
$0.0389
Volatility has been based comparable companies that have gone through a recapitalisation recently.
P a g e | 63
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 19 Share‐based payments (continued)
(ii) Director Options
In consideration for acting as a director of Calidus, the Company issued 24,000,000 Options with terms and
summaries below and further detailed in Note 19c:
Number under Option
Date of Expiry
Exercise Price
Vesting Terms
12,000,000
12,000,000
13 June 2020
13 June 2020
$0.03
$0.03
12 months from issue date
24 months from issue date
The fair value of the options granted to employees is deemed to represent the value of the employee services
received over the vesting period. The options were valued using the Black‐Scholes option pricing model, applying
the following inputs:
Grant date:
Grant date share price:
Option exercise price:
Number of options issued:
Term (years):
Expected share price volatility:
Risk‐free interest rate:
Value per option
13 June 2017
$0.020
$0.030
24,000,000
3.00
100.46%
1.65%
$0.0109
Volatility has been based comparable companies that have gone through a recapitalisation recently.
(iii) Employee Securities Incentive Plan – Employee Performance Rights
In consideration for retaining key quality employee of Calidus, the Company has issued 12,000,000 Performance
Rights under the Employee Securities Incentive
Number of Performance
Rights
Date of Expiry
Exercise Price
Holding Lock Period
12,000,000
13 June 2021
$0.041
12 months from issue date
The fair value of the employee performance rights granted to employees is deemed to represent the value of the
employee services received over the vesting period. The employee performance rights were valued using the
Black‐Scholes option pricing model, applying the following inputs:
Grant date:
Grant date share price:
Option exercise price:
Number of options issued:
Term (years):
Expected share price volatility:
Risk‐free interest rate:
Value per option
13 June 2018
$0.038
$0.041
12,000,000
3.00
90.24%
2.09%
$0.0245
Volatility has been based comparable companies that have gone through a recapitalisation recently.
P a g e | 64
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note
19 Share‐based payments (continued)
ii. Share‐based payments recognised in exploration and evaluation assets
(i)
Novo Shares
ANNUAL REPORT
30 June 2018
On 6 November 2017, the Company issued 20,000,000 shares at $0.042 per share, valued at $840,000, to Novo
Resources Corp in consideration for the right to acquire 70% interest in Exploration Licences 45/3381, 45/4194,
45/4622, 45/4666 and Prospecting Licences 45/2661, 45/2662, 45/2781 and all related technical information.
(ii) Haoma Shares
On 6 November 2017, the Company issued 37,500,000 shares at $0.02 per share, valued at $750,000, and paid
$500,000 in cash to Haoma Mining NL in consideration for the Haoma tenements.
(iii) Epminex Shares
On 27 July 2017, the Company issued 30,000 shares at $0.024 per share, valued at $720, to Epminex in
consideration for the acquisition of a 50% interest in the exploration licenses 45/4555 and 45/4843.
(iv) Gardner Mining Shares
On 29 March 2018, the Company issued 1,785,000 shares at $0.043 per share, valued at $76,755, to Gardner
Mining Pty Ltd in consideration for the acquisition of 100% interest in the tenements E45/3615 and E4236.
b. Movement in share‐based payment arrangements during the period
A summary of the movements of all company options issued as share‐based payments is as follows:
2018
2017
Number of
Options
Weighted Average
Exercise Price
Number of Options
Weighted Average
Exercise Price
Outstanding at the beginning of the year
105,000,000
$0.024
‐
‐
Assumed on business combination
Granted
Exercised
Expired
‐
‐
‐
‐
81,000,000
24,000,000
$0.022
$0.030
(5,500,000)
($0.030)
‐
‐
‐
‐
‐
‐
Outstanding at year‐end
99,500,000
$0.024
105,000,000
$0.024
Exercisable at year‐end
99,500,000
$0.024
105,000,000
$0.024
i. The weighted average exercise price of outstanding options at the end of the reporting period was $0.024.
ii. The fair value of the options granted is deemed to represent the value of the employee services received over the
vesting period.
c. Fair value of options grants during the period
No options were issued during the year.
P a g e | 65
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 20
Controlled entities
a. Legal parent entity
Calidus Resources Limited is the ultimate parent of the Group (refer to note 1a.ii).
ii. Legal subsidiaries
Country of
Incorporation
Keras (Gold) Australia Pty Limited
Keras (Pilbara) Gold Pty Limited
Australia
Australia
Class of
Shares
Ordinary
Ordinary
Percentage Owned
2018
100.0
100.0
2017
100.0
100.0
b. Accounting parent entity
Keras (Gold) Australia Pty Limited is the accounting parent of the Group (refer to note 1a.ii).
ii. Accounting subsidiaries
Calidus Resources Limited
Keras (Pilbara) Gold Pty Limited
Country of
Incorporation
Australia
Australia
Class of
Shares
Ordinary
Ordinary
Percentage Controlled
2017
2018
100.0
100.0
100.0
100.0
c.
Investments in subsidiaries are accounted for at cost.
Note 21 Key Management Personnel compensation (KMP)
Managing Director
The names are positions of KMP are as follows:
Mr David Reeves
Mr Mark Connelly
Mr Keith Coughlan
Mr Peter Hepburn‐Brown
Mr Adam Miethke
Ms Jane Allen
Mr James Carter
Non‐executive Director
Non‐executive Director
Geology Manager
Non‐executive Chairman (Appointed 20 February 2018)
Non‐executive Director (Passed away 2 September 2018)
Chief Financial Officers & Co Company Secretary (Appointed on 13 June 2017)
Information regarding individual directors and executives’ compensation and some equity instruments disclosures as required
by the Corporations Regulations 2M.3.03 is provided in the Remuneration report table on page 24.
Short‐term employee benefits
Post‐employment benefits
Share‐based payments
Other long‐term benefits
Termination benefits
Total
2018
$
574,355
6,911
604,466
‐
‐
2017
$
80,537
‐
9,145
‐
‐
1,185,732
89,682
P a g e | 66
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 22 Related party transactions
Transactions between related parties are on normal commercial terms and
conditions no more favourable than those available to other parties unless
otherwise stated.
Office Rent ‐ Wilgus Investments Pty Ltd
Management Fee ‐ Keras Resources PLC
Discovery Capital & Otsana Mandate – Joint Lead Manager fee
Discovery Capital – Consulting Fees
Otsana Mandate – Corporate advisory fee (a)
ANNUAL REPORT
30 June 2018
2018
$
2017
$
60,000
‐
‐
207,585
52,300
377,066
575,451
‐
‐
1,800,000
(a) On successful completion of the acquisition of Keras Australia and re‐listing of the Company. Otsana was issued
90,000,000 shares under the facilitator offer in lieu of corporate advisory and success fee. Refer to Note 18 Issued
Capital.
Refer to the Remuneration Report point 14.8 for further information regarding the terms of the related party transactions.
Note 23
Commitments
Exploration expenditure commitments payable:
Not later than 12 months
Between 12 months and five years
Later than five years
Total Exploration tenement minimum expenditure requirements
Operating lease commitments for premises due:
Not later than 12 months
Between 12 months and five years
Later than five years
Total operating lease commitments
Note 24 Operating segments
2018
$
2017
$
583,675
1,618,484
2,548,743
4,750,902
34,200
‐
‐
34,200
‐
‐
‐
‐
‐
‐
‐
2017
$
2016
$
For management purposes, the Group’s operations are organised into one operating segment domiciled in the same country,
which involves the exploration and exploitation of Gold minerals in Australia. All of the Group’s activities are inter‐related, and
discrete financial information is reported to the Managing Director as a single segment. Accordingly, all significant operating
decisions are based upon analysis of the Group as one segment. The financial results from this segment are equivalent to the
statement of comprehensive income. The accounting policies applied for internal reporting purposes are consistent with those
applied in preparation of these financial statements.
P a g e | 67
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 25
Financial risk management
a. Financial Risk Management Policies
This note presents information about the Group's exposure to each of the above risks, its objectives, policies and
procedures for measuring and managing risk, and the management of capital.
The Group's financial instruments consist mainly of deposits with banks, short‐term investments, and accounts payable and
receivable.
The Group does not speculate in the trading of derivative instruments.
A summary of the Group's Financial Assets and Liabilities is shown below:
Floating
Interest
Rate
$
Fixed
Interest
Rate
$
Non‐
interest
Bearing
$
2018
Total
$
Floating
Interest
Rate
$
Fixed
Interest
Rate
$
Non‐
interest
Bearing
$
2017
Total
$
Financial Assets
Cash and cash equivalents
6,142,247
Trade and other receivables
Financial assets
‐
‐
Total Financial Assets
6,142,247
Financial Liabilities
Financial liabilities at
amortised cost
Trade and other payables
Short‐term financial liabilities
Long‐term financial liabilities
Total Financial Liabilities
‐
‐
‐
‐
Net Financial
Assets/(Liabilities)
6,142,247
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
6,142,247
4,441,885
301,898
301,898
‐
‐
‐
‐
301,898
6,444,145
4,441,885
1,206,655
1,206,655
‐
‐
‐
‐
1,206,655
1,206,655
‐
‐
‐
‐
(904,757)
5,237,490
4,441,885
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
4,441,885
188,439
188,439
‐
‐
188,439
4,630,324
1,141,806
1,141,806
‐
‐
‐
‐
1,141,806
1,141,806
(953,367)
3,488,518
P a g e | 68
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 25 Financial risk management (cont.)
b. Specific Financial Risk Exposures and Management
ANNUAL REPORT
30 June 2018
The main risk the Group is exposed to through its financial instruments are credit risk, liquidity risk and market risk
consisting of interest rate, foreign currency risk and equity price risk.
The Board of directors has overall responsibility for the establishment and oversight of the risk management framework.
The Board adopts practices designed to identify significant areas of business risk and to effectively manage those risks in
accordance with the Group's risk profile. This includes assessing, monitoring and managing risks for the Group and setting
appropriate risk limits and controls. The Group is not of a size nor is its affairs of such complexity to justify the
establishment of a formal system for risk management and associated controls. Instead, the Board approves all
expenditure, is intimately acquainted with all operations and discuss all relevant issues at the Board meetings. The
operational and other compliance risk management have also been assessed and found to be operating efficiently and
effectively.
ii. Credit risk
Exposure to credit risk relating to financial assets arises from the potential non‐performance by counterparties of
contract obligations that could lead to a financial loss to the Group.
The Group does not have any material credit risk exposure to any single receivable or group of receivables under
financial instruments entered into by the Group.
The objective of the Group is to minimise the risk of loss from credit risk. Although revenue from operations is minimal,
the Group trades only with creditworthy third parties.
In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad
debts is insignificant. The Group's maximum credit risk exposure is limited to the carrying value of its financial assets as
indicated on the statement of financial position.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade
and other receivables.
Credit risk exposures
The maximum exposure to credit risk is that to its alliance partners and that is limited to the carrying amount, net
of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the
financial statements.
Credit risk related to balances with banks and other financial institutions is managed by the Group in accordance
with approved Board policy. Such policy requires that surplus funds are only invested with financial institutions
residing in Australia, where ever possible.
Impairment losses
The ageing of the Group's trade and other receivables at reporting date was as follows:
P a g e | 69
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 25 Financial risk management (cont.)
Gross
2018
$
Impaired
2018
$
Past due but not
impaired
2018
$
Net
2018
$
‐
‐
‐
‐
‐
‐
301,898
301,898
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
301,898
301,898
‐
‐
‐
‐
‐
‐
‐
‐
Trade receivables
Not past due
Past due up to 15 days
Past due 15 days to 3 months
Past due over 3 months
Less intra‐Group balances
Other receivables
Not past due
Total
iii. Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities.
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash
and marketable securities are available to meet the current and future commitments of the Group.
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group's reputation.
Typically the Group ensures that it has sufficient cash to meet expected operational expenses for a period of 60 days,
including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot
reasonably be predicted, such as natural disasters.
P a g e | 70
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 25 Financial risk management (cont.)
ANNUAL REPORT
30 June 2018
Other than the trust account insurer liabilities, the financial liabilities of the Group are confined to trade and other
payables as disclosed in the statement of financial position. All trade and other payables are non‐interest bearing and
due within 30 days of the reporting date.
Contractual Maturities
The following are the contractual maturities of financial liabilities of the Group:
Within 1 Year
Greater Than 1 Year
2018
$
2017
$
2018
$
2017
$
Total
2018
$
2017
$
Financial liabilities due for payment
Trade and other payables
1,206,655
1,141,806
Borrowings
‐
‐
Total contractual outflows
1,206,655
1,141,806
Financial assets
Cash and cash equivalents
Trade and other receivables
6,142,247
4,441,885
301,898
188,439
Total anticipated inflows
6,444,145
4,630,324
Net (outflow)/inflow on financial
instruments
5,237,490
3,488,518
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
1,206,655
1,141,806
‐
‐
1,206,655
1,141,806
6,142,247
4,441,885
301,898
188,439
6,444,145
4,630,324
5,237,490
3,488,518
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier or at
significantly different amounts.
iv. Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Group's income or the value of its holdings of financial instruments. The objective of market risk
management is to manage and control market risk exposures within acceptable parameters, while optimising the
return.
The Board meets on a regular basis and considers the Group's interest rate risk.
(1) Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the
reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed
rate financial instruments. The Group is also exposed to earnings volatility on floating rate instruments.
Due to the low amount of debt exposed to floating interest rates, interest rate risk is not considered a high risk to
the Group. Movement in interest rates on the Group's financial liabilities and assets is not material.
(2) Foreign exchange risk
Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial instrument
fluctuating due to movement in foreign exchange rates of currencies in which the Group holds financial
instruments which are other than the AUD functional currency of the Group.
The Group has no material exposure to foreign exchange risk.
(3) Price risk
Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market prices. The Group does not presently hold material amounts subject to price risk. As such the
Board considers price risk as a low risk to the Group.
P a g e | 71
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 25 Financial risk management (cont.)
v. Sensitivity Analyses
The following table illustrates sensitivities to the Group's exposures to changes in interest rates. The table indicates the
impact on how profit and equity values reported at balance sheet date would have been affected by changes in the
relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the
movement in a particular variable is independent of other variables.
(1) Interest rates
Year ended 30 June 2018
±50 basis points change in interest rates
Year ended 30 June 2017
±50 basis points change in interest rates
vi. Net Fair Values
(1) Fair value estimation
Profit
$
Equity
$
± 30,711
± 30,711
± 22,209
± 22,209
The fair values of financial assets and financial liabilities are presented in the table in note 25a and can be
compared to their carrying values as presented in the statement of financial position. Fair values are those
amounts at which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an
arm's length transaction.
Financial instruments whose carrying value is equivalent to fair value due to their nature include:
Cash and cash equivalents;
Trade and other receivables; and
Trade and other payables.
The methods and assumptions used in determining the fair values of financial instruments are disclosed in the
accounting policy notes specific to the asset or liability.
Note 26
Events subsequent to reporting date
On 28 August 2018, the Company announced that it had entered into a binding letter of intent to dispose of the Conglomerate
Gold Rights over a portfolio of eight exploration licenses. In consideration the Company will receive a non‐refundable payment
of CDN$10,000 and will be issued 7,000,000 common shares of Pacton Gold Inc valued at CDN$3.5million.
All shares will be subject to a 4‐month escrow period, with 25% of the shares subject to further escrow pending grant of the
exploration licence application. Calidus may be entitled to the issue of up to 3,000,000 additional common shares in the capital
of Pacton Gold Inc during the period 12 months after the date of execution of the definitive agreement dependent on the
performance of Pactons Gold Inc share price.
There are no other material events subsequent to reporting date.
P a g e | 72
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 27
Contingent liabilities
a. Royalties
ANNUAL REPORT
30 June 2018
Keras Gold has obligation to pay royalties, based on minerals produced, pursuant to the acquisition agreement for
Arcadia Minerals Pty Ltd (now Keras (Pilbara) Gold Pty Ltd). The royalties will only become due and payable when and if
mining commences.
Under part of tenements acquired from Haoma Mining NL (see ASX Announcement 6 November 2017 Commencement
of NOVO JV and exercise of Haoma Option) there is obligation to pay a 1.25% royalty of profit (after all expenses
including development costs and capital costs) of a producing mine on the tenements acquired from Haoma. Details of
this royalty are disclosed in the Section 8 of the Company’s prospectus dated 8 May 2017.
On 6 November 2017 the Company announced that it had commenced the NOVO JV. Calidus may earn a 70% interest in
the Novo tenements by spending $2 million on the tenements over the next 3 years (Expenditure Commitment). At the
completion of the Expenditure Commitment, each party will be subject to a fund or dilute obligation in the respective
proportions on the Novo Tenements with any interest diluting below 10% converting to a 1% net smelter royalty.
Note 28 Auditor’s remuneration
Remuneration of the auditor of the company for:
Auditing or reviewing the financial reports
Other services provided by a related practice of the auditor
2018
$
45,666
‐
45,666
2017
$
27,071
28,500
55,571
P a g e | 73
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Notes to the consolidated financial statements
for the period ended 30 June 2018
Note 29
Parent entity disclosures
The following information has been executed from the books and records of the legal parent Calidus Resources Limited
(formerly Pharmanet Group Limited) have been prepared in accordance with Australian Accounting Standards and the
accounting policies as outlined in Note 1. Pharmanet Group Limited was in DOCA from 21 June 2016 to 7 March 2017, and as
such the current Directors have had limited access over the financial records of the Company pertaining to that period.
a. Financial Position of Calidus Resources Limited (legal parent)
Current assets
Non‐current assets
Total assets
Current liabilities
Non‐current assets
Total liabilities
Net assets
Equity
Issued capital
Performance Shares
Options reserve
Employee shares
Accumulated losses
Total equity
b. Financial performance of Calidus Resources Limited
Profit / (loss) for the year
Other comprehensive income
Total comprehensive income
June 2018
$
June 2017
$
17,307,652
8,084,471
‐
‐
17,307,652
8,084,471
544,746
974,505
‐
‐
544,746
974,505
16,762,906
7,109,966
45,470,811
34,122,908
‐
‐
1,678,979
1,517,269
414,029
(30,800,913)
(28,530,221)
16,762,906
7,109,956
(2,270,692)
2,527,192
‐
‐
(2,270,692)
2,527,192
c. Guarantees entered into by Calidus Resources Limited for the debts of its subsidiaries
There are no guarantees entered into by Calidus Resources Limited for the debts of its subsidiaries as at 30 June 2018
(2017: none).
d. Comparatives
The financial position of Calidus Resources Limited is as at 30 June 2018 for the current year and 30 June 2017 for the
comparative year.
The financial performance of Calidus Resources Limited is for the period between 1 July 2017 to 30 June 2018 and for the
comparative period between 1 July 2016 to 30 June 2017.
P a g e | 74
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Directors' declaration
The Directors of the Company declare that:
ANNUAL REPORT
30 June 2018
1. The financial statements and notes, as set out on pages 34 to 74, are in accordance with the Corporations Act 2001 (Cth)
and:
(a) comply with Accounting Standards;
(b) are in accordance with International Financial Reporting Standards issued by the International Accounting Standards
Board, as stated in note 1 to the financial statements; and
(c) give a true and fair view of the financial position as at 30 June 2018 and of the performance for the year ended on
that date of the Group.
(d) the Directors have been given the declarations required by s.295A of the Corporations Act 2001 (Cth);
2.
in the directors' opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the
directors by:
MARK CONNELLY
Non‐executive Chairman
Dated this Tuesday, 11 September 2018
P a g e | 75
ANNUAL REPORT
30 June 2018
Independent auditor's report
TO BE REPLACED BY MOORE STEPHENS
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
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CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
ANNUAL REPORT
30 June 2018
P a g e | 77
ANNUAL REPORT
30 June 2018
IA REPORT
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
P a g e | 78
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
ANNUAL REPORT
30 June 2018
P a g e | 79
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Corporate governance statement
The Board is responsible for establishing the Company’s corporate governance framework. In establishing its corporate
governance framework, the Board has referred to the 3rd edition of the ASX Corporate Governance Councils’ Corporate
Governance Principles and Recommendations.
The Corporate Governance Statement discloses the extent to which the Company follows the recommendations. The Company
will follow each recommendation where the Board has considered the recommendation to be an appropriate benchmark for its
corporate governance practices. Where the Company’s corporate governance practices will follow a recommendation, the
Board has made appropriate statements reporting on the adoption of the recommendation. In compliance with the “if not,
why not” reporting regime, where, after due consideration, the Company’s corporate governance practices will not follow a
recommendation, the Board has explained its reasons for not following the recommendation and disclosed what, if any,
alternative practices the Company will adopt instead of those in the recommendation.
The Company’s governance‐related documents can be found on its website at www.calidus.com.au under the section marked
"Corporate and Management".
PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1
A listed entity should have and disclose a charter which:
(a)
YES
(b)
Bsets out the respective roles and responsibilities of the
board, the chair and management; and
Bincludes a description of those matters expressly
reserved to the board and those delegated to
management.
The Company has established
roles and
responsibilities of its Board and management, and those matters
expressly
to
management,and has documented this in its Board Charter.
those delegated
the Board and
respective
reserved
the
to
The responsibilities of the Board include but are not limited to:
(a)
setting and reviewing strategic direction and planning;
(b)
reviewing financial and operational performance;
(c)
identifying principal risks and reviewing risk management
strategies; and
(d) considering and reviewing significant capital investments and
material transactions.
In exercising its responsibilities, the Board recognises that there are
many stakeholders in the operations of the Company, including
employees, shareholders, co‐ventures, the government and the
community.
Recommendation 1.2
A listed entity should:
(a) undertake appropriate checks before appointing a person,
or putting forward to security holders a candidate for
election, as a director; and
(b) provide security holders with all material information
relevant to a decision on whether or not to elect or re‐elect
a director.
YES
The Board carefully considers the character, experience, education
and skillset, as well as interests and associations of potential
candidates for appointment to the Board and conducts appropriate
checks to verify the suitability of the candidate, prior to their
election. The Company has appropriate procedures in place to
ensure that material information relevant to a decision to elect or
re‐elect a director, is disclosed in the notice of meeting provided to
shareholders.
Recommendation 1.3
A listed entity should have a written agreement with each director
and senior executive setting out the terms of their appointment.
YES
The Company has a written agreement with each of the Directors.
The material terms of any employment, service or consultancy
agreement the Company, or any of its child entities, has entered into
with its Chief Executive Officer, any of its directors, and any other
person or entity who is a related party of the Chief Executive Officer
or any of its directors will be disclosed in accordance with ASX Listing
Rule 3.16.4 (taking into consideration the exclusions from disclosure
outlined in that rule).
Recommendation 1.4
The company secretary of a listed entity should be accountable
directly to the board, through the chair, on all matters to do with
the proper functioning of the board.
YES
The Company Secretary is accountable to the Board for facilitating the
Company’s corporate governance processes and the proper functioning
of the Board. Each Director is entitled to access the advice and services of
the Company Secretary.
In accordance with the Company’s Constitution, the appointment or
removal of the Company Secretary is a matter for the Board as a whole.
Details of the Company Secretary’s experience and qualifications are set
out in the Annual Report.
P a g e | 80
2
3
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
ANNUAL REPORT
30 June 2018
PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
Recommendation 1.5
A listed entity should:
(a) have a diversity policy which includes requirements for the
board:
(i)
(ii)
to set measurable objectives for achieving gender
diversity; and
to assess annually both the objectives and the entity’s
progress in achieving them;
(b) disclose that policy or a summary or it; and
(c) disclose as at the end of each reporting period:
(i)
the measurable objectives for achieving gender
diversity set by the board in accordance with the
entity’s diversity policy and its progress towards
achieving them; and
NO
(not
followed
in full)
The Company
is committed to creating a diverse working
environment and promoting a culture which embraces diversity and
has adopted a written policy. Given the size of the Company and
scale of its operations, however, the Board is of the view that setting
measurable objectives for achieving gender diversity is not required
at this time. Further as the Company has not established measurable
objectives for achieving gender diversity, the Company has not
reported on progress towards achieving them.
(ii) either:
(A)
the respective proportions of men and women
on the board, in senior executive positions and
across the whole organisation (including how
the entity has defined “senior executive” for
these purposes); or
the entity’s “Gender Equality Indicators”, as
defined in the Workplace Gender Equality Act
2012.
(B)
Recommendation 1.6
A listed entity should:
(a) have and disclose a process for periodically evaluating the
performance of the board, its committees and individual
directors; and
(b) disclose in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting
period in accordance with that process.
NO
Whilst the Company has a written policy, the Board recognises that
as a result of the Company’s size and the stage of the entity’s life as
a public listed exploration company, the assessment of the directors’
and executives’ overall performance and its own succession plan is
conducted on an informal basis. Whilst this is at variance with the
ASX Recommendations, for the financial year ended June 2018, the
Directors consider that at the date of this report an appropriate and
adequate process for the evaluation of Directors is in place.
Refer above.
NO
NO
(not
followed
in full)
As a result of the Company’s size and the stage of the entity’s life as a
publicly listed exploration company and given the size of the Board at
present a Nomination Committee has been established with two non‐
executive members. The Nomination Committee has been combined
with the Remuneration Committee and they will plan meet from time
to time to review the skill mix required for the Board and, where gaps
are identified, they embark on a process to fill those gaps. This is
undertaken on an informal basis.
Recommendation 1.7
A listed entity should:
(a) have and disclose a process for periodically evaluating the
performance of its senior executives; and
(b) disclose in relation to each reporting period, whether a
performance evaluation was undertaken in the reporting
period in accordance with that process.
Principle 2: Structure the board to add value
Recommendation 2.1
The board of a listed entity should:
(a) have a nomination committee which:
(i)
has at least three members, a majority of whom are
independent directors; and
is chaired by an independent director,
(ii)
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the number
of times the committee met throughout the period
and the individual attendances of the members at
those meetings; or
(b)
if it does not have a nomination committee, disclose that
fact and the processes it employs to address board
succession issues and to ensure that the board has the
appropriate balance of skills, experience, independence and
knowledge of the entity to enable it to discharge its duties
and responsibilities effectively.
P a g e | 81
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
Recommendation 2.2
A listed entity should have and disclose a board skill matrix setting
out the mix of skills and diversity that the board currently has or is
looking to achieve in its membership.
NO
(not
followed
in full)
The details of the skill set of the current Board members are set out
in the description of each Director in the Annual Report. The Board
believes that the current skill mix is appropriate given the Company’s
size and the stage of the entity’s life as a publicly listed exploration
company.
Recommendation 2.3
A listed entity should disclose:
(a)
the names of the directors considered by the board to be
independent directors;
if a director has an interest, position, association or
relationship of the type described in Box 2.3 of the ASX
Corporate Governance Principles and Recommendation
(3rd Edition), but the board is of the opinion that it does not
compromise the independence of the director, the nature
of the interest, position, association or relationship in
question and an explanation of why the board is of that
opinion; and
the length of service of each director
(b)
(c)
YES
The following directors are considered independent;
Mark Connelly Non‐Executive Chairman
Keith Coughlan Non‐Executive Director
A profile of each director containing their skills, experience, expertise
and term of office is set out in the Directors' Report.
Recommendation 2.4
A majority of the board of a listed entity should be independent
directors.
NO
Recommendation 2.5
The chair of the board of a listed entity should be an independent
director and, in particular, should not be the same person as the
CEO of the entity.
Recommendation 2.6
A listed entity should have a program for inducting new directors
and
development
opportunities for continuing directors to develop and maintain
the skills and knowledge needed to perform their role as a
director effectively.
professional
appropriate
providing
YES
NO
Principle 3: Act ethically and responsibly
Recommendation 3.1
A listed entity should:
(a) have a code of conduct for its directors, senior executives
YES
and employees; and
(b) disclose that code or a summary of it.
The Board comprises four Directors of whom two are considered to
be Independent Directors. The Board is of the opinion that the
current structure of the Board is appropriate given the size and
nature of the Company. Whilst this is at variance to the ASX
Recommendations that the majority composition of the Board
comprise
Independent Directors, the Board considers that all
Directors bring an independent judgement to bear on Board decisions
and that the Board’s expertise and experience adds considerable
value to the Company.
Mr Mark Connelly is an independent director.
The Board recognises that as a result of the Company’s size and the
stage of the entity’s life as a publicly listed exploration company, the
Board has not put in place a formal program for inducting new
directors. However, it does provide a package of background
information on commencement and provides ready interaction with
the Company’s personnel to gain a stronger understanding of the
business. Similarly, the Company does not at this stage provide
professional development opportunities for Directors. More formal
processes for both of these areas will be considered in the future as
the Company develops.
The Company is committed to promoting good corporate conduct
grounded by strong ethics and responsibility. The Company has
established a Code of Conduct (Code), which addresses matters
relevant to the Company’s legal and ethical obligations to its
stakeholders. It may be amended from time to time by the Board,
and is disclosed on the Company’s website. The Code applies to all
Directors, employees, contractors and officers of the Company.
P a g e | 82
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
ANNUAL REPORT
30 June 2018
PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
Principle 4: Safeguard integrity in financial reporting
Recommendation 4.1
The board of a listed entity should:
(a) have an audit committee which:
NO
(i)
(ii)
has at least three members, all of whom are non‐
executive directors and a majority of whom are
independent directors; and
is chaired by an independent director, who is not
the chair of the board,
The Board has recently established an audit and risk committee. The
Chair of the Audit and Risk Committee is Mr Mark Connelly who is
also the Chair of the Board.
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the relevant qualifications and experience of the
members of the committee; and
in relation to each reporting period, the number of
times the committee met throughout the period
and the individual attendances of the members at
those meetings; or
(b)
if it does not have an audit committee, disclose that fact and
the processes it employs that independently verify and
safeguard the integrity of its financial reporting, including
the processes for the appointment and removal of the
external auditor and the rotation of the audit engagement
partner.
Recommendation 4.2
The board of a listed entity should, before it approves the entity’s
financial statements for a financial period, receive from its CEO
and CFO a declaration that the financial records of the entity have
been properly maintained and that the financial statements
comply with the appropriate accounting standards and give a true
and fair view of the financial position and performance of the
entity and that the opinion has been formed on the basis of a
sound system of risk management and internal control which is
operating effectively.
YES
In accordance with ASX Recommendation 4.2 the Chief Executive
Officer (or their equivalent) and Chief Financial Officer (or their
equivalent) are required to provide assurances that the written
declarations under s295A of the Corporations Act (and for the
purposes of ASX Recommendation 4.2) are founded on a sound
framework of risk management and internal control and that the
framework is operating effectively in all material respects in relation
to financial reporting risks. Both the Chief Executive Officer and
Chief Financial Officer provide such assurances at the time the s295A
declarations are provided to the Board.
Recommendation 4.3
A listed entity that has an AGM should ensure that its external
auditor attends its AGM and is available to answer questions from
security holders relevant to the audit.
YES
The Company’s external audit function is performed by Moore Stephens.
Representatives of Moore Stephens will attend the Annual General
Meeting and be available to answer shareholder questions regarding the
audit.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1
A listed entity should:
(a) have a written policy for complying with its continuous
YES
disclosure obligations under the Listing Rules; and
(b) disclose that policy or a summary of it.
Principle 6: Respect the rights of security holders
Recommendation 6.1
A listed entity should provide information about itself and its
governance to investors via its website.
YES
P a g e | 83
the
The Company operates under
continuous disclosure
requirements of the ASX Listing Rules and has adopted a policy,
which is disclosed on the Company’s website. The Continuous
Disclosure Policy sets out policies and procedures for the Company’s
compliance with its continuous disclosure obligations under the ASX
Listing Rules, and addresses financial markets communication, media
contact and continuous disclosure issues. It forms part of the
Company’s corporate policies and procedures and is available to all
staff.
The Company Secretary manages the policy. The policy will develop
over time as best practice and regulations change and the Company
Secretary will be responsible for communicating any amendments.
Investors
The Company keeps investors informed of its corporate governance,
its website –
financial performance and prospects
www.Calidus.com.au.
all
copies of
announcements to the ASX, notices of meetings, annual reports and
financial statement, and investor presentations via the ‘Investors’
tab and can access general information regarding the Company and
the structure of its business under the ‘Overview’ and ‘Features’
tabs.
via
access
can
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
Recommendation 6.2
A listed entity should design and implement an investor relations
program to facilitate effective two‐way communication with
investors.
YES
Recommendation 6.3
A listed entity should disclose the policies and processes it has in
place to facilitate and encourage participation at meetings of
security holders.
YES
Recommendation 6.4
A listed entity should give security holders the option to receive
communications from, and send communications to, the entity
and its security registry electronically.
Principle 7: Recognise and manage risk
Recommendation 7.1
The board of a listed entity should:
(a) have a committee or committees to oversee risk, each of
which:
(i) has at least three members, a majority of whom are
YES
NO
independent directors; and
(ii) is chaired by an independent director, and disclose:
(iii) the charter of the committee;
(iv) the members of the committee; and
(v) as at the end of each reporting period, the number of
times the committee met throughout the period and
the individual attendances of the members at those
meetings; or
if it does not have a risk committee or committees that
satisfy (a) above, disclose that fact and the process it
employs for overseeing the entity’s risk management
framework.
(b)
the ASX Recommendations,
The Board aims to ensure that shareholders are informed of all major
developments affecting
In
is
accordance with
communicated to shareholders as follows:
the Company’s state of affairs.
information
the annual financial report which includes relevant information
about the operations of the Company during the year, changes
in the state of affairs of the entity and details of future
developments, in addition to the other disclosures required by
the Corporations Act 2001;
the half yearly financial report lodged with the ASX and ASIC and
sent to all shareholders who request it;
notifications relating to any proposed major changes in the
impact on share ownership rights that are
Company which may
submitted to a vote of shareholders;
notices of all meetings of shareholders;
publicly released documents including full text of notices of
meetings and explanatory material made available on the
Company’s website at www.Calidus.com.au; and
disclosure of
the Corporate Governance practices and
communications strategy on the entity’s website.
While the Company aims to provide sufficient information to
Shareholders about the Company and its activities, it understands
that Shareholders may have specific questions and require
additional information. To ensure that Shareholders can obtain all
relevant information to assist them in exercising their rights as
Shareholders, the Company has made available a telephone number
and relevant contact for Shareholders to make their enquiries.
The Board encourages full participation of shareholders at the Annual
General Meeting to ensure a high
level of accountability and
identification with the Company’s strategy and goals. Important issues
are presented to the shareholders as single resolutions. The external
auditor of the Company is also invited to the Annual General Meeting of
shareholders and is available to answer any questions concerning the
conduct, preparation and content of the auditor’s report. Pursuant to
section 249K of the Corporations Act 2001 the external auditor is
provided with a copy of the notice of meeting and related
communications received by shareholders.
The Company provides
receive
communications from and send communications to, the Company and
the share registry electronically.
the option
investors
its
to
Due to the size of the Board, the Company does not have a separate
Risk Committee. The Board has recently established an Audit and
Risk Committee which is responsible for the oversight of the
Company’s risk management and control framework. The Board has
adopted a Risk Management Policy, which is disclosed on the
Company’s website as part of the Audit and risk committee Charter.
P a g e | 84
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
ANNUAL REPORT
30 June 2018
PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
Recommendation 7.2
The board or a committee of the board should:
(a)
review the entity’s risk management framework with
management at least annually to satisfy itself that it
continues to be sound, to determine whether there have
been any changes in the material business risks the entity
faces and to ensure that they remain within the risk
appetite set by the board; and
(b) disclose in relation to each reporting period, whether such a
review has taken place.
YES
The Board recognises that there are inherent risks associated with
the Company’s operations including commercial, technological legal
and other operational risks. The Board endeavours to mitigate such
risks by continually reviewing the activities of the Company in order
to identify key business and operational risks and ensuring that they
are appropriately assessed and managed. No formal report in
relation to the Company’s management of its material business risks
is presented to the Board. The Board reviews the risk profile of the
Company and monitors risk informally throughout the year.
Recommendation 7.3
A listed entity should disclose:
(a)
(b)
if it has an internal audit function, how the function is
structured and what role it performs; or
if it does not have an internal audit function, that fact and
the processes it employs for evaluating and continually
improving the effectiveness of its risk management and
internal control processes.
NO
The Company does not have an internal audit function. To evaluate
and continually improve the effectiveness of the Company’s risk
management and internal control processes, the Board relies on
ongoing reporting and discussion of the management of material
business risks as outlined in the Company’s Risk Management Policy.
Recommendation 7.4
A listed entity should disclose whether, and if so how, it has
regard to economic, environmental and social sustainability risks
and, if it does, how it manages or intends to manage those risks.
YES
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The board of a listed entity should:
(a) have a remuneration committee which:
NO
(i)
(ii)
(iii)
(iv)
(v)
has at least three members, a majority of whom are
independent directors; and
is chaired by an independent director,
and disclose:
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the number
of times the committee met throughout the period
and the individual attendances of the members at
those meetings; or
(b)
if it does not have a remuneration committee, disclose that
fact and the processes it employs for setting the level and
composition of remuneration for directors and senior
executives and ensuring that such remuneration
is
appropriate and not excessive.
Recommendation 8.2
A listed entity should separately disclose its policies and practices
regarding the remuneration of non‐executive directors and the
remuneration of executive directors and other senior executives
and ensure that the different roles and responsibilities of non‐
executive directors compared to executive directors and other
senior executives are reflected in the level and composition of
their remuneration.
YES
P a g e | 85
in
relation
As already outlined above
to various ASX
Recommendations, the Company constantly monitors and reviews
the key risks that affect the Company and the management of those
risks. The risks which the Company has identified that it has a
material exposure to are its ability to raise funds within an
acceptable time frame and on terms acceptable to it (“Capital Risk”);
and that its existing projects, or any other projects that it may
acquire in the future, will be able to be economically exploited
(“Economic Risk”). The manner in which the Company manages
those risks, in the case of Capital Risk, to monitor the market and
investment appetite and to raise further required capital in a timely
manner such that the Company’s operations are adequately funded;
in the case of Economic Risk, to adopt a diversified portfolio
approach and to also adopt a focused approach, seeking to lay off
risk where possible. More
information about the Company’s
management of risk can be found in the prospectus released 16 May
2017.
The Company has adopted a
joint Nomination and
Remuneration Committee which is chaired by an independent
director, however, given the current size of the company there
are only two non‐executive directors on this committee. The
Board has adopted a Remuneration Committee Charter which
describes the role, composition, functions and responsibilities of
the Remuneration Committee and is disclosed on the Company’s
website.
Details of the Company’s policies on remuneration are set out in the
Company’s “Remuneration Report” in each Annual Report published
by the Company. This disclosure will include a summary of the
Company’s policies regarding the deferral of performance‐based
remuneration and the reduction, cancellation or clawback of the
performance‐based
serious
misconduct or a material misstatement in the Company’s financial
statements.
the event of
remuneration
in
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
Recommendation 8.3
A listed entity which has an equity‐based remuneration scheme
should:
(a) have a policy on whether participants are permitted to
enter into transactions (whether through the use of
derivatives or otherwise) which limit the economic risk of
participating in the scheme; and
(b) disclose that policy or a summary of it.
Yes
The Company’s Security Trading Policy
includes a statement
prohibiting directors, officers and employees from dealing at any time
in financial products such as warrants, futures or other financial
products, that specifically prohibits entering
into transactions
(whether through the use of derivatives or otherwise) which limit the
economic risk of their security holding in the Company or of
participating in unvested entitlements under the equity based
remuneration schemes.
Security Trading Policy
In accordance with ASX Listing Rule 12.9, the Company has
adopted a trading policy which sets out the following information:
a) closed periods in which directors, employees and contractors
of the Company must not deal in the Company’s securities;
b) trading in the Company’s securities which is not subject to the
Company’s trading policy; and
c) the procedures for obtaining written clearance for trading in
exceptional circumstances.
The Company’s Security Trading Policy is available on the Company’s
website.
P a g e | 86
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
Additional ASX Information as at 4 September 2018
ANNUAL REPORT
30 June 2018
The following additional information is required by the Australian Securities Exchange in respect of listed public companies. As
at 4 September 2018 there were 3,121 holders of Ordinary Fully Paid Shares.
Voting Rights
The voting rights attached to each class of equity security are as follows:
Ordinary shares: Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a
meeting or by proxy has one vote on a show of hands.
Listed Options, Unlisted Options and Performance Shares: Options and performance shares do not entitle the holders to
vote in respect of that equity instrument, nor participate in dividends, when declared, until such time as the options are
exercised or performance shares convert and subsequently registered as ordinary shares.
20 Largest Shareholders — Ordinary Shares as at as at 4 September 2018
Rank
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
KERAS RESOURCES PLC
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BEATONS CREEK GOLD PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
PERSHING AUSTRALIA NOMINEES PTY LTD
DISCOVERY SERVICES PTY LTD
BUZZ CAPITAL PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MRS ELEANOR JEAN REEVES
MEDEK INVESTMENTS PTY LTD
SUNSET TIDAL PTY LTD
MR STACEY RADFORD
ROMFAL SIFAT PTY LTD
ECAPITAL NOMINEES PTY LIMITED
MR PHILLIP RICHARD PERRY
MR HOANG HUY HUYNH
ICON HOLDINGS PTY LTD
JANE ALLEN
Total
Number of
Ordinary Fully
Paid Shares
458,375,000
98,617,170
56,585,366
44,966,770
32,750,000
20,716,763
19,103,437
17,375,000
14,800,000
13,678,147
11,647,903
11,000,000
11,000,000
9,765,000
9,300,000
9,000,000
8,917,613
8,000,000
8,000,000
% Held of Ordinary
Issued Capital
35.42%
7.62%
4.37%
3.48%
2.53%
1.60%
1.48%
1.34%
1.14%
1.06%
0.90%
0.85%
0.85%
0.75%
0.72%
0.70%
0.69%
0.62%
0.62%
7,500,000
871,098,169
0.58%
67.32%
P a g e | 87
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
20 Largest Option Holders — Listed Options as at as at 4 September 2018
Rank
Name
Number of Listed
Options Held
% Held of Listed
Options Issued
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
P R PERRY NOMINEES PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
BLURRED VISION INVESTMENTS PTY LTD
MR DARREN JEFFERY HARGREAVES
CS FOURTH NOMINEES PTY LIMITED
P R PERRY NOMINEES PTY LTD
BRANDON HILL CAPITAL LIMITED
CITICORP NOMINEES PTY LIMITED
MR ERROL BERTRAM GOLDSCHMIDT &
MRS ZILLAH GOLDSCHMIDT
MR PHILLIP JOHN DOYLE &
MRS CARLA DOYLE
MR NICHOLAS JOHN LEVIS &
MRS KERRY IVY LEVIS
BURGEON CAPITAL PTY LTD
PROCUREMENT SOLUTIONS LIMITED
MR EMANUEL JOSE FERNANDES DIAS
ICON HOLDINGS PTY LTD
MR PHILLIP RICHARD PERRY &
MRS TETYANA PERRY
MRS ELEANOR JEAN REEVES
INSWINGER HOLDINGS PTY LTD
MR GEOFFREY KEVIN CAMMELL
LANEWAY HOLDINGS PTY LTD
Total
Substantial Ordinary Shareholders as at 4 September 2018
Name
KERAS RESOURCES PLC
9,410,008
6,057,788
4,000,000
4,000,000
3,000,000
2,300,000
2,225,000
1,805,556
1,565,000
10.75%
6.92%
4.57%
4.57%
3.43%
2.63%
2.54%
2.06%
1.79%
1,500,000
1.71%
1,500,000
1.71%
1,500,000
1,337,500
1,250,000
1,111,111
1,111,111
1,110,000
1,110,000
1,044,666
1,000,000
1.71%
1.53%
1.43%
1.27%
1.27%
1.27%
1.27%
1.19%
1.14%
47,937,740
63.31%
Number of Ordinary
Fully Paid Shares Held
% Held of Ordinary
Issued Capital
458,375,000
35.42%
Distribution of Ordinary Shareholders as at 4 September 2018
Holding Range
Holders
Total Units
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
1,258
381
106
761
615
257,827
927,204
833,638
32,221,622
1,259,713,204
3,121
1,293,953,495
% Issued
Ordinary Capital
0.02%
0.07%
0.06%
2.49%
97.35%
100.00%
Unmarketable Parcels – as at 4 September 2018 there were 1,871 holders with less than a marketable parcel of shares.
P a g e | 88
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
ANNUAL REPORT
30 June 2018
Distribution of Listed Option Holders as at 4 September 2018
Holding Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Holders
Total Units
3
‐
‐
85
137
225
784
‐
‐
4,689,917
82,809,299
87,500,000
% of Listed
Options
0.00%
‐
‐
5.36%
94.64%
100.00%
On‐Market Buy‐Back
There is no current on‐market buy‐back.
Restricted Securities
As at 4 September 2018 the following securities are subject to escrow:
565,000,000 Ordinary Fully Paid Shares escrowed for a period of 24 months from quotation
5,000,000 Ordinary Fully Paid Shares escrowed for a period of 24 months from quotation
275,000,000 Class B Performance Shares escrowed for a period of 24 months from quotation
30,500,000 unquoted options exercisable at $0.02 each escrowed for a period of 24 months from quotation
50,000,000 unquoted options exercisable at $0.02 each escrowed for a period of 24 months from quotation
19,000,000 unquoted options exercisable at $0.03 each escrowed for a period of 24 months from quotation
Unquoted Securities
As at 4 September 2018 the following unquoted securities are on issue:
275,000,0000F
1 Performance Shares escrowed – 1 Holder
Holders with more than 20%
Holder Name
KERAS RESOURCES PLC
Holding
275,000,000
%
100.00%
19,000,00 Options Expiring 9 June 2020 @ $0.03 escrowed for a period of 24 months from quotation – 4 Holders
Holders with more than 20%
Holder Name
MR ADAM MIETHKE
ELEANOR JEAN REEVES
Holding
6,000,000
5,000,000
%
31.58%
26.32%
INSWINGER HOLDINGS PTY LTD
5,000,000
26.32%
30,500,000 Options Expiring 9 June 2020 @ $0.025 escrowed for a period of 12 months from quotation – 27 Holders
There are no holders with more than 20%
1 Details on the performance conditions surrounding the Performance Shares are contained within Note 16c Issued Capital.
P a g e | 89
ANNUAL REPORT
30 June 2018
CALIDUS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 98 006 640 553
50,000,00 Options Expiring 18 April 2021 @ $0.02 escrowed for a period of 24 months from quotation – 11 Holders
Holders with more than 20%
Holder Name
MEDEK INVESTMENTS PTY LTD
BUZZ CAPITAL PTY LTD < ZI
VESTMENT A/C >
SUNSET TIDAL PTY LTD
ROMFAL SIFAT PTY LTD
Holding
10,000,000
%IC
20.00%
10,000,000
20.00%
10,000,000
10,000,000
20.00%
20.00%
ASX Listing Rule 4.10.19
The Company has used its cash and net assets in a form readily convertible to cash in hand at the time of reinstatement of the
Company’s securities to quotation in a way consistent with its business objectives.
P a g e | 90