ACN 119 484 016
Annual Report 2014
Classic Minerals Ltd
Corporate Directory
Directors
Justin Doutch
Kent Hunter
Stan Procak
Company Secretary
Jeffrey Nurse
ABN
77 119 484 016
Registered Office and
Principal Place of Business
Suite 7, 30 Hasler Road
Osborne Park WA 6021
Auditors
Bentleys Audit & Corporate (WA) Pty Ltd
Level 1, 12 Kings Park Road
West Perth WA 6005
Share Registry
Advanced Share Registry Limited
110 Stirling Hwy, Nedlands WA 6009
PO Box 1156, Nedlands WA 6909
Phone: +61 8 9389 8033
Fax: +61 8 9262 3723
www.advancedshare.com.au
ASX Code
CLZ, CLZO
Contact
Level 1, 7/30 Hasler Road, Osborne Park WA 6017
PO Box 487, Osborne Park WA 6917
Phone: +61 9445 3008
Fax: +61 9242 8295
Email: admin@classicminerals.com.au
www.classicminerals.com.au
Table of Contents
Managing Director’s Letter
Corporate Directory
Corporate Governance Statement
Directors’ Report
Directors’ Declaration
Auditor’s Independence Declaration
Independent Audit Report
Statement of Profit or Loss and other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
ASX Additional Information
Schedule of Mineral Tenements
Competent Persons Statement
Annual Report 2014
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Classic Minerals Ltd
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Annual Report 2014
Managing Director’s Letter
Dear Shareholders,
I am very happy to report that the financial year just ended –
your company’s first fully operational year – has vindicated
the optimism with which we all began the exciting journey
that we are travelling together.
Let’s look first at our flagship venture, the Fraser Range
Project. Situated, as it is, just 60km north of the proven Sirius
copper and nickel discoveries, and demonstrating many
similar rock characteristics, we considered it deserving of
our very best shot, a decision that has been supported by
our results to date. At the outset we were the only company
engaged in exploration to the north of Sirius, and we believe
it is no coincidence that we are now acknowledged to be the
only company to have made noteworthy discoveries in the
Fraser Range in the course of the year.
While exploration is still at a relatively early stage, we have
already made a number of discoveries – sufficient for us to
have delineated a conductive “hot zone” 8km in length. More
importantly, drilling to date has given us a sound basis to plan
the ongoing program we were developing as the financial
year came to an end. The next phase of the drilling program,
now underway, is your company’s priority as we move into
the 2014-15 financial year.
While the current focus is firmly on Fraser Range, we have
not lost sight of the exciting potential of our other properties,
Doherty’s Gold Project and Cowarna Rocks.
Doherty’s is a gold mine that was showing seriously high ore
grades at the time we acquired it, and follow-up exploration
has confirmed our hopes for this property as an early/mid-
stage revenue generator.
An initial aircore drilling program indicates the Cowarna
Rocks hematite project is capable of producing export-quality
grades, and the project’s proximity to a rail link provides the
potential for relatively low-cost transportation to Esperance
Port, thus giving your company a significant marketing edge
in the highly competitive iron ore market.
In essence, then, although our main focus is currently on
Fraser Range, we take confidence from the fact that Classic
Minerals is not a “one trick pony”. We have a trifecta of
possible winners, and that makes the future a very exciting
one both for us as a company and you, as a shareholder.
In concluding, I would like to take this opportunity to express
my thanks to my fellow directors, Mr Stan Procak, Mr. Kent
Hunter, our Company Secretary Mr Jeffrey Nurse, our
employees and consultants for their on-going support and
contributions throughout the year. I would also like to thank
our loyal shareholders for their continued support. Classic
is focussed on creating value for shareholders through the
discovery of new base and precious metal resources which lie
in the biggest exploration address in Australia. This requires
patient, systematic exploration. However, the rewards of
discovery are significant in terms of returns to investors and
I look forward to your continuing support as we work hard
to position Classic Minerals as a respected explorer and
producer in the years ahead.
Justin Doutch
Managing Director
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Classic Minerals Ltd
Operations Report
Fraser Range
During the twelve months covered by this report the
company’s primary exploration efforts have been directed at
the Fraser Range Project, to investigate early indications of a
similarity in rock structures to the proven Sirius copper and
nickel resources just 60kms to the south.
In the course of the financial year a total of 11,443 metres of
reverse circulation (RC) drilling and 21 metres of diamond core
drilling have been completed, (Note: additional 1092 metres of
RC drilling and 976 metres of diamond core drilling has been
done to date into six SAM EM targets) with zones of disseminated
to semi-massive sulphide mineralisation been intersected. This
intensive level of activity is a measure of Classic’s determination
to fast track discoveries in this highly prospective area.
Operations on the ground commenced with an initial 5,000m
reverse circulation (RC) drilling program based on flown
electromagnetic survey targets identified in June 2013, with
mineralisation intersected in all the high priority holes.
Promising results from this early stage of drilling included
the discovery of the Alpha copper deposit and the Mammoth
nickel/copper deposit further to the north.
More significant results were produced in the Stage 2 drilling
program, commenced in the second quarter, which led to the
discovery of a new nickel/copper mineralised horizon close
to the surface at the Mammoth target. This included a two
metre-wide massive intercept of 1.0% nickel from 106m.
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Annual Report 2014
Nickel and copper sulphides were intersected in holes at
Mammoth, with the mineralisation extending 240m long and
30m wide plunging to the northeast. This indicates a new
target style of magmatic nickel/copper mineralization within
mafic sills on the Fraser Range. Petrology analysis on core
and rock chips confirmed that Mammoth has similar rock
types and mineralisation to the Sirius Nova nickel/copper
deposit.
At the Alpha copper deposit, where the first RC hole drilled
on the Fraser Range Project intersected 1m of 1.95% copper,
follow up RC drilling results indicate the presence of a broad
mineralised zone up to 12m thick and over 400m long by
100m wide, cross cutting foliation of the metamorphic rocks.
The work carried out on the ground to date can only be
regarded as preliminary, but results give every reason for
optimism. An 8km “hot zone” has been identified, running
north-south through the tenement in the direction of the
Sirius Nova and Bollinger deposits just 60kms to the south.
Importantly, this year’s highly intensive program has provided
substantial data on which to base the company’s deep drilling
program, which will commence early in the next financial
year.
5
Classic Minerals Ltd
Operations Report continued
Cowarna Rocks
Doherty’s Gold Project
During the period Classic Minerals acquired the exclusive
marketing rights for hematite product over the Exploration
Licence E28/2238 from Guide Resources Pty Ltd. Under the
terms of this agreement, Classic issued 5,000,000 shares
and $400,000 as consideration to Guide Resources Pty Ltd.
On 31 July 2013 Classic Minerals exercised its option to acquire
the Doherty’s Gold Project from GWR Group Limited (formerly
known as Golden West Resources Ltd). The purchase price
was $93,130 (GST incl) and 570,000 fully paid ordinary shares
in Classic Minerals Limited valued at $51,300.
An initial aircore drilling program has been carried out, with
18 holes drilled for 96m, in order to determine the thickness
of the hematite deposit, the percentage recovery of hematite
and grade of the recoverable hematite.
Drill samples, together with a bulk sample of hematite rich
gravel from a pit dug in the centre of the deposit, have been
submitted to a metallurgical laboratory for testing. Results are
pending.
Examination of old exploration data has shown that accurate
collar and downhole surveys had not been undertaken on RC
holes previously drilled at the project, some of which intersected
the high grade gold bearing quartz vein. Arrangements were
made to have these holes accurately down hole surveyed in
February, so accurate plans and cross-sections can be drawn
up, and additional drilling planned. Some holes were blocked
at depth, and others were fully surveyed. An accurate survey
of hole collars will be undertaken to upgrade the data base
and a topographic survey will be undertaken in the immediate
area of the old workings at Doherty mine, in case an open cut
pit is considered.
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Annual Report 2014
Maitland Uranium Project
Corporate finance
A review of this project was undertaken during the
third quarter, and due to the difficulties associated with
undertaking uranium exploration, and subsequent mining in
the event that a viable deposit were found, it was decided
to relinquish the two tenements, E51/1267 and E51/1485. The
company considers that concentrating available funds in the
year ahead on continued intensive exploration of the Fraser
Range Project represents a more prudent use of shareholder
funds.
The Company successfully completed three capital raisings
during the year.
its non-
In December 2013, the Company completed
renounceable Option Entitlement Issue, and raised $1,005,126
before expenses of the issue. Shareholders as at 28 August
2013 were entitled to receive one Option exercisable at 20
cents on or before 30 June 2015 for every two fully paid
ordinary shares held. Shareholders were required to pay
$0.01 for each Option.
In February 2014, the Company raised $1.5m from sophisticated
and professional investors and issued 25m shares at $0.06
per share as part of a private placement. Proceeds from this
placement were used to advance the Company’s exploration
activities at the Alpha and Mammoth discoveries at Fraser
Range.
In June 2014, the Company successfully completed its first
Share Purchase Plan. The Company raised $208,500 at
$0.04 per share and issued 5,212,500 shares to existing
shareholders.
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Classic Minerals Ltd
Corporate Governance Report
The Company is committed to implementing the highest standards of corporate governance. In determining
what those high standards should involve the Company has turned to the ASX Corporate Governance
Council’s Principles of Good Corporate Governance and Recommendations. The Company is pleased to
advise that the Company’s practices are largely consistent with those ASX guidelines. As consistency with
the guidelines has been a gradual process, where the Company did not have certain policies or committees
recommended by the ASX Corporate Governance Council (the Council) in place during the reporting period,
we have identified such policies or committees.
Where the Company’s corporate governance practices do not correlate with the practices recommended by
the Council, the Company is working towards compliance however it does not consider that all the practices
are appropriate for the Company due to the size and scale of Company operations.
To illustrate where the Company has addressed each of the Council’s recommendations, the following table
cross-references each recommendation with sections of this report. The table does not provide the full text
of each recommendation but rather the topic covered. Details of all of the recommendations can be found
on the ASX Corporate Governance Council’s website at
http://www.asx.com.au/about/CorporateGovernance_AA2.shtm
PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT
Role of the Board
1.1
The Board’s role is to govern the Company rather than to manage it. In governing the Company, the
Directors must act in the best interests of the Company as a whole. It is the role of the senior executives to
manage the Company in accordance with the direction and delegations of the Board and the responsibility
of the Board to oversee the activities of management in carrying out these delegated duties. In carrying out
its governance role, the main task of the Board is to drive the performance of the Company. The Board
must also ensure that the Company complies with all of its contractual, statutory and any other legal
obligations, including the requirements of any regulatory body. The Board has the final responsibility for the
successful operations of the Company.
To assist the Board carry out its functions, it has developed a Code of Conduct to guide the Directors, the
Managing Director and other senior executives in the performance of their roles. The Code of Conduct
addresses the maintenance of the confidence in the Company’s integrity, legal obligations and expectations
of shareholders, responsibility and accountability of individuals for reporting and investigating reports of
unethical behaviour.
Responsibilities of the Board
1.2
In general, the Board is responsible for, and has the authority to determine, all matters relating to the
policies, practices, management and operations of the Company. It is required to do all things that may be
necessary to be done in order to carry out the objectives of the Company.
Without intending to limit this general role of the Board, the principal functions and responsibilities of the
Board include the following:
• Leadership of the Organisation: overseeing the Company and establishing codes that reflect the
values of the Company and guide the conduct of the Board.
• Strategy Formulation: to set and review the overall strategy and goals for the Company and ensuring
Scholes method.
that there are policies in place to govern the operation of the Company.
• Overseeing Planning Activities: the development of the Company’s strategic plan.
• Shareholder Liaison: ensuring effective communications with shareholders through an appropriate
communications policy and promoting participation at general meetings of the Company.
• Monitoring, Compliance and Risk Management:
the Company’s risk
management, compliance, control and accountability systems and monitoring and directing the
financial and operational performance of the Company.
the development of
• Company Finances: approving expenses and approving and monitoring acquisitions, divestitures
and financial and other reporting.
• Human Resources: appointing, and, where appropriate, removing the Managing Director (“MD”) as
well as reviewing the performance of the Managing Director and monitoring the performance of
senior management in their implementation of the Company’s strategy.
• Ensuring the Health, Safety and Well-Being of Employees: in conjunction with the senior
management team, developing, overseeing and reviewing the effectiveness of the Company’s
occupational health and safety systems to ensure the well-being of all employees.
8
• Delegation of Authority: delegating appropriate powers to the Managing Director to ensure the
effective day-to-day management of the Company and establishing and determining the powers and
functions of the Committees of the Board.
The role of a Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of
establishing appropriate remuneration levels and incentive policies for employees.
As the whole board consists of three (3) members, the Company does not have a remuneration committee
because it would not be a more efficient mechanism than the full board for focusing the Company on
1.3
Remuneration Committee
1.3.1 Role
specific issues.
1.3.2 Responsibilities
The responsibilities of a Remuneration Committee include setting policies for senior officers’ remuneration,
setting the terms and conditions of employment for the Managing Director, reviewing and making
recommendations to the Board on the Company’s incentive schemes and superannuation arrangements,
viewing the remuneration of both Executive and Non- Executive Directors’ and making recommendations on
any proposed changes and undertaking reviews of the Managing Director’s performance, including, setting
with the Managing Director goals and reviewing progress in achieving those goals.
Directors’ Remuneration for the majority of Directors was approved at a Board meeting held after the ASX
1.4
Remuneration Policy
listing of the Company.
1.4.1 Senior Executive Remuneration Policy
The Company is committed to remunerating its senior executives in a manner that is market-competitive
and consistent with best practice as well as supporting the interests of shareholders and in accordance with
thresholds set in plans approved by shareholders. Consequently, under the Senior Executive Remuneration
Policy the remuneration of senior executive may be comprised of the following:
•
fixed salary that is determined from a review of the market and reflects core performance
requirements and expectations;
• a performance bonus designed to reward actual achievement by the individual of performance
objectives and for materially improved Company performance;
• participation in any share/option scheme with thresholds approved by shareholders;
•
statutory superannuation.
There are no retirement benefits for senior executives.
By remunerating senior executives through performance and long-term incentive plans in addition to their
fixed remuneration the Company aims to align the interests of senior executives with those of shareholders
and increase Company performance.
Where shares and options are granted to senior executives the value would be calculated using the Black-
The objective behind using this remuneration structure is to drive improved Company performance and
thereby increase shareholder value as well as aligning the interests of executives and shareholders.
The Board may use its discretion with respect to the payment of bonuses, stock options and other incentive
payments.
Annual Report 2014
• Delegation of Authority: delegating appropriate powers to the Managing Director to ensure the
effective day-to-day management of the Company and establishing and determining the powers and
functions of the Committees of the Board.
1.3
Remuneration Committee
1.3.1 Role
The role of a Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of
establishing appropriate remuneration levels and incentive policies for employees.
As the whole board consists of three (3) members, the Company does not have a remuneration committee
because it would not be a more efficient mechanism than the full board for focusing the Company on
specific issues.
1.3.2 Responsibilities
The responsibilities of a Remuneration Committee include setting policies for senior officers’ remuneration,
setting the terms and conditions of employment for the Managing Director, reviewing and making
recommendations to the Board on the Company’s incentive schemes and superannuation arrangements,
viewing the remuneration of both Executive and Non- Executive Directors’ and making recommendations on
any proposed changes and undertaking reviews of the Managing Director’s performance, including, setting
with the Managing Director goals and reviewing progress in achieving those goals.
Remuneration Policy
1.4
Directors’ Remuneration for the majority of Directors was approved at a Board meeting held after the ASX
listing of the Company.
1.4.1 Senior Executive Remuneration Policy
The Company is committed to remunerating its senior executives in a manner that is market-competitive
and consistent with best practice as well as supporting the interests of shareholders and in accordance with
thresholds set in plans approved by shareholders. Consequently, under the Senior Executive Remuneration
Policy the remuneration of senior executive may be comprised of the following:
•
fixed salary that is determined from a review of the market and reflects core performance
requirements and expectations;
• a performance bonus designed to reward actual achievement by the individual of performance
objectives and for materially improved Company performance;
• participation in any share/option scheme with thresholds approved by shareholders;
•
statutory superannuation.
There are no retirement benefits for senior executives.
By remunerating senior executives through performance and long-term incentive plans in addition to their
fixed remuneration the Company aims to align the interests of senior executives with those of shareholders
and increase Company performance.
Where shares and options are granted to senior executives the value would be calculated using the Black-
Scholes method.
The objective behind using this remuneration structure is to drive improved Company performance and
thereby increase shareholder value as well as aligning the interests of executives and shareholders.
The Board may use its discretion with respect to the payment of bonuses, stock options and other incentive
payments.
9
Classic Minerals Ltd
Corporate Governance Report
Education and Induction
1.5
It is the policy of the Company that new Directors undergo an induction process in which they are given a
full briefing on the Company. Where possible this includes meetings with key executives, tours of the
premises, an induction package and presentations. Information conveyed to new Directors include:
formal policies on Director appointment as well as conduct and contribution expectations;
• details of the roles and responsibilities of a Director;
•
• access to a copy of the Board Charter;
• guidelines on how the Board processes function;
• details of past, recent and likely future developments relating to the Board;
• background information on and contact information for key people in the organisation;
• an analysis of the Company;
• a synopsis of the current strategic direction of the Company;
• a copy of the Corporate Governance Statement, Charters, Policies and Memos; and
• a copy of the Constitution of the Company.
In order to achieve continuing improvement in Board performance, all Directors are encouraged to undergo
continual professional development. Specifically, Directors are provided with the resources and training to
address skills gaps where they are identified.
PRINCIPLE 2: STRUCTURE THE BOARD TO ADD VALUE
Composition of the Board
2.1
To add value to the Company the Board has been formed so that it has effective composition, size and
commitment to adequately discharge its responsibilities and duties given its current size and scale of
operations. Directors are appointed based on the specific skills required by the Company and on their
decision-making and judgment skills.
The Company recognises the importance of Non-Executive Directors’ and the external perspective and
advice that Non-Executive Directors can offer. Kent Hunter and Stanislaw Procak are Non-Executive
Directors and are both independent Directors as they meet the following criteria for independence adopted
by the Company:
An Independent Director is a Non-Executive Director and:
•
is not a substantial shareholder of the Company or an officer of, or otherwise associated directly
with, a substantial shareholder of the Company;
• has not been employed in an executive capacity by the Company or another group member and
there has not been a period of at least three years between ceasing such employment and serving
on the Board;
• within the last three years has not been a principal of a material professional adviser or a material
consultant to the Company or another group member or an employee materially associated with the
service provided;
is not a material supplier or customer of the Company or another group member, or an officer of or
otherwise associated directly or indirectly with a material supplier or customer; and
•
• has no material contractual relationship with the Company or other group member other than as a
Director of the Company.
Justin Doutch is the Managing Director of the Company and does not meet the Company’s criteria for
independence.
The skills, experience and expertise relevant to the position of Director held by each Director in office at the
date of the Annual Report is included in the Directors’ Report.
The term in office of each Director in office at the date of this report is as follows:
Name
Justin Doutch
Stanislaw Procak
Kent Hunter
Term in Office
Since 16 September 2011
Since 7 November 2012
Since 29 November 2013
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Annual Report 2014
Responsibilities of the Board
2.2
In general, the Board is responsible for, and has the authority to determine, all matters relating to the
policies, practices, management and operations of the Company. It is required to do all things that may be
necessary to be done in order to carry out the objectives of the Company.
Without intending to limit this general role of the Board, the principal functions and responsibilities of the
Board include the following:
• Leadership of the Organisation: overseeing the Company and establishing codes that reflect the
values of the Company and guide the conduct of the Board.
• Strategy Formulation: to set and review the overall strategy and goals for the Company and ensuring
that there are policies in place to govern the operation of the Company.
• Overseeing Planning Activities: the development of the Company’s strategic plan.
• Shareholder Liaison: ensuring effective communications with shareholders through an appropriate
communications policy and promoting participation at general meetings of the Company.
• Monitoring, Compliance and Risk Management:
the Company’s risk
management, compliance, control and accountability systems and monitoring and directing the
financial and operational performance of the Company.
the development of
• Company Finances: approving expenses and approving and monitoring acquisitions, divestitures
and financial and other reporting.
• Human Resources: appointing, and, where appropriate, removing the Managing Director as well as
reviewing the performance of the Managing Director and monitoring the performance of senior
management in their implementation of the Company’s strategy.
• Ensuring the Health, Safety and Well-Being of Employees: in conjunction with the senior
management team, developing, overseeing and reviewing the effectiveness of the Company’s
occupational health and safety systems to ensure the well-being of all employees.
• Delegation of Authority: delegating appropriate powers to the Managing Director to ensure the
effective day-to-day management of the Company and establishing and determining the powers and
functions of the Committees of the Board.
2.3
Nomination Committee
2.3.1 Role
The role of a Nomination Committee is to help achieve a structured Board that adds value to the Company
by ensuring an appropriate mix of skills are present in Directors on the Board at all times.
As the whole board consists of three (3) members, the Company does not have a remuneration committee
because it would not be a more efficient mechanism than the full board for focusing the Company on
specific issues.
2.3.2 Responsibilities
The responsibilities of a Nomination Committee would include devising criteria for Board membership,
regularly reviewing the need for various skills and experience on the Board and identifying specific
individuals for nomination as Directors for review by the Board. The Nomination Committee also oversees
management succession plans including the Managing Director and his/her direct reports and evaluate the
Board’s performance and make recommendations for the appointment and removal of Directors. Currently
the Board as a whole performs this role. Matters such as remuneration, expectations, terms, the
procedures for dealing with conflicts of interest and the availability of independent professional advice are
clearly understood by all Directors, who are experienced public company Directors.
11
Classic Minerals Ltd
Corporate Governance Report
Criteria for selection of Directors
2.4
Directors are appointed based on the specific governance skills required by the Company. Given the size of
the Company and the business that it operates, the Company aims at all times to have at least two Directors
with experience appropriate to the Company’s target market. In addition, Directors should have the relevant
blend of personal experience in accounting and financial management and Director-level business
experience. The Nomination Committee is responsible for implementing a program to identify, assess and
enhance director competencies. In addition, the Nomination Committee puts in place succession plans to
ensure an appropriate mix of skills; experience, expertise and diversity are maintained on the Board.
Performance Review/Evaluation
2.5
It is the policy of the Board to conduct a regular evaluation of its own performance, the committees’
performances and the Directors’ performances against appropriate measures. The evaluation process was
first introduced via the Board Charter adopted on 14 September 2011. It was implemented for the financial
year ended 30 June 2013. The objective of this evaluation is to provide ongoing best practice corporate
governance to the Company.
Independent Professional Advice
2.6
The Board collectively and each Director has the right to seek independent professional advice at the
Company’s expense, up to specified limits, to assist them to carry out their responsibilities.
PRINCIPLE 3: PROMOTE ETHICAL AND RESPONSIBLE DECISION MAKING
Role of the Board
3.1
The Board’s role is to govern the Company rather than to manage it. In governing the Company, the
Directors must act in the best interests of the Company as a whole. It is the role of the senior executives to
manage the Company in accordance with the direction and delegations of the Board and the responsibility
of the Board to oversee the activities of management in carrying out these delegated duties. In carrying out
its governance role, the main task of the Board is to drive the performance of the Company. The Board
must also ensure that the Company complies with all of its contractual, statutory and any other legal
obligations, including the requirements of any regulatory body. The Board has the final responsibility for the
successful operations of the Company.
To assist the Board carry out its functions, it has developed a Code of Conduct to guide the Directors, the
Managing Director and other senior executives in the performance of their roles. The Code of Conduct
addresses the maintenance of the confidence in the Company’s integrity, legal obligations and expectations
of shareholders, responsibility and accountability of individuals for reporting and investigating reports of
unethical behaviour.
Trading in Company Shares
3.2
On 14 September 2011 the Board reviewed and adopted a Share Trading Policy which included restrictions
on trading in closed periods, complying with the ASX Listing Rule requirements. The Board periodically
reminds Directors, senior executives and employees of the prohibition in the Corporations Act 2001
concerning trading in the Company’s securities when in possession of “inside information”. The Board also
periodically reminds Directors of their obligations to notify the Company Secretary of any trade in securities
to ensure that ASX Listing Rule requirements are met.
3.3
Directors must:
Conflicts of Interest
•
• disclose to the Board actual or potential conflicts of interest that may or might reasonably be thought
to exist between the interests of the Director and the interests of any other parties in carrying out the
activities of the Company; and
if requested by the Board, within seven days or such further period as may be permitted, take such
necessary and reasonable steps to remove any conflict of interest.
If a Director cannot or is unwilling to remove a conflict of interest then the Director must, as per the
Corporations Act, absent himself or herself from the room when discussion and/or voting occurs on
matters about which the conflict relates.
Commitments
3.4
Each member of the Board is committed to spending sufficient time to enable them to carry out their duties
as a Director of the Company.
•
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Annual Report 2014
Confidentiality
3.5
In accordance with legal requirements and agreed ethical standards, Directors and key executives of the
Company have agreed to keep confidential, information received in the course of the exercise of their duties
and will not disclose non-public information except where disclosure is authorised or legally mandated.
Related Party Transactions
3.6
Related party transactions include any financial transaction between a Director and the Company. Unless
there is an exemption under the Corporations Act from the requirement to obtain shareholder approval for
the related party transaction, the Board cannot approve the transaction.
Diversity Policy
3.7
The Company recognises and respects the value of diversity at all levels of the organisation.
The Company is committed to setting measurable objectives for attracting and engaging women at the
Board level, in senior management and across the whole organisation.
As at the date of this report, the Company has the following proportion of women appointed:
•
•
•
to the Board – 0%
to senior management – 0%
to the organisation as a whole – 12.5%
The Company’s objective is to promote a culture which embraces diversity through ongoing education,
succession planning, director and employee selection and recognising skills are not gender specific.
PRINCIPLE 4: SAFEGUARD INTEGRITY IN FINANCIAL REPORTING
Audit Committee
4.1
Due to the size and scale of operations of the Company the full Board undertakes the role of the Audit
Committee. In the absence of an audit committee, the Board sets aside time to deal with issues and
responsibilities usually delegated to the audit committee to ensure the integrity of the financial statements of
the Company and the independence of the external auditor. Below is a summary of the role and
responsibilities of an Audit Committee.
4.1.1 Role
The Audit Committee is responsible for reviewing the integrity of the Company’s financial reporting and
overseeing the independence of the external auditors.
As the whole Board only consists of three (3) members, the Company does not have an audit committee
because it would not be a more efficient mechanism than the full Board for focusing the Company on
specific issues and an audit committee cannot be justified based on a cost-benefit analysis. As the
Company moves towards becoming a mining company, an audit committee will be formed consisting
primarily of Independent Directors.
4.1.2 Responsibilities
The Audit Committee or as at the date of this report the full Board of the Company reviews the audited
annual and half-yearly financial statements and any reports which accompany published financial
statements and recommends their approval to the members.
The Audit Committee or as at the date of this report the full Board of the Company each year reviews the
appointment of the external auditor, their independence, the audit fee, and any questions of resignation or
dismissal.
The Audit Committee or as at the date of this report the full Board of the Company is also responsible for
establishing policies on risk oversight and management.
13
Classic Minerals Ltd
Corporate Governance Report
Risk Management Policies
4.2
The Board’s Charter clearly establishes that it is responsible for ensuring there is a sound system for
overseeing and managing risk. As the whole Board only consists of three (3) members, the Company does
not have a Risk Management Committee because it would not be a more efficient mechanism than the full
Board for focusing the Company on specific issues.
The Board sets aside time at meetings to discuss any risk management issues and Directors are
encouraged to give priority to such issues. The Company has developed a Risk Assessment Record in
order to assist with the risk management of the Company.
In developing its risk management policies, the Board has taken into consideration any legal obligations and
the reasonable expectations of its stakeholders in relation to risk management. The Chair is accountable to
the Board for effective risk management. The Board undertakes to review the management of material
business risks at least annually.
The Board has received assurance from the Managing Director that the declaration provided in accordance
with section 295A of the Corporations Act is founded on a sound system of risk management and internal
control and that the system is operating effectively in all material respects in relation to financial reporting
risks.
PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE
Continuous Disclosure
5.1
The Board has adopted a continuous disclosure policy to ensure that the Company complies with the
disclosure requirements of the ASX Listing Rules. The Board and Senior Executives have designated the
Company Secretary as the person responsible for overseeing and coordinating disclosure of information to
the ASX as well as communicating with the ASX. In accordance with the ASX Listing Rules the Company
immediately notifies the ASX of information:
•
•
concerning the Company that a reasonable person would expect to have a material effect on the
price or value of the Company’s securities; and
that would, or would be likely to, influence persons who commonly invest in securities in deciding
whether to acquire or dispose of the Company’s securities.
PRINCIPLE 6: RESPECT THE RIGHTS OF SHAREHOLDERS
Shareholder Communication
6.1
The Company respects the rights of its shareholders and to facilitate the effective exercise of those rights
the Company is committed to:
•
communicating effectively with shareholders through releases to the market via ASX, information
mailed to shareholders and the general meetings of the Company;
• giving shareholders ready access to balanced and understandable information about the Company
and corporate proposals;
• making it easy for shareholders to participate in general meetings of the Company; and
•
requesting the external auditor to attend the annual general meeting and be available to answer
shareholder questions about the conduct of the audit and the preparation and content of the auditor’s
report.
The Company also makes available a telephone number and email address for shareholders to make
enquiries of the Company and encourages shareholders to visit the Company’s website for information.
14
Annual Report 2014
PRINCIPLE 7: RECOGNISE AND MANAGE RISK
7.1
Risk Management
7.1.1 Risk Management Policies
The Company’s risk management strategy policy states that the Board as a whole is responsible for the
oversight of the Company’s risk management and control framework. The objectives of the Company’s risk
management strategy are to:
identify risks to the Company;
•
• balance risk to reward;
• ensure regulatory compliance is achieved; and
• ensure senior executives, the Board and investors understand the risk profile of the Company.
The Board monitors risk through various arrangements including:
•
regular Board meetings;
•
share price monitoring;
• market monitoring; and
•
regular review of financial position and operations.
The Company has developed a Risk Assessment Record in order to assist with the risk management of the
Company. The Company’s risk management strategy was formally reviewed by the Board on 14
September 2011 and was considered a sound strategy for addressing and managing risk.
Attestations by Managing Director and Chief Financial Officer
7.2
It is the Board’s policy, that the Managing Director and the Chief Financial Officer make the attestations
recommended by the ASX Corporate Governance Council as to the Company’s financial condition prior to
the Board signing the Annual Report. These roles are performed by the Managing Director and Chief
Financial Officer. The Managing Director and Chief Financial Officer have declared to the Board that the
Company’s management of its material business risks is effective.
PRINCIPLE 8: RENUMERATE FAIRLY AND RESPONSIBLY
8.1
Remuneration Committee
8.1.1 Role
The role of a Remuneration Committee is to assist the Board in fulfilling its responsibilities in respect of
establishing appropriate remuneration levels and incentive policies for employees.
As the whole board consists of three (3) members, the Company does not have a remuneration committee
because it would not be a more efficient mechanism than the full board for focusing the Company on
specific issues.
8.1.2 Responsibilities
The responsibilities of a Remuneration Committee, or the full Board include setting policies for senior
officers’ remuneration, setting the terms and conditions of employment for the Managing Director, reviewing
and making recommendations to the Board on the Company’s incentive schemes and superannuation
arrangements,
remuneration of both Executive and Non-Executive Director’s,
recommendations for remuneration by gender and making recommendations on any proposed changes and
undertaking reviews of the Managing Director’s performance, including, setting with the Managing Director
goals and reviewing progress in achieving those goals.
reviewing
the
15
Classic Minerals Ltd
Corporate Governance Report
Remuneration Policy
8.2
Directors’ Remuneration for the majority of Directors was approved at a Board meeting held after the ASX
listing of the Company.
8.2.1 Senior Executive Remuneration Policy
The Company is committed to remunerating its senior executives in a manner that is market-competitive
and consistent with best practice as well as supporting the interests of shareholders and in accordance with
thresholds set in plans approved by shareholders. Consequently, under the Senior Executive Remuneration
Policy the remuneration of senior executive may be comprised of the following:
•
fixed salary that is determined from a review of the market and reflects core performance
requirements and expectations;
long term incentives in the form of shares or options in the Company;
•
• participation in any share/option scheme with thresholds approved by shareholders;
•
statutory superannuation.
There are no retirement benefits for senior executives.
By remunerating senior executives through performance and long-term incentive plans in addition to their
fixed remuneration the Company aims to align the interests of senior executives with those of shareholders
and increase Company performance.
Where shares and options are granted to senior executives the value would be calculated using the Black-
Scholes method.
The objective behind using this remuneration structure is to drive improved Company performance and
thereby increase shareholder value as well as aligning the interests of executives and shareholders.
The Board may use its discretion with respect to the payment of bonuses, stock options and other incentive
payments.
8.2.2 Non-Executive Director Remuneration Policy
Non-Executive Directors are to be paid their fees out of the maximum aggregate amount approved by
shareholders for the remuneration of Non-Executive Directors. Non-Executive Directors do not receive
performance based bonuses and do not participate in equity schemes of the Company.
Non-Executive Directors are entitled to but not necessarily paid statutory superannuation. There are no
retirement benefits for Non-Executive Directors.
8.3
Full details regarding the remuneration of Directors, is included in the Directors’ Report.
Current Director Remuneration
Principle
Recommendation
/
Requirement
Compliance
Reference
Principle 1
Recommendation
1.1
Recommendation
1.2
Recommendation
1.3
Principle 2
Recommendation
2.1
Lay Solid Foundations for Management and
Oversight
Functions of the Board and Senior Executives
Performance Evaluation of Senior Executives
Reporting on Principle 1
Yes
Yes
Yes
1.1, 1.2,
1.4
1.1, 1.2,
Structure the Board to Add Value
Independent Directors
Yes
2.1
16
Annual Report 2014
Recommendation
2.2
Recommendation
2.3
Recommendation
2.4
Recommendation
2.5
Recommendation
2.6
Principle 3
Recommendation
3.1
Recommendation
3.2
Recommendation
3.3
Recommendation
3.4
Recommendation
3.5
Principle 4
Recommendation
4.1
Recommendation
4.2
Recommendation
4.3
Recommendation
4.4
Principle 5
Recommendation
5.1
Recommendation
5.2
Principle 6
Recommendation
6.1
Recommendation
6.2
Principle 7
Recommendation
7.1
Recommendation
7.2
Recommendation
7.3
Recommendation
7.4
Principle 8
Recommendation
8.1
Independent Chair
Role of the Chair and CEO
Establishment of Nomination Committee
Performance Evaluation Process
Reporting on Principle 2
Promote Ethical and Responsible Decision
Making
Directors’ and Senior Executives’ Code of Conduct
Diversity Policy
Diversity Policy Objectives
Diversity Reporting
Reporting on Principle 3
Safeguard Integrity in Financial Reporting
Establishment of Audit Committee
Structure of Audit Committee
Audit Committee Charter
Reporting on Principle 4
Make Timely and Balanced Disclosure
Policy for Compliance with Continuous Disclosure
Reporting on Principle 5
Respect the Rights of Shareholders
Communications Strategy
Reporting on Principle 6
Recognise and Manage Risk
Policies on Risk Oversight and Management of
Material Business Risks
Attestations by Chief Executive Officer and Chief
Financial Officer
Risk Management and Internal Control
Reporting on Principle 7
No
Yes
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
No
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
2.1
2.1, 1.2
2.3
2.5
2.1, 2.6,
2.3.2, 2.5
3.1, 3.2
3.7
3.7
3.7
3.1, 3.2,
3.7
4.1
4.1.2
4.1
4.1,
4.1.1, 4.2
5.1
5.1
6.1
6.1
7.1.1
7.2
7.1.1
7.1.1
Renumerate Fairly and Responsibly
Establishment of Remuneration Committee
No
8.1, 8.3
17
Classic Minerals Ltd
Corporate Governance Report
Recommendation
8.2
Recommendation
8.3
Recommendation
8.4
Structure of Remuneration Committee
Executive and Non-Executive Director Remuneration
Reporting on Principle 8
No
Yes
Yes
8.1
8.2.1,
8.2.2
8.1, 8.2.1
18
Annual Report 2014
Directors’ Report
The directors of Classic Minerals Limited submit herewith the financial report for the financial year ended 30
June 2014.
Directors
The names of directors in office at any time during or since the end of the financial year are:
Justin Doutch
Kent Hunter
Paul Lambrecht
Stanislaw Procak
(appointed 29 November 2013)
(resigned 29 November 2013)
Directors have been in office since the start of the financial year to the date of this report unless otherwise
stated.
Company Secretary
The name of secretary in office at any time during or since the end of the financial year is:
Kent Hunter
(resigned 22 April 2014)
Mr Jeffrey S Nurse CA, MBA, ACIS was appointed to the position of Company Secretary in 22 April 2014. Mr
Nurse is a Chartered Accountant and an Associate of the Chartered Institute of Secretaries. Previously, Mr
Nurse worked in several mid-tier chartered accounting firms.
Current Directors’ qualifications and experience
Justin Doutch (Executive Director)
Age: 32 years old
Qualifications and
Experience
Mr Doutch has served in the resource industry in Western Australia for the
past 11 years, where he has gained extensive experience in the areas of
drilling, mineral exploration and project financing. More recently Mr Doutch
has been serving as a Non-Executive Director of Ironstone Resources Ltd,
actively involved in the exploration and acquisition of a diverse range of
tenements in Western Australia. Justin's experience in exploration and the
development of processes to expediently access and explore Classic's
tenements is invaluable as is its alignment to the process of marketing its
value to investors and end-users alike.
Shareholdings
2,750,004 ordinary shares
(500,000 ordinary shares are indirectly held by Ironstone Resources Limited)
500,000 Options exercisable at $0.20 on or before 30 June 2015.
19
Classic Minerals Ltd
Directors’ Report
Kent Hunter (Non-Executive Director)
Age: 47 years old
Qualifications and
Experience
B.Bus CA
Mr Hunter is a Chartered Accountant with over 16 years in corporate and
company secretarial services, capital raisings, ASX Compliance and
regulatory requirements and involvement in listing over 20 Companies. Mr
Hunter founded Mining Corporate in 2000 which identified industrial,
technology and exploration companies requiring a route to ASX Listing. Mr
Hunter is a director of Cazaly Resources Limited.
Shareholdings
1,300,002 ordinary shares
Stanislaw Procak (Non-Executive Director)
Age: 71 years old
Qualifications and Experience
Mr Procak is an experienced manager with over 35 years of mining industry
experience in Western Australia. His specific area of experience comprises
the coordinating of the complete set-up for mining projects from grass roots
financial management, mining
including staffing, operating budgets,
techniques and methods and staff motivation to attain significant project
milestones including throughput and grades. Immediately prior to joining
Classic, Mr Procak was project manager at Golden West Resources Limited
and prior to that General Manager Operations with Mawson West Limited.
Mr. Procak’s experience includes employment in senior positions at Telfer
Gold Mine, Big Bell Gold Mine, Golden Grove Polymetaliic Mine and
Kambalda Nickel Operations.
Shareholdings
1,712,502 ordinary shares
825,001 Options exercisable at $0.20 on or before 30 June 2015.
Meetings of directors
During this financial year, the Directors met regularly to discuss the affairs of the Company.
The number of Directors’ meetings (including committees) held during the financial period, each
Director held office during the financial year, and the number of meetings attended by each director
were as follows:
Director
Board of Directors
Meetings.
Attended
Number
Eligible to Attend
Justin Doutch
Paul Lambrecht
Stan Procak
Kent Hunter
2
2*
2
2**
2
2*
2
2**
*: Mr Paul Lambrecht attended both Board Meetings prior to his resignation on 29 November 2013.
**: Mr Kent Hunter attended the Board Meetings in his capacity as Company Secretary.
Principal activities
The principal activity of Classic Minerals Limited during the financial year was the exploration of mineral
resource based projects, focussing on nickel, copper and gold metals.
20
Annual Report 2014
Operating results
The loss of the Company for the year ended 30 June 2014 amounted to $3,102,505 (2013- loss of
$3,206,916).
Dividends
No dividends were paid or declared for payment since the incorporation of the Company.
Review of operations
A comprehensive description of the Company’s exploration and research and development activities appears
in other Sections of this Annual Report.
The company has been engaged in acquiring tenements, conducting aeromagnetic surveys, conducting
geological assessment of other tenements as well as sourcing and gathering information on prospective new
tenements.
The company also conducted RC drilling activities and continued its geological assessment of its Fraser
Range tenement as part of its research and development activities.
In July 2014, the Company commenced RC Drilling on four new targets which were identified from the high
power Sub Audio Magnetics (SAM) Fixed Loop Electromagnetic (FLEM) survey, which was carried out in
May.
Significant changes in state of affairs
On 18 December 2013, the Company completed its non-renounceable Option Entitlement issue and raised
$1,005,126 before expenses of the issue. Shareholders as at 28 August 2013 were entitled to receive one
Option exercisable at 20 cents on or before 30 June 2015 for every two fully paid ordinary shares held.
Shareholders were required to pay $0.01 for each Option.
On 19 February 2014, the company issued 25m shares to sophisticated investors and raised $1.5m (“Private
Placement”). Proceeds from this Private Placement were used to advance the company’s exploration
activities at its Alpha and Mammoth discoveries at Fraser Range.
On 9 June 2014, the Company successfully completed its first Share Purchase Plan (“SPP”) and issued
5,212,500 shares at $0.04 per share and raised $208,500.
There were no other significant changes in the state of affairs of the Company during the year ended 30
June 2014.
After reporting date events
There are no other matters or circumstances that have arisen since 30 June 2014 that have or may
significantly affect the operations, results, or state of affairs of the Company in future financial years.
Future developments
The Company will continue to explore its exploration areas and look to establish its exploration interest in
prospective fields.
Environmental regulation
The Company is aware of its environmental obligations and acts to ensure its environmental commitments
are met. The directors are not aware of any significant breaches during the year.
21
Classic Minerals Ltd
Directors’ Report
Options Premium Reserve
The Option Premium reserve had a balance of $1,005,126 as at 30 June 2014.
Non-Audit Services
No non-audit services were provided in this financial year (2013 - $15,250). In 2013, the Company’s
previous auditors, Stantons International received non-audit fees for the preparation of an Investigating
Accountants Report for the Company’s Initial Public Offering (“IPO”).
Auditor’s independence declaration
The auditor’s independence declaration for the year ended 30 June 2014 has been received, forms part of
the Director’s Report, and can be found on page 30.
Indemnification of Officers
In accordance with the Company’s constitution, except as may be prohibited by the Corporations Act 2001,
every Officer or agent of the Company shall be indemnified out of the property of the Company against any
liability incurred by him in his capacity as Officer or agent of the Company or any related corporation in
respect of any act or omission whatsoever and howsoever occurring or in defending any proceedings,
whether civil or criminal.
During the financial year, the Company has paid insurance premiums in respect of directors’ and officers’
liability insurance. The insurance premiums relate to:
•
Costs and expenses incurred by the relevant officers in defending legal proceedings, whether civil or
criminal and whatever their outcome; and
Other liabilities that may arise from their position, with the exception of conduct involving wilful
breach of duty or improper use of information to gain a personal advantage.
•
During the financial year, the Company paid premiums for Directors and Officers liability insurance of
$14,190 (2013: $12,672).
Proceedings on behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the
Company for all or any part of those proceedings. The Company has not a party to any such proceedings
during the year.
22
Annual Report 2014
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for Directors and executives of Classic Minerals
Limited in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the
purpose of this report, Key Management Personnel of the Company are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the Company, directly
or indirectly, including any Director.
The remuneration report is set out in the Table.
Principles used to determine the nature and amount of remuneration
The Board is responsible for determining and reviewing compensation arrangements for the Directors. The
Board assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic
basis by reference to relevant employment market conditions with the overall objective of ensuring maximum
stakeholder benefit from the retention of a high quality board and executive team. The Company does not
link the nature and amount of the emoluments of such officers to the Company’s financial or operational
performance. The expected outcome of this remuneration structure is to retain and motive directors.
Due to the current size of the Company and number of directors, the Board has elected not to create a
separate Remuneration Committee but has instead decided to undertake the function of the Committee as a
full Board under the guidance of the formal charter.
The rewards for Directors have no set or pre-determined performance conditions or key performance
indicators as part of their remuneration due to the current nature of the business operations. The Board
determines appropriate levels of performance rewards as and when they consider rewards are warranted.
(a) Details of key management personnel (“KMP”)
(i) Directors
Justin Doutch
Stanislaw Procak
Kent Hunter
Paul Lambrecht
(ii) Senior Executives
Jacob Doutch
James Passaris
Jeffrey Nurse
(appointed 29 November 2013)
(resigned 29 November 2013)
(from 1 July 2013)
Details of Remuneration for Year Ended 30 June 2014 and 30 June 2013
The remuneration for each key management personnel of the Company during the
year was as follows:
23
Classic Minerals Ltd
Directors’ Report
SHORT-TERM BENEFITS
POST EMPLOYMENT
SHARE-BASED
PAYMENT
TOTAL
Salary
Other
Non-
Monetary
Superann-
uation
Retirement
Benefits
Equity
Options
$
Directors
Kevin Robertson
2014
2013
Kent Hunter
-
100,000
2014
2013
Stanislaw Procak
2014
2013
Justin Doutch
31,862
-
50,000
84,366
2014
2013
Jacob Doutch (ii)
2014
2013
Paul Lambrecht
2014
2013
250,000
133,963
173,042
149,422
18,939
58,288
James Passaris
2014
2013
227,854
169,521
Jeffrey Nurse
2014
110,000
-
-
-
-
-
21,300
-
-
-
-
-
-
21,330 (i)
52,100
-
-
-
-
265,289 (iii)
-
-
-
-
-
-
-
-
-
-
-
2013
-
Total Remuneration Key Management Personnel
-
861,697
695,560
265,289
73,400
21,330
-
-
-
-
-
4,625
375
23,125
11,049
16,006
12,205
-
375
-
-
10,175
-
53,931
24,004
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60,000 (ii)
-
-
-
-
-
-
-
60,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
31,862
-
54,625
106,011
294,455
197,112
189,048
221,627
18,939
58,663
493,143
169,521
120,175
-
1,202,247
852,964
REPRE-
SENTED
BY
EQUITY/
OPTIONS
%
-
-
-
-
-
-
-
-
27%
-
-
-
-
-
-
-
-
Included in Mr. Justin Doutch’s remuneration are non-monetary benefits being a motor vehicle that he is entitled to under his
services agreement.
In 2013, an aggregate amount of $221,627 was paid or was due and payable to Mr. Jacob Doutch in his capacity as tenement
manager and included the granting of 2,000,000 shares at nil consideration.
As at 30 June 2013, a total of $248,681 was outstanding from Mr. Passaris, a member of the Company’s key management
personnel. During the period interest accrued on this loan balance amounted to $16,608. On 30 December 2013 the directors
resolved to forgive the total loan amount, including accrued interest, of $265,289 to Mr Passaris. This loan forgiveness has
been treated as part of Mr Passaris’s remuneration for the current financial period.
2014
2013
i)
ii)
iii)
24
Annual Report 2014
Employment Details of Members of Key Management Personnel
On 19 November 2012, the Company entered into a services agreement with Mr. Justin Doutch effective
from 9 November 2012. Under this Agreement, Mr Doutch has been engaged by the Company to provide
services to the Company in the capacity of Managing Director. There is no fixed term to this Agreement.
Under this Agreement there are standard termination provisions under which the Company can give notice of
termination, or alternatively, payment in lieu of services. In addition, Mr Doutch is entitled to all unpaid
remuneration and entitlements up to the date of termination. Mr. Doutch was paid an annual remuneration of
$180,000 plus statutory superannuation and is entitled to the supply of a motor vehicle. Following the
Company’s successful Initial Public Offering (“IPO”), Mr. Doutch’s salary has been increased to $250,000
plus statutory superannuation. This increase was approved at a Director’s Meeting by the Board. Upon
termination or after a period of 5 years, the motor vehicle ownership will be transferred to Mr. Doutch at nil
consideration at which point all running costs will be at the expense of Mr. Doutch. Mr. Doutch will also be
reimbursed for reasonable expenses incurred in carrying out his duties.
In the event that Mr Justin Doutch’s contract is terminated after one year of service, he will be entitled to an
additional week’s notice and any annual leave and long service leave entitlements will be paid.
Non-Executive Director Letter Agreements
The Company has entered into non-executive director letter agreements with Kent Hunter, and Stan Procak,
as well as previous director, Paul Lambrecht to provide for the terms and conditions on which the Non-
Executive Directors would carry out their duties to the Company and the Non-Executive Directors agreed to
act as non-Executive Directors to the Company. Mr. Hunter and Mr. Procak were paid an annual
remuneration of $60,000 and $50,000 plus statutory superannuation respectively and are reimbursed for
reasonable expenses incurred in carrying out their duties.
Executive Agreements
The Company has entered into an employment contract with Jacob Doutch as Tenement Manager effective
from 15 June 2012 at an agreed salary of $133,328 inclusive of superannuation. Following the Company’s
successful
to $165,000 plus
superannuation and during this financial year was increased to $195,000 plus superannuation.
Initial Public Offering, Jacob Doutch’s salary has been
increased
In the event that Mr Jacob Doutch’s employment is terminated after one year of service, he will be entitled to
receive an additional week’s notice and any annual leave and long service leave entitlements will be paid.
The Company has entered into an employment contract with Jeffrey Nurse as the Company’s Chief Financial
Officer effective from 1 April 2012. Following the Company’s successful IPO, Jeffrey Nurse’s salary was
increased to $110,000 plus superannuation. On 22 April 2014, Mr Nurse accepted the additional role of
Company Secretary.
Consultancy Agreement
The company has entered into a consultancy agreement with Aneles Consulting Pty Ltd, a company in which
James Passaris has an interest to provide business services at the rate of $2,500 per week plus GST.
Following the Company’s successful IPO this was increased to $4,820 (GST inclusive) per week.
Either party may terminate the Agreement at any time by providing the other Party with a written notice of
termination equal to the Notice period and in the case of the principal paying the Contractor an amount equal
to the Fee the contractor would otherwise earn during the Notice period. The Notice period is 90 days.
25
Classic Minerals Ltd
Directors’ Report
Shareholdings of Key Management Personnel
(a) Number of ordinary shares held by key management personnel during the year
Stanislaw Procak
Justin Doutch
Kent Hunter
Paul Lambrecht
Jacob Doutch
James Passaris
Jeffrey Nurse
Balance
1 July 2013
Received as
remuneration
Net Change
Other
Balance
30 June 2014
1,650,002
2,000,004
1,300,002
1,200,002
1,960,000
2,240,010
500,000
10,850,020
-
-
-
-
-
-
-
-
62,500
250,000
-
-
-
-
-
312,500
1,712,502
2,250,004
1,300,002
1,200,002*
1,960,000
2,240,010
500,000
11,162,520
(i) Number of shares held at time of Resignation
Kevin Robertson(i)
Angelo Ikonomou(i)
Gary Lyons (i)
Stanislaw Procak
Justin Doutch
Paul Lambrecht
Jacob Doutch
James Passaris
Balance
1 July 2012
Received as
remuneration
Net Change
Other
Balance
30 June 2013
600,000
1,000,000
1,000,000
1,650,000
2,000,000
1,200,000
-
2,240,000
9,690,000
-
-
-
-
-
-
1,960,000
-
1,960,000
-
-
-
2
4
2
-
10
18
600,000
1,000,000
1,000,000
1,650,002
2,000,004
1,200,002
1,960,000
2,240,010
11,650,018
Options to subscribe for unused fully paid ordinary shares in the Company at the date of this report held by
directors and other Key Management Personnel.
Status
Directors
Justin Doutch
Kent Hunter
Paul Lambrecht
Stan Procak
Senior Executives
Jacob Doutch
James Passaris
Jeffrey Nurse
Number
Exercise Price
Expiry Date
500,000 Options
600,001 Options
600,001 Options
825,001 Options
Nil Options
20,000 Options
250,000 Options
2,795,003
Options
$0.20
$0.20
$0.20
$0.20
$0.20
$0.20
$0.20
On or before 30 June 2015
On or before 30 June 2015
On or before 30 June 2015
On or before 30 June 2015
On or before 30 June 2015
On or before 30 June 2015
On or before 30 June 2015
Options to subscribe for unused fully paid ordinary shares in the Company at the date of this report held by
other option holders:
Status
Number
Exercise Price Expiry Date
Other Option holders
98,342,604 Options
$0.20
On or before 30 June 2015
No person entitled to exercise any of these options had or has any right by virtue of the option to participate
in any share issue of any other body corporate.
26
Annual Report 2014
Transactions with Directors, Director Related Entities and other Related Entities are:
In 2014, an aggregate amount of $55,000 was paid or due and payable to Guide Resources Pty Ltd, these payments
related to Options over several mining tenements covered by a Tenement Sourcing Agreement. Mr. James Passaris is a
director of Guide Resources Pty Ltd. In addition to these payments, the Company made a $100,000 fully refundable
deposit to Guide to carry out due diligence on three tenements E28/2370, E28/2371 and E25/454 all located in the
Cowarna Rocks area, to acquire the marketing of iron ore rights on these tenements.
Additionally, the Company acquired the Marketing Rights to iron ore over the Cowarna Rocks tenement (E28/2238) for
$400,000 (cash) and 5 million shares valued at $800,000 from Guide Resources Pty Ltd. In June 2014, an independent
valuation of the Cowarna Rocks tenement was prepared by an Independent Geologist, Al Maynard & Associates and
valued the Cowarna Rocks tenement between $0.8 million and $1.4 million.
In 2014, an aggregate amount of $985,919 was paid or due and payable to Denarda Holdings Pty Ltd (“Denarda”).
Denarda is in the business of providing drilling services to mining companies and these services were provided to this
Company at commercial rates. An amount of $264,609 remains as a prepayment as at 30 June 2014.
In 2014, an aggregate amount of $39,394 was paid or due and payable to MCAS Corporate Advisory Services Pty Ltd,
(“MCAS”) of this amount $7,532 related to the provision of corporate advisory services, and corporate secretarial services
while Mr. Kent Hunter, acted as Company Secretary. The remaining $31,862 related to Directors Fees payable to Mr
Hunter in his capacity as Non-Executive Director. Mr Hunter has an interest in MCAS Corporate Advisory Services Pty
Ltd.
In the financial year ended 30 June 2014, an aggregate amount of $18,939 was paid, or due and payable to Alouisus Pty
Ltd, a company related to Mr. Paul Lambrecht, this amount represented Directors’ Fees for the five months that Mr
Lambrecht was a Non-Executive Director of the Company. Mr Lambrecht resigned as a Non-Executive Director with
effect from 29 November 2013.
In 2013, an aggregate amount of $313,166 was paid or due and payable to Denarda Holdings Pty Ltd (“Denarda”), a
company in which John Doutch has a beneficial interest. Denarda is in the business of providing drilling services to
mining companies and these services were provided to this Company at commercial rates.
In 2013, an aggregate amount of $74,372 was paid or due and payable to Mining Corporate Pty Ltd, (“Mining Corporate”)
in regard to the provision of corporate advisory services, assistance with the Company’s IPO and corporate secretarial
services. Mr. Kent Hunter, the Company Secretary at that time had an interest in Mining Corporate.
In 2013, an aggregate amount of $407,527 was paid or due and payable to Jett Holdings Pty Ltd in relation to
commissions as part of the Company’s IPO.
In 2013, an aggregate amount of $187,000 was paid or due and payable to Guide Resources Pty Ltd, these payments
related to the renewal of options over several mining tenements. Mr. James Passaris is a director of Guide Resources Pty
Ltd. In addition to these payments, the Company acquired the rights to market iron ore to potential purchasers,
consideration for this transaction was a $225,000 refundable deposit paid 21 June 2013, of which $25,000 has been
expensed, and five million shares in this Company.
•
•
•
•
•
•
•
• On 26th September 2013, the Company received a $220,000 (cash) (GST inclusive) payment relating to the sale of
mining tenements to Ironstone Resources Limited. The details of this transaction have been disclosed in Notes 8(i).
• As at 30 June 2013, an amount of $4,180 was due to Philip Capital Limited, this amount represented commissions
relating to the raising of capital in the Company’s IPO. Mr. Paul Lambrecht, a director of the Company at that time was
an employee of Philip Capital.
• As at 30 June 2013, an amount of $14,339 was due from John Doutch, Justin Doutch’s father. This amount has been
•
•
•
•
repaid in full.
In 2013, an aggregate amount of $201,336 was paid or due and payable to Justin Doutch and included an amount of
$52,100 was paid to a company related to Justin Doutch.
In the financial year ended 30 June 2013, an aggregate amount of $62,887 was paid, or due and payable to Alouisus Pty
Ltd, a company related to Mr. Paul Lambrecht as Directors’ Fees, for the preceding fifteen month period.
In the financial year ended 30 June 2013, an aggregate amount of $110,265 was paid, or due and payable to Mr. Procak
for consulting services and Directors’ Fees for the fifteen months ended 30 June 2013;
In financial year ended 30 June 2013, an aggregate amount of $100,000 was paid or due and payable to Mr. Kevin
Robertson as Director’s Fees for the 24 months ending November 2012;
END OF REMUNERATION REPORT
27
Classic Minerals Ltd
Directors’ Report
This report of the directors, incorporating the Remuneration Report, is signed in accordance with a resolution
of the Board of Directors.
Justin Doutch
Executive Director
Dated this 29th day of September 2014
28
Annual Report 2014
Director’s Declaration
It is the opinion of the directors of Classic Minerals Limited (the “Company”);
1.
the financial statements and notes are in accordance with the Corporations Act 2001 and:
a.
b.
comply with Australian Accounting Standards and the Corporations Regulations 2001; and
give a true and fair view of the financial position of the Company as at 30 June 2014 and of
the performance as represented by the results of its operations and its cashflows for the
year ended on that date;
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.
3. the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in note 2.
This declaration is made in accordance with a resolution of the Board of Directors.
Justin Doutch
Executive Director
Dated this 29th day of September 2014
29
Classic Minerals Ltd
Auditors Independence Declaration
To The Board of Directors
As lead audit director for the audit of the financial statements of Classic Minerals Limited
for the financial year ended 30 June 2014, I declare that to the best of my knowledge
and belief, there have been no contraventions of:
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
any applicable code of professional conduct in relation to the audit.
Yours faithfully
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Director
Dated at Perth this 29th day of September 2014
30
Independent Audit Report
Annual Report 2014
We have audited the accompanying financial report of Classic Minerals Limited (“the
Company”), which comprises the statement of financial position as at 30 June 2014, and
the statement of profit or loss and other comprehensive income, statement of changes in
equity and statement of cash flows for the year then ended, notes comprising a summary
of accounting policies, other explanatory information and the directors’ declaration.
The directors of the Company are responsible for the preparation and fair presentation of
the financial report in accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the directors determine is
necessary to enable the preparation of the financial report that is free from material
misstatement, whether due to fraud or error. In Note 2, the directors also state, in
accordance with Accounting Standards AASB 101: Presentation of Financial Statements,
that the financial statements comply with International Financial Reporting Standards.
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. These Auditing
Standards require that we comply with relevant ethical requirements relating to audit
engagements and plan and perform the audit to obtain reasonable assurance whether
the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company’s preparation and fair presentation of
the financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Company’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the
directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
31
Classic Minerals Ltd
Independent Audit Report
In conducting our audit, we followed applicable independence requirements of Australian professional ethical
pronouncements and the Corporations Act 2001.
In our opinion:
a. The financial report of Classic Minerals Limited is in accordance with the Corporations Act 2001, including:
i.
giving a true and fair view of the Company’s financial position as at 30 June 2014 and of its
performance for the year ended on that date; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b. The financial statements also comply with International Financial Reporting Standards as disclosed in
Note 2.
Without qualifying our opinion, we draw attention to Note 2 in the financial report which indicates that the
Company incurred a loss before income tax of $3,102,505 during the year ended 30 June 2014. This
condition, along with other matters as set forth in Note 2, indicate the existence of a material uncertainty which
may cast significant doubt about the ability of the Company to continue as a going concern and whether it will
realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the
financial report.
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2014.
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on
the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
In our opinion, the Remuneration Report of Classic Minerals Limited for the year ended 30 June 2014,
complies with section 300A of the Corporations Act 2001.
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Director
Dated at Perth this 29th day of September 2014
32
Statement of Profit or Loss and Other Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2014
Annual Report 2014
Revenue from continuing operations
Profit on sale of shares in listed company
Profit on the sale of mining tenements
Research & Development rebate
Other Income
Employee benefits and consultants expense
Legal expenses & professional fees
Commissions paid
Depreciation expense
Exploration expense
Share-based payments
Travel expenses
Occupancy expenses
Provision for diminution in value of shares received as consideration
Administration expenses
Loan Forgiveness
Loss before income tax expense
Income tax benefit
Loss for the year
Other Comprehensive Income
Items that may subsequently be reclassified to profit or loss
-
Income tax on other comprehensive Income
Total Other Comprehensive Income
Total Comprehensive loss for year
sale of financial asset
Loss for the year
Attributable to members of Classic Minerals Limited
Attributable to non-controlling interest
Total Comprehensive loss for year
Attributable to members of Classic Minerals Limited
Attributable to non-controlling interest
Note
3
3
3
3
3
11
28
4
8
5
30 June 2014
$
30 June 2013
$
50,000
399,319
-
2,830,198
37,755
(1,743,810)
(545,987)
(277,514)
(65,341)
(2,738,361)
(433,065)
(85,933)
(152,995)
-
(111,482)
(265,289)
(3,102,505)
-
(3,102,505)
(66,667)
-
(66,667)
(3,169,172)
(3,102,505)
-
(3,102,505)
(3,169,172)
-
(3,169,172)
45,659
-
334,000
-
-
(1,216,836)
(77,890)
(9,569)
(18,527)
(1,116,475)
(258,545)
(176,643)
(64,274)
(275,000)
(372,816)
-
(3,206,916)
-
(3,206,916)
-
66,667
-
66,667-
(3,140,249)
(3,206,916)
-
(3,206,916)
(3,140,249)
-
(3,140,249)
Basic loss per share (cents per share)
6
(1.51)
(1.821)
The accompanying notes form part of this financial report.
33
Classic Minerals Ltd
Statement of Financial Position
AS AT 30 JUNE 2014
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial Assets
Other
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Exploration, evaluation and development
Intangibles
Other assets
Financial assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Employee provision
Borrowings
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS/ (LIABILITIES)
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of this financial report.
30 June 2014
$
30 June 2013
$
Note
7
8
9
10
11
12
13
14
9
15
16
17
17
18
19
339,807
3,054,814
-
264,609
3,659,230
350,578
131,300
1,200,000
35,642
-
1,717,520
5,376,750
1,342,567
54,477
852,676
2,249,720
108,905
108,905
2,358,625
3,018,125
11,943,381
1,005,126
(9,930,382)
3,018,125
1,284,830
588,702
566,667
75,000
2,515,199
213,274
-
-
215,642
-
428,916
2,944,115
663,259
29,753
13,368
706,380
62,898
62,898
769,278
2,174,837
8,936,046
66,667
(6,827,877)
2,174,837
34
Annual Report 2014
Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2014
Balance at 30 June 2012
Total Comprehensive Loss for the year
Loss for the year
Other Comprehensive Income
Total Comprehensive Income/(Loss)
Transactions with owners recorded directly
in equity
Shares issued (net of expenses) during
the year
Issued
Capital
$
2,466,974
-
-
-
Financial Asset
Reserve
$
-
-
66,667
66,667
Accumulated
Losses
$
(3,620,961)
(3,206,916)
-
(3,206,916)
Total
Equity
$
(1,153,987)
(3,206,916)
66,667
(3,140,249)
6,469,072
-
-
6,469,072
Balance at 30 June 2013
8,936,046
66,667
(6,827,877)
2,174,836
Balance at 30 June 2013
Total Comprehensive Loss for the year
Loss for the year
Other Comprehensive Income
Total Comprehensive Income/(Loss)
Transactions with owners recorded directly
in equity
Shares issued (net of expenses) during
the year
Balance at 30 June 2014
Issued
Capital
$
8,936,046
Financial Asset
Reserve
$
66,667
-
-
-
-
3,007,335
11,943,381
-
(66,667)
(66,667)
-
-
-
Option Premium
Reserve
-
-
-
-
1,005,126
-
Accumulated
Losses
$
(6,827,877)
(3,102,505)
-
(3,102,505)
-
-
Total
Equity
$
2,174,836
(3,102,505)
(66,667)
(3,169,172)
1,005,126
3,007,335
1,005,126
(9,930,382)
3,018,125
The accompanying notes form part of this financial report.
35
Classic Minerals Ltd
Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2014
Note
23(a)
13
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Net cash (outflows) from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Fixed Assets
Proceeds from the sale of shares in a listed company
Purchase of shares in listed company Fairstar Resources Ltd
Exercise of Option to acquire Doherty’s
Purchase of Marketing Rights at Cowarna Rocks
Loans to employees/consultants
Loans to related entities
Return of Refundable Deposit
Refundable Deposit received subject to due diligence
Payments for other assets
Net cash (outflows) from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Share Capital received (net)
Proceeds from Option Entitlement Issue
Repayment of Loans received/(repaid)
Proceeds of short term loans and convertible note
Net cash inflows from financing activities
Net increase/ (decrease) in cash held
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
23(b)
The accompanying notes form part of this financial report.
30 June 2014
$
(5,184,901)
1,159
(5,183,742)
30 June 2013
$
(3,210,989)
45,659
(3,165,330)
(202,645)
699,319
(100,000)
(80,000)
(200,000)
-
14,339
350,000
200,000
-
681,013
1,722,970
1,005,126
(520,000)
1,349,610
3,557,706
(945,023)
1,284,830
339,807
(123,406)
-
(200,000)
-
-
(248,681)
(14,339)
(300,000)
-
(75,000)
(961,426)
5,850,777
-
(533,128)
-
5,317,649
1,190,893
93,937
1,284,830
36
Annual Report 2014
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
1. Corporate Information
The financial report of Classic Minerals Limited (the Company) for the year ended 30 June 2014 was
authorised for issue in accordance with a resolution of the directors on 29th September 2014.
2. Summary of Significant Accounting Policies
Basis of preparation
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards (including
Interpretations), other
authoritative pronouncements of the Australian Accounting Standards Board and the Corporation Act
2001.
the Australian Accounting
Australian Accounting Standards set out accounting policies that the AASB has concluded would
result in a financial report containing relevant and reliable information about transactions, events and
conditions. Compliance with Australian Accounting Standards ensures that the financial statements
and notes also comply with International Financial Reporting Standards. Material accounting policies
adopted in the preparation of this financial report are presented below and have been consistently
applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs,
modified, where applicable, by the measurement at fair value of selected non-current assets, financial
assets and financial liabilities.
Going Concern
The accounts have been prepared on the going concern basis, which contemplates continuity of
normal activities and the realisation of assets and settlement of liabilities in the ordinary course of
business. The Company incurred a loss of $3,102,505 for the year ended 30 June 2014 (2013:
$3,206,916).
The net working capital position of the Company at 30 June 2014 was $1,409,510 (2013: $1,808,819)
and the net decrease in cash held during the year was $945,023 (2013: increase of $1,190,893).
The Company has expenditure commitments relating to exploration expenditure obligations for their
projects of $105,300 which potentially could fall due in the twelve months to 30 June 2015.
Furthermore, the Company has finance and operating lease commitments of $192,122 payable in the
next 12 months.
The Directors have prepared a cashflow forecast which indicates that the Company will have sufficient
cashflows to meet all commitments and workings capital requirements for the period 12 months from
the date of signing this report. The Company intends to finance the future operations through the
following actions:
•
•
•
•
the completion of planned share placements to raise funds from the market
the receipt of the research and development rebate for the 2014 financial year
the continued support of shareholders in relation to loans provided
containing cash outflows
Should the Company not achieve the matters set out above, there is material uncertainty whether it
would continue as a going concern and therefore whether it would realise its assets and extinguish its
liabilities in the normal course of business and at the amounts stated in the financial statements.
The financial statements do not include any adjustment relating to the recoverability or classification of
recorded asset amounts or to the amounts or classifications of liabilities that might be necessary
should the Company not be able to continue as a going concern.
37
Classic Minerals Ltd
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
2. Summary of Significant Accounting Policies (continued)
(a) Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market
instruments, net of outstanding bank overdrafts.
Employee benefits
(b)
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave,
and sick leave when it is probable that settlement will be required and they are capable of being
measured reliably.
Provisions made in respect of employee benefits expected to be settled within 12 months, are
measured at their nominal values using the remuneration rate expected to apply at the time of
settlement.
Provisions made in respect of employee benefits which are not expected to be settled within 12
months are measured as the present value of the estimated future cash outflows to be made by the
entity in respect of services provided by employees up to reporting date.
(c) Financial assets
Investments are recognised and derecognised on trade date where purchase or sale of an investment
is under a contract whose terms require delivery of the investment within the timeframe established by
the market concerned, and are initially measured at fair value, net of transaction costs.
Subsequent to initial recognition, investments in subsidiaries are measured at cost.
Other financial assets are classified into the following specified categories: financial assets ‘at fair
value through profit or loss’, ‘available-for-sale’ financial assets, and ‘loans and receivables’. The
classification depends on the nature and purpose of the financial assets and is determined at the time
of initial recognition.
Available-for-sale financial assets
Shares and options held by the company are classified as being available-for-sale and are stated at
fair value less impairment. Gains and losses arising from changes in fair value are recognised directly
in the available-for-sale revaluation reserve, until the investment is disposed of or is determined to be
impaired, at which time the cumulative gain or loss previously recognised in the available-for-sale
revaluation reserve is included in the Statement of Profit or Loss and Other Comprehensive Income
for the year.
Financial assets at fair value through the Statement of Profit or Loss and Other Comprehensive
Income
The Company classifies certain shares as financial assets at fair value through profit or loss. Financial
assets held for trading purposes are classified as current assets and are stated at fair value, with any
resultant gain or loss recognised in the Statement of Profit or Loss and Other Comprehensive Income
for the year.
Loans and receivables
Trade receivables, loans, and other receivables are recorded at amortised cost less impairment.
(d) Financial instruments issued by the company
Debt and equity instruments
Debt and equity instruments are classified as either liabilities or as equity in accordance with the
substance of the contractual arrangement.
38
Annual Report 2014
2. Summary of Significant Accounting Policies (continued)
(d) Financial instruments issued by the company (continued)
Transaction costs on the issue of equity instruments
Transaction costs arising on the issue of equity instruments are recognised directly in equity as a
reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the
costs that are incurred directly in connection with the issue of those equity instruments and which
would not have been incurred had those instruments not been issued.
Fair Value of Assets and Liabilities
The Company measures some of its assets and liabilities at fair value on either a recurring or non-
recurring basis, depending on the requirements of the applicable Accounting Standard.
Fair value is the price the Company would receive to sell an asset or would have to pay to transfer a
liability in an orderly (i.e. unforced) transaction between independent, knowledgeable and willing
market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent observable market pricing information
is used to determine fair value. Adjustments to market values may be made having regard to the
characteristics of the specific asset or liability. The fair values of assets and liabilities that are not
traded in an active market are determined using one or more valuation techniques. These valuation
techniques maximise, to the extent possible, the use of observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or
liability (i.e. the market with the greatest volume and level of activity for the asset or liability) or, in the
absence of such a market, the most advantageous market available to the entity at the end of the
reporting period (ie the market that maximises the receipts from the sale of the asset or minimises the
payments made to transfer the liability, after taking into account transaction costs and transport costs).
For non-financial assets, the fair value measurement also takes into account a market participant's
ability to use the asset in its highest and best use or to sell it to another market participant that would
use the asset in its highest and best use.
The fair value of liabilities and the entity's own equity instruments (excluding those related to share-
based payment arrangements) may be valued, where there is no observable market price in relation to
the transfer of such financial instruments, by reference to observable market information where such
instruments are held as assets. Where this information is not available, other valuation techniques are
adopted and, where significant, are detailed in the respective note to the financial statements.
Valuation techniques
In the absence of an active market for an identical asset or liability, the Company selects and uses
one or more valuation techniques to measure the fair value of the asset or liability, The Company
selects a valuation technique that is appropriate in the circumstances and for which sufficient data is
available to measure fair value. The availability of sufficient and relevant data primarily depends on the
specific characteristics of the asset or liability being measured. The valuation techniques selected by
the Company are consistent with one or more of the following valuation approaches:
Market approach: valuation techniques that use prices and other relevant information generated by
market transactions for identical or similar assets or liabilities.
Income approach: valuation techniques that convert estimated future cash flows or income and
expenses into a single discounted present value.
Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current
service capacity.
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would
use when pricing the asset or liability, including assumptions about risks. When selecting a valuation
39
Classic Minerals Ltd
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
2. Summary of Significant Accounting Policies (continued)
(d) Financial instruments issued by the company (continued)
technique, the Company gives priority to those techniques that maximise the use of observable inputs
and minimise the use of unobservable inputs. Inputs that are developed using market data (such as
publicly available information on actual transactions) and reflect the assumptions that buyers and
sellers would generally use when pricing the asset or liability are considered observable, whereas
inputs for which market data is not available and therefore are developed using the best information
available about such assumptions are considered unobservable.
Fair value hierarchy
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which
categorises fair value measurements into one of three possible levels based on the lowest level that
an input that is significant to the measurement can be categorised into as follows:
Level 1
Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities
that the entity can access at the measurement date.
Measurements based on inputs other than quoted prices included in Level 1 that are observable for
the asset or liability, either directly or indirectly.
Level 2
Measurements based on inputs other than quoted prices included in Level 1 that are observable for
the asset or liability, either directly or indirectly
Level 3
Measurements based on unobservable inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using
one or more valuation techniques. These valuation techniques maximise, to the extent possible, the
use of observable market data. If all significant inputs required to measure fair value are observable,
the asset or liability is included in Level 2. If one or more significant inputs are not based on
observable market data, the asset or liability is included in Level 3.
The Group would change the categorisation within the fair value hierarchy only in the following
circumstances:
(i) if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or
vice versa; or
(ii) if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or
vice versa.
When a change in the categorisation occurs, the Group recognises transfers between levels of the fair
value hierarchy (i.e. transfers into and out of each level of the fair value hierarchy) on the date the
event or change in circumstances occurred.
40
Annual Report 2014
2. Summary of Significant Accounting Policies (continued)
(e) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST),
except:
i. where the amount of GST incurred is not recoverable from the taxation authority, it is
recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
for receivables and payables which are recognised inclusive of GST;
ii.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables.
Cash flows are included in the cash flow statement on a gross basis. The GST component of cash
flows arising from investing and financing activities which is recoverable from, or payable to, the
taxation authority is classified as operating cash flows.
(f) Impairment of assets
At each reporting date, the Company reviews the carrying amounts of its tangible and intangible
assets to determine whether there is any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where the asset does not generate cash flows
that are independent from other assets, the entity estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested
for impairment annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised in the Statement of Profit or Loss and Other
Comprehensive Income immediately, unless the relevant asset is carried at fair value, in which
case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-
generating unit) is increased to the revised estimate of its recoverable amount, but only to the
extent that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised for the asset (cash-generating unit) in
prior years. A reversal of an impairment loss is recognised in the Statement of Profit or Loss and
Other Comprehensive Income immediately, unless the relevant asset is carried at fair value, in
which case the reversal of the impairment loss is treated as a revaluation increase.
(g) Income tax
Current tax
Current tax is calculated by reference to the amount of income tax payable or recoverable in
respect of the taxable profit or tax loss for the year. It is calculated using tax rates and tax laws that
have been enacted or substantively enacted by reporting date. Current tax for current and prior
years is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
41
Classic Minerals Ltd
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
2. Summary of Significant Accounting Policies (continued)
(g) Income tax (continued)
Deferred tax
Deferred tax is accounted for using the statement of financial position liability method in respect of
temporary differences arising from differences between the carrying amount of assets and liabilities
in the financial statements and the corresponding tax base of those items.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred
tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be
available against which deductible temporary differences or unused tax losses and tax offsets can
be utilised. However, deferred tax assets and liabilities are not recognised if the temporary
differences giving rise to them arise from the initial recognition of assets and liabilities (other than
as a result of a business combination) which affects neither taxable income nor accounting profit.
Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences
arising from goodwill.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in
subsidiaries, branches, associates and joint ventures except where the entity is able to control the
reversal of the temporary differences and it is probable that the temporary differences will not
reverse in the foreseeable future. Deferred tax assets arising from deductible temporary
differences associated with these investments and interests are only recognised to the extent that it
is probable that there will be sufficient taxable profits against which to utilise the benefits of the
temporary differences and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
year(s) when the asset and liability giving rise to them are realised or settled, based on tax rates
(and tax laws) that have been enacted or substantively enacted by reporting date. The
measurement of deferred tax liabilities and assets reflects the tax consequences that would follow
from the manner in which the entity expects, at the reporting date, to recover or settle the carrying
amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same
taxation authority and the entity intends to settle its current tax assets and liabilities on a net basis.
Current and deferred tax for the year
Current and deferred tax is recognised as an expense or income in the statement of
comprehensive income, except when it relates to items credited or debited directly to equity, in
which case the deferred tax is also recognised directly in equity, or where it arises from the initial
accounting for a business combination, in which case it is taken into account in the determination
of goodwill or excess.
(h) Payables
Trade payables and other accounts payable are recognised when the entity becomes obliged to
make future payments resulting from the purchase of goods and services.
(i) Presentation currency
The entity operates entirely within Australia and the presentation currency is Australian dollars.
(j) Plant and equipment
Each class of property, plant and equipment is carried at cost or fair value less, where
applicable, any accumulated depreciation. 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.
42
Annual Report 2014
2. Summary of Significant Accounting Policies (continued)
(j) Plant and equipment
Depreciation
The depreciable amount of all fixed assets is depreciated on a diminishing value basis over their
useful lives to the Company commencing from the time the asset is held ready for use. The
depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Motor vehicles, Caravan and Quad Bikes
Office equipment
Depreciation Rate
18.75% - 37.5%
7.5% - 100%
(k) Exploration and Evaluation Expenditure
Identifiable exploration assets acquired are recognised as assets at their cost of acquisition.
Subsequent exploration and evaluation costs related to an area of interest are written off.
Acquired exploration assets are not written down below acquisition cost until such time as the acq
cost is not expected to be recovered through use or sale.
(l) Intangible assets
Intangible assets with indefinite lives that are acquired separately are carried at cost less
accumulated impairment losses.
(m) Provisions
Provisions are recognised when the entity has a present obligation, the future sacrifice of
economic benefits is probable, and the amount of the provision can be measured reliably.
The amount recognised as a provision is the best estimate of the consideration required to settle
the present obligation at reporting date, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured using the cashflows estimated to
settle the present obligation, its carrying amount is the present value of those cashflows.
When some or all of the economic benefits required to settle a provision are expected to be
recovered from a third party, the receivable is recognised as an asset if it is virtually certain that
recovery will be received and the amount of the receivable can be measured reliably.
(n) Revenue recognition
Interest revenue
Interest revenue is recognised on a time proportionate basis that takes into account the effective
yield on the financial asset.
(o) Equity based compensation
The Company expenses equity based compensation such as share and option issues after
ascribing a fair value to the shares and/or options issued. If options vest at date of grant, the
expense is taken up at date of grant and a corresponding Option Reserve is credited.
(p) Issued capital
Issued capital is recognised at the fair value of the consideration received by the Company. Any
transaction costs on the issue of shares are recognised directly in equity as a reduction of the
share proceeds received.
43
Classic Minerals Ltd
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
2. Summary of Significant Accounting Policies (continued)
(p) Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership
of the asset, but not the legal ownership that it transferred to the company, are classified as
finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts
equal to the fair value of the leased property or the present value of the minimum lease
payments, including any guaranteed residual values. Lease payments are allocated between
the reduction of the lease liability and the lease interest expense for the year.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful
lives or the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with
the lessor, are charged as expenses in the years in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a
straight-line basis over the life of the lease term.
(q) Earnings per share
Basic earnings per share is calculated as a net profit attributable to members, adjusted to
exclude any costs of servicing equity (other than dividends) and preference share dividends,
divided by the weighted average number of ordinary shares, adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members, adjusted for:
• costs of servicing equity (other than dividends) and preference share dividends;
• the after tax effect of dividends and interest associated with dilutive potential ordinary shares
that have been recognised as expenses; and
• other non-discretionary changes in revenues or expenses during the year that would result
from the dilution of potential ordinary shares; divided by the weighted average number of
ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
(r) Critical accounting judgments, estimates and assumptions
Share based payments
The Company measures the cost of equity-settled transactions principally with its creditors by
reference to the fair value of the equity instruments at the date at which they are granted. Share
based payments are disclosed at Note 28.
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 environmental impact the directors
believe such treatment is reasonable and appropriate.
44
Annual Report 2014
2. Summary of Significant Accounting Policies (continued)
(s) Critical accounting judgments, estimates and assumptions (continued)
Exploration and evaluation costs
Exploration and evaluation costs are written off in the year they are incurred apart from
acquisition costs which 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 statement of financial
position date reached a stage that permits reasonable assessment of the existence of
economically recoverable reserves.
Impairment of intangible assets
During the year, the directors considered the recoverability of the intangible asset by obtaining
an independent valuation to support the carrying value of the asset as described in Note 13.
The valuation resulted in a range between $0.8 million and $1.4 million. The directors believe
that the carrying value of $1,200,000 is not impaired.
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 the Australian Taxation Office.
Comparative figures
When required by accounting standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year.
When the Group applies an accounting policy retrospectively, makes a retrospective restatement
or reclassifies items in its financial statements, a statement of financial position as at the
beginning of the earliest comparative period will be disclosed.
(t) Adoption of New and Revised Accounting Standard
New and revised AASB’s affecting amounts reported and/or disclosures in the financial
statements
In the current year, the Company has applied a number of new and revised AASB’s issued by the
Australian Accounting Standards Board (AASB) that are mandatorily effective from an accounting
period on or after 1 January 2013.
The Company has applied AASB 13 ‘Fair Value Measurement’ for the first time in the current
year. AASB 13 establishes a single source of guidance for fair value measurements and
disclosures about fair value measurements. The scope of AASB 13 is broad; the fair value
measurement requirements of AASB 13 apply to both financial instrument items and non-financial
instrument items.
AASB 13 defines fair value as the price that would be received to sell an asset or paid to transfer
a liability in an orderly transaction in the principal (or most advantageous) market at the
measurement date under current market conditions. Fair value under AASB 13 is an exit price
regardless of whether that price is directly observable or estimated using another valuation
technique. Also, AASB 13 includes extensive disclosure requirements.
45
Classic Minerals Ltd
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
2. Summary of Significant Accounting Policies (continued)
(t) Adoption of New and Revised Accounting Standard (continued)
In addition, standards on consolidation, joint arrangements, associates and disclosures were
adopted. The impact of the application of these standards is not material.
Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Standards and Interpretations listed
below were in issue but not yet effective.
The Company does not anticipate that there will be a material effect on the financial statements
from the adoption of these standards.
Standard/Interpretation
Effective for annual
reporting
periods
beginning on or
after
to
Expected
be
initially applied in the
financial year ending
AASB 9 ‘Financial Instruments’, and the relevant
amending standards
1 January 2017
30 June 2018
AASB 1031 ‘Materiality’ (2013)
1 January 2014
30 June 2015
2012-3
to Australian
“Amendments
AASB
Accounting Standards – Offsetting Financial Assets
and Financial Liabilities’
1 January 2014
30 June 2015
AASB 2013-3 “Amendments
Recoverable Amount Disclosures
Financial Assets’
to AASB 135 –
-
for Non
AASB
Accounting Standards – Investment Entities’
“Amendments
2013-5
to Australian
1 January 2014
30 June 2015
1 January 2014
30 June 2015
2013-9
AASB
to Australian
“Amendments
Accounting Standards – Conceptual Framework,
Materiality and Financial Instruments’
1 January 2014
30 June 2015
NOTE 3: REVENUE FROM CONTINUING OPERATIONS
Interest on due diligence deposit
Research & Development Rebate 2012/13
Research & Development Rebate 2013/14
Profit on the sale of shares in a listed company
Other Income
Interest Income
Profit on the disposal of Motor vehicle
Profit on sale of mining tenements
30 June 2014
$
50,000
966,230
1,863,968
399,319
35,854
1,159
742
-
3,317,272
30 June 2013
$
-
-
-
-
-
45,659
-
334,000
379,659
46
Annual Report 2014
30 June 2014
$
30 June 2013
$
32,868
14,733
63,881
111,482
25,765
12,290
334,761
372,816
30 June 2014
$
30 June 2013
$
-
-
-
-
(3,102,505)
(3,206,916)
(930,751)
(962,075)
153,729
847,540
29,682
(100,200)
-
80,085
881,990
-
-
1,740,819
-
240,607
1,981,426
1,913,652
82,500
332,406
2,328,558
NOTE 4: LOSS BEFORE INCOME TAX
The loss before income tax has been arrived at after
charging the following expenses:
Insurance expenses
Telephone expenses
Other administration expenses
NOTE 5: INCOME TAX
(a) Current tax expense
Current year
(b) Numerical reconciliation between tax expense and pre tax net profit
Loss before tax
Income tax benefit calculated at 30%
Tax effect of:
- Non-deductible expenses
- Current year revenue losses for which no deferred tax
asset has been recognised
-Unrecognised timing differences
Capital losses utilised
Income tax expense on pre-tax net profit
(c) Unrecognised deferred tax balances
The following deferred tax assets (at 30%) have not been
brought to account:
Unrecognised deferred tax asset – tax losses
Unrecognised deferred tax asset- unrealised capital losses
Unrecognised deferred tax asset- other timing differences
Net deferred tax assets
The net deferred tax assets not brought into account will only be of a benefit to the Company if future assessable income is derived
of a nature and amount sufficient to enable the benefits to be realised, the conditions for deductibility imposed by the tax legislation
continue to be complied with and the Company are able to meet the continuity of ownership and/or continuity of business tests.
During the year ended 30 June 2014, the Company applied for and has been assessed as being eligible to receive a rebate from the
Australian Taxation Office of $966,230 representing the tax value of research and development costs for the year 30 June 2013 this
was received on 9 September 2014 and has been shown as a receivable at 30 June 2014. The estimated research and development
tax rebate in respect of expenditure incurred for the year ended 30 June 2014 of $1,863,968 is also shown as a receivable as at 30
June 2014 (Refer to Note 8).
NOTE 6: EARNINGS PER SHARE
a.
Loss for the year
Loss attributable to ordinary shareholders
30 June 2014
$
30 June 2013
$
(3,102,505)
(3,102,505)
(3,206,916)
(3,206,916)
b.
Weighted average number of ordinary shares at 30 June
204,837,678
176,120,830
Earnings per share – cents
(1.51)
(1.821)
47
Classic Minerals Ltd
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 7: CASH AND CASH EQUIVALENTS
Cash at bank
NOTE 8: TRADE AND OTHER RECEIVABLES
Current
Research & Development Rebate 2012/13(i)
Research & Development Rebate 2013/14
Receivable from Ironstone Resources Limited
Refundable Deposit
Resources Pty Ltd (ii)
Bonds and Security Deposits
Loan to Related Parties (iii)
Other receivables
for Marketing Rights paid
to Guide
30 June 2014
$
339,807
30 June 2013
$
1,284,830
30 June 2014
$
30 June 2013
$
966,230
1,863,968
-
100,000
42,477
-
82,139
3,054,814
-
-
200,000
-
-
263,020
125,682
588,702
As at 30 June 2014 trade and other receivables do not contain impaired assets and are not past due.
(i) On 9 September 2014, the Company received the Research & Development Rebate for 2012/13 of $966,230 and $19,627 in
interest.
(ii) On 4 March 2014, under the Company’s Tenement Sourcing Agreement with Guide Resources Pty Ltd, the Company entered
into an agreement to potentially acquire the marketing rights over three tenements. The price of the acquisition was to be
negotiated within a due diligence period of six months from the date of acceptance with a fully refundable deposit of $100,000
paid by the Company. As at the date of this report, the Company is in negotiations to extend the due diligence period. Refer to
Note 25 for disclosure of Related Party transactions.
(iii) Loans to Key Management Personnel (“KMP”) and Related Parties
Loan to John Doutch
Loan to James Passaris (iv)
30 June 2014
$
-
-
30 June 2013
$
14,339
248,681
(iv) As at 30 June 2013, a total of $248,681 was outstanding from Mr. Passaris, a member of the Company’s key management
personnel. During the period interest accrued on this loan balance amounted to $16,608.
On 30/12/2013 the directors resolved to forgive the total loan amount including accrued interest of $265,289 to Mr Passaris.
This loan forgiveness has been treated as part of Mr Passaris’s remuneration for the current financial period.
NOTE 9: FINANCIAL ASSETS
Current
Refundable Deposit with Nex Metals Exploration Limited (i)
Investment in shares in a listed company (ii)
30 June 2014
$
30 June 2013
$
-
-
-
300,000
266,667
566,667
(i) On 11 November 2013, the Company received the refundable deposit from Nex Metals Exploration Limited (“Nex Metals”).
(ii) As at 30 June 2014, the Company had sold all of its shareholding in Fairstar Resources Limited. The Company realised a profit
of $399,319 on the sale of these shares.
Non-Current
Shares received in consideration for the sale of mining tenements (at fair value) (iii)
Less: Provision for diminution in values of shares
275,000
(275,000)
-
275,000
(275,000)
-
48
Annual Report 2014
NOTE 9: FINANCIAL ASSETS (continued)
(iii) As at 30 June 2014 and 30 June 2013, the Company held 2,750,000 shares in Ironstone Resources Limited, a public
unlisted company. A provision for the diminution in value of these shares has been made.
NOTE 10: OTHER ASSETS
Current
Prepaid Drilling Expenses
30 June 2014
$
30 June 2013
$
264,609
264,609
75,000
75,000
The Company has a contract with Denarda Holdings Pty Ltd for the provision of drilling services. Pursuant to this Agreement the
Company has pre-paid drilling expenses. This prepayment will recovered from future services provided by Denarda. Refer to Note 25
for further explanation.
NOTE 11: PLANT AND EQUIPMENT
Gross Carrying Amount
Motor Vehicles, Caravan and Quad Bikes
Opening balance
Acquisitions
Disposals
Closing balance
Plant & Equipment
Opening balance
Acquisitions
Disposals
Closing balance
Motor Vehicle under Hire Purchase
Opening balance
Acquisitions
Disposals
Closing balance
Total Cost
Accumulated Depreciation
Motor Vehicles, Caravan and Quad Bikes
Opening balance
Depreciation charge for year
Impairment losses
Disposals
Closing balance
Plant & Equipment
Opening balance
Depreciation charge for year
Impairment losses
Disposals
Closing balance
30 June 2014
$
30 June 2013
$
192,466
74,273
(22,709)
244,030
62,800
83,676
-
146,476
77,500
139,853
(77,500)
139,853
530,359
83,350
109,116
-
192,466
49,957
12,843
-
62,800
-
77,500
-
77,500
332,766
30 June 2014
$
30 June 2013
$
69,031
24,239
-
-
93,270
46,828
24,387
-
-
71,215
57,999
11,032
-
-
69,031
43,179
3,649
-
-
46,828
49
Classic Minerals Ltd
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 11: PLANT AND EQUIPMENT (continued)
30 June 2014
30 June 2013
Motor Vehicle under Hire Purchase
Opening balance
Depreciation charge for year
Disposals
Closing balance
Carrying Amount
Motor vehicles, Caravan and Quad Bikes
At 1 July
At 30 June
Plant & Equipment
At 1 July
At 30 June
Motor Vehicle under Hire Purchase
At 1 July
At 30 June
Total Carrying Amount
-
18,929
(3,633)
15,296
179,781
123,435
150,763
15,972
75,261
73,867
124,557
350,581
-
3,633
-
3,633
119,492
25,351
123,435
6,778
15,972
-
73,867
213,274
NOTE 12: EXPLORATION, EVALUATION AND DEVELOPMENT
Non-Current
Acquisition of Doherty’s tenement (i)
30 June 2014
$
30 June 2013
$
131,300
131,300
-
-
(i)
On 31 July 2013, pursuant to an Option agreement with GWR Group Limited (formerly known as Golden West Resources
Limited) the Company exercised its option and acquired 100% of Doherty’s (M57/619) for $93,130 (GST Inclusive) and
570,000 shares valued at $51,300.
NOTE 13: INTANGIBLES
Non-Current
Acquisition of Marketing Rights over Cowarna Rocks (i)
30 June 2014
$
30 June 2013
$
1,200,000
1,200,000
-
-
(i)
The Company acquired the Marketing Rights to iron ore over the Cowarna Rocks tenement (E28/2238) for $400,000
(cash) and 5 million shares valued at $800,000 from Guide Resources Pty Ltd. In June 2014, an independent valuation of
the Cowarna Rocks tenement was prepared by an Independent Geologist, Al Maynard & Associates and valued the
Cowarna Rocks tenement between $0.8 million and $1.4 million. Refer to Note 25 for disclosure of related party
transactions.
NOTE 14: OTHER ASSETS
30 June 2014
$
30 June 2013
$
Non- Current
Prepaid Deposit with Guide Resources Pty Ltd (i)
Option agreements (ii)
Bond on tenements
200,000
12,000
3,642
215,642
Under an agreement with Guide Resources Pty Ltd (“Guide”), Classic has been granted the rights to market the iron ore
rights owned by Guide over exploration license E28/2238. Pursuant to this agreement the Company deposited a sign-on
deposit of $225,000 with Guide of which $25,000 was not refundable and has been expensed. In January 2014, an
additional $200,000 was paid to Guide and the total consideration for the acquisition of $1.2m has been recognised as an
Intangible Asset in Note 13.
-
32,000
3,642
35,642
(i)
(ii) The Company has been granted options to acquire interests in mineral prospects under a Tenement Sourcing Agreement
with Guide Resources Pty Ltd. The terms of the Tenement Sourcing Agreement can be found in Note 21.
50
Annual Report 2014
NOTE 15: TRADE AND OTHER PAYABLES
Current
Trade and other payables (i)
Accruals
30 June 2014
$
30 June 2013
$
588,961
533,606
1,122,567
419,770
243,489
663,259
Refundable deposit - received subject to due diligence (ii)
-
-
Trade payables are non-interest bearing and are normally settled on 30-60 day terms. The amount of payables at balance
date exceeding normal trading terms is estimated at $250,000
220,000
220,000
(i)
(ii) On 4 January 2014, the Company Entered into a Sale Agreement with Nex Metals Exploration Ltd for the sale of a
tenement, subject to due diligence. As at the date of this report, Nex Metals Exploration Limited is not proceeding with the
sale agreement and the balance is due and payable.
NOTE 16: PROVISION FOR EMPLOYEE BENEFITS
Current
Provision for Annual Leave
NOTE 17: BORROWINGS
Current
Loans from shareholders (iii)
Loans from Related Parties (ii)
Hire Purchase contract (i)
Non-Current
Hire purchase contract (i)
30 June 2014
$
30 June 2013
$
54,477
54,477
29,753
29,753
30 June 2014
$
30 June 2013
$
820,000
9,610
23,066
852,676
108,905
108,905
-
-
13,368
13,368
62,898
62,898
(i) The hire purchase contract is secured by a motor vehicle.
(ii) Short-term loans for $3,010 and $6,600 were advanced to the Company by Mr Justin Doutch and Mr James Passaris
respectively. Both of these loans were repaid after the end of the financial year. The loan from James Passaris accrued $600 in
interest.
(iii) Two short term loans were advanced to the Company by two of its shareholders. As at 30 June 2014, these unsecured loans
amounted to $720,000. Interest accrued on these loans at 10 per cent per month for a term of 2 months.
A further $100,000 was advanced to Company via a Convertible Note with one of its shareholders, with interest on this loan at 10%
per annum expiring on 26 November 2014.
NOTE 18: ISSUED CAPITAL
Ordinary shares
At the beginning of the reporting year
Conversion of Performance shares (November 2012)
Share based payments (refer to Note 28)
Seed Capital issued at 3 cents (1 August 2012 to 31 December 2012 )
Seed Capital issued at 5 cents ( 1 August 2012 to 31 December 2012 )
Seed Capital issued at 10 cents ( 1 August 2012 to 31 December 2012)
Shares cancelled
Capital Raising in Initial Public Offering (“IPO”)
Less: expenses related to capital Raisings
At the end of the reporting year
30 June 2013
$
2,466,974
-
653,145
660,100
1,591,000
932,000
(2,000)
3,625,700
(990,873)
8,936,046
Number of
Shares
99,068,468
112
20,154,800
22,003,333
31,820,000
9,320,000
(40,000)
18,128,500
-
200,455,213
51
Classic Minerals Ltd
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 18: ISSUED CAPITAL (continued)
Ordinary shares
At the beginning of the reporting year
Share based payments (refer to Note 28)
Share Capital issued at 4 cents (January 2014),
Private Placement of shares at 6 cents (February 2014)
Share Capital issued at 5 cents (February 2014)
Share Purchase Plan at 4 cents (June 2014)
Share Capital issued at 3.2 cents (June 2014)
Share Capital issued at 3 cents (June 2014)
Less: expenses related to capital raisings
At the end of the reporting year
30 June 2014
$
8,936,046
1,284,365
50,000
1,500,000
20,000
208,500
20,000
14,000
(89,259)
11,943,381
Number of
Shares
200,455,213
14,196,786
1,250,000
25,000,000
400,000
5,212,500
625,000
466,667
247,606,166
NOTE 19: FINANCIAL ASSET RESERVE
The Company held shares in a listed company the movement in the fair value of this asset has been recognised in the Financial
Asset Reserve.
NOTE 19a: OPTION PREMIUM RESERVE
The Company issued 100,512,607 Options in December 2013 to existing shareholders. Shareholders were required to pay a
premium of $0.01 to receive this entitlement and this has been recognised as a Reserve.
NOTE 20: EXPENDITURE COMMITMENTS
(a) Exploration Expenditure Commitments
Payable
Not later than 1 year
Later than 1 year but not later than 5 years
Later than 5 years
(b) Rental Commitments
Payable
Not later than 1 year
Later than 1 year but not later than 5 years
30 June 2014
$
30 June 2013
$
105,300
189,173
285,082
579,555
206,038
304,768
303,600
814,406
30 June 2014
$
30 June 2013
$
169,056
-
169,056
106,546
26,182
132,728
The Company has entered into a contract to lease office premises located at Suite 7, 30 Hasler Road, Osborne Park. The lease
commenced from 1 October 2013. The annual rental is for approximately $67,200 plus variable outgoings of $ 27,029 per annum
and GST. In addition, the lease agreement provides for seven car bays at $10,500 per annum. The Company also entered into an
agreement for the lease of a factory/ warehouse located at Rowallan Street, Osborne Park, this lease commenced on 1 July 2013 for
an annual fee of $28,000 plus GST. This lease agreement is for a term of one year with an option for a further two years.
52
Annual Report 2014
NOTE 20: EXPENDITURE COMMITMENTS
(c) Finance lease commitments – Company as lessee
Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are
as follows:
30 June 2014
$
30 June 2013
$
23,066
134,954
158,020
(26,049)
131,971
23,066
108,905
131,971
19,608
73,529
93,137
(16,871)
76,266
13,368
62,898
76,266
Within one year
After one year but not more than five years
Total minimum lease repayments
Less amounts representing finance charges
Present value of minimum lease payments
Included in the financial statements as:
Current interest-bearing liabilities
Non-current interest-bearing liabilities
Total included in interest-bearing liabilities
(d) Capital Expenditure Commitments
There were no capital expenditure commitments at 30 June 2014.
(e) Remuneration Commitments
There were no remuneration commitments at 30 June 2014.
NOTE 21: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The Company has an Agreement for Sourcing Tenements (“AST”) with Guide Resources Pty Ltd (“Guide”) whereby if Guide
introduces tenements to Classic and Classic enters into arrangements to acquire a relevant interest in such tenements (and other
tenements acquired within a 20km radius), Guide Resources is entitled to receive a minimum fee of $10,000 relating to each
tenement. Furthermore, Guide Resources would be entitled to conduct exploration on each relevant tenement for all minerals other
than uranium, gold and silver. If production commences from gold, silver or uranium on a relevant tenement, Guide Resources is
entitled to a royalty of $2.50 per wet tonne.
NOTE 22: SEGMENT REPORTING
The Company operates predominantly in the mineral exploration industry in Australia. For management purposes, the Company is
organised into one main operating segment which involves the exploration of minerals in Australia. All of the Company’s activities are
interrelated and discrete financial information is reported to the Board (Chief Operating Decision Maker) as a single segment.
Accordingly, all significant operating decisions are based upon analysis of the Company’s as one segment. The financial results from
this segment are equivalent to the financial statements of the Company’s as a whole.
53
Classic Minerals Ltd
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 23: STATEMENT OF CASH FLOWS
a.
Reconciliation of the net loss after income tax to net
cash flows from operating activities
Net loss for the year
Non-cash Items
Depreciation expense
Share based payments
Provision for non-recovery of investment
Profit on sale of shares
Gain on sale of mineral tenements
Carrying value of mineral tenements sold
Changes in assets and liabilities
(Increase)/decrease in debtors/receivables
(Increase)/decrease in Other Assets
(Increase)/decrease in Financial Assets
Increase/(decrease) in trade creditors and accruals
Increase/(decrease) in Hire Purchase liability
Increase/(decrease) in provisions
Cash outflows from operations
30 June 2014
$
30 June 2013
$
(3,102,505)
(3,206,916)
65,341
433,065
-
(399,319)
-
-
(2,730,452)
(189,609)
180,000
479,308
55,705
24,724
(5,183,742)
18,527
258,545
275,000
-
(334,000)
(41,000)
(225,682)
(157,142)
-
220,084
-
27,254
(3,165,330)
During the year, non-cash share based payments amounted to $1,284,365. For further information refer to Note 28.
b. Reconciliation of cash and equivalents
Cash and equivalents comprise
- cash at bank and in hand
339,807
1,284,830
Cash at bank and in hand earns interest at floating rates based on daily bank deposit rates.
Short term deposits are made for varying years of between one day and three months depending on the immediate cash
requirements of the Company, and earn interest at the respective short-term deposit rates.
NOTE 24: KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Compensation of key management personnel by category
Short-term employee benefits
Post employment benefits
Share-based payment
30 June 2014
$
30 June 2013
$
1,148,316
53,931
-
1,202,247
781,632
24,004
60,000
865,636
Refer to the Remuneration report contained in the Director’s Report for details of the remuneration paid to each member of the
Company’s Key Management Personnel, shares and option holdings.
54
Annual Report 2014
NOTE 25: RELATED PARTY TRANSACTIONS
Transactions with Directors, Director Related Entities and other Related Entities are:
•
•
•
•
•
•
•
•
In 2014, an aggregate amount of $55,000 was paid or due and payable to Guide Resources Pty Ltd, these payments
related to Options over several mining tenements covered by a Tenement Sourcing Agreement. Mr. James Passaris is a
director of Guide Resources Pty Ltd. In addition to these payments, the Company made a $100,000 fully refundable
deposit to Guide to carry out due diligence on three tenements E28/2370, E28/2371 and E25/454 all located in the
Cowarna Rocks area, to acquire the marketing of iron ore rights on these tenements.
Additionally, the Company acquired the Marketing Rights to iron ore over the Cowarna Rocks tenement (E28/2238) for
$400,000 (cash) and 5 million shares valued at $800,000 from Guide Resources Pty Ltd. In June 2014, an independent
valuation of the Cowarna Rocks tenement was prepared by an Independent Geologist, Al Maynard & Associates and
valued the Cowarna Rocks tenement between $0.8 million and $1.4 million.
In 2014, an aggregate amount of $985,919 was paid or due and payable to Denarda Holdings Pty Ltd (“Denarda”).
Denarda is in the business of providing drilling services to mining companies and these services were provided to this
Company at commercial rates. An amount of $264,609 remains as a prepayment as at 30 June 2014.
In 2014, an aggregate amount of $39,394 was paid or due and payable to MCAS Corporate Advisory Services Pty Ltd,
(“MCAS”) of this amount $7,532 related to the provision of corporate advisory services, and corporate secretarial services
while Mr. Kent Hunter, acted as Company Secretary. The remaining $31,862 related to Directors Fees payable to Mr
Hunter in his capacity as Non-Executive Director. Mr Hunter has an interest in MCAS Corporate Advisory Services Pty
Ltd.
In the financial year ended 30 June 2014, an aggregate amount of $18,939 was paid, or due and payable to Alouisus Pty
Ltd, a company related to Mr. Paul Lambrecht, this amount represented Directors’ Fees for the five months that Mr
Lambrecht was a Non-Executive Director of the Company. Mr Lambrecht resigned as a Non-Executive Director with effect
from 29 November 2013.
In 2013, an aggregate amount of $313,166 was paid or due and payable to Denarda Holdings Pty Ltd (“Denarda”), a
company in which John Doutch has a beneficial interest. Denarda is in the business of providing drilling services to
mining companies and these services were provided to this Company at commercial rates.
In 2013, an aggregate amount of $74,372 was paid or due and payable to Mining Corporate Pty Ltd, (“Mining Corporate”)
in regard to the provision of corporate advisory services, assistance with the Company’s IPO and corporate secretarial
services. Mr. Kent Hunter, the Company Secretary at that time had an interest in Mining Corporate.
In 2013, an aggregate amount of $407,527 was paid or due and payable to Jett Holdings Pty Ltd in relation to
commissions as part of the Company’s IPO.
In 2013, an aggregate amount of $187,000 was paid or due and payable to Guide Resources Pty Ltd, these payments
related to the renewal of options over several mining tenements. Mr. James Passaris is a director of Guide Resources Pty
Ltd. In addition to these payments, the Company acquired the rights to market iron ore to potential purchasers,
consideration for this transaction was a $225,000 refundable deposit paid 21 June 2013, of which $25,000 has been
expensed, and five million shares in this Company.
• On 26th September 2013, the Company received a $220,000 (cash) (GST inclusive) payment relating to the sale of
mining tenements to Ironstone Resources Limited. The details of this transaction have been disclosed in Notes 8(i).
• As at 30 June 2013, an amount of $4,180 was due to Philip Capital Limited, this amount represented commissions
relating to the raising of capital in the Company’s IPO. Mr. Paul Lambrecht, a director of the Company at that time was
an employee of Philip Capital.
• As at 30 June 2013, an amount of $14,339 was due from John Doutch, Justin Doutch’s father. This amount has been
•
•
•
•
repaid in full.
In 2013, an aggregate amount of $201,336 was paid or due and payable to Justin Doutch and included an amount of
$52,100 was paid to a company related to Justin Doutch.
In the financial year ended 30 June 2013, an aggregate amount of $62,887 was paid, or due and payable to Alouisus Pty
Ltd, a company related to Mr. Paul Lambrecht as Directors’ Fees, for the preceding fifteen month period.
In the financial year ended 30 June 2013, an aggregate amount of $110,265 was paid, or due and payable to Mr. Procak
for consulting services and Directors’ Fees for the fifteen months ended 30 June 2013;
In financial year ended 30 June 2013, an aggregate amount of $100,000 was paid or due and payable to Mr. Kevin
Robertson as Director’s Fees for the 24 months ending November 2012;
55
Classic Minerals Ltd
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 26: FINANCIAL RISK MANAGEMENT AND POLICIES
The Company’s activities expose it to a variety of financial risks: market risk (interest rate risk), credit risk and liquidity risk. The
Company’s overall risk management program focuses on the unpredictability of the financial markets and seeks to minimise potential
adverse effects on the financial performance of the Company. The Company does not use derivative financial instruments; however
the Company uses different methods to measure different types of risk to which it is exposed.
Risk management is carried out by the Board of Directors with assistance from suitably qualified external advisors. The Board
provides written principles for overall risk management and further policies will evolve commensurate with the evolution and growth
of the Company.
The carrying value of the Company’s and the Company’s financial instruments are as follows:
Financial assets
Cash and cash equivalents
Trade and other receivables
Other Financial Assets
Financial liabilities
Trade and other payables
Borrowings
30 June 2014
$
30 June 2013
$
339,807
3,054,814
-
3,394,621
1,342,567
961,851
2,304,418
1,284,830
588,702
566,667
2,440,199
663,259
76,266
739,525
The Company’s principal financial instruments comprise cash and short-term deposits, trade and other receivables. The Company
has borrowings and a hire purchase liability for a motor vehicle and trade and other payables in the normal course of business.
The main purpose of these financial instruments is to fund the Company’s operations.
It is, and has been throughout the year under review, the Company’s policy that no trading in financial instruments shall be
undertaken. The main risks arising from the Company are cash flow (interest rate risk, liquidity risk and credit risk). The Board
reviews and agrees policies for managing each of these risks and they are summarised below.
(a)
Market risk
Foreign exchange risk
(i)
The Company’s exposure to foreign exchange risk arising from currency exposures is limited.
Cash flow and interest rate risk
(ii)
The Company’s only interest rate risk arises from cash and cash equivalents held. Term deposits and current accounts held with
variable interest rates expose the Company to cash flow interest rate risk. The Company does not consider this to be material and
has therefore not undertaken any further analysis of risk exposure.
(b)
Credit risk
Credit risk is managed by the Board and arises from cash and cash equivalents as well as credit exposure including outstanding
receivables and committed transactions.
All cash balances held at banks are held at internationally recognised institutions.
The maximum exposure to credit risk at reporting date is the carrying amount of the trade and other receivables as summarised at
the start of Note 25. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to
external credit ratings (if available) or to historical information about default rates.
56
Annual Report 2014
NOTE 26: FINANCIAL RISK MANAGEMENT AND POLICIES (continued)
Financial assets that are neither past due and not impaired are as follows:-
Cash and cash equivalents
AA S&P rating
Trade and Other receivables
-
Unsecured
Financial Assets
Unsecured (i)
(c)
Liquidity risk
30 June 2014
$
30 June 2013
$
339,807
1,284,830
3,054,814
588,702
-
566,667
Prudent liquidity risk management implies maintaining sufficient cash balances and access to equity funding.
The Company’s exposure to the risk of changes in market interest rates relate primarily to cash assets and floating interest rates.
The Company does not have significant interest-bearing assets and is not materially exposed to changes in market interest rates.
The directors monitor the cash-burn rate of the Company on an on-going basis against budget and the maturity profiles of financial
assets and liabilities to manage its liquidity risk.
The Company has completed an Option Entitlement, a private placement and a Share Purchase Plan. In addition, to the Company’s
Research & Development rebates for 2012/13 and 2013/14 the Company has adequate funding for its operations for the next twelve
months.
The financial liabilities the Company had at reporting date were trade payables incurred in the normal course of the business and a
hire purchase liability.
The following table sets out the carrying amount, by maturity, of the financial assets and liabilities:
Year ended 30 June 2014
<1 year
1 - 5
Years
Over 5
Years
Financial Assets:
Cash and Cash equivalents
Trade and other Receivables
Financial Liabilities:
Trade and other payables
Hire purchase liabilities
Borrowings
339,807
3,054,814
3,394,621
1,342,567
23,066
829,610
2,195,243
-
108,905
-
108,905
Total
contractual
cashflows
Weighted
average
effective
interest rate %
339,807
3,054,814
3,394,621
1,342,567
131,971
829,610
2,304,148
-
-
-
-
2.5
-
-
5.3
105.2
57
Classic Minerals Ltd
Notes to the Financial Statements
FOR THE YEAR ENDED 30 JUNE 2014
NOTE 26: FINANCIAL RISK MANAGEMENT AND POLICIES (continued)
Year ended 30 June 2013
<1 year
1 - 5
Years
Over 5
Years
Financial Assets:
Cash and Cash equivalents
Trade and other Receivables
Financial Asset
Financial Assets
Financial Liabilities:
Trade and other payables
Hire purchase liabilities
Borrowings
(d)
Fair value estimation
1,284,830
588,702
300,000
-
2,173,532
663,259
13,368
-
676,627
-
266,667
266,667
62,898
-
62,898
Total
contractual
cashflows
Weighted
average
effective
interest rate %
1,284,830
588,702
300,000
266,667
2,440,199
663,259
76,266
-
739,525
-
-
-
-
-
-
2.5
-
-
-
-
5.3
-
The fair value of financial assets and liabilities must be estimated for recognition and measurement or for disclosure purposes.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values due to
their short term nature.
The fair value of long term borrowings is not materially different from their carrying value.
The entity’s principle financial instruments consist of cash and deposits with banks, accounts receivable, trade payables and loans
payable. The main purpose of these non-derivative financial instruments is to finance the entity’s operations.
(e)
Capital risk
The Company determines capital to be the equity as shown in the statement of financial position plus net debt (being total
borrowings less cash and cash equivalents).
The Company’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can
provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of
capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt.
During 2014, the Company’s strategy, which was unchanged from 2013, borrowed funds on a short-term basis to assist in its
exploration activities. The company’s equity management is determined by funds required to undertake its research & development
activities and meet its corporate and other costs.
NOTE 27: SUBSEQUENT EVENTS
There have been no matters or circumstances that have arisen since 30 June 2014 that have or may significantly affect the
operations, results, or state of affairs of the Company in future financials years.
58
Annual Report 2014
NOTE 28: SHARE BASED PAYMENTS
Shares granted to creditors and advisers as share based payments during the year are as follows:
Name
Grant Date
Vesting Date
(cid:1)
GWR Group Limited
Guide Resources Pty Ltd
31 July 2013
27 August 2013
31 July 2013
27 August 2013
Mavia Pty Ltd
Lawton Gillon
Al Maynard & Associates
Mrs. Johanne Topping
Mr. Paul Ravesi
Ashmik Pty Ltd
Mrs Johanne Topping
Mr Denis McInerney
Alpha Securities Pty Ltd
Foskin Pty Ltd
Greywood Holdings Pty Ltd
Mrs. Johanne Topping
Foskin Pty Ltd
6 December 2013
17 December 2013
17 December 2013
7 January 2014
30 January 2014
19 February 2014
19 February 2014
11 March 2014
11 March 2014
14 May 2014
14 May 2014
14 May 2014
27 June 2014
6 December 2013
17 December 2013
17 December 2013
7 January 2014
30 January 2014
19 February 2014
19 February 2014
11 March 2014
11 March 2014
14 May 2014
14 May 2014
14 May 2014
27 June 2014
Number of
shares
Total Value
Reason for Issue
570,000
5,000,000
362,500
714,286
585,714
142,857
700,000
250,000
71,429
200,000
500,000
1,000,000
2,000,000
100,000
2,000,000
14,196,786
$51,300
$800,000
$21,750
$50,000
$41,000
$10,000
$31,815
$12,500
$ 5,000
$ 12,000
$ 30,000
$ 50,000
$100,000
$ 5,000
$ 64,000
$1,284,365
Exercise of Option
Acquisition of Marketing
Rights
Payment of Creditor
Payment of Creditor
Payment of Creditor
Payment of Creditor
Payment of Creditor
Payment of Creditor
Payment of Creditor
Payment of Creditor
Payment of Creditor
Payment of Creditor
Payment of Creditor
Payment of Creditor
Payment of Creditor
NOTE 29: AUDITORS REMUNERATION
Auditors remuneration
Other services – Preparation of Investigating Accountant’s Report
30 June 2014
$
30 June 2013
$
30,909
-
30,909
30,411
15,250
45,661
NOTE 30: COMPANY DETAILS
The principal place of business of the Company is Suite 7, 30 Hasler Road, Osborne Park WA 6017.
59
Classic Minerals Ltd
ASX Additional Information
FOR THE YEAR ENDED 30 JUNE 2014
The following additional information is required by the ASX Limited in respect of listed public companies and was
applicable at 3 October 2014.
1.
Shareholding
a.
Distribution of Shareholders
Number (as at 3 October 2014)
Category (size of holding)
Shareholders
Ordinary Shares
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
16
6
137
373
283
815
695
23,454
1,335,904
18,222,556
238,273,306
257,855,915
b.
The number of shareholdings held in less than marketable parcels is 193 shareholders amounting to 1,867,123
shares.
c.
The followings securities are restricted at 3 October 2014:
- 75,765,112 ordinary shares fully paid until 24 May 2015
d.
The names of substantial shareholders listed in the company’s register as at 3 October 2014 are:
Shareholder
Ordinary Shares
Sheldon Coates & Harvey Coates
%Held of Total
Ordinary Shares
6.35
e.
Voting Rights
The voting rights attached to the ordinary shares are as follows:
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.
60
f.
20 Largest Shareholders as at 3 October 2014 — Ordinary Shares
1
2
3.
4.
5.
6.
Sheldon and Harvey Coates
Murano Holdings Pty Ltd
Tarwarri Holdings Pty Ltd
Conray Passaris
Craig Martin
Greywood Holdings Pty Ltd
Robert Floreanni
Etherton International Limited
Mr Nathan Benjamin Manning
Morelshy Pty Ltd
Rockcom Pty Ltd
Adaven Pty ltd
Namija Pty Ltd
7.
8.
9.
10.
11
12.
13.
14
15
16.
17.
18.
19. Mr Sheldon Coates
Lynda Lee Doutch
20.
Annual Report 2014
Number of
Ordinary Fully
Paid Shares
Held
% Held of
Issued
Ordinary
Capital
16,375,000
11,479,999
9,999,526
6,350,000
5,400,000
4,600,000
4,591,000
4,367,208
4,141,766
4,020,000
4,000,000
3,725,004
3,500,000
3,373,333
3,000,008
3,000,008
3,000,000
2,729,791
2,675,000
2,450,000
102,777,643
6.35
4.452
3.878
2.463
2.094
1.784
1.780
1.694
1.606
1.559
1.551
1.445
1.357
1.308
1.163
1.163
1.163
1.059
1.037
0.95
39.859
The name of the company secretary is Jeffrey Nurse
2.
The address of the principal registered office in Australia is: Suite 7, 30 Hasler Road, Osborne Park, WA, 6917.
3.
Registers of securities are held at the following address: Advanced Share Registry Limited, 110 Stirling Highway,
Nedlands, WA,
4.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the company (with the exception of shares detailed in
1c (above)) on all Member Exchanges of the ASX Limited.
5.
Unquoted Securities
The Company has the following unquoted securities as at 3 October 2014.
13,591,667 $0.10 Options (unlisted) exercisable on or before 31 December 2015.
6.
Quoted Options over Unissued Shares ($0.20 options – expiry 30 June 2015)
A total of 101,137,607 $0.20 options are on issue. Each option can be exercised upon the payment of $0.20 and
will receive one ordinary share. The expiry date for the options is 30 June 2015.
61
Classic Minerals Ltd
ASX Additional Information
FOR THE YEAR ENDED 30 JUNE 2014
20 Largest Option holders as at 3 October 2014 — $0.20 options expiring on or before 30 June 2015
1.
2
3.
4.
Denarda Holdings Pty Ltd
Mr. Dominic Virgara
Murano Holdings Pty Ltd
Sheldon & Harvey Coates
Viking Equities Pty Ltd
Iron Resources Pty Ltd
Mr Steven Karl Hegyi
Aneles Consulting Pty Ltd
Mr Saverio Virgara
5.
6.
7.
8.
9.
10. Mr Amin Chehade & Miss Jacqueline Lewis
11. Mr Issa Boulos
12.
13. Mr Denis McInerney
14. Mr Sheldon Coates
15. Mrs Lynette Kay Samuel
16. Mr Raymore Millard & Mrs Jacinta Louise Reynolds
17. Mr Ray Wright
18.
19.
20.
Chatenois Pty Ltd
Alexander Pikl
Stan Procak
HSBC Custody Nominees (Australia) Limited
Number of
$0.20 Options
Held
30,671,253
6,212,500
6,150,000
6,000,000
5,014,765
2,930,000
2,273,803
2,000,000
2,000,000
1,975,000
1,882,500
1,700,000
1,222,500
1,145,000
1,065,000
1,000,000
1,000,000
1,000,000
940,000
825,001
77,007,322
% Held of
$0.20
Options
30.326
6.143
6.081
5.933
4.958
2.897
2.248
1.978
1.978
1.953
1.861
1.681
1.209
1.132
1.053
.989
.989
.989
.929
.816
76.141
7.
Use of Cash and Assets
The Company used the cash and assets in a form readily convertible to cash that it had at the time of admission
in a way consistent with its business objectives stated in the company’s replacement prospectus dated 17 March
2013.
SCHEDULE OF MINERAL TENEMENTS
AS AT 3 OCTOBER 2014
Project
Doherty’s
Tenement
M57/619
East Kalgoorlie
E28/2238
Fraser Range
E28/1904
Jurangie Hill
E28/2370, E28/2371
Interest held by
Classic Minerals Limited
100%
100%
100%
100%
62
20 Largest Option holders as at 3 October 2014 — $0.20 options expiring on or before 30 June 2015
Sheldon & Harvey Coates
Viking Equities Pty Ltd
Iron Resources Pty Ltd
Mr Steven Karl Hegyi
Aneles Consulting Pty Ltd
Mr Saverio Virgara
13. Mr Denis McInerney
14. Mr Sheldon Coates
15. Mrs Lynette Kay Samuel
17. Mr Ray Wright
18.
19.
20.
Chatenois Pty Ltd
Alexander Pikl
Stan Procak
10. Mr Amin Chehade & Miss Jacqueline Lewis
11. Mr Issa Boulos
12.
HSBC Custody Nominees (Australia) Limited
16. Mr Raymore Millard & Mrs Jacinta Louise Reynolds
Number of
% Held of
$0.20 Options
$0.20
Held
Options
30,671,253
6,212,500
6,150,000
30.326
6.143
6.081
6,000,000
5,014,765
2,930,000
2,273,803
2,000,000
2,000,000
1,975,000
1,882,500
1,700,000
1,222,500
1,145,000
1,065,000
1,000,000
1,000,000
1,000,000
940,000
825,001
5.933
4.958
2.897
2.248
1.978
1.978
1.953
1.861
1.681
1.209
1.132
1.053
.989
.989
.989
.929
.816
77,007,322
76.141
7.
Use of Cash and Assets
The Company used the cash and assets in a form readily convertible to cash that it had at the time of admission
in a way consistent with its business objectives stated in the company’s replacement prospectus dated 17 March
2013.
Annual Report 2014
Schedule of Mineral Tenements
AS AT 3 OCTOBER 2014
SCHEDULE OF MINERAL TENEMENTS
AS AT 3 OCTOBER 2014
Project
Doherty’s
Tenement
M57/619
East Kalgoorlie
E28/2238
Fraser Range
E28/1904
Jurangie Hill
E28/2370, E28/2371
Interest held by
Classic Minerals Limited
100%
100%
100%
100%
63
Classic Minerals Ltd
Competent Persons Statement
The information in this report that relates to Exploration Results is based on information compiled by Mr Andrew Rust, who is
a Member of the Australasian Institute of Mining & Metallurgy. Mr Rust is employed by Shearwater Australia Pty. Ltd who is a
consultant to Classic Minerals Ltd. Mr Rust has sufficient experience relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition
of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Rust consents to the
inclusion in the report of the matters based on his information in the form and context in which it appears.
64
Annual Report 2014
ACN 119 484 016
⌂ Level 1, 7/30 Hasler Road, Osborne Park WA 6017
📫 PO Box 487, Osborne Park WA 6917
📱
⎙
💻 www.classicminerals.com.au
✉ admin@classicminerals.com.au
(08) 9445 3008
(08) 9242 8295