ACN 119 484 016
Annual Report 2015
CLASSIC MINERALS LIMITED
ACN: 119 484 016
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2015
C O N T E N T S
Corporate directory
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
PAGE
1
2
12
13
14
16
17
18
19
20
43
45
CLASSIC MINERALS LIMITED
CORPORATE DIRECTORY
DIRECTORS
Justin Doutch
Kent Hunter
Stan Procak
COMPANY SECRETARY
Jeffrey Nurse
A.B.N.
77 119 484 016
PRINCIPAL OFFICE
71 Furniss Road
Landsdale, WA, 6065
REGISTERED OFFICE
71 Furniss Road,
Landsdale, WA, 6065
AUDITORS
Bentleys Audit & Corporate (WA) Pty Ltd
Level 1, 12 Kings Park Road
WEST PERTH WA 6005
1
CLASSIC MINERALS LIMITED
DIRECTORS’ REPORT
The directors of Classic Minerals Limited submit herewith the financial report for the financial year ended 30
June 2015.
Directors
The names of directors in office at any time during or since the end of the financial year are:
Justin Doutch
Kent Hunter
Stanislaw Procak
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:
Jeffrey Nurse
Mr Jeffrey Nurse CA, MBA, ACIS is a Chartered Accountant. He holds a Masters Degree in Business
Administration from the University of Western Australia and is an Associate of the Governance Institute of
Australia.
Current Directors’ qualifications and experience
Justin Doutch (Executive Director)
Age: 33 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
5,748,337 ordinary shares
2
CLASSIC MINERALS LIMITED
DIRECTORS’ REPORT
Kent Hunter (Non-Executive Director)
Age: 48 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 and Carbon Conscious Limited.
Shareholdings
1,500,002 ordinary shares (held directly).
Stanislaw Procak (Non-Executive Director)
Age: 72 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
including staffing, operating budgets,
financial management, mining
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 (held directly)
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
Stan Procak
Kent Hunter
1
1
1
1
1
1
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.
Operating results
The loss of the Company for the year ended 30 June 2015 amounted to $5,910,190 (2014: loss of
$3,102,505).
3
CLASSIC MINERALS LIMITED
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.
Throughout this financial year the company conducted a number of drilling campaigns, ground and aerial
surveys and geo-chemical sampling programs.
Between August and September 2014, the drilling of the SAM targets was completed in which all diamond
core holes intersected disseminated sulphide mineralization that was targeted using the SAM survey
method.
Mapping and Geo-chemical sampling of the Fraser Range project included a mapped area of 3km x 1.5km.
A topographical survey of the Alpha deposit was completed along with a detailed survey of accurate collar
locations using DGPS was also completed.
Detailed surveys for accurate collar locations were also conducted in September 2014 at the Cowarna rocks
hematite deposit E28/2238 and the Dohertys gold mining lease project M57/619.
Operations in October and December 2014 included the downhole Electro-magnetic survey at the SAM 1
target and the detailed Aero-Magnetic survey flown over the Fraser Range Project.
In the first quarter of 2015 the Company’s operations included definition drilling at the Alpha deposit,
mapping of the central zone of the Fraser Range tenement and a rock chip geo-chemical program targeting
the “Western gabbro marker horizon”.
Significant changes in state of affairs
In May 2015, the company issued 7,633,929 shares to several sophisticated investors; these shares were
issued at $0.0064 to $0.01 per share and raised $60,000.
There were no other significant changes in the state of affairs of the Company during the year ended 30
June 2015.
After reporting date events
On 26 August 2015, the Company received the proceeds from a Convertible Note issue of $1m to Mdvest
Pty Ltd, a company related to Marlene Doutch (mother of Justin Doutch). Under the terms of the Convertible
Note (“CN”) the face value of the CN can be converted into shares at any time during a 12-month period at
an exercise price of $0.03 per share. Interest on the CN is charged at 17.5%per annum.
There are no other matters or circumstances that have arisen since 30 June 2015 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.
4
CLASSIC MINERALS LIMITED
DIRECTORS’ REPORT
Options Premium Reserve
The Option Premium reserve had a balance of $Nil as at 30 June 2015 (2014: $1,005,126).
Non-Audit Services
No non-audit services were provided in this financial year.
Auditor’s independence declaration
The auditor’s independence declaration for the year ended 30 June 2015 has been received, forms part of
the Director’s Report, and can be found on page 13.
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 (2014: $14,190).
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.
5
CLASSIC MINERALS LIMITED
DIRECTORS’ REPORT
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.
The remuneration policy, setting the terms and conditions for the executive directors and other executives,
was developed by the board. All executives receive a base salary (which is based on factors such as length
of service and experience) and superannuation. The board reviews executive packages annually by
reference to the Company's performance, executive performance and comparable information from industry
sectors and other listed companies in similar industries.
The board may exercise discretion in relation to approving incentives, bonuses and options. The policy is
designed to attract the highest calibre of executives and reward them for performance that results in
long-term growth in shareholder wealth.
(a) Details of key management personnel (“KMP”)
(i) Directors
Justin Doutch
Kent Hunter
Stanislaw Procak
(ii) Senior Executives
Jacob Doutch
James Passaris
Jeffrey Nurse
6
CLASSIC MINERALS LIMITED
Details of Remuneration for Year Ended 30 June 2015 and 30 June 2014
The remuneration for each key management personnel of the Company during the year was as follows:
SHORT-TERM BENEFITS
POST EMPLOYMENT
SHARE-BASED
PAYMENT
TOTAL
Salary
Other
Non-
Monetary
Superann-
uation
Retirement
Benefits
Equity
Options
$
Directors
Kent Hunter
2015
2014
Stanislaw Procak
2015
2014
Justin Doutch
60,000
31,862
50,000
50,000
2015
2014
250,000(i)
250,000
Jacob Doutch (ii)
2015
2014
175,000(i)(ii)
173,042
-
-
-
-
5,400
-
-
-
Paul Lambrecht (resigned 29 November 2013)
2015
2014
-
18,939
James Passaris
2015
2014
Jeffrey Nurse
2015
2014
227,854
227,854
110,890
110,000
-
-
-
265,289 (iii)
-
-
-
-
-
21,330
21,330
-
-
-
-
-
-
-
-
Total Remuneration Key Management Personnel
2015
2014
873,744
861,697
5,400
265,289
21,330
21,330
-
-
4,625
4,625
23,750
23,125
18,525
16,006
-
-
-
-
10,439
10,175
57,339
53,931
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,000
-
-
-
-
-
-
-
20,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
REPRE-
SENTED
BY
EQUITY/
OPTIONS
%
-
-
-
-
-
-
9.3%
-
-
-
-
-
-
-
60,000
31,862
54,625
54,625
300,480
294,455
213,525
189,048
-
18,939
227,854
493,143
121,329
120,175
977,813
2.04%
1,202,247
-
i)
ii)
iii)
Justin Doutch and Jacob Doutch agreed to defer the payment of salaries until such time as the Company could pay them. The
amount as at 30 June 2015 owing to Justin Doutch was $99,811 and owing to Jacob Doutch was $58,284. Please refer to
Note 15.
In 2015, Mr. Jacob Doutch received 2,000,000 shares (amounting to $20,000) in lieu of salary payable.
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.
7
CLASSIC MINERALS LIMITED
DIRECTORS’ REPORT
Employment Details of Members of Key Management Personnel
The Company has entered into a services agreement with Mr. Justin Doutch to provide services in his
capacity as Managing Director. There is no fixed term to this Agreement.
Under this Agreement there are standard termination provisions and the Company can give notice of
termination, or alternatively, payment in lieu of services. Following the Company’s Initial Public Offering
(“IPO”), Mr. Doutch’s salary was increased to $250,000 plus statutory superannuation. This increase was
approved at a Director’s Meeting by the Board. In 2014/15, Mr Doutch agreed to defer salary payments until
such time as the Company could make salary payments. Upon termination of this agreement or after a
period of 5 years, the motor vehicle leased by the Company 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 is also be
reimbursed for reasonable expenses incurred in carrying out his duties.
Non-Executive Director Letter Agreements
The Company has entered into non-executive director letter agreements with Kent Hunter, and Stan Procak,
these letter agreements outline the terms and conditions on which the Non-Executive Directors would carry
out their duties to the Company. Mr. Hunter and Mr. Procak have been paid an annual remuneration of
$60,000 with no superannuation and $50,000 plus statutory superannuation respectively. Both Mr Hunter
and Mr Procak are reimbursed for reasonable expenses incurred in carrying out their duties.
Executive Agreements
The Company has an employment contract with Jacob Doutch as Tenement Manager, Jacob Doutch’s
salary has been increased to $195,000 plus superannuation.
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. In
2014/15, financial year, Mr Doutch agreed to defer payments of his salary until the Company could afford to
make such payments.
The Company has an employment contract with Jeffrey Nurse as the Company’s Chief Financial Officer and
Company Secretary. Following the Company’s IPO, Jeffrey Nurse’s salary was increased to $110,000 plus
superannuation.
Consultancy Agreement
The company has entered into a consultancy agreement with Aneles Consulting Services Pty Ltd, a
company in which James Passaris has an interest to provide business services at the rate of $4,820 per
week plus GST.
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.
8
CLASSIC MINERALS LIMITED
Shareholdings of Key Management Personnel
(a) Number of ordinary shares held by key management personnel during the year
Stanislaw Procak
Justin Doutch
Kent Hunter
Jacob Doutch
James Passaris
Jeffrey Nurse
Balance
1 July 2014
Received as
remuneration
Net Change
Other
Balance
30 June 2015
1,712,502
2,250,004
1,300,002
1,960,000
2,240,010
500,000
9,962,518
-
-
-
2,000,000
-
-
2,000,000
-
2,998,333 (ii)
-
-
-
10,000
3,008,333
1,712,502
5,248,337
1,300,002
3,960,000
2,240,010
510,000
14,970,851
(i)
Included in this amount was 1,800,000 shares received by Samantha Doutch (wife of Justin Doutch) as part of providing
loans to the Company 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 (i)
1,960,000
2,240,010
500,000
11,162,520
(i) Number of shares held at time of resignation – 29 November 2013
Option holdings of Key Management Personnel
(a) Number of ordinary shares held by key management personnel during the year
Stanislaw Procak
Justin Doutch
Kent Hunter
Jacob Doutch
James Passaris
Jeffrey Nurse
Balance
1 July 2014
Received as
remuneration
Net Change
Other
Balance
30 June 2015
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
233,333
233,334
-
466,667
-
-
-
233,333
233,334
-
466,667
No 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.
9
CLASSIC MINERALS LIMITED
Transactions with Directors, Director Related Entities and other Related Entities are:
2015
•
•
•
•
•
•
2014
•
•
•
•
•
In 2015, an aggregate amount of $60,000 was paid or due and payable to MCAS Pty Ltd, (“Mining Corporate”) and M.Y.
Body this amount represented Directors Fees payable to Mr Hunter in his capacity as Non-Executive Director. Mr Hunter
has an interest in MCAS and M.Y Body. An amount of $30,044 remains owing as at 30 June 2015.
In 2015, an aggregate amount of $380,080 was paid or due and payable to Denarda Holdings Pty Ltd (“Denarda”), a
company in which John Doutch (father of Justin 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. An amount
of $200,277 remains as a prepayment for future drilling as at 30 June 2015.
In 2015, an aggregate amount of $383,420 was expensed by the Company in relation to services provided by Namija Pty
Ltd (“Namija”), a company which John Doutch (father of Justin Doutch) is a consultant. Services performed by Namija
during the year include consulting and fees in relation to business strategy, financing and indigenous affairs support at
commercial rates. An amount of $170,017 remains owing as at 30 June 2015.
In 2015, the Company had a $100,000 fully refundable deposit with Guide Resources Pty Ltd, to carry out due diligence
on three tenements – E28/2730, E28/2731 and E25/454 located in the Cowarna Rocks area. Mr. James Passaris is a
director of Guide Resources Pty Ltd. During the year the Company agreed to acquire these tenements for $100,000. No
further payment was made to Guide during the year.
In 2015, three short-term loans totalling $48,519 (tranche 1), $30,000 (tranche 2) and $8,000 (tranche 3) were advanced
to the Company by Samantha Doutch (wife of Justin Doutch). These loans have subsequently been repaid, with tranche 3
repaid during the period. Finance charges included in tranche 1 and tranche 3 was interest on advances at 20% per
month, and as well as 1,000,000 shares for tranche 1 and 800,000 shares for tranche 3. There was no interest incurred
on the second tranche advance.
In June 2015, the Company received two short-term loans from Jacob Doutch ($3,500) and Aneles Consulting Services
Pty Ltd ($3,157), a company related to James Passaris. Both of these loans attracted an interest rate of 10% per month
and have been repaid subsequent to the end of the financial year.
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”), 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. An amount of $264,609
remains as a prepayment as at 30 June 2014.
In 2014, an aggregate amount of $381,969 was expensed by the Company in relation to services provided by Namija Pty
Ltd (“Namija”), a company which John Doutch (father of Justin Doutch) is a consultant. Services performed by Namija
during the year include consulting and fees in relation to business strategy, financing and indigenous affairs support at
commercial rates. An amount of $9,038 remains owing as at 30 June 2014.
In 2014, an aggregate amount of $39,394 was paid or due and payable to Mining Corporate Pty Ltd, (“Mining
Corporate”) 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 Mining Corporate 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.
END OF REMUNERATION REPORT
10
CLASSIC MINERALS LIMITED
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 30th day of September 2015
11
CLASSIC MINERALS LIMITED
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 2015 and of
the performance as represented by the results of its operations and its cashflows for the
year ended on that date;
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.
the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in note 2.
2.
3.
This declaration is made in accordance with a resolution of the Board of Directors.
Justin Doutch
Executive Director
Dated this 30th day of September 2015
12
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 2015, 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 30th day of September 2015
We have audited the accompanying financial report of Classic Minerals Limited (“the
Company”), which comprises the statement of financial position as at 30 June 2015, 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 of the financial report
that gives a true and fair view in accordance with Australian Accounting Standards and
the Corporations Act 2001 and for such internal control as the directors determine is
necessary to enable the preparation of the financial report that gives a true and fair view
and is free from material misstatement, whether due to fraud or error. 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 of the financial report
that gives a true and fair view 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.
In conducting our audit, we have complied with the independence requirements of 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 2015 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 net loss of $5,910,190 during the year ended 30 June 2015. 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 2015.
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 2015,
complies with section 300A of the Corporations Act 2001.
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Director
Dated at Perth this 30th day of September 2015
CLASSIC MINERALS LIMITED
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2015
Revenue from continuing operations
Profit on sale of shares in listed company
Research & Development rebate
Other Income
Employee benefits and consultants expense
Legal expenses & professional fees
Commissions paid
Depreciation expense
Exploration expenses
Financing Charges
Travel expenses
Occupancy expenses
Impairment Charge relating to the diminution in value of marketing rights
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
Total Comprehensive loss for year
Attributable to members of Classic Minerals Limited
Note
3
3
3
3
11
13
4
5
30 June 2015
$
30 June 2014
$
-
-
-
37,815
(1,340,618)
(165,415)
(114,795)
(74,796)
(1,172,737)
(1,318,654)
(18,554)
(156,726)
(1,200,000)
(385,710)
-
(5,910,190)
-
(5,910,190)
-
-
-
(5,910,190)
50,000
399,319
2,830,198
37,755
(1,858,375)
(595,987)
(277,514)
(65,341)
(2,738,361)
(268,500)
(85,933)
(152,995)
-
(111,482)
(265,289)
(3,102,505)
-
(3,102,505)
-
(66,667)
-
(66,667)
(3,169,172)
(5,910,190)
(5,910,190)
(3,102,505)
(3,102,505)
(5,910,190)
(5,910,190)
(3,169,172)
(3,169,172)
Basic loss per share (cents per share)
6
(0.022)
(1.51)
The accompanying notes form part of this financial report.
16
CLASSIC MINERALS LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
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
Provision for Employee Benefits
Borrowings
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET (LIABILITIES)/ ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of this financial report.
30 June 2015
$
30 June 2014
$
39,537
47,877
200,277
287,691
280,315
231,300
-
3,642
-
515,257
802,948
1,661,619
61,669
899,374
2,622,662
92,574
92,574
2,715,236
(1,912,288)
12,923,158
-
(14,835,446)
(1,912,288)
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
Note
7
8
10
11
12
13
14
9
15
16
17
17
18
19
17
CLASSIC MINERALS LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
Balance at 30 June 2014
Total Comprehensive Loss for the year
Loss for the year
Other Comprehensive Income
Total Comprehensive Income/(Loss)
Transactions with owners recorded directly
in equity
Options expired during the period
Shares issued (net of expenses) during
the year
Balance at 30 June 2015
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
$
11,943,381
-
-
-
-
979,777
12,923,158
Financial Asset
Reserve
$
Option Premium
Reserve
1,005,126
Accumulated
Losses
$
(9,930,382)
Total
Equity
$
3,018,125
-
-
-
-
-
-
-
-
-
-
(5,910,190)
-
(5,910,190)
(5,910,190)
-
(5,910,190)
(1,005,126)
1,005,126
-
-
-
-
979,777
(14,835,446)
(1,912,288)
Issued
Capital
$
8,936,046
Financial Asset
Reserve
$
66,667
-
-
-
-
3,007,335
11,943,381
-
(66,667)
(66,667)
-
-
-
Option Premium
Reserve
-
-
-
-
Accumulated
Losses
$
(6,827,877)
Total
Equity
$
2,174,836
(3,102,505)
-
(3,102,505)
(3,102,505)
(66,667)
(3,169,172)
1,005,126
-
-
-
1,005,126
3,007,335
1,005,126
(9,930,382)
3,018,125
The accompanying notes form part of this financial report.
18
CLASSIC MINERALS LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015
Note
30 June 2015
$
30 June 2014
$
2,830,198
(2,716,340)
(728,764)
23,989
13,826
(577,091)
(24,364)
-
-
-
-
-
-
(24,364)
60,000
-
(3,211,272)
3,452,457
301,185
(300,270)
339,807
39,537
-
(5,045,128)
(139,773)
1,159
-
(5,183,742)
(202,645)
699,319
(100,000)
(80,000)
(200,000)
14,339
550,000
681,013
1,722,970
1,005,126
(520,000)
1,349,610
3,557,706
(945,023)
1,284,830
339,807
CASH FLOWS FROM OPERATING ACTIVITIES
Receipt of Research & Development rebates for 2012/13 and
2013/14
Payments to suppliers and employees
Interest expense
Interest received
Other Income received
Net cash (outflows) from operating activities
23(a)
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 related entities
Return of Refundable Deposit
Net cash (outflows) from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Share Capital received
Proceeds from Option Entitlement Issue
Repayment of Loans received/(repaid)
Proceeds of short term loans
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
The accompanying notes form part of this financial report.
23(b)
19
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
1. Corporate Information
The financial report of Classic Minerals Limited (the Company) for the year ended 30 June 2015 was
authorised for issue in accordance with a resolution of the directors on 30th September 2015.
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
Interpretations), other
Australian Accounting Standards (including
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 $5,910,190 for the year ended 30 June 2015 (2014:
$3,102,505).
The net working capital position of the Company at 30 June 2015 was a deficit of $2,334,971 (2014:
surplus of $1,409,510) and the net decrease in cash held during the year was $300,270 (2014:
945,023). The Company has expenditure commitments relating to exploration expenditure obligations
for their projects of $227,006 which potentially could fall due in the twelve months to 30 June 2016.
Furthermore, the Company has finance and operating lease commitments of $150,026 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:
•
•
• Subsequent to balance date the Company raised $1,000,000 in cash via a convertible note as
disclosed in note 27. The maturity date of this convertible note is 26 August 2016, and the
directors believe that this will be converted into equity;
the completion of planned share placements expected to take place, including an Entitlements
Issue in October to raise funds from the market of approx. $300,000;
the completion of subsequent raisings from placement to sophisticated investors of approx.
$1,000,000 in December;
the completion of the research and development rebate for the 2015 financial year anticipated
to be received in November 2015;
the continued support of shareholders in relation to loans provided, which was evidenced by
the extension on the repayment dates of borrowings of $800,000 at balance date to 1
November 2015; and
containing cash outflows based on working capital requirements
•
•
•
20
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
2. Summary of Significant Accounting Policies (continued)
Based on the cash flow forecasts and other factors referred to above, the directors are satisfied that
the going concern basis of preparation is appropriate. In particular, given the Company’s history of
raising capital to date, the directors are confident of the Company’s ability to raise additional funds as
and when they are required.
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.
(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
21
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
2. Summary of Significant Accounting Policies (continued)
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.
(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:
22
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
2. Summary of Significant Accounting Policies (continued)
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
(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
23
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
2. Summary of Significant Accounting Policies (continued)
(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.
(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.
24
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
2. Summary of Significant Accounting Policies (continued)
(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).
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.
25
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
2. Summary of Significant Accounting Policies (continued)
(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.
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 th
acquisition 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.
26
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
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.
27
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
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
As at 30 June 2015, the directors considered the value of the marketing rights over iron ore at
the Company’s Cowarna Rocks tenement and in light of downward trend in iron ore prices
reduced the carrying value to $Nil.
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
Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Standards and Interpretations that
were issued but not yet effective are listed below.
Standard/Interpretation
Effective for annual
reporting periods
beginning on or after
Expected to be initially
applied in the financial
year ending
AASB 9 ‘Financial Instruments’, and the relevant
amending standards
1 January 2018
30 June 2019
AASB 15 ‘Revenue from Contracts with Customers’
and AASB 2014-5 ‘Amendments to Australian
Accounting Standards arising from
AASB 15’
1 January 2017
30 June 2018
28
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
AASB 2014-3 ‘Amendments to Australian
Accounting Standards – Accounting for
Acquisitions of Interests in Joint Operations’
AASB 2014-4 ‘Amendments to Australian
Accounting Standards – Clarification of Acceptable
Methods of Depreciation and Amortisation’
1 January 2016
30 June 2017
1 January 2016
30 June 2017
AASB 2014-6 ‘Amendments to Australian
Accounting Standards – Agriculture: Bearer Plants’
1 January 2016
30 June 2017
AASB 2014-9 ‘Amendments to Australian
Accounting Standards – Equity Method in Separate
Financial Statements’
AASB 2014-10 ‘Amendments to Australian
Accounting Standards – Sale or Contribution of
Assets between an Investor and its Associate or
Joint Venture’
AASB 2015-1 ‘Amendments to Australian Accounting
Standards – Annual Improvements to Australian
Accounting Standards 2012-2014 Cycle’
AASB 2015-2 ‘Amendments to Australian Accounting
Standards – Disclosure Initiative: Amendments to
AASB 101’
AASB 2015-3 ‘Amendments to Australian Accounting
Standards arising from the Withdrawal of AASB 1031
Materiality’
AASB 2015-4 ‘Amendments to Australian Accounting
Standards – Financial Reporting Requirements for
Australian Groups with a Foreign Parent’
AASB 2015-5 ‘Amendments to Australian Accounting
Standards – Investment Entities: Applying the
Consolidation Exception’
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 July 2015
30 June 2016
1 July 2015
30 June 2016
1 January 2016
30 June 2017
Note that the following new Standards and Interpretations are not applicable for the Group but
are relevant for the period:
AASB 14 ‘Regulatory Deferral Accounts’ and AASB 2014-1 ‘Amendments to Australian
Accounting Standards – Part D: ’Consequential Amendments arising from AASB 14’ is not
applicable to the Group as the Group is not a first-time adopter of Australian Accounting
Standards.
AASB 1056 ‘Superannuation Entities’ is not applicable to the Group as the Group is not a
superannuation entity.
AASB 2015-6 ‘Amendments to Australian Accounting Standards – Extending Related Party
Disclosures to Not-for-Profit Public Sector Entities’ is not applicable to the Group as the Group is
a for-profit entity.
29
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 3: REVENUE FROM CONTINUING OPERATIONS
Interest Income
Other Income
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
Profit on the disposal of Motor vehicle
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
- Impairment
- Current year revenue losses for which no deferred tax
asset has been recognised
-Unrecognised timing differences
-Exploration costs
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- other timing differences
Net deferred tax assets
30 June 2015
$
23,989
13,826
-
-
-
-
-
37,815
30 June 2014
$
1,159
35,854
50,000
966,230
1,863,968
399,319
742
3,317,272
30 June 2015
$
30 June 2014
$
37,844
10,666
337,200
385,710
32,868
14,733
63,881
111,482
30 June 2015
$
30 June 2014
$
-
-
-
-
(5,910,190)
(3,102,505)
(1,773,057)
(930,751)
239,011
360,000
1,248,681
(44,635)
(30,000)
-
-
153,729
-
847,540
29,682
-
(100,200)
2,833,268
177,224
3,010,492
1,740,819
240,607
1,981,426
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 was 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 was also shown as a receivable as at 30
June 2014 (Refer to Note 8).
30
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
30 June 2015
$
30 June 2014
$
(5,910,190)
(3,102,505)
NOTE 6: EARNINGS PER SHARE
Loss for the year
a.
b.
Weighted average number of ordinary shares at 30 June
271,913,388
204,837,678
Earnings per share – cents
(0.022)
(1.51)
NOTE 7: CASH AND CASH EQUIVALENTS
Cash at bank
NOTE 8: TRADE AND OTHER RECEIVABLES
Current
Research & Development Rebate 2012/13 and 2013/14 (i)
Refundable Deposit
Resources Pty Ltd (ii)
Bonds and Security Deposits
Other receivables
for Marketing Rights paid
to Guide
30 June 2015
$
39,537
30 June 2014
$
339,807
30 June 2015
$
30 June 2014
$
-
-
15,477
32,400
47,877
2,830,198
100,000
42,477
82,139
3,054,814
As at 30 June 2015 trade and other receivables do not contain impaired assets.
(i) On 9 September 2014 and 4 November 2014, the Company received the Research & Development Rebate for 2012/13 and
2013/14 for $966,230 and $1,863,968 respectively.
(ii) Under the Company’s Tenement Sourcing Agreement with Guide Resources Pty Ltd, the Company entered into an agreement
to acquire the marketing rights over three tenements for a refundable deposit of $100,000. As at 30 June 2015, the Company
had acquired all three tenements and Guide Resources is not required to refund any part of the deposit. Under Classic’s
accounting policy the cost of acquisition for these tenements has been capitalised. Refer to Note 25 for disclosure of Related
Party transactions.
NOTE 9: FINANCIAL ASSETS
Non-Current
Shares received in consideration for the sale of mining tenements
(at fair value)
Less: Provision for diminution in value of shares
30 June 2015
$
30 June 2014
$
275,000
275,000
(275,000)
-
(275,000)
-
(i) As at 30 June 2015 and 30 June 2014, 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 2015
$
30 June 2014
$
200,277
200,277
264,609
264,609
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 be recovered from future services provided by Denarda. Refer to Note
25 for further explanation.
31
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
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
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
32
30 June 2015
$
30 June 2014
$
244,030
12,727
(24,363)
232,394
146,476
11,636
-
158,112
139,853
-
-
139,853
530,359
192,466
74,273
(22,709)
244,030
62,800
83,676
-
146,476
77,500
139,853
(77,500)
139,853
530,359
30 June 2015
$
30 June 2014
$
93,270
27,054
-
(19,854)
100,470
71,215
39,708
-
-
110,923
15,296
23,355
-
38,651
250,044
150,760
131,924
75,261
47,189
124,557
101,202
280,315
69,031
24,239
-
-
93,270
46,828
24,387
-
-
71,215
-
18,929
(3,633)
15,296
179,781
123,435
150,760
15,972
75,261
73,867
124,557
350,578
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 12: EXPLORATION, EVALUATION AND DEVELOPMENT
Non-Current
Doherty’s exploration project
Cowarna Rocks exploration project
NOTE 13: INTANGIBLES
Non-Current
Acquisition of Marketing Rights over Cowarna Rocks (i)
Less: Impairment Charge
30 June 2015
$
30 June 2014
$
131,300
100,000
231,300
131,300
-
131,300
30 June 2015
$
30 June 2014
$
1,200,000
(1,200,000)
-
1,200,000
-
1,200,000
(i)
In June 2014, the Company’s requested an independent valuation of its tenement Cowarna Rocks. This valuation was
prepared by Independent Geologist, Al Maynard & Associates and valued the Cowarna Rocks tenement between $0.8
million and $1.4 million. As a result of the downtrend in the spot price for Iron ore during the first half of 2015, the Directors
have decided to recognise an impairment charge of $1,200,000 for the year. The Directors continue to monitor trends in
the price of iron ore and will review the value of the asset in future. Refer to Note 25 for disclosure of related party
transactions.
NOTE 14: OTHER ASSETS
Non- Current
Option agreements
Bond on tenements
NOTE 15: TRADE AND OTHER PAYABLES
Current
Trade and other payables (i)
Accruals
Accrual – outstanding salaries for Justin Doutch and Jacob Doutch (ii)
30 June 2015
$
30 June 2014
$
-
3,642
3,642
32,000
3,642
35,642
30 June 2015
$
30 June 2014
$
617,734
585,790
158,095
1,361,619
588,961
533,606
-
1,122,567
Refundable deposit - received subject to due diligence (iii)
220,000
220,000
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 totalling $362,568.
Justin Doutch and Jacob Doutch agreed to defer the payment of salaries until such time as the Company could pay them.
The amount as at 30 June 2015 owing to Justin Doutch was $99,811 and owing to Jacob Doutch was $58,284.
300,000
300,000
(i)
(ii)
(iii) 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 of $200,000 and interest of $100,000 is due and payable.
NOTE 16: PROVISION FOR EMPLOYEE BENEFITS
Current
Provision for Annual Leave
NOTE 17: BORROWINGS
Current
Loans from shareholders (i)
Loans from Related Parties (ii)
Hire Purchase contract (iii)
33
30 June 2015
$
30 June 2014
$
61,669
61,669
54,477
54,477
30 June 2015
$
30 June 2014
$
800,000
76,308
23,066
899,374
820,000
9,610
23,066
852,676
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Non-Current
Hire purchase contract (iii)
92,575
92,575
108,905
108,905
(i) As at 30 June 2015, three short-term loans were advanced to the Company by its shareholders. These unsecured loans
amounted to $857,704. Interest accrued on these loans at 10 per cent per month for a term of between 2-3 months.
(ii) Short-term loans totalling $76,308 were advanced to the Company - $70,650 (Tranches 1 and 2), $3,500 and $2,158 by Mrs
Samantha Doutch (wife of Justin Doutch), Mr Jacob Doutch and Aneles Consulting Services Pty Ltd (a company related to Mr
James Passaris) respectively. Interest on these loans accrued 10 per cent per month, except $40,650 (tranche 1) which was
accrued at 20% per month and $30,000 (tranche 2) which was interest-free. A further $8,000 was issued by Mrs Doutch as part of
tranche 3, with interest at 20% per month that was repaid before balance date. Refer Note 25 for further details of transactions.
(iii) The hire purchase contract is secured by a motor vehicle.
NOTE 18: ISSUED CAPITAL
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 (February 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
Ordinary shares
At the beginning of the reporting year
Share based payments (refer to Note 28)
Share Capital issued at 1 cents (May 2015),
Share Capital issued at 0.007 cents (May 2015)
Share Capital issued at 0.0064 cents (May 2015)
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
(89,530)
11,943,381
30 June 2015
$
11,943,381
929,324
25,000
25,000
10,000
(9,547)
12,923,158
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
Number of
Shares
247,606,166
47,030,370
2,500,000
3,571,429
1,562,500
-
302,270,465
NOTE 19: OPTION PREMIUM RESERVE
As at 30 June 2015, the balance of the Option Premium reserve was Nil. The Company’s class of listed options expired during the
period.
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
34
30 June 2015
$
30 June 2014
$
227,006
773,378
158,400
1,158,784
105,300
189,173
285,082
579,555
30 June 2015
$
30 June 2014
$
126,960
128,970
255,930
169,056
-
169,056
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
The Company has entered into a contract to lease office and warehouse premises located at 71 Furniss Street, Landsdale, 6065.
The lease commenced from 1 September 2015 for a period of 24 months. The rental in the first year of the lease is approximately
$67,000 plus variable outgoings estimated to be around $20,000. The Company leased a storage shed located in Kalgoorlie for
$3,330 per month.
(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:
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
30 June 2015
$
30 June 2014
$
23,066
118,623
141,689
(26,048)
115,641
23,066
92,575
115,641
23,066
134,954
158,020
(26,049)
131,971
23,066
108,905
131,971
(d) Capital Expenditure Commitments
There were no capital expenditure commitments at 30 June 2015.
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.
The Company acquired the iron ore rights of a number of exploration licences during the year from Guide during the year. As part of
the terms of the acquisition contract, Guide was entitled to a 20% royalty on any iron sales from these tenements.
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.
35
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
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 impairment charge
Profit on sale of shares
Changes in assets and liabilities
(Increase)/decrease in debtors/receivables
(Increase)/decrease in Other Assets
Increase)/decrease in Exploration and evaluation 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 2015
$
30 June 2014
$
(5,910,190)
(3,102,505)
74,796
929,324
1,200,000
-
3,006,937
64,332
(100,000)
32,000
134,849
(16,331)
7,192
(577,091)
65,341
433,065
-
(399,319)
(2,730,452)
(189,609)
-
180,000
479,308
55,705
24,724
(5,183,742)
During the year, non-cash share based payments amounted to $929,324. For further information refer to Note 28.
b. Reconciliation of cash and equivalents
Cash and equivalents comprise
- cash at bank and in hand
39,537
339,807
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 2015
$
900,474
57,339
20,000
977,813
30 June
2014
$
1,148,316
53,931
-
1,202,247
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.
36
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 25: RELATED PARTY TRANSACTIONS
Transactions with Directors, Director Related Entities and other Related Entities are:
2015
•
•
•
•
•
•
2014
•
•
•
•
•
In 2015, an aggregate amount of $60,000 was paid or due and payable to MCAS Pty Ltd, (“Mining Corporate”) and M.Y. Body
this amount represented Directors Fees payable to Mr Hunter in his capacity as Non-Executive Director. Mr Hunter has an
interest in MCAS and M.Y Body. An amount of $30,044 remains owing as at 30 June 2015.
In 2015, an aggregate amount of $380,080 was paid or due and payable to Denarda Holdings Pty Ltd (“Denarda”), a
company in which John Doutch (father of Justin 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. An amount of
$200,277 remains as a prepayment for future drilling as at 30 June 2015.
In 2015, an aggregate amount of $383,420 was expensed by the Company in relation to services provided by Namija Pty Ltd
(“Namija”), a company which John Doutch (father of Justin Doutch) is a consultant. Services performed by Namija during the
year include consulting and fees in relation to business strategy, financing and indigenous affairs support at commercial
rates. An amount of $170,017 remains owing as at 30 June 2015.
In 2015, the Company had a $100,000 fully refundable deposit with Guide Resources Pty Ltd, to carry out due diligence on
three tenements – E28/2730, E28/2731 and E25/454 located in the Cowarna Rocks area. Mr. James Passaris is a director of
Guide Resources Pty Ltd. During the year the Company agreed to acquire these tenements for $100,000. No further payment
was made to Guide during the year.
In 2015, three short-term loans totalling $48,519 (tranche 1), $30,000 (tranche 2) and $8,000 (tranche 3) were advanced to
the Company by Samantha Doutch (wife of Justin Doutch). These loans have subsequently been repaid, with tranche 3
repaid during the period. Finance charges included in tranche 1 and tranche 3 was interest on advances at 20% per month,
and as well as 1,000,000 shares for tranche 1 and 800,000 shares for tranche 3. There was no interest incurred on the
second tranche advance.
In June 2015, the Company received two short-term loans from Jacob Doutch ($3,500) and Aneles Consulting Services Pty
Ltd ($3,157), a company related to James Passaris. Both of these loans attracted an interest rate of 10% per month and have
been repaid subsequent to the end of the financial year.
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”), 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. An amount of $264,609 remains as a
prepayment as at 30 June 2014.
In 2014, an aggregate amount of $381,969 was expensed by the Company in relation to services provided by Namija
Holdings Pty Ltd (“Namija”), a company which John Doutch (father of Justin Doutch) is a consultant. Services performed by
Namija during the year include consulting and fees in relation to business strategy, financing and indigenous affairs support at
commercial rates. An amount of $9,038 remains owing as at 30 June 2014.
In 2014, an aggregate amount of $39,394 was paid or due and payable to Mining Corporate Pty Ltd, (“Mining Corporate”) 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 Mining Corporate 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.
37
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
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
Financial liabilities
Trade and other payables
Borrowings
30 June 2015
$
30 June 2014
$
39,537
47,877
87,414
1,661,619
991,948
2,653,567
339,807
3,054,814
3,394,621
1,342,567
961,851
2,304,418
The Company’s principal financial instruments comprise cash, 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.
38
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 26: FINANCIAL RISK MANAGEMENT AND POLICIES (continued)
(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 26. 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.
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
(c)
Liquidity risk
30 June 2015
$
30 June 2014
$
39,537
339,807
47,877
3,054,814
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 completed a private placement during the last financial year as well as receiving Research & Development Rebates
for 2012/13 ($966,230) and 2013/14 ($1,863,968).
The Company will apply for a Research & Development rebate for 2014/15 financial year and raise further capital. The Company will
have 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:
39
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 26: FINANCIAL RISK MANAGEMENT AND POLICIES (continued)
Year ended 30 June 2015
<1 year
1 - 5
Years
Over 5
Years
Total contractual
cashflows
Weighted
average
effective
interest rate %
Financial Assets:
Cash and Cash equivalents
Trade and other Receivables
Financial Liabilities:
Trade and other payables
Hire purchase liabilities
Borrowings
39,537
47,877
87,414
1,661,619
23,066
876,307
2,560,992
-
-
-
-
92,575
-
92,575
-
-
-
-
-
-
-
39,537
47,877
87,414
1,661,619
115,641
876,307
2,653,567
-
-
-
5.3
100.0
Year ended 30 June 2014
<1 year
1 - 5
Years
Over 5
Years
Total contractual
cashflows
Weighted
average
effective
interest rate %
Financial Assets:
Cash and Cash equivalents
Trade and other Receivables
Financial Liabilities:
Trade and other payables
Hire purchase liabilities
Borrowings
(d)
Fair value estimation
339,807
3,054,814
3,394,621
1,342,567
23,066
829,610
2,195,243
-
108,905
-
108,905
339,807
3,054,814
3,394,621
1,342,567
131,971
829,610
2,304,148
2.5
-
-
5.3
105.2
-
-
-
-
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.
40
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 26: FINANCIAL RISK MANAGEMENT AND POLICIES (continued)
(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 2015, the Company’s strategy, which remains unchanged from 2013 and 2014, 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 2015 that have or may significantly affect the
operations, results, or state of affairs of the Company in future financials years other than:
On 26 August 2015, the Company received the proceeds from a Convertible Note issue of $1m to Mdvest Pty Ltd, a company
related to Marlene Doutch (mother of Justin Doutch). Under the terms of the Convertible Note (“CN”) the face value of the CN can be
converted into shares at any time during a 12-month period at an exercise price of $0.03 per share. Interest on the CN is charged at
17.5%per annum.
41
CLASSIC MINERALS LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 28: SHARE BASED PAYMENTS
Shares granted to creditors and advisers as share based payments during the year are as follows:
(cid:1)
Name
Grant Date
Vesting Date
Number of
shares
Total Value
Expense
333,333
163,000
2,000,000
375,000
1,818,181
138,913
904,761
100,000
83,228
333,333
3,000,000
1,000,000
91,080
3,000,000
4,739,400
165,000
165,000
165,000
750,000
1,000,000
800,000
1,000,000
2,000,000
800,000
8,333,333
3,000,000
192,308
640,000
360,100
193,100
386,300
3,000,000
3,000,000
2,000,000
1,000,000,
47,030,370
$11,667
$5,228
$79,424
$10,909
$60,000
$5,695
$38,000
$4,400
$ 2,913
$ 10,000
$ 90,000
$ 32,000
$1,821
$ 66,000
$142,182
$3,795
$3,795
$4,950
$17,250
$18,000
$12,000
$15,000
$30,000
$12,000
$100,000
$42,000
$2,500
$6,400
$3,601
$1,931
$3,863
$33,000
$33,000
$20,000
$6,000
$929,324
Financing
Marketing
Financing
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Financing
Financing
Financing
Exploration
Financing
Payment of Creditor
Financing
Financing
Financing
Financing
Financing
Financing
Financing
Financing
Financing
Exploration
Financing
Exploration
Exploration
Exploration
Exploration
Exploration
Financing
Financing
Employee benefits
Financing
30 June 2015
$
30 June 2014
$
44,142
-
44,142
30,909
-
30,909
Greywood Holdings Pty Ltd
Neil Le Febvre
Greywood Holdings Pty Ltd
Kimberley Paul Doutch
Jett Holdings Pty Ltd
Malcolm Doutch
Namija Pty Ltd
GEM Geophysics Pty Ltd
Kerry and Ian Holman
Aneles Consulting Services Pty Ltd
Tarwarri Holdings Pty Ltd
Greywood Holdings Pty Ltd
Kimberly Paul Doutch
Foskin Pty Ltd
Ken Allen
Aneles Consulting Services Pty Ltd
Jacob Doutch
Aneles Consulting
Greywood Holdings Pty Ltd
Greywood Holdings Pty Ltd
Aneles Consulting
CTRC Pty Ltd
Foskin Pty Ltd
Samantha Doutch
Namija Pty Ltd
CTRC Pty Ltd
Jie Yang Consulting
Malcolm Doutch
Gary Doutch
Ozkan Pasli
Martin Purnell
Foskin Pty Ltd
Greywood Holdings Pty Ltd
Jacob Doutch
Samantha Doutch
9 July 2014
17 July 2014
17 July 2014
17 July 2014
15 August 2014
15 August 2014
15 August 2014
18 August 2014
20 August 2014
20 August 2014
7 October 2014
7 October 2014
15 October 2014
16 October 2014
16 October 2014
17 October 2014
17 October 2014
4 November 2014
4 November 2014
15 December 2014
16 February 2015
16 February 2015
16 February 2015
16 February 2015
17 February 2015
14 March 2015
14 March 2015
20 March 2015
20 March 2015
20 March 2015
15 April 2015
15 April 2015
15 April 2015
15 April /2015
18 June 2015
9 July 2014
17 July 2014
17 July 2014
17 July 2014
15 August 2014
15 August 2014
15 August 2014
18 August 2014
19 August 2014
20 August 2014
7 October 2014
7 October 2014
15 October 2014
16 October 2014
16 October 2014
17 October 2014
17 October 2014
4 November 2014
4 November 2014
15 December 2014
16 February 2015
16 February 2015
16 February 2015
16 February 2015
17 February 2015
14 March 2015
14 March 2015
20 March 2015
20 March 2015
20 March 2015
15 April 2015
15 April 2015
15 April 2015
15 April 2015
18 June 2015
NOTE 29: AUDITORS REMUNERATION
Auditors remuneration
Other services
NOTE 30: COMPANY DETAILS
The principal place of business of the Company is 71 Furniss Road, Landsdale WA 6065.
42
CLASSIC MINERALS LIMITED
ASX INFORMATION
ASX INFORMATION
AS AT 7 OCTOBER 2015
The following additional information is required by the ASX Limited in respect of listed public companies and was
applicable at 7 October 2015.
1.
Shareholding
a.
Distribution of Shareholders
Number
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
18
5
130
355
307
815
737
21,704
1,289,538
17,299,984
288,678,502
307,270,465
b.
The number of shareholdings held in less than marketable parcels is 527 shareholders amounting to 20,717,836
shares.
c.
As at 7 October 2015 there are no restricted shares
d.
The names of substantial shareholders listed in the company’s register as at 7 October 2015 are:
Shareholder
Ordinary Shares
%Held of Total
Ordinary Shares
Sheldon Coates& Harvey Coates
16,875,000
5.492
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.
43
CLASSIC MINERALS LIMITED
ASX INFORMATION
20 Largest Shareholders as at 7 October 2015 — Ordinary Shares
MR SHELDON PHILIP COATES & MR HARVEY LARRY
CHARLES COATES
GURINDJI PTY LTD
VIKING EQUITIES PTY LIMITED
MR DOMINIC VIRGARA
NAMIJA PTY LTD
FOSKIN PTY LTD
KENNETH ALLEN
GREYWOOD HOLDINGS PTY LTD
Number of
Ordinary Fully
Paid Shares
Held
% Held of
Issued
Ordinary
Capital
16,875,000
11,479,999
9,999,526
8,350,000
7,972,053
6,457,000
5,039,400
5,000,000
5.492
3.736
3.254
2.717
2.594
2.101
1.64
1.627
ROBERT FLOREANI & YVONNE FLOREANI
4,600,000
1.497
CONRAY MICHAEL PASSARIS
4,141,766
TARWARRI HOLDINGS PTY LTD
ADAVEN PTY LTD
ETHERTON INTERNATIONAL LTD
MR ISSA BOULOS
MR NATHAN BENJAMIN MANNING
MORELSHY PTY LTD
ROCKCOM PTY LTD
ADAVEN PTY LTD
4,102,782
4,000,000
3,500,000
3,499,893
3,373,333
3,000,008
3,000,008
3,000,000
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
3,000,000
1.348
1.335
1.302
1.139
1.139
1.098
0.976
0.976
0.976
0.976
TOTAL
113,860,768
37.056
1
2
3
4
5
6
7
8
9
10
11
12
13
14
16
17
18
19
20
2.
The name of the company secretary is Jeffrey Nurse.
3.
The address of the principal registered office in Australia is: 71 Furniss Road, Landsdale, WA, 6065.
4.
Registers of securities are held at the following address:
Advanced Share Registry Limited, 110 Stirling Hwy, Nedlands WA 6009
44
CLASSIC MINERALS LIMITED
ASX INFORMATION
5.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the ASX
Limited.
6.
Unquoted Securities
The Company has the following unquoted securities as at 7 October 2015
13,591,667 $0.10 Options (unlisted) exercisable on or before 31 December 2015
7.
The Options series (ASX Code: CLZO) expired on 30 June 2015
8.
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 1 March
2013.
SCHEDULE OF MINERAL TENEMENTS
AS AT 7 OCTOBER 2015
Project
Tenement
Classic Minerals Limited
Interest held by
Fraser Range
E28/1904
Doherty’s
M57/0619
Cowarna Rocks
E28/2238
Sawmill Dam
E28/2465
Lake Penny
E27/0530
Dingo Rock
E28/2455
Jurangie Hill
E28/2370, E28/2371
100%
100%
100%
100%
100%
100%
100%
45