Corporate Directory
Directors
Heath Hellewell – Executive Chairman
Guy LeClezio – Non-Executive Director
Stuart Pether – Non-Executive Director
Joint Company Secretaries
Jonathan Shellabear
Natasha Santi
Registered Office & Principal Place of Business
Level 1, 28 Ord Street
WEST PERTH WA 6005
+61 8 9212 4600
+61 8 9212 4699
Telephone:
Facsimile:
Email: enquirieis@capmet.com.au
Website: capmetals.com.au
Share Registry
Automic Pty Ltd
Level 2, 267 St Georges Terrace
PERTH WA 6000
Telephone:
Or
+61 2 9698 5414
1300 288 664
Auditor
William Buck Audit (WA) Pty Ltd
Level 3, 15 Labouchere Road
SOUTH PERTH WA 6151
Securities Exchange Listing
Australian Securities Exchange
ASX Code: CMM
Annual General Meeting
The Annual General Meeting of Capricorn Metals Ltd will be
held in the Function Room, The Celtic Club, 1st Floor, 48 Ord
Street, West Perth Australia at 9 am on Thursday 23rd
November 2017.
Registered under the Corporations Act 2001 in the State of Western Australia on 22nd September 2006
Contents
Chairman’s Letter
Operating and Financial Review
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Audit Report
ASX Additional Information
Group Tenement Schedule
Page No.
2
3
8
11
17
18
19
20
21
22
47
48
55
57
CAPRICORN METALS LTD ABN 84 121 700 105
1
Chairman’s Letter
Dear Shareholders,
It is with great satisfaction we present to you the Capricorn Metals Ltd 2017 Annual Report. This past reporting
period has been a very busy and very exciting year, with many key achievements by staff and consultants, as
we seek to realise our aim of becoming a significant new Australian gold producer.
We continue working towards the delivery of the Feasibility Study for the proposed open pit mining and
standalone processing facility at Karlawinda. This study will be based on our maiden Ore Reserve estimate for
the Bibra deposit, completed during the year. Whilst we are confident this study will provide a positive outcome
and ultimately lead to the development of the project, we see this as just the start for the Company at Karlawinda.
In parallel with our ongoing development studies we have maintained a very active exploration program as we
seek to realise the full potential of the Company’s assets and look to maintain the strong growth in our resource
and reserve base for the proposed operation.
We are excited by the endowment potential of the entire tenement area at Karlawinda. The opportunities to
increase the resource at Bibra are significant. Furthermore, the advanced prospects at Francopan and K3, both
of which have all the hall marks of another major mineralised system, have significant untested potential. In our
opinion, there is excellent potential for significant new discoveries at Karlawinda and we intend to continue an
aggressive exploration program to unlock these opportunities which should add significant value to the
underlying Karlawinda Gold Project. We consider this as a rare opportunity to be at the start of defining what we
believe will develop into a significant gold camp.
We thank you, our shareholders, for your ongoing support and look forward to the continued transition of our
Company into a profitable gold producer.
Heath Hellewell
CAPRICORN METALS LTD ABN 84 121 700 105
2
Operating and Financial Review
OPERATIONS REVIEW
Highlights
Completion of a positive Scoping Study and commencement of the Karlawinda Gold Project Feasibility
Study.
Grant of Mining Lease M52/1070 following execution of Native Title Land Access Agreement for the
Karlawinda Gold Project.
Upgraded Mineral Resource estimate and release of the Maiden Bibra Ore Reserve statement.
Karlawinda Gold Project
The Karlawinda Gold Project is located in the Pilbara region of Western Australia, 65km south-east of the town of Newman.
Tenure
Originally acquired in February 2016, Capricorn assumed 100% control of the key mineral tenements covering an area of 290km2
following the final payment of $1.5M to the previous project owners in August 2016. Throughout the reporting period Capricorn
continued to build its tenement position at Karlawinda to its current total area of 1419km2. A Land Access agreement was executed
with the single traditional claimant group, the Nyiyaparli, in November 2016. Mining lease M52/1070 was granted over the key ore
deposit at Bibra and surrounding areas for potential project infrastructure in December 2016, the lease is valid for 21 years.
Figure 1: Location map & tenement holdings
CAPRICORN METALS LTD ABN 84 121 700 105
3
Operating and Financial Review (Cont’d)
Geology
The project area is underlain by a largely unexplored and only recently recognised belt of Archaean greenstone rocks that were
discovered in 2005. This belt of predominantly volcanic and sedimentary rocks is located on the southern margin of the Sylvania Dome,
a major structure where Archaean-aged, predominantly granitic basement rocks, thought to be part of the Pilbara Craton, are exposed
at surface within surrounding younger Proterozoic aged sedimentary basins.
The Bibra deposit is part of a large-scale Archaean aged gold mineralising system, mineralisation at Bibra is hosted within a package
of deformed meta-sediments and meta volcanic rocks and is developed on four main parallel, shallow dipping structures. Close to
surface in the weathered rock, oxide gold mineralisation has been developed over the structures from surface to a depth of
approximately 60m.
Approximately 5km south east of Bibra, previous drilling at the Francopan and K3 prospects has intercepted gold mineralisation with
similar characteristics in similar host rocks to that which is present at Bibra.
Strategy
Following acquisition of the Karlawinda Gold Project, Capricorn immediately initiated a strategy to bring the project into gold production
via an initial open pit mine and large scale standalone ore processing facility. Underpinning this strategy has been an aggressive
program of drilling to grow the project resource base at the Bibra deposit to the current estimate of 1,114,000oz (Indicated and Inferred),
a growth in resource inventory for the project of over 70% since the project acquisition.
Scoping Study
A Scoping Study for a mine development at Karlawinda was completed in July 2016. The study, which built on project scoping work
undertaken by the previous project owners, concluded that a single large open pit mine at the Bibra deposit, feeding a 3Mtpa standalone
CIL (carbon-in-leach) processing facility on site was economically the most robust of two scenarios considered.
Feasibility Study
Following the positive outcome from the scoping study, Capricorn commenced a Feasibility Study into the development of the
Karlawinda Gold Project. This study is supported by a major 75,000m infill drilling program completed in December 2016. The aim of
the program was to upgrade the confidence level in the previous Inferred Mineral Resource at Bibra to the higher confidence Indicated
category. This drilling program was one of the largest drilling campaigns undertaken by the Australian gold sector in 2016.
The upgraded Mineral Resource estimation at Bibra deposit currently stands at:
31 million tonnes @ 1.1g/t Au for 1,114,000 ounces of gold
Based on this Mineral Resource estimate and the ongoing Feasibility Study work completed at that time, Capricorn released an Ore
Reserve estimate for Bibra on 7th August 2017. The Bibra Ore Reserve is currently estimated at:
21,025,000 tonnes @ 1.06g/t Au for 713,000 ounces of gold
The Karlawinda Gold Project Feasibility Study is scheduled for completion in the coming weeks.
Exploration
In parallel with the ongoing resource development drilling programs and feasibility work, Capricorn has maintained a very active
program of exploration activities. Whilst most of the work this year was understandably focused around the Bibra deposit and its
immediate extensions, the Company has been pro-actively building on an improved understanding of the mineralisation and controls
at Bibra, as it continued to build up its regional datasets and refined its future exploration targets.
This work has been completed in anticipation of a major exploration push for the coming year as the Company now looks towards
building on the completion of the Feasibility Study and maximizing its investment at Karlawinda. Particularly exciting is the potential of
the Francopan and K3 prospects where significant mineralisation is already known to occur from previous drilling and the Bundoran
prospect where there are several coincident geophysical signatures with similar characteristics to the Bibra deposit. As the Company
moves towards production the leverage off exploration success will be significant for shareholders.
Corporate
To ensure that Capricorn has the appropriate balance and blend of skills and experience between the Board and executive
management, an organisational restructuring was undertaken during March 2017. The restructure has laid the foundation for the
Company to move forward and deliver on its strategy to become a significant Australian gold producer.
On the 6th of February 2017, Capricorn announced the execution of a binding agreement with Hawke’s Point Holdings L.P. to raise a
total of $10 million in new equity through the issue of two tranches of shares at a price of 11.7c per share.
CAPRICORN METALS LTD ABN 84 121 700 105
4
Operating and Financial Review (Cont’d)
The investment by Hawke’s Point, which followed an extensive due diligence process, is a strong endorsement for the Karlawinda
Gold Project and means that Capricorn is fully-funded through to the completion of the Feasibility Study. On the 28th April, Tranche
One shares were ratified and Tranche Two shares were approved for issue at a General Meeting of shareholders.
Madagascar Projects
As previously reported the Company has an active divestment program for its Madagascan assets, as they are now considered non-
core, with the sole focus to be on the development of the Karlawinda Gold Project.
During the year, the Company made progress with the following divestment activities in Madagascar:
Sale of Madagascar Graphite Ltd to Blackearth Minerals NL (Blackearth).
$75,000 cash was paid on signing of the Share Sale & Purchase Agreement in February 2017.
o
o Remaining consideration of $75,000 cash and 2,000,000 shares due on completion, expected by 30 November 2017.
Completion requires Blackearth to complete and initial public offering and receive approval to be added to the official
list of the Australia Securities Exchange. In addition, a further $1,000,000 cash is due upon a ‘decision to mine’ being
made by Blackearth within 8 years of completion of this transaction;
Sale of equipment and vehicles for $17,722; and
Sale of shares in NEXT Source Materials Inc (formerly Energizer Resources Inc.) for $21,330.
The principal Madagascar assets remaining to be divested include some real estate and mineral lease properties.
Bibra Ore Reserve
On 7 August 2017, the Company released its maiden JORC 2012 compliant Ore Reserve estimate of 21,025,000 tonnes @ 1.06g/t
Au for 713,000 ounces for the Bibra deposit at the Karlawinda Gold Project (see ASX Release dated 7 August 2017), which is based
on the updated April 2017 Mineral Resource estimate (ASX release 10 April 2017) of 31,331,100 tonnes @ 1.1g/t Au for 1,114,000
million ounces.
BIBRA GOLD DEPOSIT JORC OPEN PIT RESERVE STATEMENT (A$1500/ounce assumption)
PROVED RESERVES
PROBABLE RESERVES
TOTAL RESERVES
Tonnes
(Mt)
Grade
(g/t Au)
Ounces
(Moz)
Tonnes
(Mt)
Grade
(g/t Au)
Ounces
(Moz)
Tonnes
(Mt)
Grade
(g/t Au)
Ounces
(Moz)
-
-
-
21
1.06
0.713
21
1.06
0.713
Date
August
2017
Notes on the August 2017 Ore Reserve:
1. Reserves are a subset of Resources
2. Ore Reserves conform with and use the JORC 2012 Code definitions
3. Ore Reserves are calculated using a gold price of A$1500/ounce
4. Ore Reserves are calculated using a cut-off grade between 0.40g/t and 0.47g/t Au
5. Mining dilution, estimated by modelling to a Selective Mining Unit (SMU) with dimensions of 5m x6.25m x2.5m result in a reduction of 13% of reportable Au
ounces
6. All figures are rounded to reflect appropriate levels of confidence which may result in apparent errors of summation
Bibra Mineral Resource
An updated Mineral Resource for the Bibra deposit was estimated in July 2016 and a further updated Mineral Resource estimate was
undertaken in April 2017.
The April 2017 Indicated and Inferred Resource estimate for the Bibra deposit was 31,331,100 tonnes @ 1.10g/t for 1,114,000 ounces
of contained gold (see ASX release dated 10 April 2017). The resource is reported at a 0.5g/t Au cut-off grade and is constrained
within an optimised open pit shell using a gold price of A$1750/oz.
The Bibra JORC-2012 compliant Inferred Resource Estimate as at 30 June 2017, is as follows:
BIBRA GOLD DEPOSIT JORC OPEN PIT RESOURCE ESTIMATE
DATE
April 2017
July 2016
Tonnes
(Mt)
28.9
---
INDICATED
Grade
(g/t Au)
1.10
---
Ounces
(Moz)
1.03
---
Tonnes
(Mt)
2.4
25.5
INFERRED
Grade
(g/t Au)
1.06
1.10
Ounces
(Moz)
0.084
0.914
Tonnes
(Mt)
31.3
25.5
TOTAL
Grade
(g/t Au)
1.10
1.10
Ounces
(Moz)
1.114
0.914
CAPRICORN METALS LTD ABN 84 121 700 105
5
Operating and Financial Review (Cont’d)
BIBRA GOLD DEPOSIT JORC OPEN PIT RESOURCE ESTIMATE BY DOMAIN
DOMAIN
Laterite
Oxide – Upper Saprolite
Oxide – Lower Saprolite
Transitional
Fresh
TOTAL
Tonnes
1,544,000
2,318,000
3,075,000
2,071,600
22,322,500
31,331,100
Grade (g/t Au)
1.4
1.0
1.0
1.0
1.1
1.1
Ounces
67,600
73,000
99,850
65,270
808,380
1,114,000
Notes on the April 2017 Inferred Mineral Resource Estimate:
1. Refer to JORC 2012 Table (1) in Appendix 1 of ASX Release on 10 April 2017 for full details.
2. Discrepancy in summation may occur due to rounding.
3. The mineralisation has been wireframe modelled using a 0.3g/t Au assay cut-off grade. The resource estimate has been reported above a block grade of 0.5g/t Au.
4. The resource has been constrained by a A$1750/ounce conceptual optimal pit shell.
5. Ordinary kriging was used for grade estimation utilising Surpac software v6.6.2.
6. Grade estimation was constrained to blocks within each of the mineralised wireframes.
7. See ASX announcement dated 10th April 2016 for Inferred Resource announcement.
The Bibra JORC-2012 compliant Inferred Resource Estimate as at 30 June 2016, was as follows:
BIBRA GOLD JORC OPEN PIT INFERRED RESOURCE ESTIMATE
Domain
Laterite
Saprolite
Transition
Fresh
TOTAL
Tonnes
2,100,000
4,300,000
1,500,000
17,600,000
25,500,000
Grade (g/t Au)
1.3
1.0
1.2
1.1
1.1
Ounces
85,000
142,000
58,000
629,000
914,000
Notes on the July 2016 Inferred Mineral Resource Estimate:
1. Refer to JORC 2012 Table (1) in Appendix 1 of ASX release 4 July 2016 for full details.
2. Discrepancy in summation may occur due to rounding.
3. The mineralisation has been wireframe modelled using a 0.3g/t Au assay cut-off grade. The resource estimate has been reported above a block grade of 0.5g/t
Au.
4. The resource has been constrained by a A$1750/ounce conceptual optimal pit shell.
5. Ordinary Kriging was used for grade estimation utilising Surpac software v6.6.2.
6. Grade estimation was constrained to blocks within each of the mineralisation wireframes.
7. See ASX announcement dated 4th July 2016 for Inferred Resource announcement.
Competent Persons Statement
The information in this report that relates to Exploration Results or Mineral Resources is based on information compiled or reviewed
by Mr. Michael Martin who is Chief Geologist and a full-time employee of the Company. Mr. Michael Martin is a current Member of the
Australian Institute of Geoscientists and has sufficient experience, which is relevant to the style of mineralisation and types of deposit
under consideration and to the activities undertaken, to qualify as a Competent Person as defined in the 2012 Edition of the
“Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Martin consents to the inclusion
in the report of the matters based on the information in the form and context in which it appears.
The information in this report that relates to Exploration Results or Mineral Resources is based on information reviewed by Mr. Peter
Langworthy who is Executive General Manager Geology and a full-time employee of the Company. Mr. Peter Langworthy is a current
Member of the Australian Institute of Mining and Metallurgy and has sufficient experience, which is relevant to the style of mineralisation
and types of deposit under consideration and to the activities undertaken, to qualify as a Competent Person as defined in the 2012
Edition of the “Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Langworthy consents
to the inclusion in the report of the matters based on the information in the form and context in which it appears.
The information in this report that relates to Ore Reserves for Bibra is based on information compiled by Quinton de Klerk. Mr de Klerk
is an employee of Cube Consulting PL and is a Fellow of the Australian Institute of Mining and Metallurgy (FAusIMM, #210114). Mr
de Klerk has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the
activity currently being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code of
Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. de Klerk consents to the inclusion in this report of the
matters based on the information in the form and context in which it appears.
Capricorn Metals confirms that it is not aware of any new information or data that materially affects the information included in the
previous ASX announcements on Resources (10/4/2017) and Metallurgy (19/6/2017) and, in the case of estimates of Mineral
Resources, Ore Reserves, Plant operating costs and Metallurgy, all material assumptions and technical parameters underpinning the
estimates in the relevant market announcements continue to apply and have not materially changed. The Company confirms that the
form and context in which the Competent Persons’ findings are presented have not materially changed from previous market
announcements.
CAPRICORN METALS LTD ABN 84 121 700 105
6
Operating and Financial Review (Cont’d)
FINANCIAL REVIEW
Financial Position
The consolidated loss for the year was $3,293,239 (2016: $3,700,868). In addition, a payment of $75,000 was received in relation to
the sale of wholly owned subsidiary Madagascar Graphite Ltd.
During the year, Madagascan operations required parent company funding of $0.1 million, representing a shortfall in the self-funding
strategy (2016 requirement: $0.3 million).
The cash balance of the Group at 30 June 2017 was $5.5 million.
Corporate Transactions
Blackearth Minerals NL:
In February 2017, the Company committed to the sale of the wholly owned Mauritian subsidiary, Madagascar Graphite Ltd and its
assets which comprise 100% ownership of Madagascan subsidiary, Mada-Aust SARL, by way of a Share Sale & Purchase Agreement
with Blackearth Minerals NL (Blackearth).
The key terms of the agreement saw the payment of $75,000 non-refundable deposit on signing of the agreement.
Consideration outstanding comprises a further $75,000 cash and the issue of 2,000,000 ordinary shares in Blackearth, both due on
completion of the sale which requires Blackearth to successfully complete an initial public offer and receive conditional approval for
admission to the official list of the Australian Securities Exchange.
A further deferred consideration of $1,000,000 is payable upon a ‘decision to mine’ being made by Blackearth within 8 years of
completion of this transaction.
The transaction is expected to conclude by 30 November 2017.
Future Prospects
The group’s cash balance at 30 June 2017 will be sufficient to see the group through the planned activities in relation to the completion
of the Feasibility Study at Karlawinda, during the coming year.
CAPRICORN METALS LTD ABN 84 121 700 105
7
Directors’ Report
The directors present their report on the Consolidated Group, comprising Capricorn Metals Ltd (referred to in these financial statements as “Parent”
or “Capricorn” and its wholly owned subsidiaries (“the Group”), together with the financial report for the year ended 30 June 2017 and the audit report
thereon.
1. DIRECTORS
The directors of the Company at any time during or since the end of the year are set out below. Directors have been in office since the start of the
financial year to the date of this report unless otherwise stated.
Mr Heath HELLEWELL
B.sc Hons, MAIG
Non-Executive Director – Appointed 3 February 2016
Executive Chairman – From 14 March 2017
Mr Hellewell is an exploration geologist with over 22 years of experience in gold, base metals and diamond exploration predominantly in Australia
and West Africa. Mr Hellewell graduated from Curtin University with an Honours Degree in Geology and is a member of the Australian Institute of
Geoscientists. Mr Hellewell has previously held senior exploration positions with a number of successful mining and exploration groups including
DeBeers Australia Pty Ltd and Resolute Mining Limited. Mr Hellewell joined Independence Group NL in 2000 prior to the Company’s IPO and was
part of the team that identified and acquired the Tropicana project area, eventually leading to the discovery of the Tropicana and Havana gold deposits
which are now subject to a production joint venture with Anglo Ashanti Australia Ltd. Mr Hellewell ultimately rose to the position of Exploration Manager
at Independence Group.
Most recently he was the co-founding Executive Director of Doray Minerals Limited, where he was responsible for the Company’s exploration and
new business activities. Following the discovery of the Andy Well gold deposits in 2010, Doray Minerals was named “Gold Explorer of the Year” in
2011 by The Gold Mining Journal and in 2014 Heath was the co-winner of the prestigious “Prospector of the Year” award, presented by the Association
of Mining and Exploration Companies.
Mr Hellewell is not an independent director.
During the past three years Mr Hellewell has held the following other listed company directorships:
Non-Executive Director – Core Exploration Ltd (15 September 2014 to present)
Non-Executive Director – Duketon Mining Limited (18 November 2014 to present)
Mr Guy LE CLEZIO
BA
Non-Executive Chairman – 4 April 2007 to 14 March 2017
Non-Executive Director – From 14 March 2017
Mr Le Clezio holds a Bachelor of Arts from the University of Western Australia. He has had 20 years’ experience in the mining and exploration
industry and was an Executive Director of Eyres Reed Ltd and Canadian Imperial Bank of Commerce who were leading Western Australian
stockbrokers specialising in the mining industry. He was a founding director of World Titanium Resources Ltd and a former director of ASX listed
Windy Knob Resources Ltd.
Mr LeClezio is an independent director.
During the past three years Mr Le Clezio has not held any other listed company directorships.
Mr Stuart PETHER
B.E Hons, MAUSIM
Non-Executive Director – Appointed 14 March 2017
Mr Pether has over 25 years resources industry experience in project development, technical studies, mine operations and corporate management.
He is equally skilled in open pit and underground mining in a range of commodities including gold, nickel and lead and zinc. A qualified mining
engineer, he holds a Bachelor in Engineering (Mining Engineering) from the Western Australia School of Mines.
Mr Pether was previously the Chief Executive Officer for Kula Gold and executive director of the 100% subsidiary Woodlark Mining Limited, the owner
of the advance development project the Woodlark Island Gold Project in PNG.
He held the position of Chief Operating Officer at Catalpa Resources where he was responsible for the construction, commissioning and operation of
the $92 million Edna May Gold Project and represented Catalpa Resources on the Cracow Gold Mine Joint Venture committee with Newcrest Mining.
Following the merger of Catalpa Resources with Conquest Mining in November 2011, forming Evolution Mining, he took up the position of Vice
President, Project Development where he was responsible for technical studies and major capital projects, including the construction of the $140
million Mt Carlton Gold Project in Queensland.
Prior, he worked in various mining management roles for CBH Resources, PacMin Mining Limited, Dominion Mining and Western Mining Corporation.
Mr Pether is a member of the Australasian Institute of Mining and Metallurgy.
CAPRICORN METALS LTD ABN 84 121 700 105
8
Directors’ Report (Cont’d)
Mr Pether is not an independent director, as he is the appointed board nominee of substantial shareholder, Hawke’s Point Holdings I Limited.
During the past three years Mr Pether has held no other listed company directorships.
Mr Peter THOMPSON
B.sc, M.Sc, MAusIMM
Managing Director – Appointed 3 February 2016 – Resigned 14 March 2017 to take the role of Chief Operating Officer
Mr Thompson trained as a geologist in Trinity College Dublin and Leicester University, he came to Australia in 1988 and has had a continuous career
in exploration and mining for gold, nickel and copper.
Employed by WMC, Anaconda Nickel, Jubilee Mines, St Barbara Ltd, Beaconsfield Gold and Central Asia Resources in a range of roles, he has
overseen several discoveries, project developments, feasibility studies, acquisitions, divestments and company start-ups.
Recent responsibilities as CEO of Beaconsfield Resources and Central Asia Resources have been for operating deep underground gold and heap
leach start-up operations.
During the past three years Mr Thompson has held the following other listed company directorships:
Chief Executive Officer & Managing Director – Central Asia Resources Ltd (4 July 2014 to 8 February 2016)
Non-Executive Director – Central Asia Resources Ltd (8 February 2016 to 5 September 2016)
Non-Executive Director – Marmota Energy Ltd (26 May 2015 to present)
Mr Peter LANGWORTHY
BSc(Hons), MAusIMM
Non-Executive Director – 24 July 2013 to 2 February 2016
Executive Director – From 3 February 2016 – Resigned 14 March 2017 to take the role of Executive General Manager – Geology
Mr Langworthy is a geologist with a career spanning 26 years in mineral exploration and project development in Australia and Indonesia. He has
specific expertise in building successful teams that have been responsible for significant mineral discoveries and in integrating technically sound
exploration and resource development strategies into corporate planning. His industry experience includes 12 years in senior management roles with
WMC Resources, four years with PacMIn Mining as Exploration Manager, five years with Jubilee Mines where he built the team responsible for
numerous discoveries at the Cosmos Nickel Mine and the Sinclair nickel project, and three years with Talisman Mining as Technical Director. At
Jubilee he was part of the corporate team responsible for the growth of the company until it was taken over by Xstrata for $23/share.
During the past three years Mr Langworthy has held the following other listed company directorship:
Non-Executive Chairman – Syndicated Metals Limited (20 March 2012 to present)
Non-Executive Director – Silver Mines Limited (21 June 2016 to present)
Mr Jonathan SHELLABEAR
B.Sc Hons, MBA
Non-Executive Director – Appointed 5 December 2016 – Resigned 14 March 2017 to take the role of Chief Financial Officer.
Mr Shellabear has over 25 years’ experience in the Australian and international resources industry as a senior corporate executive and investment
banker specialising in the mining sector. Mr Shellabear holds a Bachelor of Science with Honours in Geology and a Master in Business Administration
from the University of Western Australia.
He has extensive capital markets and advisory experience in the resources sector and has held senior investment banking positions with NM
Rothschild & Sons, Deutsche Bank and Resource Finance Corporation.
Mr Shellabear was previously the Managing Director and Chief Executive Officer of Dominion Mining Ltd which was acquired by Kingsgate
Consolidated Ltd in 2011 to create, at that time, Australia’s second largest gold company by market capitalisation. He has also held senior corporate
roles with Portman Limited (now Cliffs Natural Resources) as General Manager, Business Development and Heron Resources Ltd as Managing
Director and Chief Executive Officer.
During the past three years Mr Shellabear has not held any other listed company directorship:
2. COMPANY SECRETARIES
Mr Graeme Boden and Mrs Natasha Santi were appointed as Joint Company Secretaries on 30 September 2012.
Mrs N Santi has 9 years’ experience, as an employee of Boden Corporate Services Pty Ltd, providing company secretarial and accounting services
to a range of ASX listed and unlisted companies. On 1 April 2017 Mrs N Santi became a full-time employee of Capricorn Metals and ceased
arrangements with Boden Corporate Services.
On 11 May 2017 Mr Graeme Boden resigned as Joint Company Secretary and Mr Jonathan Shellabear, the Chief Financial Officer was appointed
Joint Company Secretary.
CAPRICORN METALS LTD ABN 84 121 700 105
9
Directors’ Report (Cont’d)
3. MEETINGS OF DIRECTORS
During the financial year, the directors’ attendance at meetings of directors and committees of directors were as follows:
Directors’
Meetings
Audit
A
8
8
2
6
6
2
B
8
8
2
6
6
2
A
-
-
-
-
-
-
Committee Meetings
Remuneration
B
A
-
-
-
-
-
-
-
-
-
-
-
-
B
-
-
-
-
-
-
Nomination
A
B
-
-
-
-
-
-
-
-
-
-
Director
H Hellewell
G LeClezio
S Pether
P Thompson
P Langworthy
J Shellabear
A = Number eligible to attend
B = Number attended
The Full Board sits as the Audit, Remuneration and Nomination Committees when those responsibilities are required to be fulfilled.
4. PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity during the financial year were mineral exploration and project evaluation. There was no change in
the nature of these activities during the financial year.
5. OPERATING RESULTS
The consolidated loss of the consolidated entity after providing for income tax amounted to $3,293,239 (2016: $3,700,868).
6. DIVIDENDS PAID OR RECOMMENDED
No dividends were paid or recommended to be paid during the financial year (2016: Nil).
7. REVIEW OF OPERATIONS
A review of the consolidated entity's operations during the year and the results of those operations are contained in the Operating and Financial
Review section of this Annual Report from page 2.
8. FINANCIAL POSITION
The net assets of the Group have increased by $6,9897,009 to $30,107,548 during the financial year. This significant increase is largely due to net
capital raising proceeds of $9,612,383 and the capitalisation of exploration expenditure.
The directors believe the group is in a financial position to progress its current objectives and strategies.
9. SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Other than as set out elsewhere in the report, there were no significant changes in the state of affairs.
10. SUBSEQUENT EVENTS
There were no material events arising subsequent to 30 June 2017, to the date of this report which may significantly affect the operations of the
consolidated entity, the results of those operations and the state of affairs of the consolidated entity in the future, other than:
22 September 2016, 6,000,000 unlisted incentive options were issued under the Incentive Option Plan to Chief Financial Officer, Mr J
Shellabear. The options are exercisable at $0.15 per share and expire on 5 May 2021.
11. FUTURE DEVELOPMENTS
Likely future developments in the operations of the consolidated entity are referred to in the Operating and Financial Review section of this Annual
Report.
12. ENVIRONMENTAL ISSUES
Mining and exploration operations in Madagascar and Australia are subject to environmental regulation under the Laws of each country. The Group’s
current activities generally involve disturbance associated with exploration drilling programmes in Australia, with only low-level activities in
Madagascar. There have been no breaches of the Group’s obligations under environmental laws.
CAPRICORN METALS LTD ABN 84 121 700 105
10
Directors’ Report (Cont’d)
13. DIRECTORS INTERESTS
As at the date of this report, the interests of the Directors in shares and options of the Company were:
Director
H Hellewell
G LeClezio
S Pether
No. of
Shares
102,757,655
19,444,276
250,000
No. of
Unlisted Options
1,000,000
1,000,000
-
14. CORPORATE GOVERNANCE
The Company’s corporate governance statement can be found at the following URL:
http://capmetals.com.au/wp-content/uploads/2017/09/170929-CMM-Corporate-Governance-Statement.pdf
15. REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for each Key Management Personnel of Capricorn Metals Ltd.
The remuneration policy was approved by the Board. Executives receive a base salary, superannuation, fringe benefits, performance incentives and
retirement benefits as relevant or appropriate to their position. The remuneration committee reviews executive packages annually by reference to
Company performance, executive performance, comparable information from industry sectors and other listed companies and independent advice. The
performance of executives is reviewed annually, by the remuneration committee.
Executives may be granted unlisted share options from time to time, as determined by the Board.
The Board expects that the remuneration structure implemented will result in the Company being able to attract and retain executives to manage the
consolidated entity. It will also provide executives with the necessary incentives to work towards sustainable growth in shareholder value.
The payment of bonuses, options and other incentive payments are reviewed by the remuneration committee annually as part of the review of
executive remuneration, and a recommendation is put to the Board for approval. The Board can exercise its discretion in relation to approving
incentives, bonuses and options and can recommend changes to the committee's recommendations. Any changes must be justified by reference to
measurable performance criteria.
Details of Remuneration for Year Ended 30 June 2017:
Executive Director & Executive Management
At 30 June 2017, the senior executives of the Company, who are full time employees, had conditions of employment as set out below. Either party
may terminate their agreement without cause by giving written notice of three months. There is no termination fee payable other than during the term
of notice.
Name
Position
Mr Heath Hellewell
Mr Jonathan Shellabear Mr Peter Langworthy
Mr Peter Thompson
Executive Chairman
Chief Financial Officer
Salary Package per annum
Annual leave days per annum
Options (1)
$246,375
25
1,000,000
$317,550
20
-
Executive General
Manager – Geology
$246,375
30
7,300,000
Chief Operating Officer
$317,550
20
8,500,000
Note:
(1)
In addition to their contracted remuneration set out above 6,000,000 (2016: 10,800,000) unlisted Options were issued as incentives during the
year ended 30 June 2017 (see (b) equity issued as part of remuneration).
Non-Executive Directors
The base fee for a non-executive director is $40,000 per annum. The Company makes contributions at the statutory minimum rate to superannuation
funds nominated by directors, in addition to the base fee.
In addition to the base non-executive director fee, Mr G LeClezio was also issued 1,000,000 unlisted options during the year ended 30 June 2017.
The aggregate amount of remuneration payable to all non-executive directors was set prior to ASX listing, at $200,000 per annum.
Directors’ fees cover all main board activities and committee memberships.
CAPRICORN METALS LTD ABN 84 121 700 105
11
Directors’ Report (Cont’d)
(a) Remuneration for Key Management Personnel of the consolidated entity during the year was as follows:
2017
Non-Executive Directors:
G LeClezio
S Pether (1)
H Hellewell (2)
J Shellabear (3)
Executive Directors:
H Hellewell
P Thompson (4)
P Langworthy (5)
Management:
P Thompson (4)
P Langworthy (5)
J Shellabear (3)
J L Marquetoux
Company Secretaries:
G Boden & N Santi (6)
N Santi (7)
Total Key Management Personnel
Short Term Benefits
Salary &
Director Fees
$
Other
Service Fees
$
Post-Employment
Benefits
Share Based
Expense
Superannuation
$
Annual Leave
$
Value of Options
$
Total
$
Performance related
%
40,000
12,775
29,200
9,570
75,000
160,000
100,000
426,545
96,667
75,000
96,667
152,031
420,365
-
33,750
33,750
880,660
-
4,000
-
-
-
-
-
4,000
-
-
-
-
-
128,998
-
128,998
132,998
3,800
-
-
909
7,125
13,077
9,500
34,411
9,183
7,125
9,183
-
25,491
-
3,206
3,206
63,108
-
-
-
-
8,334
-
-
8,334
16,550
24,472
8,590
-
49,612
-
2,999
2,999
60,945
7,324
-
-
-
7,324
-
-
14,648
291,699
237,021
-
-
528,720
-
436
436
51,124
16,775
29,200
10,479
97,783
173,077
109,500
479,604
414,099
343,618
114,440
152,031
1,024,188
128,998
40,391
169,389
543,804
1,681,515
14.33
-
-
-
7.49
-
-
70.44
68.98
-
-
1.08
Notes:
(1)
(2)
(3)
(4)
(5)
(6)
Mr Stuart Pether was appointed a Non-Executive Director on 14 March 2017.
Mr H Hellewell transitioned from Non-Executive Director to Executive Chairman on 14 March 2017.
Mr J Shellabear was appointed a Non-Executive Director on 5 December 2016. Mr Shellabear transitioned from Non-Executive Director to Chief Financial Officer on 14 March 2017 and was appointed Joint Company
Secretary on 11 May 2017.
Mr P Thompson transitioned from Managing Director to Chief Operating Officer on 14 March 2017.
Mr P Langworthy transitioned from Executive Director to Executive General Manager – Geology on 14 March 2017.
Payments made to Mr Graeme Boden through Boden Corporate Services Pty Ltd (BCS) include time spent on Company activities, including accounting and administration by G Boden and other employees of BCS,
including N Santi as Joint Company Secretary (until 31 March 2017, see 7 below). Mr G Boden resigned as Joint Company Secretary on 11 May 2017.
(7) Ms Natasha Santi ceased employment with Boden Corporate Services Pty Ltd and became a direct employee of the Company from 1 April 2017, continuing in the role of Joint Company Secretary.
There were no bonuses paid to any Key Management Personnel during the year.
CAPRICORN METALS LTD ABN 84 121 700 105
12
Directors’ Report (Cont’d)
2016
Non-Executive Directors:
G LeClezio
H Hellewell
P Woods (1)
Executive Directors:
P Thompson (2)
P Langworthy (3)
Management:
J L Marquetoux
Company Secretaries:
G Boden & N Santi (4)(5)
Total Key Management Personnel
Short Term Benefits
Salary &
Director Fees
$
Other
Service Fees
$
Post-Employment
Benefits
Share Based
Expense
Superannuation
$
Annual Leave
$
Value of Options
$
Total
$
Performance related
%
40,950
18,250
24,628
100,000
48,450
232,278
169,783
-
402,061
3,000
-
-
-
-
3,000
-
130,134
133,134
2,850
-
1,299
8,045
3,563
15,757
-
-
-
-
-
8,423
4,738
13,161
-
-
-
-
-
64,258
51,407
115,665
-
-
15,757
13,161
115,665
46,800
18,250
25,927
180,726
108,158
379,861
169,783
130,134
679,778
-
-
-
35.56
47.53
-
-
Dr P Woods resigned as a director on 3 February 2016.
Mr P Thompson was appointed Managing Director on 3 February 2016.
Notes:
(8)
(9)
(10) Mr P Langworthy transitioned from a Non-Executive Director to an Executive Director role on 3 February 2016.
(11) Mr G Boden resigned as a director on 3 February 2016. Mr Boden did not receive payment of a director’s fee.
(12)
Payments made to G Boden through Boden Corporate Services Pty Ltd (BCS) include time spent on Company activities, including accounting and administration by G Boden and other employees of BCS, including N
Forde as Joint Company Secretary.
There were no bonuses paid to any Key Management Personnel during the year.
CAPRICORN METALS LTD ABN 84 121 700 105
13
Directors’ Report (Cont’d)
(b) Equity issued as part of remuneration:
Options:
During the year ended 30 June 2017, 7,800,000 (2016: 10,800,000) unlisted options, were issued to Key Management Personnel. The options have
the following terms and vesting profiles.
7,000,000 options exercisable at $0.20 on or before 31 May 2020, subject to the following vesting periods :
-
-
-
2,333,333 (one third) vest on 25 November 2017;
2,333,333 (one third) vest on 25 November 2018; and
2,333,334 (one third) vest on 25 November 2019.
800,000 options exercisable at $0.15 on or before 5 May 2021, subject to the following vesting periods:
-
-
-
266,666 (one third) vest on 11 May 2018;
266,667 (one third) vest on 11 May 2019; and
266,667 (one third) vest on 11 May 2020.
Details of the options issued are as follows:
Key Management Person
H Hellewell
G LeClezio
P Thompson
P Langworthy
N Santi
Vested
No.
Granted
No.
1,000,000
1,000,000
2,500,000
2,500,000
800,000
7,800,000
-
-
-
-
-
-
Grant
Date
25/11/2016
25/11/2016
25/11/2016
25/11/2016
13/06/2017
Value per
Option at Grant
Date
$0.021
$0.021
$0.021
$0.021
$0.021
Exercise Price Expiry Date
31/05/2020
31/05/2020
31/05/2020
31/05/2020
05/05/2021
$0.20
$0.20
$0.20
$0.20
$0.15
(c) Movements in share and options holdings, held by key management personnel:
Movements in options over equity instruments:
The movement during the reporting period in the number of options over ordinary shares in the Entity held, directly, indirectly or beneficially, by each
key management person, including their related parties is as follows:
Balance
1 July 2016
Granted as
Remuneration
Exercised
Expired
Balance
30 June 2017
Vested
During the Year
Vested &
Exercisable
30 June 2017
Directors:
H Hellewell
G LeClezio
S Pether (1)
Management:
P Thompson
P Langworthy
J Shellabear
JL Marquetoux
Company
Secretaries:
G Boden (2)
N Santi
-
2,000,000
-
2,000,000
6,000,000
4,800,000
-
250,000
11,050,000
1,000,000
1,000,000
-
2,000,000
2,500,000
2,500,000
-
-
5,000,000
750,000
250,000
1,000,000
-
800,000
800,000
-
(1,000,000)
-
(1,000,000)
-
(1,000,000)
-
(1,000,000)
1,000,000
1,000,000
-
2,000,000
8,500,000
7,300,000
-
-
15,800,000
-
-
-
-
-
-
-
-
2,000,000
1,600,000
-
-
3,600,000
2,000,000
1,600,000
-
-
3,600,000
-
-
-
(250,000)
(250,000)
(750,000)
(250,000)
(1,000,000)
-
800,000
800,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,050,000
7,800,000
(1,000,000)
(2,250,000)
18,600,000
3,600,000
3,600,000
Note:
(1)
(2)
S Pether was appointed a director on 14 March 2017.
G Boden resigned as company secretary on 11 May 2017.
CAPRICORN METALS LTD ABN 84 121 700 105
14
Directors’ Report (Cont’d)
Movements in Share Holdings:
The movement during the reporting period in the number of ordinary shares in the Entity held, directly, indirectly or beneficially, by each key
management person, including their related parties, is as follows:
Acquired
Options Exercised
Disposed
Balance
30 June 2017
Directors:
H Hellewell
G LeClezio
S Pether (1)
Management:
P Thompson
P Langworthy
J Shellabear
JL Marquetoux
Company Secretaries:
G Boden (2)
N Santi
Balance
1 July 2016
102,757,655
16,444,276
N/A
119,201,931
6,279,974
5,104,903
-
-
11,384,877
1,000,000
-
1,000,000
-
2,000,000
250,000
2,250,000
388,100
-
-
-
388,100
-
-
-
-
1,000,000
-
1,000,000
-
-
-
-
-
-
-
-
131,586,808
2,638,100
1,000,000
Note:
(1)
(2)
S Pether was appointed a director on 14 March 2017.
G Boden resigned as company secretary on 11 May 2017.
(d) Related Party Transactions with Key Management Personnel:
-
-
-
-
-
-
-
-
-
-
-
-
-
102,757,655
19,444,276
250,000
122,451,931
6,668,074
5,104,903
-
-
11,772,977
N/A
-
-
134,224,908
Apart from details disclosed in this note, no director has entered into a material contract with the Group since the end of the previous financial year
and there were no material contracts involving directors’ interests existing at year end.
Transactions between related parties are on usual commercial terms and conditions no more favourable than those available to other parties unless
otherwise stated.
The aggregate amounts recognised during the year relating to key management personnel and their related parties are as follows:
Key Management Person
P Langworthy (1)
G Boden (2)
Transaction
Exploration programme management
Corporate services
2017
$
1,937,760
128,998
2,066,758
2016
$
644,037
130,134
774,171
Note:
(1)
(2)
OMNI GeoX Pty Ltd, of which Mr P Langworthy is a Director and shareholder, provides services in relation to the management and execution
of the exploration programme, for which fees were billed on hourly rates the same as for other clients, as were due and payable under normal
terms. The agreement may be terminated by one months’ notice.
Boden Corporate Services Pty Ltd, of which Mr G Boden is a director, provided services in company secretarial, accounting and administration
roles for which service fees were billed based on normal market rates, and were due and payable under normal terms. Boden Corporate
provided these services from 1 October 2013 to 31 May 2017.
Amounts payable to key management personnel at the reporting date arising from these contract services were as set out below:
Current payables:
Trade and other payables
2017
$
2016
$
62,611
62,611
95,914
95,914
CAPRICORN METALS LTD ABN 84 121 700 105
15
Directors’ Report (Cont’d)
Company Performance
The following table shows the gross revenue, profits, dividends and share price at the end of financial year for the past five financial years ending 30
June:
Consolidated Entity
Revenue
Net Profit/(Loss)
Share Price at Year End
Dividends Paid
2013
664,831
(3,262,572)
1.9c
-
2014
1,831,271
229,752
2.8c
-
2015
1,334,642
(602,534)
1.8c
-
2016
700,637
(3,700,868)
15.0c
-
2017
425,592
(3,293,239)
8.1c
-
The Board does not consider earnings during the current and previous four financial years when determining, and in relation to, the nature and amount
of remuneration of key management personnel.
- - END OF AUDITED REMUNERATION REPORT - -
16. NON-AUDIT SERVICES
No fees were paid or payable to William Buck Audit (WA) Pty Ltd for non-audit services during the year ended 30 June 2017 (2016: Nil).
17. INDEMNIFYING OFFICERS AND AUDITORS
The Company has established an insurance policy insuring Directors and officers of the Company against any liability arising from a claim brought
by a third party against the Company or its Directors and officers, and against liabilities for costs and expenses incurred by them in defending any
legal proceedings arising out of their conduct while acting in their capacity as a Director or officer of the Company, other than conduct involving a
wilful breach of duty in relation to the Company.
In accordance with a confidentiality clause under the insurance policy, the amount of the premium paid to insurers will not be disclosed. This is
permitted under S300(9) of the Corporation Act 2001.
No indemnity has been obtained for the auditor of the group.
18. SHARE OPTIONS
At the date of this report, the unissued ordinary shares of Capricorn Metals Ltd under option are as follows:
Grant Date
20 April 2016
25 November 2016
9 March 2017
5 May 2017
13 June 2017
Date of Expiry
31 May 2020
31 May 2020
5 May 2021
5 May 2021
5 May 2021
Exercise Price
$0.10
$0.20
$0.15
$0.15
$0.15
No.
Under Option
10,800,000
7,000,000
18,284,101
10,205,927
9,400,000
55,690,028
1,000,000 options at a price of $0.15 per share were exercised during the year ended 30 June 2017 (2016: Nil).
19. 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.
20. AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2017 has been received and can be found on page 17 of the annual report.
Signed in accordance with a resolution of the Board of Directors.
Mr H Hellewell
Executive Chairman
Perth, Western Australia
28 September 2017
CAPRICORN METALS LTD ABN 84 121 700 105
16
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2017
Revenue
Other Income
Fair value loss on other financial assets
Gain/(loss) on disposal of other financial assets
Employee benefits expense
Depreciation expense
Foreign currency gain
Administration costs
Exploration expenditure
Share-based payments
Reversal of impairment of receivable
Impairment of other financial assets
Impairment of assets & liabilities related to subsidiary disposal group
Impairment of deferred exploration and evaluation expenditure
Loss before income tax expense
Income tax expense
Net loss attributable to members of the parent entity
Other Comprehensive Income:
Items that may be re-classified to profit or loss:
- Adjustment from translation of foreign controlled entities
- Revaluation of property asset
Total comprehensive loss for the year attributable to members of the parent entity
Note
2(a)
2(b)
4
3
9
20
4
10
12
5
2017
$
2016
$
189,214
236,378
(22,632)
5,357
(1,048,075)
(73,727)
74
(1,316,337)
(152,479)
(545,221)
7,328
(66,885)
(85,848)
248,099
452,538
(216,868)
(51,554)
(685,981)
(62,673)
338
(707,937)
(257,535)
(115,665)
22,673
-
-
(417,000)
(2,322,216)
(3,289,853)
(3,696,781)
(3,386)
(4,087)
(3,293,239)
(3,700,868)
16,357
16,287
20,395
2,167,734
(3,260,595)
(1,512,739)
Earnings per share:
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
19
19
(0.65)
(0.65)
(1.36)
(1.36)
The accompanying notes form part of these financial statements
CAPRICORN METALS LTD ABN 84 121 700 105
18
Consolidated Statement of Financial Position
As at 30 June 2017
Current Assets
Cash and cash equivalents
Other current receivables
Other current assets
Other financial assets
Assets classified as held for sale
Total Current Assets
Non-Current Assets
Property, plant & equipment
Deferred exploration and evaluation costs
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
Trade and other payables
Other liability
Short-term provisions
Total Current Liabilities
Non-Current Liabilities
Trade and other payables
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
2017
$
2016
$
6
8
7
4
10
9
12
13
14
15
16
17
18
5,541,663
196,169
23,964
70,139
5,831,935
5,050,000
10,881,935
373,498
20,668,339
21,041,837
11,755,911
119,232
44,426
175,629
12,095,198
-
12,095,198
4,819,707
8,565,465
13,385,172
31,923,772
25,480,370
1,346,353
2,398
89,057
1,437,808
1,867,017
2,305
25,931
1,895,253
378,416
378,416
374,578
374,578
1,816,224
2,269,832
30,107,548
23,210,539
42,121,506
2,327,978
(14,341,936)
32,509,123
1,750,113
(11,048,697)
30,107,548
23,210,539
The accompanying notes form part of these financial statements.
CAPRICORN METALS LTD ABN 84 121 700 105
19
Consolidated Statement of Changes in Equity
For the year ended 30 June 2017
Balance at 1 July 2015
Loss for the year
Other comprehensive income
Total comprehensive income
Issue of shares
Cost of capital raised
Share based payments
Balance at 30 June 2016
Balance at 1 July 2016
Loss for the year
Other comprehensive income
Total comprehensive income
Issue of shares
Cost of capital raised
Share based payments
Balance at 30 June 2017
Note
Issued
Capital
$
14,733,538
Accumulated Losses
$
(7,347,829)
Foreign Currency
Translation Reserve
$
Asset Revaluation
Reserve
$
(754,034)
-
-
-
-
18,412,074
(636,489)
-
32,509,123
(3,700,868)
-
(3,700,868)
-
-
-
-
(11,048,697)
-
20,395
20,395
-
-
-
(733,639)
-
2,167,734
2,167,734
-
-
-
-
2,167,734
Option
Reserve
$
200,353
-
-
-
-
-
-
115,665
316,018
Total
$
6,832,028
(3,700,868)
2,188,129
(1,512,739)
18,412,074
(636,489)
115,665
23,210,539
32,509,123
(11,048,697)
(733,639)
2,167,734
316,018
23,210,539
-
-
-
10,150,000
(537,617)
-
42,121,506
(3,293,239)
-
(3,293,239)
-
-
-
(14,341,936)
-
16,357
16,357
-
-
-
(717,282)
-
16,287
16,287
-
-
-
2,184,021
-
-
-
-
-
545,221
861,239
(3,293,239)
32,644
(3,260,595)
10,150,000
(537,617)
545,221
30,107,548
The accompanying notes form part of these financial statements
16
16
17
16
16
17
CAPRICORN METALS LTD ABN 84 121 700 105
20
Consolidated Statement of Cash Flows
For the year ended 30 June 2017
Cash flows from Operating Activities
Payments to suppliers and employees
Payments for exploration expenditure
Interest received
Royalties received
Other Income
Net cash used in operating activities
Cash flows from Investing Activities
Payments for property, plant and equipment
Proceeds on sale of fixed assets
Proceeds on sale of financial assets
Option payment received on potential sale of exploration permits
Deposit received on sale of Subsidiary
Proceeds on sale of potential future royalty
Capitalised exploration expenditure
Payment for the acquisition of the Karlawinda tenements
Cash acquired on acquisition of Greenmount Resources Pty Ltd
Net cash used in investing activities
Cash flows from Financing Activities
Proceeds received from the issue of shares
Costs of capital raised
Deferred payments under share purchase agreement
Security deposit
Net cash flows provided by financing activities
Net (decrease)/increase in cash held
Cash and cash equivalent at the beginning of the year
Effect of exchange rates on cash holdings in foreign currencies
Cash directly associated with assets classified as held for sale
Cash and cash equivalents at the end of the year
Note
2017
$
2016
$
(1,916,351)
(121,330)
93,723
108,929
71,127
(1,763,902)
(175,138)
17,887
21,330
30,323
75,000
-
(12,405,323)
(1,500,000)
-
(13,935,921)
10,150,000
(537,617)
(26,162)
(98,364)
9,487,857
(1,558,667)
(273,398)
34,161
91,360
185,691
(1,520,853)
(44,488)
49,550
200,771
-
-
305,960
(1,511,517)
-
88,225
(911,499)
14,133,644
(636,489)
(47,996)
(40,000)
13,409,159
(6,211,966)
10,976,807
11,755,911
778,206
336
(2,618)
898
-
5,541,663
11,755,911
21
6
10
6
The accompanying notes form part of these financial statements.
CAPRICORN METALS LTD ABN 84 121 700 105
21
Notes to the Consolidated Financial Statements
For the year ended 30 June 2017
NOTE 1 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The consolidated financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards,
Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations
Act 2001.
The financial statements were authorised for issue on 28 September 2017 by the Directors of the Company.
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 the financial statements are presented below and have been consistently applied
unless otherwise stated.
The consolidated financial statements of Capricorn Metals Ltd for the year ended 30 June 2017 comprises the Company and its subsidiaries (together
referred to as the ‘Group’ or ‘Consolidated Entity’). Capricorn Metals Ltd is a listed public company, incorporated and domiciled in Australia. The
Group is a for profit entity for financial reporting purposes under Australian Accounting Standards.
Basis of Preparation:
Going Concern
The financial statements have been prepared on a going concern basis which assumes the settlement of liabilities and the realisation of assets in the
ordinary course of business.
For the year ended 30 June 2017 the Group has incurred a loss of $3,293,239 (2016: $3,700,868) and at 30 June 2017 the Group had working capital
of $4,394,127, excluding assets held for sale, (30 June 2016: $9,860,658) including a cash and cash equivalents balance of $5,541,663 (30 June
2016: $11,755,911). Net cash used in operating and investing activities in the year to 30 June 2017 was $15,699,823 (2016: $2,432,352).
The Directors believe that it is appropriate to prepare the financial report on a going concern basis because, although a capital raising may be required
to fund further exploration and development expenditure, the Directors are confident that a sufficient capital raising can be completed, as has been
demonstrated during 2017, through the successful placement to raise $10 million. Further, if a sufficient capital raising cannot be made, the Company
is able to reduce expenditure within the available cash balance.
Reporting Basis and Conventions
Except for the cash flow information, the financial report has been prepared on an accruals basis and is based on historical costs modified by the
revaluation of selected non-current assets, and financial assets and financial liabilities for which the fair value basis of accounting has been applied.
Accounting Policies:
(a)
Principles of Consolidation
The consolidated financial statements incorporate the financial statements of the Parent Entity and Entities (including special purpose entities)
controlled by the Parent Entity (its subsidiaries). The parent controls an entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power over the entity. A list of the subsidiaries is provided in Note 27.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting
from intra-group transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the group and cease to be consolidated from the date on which
control is transferred out of the group.
Unrealised gains or transactions between the group and its associates are eliminated to the extent of the group’s interests in the associates.
Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of
associates have been changed where necessary to ensure consistency with the policies adopted by the group.
When the group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the
change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for
the retained interest as an associate, joint controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive
income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts
previously recognised in other comprehensive income are reclassified to profit or loss.
(b)
Income Tax
The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable or disallowed items. It is calculated
using tax rates that have been enacted or are substantively enacted by the reporting date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset
or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax is calculated at the tax
CAPRICORN METALS LTD ABN 84 121 700 105
22
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 1 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is credited in the statement of profit and
loss and other comprehensive income except where it relates to items that may be credited directly to equity, in which case the deferred tax is adjusted
directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary
differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in
income taxation legislation and the anticipation that the consolidated entity will derive sufficient future assessable income to enable the benefit to be
realised and comply with the conditions of deductibility imposed by the law.
(c)
Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value, less, where applicable, any accumulated depreciation and impairment
losses.
Property:
Land and Buildings are measured using a revaluation model in accordance with paragraph 31 of AASB 116 Property, Plant and Equipment. The
entire class of property, plant and equipment to which land and buildings belong is subject to review and revalued on the basis of independent
valuations. Any revaluation adjustment to the carrying amount of land and buildings is recognised in other comprehensive income and accumulated
in equity under the heading of asset revaluation reserve.
Plant and equipment:
Plant and equipment are measured on the cost basis less depreciation and impairment losses.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance
are charged to the income statement during the financial period in which they are incurred.
Depreciation:
The depreciable amount of all fixed assets including capitalised lease assets, is depreciated on a reducing balance commencing from the time the
asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Buildings
Plant and Equipment
Computers
Motor vehicles
Field equipment
Depreciation Rate
1%
7.5% - 50%
20%
20%
40%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of the reporting period. An asset’s carrying amount
is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement
of profit or loss and other comprehensive income.
(d)
Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered
primarily through the sale rather than through continuing use.
Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss
on a disposal group is allocated first to goodwill, and then to the remaining assets, deferred tax assets, employee benefits assets, investment property
or biological assets, which continue to be measured in accordance with the Group’s other accounting policies. Impairment losses on initial
classification as held-for-sale or held-for-distribution and subsequent gains and losses on remeasurement are recognised in profit or loss.
Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or depreciated, and any equity-
accounted investee is no longer equity accounted.
(e)
Exploration, Evaluation and Development Expenditure
Exploration, evaluation and development expenditure incurred is either written off as incurred or accumulated in respect of each identifiable area of
interest. Tenement acquisition costs are initially capitalised. Costs are only carried forward to the extent that they are expected to be recouped
through the successful development of the area, sale of the respective areas of interest or where activities in the area have not yet reached a stage,
which permits reasonable assessment of the existence of economically recoverable reserves.
CAPRICORN METALS LTD ABN 84 121 700 105
23
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 1 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over the life of the area according to the rate of
depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area
of interest.
Immediate restoration, rehabilitation and environmental costs necessitated by exploration and evaluation activities are expensed as incurred and
treated as exploration and evaluation expenditure. Exploration activities resulting in future obligations in respect of restoration costs result in a
provision to be made by capitalising the estimated costs, on a discounted cash basis, of restoration and depreciating over the useful life of the asset.
The unwinding of the effect of the discounting on the provision is recorded as a finance cost on the statement of profit or loss and other comprehensive
income.
(f)
Financial Instruments
Recognition and measurement:
Financial instruments are initially measured at fair value on trade date, which includes transaction costs, when the related contractual rights or
obligations exist. Subsequent to initial recognition these instruments are measured as set out below.
Loans and receivables:
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated
at amortised cost using the effective interest rate method.
Financial assets at fair value through profit or loss:
Financial assets are classified as “fair value through profit or loss” when they are held for trading for the purpose of short-term profit taking. Such
assets are subsequently measured at fair value with changes in carrying amount being included in the statement of profit or loss and other
comprehensive income.
Financial liabilities:
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.
Fair value:
Fair value is determined based on current bid process for all quoted investments. Valuation techniques are applied to determine the fair value for all
unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.
Impairment:
At each reporting date, the group assess whether there is objective evidence that a financial instrument has been impaired. In the case of available-
for sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment
losses are recognised in the statement of profit or loss and other comprehensive income.
(g)
Impairment of Debtors
Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are written off by reducing the carrying
amount directly. An allowance account is used when there is objective evidence that the Group will not be able to collect all amounts due according
to the original contractual terms. Factors considered by the Group in making this determination include known significant financial difficulties of the
debtor, review of financial information and significant delinquency in making contractual payments to the Group. The impairment allowance is set
equal to the difference between the carrying amount of the receivable and the present value of estimated future cash flows, discounted at the original
effective interest rate. Where receivables are short‐term discounting is not applied in determining the allowance.
The amount of the impairment loss is recognised in the statement of profit or loss and other comprehensive income within other expenses. When a
trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the
allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the statement of profit or loss
and other comprehensive income.
(h)
Impairment of Assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that
those assets have been impaired. If such an indication exists, the recoverable amount of the assets, being the higher of the asset’s fair value less
costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is
expensed to the statement of profit or loss and other comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating
unit to which the asset belongs.
CAPRICORN METALS LTD ABN 84 121 700 105
24
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 1 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(i)
Interests in Joint Ventures
The Groups interests in the joint venture entity is recorded using the equity method of accounting in the consolidated financial statements. Details of
the Groups interest is provided in Note 11.
(j)
Foreign Currency Transactions and Balances
Functional and presentation currency:
The functional currency of each of the group’s entities is measured using the currency of the primary economic environment in which that entity
operates. The consolidated financial statements are presented in Australian dollars which is the parent entity’s functional and presentation currency.
Transaction and balances:
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign
currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the
exchange rate at the date of the transaction.
Exchange differences arising on the translation of monetary items are recognised in the statement of profit or loss and other comprehensive income.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly
recognised in equity; otherwise the exchange difference is recognised in the statement of profit or loss and other comprehensive income.
Group companies:
The financial results and position of foreign operations, whose functional currency is different from the Group’s presentation currency, are translated
as follows:
-
-
-
Assets and liabilities are translated at exchange rates prevailing at the end of the reporting period;
Income and expenses are translated at average exchange rates for the period, when the average rate approximates the rate at the date of the
transaction; and
Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised in other
comprehensive income and included in foreign currency translation reserve in the statement of financial position. These differences are recognised
in the statement of profit or loss and other comprehensive income in the period in which the operation is disposed of.
(k)
Employee Benefits
Short-term employee benefits:
Provision is made for the Group’s obligation for short-term employee benefits. Short-term employee benefits are benefits (other than termination
benefits) that are expected to be settled wholly before 12 months after the end of the annual reporting period in which the employees render the
related service, including wages, salaries and annual leave entitlements. Short-term employee benefits are measured at the (undiscounted) amounts
expected to be paid when the obligation is settled.
The Group’s obligations for short-term employee benefits such as wages, salaries and annual leave are recognised as a part of current trade and
other payables in the statement of financial position. The Group’s obligations for employees’ long service leave entitlements are recognised as
provisions in the statement of financial position.
Other long-term employee benefits:
Provision is made for employees’ long service leave entitlements not expected to be settled wholly within 12 months after the end of the annual
reporting period in which the employees render the related service. Other long-term employee benefits are measured at the present value of the
expected future payments to be made to employees. Expected future payments incorporate anticipated future wage and salary levels, durations of
service and employee departures and are discounted at rates determined by reference to market yields at the end of the reporting period on
corporate bonds that have maturity dates that approximate the terms of the obligations.
Any re-measurements for changes in assumptions of obligations for other long-term employee benefits are recognised in profit or loss in the periods
in which the changes occur.
The Group’s obligations for long-term employee benefits are presented as non-current provisions in its statement of financial position, except where
the Group does not have an unconditional right to defer settlement for at least 12 months after the end of the reporting period, in which case the
obligations are presented as current provisions.
Defined contribution superannuation benefits:
All employees of the Group, located in Australia receive defined contribution superannuation entitlements, for which the Group pays the fixed
superannuation guarantee contribution (currently 9.50% of the employee’s average ordinary salary) to the employee’s superannuation fund of
choice. All contributions in respect of employees’ defined contribution entitlements are recognised as an expense when they become payable. The
Group’s obligation with respect to employees’ defined contribution entitlements is limited to its obligation for any unpaid superannuation guarantee
contributions at the end of the reporting period. All obligations for unpaid superannuation guarantee contributions are measured at the
CAPRICORN METALS LTD ABN 84 121 700 105
25
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 1 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(undiscounted) amounts expected to be paid when the obligation is settled and are presented as current liabilities in the Group’s statement of
financial position.
Equity-settled compensation:
The Group provides benefits to employees (including directors) of the Group in the form of share-based payment transactions, whereby employees
render services in exchange for shares or rights over shares (‘equity-settled transactions’) refer to Note 20.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The
fair value of options is determined by an internal valuation using a Black-Scholes option pricing model. The fair value of performance rights
determined by consideration of the Company’s share price at the grant date and consideration of the specific non-market vesting conditions
applicable to the performance rights.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance
conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting
period has expired and (ii) the number of options that, in the opinion of the directors of the Company, will ultimately vest. This opinion is formed
based on the best available information at balance date. No adjustment is made for the likelihood of market performance conditions being met as
the effect of these conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the
award is recognised immediately. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the
date that it is granted, the cancelled and new award are treated as if they were a modification of the original award.
(l)
Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of
economic benefits will result and that outflow can be reliably measured.
(m)
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities
of three months or less.
(n)
Revenue and Other Income
Revenue from the sale of goods is recognised upon the delivery of goods to customers. Interest revenue is recognised on a proportional basis taking
into account the interest rates applicable to the financial assets. Revenue from the rendering of a service is recognised upon the delivery of the
service to the customers. Revenue from Royalties are recognised upon delivery of goods to customers or to the minimum monthly contractual amount.
Rental income is recognised on a straight line basis over the period of the lease term so as to reflect a constant periodic return on the property.
Revenue is measured at fair value of the consideration received or receivable to the extent that it is probable that the economic benefit will flow to
the entity and the revenue can be measured reliably.
All revenue is stated net of the amount of goods and services tax (GST).
(o)
Group as a lessor
Leases in which the Group does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Initial
direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the
lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
(p)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the
Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flow on a gross basis, except for the GST component of investing and financing activities, which
are disclosed as operating cash flows.
(q)
Value Added Tax (VAT)
Revenues, expenses and assets are recognised net of the amount of VAT, except where the amount of VAT incurred is not recoverable from the
Madagascan tax authority. In these circumstances VAT is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the statement of financial position are shown inclusive of VAT.
CAPRICORN METALS LTD ABN 84 121 700 105
26
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 1 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
Cash flows are presented in the statement of cash flow on a gross basis, except for the VAT component of investing and financing activities, which
are disclosed as operating cash flows.
(r)
Contributed Equity
Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue
of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.
(s)
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial
year.
(t)
Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current
information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both
externally and within the group.
Key Estimates:
Impairment
The group assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where
an impairment trigger exists, the recoverable amount of the asset is determined. Impairment of investments in subsidiaries arises where the carrying
value of the asset exceeds the net asset position of the subsidiaries and impairment is recognised to the value of the deficit. Impairment of Intangible
assets is recognised upon managements’ best estimate that the carrying value exceeds the fair value of the asset considering future cash flows and
profits arising from the asset.
Share-Based Payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at
which they are granted. The fair value of options is determined by an internal valuation using a Black-Scholes option pricing model, using the
assumptions detailed in Note 20. The fair value of performance rights is determined by the share price at the date of valuation and consideration of
the probability of the vesting condition being met.
Key Judgements:
Exploration and Evaluation Expenditure
Tenement acquisition costs are initially capitalised and then amortised with other exploration and evaluation expenditure written off as incurred. Costs
are only carried forward to the extent that they are expected to be recouped through the successful development of the area, sale of the respective
areas of interest or where activities in the area have not yet reached a stage, which permits reasonable assessment of the existence of economically
recoverable reserves. A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs
in relation to that area of interest. The Directors believe that the capitalised exploration expenditure should not be written off at reporting date as the
tenements areas have been reviewed for impairment indicators and Directors believe no indicators of impairment exist.
Non-Current Receivables
Non-Current Receivables includes the tax (VAT) recoverable from the Madagascan tax authority. The Directors believe the full amount to be non-
recoverable at 30 June 2017 and therefore a provision for impairment has been made.
Accrued Expenses
Accrued expenses are amounts in respect of the Share Sale Agreement with WTR Holdings Pty Ltd (formerly Madagascar Resources NL). The
liability is only repayable from 70% of the labradorite royalty cash receipts by Mada-Aust SARL and is split between current and non-current portions.
The directors believe the royalty generating operations will continue at a rate which will pay the liability in accordance with the agreement. The current
portion of the liability is based on the estimate of the next financial year’s cash receipts with the remaining balance not expected to be settled in the
next financial year treated as non-current.
(u)
Other receivables
Other receivables include amounts due from customers for services performed in the ordinary course of business. Receivables expected to be
collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as non-current assets.
Other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any
provision for impairment. Refer to Note 1(g) for further discussion on the determination of impairment losses.
(v)
Other payables
Other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial
year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services.
Trade and other payables are presented as current liabilities unless payment is not due within 12 months.
CAPRICORN METALS LTD ABN 84 121 700 105
27
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 1 – STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(w)
Adoption of New and Revised Accounting Standards
The Group has adopted all of the new and revised pronouncements which became mandatory for annual reporting periods beginning on or after 1
July 2016.
Standards and interpretations issued, but not yet adopted:
Certain new accounting standards and interpretations have been published that are not yet mandatory for 30 June 2017 reporting periods and have
not been early adopted by the Group. The Group’s assessment of the impact of these new standards and interpretations, most relevant to the
consolidated entity, are set out below.
Mandatory application date/
Date adopted by Company
Must be applied for reporting
periods commencing on or after 1
January 2018. Therefore the
application date for the Company
will be for the reporting period
commencing on 1 July 2018.
Must be applied for annual
reporting periods beginning on or
after 1 January 2018. Therefore
the application date for the
Company will be for the reporting
period commencing on 1 July
2018.
Must be applied for reporting
periods commencing on or after 1
January 2019. Therefore the
application date for the Company
will be for the reporting period
commencing on 1 July 2019.
Title of standard
Nature of change
Impact
AASB 9 Financial
Instruments
AASB 15
Revenue from contracts
with customers
AASB 16 (issued
February 2016) Leases
Given the nature of the
Company’s financial assets and
financial liabilities, the Company
does not expect the impact to be
significant.
Based on the Company’s
assessment, the impact is not
considered to be significant.
The major sources of revenue
relate to royalty income from
labradorite quarrying contracts,
where a minimum monthly fee is
payable and from rental income
generated by the lease of office
space in the Group property asset.
Due to the nature of the revenue
received, the timing of revenue
recognition is expected to be
consistent with the current
practice.
The group is expecting the
standard will impact the financial
statements as they do currently
have lease obligations totalling
$786,666 at 30 June 2017.
A preliminary assessment
indicates that these arrangements
will meet the definition of a lease
under AASB 16, and hence the
Group will recognise right-of-use
assets and corresponding
liabilities in respect of all leases.
AASB 9 addresses the
classification, measurement and
de-recognition of financial assets
and financial liabilities, impairment
of financial assets and hedge
accounting.
An entity will recognise revenue to
depict the transfer of promised
goods or services to customers in
an amount that reflects the
consideration to which the entity
expects to be entitled in exchange
for those goods or services. This
means that revenue will be
recognised when control of goods
or services is transferred, rather
than on transfer of risks and
rewards as is currently the case
under AASB 118 Revenue.
AASB 16 eliminates the operating
and finance lease classifications
for lessees currently accounted for
under AASB 117 Leases. It
instead requires an entity to bring
most leases onto its balance sheet
in a similar way to how existing
finance leases are treated under
AASB 117. An entity will be
required to recognise a lease
liability and a right of use asset in
its balance sheet for most leases.
There are some optional
exemptions for leases with a
period of 12 months or less and
for low value leases.
Lessor accounting remains largely
unchanged from AASB 117.
Other standards not yet applicable
There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future
reporting periods and on foreseeable future transactions.
CAPRICORN METALS LTD ABN 84 121 700 105
28
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 2 – REVENUE
(a) Revenue:
- royalties
- rental
- other
Total Revenue
(b) Other Income:
- net Interest received
- non-refundable deposit (1)(2)
- Option payment (3)
- sale of fixed assets
- sale of potential future royalty
Total Other Income
Total Revenue
2017
$
2016
$
113,963
65,362
9,889
189,214
87,422
75,000
56,234
17,722
-
236,378
425,592
119,052
117,367
11,680
248,099
46,176
53,126
-
47,276
305,960
452,538
700,637
Note:
(1)
Jupiter Mines Et Minerals SARL entered into a leasing arrangement for Labradorite permit 5394 with Mada-Aust SARL which saw the payment
of a non-refundable deposit totalling $53,126.
(2) Blackearth Minerals NL entered into a share sale and purchase agreement to acquire Capricorn’s wholly owned Madagascan subsidiary Mada-
Aust SARL. An initial non-refundable deposit of $75,000 was paid on signing of the agreement.
(3) AAA International Madagascar SARL entered into an option agreement to negotiate for the purchase of all or part labradorite mining permit
19932. Upon signing of the agreement, a non-refundable deposit of USD 50,000 payable for the one year option term.
NOTE 3 – EXPENSES
(a) Employee benefits expense:
Australia
Non-executive directors’ fees
Executive directors’ salary
Other salaries
Superannuation
Annual leave entitlements
Other employment expenses
Salary capitalised as exploration and evaluation expenditure
Mauritius
Directors remuneration
Madagascar
Country manager - J L Marquetoux
Payroll
2017
$
2016
$
95,545
335,000
443,417
76,535
78,296
7,737
(382,641)
653,889
12,000
12,000
152,031
230,155
382,186
97,729
137,500
-
15,757
10,634
-
(39,603)
222,017
7,000
7,000
169,783
287,181
456,964
Total employee benefits expense
1,048,075
685,981
CAPRICORN METALS LTD ABN 84 121 700 105
29
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 4 – OTHER FINANCIAL ASSETS
During the year ended Energizer Resources Inc changed its name to NEXT Source Materials Inc.
Listed Shares in NEXT Source Materials Inc
Unlisted Warrants in NEXT Source Materials Inc
Listed shares in NEXT Source Materials Inc:
At 1 July
Fair value increase/(decrease)
Shares sold
At 30 June
2017
$
2016
$
70,139
-
70,139
83,369
92,260
175,629
2017
2016
Number
$
Number
$
1,237,000
-
(237,000)
1,000,000
83,369
2,743
(15,973)
70,139
3,500,000
-
(2,263,000)
1,237,000
402,937
(67,243)
(252,325)
83,369
Financial assets, revalued at fair value through the profit and loss using the closing quoting bid prices at the end of the reporting period represent
1,000,000 (30 June 2016: 1,237,000) fully paid ordinary shares in Canadian company, NEXT Source Materials Inc.
Disposal of listed shares:
Shares disposed
Proceeds received
(Loss)/gain on disposal
Fair value of listed shares and assumptions:
Fair value per listed share
Closing quoting bid price per share
Foreign exchange rate – Australian Dollar per 1 Canadian Dollar
* The values set out in the table above are subject to rounding.
Unlisted Warrants in NEXT Source Materials Inc:
Balance at 1 July
Fair value decrease
Fair value decline
Balance at 30 June
2017
$
(15,973)
21,330
5,357
2016
$
(252,325)
200,771
(51,554)
2017
$0.701
CAD $0.070
1.00198
2016
$0.067
CAD $0.065
1.03686
2017
$
2016
$
92,260
(25,375)
(66,885)
-
241,885
(149,625)
-
92,260
The Company holds 3,500,000 Warrants in NEXT Source Materials Inc, convertible at USD $0.14 per warrant and expire 15 April 2019. The fair value
of the warrants was revalued through the profit and loss using the Black and Scholes valuation method.
At 30 June 2017, the Directors have considered it is unlikely that, despite the fair value of this investment, any value will be realised and have
assessed carrying value of this investment as nil.
Fair value of unlisted warrants and assumptions:
Fair value per unlisted warrant
Closing quoting bid price per share
Foreign exchange rate – Australian Dollar per 1 Canadian Dollar
Exercise price per warrant
Foreign exchange rate – Australian Dollar per 1 US Dollar
Risk free interest rate
Expected volatility
Expected life (days)
* The values set out in the table above are subject to rounding.
2017
$0.019
CAD $0.070
1.00198
USD $0.14
1.30091
1.725%
100%
654
2016
$0.026
CAD $0.067
1.03686
USD $0.14
1.34363
1.550%
100%
1,019
CAPRICORN METALS LTD ABN 84 121 700 105
30
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 5 - INCOME TAX
(a) Income Tax Expense
The prima facie tax expense/(benefit) on Profit/(Loss) from ordinary activities is reconciled as follows:
The Components of tax expense comprise:
- Current Tax
- Deferred Tax – temporary differences
2017
$
2016
$
1,960
1,425
3,386
2,690
1,397
4,087
The Prima facie tax on Loss before income tax at 27.50% (2016: 30%)
(904,710)
(1,109,034)
Add/(subtract) the tax effect of:
- Tax attributable to foreign subsidiary
- Other assessable income not included as accounting income
- Non-deductible expenses
- Accounting income not included as assessable income
- Other deductible expenses
- Deferred tax assets / (liabilities) not brought to account
Income tax expense / (benefit) attributable to entity
(b) Recognised Deferred Tax Balances
Deferred Tax Asset
Deferred Tax Liability
(c) Unrecognised Deferred Tax Balances
The following deferred tax assets have not been brought to account:
Unrecognised deferred tax assets comprise:
- Deferred tax assets attributable to tax losses
- Transaction costs on equity issue
3,386
3,304
458,114
(22,196)
(14,995)
(424,227)
3,386
-
-
-
4,087
292,523
190,181
(3,605)
(83,007)
712,942
4,087
-
-
-
5,663,748
-
5,663,748
1,735,082
152,819
1,887,901
The tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not
probable that future taxable profit will be available against which the Company can utilise these benefits.
NOTE 6 – CASH AND CASH EQUIVALENTS
Cash at bank
NOTE 7 – OTHER CURRENT ASSETS
Prepayments
Other
Total Other Current Assets
NOTE 8 – OTHER CURRENT RECEIVABLES
Interest
Other receivables
Bank guarantees (1)
Total Other Current Receivables
Note:
2017
$
5,541,663
2016
$
11,755,911
2017
$
2016
$
22,963
1,001
23,964
41,312
3,114
44,426
2017
$
2016
$
5,714
52,091
138,364
196,169
12,015
67,217
40,000
119,232
(1) Bank guarantees are made up of the following:
-
-
$40,000 is held as security for the credit card facility and bears 2.2% interest
$98,364 is held as security for the office lease and bears 2.2% interest.
CAPRICORN METALS LTD ABN 84 121 700 105
31
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 9 – PROPERTY, PLANT AND EQUIPMENT
Plant & Equipment – At cost
Less accumulated depreciation
Total Plant & Equipment
Field Equipment – At cost
Less accumulated depreciation
Total Field Equipment
Motor Vehicles – At cost
Less accumulated depreciation
Total Motor Vehicles
Total Plant and Equipment
Land and Buildings – At cost
Fair value re-measurement (1)
Less accumulated depreciation
Total Land & Buildings
2017
$
2016
$
441,246
(167,862)
273,384
218,941
(118,827)
100,114
29,699
(29,699)
-
376,376
(201,282)
175,094
337,629
(195,335)
142,294
181,175
(178,856)
2,319
373,498
319,707
-
-
-
-
2,500,000
2,167,734
(167,734)
4,500,000
Total Property, Plant and Equipment
373,498
4,819,707
Note:
(1)
See Note 10.
(a) Movements in carrying amounts
Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year:
Land &
Buildings
$
2,347,774
Plant &
Equipment
$
164,581
Field
Equipment
$
146,377
-
-
(15,508)
2,167,734
-
4,500,000
-
(16,287)
16,287
(4,500,000)
-
-
40,043
(122)
(29,408)
-
-
175,094
159,629
-
(38,867)
-
(22,472)
-
295,856
11,358
(2)
(15,439)
-
-
142,294
20,443
(165)
(18,573)
-
(43,885)
-
143,999
Motor Vehicles
$
6,787
-
(2,150)
(2,318)
-
-
2,319
2,319
-
-
-
-
(2,319)
-
Total
$
2,665,519
51,401
(2,274)
(62,673)
2,167,734
-
4,819,707
182,072
(165)
(73,727)
16,287
(4,566,357)
(2,319)
373,498
Carrying amount at 30 June 2015
Additions
Disposals
Depreciation expense
Fair value re-measurement (1)
Currency translation differences
Carrying amount at 30 June 2016
Additions
Disposals
Depreciation expense
Fair value re-measurement (1)
Reclassified as held for sale (1)
Currency translation differences
Carrying amount at 30 June 2017
Note:
(1)
See Note 10.
CAPRICORN METALS LTD ABN 84 121 700 105
32
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 10 – ASSETS HELD FOR SALE
Assets held for sale comprises:
Property Asset (1)
Subsidiary disposal group:(2)
tenement holdings
operating & fixed assets
liabilities
Impairment of assets & liabilities
Total Assets Held for Sale
(1) Property Asset
2017
$
4,500,000
4,500,000
550,000
186,347
(100,499)
(85,848)
550,000
5,050,000
The Company intends to dispose of a freely held property asset located in Antanarirvo, Madagascar within the next 12 months.
The Board of Directors have determined a fair value of $4,500,000 for the Group’s freehold land and buildings based on the market valuation
performed by Messrs Cabinet D’Expertise Razafindratandra in October 2015 of 11,323,422,000 Ariary (AUD $4,899,899). Messrs Cabinet D’Expertise
Razafindratandra have appropriate qualifications and recent experience in the fair value measurement of properties in the relevant locations.
The fair value of the freehold land was determined based on the market comparable approach that reflects recent transaction prices for similar
properties.
(2) Subsidiary Disposal Group
In February 2017, the Company committed to the sale of a wholly owned Mauritian subsidiary, Madagascar Graphite Ltd and its assets which comprise
100% ownership of Madagascan subsidiary, Mada-Aust SARL, by way of a Share Sale & Purchase Agreement with Blackearth Minerals NL
(Blackearth).
The key terms of the agreement saw the payment of $75,000 non-refundable deposit on signing of the agreement.
Consideration outstanding comprises a further $75,000 cash and the issue of 2,000,000 ordinary shares in Blackearth, both due on completion of the
sale which requires Blackearth to successfully complete an initial public offer and receive conditional approval for admission to the official list of the
Australian Securities Exchange.
Further deferred consideration of $1,000,000 is payable upon a ‘decision to mine’ being made by Blackearth within 8 years of completion of this
transaction.
The fair value of the disposal is equal to the consideration due under the Share Sale & Purchase Agreement totaling $550,000.
NOTE 11 – INTERESTS IN JOINT VENTURES
The Company had been in various joint venture arrangements with Canadian TSX listed company, NEXT Source Materials Inc (formerly Energizer
Resources Inc) (“NEXT”). At the commencement of the 2016 financial year the only elements of that relationship which remained in effect were:
- A payment by NEXT of CAD $1,000,000 upon the commencement of commercial production at the Molo graphite project.
- A royalty calculated as 1.5% of Net Smelter Return on all production from Molo.
On 29 April 2016, Capricorn sold the royalty to a third party, for upfront cash consideration of CAD $300,000, with an additional CAD $1,000,000
payable by the third party in the event that NEXT commences commercial production at Molo.
The potential production payments (CAD $2,000,000) have not been included as contingent assets, as the fair value at the date of this report is nil.
The former joint venture tenements remain in the name of Capricorn subsidiaries, pending registration of the transfers which have been lodged with
the Madagascan government.
CAPRICORN METALS LTD ABN 84 121 700 105
33
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 12 – DEFERRED EXPLORATION & EVALUATION COSTS
Madagascar:
At 1 July
Impairment
Reclassified as held for sale asset (2)
At 30 June
Australia:
At 1 July
Acquisition of Karlawinda Gold Project (1)
Capitalised exploration expenditure
At 30 June
2017
$
2016
$
967,000
(417,000)
(550,000)
-
7,598,465
-
13,069,874
20,668,339
3,289,216
(2,322,216)
-
967,000
-
5,700,000
1,898,465
7,598,465
Total Deferred Exploration & Evaluation Costs
20,668,339
8,565,465
Note:
(1)
(2)
The Karlawinda Gold Project was acquired through the acquisition of Greenmount Resources Pty Ltd on 3 February 2016. See Note 28.
See Note 10.
NOTE 13 – CURRENT TRADE & OTHER PAYABLES
Unsecured liabilities:
Trade Payables
Accrued Payables – Operating (1) (2)
Accrued Payables – World Titane Holdings Ltd (3)
Total Current Trade & Other Payables
2017
$
2016
$
939,466
376,887
30,000
1,346,353
231,629
1,575,388
60,000
1,867,017
Note:
(1)
(2)
(3)
2016: Includes the final instalment of $1,500,000, due to Independence Group NL for the completion of the acquisition of the Karlawinda Gold
Project tenements by wholly owned subsidiary, Greenmount Resources Pty Ltd.
2017: Includes $330,584 of stamp duty payable in relation to the acquisition of Greenmount Resources Pty Ltd.
Accrued payables include amounts in respect of the Share Purchase Agreement with WTR Holdings Pty Ltd (formerly Madagascar Resources
NL) estimated to be payable within the next 12 months. WTR Holdings Pty Ltd transferred its receivable to World Titane Holdings Ltd (WTH)
in December 2016. The liability owed to WTH is only repayable from 70% of the labradorite royalty cash receipts actually received by Mada-
Aust SARL from the one remaining specified lessee.
NOTE 14 – SHORT TERM PROVISIONS
Provision for annual leave:
Opening 1 July
Additional provisions
Amounts used
Foreign exchange adjustments
Liabilities directly associated with assets classified as held for sale
Closing 30 June
Number of employees at year end:
Australia
Madagascar
2017
$
2016
$
25,931
128,135
(54,005)
479
(11,483)
89,057
9
15
24
16,893
37,197
(28,704)
545
-
25,931
2
21
23
CAPRICORN METALS LTD ABN 84 121 700 105
34
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 15 – NON-CURRENT TRADE & OTHER PAYABLES
Unsecured liabilities:
Accrued Payables (1)
Total Non-Current Trade & Other Payables
2017
$
2016
$
378,416
378,416
374,578
374,578
Note:
(1)
Accrued payables are amounts in respect of the Share Purchase Agreement with WTR Holdings Pty Ltd (formerly Madagascar Resources
NL). This portion of the liability is only repayable from 70% of the labradorite royalty cash receipts actually received by Mada-Aust SARL and
is not expected to be settled in the next financial year.
The agreement provides that repayment is due only from amounts received in cash from royalty payers. Two of the three companies ceased
operations during 2011 and have returned the tenements to the Company. The term of the remaining royalty agreement ends 30 June 2030.
NOTE 16 – ISSUED CAPITAL
572,379,458 fully paid ordinary shares (2016: 485,909,373)
Ordinary shares:
At 1 July
Shares issued during the year:
- 2 December 2015 (1)
- 3 February 2016 (2)
- 3 February 2016 (3)
- 5 May 2016 (4)
- 19 September 2016 (5)
- 10 March 2017 (6)
- 5 May 2017 (7)
Costs of capital raised
At 30 June
2017
$
42,121,506
42,121,506
2016
$
32,509,123
32,509,123
2017
2016
No.
$
No.
$
485,909,373
32,509,123
165,346,421
14,733,538
-
-
-
-
1,000,000
54,852,304
30,617,781
-
572,379,458
-
-
-
-
150,000
6,417,720
3,582,280
(537,617)
42,121,506
6,290,055
171,636,476
45,454,546
97,181,875
-
-
-
-
485,909,373
131,475
4,146,955
1,500,000
12,633,644
-
-
-
(636,489)
32,509,123
There are no preference shares on issue.
Note:
(1)
2 December 2015: 6,290,055 fully paid ordinary shares were issued to directors, subsequent
to shareholder approval received on 26 November 2015. The shares were issued as payment
for accrued director fees totalling $131,475. The shares were issued as follows:
Shares Issued
1,097,499
1,493,181
1,646,250
2,053,125
6,290,055
Issue Price
(per share)
$0.030
$0.022
$0.020
$0.016
(2)
(3)
(4)
(5)
(6)
(7)
3 February 2016: 171,636,476 shares were issued for the acquisition of Greenmount Resources Pty Ltd. See Note 28.
3 February 2016: 45,454,546 shares were issued at a price of $0.033 per share on completion of a placement.
5 May 2016: 97,181,875 shares were issued at a price of $0.13 per share on completion of a placement.
19 September 2016: 1,000,000 shares were issued at a price of $0.15 per share on the exercise of unlisted options by Non-Executive Director,
Mr G LeClezio.
10 March 2017: 54,852,304 shares were issued at a price of $0.117 per share as completion of Tranche 1 of the placement to Hawke’s Point
Holdings I Limited. In addition, 18,284,101 free attaching options were also issued with an exercise price of $0.15 per share and an expiry date
of 5 May 2020.
5 May 2017: 30,617,781 shares were issued at a price of $0.117 per share as completion of Tranche 2 of the placement to Hawke’s Point
Holdings I Limited. In addition, 10,205,927 free attaching options were also issued with an exercise price of $0.15 per share and an expiry date
of 5 May 2020.
CAPRICORN METALS LTD ABN 84 121 700 105
35
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 16 – ISSUED CAPITAL (Cont’d)
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held. At
shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of
hands.
The Company does not have authorised capital or par value in respect of its shares.
Stock Exchange Listing:
Total issued capital is 572,379,458 (2016: 485,909,373) shares, of which 572,379,458 (2016: 314,272,897) are listed on the Australian Securities
Exchange (ASX) at the date of this report.
Options:
The following options were on issue during the year:
2017
2016
Weighted Av.
Exercise Price
Number of
Options
Weighted Av.
Exercise Price
Number of
Options
(a) Options exercisable at $0.15 on or before
30 November 2016:
Balance at beginning of year
Exercised
Lapsed
Balance at end of year
(b) Options exercisable at $0.10 on or before
31 May 2020:
Balance at beginning of year
Issued during the year
Balance at end of year
(c) Options exercisable at $0.20 on or before
31 May 2020:
Balance at beginning of year
Issued during the year
Balance at end of year
(d) Options exercisable at $0.15 on or before
5 May 2021:
Balance at beginning of year
Issued during the year
Balance at end of year
Fair value:
$0.15
$0.15
$0.15
-
$0.10
-
$0.10
-
$0.20
$0.20
-
$0.15
$0.15
7,500,000
(1,000,000)
(6,500,000)
-
10,800,000
-
10,800,000
-
7,000,000
7,000,000
-
31,890,028
31,890,028
$0.15
-
$0.15
-
$0.10
$0.10
-
-
-
-
-
-
7,500,000
-
7,500,000
-
10,800,000
10,800,000
-
-
-
-
-
-
The fair value of services rendered in return for share options granted is based on the fair value of share options granted, measured using the Black-
Sholes option pricing formula. There were 38,890,028 share options granted during the year ended 30 June 2017 (2016: 10,800,000).
Fair Value of Options & Assumptions:
Grant date
Expiry date
Number granted
Fair Value at grant date (per option)
Share Price at grant date
Exercise price
Expected share price volatility
Expected life of option (days)
Expected dividends
Risk free interest rate
Directors
29/11/16
31/05/20
7,000,000
$0.021
$0.100
$0.200
60%
1,283
-
1.97%
Employees
13/06/17
05/05/21
3,400,000
$0.021
$0.088
$0.150
50%
1,422
-
1.84%
CAPRICORN METALS LTD ABN 84 121 700 105
36
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 17 – RESERVES
Share based payment reserve:
Opening balance 1 July
Share based payments for the year
Closing balance 30 June
2017
$
2016
$
316,018
545,221
861,239
200,353
115,665
316,018
This reserve is used to record the value of equity benefits provided to employees and directors as part of their remuneration. Refer to Note 20 and
the Remuneration Report for further details.
Foreign currency translation reserve:
Opening balance 1 July
Translation movement for the year
Closing balance 30 June
This reserve records exchange differences arising on translation of foreign controlled subsidiaries.
Asset revaluation reserve:
Opening balance 1 July
Revaluation movement for the year
Closing balance 30 June
2017
$
2016
$
(733,639)
16,357
(717,282)
(754,034)
20,395
(733,639)
2017
$
2016
$
2,167,734
16,287
2,184,021
-
2,167,734
2,167,734
This reserve records fair value re-measurement recorded on the Groups land & building asset held in Madagascar.
NOTE 18 – ACCUMULATED LOSSES
Opening balance 1 July
Loss for the year
Closing balance 30 June
NOTE 19 – EARNINGS PER SHARE
Earnings used in calculating basic and diluted earnings per share:
-
Loss attributable to members of the parent entity
Basic and diluted loss per share:
-
cents per share
Weighted average number of ordinary shares outstanding at 30 June
As at 30 June 2017 there are 49,690,028 (2016: 18,300,000) unlisted options on issue.
2017
$
(11,048,697)
(3,293,239)
(14,341,936)
2016
$
(7,347,829)
(3,700,868)
(11,048,697)
2017
$
2016
$
(3,293,239)
(3,700,868)
Cents
Cents
(0.65)
(1.36)
Number
Number
508,216,370
271,652,335
As the Group incurred a loss for the year (2016: Loss), the options on issue have no dilutive effect, therefore the diluted earnings per share is equal
to the basic earnings per share.
49,690,028 (2016: 18,300,000) unlisted options which could potentially dilute the basic earnings per share in the future have been excluded from the
diluted earnings per share calculation as they are not dilutive for the current year presented.
CAPRICORN METALS LTD ABN 84 121 700 105
37
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 20 – SHARE BASED PAYMENTS
Options:
All options refer to options over ordinary shares of Capricorn Metals Ltd which are exercisable on a one for one basis.
During the year ended 30 June 2017, 10,400,000 options were granted to key management personnel & employees of the Company (2016:
10,800,000 options).
The fair value of the options is calculated at the grant date using a Black–Scholes pricing model and allocated to each reporting period in accordance
with the vesting profile of the options.
The value recognised is the portion of the fair value of the options allocated to the reporting period. The factors and assumptions used in determining
the fair value on grant date of options issued during the financial year as follows:
Granted during 2017:
Number of
Options
Grant
Date
Expiry
Date
Fair Value per
Option
Exercise
Price
Share Price on
Grant Date
Risk Free Interest
Rate (%)
Estimated
Volatility
(%)
Number Vested
as at
30 June 2017
7,000,000 (1)
29/11/2016
31/05/2020
3,400,000 (2)
13/06/2017
31/05/2021
$0.021
$0.021
$0.200
$0.150
$0.100
$0.088
1.97%
1.84%
60%
50%
-
-
In the table above, the following vesting profiles have been adopted:
(1) 2,333,333 vest on 29 November 2017, 2,333,333 vest on 29 November 2018 and 2,333,334 vest on 29 November 2019.
(2) 1,133,333 vest on 11 May 2018, 1,133,333 vest on 11 May 2019 and 1,133,334 vest on 11 May 2020.
Granted during 2016 and outstanding at 30 June 2017:
Number of
Options
Grant
Date
Expiry
Date
Fair Value per
Option
Exercise
Price
Share Price on
Grant Date
Risk Free Interest
Rate (%)
Estimated
Volatility
(%)
Number Vested
as at
30 June 2017
10,800,000
20/04/16
31/05/20
$0.105
$0.100
$0.140
2.01
100
3,600,000
In the table above, the following vesting profile has been adopted:
3,600,000 vest on 20 April 2017, 3,600,000 vest on 20 April 2018 and 3,600,000 vest on 20 April 2019.
The expected volatility is based on the historic volatility (calculated based on the weighted average remaining life of the share options), adjusted for
any expected changes to future volatility due to publicly available information.
No dividends have been assumed to be paid during the life of the options. No options were exercised during the year (2016: Nil).
Expenses arising from share-based payment transactions:
Total expenses arising from share-based payment transactions recognised during the period were as follows:
Options
2017
$
2016
$
545,221
115,665
CAPRICORN METALS LTD ABN 84 121 700 105
38
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 21 – NOTE TO THE STATEMENT OF CASH FLOWS
Reconciliation of cash flow from operations, with loss after income tax:
Loss after income tax
Non-cash flows in result:
Depreciation
Impairment
Fair value gain on financial assets
Foreign currency translation
Share based payment
Cash flows in result not classified as cash flows from operations:
Profit on sale of fixed assets
Profit/(Loss) on sale of financial assets
Profit on sale of potential future royalty
Option payment received on potential sale of exploration permits
Deposit received on sale of Subsidiary
Changes in assets and liabilities:
Increase in income taxes payable
(Increase) in other current assets
Increase/(Decrease) in payables and accruals
Cashflow used by Operations
Non-cash investing and financing activities:
2017
$
(3,293,239)
2016
$
(3,700,868)
73,727
558,885
22,632
(6,965)
545,221
(17,722)
(5,357)
-
(56,234)
(75,000)
1,426
(137,910)
626,634
(1,763,902)
62,673
2,322,216
216,868
19,497
115,665
(47,276)
51,555
(305,960)
-
-
1,397
(204,929)
(51,691)
(1,520,853)
There were no non-cash investing and financing activities during the year ended 30 June 2017. During the year ended 30 June 2016, 171,636,476
ordinary shares were issued for the acquisition of Greenmount Resources Pty Ltd (See Note 28).
NOTE 22 – COMMITMENTS
Exploration Commitments
Madagascar
The Group has no statutory obligations to perform minimum exploration work on its tenements; however, the Company needs to maintain an active
work program to retain its interests. For the 2017 calendar year tenement rents of approximately $85,000 per annum were payable to maintain
ownership over the tenement areas. 33% of the tenement rents were recouped from other parties.
Australia
The Group is obligated to meet the minimum expenditure commitments on its tenements held in Western Australia or may face forced relinquishment
of all or part of the tenement.
As at 30 June 2017 there are 7 granted tenements with an annual expenditure commitment totalling $310,000 and one granted mining lease with an
annual expenditure commitment of $297,600.
Operating Lease Commitments
The Group leases office premises in West Perth, Western Australia under normal commercial lease arrangements. The office lease was entered into
for an initial 5 year period commencing 1 May 2017. In addition, the Group entered into a lease arrangement on a printer from 22 May 2017. The
lease is for a term of 5 years.
Lease Commitments: Group as lessee
Operating leases:
- Within one year
-
Later than one year but not later than five years
Aggregate lease expenditure contracted for at reporting date but not recognised as liabilities
Other commitments
Capricorn Metals Ltd has bank guarantees totalling $138,364. See Note 8.
CAPRICORN METALS LTD ABN 84 121 700 105
2017
$
2016
$
141,268
645,398
786,666
-
-
-
39
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 23 – CONTINGENT ASSETS AND LIABILITIES
There were no contingent assets or liabilities at 30 June 2017 (2016: Nil).
NOTE 24 – EVENTS SUBSEQUENT TO REPORTING DATE
There were no material events arising subsequent to 30 June 2017 to the date of this report which may significantly affect the operations of the
consolidated entity, the results of those operations and the state of affairs of the consolidated entity in the future, other than:
22 September 2016, 6,000,000 unlisted incentive options were issued under the Incentive Option Plan to Chief Financial Officer, Mr J
Shellabear.
NOTE 25 – FINANCIAL INSTRUMENTS
(a)
Capital risk management:
Management controls the capital of the Group in order to ensure that the Group can fund its operations and continue as a going concern.
There are no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital structure in response to changes
in these risks and in the market. These responses include the management of debt levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year.
(b)
Market risk:
The Group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable. The Group does not speculate in the
trading of derivative instruments.
There has been no change to the Group’s exposure to market risks or the manner in which it manages and measures the risk from the previous year.
(c)
Foreign currency risk:
The Group is exposed to fluctuations in foreign currencies arising from the sale and purchase of goods and services in currencies other than the
Group’s functional and presentation currency.
As a result of subsidiary companies being registered in Madagascar, the Group's statement of financial position can be affected by movements in
the AUD$/Ariary exchange rates. The Group do not seek to hedge this exposure. There is no formal foreign currency management policy, however
the Group monitors its foreign currency expenditure and foreign subsidiary requirements.
The following table shows the foreign currency risk on the financial assets and liabilities of the Groups operations denominated in currencies other
than the functional currency of the operations.
2017
Cash
Receivables
Payables
Statement of Financial Position exposure
2016
Cash
Receivables
Payables
Statement of Financial Position exposure
MGA
5,891
49,520
(14,185)
41,226
MGA
34,227
67,217
(12,661)
88,783
Net Financial Assets/(liabilities) in AUD
AUD
EURO
USD
5,535,579
146,649
(1,332,168)
4,350,060
-
-
-
-
193
-
-
193
Total AUD
5,541,663
196,169
(1,346,353)
4,391,479
Net Financial Assets/(liabilities) in AUD
EURO
USD
AUD
11,721,401
52,015
(1,854,356)
9,919,060
88
-
-
88
Total AUD
11,755,911
119,232
(1,867,017)
10,008,126
195
-
-
195
CAPRICORN METALS LTD ABN 84 121 700 105
40
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 25 – FINANCIAL INSTRUMENTS (Cont’d)
(d)
Interest rate risk:
At the reporting date, the interest rate profile of the Group’s interest bearing financial instruments was:
Variable rate instruments:
- Financial assets
Cash flow sensitivity analysis for variable rate instruments:
2017
$
2016
$
5,541,663
11,755,911
A change of 100 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown
below. This analysis assumes that all other variables remain constant. The analysis is performed on the same basis for 2016.
Variable rate instruments
(e)
Liquidity risk:
2017
2016
100 bp
increase
55,416
100 bp
decrease
(55,416)
100 bp
increase
117,559
100 bp
decrease
(117,559)
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to
financial liabilities.
The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate facilities are maintained.
The following are the contractual maturities of the Group’s financial liabilities:
Trade and other payables:
- at 30 June 2017
- at 30 June 2016
(f)
Credit risk:
Carrying Amount
$
Contractual Cash
Flows
$
6 Months or Less
$
1,346,353
1,867,017
(1,346,353)
(1,867,017)
(1,346,353)
(1,867,017)
Credit risk is managed to ensure that customers are of sound credit worthiness and monitoring is used to recover aged debts and assess receivables
for impairment.
Credit terms are generally 30 days from the invoice date.
The Group has no significant concentration of credit risk with any single party with the exception of the TVA receivable from the Madagascan
government relating to taxes paid on the Business Sale Agreement and Long Term Lease Agreement. These taxes are recoverable long term in
accordance with existing Madagascan taxation law. The Group has assessed the non-current TVA receivable as non-recoverable, and has recorded
a provision for impairment of the full amount.
Risk is also minimized by investing surplus funds in financial institutions with a high credit rating.
CAPRICORN METALS LTD ABN 84 121 700 105
41
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 25 – FINANCIAL INSTRUMENTS (Cont’d)
(g)
Financial instruments measured at fair value:
The financial instruments recognised at fair value in the statement of financial position have been analysed and classified using a fair value hierarchy
reflecting the significance of the inputs used in making the measurements.
The fair value hierarchy consists of the following levels:
- quoted prices in active markets for identical assets or liabilities (Level 1);
- inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived
from prices) (Level 2); and
- inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).
Level 1
Level 2
Level 3
Total
30 June 2017
Financial assets:
Available-for-sale financial assets:
- listed investments
- unlisted warrants
30 June 2016
Financial assets:
Available-for-sale financial assets:
- listed investments
- unlisted warrants
70,139
-
70,139
83,369
-
83,369
-
-
-
-
92,260
92,260
-
-
-
-
-
-
70,139
-
70,139
83,369
92,260
175,629
Included within Level 1 of the hierarchy are the NEXT Source Materials Inc shares listed on the Toronto Stock Exchange. The fair values of these
financial assets have been based on the closing quoted bid prices at the end of the reporting period, excluding transaction costs.
In determining the fair value of unlisted investments included in Level 2 of the hierarchy, which include unlisted warrants held in NEXT Source
Materials Inc, the Black Scholes option pricing model has been used to calculate a fair value based on the income approach valuation and inputs as
set out in Note 4.
No transfers between the levels of the fair value hierarchy occurred during the current or previous reporting period.
The directors consider that the carrying value of all financial assets and financial liabilities are recognised in the consolidated financial statements
approximate to their fair value.
(h)
Financial liability and financial asset maturity analysis:
Financial liabilities – Due for payment:
Payables
Payable for Share Purchase Agreement
Total expected outflows
Financial Assets – Cash flows realisable:
Cash
Assets
Receivables
Total Inflow on Financial Instruments
Within 1 year
1 to 5 years
Total
2017
$
2016
$
2017
$
2016
$
2017
$
2016
$
1,508,307
30,000
1,538,307
1,835,254
60,000
1,895,254
-
378,416
378,416
-
374,578
374,578
5,544,281
70,139
276,116
5,890,536
11,755,911
175,629
119,232
12,050,772
-
-
-
-
-
-
-
-
1,508,307
408,416
1,916,723
5,544,281
70,139
276,116
5,890,536
1,835,254
434,578
2,269,832
11,755,911
175,629
119,232
12,050,772
CAPRICORN METALS LTD ABN 84 121 700 105
42
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 26 – STATEMENT OF OPERATIONS BY SEGMENT
Identification of reportable segments:
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (as the chief
operating decision makers) in assessing performance and determining the allocation of resources.
The group is managed primarily on the basis of geographical location as the Group’s operations inherently have different risk profiles and performance
assessment criteria. Operating segments are therefore determined on the same basis. Reportable segments are therefore disclosed as geographical
segments being Australia, Madagascar and Mauritius.
Basis for accounting for purpose of reporting by operating segments:
Accounting policies adopted:
Unless otherwise stated, all amounts reported to the Board of Directors, being the chief operating decision makers with respect to operating segments,
are determined in accordance with accounting policies that are consistent to those adopted in the annual financial statements of the Group outlined
in Note 1.
Intersegmental transactions:
Intersegment loans are recognised at the consideration received net of transaction costs. Intersegment loans are not adjusted to fair value based on
market interest rates.
2017
Revenue
Revenue
Other income
Total segment revenue
Result
Segment Result
Profit/(Loss) before Income tax
Assets
Segment Assets
Segment Liabilities
Other
Acquisition of non-current assets
Depreciation expense
2016
Revenue
Revenue
Other income
Total segment revenue
Result
Segment Result
Profit/(Loss) before Income tax
Assets
Segment Assets
Segment Liabilities
Other
Acquisition of non-current assets
Depreciation expense
Australia
Madagascar
Mauritius
Elimination
Consolidated Entity
-
162,626
162,626
189,214
73,752
262,966
-
-
-
-
-
-
189,214
236,378
425,592
(3,017,516)
(3,017,516)
(133,581)
(130,195)
(24,500)
(24,500)
(117,642)
(117,642)
(3,293,239)
(3,289,853)
26,043,170
(1,799,513)
2,519,807
(19,917)
178,393
19,790
1,679
53,937
Australia
Madagascar
Mauritius
-
351,819
351,819
249,099
100,719
348,818
-
-
-
-
-
-
-
3,360,795
3,206
31,923,772
(1,816,224)
-
-
180,072
73,727
Elimination
Consolidated Entity
-
-
-
248,099
452,538
700,637
(2,936,913)
(2,936,913)
(785,522)
(781,435)
(29,192)
(29,192)
50,759
50,759
(3,700,868)
(3,696,781)
26,137,230
(2,239,568)
2,673,365
(70,105)
45,858
2,609
5,543
60,064
-
-
-
-
(3,330,225)
39,842
25,480,370
(2,269,831)
-
-
51,401
62,673
CAPRICORN METALS LTD ABN 84 121 700 105
43
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 27 – RELATED PARTY DISCLOSURES
(a) Key Management Personnel:
Mr H Hellewell
Executive Chairman
Transitioned from Non-Executive Director to Executive Chairman – 14 March 2017
Mr G LeClezio
Non-Executive Director
Transitioned from Non-Executive Chairman to Non-Executive Director – 14 March
2017
Mr Stuart Pether
Non-Executive Director
Appointed 14 March 2017
Mr P Thompson
Chief Operating Officer
Transitioned from Managing Director to Chief Operating Officer – 14 March 2017
Mr P Langworthy
Executive General Manager - Geology
Transitioned from Technical Director to Executive General Manager - Geology – 14
March 2017
Mr J Shellabear
Chief Financial Officer
Joint Company Secretary
Mr J Marquetoux
CFO & Gerant (Madagascar)
Appointed Non-Executive Director 5 December 2017. Transitioned from Non-
Executive Director to Chief Financial Officer – 14 March 2017. Appointed Joint
Company Secretary 11 May 2017.
Mr G Boden
Joint Company Secretary
Resigned as Company Secretary – 11 May 2017.
Mrs N Santi
Joint Company Secretary
Key Management Personnel Remuneration:
Key management personnel remuneration has been included in the Remuneration Report section of the Directors Report.
The total remuneration paid to Key Management Personnel of the Group during the year are as follows:
Short term benefits
Other service fees
Post – employment benefits
Share Based Payments
Annual Leave
2017
$
2016
$
880,660
132,998
63,108
543,804
60,945
1,681,515
402,061
133,134
15,757
115,665
13,161
679,778
(b) Related Party Transactions with Key Management Personnel:
Apart from details disclosed in this note, no director has entered into a material contract with the Group since the end of the previous financial year
and there were no material contracts involving directors’ interests existing at year end.
Transactions between related parties are on usual commercial terms and conditions no more favourable than those available to other parties unless
otherwise stated.
The aggregate amounts recognised during the year relating to key management personnel and their related parties are as follows:
Key Management Person
P Langworthy (1)
G Boden (2)
Transaction
Exploration programme management
Corporate services
2017
$
1,937,760
128,998
2,066,758
2016
$
644,037
130,134
774,171
Note:
(1)
(2)
OMNI GeoX Pty Ltd, of which Mr P Langworthy is a Director and shareholder, provides services in relation to the management and execution
of the exploration programme, for which fees were billed on hourly rates the same as for other clients, as were due and payable under normal
terms. The agreement may be terminated by one months’ notice.
Boden Corporate Services Pty Ltd, of which Mr G Boden is a director, provided services in company secretarial, accounting and administration
roles for which service fees were billed based on normal market rates, and were due and payable under normal terms. Boden Corporate
provided these services from 1 October 2013 to 31 May 2017.
Amounts payable to key management personnel at the reporting date arising from these contract services were as set out below:
Current payables:
Trade and other payables
CAPRICORN METALS LTD ABN 84 121 700 105
2017
$
2016
$
62,611
62,611
95,914
95,914
44
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 27 – RELATED PARTY DISCLOSURES (Cont’d)
(c) Controlled Entities:
The consolidated financial statements include the financial statements of Capricorn Metals Ltd and the subsidiaries set out in the following table.
Subsidiaries
Mada-Aust SARL
Mazoto Minerals SARL (1)
Energex SARL
Mining Services SARL
St Denis Holdings SARL
Madagascar Graphite Ltd (2)
MGY Mauritius Ltd (3)
Malagasy Graphite Holdings Ltd (4)
Greenmount Resources Pty Ltd (5)
% Ownership
Country
Madagascar
Madagascar
Madagascar
Madagascar
Madagascar
Mauritius
Mauritius
Australia
Australia
Principal activity
Exploration
Exploration
Dormant
Exploration Services
Commercial Property
Investment Holding
Investment Holding
Investment Holding
Exploration
2017
100%
100%
100%
100%
100%
100%
100%
100%
100%
2016
100%
100%
100%
100%
100%
100%
100%
100%
100%
Note:
(1)
(2)
(3)
(4)
(5)
A 1% interest is held in trust for Capricorn Metals Ltd.
Incorporated 23 November 2015.
Incorporated 12 November 2015.
Incorporated 30 October 2015.
Acquired 3 February 2016 (See Note 28).
The subsidiaries noted above are all controlled entities and are dependent on the parent entity for financial support.
During the year no loans were capitalised as investment (2016: Nil).
Additional loans were made as follows:
- Madagascan operations: $96,867 (2016: $332,687).
- Australian operations: $14,442,874 (2016: 1,922,766)
At the year end, total net loans from the parent company to these subsidiaries amount to $20,274,370 (2016: $513,770). Loans to subsidiaries total
$27,348,526 (2016: $7,000,060) with a provision for impairment of $7,074,157 (2016: $6,486,290).
NOTE 28 – ASSET ACQUISITION
Acquisition of Subsidiary Company – Greenmount Resources Pty Ltd
On 3 February 2016, Capricorn Metals Ltd acquired all the voting shares of Greenmount Resources Pty Ltd (“Greenmount”) by Share Sale Agreement.
The acquisition of Greenmount was considered an asset acquisition for accounting purposes as the acquired assets did not meet the definition of a
business as defined in the Australian Accounting Standards. The directors have determined that the fair value consideration of the acquisition was
$4,146,955.
The fair value consideration of the acquisition is based upon the following:
Independent Valuation of Karlawinda Gold Project
Outstanding acquisition liabilities
Other net assets acquired
Fair value
The consideration paid was 171,636,476 ordinary shares.
$
5,700,000
(1,635,540)
4,064,460
82,495
4,146,955
CAPRICORN METALS LTD ABN 84 121 700 105
45
Notes to the Consolidated Financial Statements (Cont’d)
For the year ended 30 June 2017
NOTE 29 – PARENT ENTITY DISCLOSURES
The following information has been extracted from the books and records of the parent and has been prepared in accordance with Australian
Accounting Standards.
Assets:
Current Assets
Non-Current Assets
Total Assets
Liabilities:
Current Liabilities
Non-Current Liabilities
Total Liabilities
Shareholders’ Equity:
Issued Capital
Reserves
Accumulated Losses
Total Shareholders’ Equity
2017
$
2016
$
5,263,524
25,752,655
31,016,179
612,860
378,416
991,276
42,121,506
861,239
(12,957,842)
30,024,903
11,942,159
11,579,970
23,522,129
297,126
374,578
671,704
32,509,123
316,018
(9,974,716)
22,850,425
Statement of Comprehensive Income:
Net loss attributable to members of the parent entity
(2,983,126)
(2,914,529)
Total comprehensive loss for the year attributable to members of the parent entity
(2,983,126)
(2,914,529)
The Parent entity has not entered into any contractual commitments for the acquisition of property plant and equipment at the date of this report.
Guarantees entered into by Parent entity:
As at 30 June 2017, the Group has the following financial guarantees:
-
-
$40,000 is held as security for the credit card facility and bears 2.2% interest
$98,364 is held as security for the office lease and bears 2.2% interest.
NOTE 30 – AUDITORS REMUNERATION
Amount payable to William Buck Audit (WA) Pty Ltd
- Auditing or reviewing the financial report
2017
$
2016
$
27,050
24,050
Amounts payable to other audit firms for the audit and review of the financial reports of subsidiary companies was $6,315 (2016: $3,671)
CAPRICORN METALS LTD ABN 84 121 700 105
46
Directors’ Declaration
The Directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 18 to 46 are in accordance with the Corporations Act 2001 and:
(a)
comply with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
give a true and fair view of the financial position as at 30 June 2017 and of the performance for the year ended on that date of the
consolidated entity;
2.
the Chief Executive Officer and Chief Financial Officer have each declared that:
(a)
the financial records of the Company for the financial year have been properly maintained in accordance with section 286 of the
Corporations Act 2001;
(b)
the financial statements and notes for the financial year comply with the Accounting Standards; and
(c)
the financial report also complies with International Financial Reporting Standards as disclosed in Note 1; and
(d)
the financial statements and notes for the financial year give a true and fair view;
3.
4.
the remuneration disclosures that are contained in the Remuneration Report in the Directors Report comply with the Corporations Act 2001
and the Corporations Regulations 2001.
in the directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors by:
Mr H Hellewell
Executive Chairman
Perth, Western Australia
28 September 2017
CAPRICORN METALS LTD ABN 84 121 700 105
47
ASX Additional Information
1.
Listed Shares
The shareholder information set out below was applicable as at 22 September 2017.
a)
Distribution of Share Holdings
Size of Holding
No. of Shareholders
No. of Shares
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total Shareholders
38
53
175
642
342
1,250
7,837
207,892
1,426,082
28,372,375
542,365,272
572,379,458
There are 99 Shareholders with less than a marketable parcel at a price of $0.09, totalling 258,155 shares.
b)
Voting Rights
The voting rights attached to the ordinary shares are governed by the Constitution.
On a show of hands every person present who is a Member or representative of a Member shall have one vote and on a poll, every Member present
in person or by proxy or by attorney or duly authorised representative shall have one vote for each share held. None of the options have any voting
rights.
c)
Twenty Largest Shareholders
Shareholder
Citicorp Nominees Pty Limited
Centrepeak Resources Group Pty Ltd
Nedlands Nominees Pty Ltd
Merrill Lynch (Australia) Nominees Pty Limited
Harmanis Holdings Pty Ltd
Ellenbrook Investments Pty Ltd
Resource Discovery Pty Ltd
J P Morgan Nominees Australia Limited
BNP Paribas Noms Pty Ltd
Running Water Limited
Citicorp Nominees Pty Limited
Mr Jules LeClezio
Mr Bradley James Drabsch
Pershing Australia Nominees Pty Ltd
Peter Robert Thompson
OMNI GeoX Pty Ltd
Mutual Investments Pty Ltd
Sassey Pty Ltd
HSBC Custody Nominees (Australia) Limited
Quantum Holdings Pty Ltd
Precision Opportunities Fund Ltd
Top Twenty Shareholders
Total Issued Capital
d)
Substantial Shareholders
No. of Shares
86,040,627
74,221,378
28,536,277
23,102,817
17,851,616
17,671,673
14,135,322
13,374,738
12,725,246
12,690,513
11,800,757
11,700,000
8,711,936
8,578,435
5,522,398
5,104,903
5,000,000
5,000,000
4,719,163
4,550,000
4,500,000
375,537,799
572,379,458
The names of the substantial shareholders listed in the Company’s share register as at 22 September 2017 were:
Shareholder
Hawke’s Point Holdings I Limited
Centrepeak Resources Group Pty Ltd
Acorn Capital Limited
Total
e)
On Market Buy-Back
There is currently no on-market buy-back in place
No. of Shares
85,470,085
74,221,378
34,704,712
94,396,175
%
15.03
12.97
4.99
4.04
3.12
3.09
2.47
2.33
2.22
2.22
2.06
2.04
1.52
1.50
0.96
0.89
0.87
0.87
0.82
0.79
0.79
65.61
100.00
%
14.93
12.97
6.06
33.96
CAPRICORN METALS LTD ABN 84 121 700 105
55
ASX Additional Information (Cont’d)
2.
a)
Unquoted Securities – Options
Distribution of Option Holdings
Size of Holding
100,001 and over
Total Optionholders
b)
Voting Rights
No. of Optionholders
13
13
No. of Options
55,690,028
55,690,028
Unlisted options do not entitle the holder to any voting rights.
c)
Holder of More Than 20% of Unquoted Options
As at 22 September 2017 the Company has on issue 55,690,028 Unquoted Options over ordinary shares. The names of security holders holding
more that 20% of a class of Unquoted Option are listed below.
Optionholder
Jericho Exploration Pty Ltd
Peter Robert Thompson
Hawke’s Point Holdings I Limited
Holders individually less than 20%
Total
Exercisable at $0.10
Expiring 31/05/2020
4,800,000
6,000,000
-
-
10,800,000
Exercisable at $0.20
Expiring 31/05/2020
2,500,000
2,500,000
-
2,000,000
7,000,000
Exercisable at $0.15
Expiring 05/05/2021
-
-
28,490,028
9,400,000
37,890,028
d)
Details of options on issue
The following Unquoted Options are on issue:
No. of Options
3,600,000
3,600,000
3,600,000
2,333,333
2,333,333
2,333,334
18,284,101
10,205,927
3,133,333
3,133,333
3,133,334
55,690,028
Exercise Price
$0.10
$0.10
$0.10
$0.20
$0.20
$0.20
$0.15
$0.15
$0.15
$0.15
$0.15
Vesting Date
20/04/2017
20/04/2018
20/04/2019
25/11/2017
25/11/2018
25/11/2019
09/03/2017
05/05/2017
11/05/2018
11/05/2019
11/05/2020
Expiry Date
31/05/2020
31/05/2020
31/05/2020
31/05/2020
31/05/2020
31/05/2020
05/05/2021
05/05/2021
05/05/2021
05/05/2021
05/05/2021
CAPRICORN METALS LTD ABN 84 121 700 105
56
Tenement Schedule
Australia:
Lease
Project
Company
Blocks 1
Status
Date of Grant/
Application
Expiry
Tenements
E52/1711
E52/2247
E52/2398
E52/2409
E52/3323
E52/3363
E52/3364
E52/3450
E52/3474
E52/3533
E52/3541
E52/3543
E52/3554
E52/3562
E52/3571
Total Blocks
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Miscellaneous Licences
L52/174
L52/175
L52/177
L52/178
L52/179
L52/180
L52/181
Mining Lease
M52/1070
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Karlawinda
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
Greenmount
33
16
15
8
11
36
44
16
128
109
7
8
19
20
10
480
22.17 ha
39.07 ha
12.20 ha
21.41 ha
127.83 ha
20.63 ha
1.00 ha
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
Application
05/08/2004
21/07/2009
28/04/2010
15/06/2010
11/03/2016
13/01/2017
07/03/2017
13/01/2017
03/07/2017
23/03/2017
19/04/2017
20/04/2017
29/05/2017
16/06/2017
10/08/2017
25/08/17
25/08/17
25/08/17
25/08/17
25/08/17
14/09/17
15/09/17
04/08/2018
20/07/2019
27/04/2020
14/06/2020
10/03/2021
12/01/2022
06/03/2022
12/01/2022
02/07/2022
-
-
-
-
-
-
-
-
-
-
-
-
-
Karlawinda
Greenmount
2975.07 ha
Granted
23/11/2016
22/11/2037
Note:
1.
The area measurement for one block can vary between 2.8 – 3.2 km2
Madagascar:
Title
Number
3432
5391
5392
5393
5394
19932
25093
25094
25095
25605
25606
39750
39751
Permit Type
PR
PE
PE
PE
PE
PE
PE
PE
PE
PR
PR
PR
PR
Total Carres
Grant
Date
21-Sep-15
20-Nov-02
20-Nov-02
20-Nov-02
20-Nov-02
10-Mar-06
18-Jan-07
18-Jan-07
18-Jan-07
18-Jun-01
18-Jun-01
21-Sep-15
21-Sep-15
Expiry
Date
20-Sep-18
19-Nov-42
19-Nov-42
19-Nov-42
19-Nov-42
09-Mar-46
17-Jan-47
17-Jan-47
17-Jan-47
17-Jun-11
17-Jun-11
20-Sep-18
20-Sep-18
Term
(Years)
3
40
40
40
40
40
40
40
40
10
10
3
3
Project Name
Ampanihy - Central (Big 'S')
Ampanihy - Ianapera
Ampanihy - Ianapera
Ampanihy - Ianapera
Ampanihy - Maniry
Ampanihy - Maniry
Ampanihy - Ianapera
Ampanihy - Ianapera
Ampanihy - Maniry
Ampanihy - Maniry
Ampanihy - Maniry
Ampanihy - Central (Big 'S')
Ampanihy - Central (Big 'S')
Total Carres
(New - 0.391km2)
48
16
16
16
48
112
16
16
48
80
16
16
160
608
Interest
%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Note
5
5
4,5
5
3,5
5
5
2
1,5
1,5
5
5
Note:
1.
2.
3.
4.
5.
Renewal awaiting confirmation from BCMM. All annual fees have been paid up to 31 December 2017.
Leased to SQNY – Royalty and partial tenement fees payable to subsidiary Mada-Aust SARL.
Leased to Jupiter Mines and Minerals – Royalty and annual tenement fees payable to MDA.
Leased to Hery Lala Alain Raharinavio – Royalty on small blocks.
Subject to sale to Blackearth Minerals NL upon the completion of the sale of Madagascar Graphite Ltd under the Share Sale & Purchase
Agreement.
CAPRICORN METALS LTD ABN 84 121 700 105
57