ACN 009 468 099
Annual Report
31 December 2016
Centaurus Metals Limited ABN 40 009 468 099
And its controlled entities
Contents
Page
3
4
5
6
13
22
23
24
25
27
28
56
57
61
64
Corporate Directory
Director’s Report
Corporate Governance Statement
Remuneration Report
Operating and Financial Review
Auditors 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 Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Tenement Information
65 Mineral Resources and Ore Reserves Information
Page 2 of 67
Annual Report – 31 December 2016
Corporate Directory
Directors
Mr D M Murcia AM, B.Juris, LL.B
Non-Executive Chairman
Mr D P Gordon B.Bus, FCA, AGIA
Managing Director
Mr M D Hancock B.Bus, CA, FFin
Non-Executive Director
Mr B R Scarpelli M.Sc, PMP
Executive Director
Company Secretary
Mr P A Bridson B.Com, CA, AGIA
Share Registry
Advanced Share Registry Limited
150 Stirling Highway
Nedlands WA 6009
Telephone: (08) 9389 8033
Auditors
KPMG
Chartered Accountants
235 St Georges Terrace
Perth WA 6000
Bankers
Australia
National Australia Bank
1232 Hay Street
West Perth WA 6005
Brazil
Intermedium
ag: 2946. c/c:74404-2
Endereço: Rua da Bahia, 951 – 5º andar
Belo Horizonte – MG - CEP: 30.130.008
BRAZIL
Stock Exchange Listing
Centaurus Metals Limited shares are
listed on the Australian Securities Exchange
Ordinary fully paid shares (ASX code: CTM)
Listed options (ASX code: CTMO & CTMOA)
Principal & Registered Office in Australia
Level 3, 10 Outram Street
West Perth WA 6005
PO Box 975
West Perth WA 6872
Telephone: (08) 9420 4000
Facsimile: (08) 9420 4040
Email: info@centaurus.com.au
Website: www.centaurus.com.au
Brazil Office
Avenida Barao Homem de Melo, 4391
Salas 606 and 607 – Estoril
Belo Horizonte - MG - CEP: 30.494.275
BRAZIL
Telephone: +55 31 3194 7750
Page 3 of 67
Annual Report – 31 December 2016
Directors’ Report
Your directors present their report on the Consolidated Entity (“Group”) consisting of Centaurus Metals
Limited (“Centaurus” or “the Company”) and the entities it controlled at the end of, or during, the year ended
31 December 2016 together with the consolidated financial report and review report thereon.
1 Directors
The directors of the Company at any time during or since the end of the year are:
D M Murcia
D P Gordon
M D Hancock
B R Scarpelli
Independent Non-Executive Chairman
Managing Director
Non-Executive Director
Executive Director
Unless otherwise disclosed, all directors held their office from 1 January 2016 until the date of this report.
2 Directors and Officers
Mr Didier M Murcia, AM, B.Juris, LL.B
Non-Executive Chairman, Age 54
Experience and Expertise
Independent non-executive director appointed 16 April 2009 and appointed Chairman 28 January 2010.
Lawyer with over 25 years legal and corporate experience in the mining industry. Mr Murcia is currently
Honorary Australian Consul for the United Republic of Tanzania. He is Chairman and founding director of
Perth-based legal group MPH Lawyers. He is Chairman of Strandline Resources Limited and Alicanto Minerals
Ltd.
Other Directorships
During the last three years Mr Murcia has held directorships in the following ASX listed companies:
Alicanto Minerals Limited (appointed 30 May 2012) - Non Executive Chairman
Strandline Resources Limited (appointed 23 October 2014) - Non Executive Chairman
Gryphon Minerals Limited (appointed 28 July 2006, resigned 13 October 2016)
Cradle Resources Limited (appointed 13 August 2013, resigned 8 May 2016)
Special Responsibilities
Chairman of the Board
Mr Darren P Gordon, B.Bus, FCA, AGIA
Managing Director, Age 45
Experience and Expertise
Managing Director appointed 4 May 2009. Chartered Accountant with over 20 years resource sector
experience as a senior finance and resources executive. Mr Gordon was formerly Chief Financial Officer for
Gindalbie Metals Limited.
Special Responsibilities
Managing Director
Other Directorships
During the last three years Mr Gordon has held directorships in the following ASX listed companies:
Genesis Minerals Limited (appointed 23 March 2016)
Mr Mark D Hancock, B.Bus, CA, FFin
Non-Executive Director, Age 48
Experience and Expertise
Non-executive director appointed 23 September 2011. Mr Hancock is currently Chief Financial Officer at Atlas
Iron Limited. He has over 20 years’ experience in senior financial roles across a number of leading companies
in Australia and South East Asia, including Lend Lease Corporation Ltd, Woodside Petroleum Ltd and Premier
Oil Plc.
Page 4 of 67
Annual Report – 31 December 2016
Other Directorships
During the last three years Mr Hancock held directorships in the following ASX listed companies:
Atlas Iron Limited (appointed 25 May 2012, resigned 2 December 2014)
Mr Bruno R Scarpelli, M.Sc., PMP
Executive Director, Age 39
Experience and Expertise
Executive Director appointed 3 September 2015. Mr Scarpelli is an engineer with over 15 years’ experience in
the mining sector, specifically in the environmental approvals, health and safety and human resources fields.
He was formerly environmental manager for Vale’s S11D Project.
Special Responsibilities
Administrator of Brazilian subsidiaries
Country Manager - Brazil
Mr Paul A Bridson, B.Com, CA, AGIA
Company Secretary, Age 49
Experience and Expertise
Mr Bridson was appointed as Company Secretary on 3 May 2016. Mr Bridson is a Chartered Accountant and a
member of Governance Institute. He has over 20 years’ experience in the resources sector.
Special Responsibilities
Company Secretary
3 Directors Meetings
The number of meetings of the Company’s Board of Directors and of each Board Committee held during the
year ended 31 December 2016 and the number of meetings attended by each director were:
Mr D M Murcia
Mr D P Gordon
Mr M D Hancock
Mr B R Scarpelli
Meetings of Directors
Held*
Attended
4
4
4
4
4
4
4
4
*Denotes the number of meetings held during the time the director held office.
The Company does not have a formal Nomination Committee, Audit & Risk Committee or Remuneration
Committee. The functions of the Audit & Risk Committee and the Remuneration Committee are performed by
the full Board.
4 Corporate Governance Statement
A copy of Centaurus’ 2016 Corporate Governance Statement, which provides detailed information about
governance, and a copy of Centaurus’ Appendix 4G which sets out the Company’s compliance with the
in the third edition of the ASX Corporate Governance Council’s Principles and
recommendations
Recommendations
is available on the corporate governance section of the Company’s website at
www.centaurus.com.au/corporate-governance.
Page 5 of 67
Annual Report – 31 December 2016
5 Remuneration Report – Audited
5.1
Principles of Remuneration
The primary objective of the Group’s executive reward framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with
achievement of strategic objectives and the creation of value for shareholders. The Board ensures that
executive reward satisfies the following key criteria for good reward and governance practices:
competitiveness and reasonableness;
acceptability to shareholders;
performance linked executive compensation;
transparency; and
capital management.
The Group has structured an executive remuneration framework that
complimentary to the reward strategy of the organisation to ensure:
is market competitive and
(i)
Alignment to shareholders’ interests:
focuses on the creation of shareholder value and returns; and
attracts and retains high calibre executives with an inherent knowledge of the Company’s ongoing
business and activities.
(ii)
Alignment to program participants’ interests:
rewards capability and experience;
reflects competitive reward for contribution to growth in shareholder wealth;
provides a clear structure for earning rewards;
provides recognition for contribution; and
seeks to retain experienced and competent individuals in key executives roles.
The remuneration framework currently consists of base pay and long-term incentives through participation in
the Employee Share Option Plan.
The overall level of executive reward takes into account the performance of the Group over a number of years,
with greater emphasis given to the current and prior year. Over the past 5 years, the Group was involved in
mineral exploration and pre-development activities and therefore growth in earnings is not considered
particularly relevant. Shareholder wealth is dependent upon exploration success and has fluctuated
accordingly in addition to being influenced by broader market factors.
The performance of the Group in respect of the current period and the previous four financial years is set out
below:
2016
$
2015
$
2014
$
2013
$
2012
$
Net Loss
(2,560,899)
(3,700,866)
(10,460,299)
(32,714,987)
(9,125,800)
Change in share price
$0.002
($0.046)
($0.15)
($0.13)
($0.11)
During the financial year ended 31 December 2016, no salary or fee increases were awarded to non-executive
directors, executive directors or executives of the Company.
The executive pay and reward framework currently has three components:
base pay and benefits;
long term incentives through participation in the Employee Share Option Plan; and
other remuneration such as superannuation and insurances.
The combination of these components comprises the executive’s total remuneration.
Base Pay
Base pay is structured as a total employment cost package which may be delivered as a combination of cash
and prescribed non-financial benefits at the executive’s discretion. Executives are offered a competitive base
pay that is reflective of current market conditions, comprising a fixed component of pay and rewards. Base
pay for senior executives is reviewed annually to ensure the executive’s remuneration is competitive with the
market. An executive’s base pay is also reviewed on promotion. There are no guaranteed base pay increases
included in any senior executive contracts.
Page 6 of 67
Annual Report – 31 December 2016
Retirement Benefits
In accordance with regulatory requirements, Directors and employees are permitted to nominate a
superannuation fund of their choice to receive superannuation contributions.
Long Term Incentives – Options
Long term incentive share options are granted from time to time to encourage exceptional performance in the
realisation of strategic outcomes and growth in shareholder wealth. Options are granted for no consideration
and do not carry voting or dividend entitlements. Information on share options granted during the year is set
out in section 5.3.
Short Term Incentive Plan
No short term incentives were offered in the year ended 31 December 2016 and there are no short term
incentives in place as at the date of this report.
Employment Agreements
Remuneration and other terms of employment for executives are formalised in employment agreements. The
agreements provide for the provision of other benefits and participation, when eligible, in the Employee Share
Option Plan.
Other major provisions of the agreements relating to remuneration are set out below:
D P Gordon – Managing Director
Term of agreement – commenced on 4 May 2009. Mr Gordon may terminate the agreement by
giving 6 months’ notice. The Company may terminate the agreement by giving 12 months’ notice.
Base cash salary, exclusive of superannuation at 31 December 2016 was $300,000. During the year
$28,000 was paid via the issue of shares in lieu of salary as approved by shareholders on 8 October
2015. Provision of four weeks annual leave.
Long Term Incentive Options – subject to shareholder approval, options may be issued under the
Company’s Employee Share Option Plan with vesting conditions. Refer to section 5.3 for options
issued during 2016.
B R Scarpelli – Country Manager - Brazil
Term of agreement – commenced on 6 December 2010 with no set term. Mr Scarpelli or the
Company may terminate the agreement by giving 2 months’ notice. Entitled to 6 months salary if
position is made redundant.
Base cash salary exclusive of superannuation at 31 December 2016 was $165,000 reviewed annually.
Provision of four weeks annual leave.
Long Term Incentive Options – subject to shareholder approval, options may be issued under the
Company’s Employee Share Option Plan with vesting conditions. Refer to section 5.3 for options
issued during 2016.
Non- Executive Directors
Fees and payments to non-executives reflect the demands which are made on, and the responsibilities of, the
directors. Non-Executive directors’ fees and payments are reviewed at least annually by the Board. The
Chairman’s fees are determined independently to the fees of non-executives based on comparative roles in
the external market and prevailing market conditions.
Non-Executive directors’ remuneration consists of set fee amounts and statutory superannuation. The level of
fees for Non-Executive directors remained unchanged during the year at $30,000 per annum. The Non-
Executive Chairman’s fees remained unchanged during the year at $45,000 per annum. Directors do not
receive additional committee fees. Non-Executive directors’ fees are determined within an aggregate
directors’ fee pool limit, which is periodically recommended for approval by shareholders. The total maximum
currently stands at $400,000. There is no provision for retirement allowances for Non-Executive directors.
Non-Executives are eligible to be granted options to provide a material additional incentive for their ongoing
commitment and dedication to the continued growth of the Group. Refer to section 5.3 for options issued
during the period. Prior to issuing incentives the Board considers whether the issue is reasonable in the
circumstances. The incentives have been offered to assist the Company in attracting and retaining the highest
calibre of Non-Executive, whilst maintaining the Group’s cash reserves.
Page 7 of 67
Annual Report – 31 December 2016
5.2
Directors’ and Executive Officers’ Remuneration
Details of the nature and amount of each major element of remuneration of each director of the Company, each of the named Company executives and other key
management personnel of the Group are:
Short Term Benefits
Post-
employment
Benefits
Long Term
Benefits
Share- based
Payments
Salary & Fees
$
Other
Benefits(1)
$
Shares issued
in lieu of
remuneration
$
Super-
annuation
$
Long Service
Leave(2)
$
Options(3)
$
Total
$
S300A(1)(e)(i)
Proportion of
Remuneration
Performance
Related(4)
%
S300A(1)(e)(vi)
Value of
Options as
Proportion of
Remuneration
%
45,000
30,000
272,692
163,357
511,049
-
-
16,188
(3,234)
12,954
-
-
-
-
28,000
19,308
-
-
28,000
19,308
-
-
7,326
-
7,326
3,347
2,766
11,065
14,115
31,293
48,347
32,766
354,579
174,238
609,930
6.9%
8.4%
3.1%
8.1%
6.9%
8.4%
3.1%
8.1%
Year Ended 31 December 2016
Non- Executive Directors
Mr D M Murcia
Mr M D Hancock
Executive Directors
Mr D P Gordon
Mr B R Scarpelli
Total
(1) Other benefits includes the movement in annual leave entitlements over the 12 month period, measured on an accruals basis, and other minor benefits for executives located in Brazil.
(2) Relates to pro rata long service leave measured on an accruals basis.
(3) The fair value of the options is calculated at the date of grant using the Black Scholes option-pricing model and allocated to each reporting period evenly over the period from grant date to vesting date. The
value disclosed is the portion of the fair value of the options recognised in this reporting period.
(4) The vesting of options is conditional on the achievement of future targets which if not achieved will result in the forfeiture of the options. The proportion of performance related remuneration consists of
long term incentives. The percentages disclosed include the value of options expensed during the year in accordance with Australian Accounting Standards. Details of the vesting conditions related to the
options have been disclosed in section 5.3.
Page 8 of 67
Annual Report – 31 December 2016
Short Term Benefits
Post-
employment
Benefits
Long Term
Benefits
Share- based
Payments
Salary & Fees
$
Other
Benefits(2)
$
Shares issued
in lieu of
remuneration
$
Super-
annuation
$
Long Service
Leave(3)
$
Options and
Rights(4)
$
Total
$
S300A(1)(e)(i)
Proportion of
Remuneration
Performance
Related(5)
%
S300A(1)(e)(vi)
Value of
Options and
Rights as
Proportion of
Remuneration
%
61,250
40,833
28,919
336,738
55,530
157,483
680,753
-
-
-
(2,599)
5,767
(19,583)
(16,415)
-
-
-
-
-
2,747
-
-
-
20,000(6)
-
17,500
37,500
15,937
(7,043)
-
11,235
29,919
-
-
(7,043)
-
-
-
(96,978)
4,946
(104,694)
(196,726)
61,250
40,833
31,666
266,055
66,243
61,941
527,988
-
-
-
-
-
-
(36.4%)
7.5%
(36.4%)
7.5%
(169%)
(169%)
Year Ended 31 December 2015
Non- Executive Directors
Mr D M Murcia
Mr M D Hancock
Mr P E Freund (resigned 3 September 2015)
Executive Directors
Mr D P Gordon
Mr B R Scarpelli(1)
Executives
Mr J W Westdorp (resigned 19 June 2015)
Total
(1) Effective 3 September 2015 Mr Scarpelli was appointed to the Board in an executive role as well as being promoted to the role of Country Manager – Brazil.
(2) Other benefits includes the movement in annual leave entitlements over the 12 month period, measured on an accruals basis, and other minor benefits for executives located in Brazil.
(3) Relates to pro rata long service leave measured on an accruals basis.
(4) The fair value of the options is calculated at the date of grant using the Black Scholes option-pricing model and allocated to each reporting period evenly over the period from grant date to vesting date. The
value disclosed is the portion of the fair value of the options recognised in this reporting period.
(5) The vesting of performance rights and options is conditional on the achievement of future targets which if not achieved will result in the forfeiture of the related rights or options. The proportion of
performance related remuneration consists of short term incentives and long term incentives. The percentages disclosed include the value of options and performance rights expensed during the year in
accordance with Australian Accounting Standards. Details of the vesting conditions related to the options and rights have been disclosed in section 5.3.
(6) The value of shares issued to Mr Gordon in lieu of remuneration during the period includes an accrual of $4,000 in relation to shares for December 2015 remuneration which were not issued until January
2016.
Page 9 of 67
Annual Report – 31 December 2016
5.3
Equity Instruments
A Performance Share Plan (PSP) was adopted by the Board on 23 July 2012 and was approved by shareholders
on 31 August 2012. Under the PSP, the Board may from time to time in its absolute discretion grant
performance rights to eligible persons including executives and employees, subject to such terms and
conditions as the Board determines. Performance rights are, in effect, options to acquire unissued shares in
the Company, the exercise of which is subject to certain performance milestones and remaining in
employment during the vesting period. Performance rights are granted under the PSP for no consideration
and are granted for a period not exceeding 5 years. There were no performance rights issued during the year
or on issue as at year end.
Options are granted under the Employee Share Option Plan (ESOP) which was approved by shareholders at the
2016 Annual General Meeting. Eligibility to participate in the ESOP (including participation by Executive and
Non-Executive directors) is determined by the Board in its absolute discretion. Where provided, options
granted under the ESOP are for no consideration and are granted for a period of up to 5 years. The vesting and
exercise conditions of options granted are also determined by the Board in its absolute discretion. Employees
must remain in employment during the vesting period. Options may also be granted by the Company outside
of the ESOP, but under similar terms and conditions.
The Group has a policy that prohibits directors and employees who are granted share options and
performance rights as part of their remuneration from entering into arrangements that limit their exposure to
losses that would result from share price decreases.
Shares issued in lieu of remuneration
During the year ended 31 December 2015 the Company received shareholder approval and an ASX Listing Rule
waiver to enable it to issue up to 12,000,000 fully paid ordinary shares to Mr Gordon in lieu of $48,000 worth
of salary over the 12 month period up to 8 October 2016.
During the reporting period the Company issued the following shares:
Tranche
Period of Remuneration
Issue Date of
Shares
Number of
Shares
Issue price
Value of
Shares $
1
2
3
4
Total
1 December 2015 – 31 January 2016
4 January 2016
1,481,481
$0.0054
1 February 2016 – 31 March 2016
1 March 2016
1,632,653
$0.0049
1 April 2016 – 31 May 2016
2 May 2016
1,333,333
$0.0060
1 June 2016 – 31 July 2016
1 July 2016
1,111,111
$0.0072
5,558,578
8,000
8,000
8,000
8,000
32,000
The issue price of the shares is determined using the volume weighted average price of the shares for the five
trading days prior to the issue date.
Page 10 of 67
Annual Report – 31 December 2016
Analysis of Options over Equity Instruments Granted as Compensation
Details of vesting profiles of the options granted as remuneration to key management personnel of the Group
are detailed below:
Directors
Mr D P Gordon
Mr D M Murcia
Mr M D Hancock
Mr B R Scarpelli
Number
Of
Options
Issued
2,000,000
3,000,000
3,000,000
500,000
1,000,000
1,000,000
500,000
750,000
750,000
250,000
250,000
500,000
1,000,000
1,500,000
1,500,000
Grant
Date
Expiry
Date
Exercise
Price
10/06/16
10/06/16
10/06/16
10/06/16
10/06/16
10/06/16
10/06/16
10/06/16
10/06/16
25/08/14
25/08/14
25/08/14
10/06/16
10/06/16
10/06/16
10/06/18
10/06/19
10/06/20
10/06/18
10/06/19
10/06/20
10/06/18
10/06/19
10/06/20
31/08/18
31/08/18
31/08/18
10/06/18
10/06/19
10/06/20
$0.0082
$0.0082
$0.0082
$0.0082
$0.0082
$0.0082
$0.0082
$0.0082
$0.0082
$0.1250
$0.1250
$0.1250
$0.0082
$0.0082
$0.0082
Fair value
per
option at
grant
date
$0.0020
$0.0026
$0.0031
$0.0020
$0.0026
$0.0031
$0.0020
$0.0026
$0.0031
$0.0446
$0.0446
$0.0446
$0.0020
$0.0026
$0.0031
%
Vest
In
Year
100%
-
-
100%
-
-
100%
-
-
-
100%
-
100%
-
-
%
Expired
In Year
%
Forfeited
In Year
Financial
Year In
Which
Grant
Vests (1)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2016
2017
2018
2016
2017
2018
2016
2017
2018
2014
2016
2017
2016
2017
2018
(1)
The options which vest in 2017 and 2018 are subject to the completion of service conditions.
Exercise of Options Granted as Compensation
There were no shares issued on exercise of options which were previously granted as compensation to key
management personnel.
Options Over Equity Instruments
The movement during the reporting period, by number of options over ordinary shares in Centaurus Metals
Limited held, directly, indirectly and beneficially, by each key management person, including their related
parties, is as follows:
Held 1
January
2016
-
-
-
1,000,000
Granted as
Compensation
Exercised
Held 31
December
2016
Vested
During the
Period
Vested and
Exercisable
31 December
2016
2,500,000
8,000,000
2,000,000
4,000,000
-
-
-
-
2,500,000
8,000,000
2,000,000
5,000,000
500,000
2,000,000
500,000
1,250,000
500,000
2,000,000
500,000
1,500,000
Directors
Mr D M Murcia
Mr D P Gordon
Mr M D Hancock
Mr B R Scarpelli
Analysis of Movements in Options
The movement during the reporting period, by value, of options over ordinary shares in the Company held by
each director, key management person and each of the Company executives and relevant Group executives is
detailed below:
Page 11 of 67
Annual Report – 31 December 2016
Value Of
Options
Granted $(A)
Value Of
Options
Exercised In
Year $(B)
Value Of
Options
Lapsed In
Year $(C)
6,714
21,164
5,291
10,582
-
-
-
-
-
-
-
-
Director
Mr D M Murcia
Mr D P Gordon
Mr M D Hancock
Mr B R Scarpelli
(A)
(B)
(C)
The value of options granted in the year is the fair value of the options calculated at grant date using
the Black Scholes option-pricing model. The total value of the options granted is included in the table
above. This amount is allocated to remuneration over the vesting period.
The value of options exercised during the year is calculated as the market price of shares of the
Company as at close of trading on the date the options were exercised after deducting the price paid to
exercise the option.
The value of unvested options that lapsed during the year represents the benefit forgone and is
calculated at the date the options lapsed using the Black Scholes option-pricing model assuming the
performance criteria had been achieved. To the extent that the options are out of the money upon
lapsing, the value is nil.
5.4
Key Management Personnel Transactions
Loans to Key Management Personnel and Their Related Parties
No loans have been made to directors or other key management personnel of Centaurus Metals Limited or the
Group.
Key Management Personnel and Director Transactions
One of the key management personnel, or their related parties, hold positions in other entities that result in
them having control or significant influence over the financial or operating policies of these entities.
One of these entities transacted with the Group in the reporting period. The terms and conditions of the
transactions with key management personnel and their related parties were no more favourable than those
available, or which might reasonably be expected to be available, on similar transactions to non-key
management personnel related entities on an arm’s length basis.
The aggregate value of transactions and outstanding balances relating to key management personnel and
entities over which they have control or significant influence were as follows:
Key Management Person
Mr D M Murcia(1)
Total and current liabilities
Transaction Value
Balance Outstanding As At
Transaction
Legal fees
2016
$
77,917
2015
$
66,268
31 Dec 2016
$
17,174
31 Dec 2015
$
1,250
17,174
1,250
(1)
Payable to MPH Lawyers, a firm in which Mr Murcia is a partner.
Shareholdings of Key Management Personnel
The movement during the reporting period of ordinary shares in Centaurus Metals Limited held, directly,
indirectly and beneficially, by each key management person, including their related parties, is as follows:
Held 1
January
2016
Purchases
Received in
lieu of
remuneration
Sales
Other
Director
Mr D M Murcia
Mr D P Gordon
Mr M D Hancock
Mr B R Scarpelli
5,304,980
18,134,182
1,477,457
-
3,182,988
14,215,656
886,473
-
-
5,558,578
-
-
-
-
-
-
Held at 31
December
2016
-
-
-
-
8,487,968
37,908,416
2,363,930
-
Page 12 of 67
Annual Report – 31 December 2016
All equity transactions with Key Management Personnel other than those arising from the exercise of
remuneration options have been entered into under terms and conditions no more favourable than those the
Group would have adopted if dealing at arms-length.
Listed Option Holdings of Key Management Personnel
On 12 October 2016 the Company announced a 3-for-5 Renounceable Rights Issue that included an issue of 1
for 2 free attaching listed options. The listed options (ASX: CTMOA) have an exercise price of $0.01 and an
expiry date of 30 April 2018.
The movement during the reporting period of the listed options in Centaurus Metals Limited held, directly,
indirectly and beneficially, by each key management person, including their related parties, is as follows:
Held 1
January
2016
Purchases
Sales
Other
343,067
2,116,666
158,888
-
1,591,494
7,107,828
443,236
-
-
-
-
-
Held at 31
December
2016
-
-
-
-
1,934,561
9,224,494
602,124
-
Director
Mr D M Murcia
Mr D P Gordon
Mr M D Hancock
Mr B R Scarpelli
6 Principal Activities
During the period the principal activities of the Group consisted of exploration and evaluation activities related
to mineral resources. There were no significant changes in the nature of the activities of the Group during the
year.
7 Operating and Financial Review
A summary of consolidated results is set out below
Interest Income
Other Income
Loss before income tax
Income tax benefit
31 December
2016
$
31 December
2015
$
43,076
142,093
185,169
(3,318,902)
758,003
39,907
1,345,315
1,385,222
(3,704,222)
3,356
Loss attributable to members of Centaurus Metals Limited
(2,560,899)
(3,700,866)
Financial Performance
During the year ended 31 December 2016 the Group expensed Exploration and Evaluation costs totalling
$1,478,842 (2015 $2,283,873) in accordance with the Group’s accounting policy. The Exploration and
Evaluation costs primarily comprise costs in relation to exploration at the Mombuca and Serra Misteriosa Gold
Projects in Brazil. Previously capitalised acquisition costs of $464,646 (2015: $101,389) were also impaired in
relation to the Mombuca and Itambe Projects.
Financial Position
At the end of the year the Group had a cash balance of $1,891,367 (2015: $541,871) and net assets of
$4,751,289 (2015: $3,874,330). Total liabilities amounted to $767,920 (2015: $926,767) and consisted of trade
and other payables and employee benefits.
Page 13 of 67
Annual Report – 31 December 2016
Strategy
The key focus for the Group is currently to explore and develop gold and copper projects which the Company
believes are capable of delivering acceptable returns to its shareholders within a reasonable timeframe.
The 2016 calendar year culminated in acquisition and commencement of field exploration activities at the
highly prospective Serra Misteriosa Gold Project in northern Brazil. The Project was acquired through the
Company’s strategic alliance with Terrativa Minerais SA (“Terrativa”). The Company continues to reposition
itself outside of the bulk commodities sector and seek value from its existing iron ore assets through either
outright sale or joint development.
Project Activities
Overview
The year culminated in an exciting new chapter for Centaurus, with the commencement of field exploration
activities at the newly-acquired Serra Misteriosa Gold Project, which forms part of the highly prospective Pará
Exploration Package (“Pará EP”) in Northern Brazil. The Pará EP was secured via an agreement with the
Company’s strategic alliance partner, Terrativa Minerais SA.
The extensive tenement package is located between several world-class mineral deposits – the 5Moz Volta
Grande Gold Project, owned by TSX listed Belo Sun Mining, to the north and the giant Carajás IOCG province to
the south. The Pará EP group of tenements include prospective gold targets for both Volta Grande-style gold
and Carajás-style copper-gold deposits.
The Serra Misteriosa Gold Project represents the most advanced project in the Pará EP, and a major Induced
Polarization survey over the tenement area commenced in November to define preferred targets for drilling in
the first half of 2017. Survey results were announced subsequent to the end of the reporting period.
The initial exploration campaign at Serra Misteriosa has been underpinned by the rights issue and share
placement that was completed in November 2016, which closed heavily over-subscribed and successfully
raised $2.25 million.
Also during the year a diamond drill campaign was completed at the Mombuca Gold Project. The exploration
results are under review, after the drilling failed to intersect any significant gold mineralisation but identified
evidence of the presence of a substantial hydrothermal mineralising system. The drilling has not adequately
explained the very strong IP chargeability anomalies identified within the project area earlier in the year.
Exploration also continued at the Aurora Copper Project in north-east Brazil during the period, with several
new priority exploration targets identified following a successful review of historical geophysical data. The
review, which was undertaken by highly experienced US-based geophysicist, Mr Robert B. Ellis, has laid the
foundations for an Induced Polarisation (IP) survey to be completed during 2017 to enhance the definition of
drill targets.
The most significant target that has emerged from the review of historical data is a chargeability high
identified north of the Diamante target which extends over +1km of strike and is up to 600m wide, and may
represent sulphide-rich mineralisation. This will be a priority focus for future exploration work at Aurora.
Acquisition of Pará Exploration Package
In October, Centaurus entered into a binding letter agreement to secure 100% of a highly prospective and
strategically located gold and copper exploration project in Northern Brazil through its existing strategic
alliance with Terrativa Minerais SA (“Terrativa”).
The highly prospective Serra Misteriosa Gold Project forms part of the +750 km2 Pará Exploration Package
(“Pará EP”) of tenements located in Brazil’s mineral-rich State of Pará, opening up a significant new front for
gold exploration for Centaurus in Brazil.
The extensive tenement package is located between several world-class mineral deposits – the 5Moz Volta
Grande Gold Project1, owned by Belo Sun Mining Corp., to the north and the giant Carajás IOCG province to
the south. The Pará EP includes the Serra Misteriosa Gold Project, the Salobo West Copper-Gold Project, the
Serra Vermelho Gold Project, the Serra da Fumaça Gold Project and the Caldeiráo Copper-Gold Project. The
tenements include prospective gold targets for both Volta Grande-style gold and Carajás-style copper-gold
deposits.
Page 14 of 67
Annual Report – 31 December 2016
Importantly for Centaurus, the Company was able to continue to build upon its Strategic Alliance with
Terrativa by securing access to the Para EP for no upfront cost with all expenditure to be directed into planned
exploration activities on the highly prospective tenure.
Key Commercial Terms
Under the Earn In Agreement with Terrativa, Centaurus will earn the right to acquire 100% of the project by
undertaking R$2.5 million (~A$1 million) of expenditure within two years of execution of the Agreement.
Once Centaurus has met the minimum expenditure commitment, it will have the right to acquire 100% of the
Project Tenements through the issue of 30 million CTM shares and a 2% production royalty over future
production from any of the project tenements. Concurrently with the issue of the ordinary shares, Centaurus
will issue Terrativa 90 million Performance Rights in 3 tranches of 30 million with varying vesting conditions.
The future issue of both ordinary shares and performance rights to Terrativa will be subject to shareholder
approval.
In the event that Centaurus disposes of any of the Projects that form part of the Pará EP then Terrativa will be
entitled to 25% of the sale proceeds. The value of any Performance Rights issued will be deducted from the
first sale proceeds of any of the Project Tenements.
The Serra Misteriosa Gold Project
Serra Misteriosa or “The Mysterious Hill” is located within an extensive farming district only 180km from the
regional centre of Marabá, a city with a population of 180,000 people, a domestic airport and excellent access
to infrastructure and services.
Serra Misteriosa is the most advanced project in the Para EP, where Terrativa has undertaken extensive early-
stage exploration work to generate numerous walk-up drill targets, none of which have yet been drill tested.
The project displays a number of close geological similarities to the 5.0Moz Volta Grande Gold Project, owned
by TSX-listed Belo Sun Mining Corp.
Volta Grande is a world-class gold deposit with reported NI 43-101 Mineral Reserves of 3.8Moz at 1.02 g/t gold
within a total Mineral Resource (Measured and Indicated) of 5.0Moz at 0.98 g/t1. Belo Sun Mining Corp.
completed a positive Feasibility Study in 2015 and has recently secured its construction licences.
The Serra Misteriosa tenement package covers 30km of strike extensions of a WNW-ESE trending Upper
Proterozoic greenstone belt that has been intruded by multiple syntectonic diorites and granodiorites. The
primary target is delineated by a continuous 2.5km long, high-grade anomaly (+50ppb Au) within a broader
+5km long gold geochemical anomaly (+25ppb Au) that is consistently up to 500m wide.
The comparisons with the Volta Grande Project geology are important. Set in a greenstone of the same
regional orientation and geological age, the Volta Grande gold mineralisation is related to a major WNW-ESE
trending shear zone within a highly silicified dolerite intrusive. The same rocks and alteration assemblage is
seen in an identical structural setting at Serra Misteriosa.
Furthermore, the discovery of the Volta Grande deposit was made by testing a 2.5km x 300m wide
geochemical signature over a rich red saprolite that coincided with the regional trends similar to that seen at
Serra Misteriosa.
Landowner agreements and drilling approvals are already well advanced by Terrativa and Centaurus plans to
commence drilling the Serra Misteriosa Project in the first half of 2017.
IP Survey
In November, Centaurus commenced a ground-based exploration program at the Serra Misteriosa Gold
Project, with an Induced Polarisation (IP) geophysical survey to help define the most prospective drill targets.
The IP survey initially covered the area of the continuous 2.4km long +50ppb Au anomaly with further survey
work undertaken to cover additional satellite targets.
The positive IP Survey results were released subsequent to the end of the reporting period and confirm the
prospectivity of the targets seen in the soil geochemical signature.
1 For additional information on the Volta Grande Mineral Reserves and Resources please refer to www.belosun.com.
Page 15 of 67
Annual Report – 31 December 2016
The Salobo West Copper-Gold Project
The Salobo West Project comprises a group of EL applications that cover 150 km2 of highly prospective ground
located in the heart of the world-class Carajás IOCG province. The project is located just 12km along strike
from Vale’s massive Salobo copper-gold mine which hosts mineral resources of over 1.1 billion tonnes at 0.7%
Cu and 0.4g/t Au2.
One of the tenement applications, located along strike from the Salobo mine, covers a 10km extension of the
Cinzento Shear Zone that hosts the world-class copper-gold deposit. The Cinzento shear zone is a well mapped
zone that is highlighted by a regional magnetic anomaly as well as variations in topography. As these areas are
still applications no ground work has been completed to date. Centaurus is working with the Pará Department
of Mines (DNPM) to get these tenements granted as soon as possible.
The Serra Vermelho and Serra da Fumaça Gold Projects
The Serra Vermelho and Serra da Fumaça Gold Projects are both in a similar setting to Serra Misteriosa where
a number of diorites have intruded a greenstone unit that displays strong hydrothermal alteration. The
projects display excellent regional geophysical characteristics with a potassium anomaly at Serra Vermelho
indicating alteration coincident with a magnetic low lineament within a magnetic high area.
Only very early stage exploration has been completed on both project areas. This work included some stream
sediment sampling that has returned multiple anomalous gold readings around the project area. Centaurus
will plan to start work at both Projects after the initial round of drilling is complete at Serra Misteriosa.
Aurora Copper Project
The Aurora Copper Project is located in the state of Ceara, north-east Brazil.
Early in the year, the Company identified several new priority exploration targets after completing a successful
review of historical geophysical data.
Primary and secondary copper mineralisation occurs in two principal target areas: the Diamante Target (south)
and the Taveira Target (north). Historical drilling at Aurora has returned a number of significant intersections
including:
12.5m at 2.4% Cu from 101.5m in Hole 3BA-14-CE (CPRM);
9.5m at 1.6% Cu from 46.0m in Hole 3BA-09-CE (CPRM);
6.9m at 0.93% Cu from 47.0m in Hole PJCA-PSED-SD0002 (Terrativa);
1.3m at 5.28% Cu from 32.0m in Hole PJCA-PTAV-SD0010 (Terrativa); and
12.0m at 0.79% Cu from surface in Hole PJCA-PTAV-SD0007 (Terrativa).
Based on historical IP survey data, there is a good correlation between the west-northwest trending
chargeability and resistivity highs with the aeromagnetic high and ground gravity low trends at the Diamante
Target and on the north and south edge of the Taveira Target. It is these zones that have returned positive drill
results in the past.
Centaurus intends to undertake a further round of geological mapping and sampling and geophysical work.
The most interesting new target that is yet to be tested at the Aurora Project is a chargeability high located
north of the Diamante target. This strong anomaly is over 1 km long and up to 600m wide and is located along
the same trend as the Taveira target. It is coincident with a resistivity high as well as a strong copper-in-soils
anomaly.
Mombuca Gold Project
The Mombuca Gold Project is located in the state of Minas Gerais, south-east Brazil. A drill program was
undertaken at the Project during September 2016 following extensive mapping, sampling and trenching of the
Project area as well as completion of a detailed Induced Polarisation (IP) Survey.
2 For additional information on the Salobo Mineral Reserves and Resources please refer to www.vale.com.
Page 16 of 67
Annual Report – 31 December 2016
Induced Polarisation (IP) Survey
The IP Survey identified a number of open-ended high chargeability zones that extended to more than 250m
depth at both the ITZ Prospect and the Bela Prospect.
The standout IP anomaly at the Bela Prospect occurred on section 675540mE, roughly 1.5km to the east of the
ITZ Prospect where an extremely high chargeability anomaly was identified, open at depth. The anomaly was
at its strongest at the base of the survey, where it is roughly 250m wide and projects upwards before
weakening some 50-75m below surface.
The anomaly is perfectly coincident with a resistivity high that may be associated with silica alteration as well
as a significant magnetic low feature surrounded by a larger magnetic high anomaly that potentially indicates
magnetite depletion by sulphide rich fluids. The combination of geophysical indicators made for an excellent,
high-priority drill target.
Within the ITZ Prospect there were similar examples of this relationship between the IP chargeability highs and
magnetic low anomalies.
Drilling Program
Based on the excellent geophysical targets, coupled with the broader positive exploration results collected on
the Project, the Company identified a number of drill targets.
The initial round of drilling saw five deep diamond drill holes completed over the two prospect areas. The
results included a shallow intercept of low-grade gold mineralisation in drill hole MBC-DD-16-002 but no
significant assay results were returned from the other four holes.
Results from the drilling have not been able to explain the strength of a number of IP anomalies in the project
area and further work in this regard is required. Priority will now, however, be given to exploring the Serra
Misteriosa Gold Project where the opportunity to discover a world class orebody is significantly greater than at
the Mombuca Project area.
Jambreiro Iron Ore Project
The Company’s 100%-owned Jambreiro Project, located in south-east Brazil, is a shovel-ready development
project that is licenced for 3Mtpa of wet production and which represents a strategic asset in the Brazilian
domestic iron ore and steel sector, particularly with the recent increase in iron ore prices and the premium
pricing that exists in the market for high grade ore (+65% Fe) like that which could be produced at Jambreiro.
Centaurus intends to pursue opportunities to extract value from the Jambreiro Project via either an outright
sale or joint development proposition.
Conquista DSO Iron Ore Project
The Conquista Project comprises a portfolio of highly prospective tenements with extensive Direct Ship Ore
(DSO) mineralisation located just 8km along well maintained gravel roads from the Company’s previously
divested Candonga DSO Iron Ore Project.
The Company has established an Exploration Target for the Conquista tenements of 3.5-8Mt of high-grade DSO
grading 64-67% Fe, with a further 20-40Mt of itabirite mineralisation grading 35-45% Fe. The Exploration
Target is based on detailed geological mapping, auger drill-hole results and is underpinned by the ground
magnetic survey. The Exploration Target quantity and grade is conceptual in nature, there has been insufficient
exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the
estimation of a Mineral Resource.
Centaurus believes that the Conquista DSO Iron Ore Project has the ability to be a significant cash generator
for the Company in the near future via sale of the asset or through joint development.
Page 17 of 67
Annual Report – 31 December 2016
Corporate
Capital Raisings
In June Centaurus successfully raised $0.65 million to undertake the maiden drilling program at the Mombuca
Gold Project.
In November, the Company completed a 3-for-5 renounceable rights
issue which closed heavily
oversubscribed. Under the offer, eligible shareholders could subscribe for 3 new shares for every 5 existing
shares held at an issue price of $0.005 per share, together with one free attaching option for every 2 new
shares subscribed for with an exercise price of $0.01 and an expiry date of 30 April 2018. The Company issued
402,467,414 New Shares and 201,233,707 New Options under the Rights Issue, raising a total of $2 million
before costs.
Due to the very strong level of demand from shareholders, the Company also agreed to place a further 50
million shares ($250,000) and 25 million options on the same terms as those issued under the Rights Issue.
The proceeds of the Rights Issue and additional placement will predominantly be used to fund an active gold
exploration program, including the Company’s first-ever drill program on the recently acquired and highly
prospective Serra Misteriosa Gold Project in northern Brazil.
Share Sale Facility
In December, Centaurus established a Share Sale Facility for holders of Unmarketable Parcels of shares in the
Company to enable the sale of their shares without incurring any brokerage or handling costs that could
otherwise make a sale of their shares uneconomic or difficult. By making this Facility available the Company
aimed to reduce the administrative costs associated with maintaining a number of small holdings. The ASX
Listing Rules defines an “Unmarketable Parcel” as those with a market value of less than A$500.
The Share Sale Facility was closed subsequent to the end of the reporting period on 23 January 2017. The final
number of shares sold under the Facility, being 24,723,276 shares from 2,507 shareholders represented 59%
of the total number of shareholders holding shares at that date. The shares were sold to sophisticated and
professional clients of CPS Capital Ltd for $0.0065 per share.
Competent Person’s Statement
The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled
by Roger Fitzhardinge, a Competent Person who is a Member of the Australasia Institute of Mining and Metallurgy and
Volodymyr Myadzel, a Competent Person who is a Member of the Australian Institute of Geoscientists. Roger Fitzhardinge
is a permanent employee of Centaurus Metals Limited and Volodymyr Myadzel is the Senior Resource Geologist of BNA
Consultoria e Sistemas Limited, independent resource consultants engaged by Centaurus Metals Limited.
Roger Fitzhardinge and Volodymyr Myadzel have sufficient experience that is relevant to the style of mineralisation and
type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as
defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Roger Fitzhardinge and Volodymyr Myadzel consent to the inclusion in the report of the matters based on their
information in the form and context in which it appears.
Exploration Targets
This Report comments on and discusses Centaurus Metals Limited’s exploration in terms of target size and type. The
information in relation to Exploration Targets should not be misunderstood or misconstrued as an estimate of Mineral
Resources or Ore Reserves. The potential quantity and quality of material discussed as Exploration Targets is conceptual in
nature since there has been insufficient work completed to define them as Mineral Resources or Ore Reserves. It is uncertain
if further exploration work will result in the determination of a Mineral Resource or Ore Reserve.
Factors and Business Risks Affecting Future Business Performance
The following factors and business risks could have a material impact on the Company’s success in delivering
its strategy:
Access to Funding
The Company’s ability to successfully develop future projects is contingent on the ability to fund those projects
from operating cash flows or through affordable debt and equity raisings. Ongoing exploration of the
Company’s Projects is contingent on developing appropriate funding solutions.
Page 18 of 67
Annual Report – 31 December 2016
Commodity Prices
Commodity prices fluctuate according to changes in demand and supply. The Company is exposed to changes
in the price of a number of commodities, which could affect the future profitability of the Company’s projects.
Significant adverse movements in commodity prices could also affect the ability to raise debt and equity to
fund future exploration and development of projects.
Exchange Rates
The Company is exposed to changes in the US Dollar and the Brazilian Real. Sales of most commodities are
denominated in US Dollars. The Company’s CAPEX and OPEX costs will be primarily denominated in Brazilian
Real.
Sale of Iron Ore Projects
The Company’s strategy in relation to its remaining iron ore assets is to divest or joint venture them to realise
value rather than developing the assets in its own right. Whilst iron ore projects with high grade, low impurity
product remain profitable in the domestic market, broader market conditions may impact on the Company’s
ability to divest the assets for a value that is reflective of the historical cost of the projects and there is no
definitive certainty that the Company will be able to enter into suitable project sale or joint venture
arrangement in line with the timetable established by the Company.
Emphasis of Matter
The audit opinion for the year ended 31 December 2016 contains an emphasis of matter in relation to
potential uncertainty regarding continuation as a going concern. The Financial Statements have been prepared
on the basis of going concern. The Group will require funding in order to continue its exploration activities and
iron ore divestment process. Refer to Note 2 of the Financial Report for further details.
Significant Changes in the State of Affairs
In the opinion of directors, other than as outlined in this report, there were no significant changes in the state
of affairs of the Group that occurred during the financial year under review.
8 Dividends
No dividend was declared or paid by the Company during the current or previous year.
9
Events Subsequent to Reporting Date
There has not arisen in the interval between the end of the financial year and the date of this report an item,
transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to
affect significantly the operations of the Group, the results of those operations, or the state of affairs of the
Group, in future financial years.
10 Likely Developments
Other than likely developments contained in the “Operating and Financial Review” and events subsequent,
further information on likely developments in the operations of the Group and the expected results of
operations have not been included in this report because the directors believe it would be likely to result in
unreasonable prejudice to the Group.
11 Environmental Regulation
The Group is subject to environmental laws and regulations under Brazilian (State and Federal) legislation
depending on the activities undertaken. Compliance with these laws and regulations is regarded as a
minimum standard for the Group to achieve. There were no known significant breaches of these regulations
during the year.
Page 19 of 67
Annual Report – 31 December 2016
12 Directors’ Interests
The relevant interest of each director in the shares and options over such shares issued by the companies
within the Group and other related bodies corporate, as notified by the directors to the ASX in accordance
with S205G(1) of the Corporations Act 2001, at the date of this report is as follows:
Directors
Mr D M Murcia
Mr D P Gordon
Mr M D Hancock
Mr B R Scarpelli
13 Share Options
Unissued Share Options
Ordinary Shares
Employee Options
Listed Options
8,487,968
37,908,416
2,363,930
-
2,500,000
8,000,000
2,000,000
5,000,000
1,934,561
9,224,494
602,124
-
At the date of this report unissued ordinary shares of the Company under option (issued under the ESOP) are:
Expiry Date
Exercise Price
Vested
Unvested
Employee Options
Total Number Of
Shares Under
Option
10/06/2018
31/08/2018
10/06/2019
10/06/2020
$0.0082
$0.1250
$0.0082
$0.0082
5,500,000
1,000,000
-
-
6,500,000
-
1,000,000
8,500,000
8,500,000
18,000,000
5,500,000
2,000,000
8,500,000
8,500,000
24,500,000
At the date of this report unissued ordinary shares of the Company under listed option are:
Expiry Date
31/03/2017
30/04/2018
Exercise Price
Total Number Of Shares
Under Option
$0.050
$0.010
20,300,666
226,233,707
246,534,373
The listed options expiring on 30 April 2018 were issued as a 1 for 2 free attaching option as part of the rights
issue announced on 12 October 2016. The full terms of the options are set out in the Prospectus lodged with
the ASX on 14 October 2016.
The listed options expiring on 31 March 2017 were issued as 1 for 3 free attaching options as part of the share
placement and entitlements issue announced on 25 February 2015. The full terms of the options are set out in
the Prospectus lodged by the Company with ASX on 6 March 2015.
14 Indemnification and Insurance of Officers and Auditors
During the period, the Company paid insurance premiums to insure the directors, executive officers and
Company Secretary of the Group. The amount of premiums paid has not been disclosed due to confidentiality
requirements under the contract of insurance.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may
be brought against the officers in their capacity as officers of entities in the Consolidated Entity, and any other
payments arising from liabilities incurred by the officers in connection with such proceedings, other than
where such liabilities arise out of conduct involving a wilful breach of duty by the officers or the improper use
by the officers of their position or of information to gain advantage for themselves or someone else or to
cause detriment to the Group.
Page 20 of 67
Annual Report – 31 December 2016
15 Non- Audit Services
During the period KPMG, the Company’s auditor, has performed certain other services in addition to their
statutory duties.
The Board has considered the non-audit services provided during the year by the auditor and in accordance
with written advice provided by resolution of the Board, is satisfied that the provision of those non-audit
services during the year by the auditor, did not compromise the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
all non-audit services were subject to the corporate governance procedures adopted by the Company
and have been reviewed by the Board to ensure they do not impact the integrity and objectivity of
the auditor; and
the non-audit services provided do not undermine the general principles relating to auditor
independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not
involve reviewing or auditing the auditor’s own work, acting in a management or decision making
capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.
Details of the amounts paid to the auditor of the Company, KPMG, and its related practices for audit and non-
audit services provided during the year are set out below.
Audit Services
Auditors of the Company
Audit and review of financial reports – KPMG
Services other than statutory audit
Taxation compliance services – KPMG
31 December
2016
$
31 December
2015
$
45,066
91,827
25,385
11,420
16 Lead Auditor’s Independence Declaration
The lead auditor’s independence declaration is set out on page 22 and forms part of the directors’ report for
the period ended 31 December 2016.
This report is signed in accordance with a resolution of the directors.
_________________
D P Gordon
Managing Director
Perth
24 March 2017
Page 21 of 67
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Centaurus Metals Limited
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year
ended 31 December 2016 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Trevor Hart
Partner
Perth
24 March 2017
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
Annual Report – 31 December 2016
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December 2016
Note
31 December
2016
$
31 December
2015
$
7
19
16
8
11
9
10
12
Profit or Loss
Other income
Exploration expenditure
Impairment of exploration and evaluation
Impairment of other receivables
Employee benefits expense
Share based payments (expense)/ reversal
Occupancy expenses
Listing and share registry fees
Professional fees
Depreciation
Net loss on disposal of property, plant & equipment
Gain/(loss) on investments
Other expenses
Results from operating activities
Finance income
Finance expenses
Net finance income
Loss before income tax
Income tax benefit
Loss for the period
Other Comprehensive Income
Items that may be reclassified subsequently to profit
or loss
Net change in fair value of available-for-sale financial
assets
Exchange differences arising on translation of foreign
operations
Other comprehensive income/(loss) for the period
Total comprehensive loss for the period
142,093
1,345,315
(1,478,842)
(464,646)
(21,160)
(711,354)
(48,176)
(96,638)
(44,740)
(342,550)
(30,688)
-
(69,243)
(195,542)
(3,361,486)
43,076
(492)
42,584
(3,318,902)
758,003
(2,560,899)
(2,283,873)
(101,389)
(879,180)
(1,262,458)
404,415
(170,334)
(56,515)
(280,642)
(93,357)
(93,172)
86,110
(341,889)
(3,726,969)
39,907
(17,160)
22,747
(3,704,222)
3,356
(3,700,866)
-
(35,556)
636,217
(1,123,109)
636,217
(1,924,682)
(1,158,665)
(4,859,531)
Earnings per Share
Basic loss per share
Diluted loss per share
14
14
Cents
Cents
(0.39)
(0.39)
(0.84)
(0.84)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes.
Page 23 of 67
Annual Report – 31 December 2016
Consolidated Statement of Financial Position
As at 31 December 2016
Current assets
Cash and cash equivalents
Other receivables and prepayments
Total current assets
Non-current assets
Other receivables and prepayments
Other investments including derivatives
Property, plant and equipment
Exploration and evaluation assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Employee benefits
Provisions
Total current liabilities
Non-current liabilities
Trade and other payables
Provisions
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Total equity
Note
15(a)
16
16
17
18
19
20
21
22
20
22
21
2016
$
2015
$
1,891,367
269,865
2,161,232
210,080
20,609
425,928
2,701,360
3,357,977
5,519,209
409,767
139,066
-
548,833
136,057
-
83,030
219,087
767,920
4,751,289
541,871
846,359
1,388,230
210,300
89,851
450,367
2,662,349
3,412,867
4,801,097
235,182
126,103
7,776
369,061
-
511,489
46,217
557,706
926,767
3,874,330
109,419,656
(6,561,211)
(98,107,156)
4,751,289
106,666,191
(7,245,604)
(95,546,257)
3,874,330
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying
notes.
Page 24 of 67
Annual Report – 31 December 2016
Consolidated Statement of Changes in Equity
For the year ended 31 December 2016
Balance at 1 January 2016
Loss for the period
Foreign currency translation difference for
foreign operation
Total comprehensive loss for the period
Share-based payment/(reversal) transactions
Issues of ordinary shares
Share issue costs
Total transactions with owners
Balance at 31 December 2016
Issued
Capital
$
Option
Reserve
$
Share-Based
Payments
Reserve
$
Fair Value
Reserve
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
$
Total
Equity
$
106,666,191
-
-
-
-
3,010,089
(256,624)
2,753,465
109,419,656
-
-
-
-
-
-
-
-
-
62,375
-
-
-
48,176
-
-
48,176
110,551
-
-
-
-
-
-
-
-
-
(7,307,979)
-
(95,546,257)
(2,560,899)
3,874,330
(2,560,899)
636,217
636,217
-
636,217
(2,560,899)
(1,924,682)
-
-
-
-
-
-
-
-
48,176
3,010,089
(256,624)
2,801,641
(6,671,762)
(98,107,156)
4,751,289
The amounts recognised directly in equity are disclosed net of tax.
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Page 25 of 67
Annual Report – 31 December 2016
Balance at 1 January 2015
Loss for the period
Net change in fair value of available-for-sale
financial assets
Foreign currency translation difference for
foreign operation
Total comprehensive loss for the period
Share-based payment/(reversal) transactions
Issues of ordinary shares
Share issue costs
Share options exercised
Transfer to accumulated losses
Total transactions with owners
Balance at 31 December 2015
Issued
Capital
$
Option
Reserve
$
Share-Based
Payments
Reserve
$
Fair Value
Reserve
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
$
Total
Equity
$
104,035,437
-
2,966,597
-
2,796,173
-
35,556
-
(6,184,870)
-
(97,141,371)
(3,700,866)
6,507,522
(3,700,866)
-
-
-
-
-
-
-
-
-
(35,556)
-
-
(1,123,109)
-
-
(35,556)
(1,123,109)
(35,556)
(1,123,109)
(3,700,866)
(4,859,531)
-
2,816,704
(186,167)
217
-
-
-
-
-
(2,966,597)
(404,415)
-
-
-
(2,329,383)
2,630,754
(2,966,597)
(2,733,798)
106,666,191
-
62,375
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,295,980
(404,415)
2,816,704
(186,167)
217
-
5,295,980
2,226,339
(7,307,979)
(95,546,257)
3,874,330
The amounts recognised directly in equity are disclosed net of tax.
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Page 26 of 67
Annual Report – 31 December 2016
Consolidated Statement of Cash Flows
For the year ended 31 December 2016
Note
31 December
2016
$
31 December
2015
$
Cash flows from operating activities
Exploration and evaluation expenditure
Payments to suppliers and employees (inclusive of goods
and services tax)
Proceeds from court settlement
Cash receipts from joint venture partners
Interest received
(1,264,846)
(2,321,745)
(979,427)
(1,537,469)
-
98,238
32,565
272,570
-
20,521
Net cash used in operating activities
15(b)
(2,113,470)
(3,566,123)
Cash flows from investing activities
Payments for plant & equipment
Proceeds from grant of future lease of mining rights
Proceeds from sale of investments
Proceeds from sale of plant & equipment
Net cash from investing activities
Cash flows from financing activities
Proceeds from issue of equity securities
Capital raising costs
Net cash from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at 31 December
15(a)
(3,947)
736,782
-
23,660
756,495
2,912,338
(222,826)
2,689,512
1,332,537
541,871
16,959
1,891,367
(17,270)
745,679
208,752
202,882
1,140,043
2,307,698
(186,167)
2,121,531
(304,549)
891,990
(45,570)
541,871
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Page 27 of 67
Annual Report – 31 December 2016
Notes to the Consolidated Financial Statements
For the year ended 31 December 2016
Note 1. Reporting Entity
Centaurus Metals Limited (“the Company”) is a company domiciled in Australia. The Company’s registered
office is at Level 3, 10 Outram Street, West Perth WA 6005. The consolidated financial statements of the
Company as at and for the year ended 31 December 2016 comprise the Company and its subsidiaries
(collectively the “Group” and individually “Group entities”). The Group is a for-profit entity and is primarily
involved in exploration for and evaluation of mineral resources.
Note 2. Basis of Preparation
Statement of Compliance
The consolidated financial statements are general purpose financial statements which have been prepared in
accordance with Australian Accounting Standards (AASBs) (including Australian Accounting Interpretations)
adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The
consolidated financial statements comply with International Financial Reporting Standards (IFRS’s) adopted by
the International Accounting Standards Board (IASB).
The consolidated financial statements were authorised for issue by the Board of Directors on 24 March 2017.
Basis of Measurement
The consolidated financial statements have been prepared on the historical cost basis, except for the following
material items in the statement of financial position:
Derivative financial instruments are measured at fair value;
Available-for-sale financial assets are measured at fair value; and
Share based payments are measured at fair value.
Going Concern
The financial statements for the year ended 31 December 2016 have been prepared on a going concern basis,
which contemplates continuity of normal business activities and the realisation of assets and settlement of
liabilities in the ordinary course of business.
During the year, the Group incurred a loss after tax of $2,560,899 with net cash inflows of $1,332,537. The
Group has a working capital surplus of $1,612,399.
The Group’s strategy is to divest or joint venture its remaining iron ore projects in south-eastern Brazil
following the successful divestment of the Candonga DSO Iron Ore Project during 2015.
The Group plans to continue exploration work on its other gold and copper projects during 2017 to the extent
that funding is available. The Group has the ability to accelerate its work programs or to reduce or defer
expenditure.
The Group will require further funding in order to maintain its tenements and meet planned ongoing costs of
the business. The Group intends to fund further exploration with new equity issues or via the divestment of
the Company’s remaining iron ore assets. The Directors believe that the Group will be able to secure funding
sufficient to meet requirements to continue as a going concern due to the following:
The Group has successfully raised equity capital in the past;
Commodity prices relevant to all of the Company’s projects (gold, copper and iron ore) have improved
over the course of the last 12 months, making raising equity for future exploration more appealing to
investors; and
The Group has an ongoing divestment process in place in respect to its remaining iron ore assets and
is engaged in discussions with a number of interested parties.
Page 28 of 67
Annual Report – 31 December 2016
The form, value and timing of any transaction that may provide funding is yet to be determined and will
depend amongst other things, on capital markets, commodity prices and the outcome of planned exploration
and evaluation activities.
The Directors consider the going concern basis of preparation to be appropriate based on forecast cash flows
for the next 12 months, which includes raising additional funds to meet forecast minimum expenditure
required to maintain tenements and meet ongoing costs. The ability of the Company to achieve its forecast
cash flows, including the raising of additional funds, represents material uncertainty that may cast significant
doubt about whether the Company can continue as a going concern in which case it may not be able to realise
its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the
financial report.
Note 3. Functional and Presentation Currency
These consolidated financial statements are presented in Australian Dollars, which is the Company’s functional
currency. The functional currency of the Brazilian subsidiaries is the Brazilian Real.
Note 4. Use of Judgements and Estimates
In preparing these consolidated financial statements, management has made judgements, estimates and
assumptions that affect the application of the Group’s accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimates are revised and in any future periods affected.
(a) Judgements
Information about judgements made in applying accounting policies that have the most significant effects on
the amounts recognised in the consolidated financial statements is included below and also in the following
notes:
Note 16 - Other Receivables and Prepayments;
Note 19 - Exploration and Evaluation Assets. The application of the Group’s accounting policy for
exploration and evaluation expenditure requires judgement to determine whether future economic
benefits are likely, from either future exploitation or sale, or whether activities have not reached a
stage that permits a reasonable assessment of the existence of reserves; and
Note 25 - Financial Instruments – Fair Values and Risk Management.
(b) Assumptions and Estimation Uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a
material adjustment in the year ending 31 December 2016 is included in Note 19 – Exploration and Evaluation
Assets. In addition to applying judgement to determine whether future economic benefits are likely to arise
from the Group’s Exploration and Evaluation assets or whether activities have not reached a stage that permits
a reasonable assessment of the existence of Reserves, the Group has to apply a number of estimates and
assumptions. The Group is required to make estimates and assumptions as to future events and
circumstances, in particular, whether successful development and commercial exploitation, or alternatively
sale, of the respective areas of interest will be achieved. Critical to this assessment are estimates and
assumptions as to Ore Reserves, the timing of expected cash flows, exchange rates, commodity prices and
future capital requirements. Changes in these estimates and assumptions as new information about the
recoverability of Ore Reserves becomes available, may impact the assessment of the recoverable amount of
exploration and evaluation assets. If, after the expenditure is capitalised, information becomes available
suggesting that the recovery of expenditure is unlikely, the relevant capitalised amount is written off to profit
or loss in the period when that information becomes available.
(c) Measurement of Fair Values
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both
financial and non-financial assets and liabilities.
Page 29 of 67
Annual Report – 31 December 2016
Fair values have been determined for measurement and/or disclosure purposes based on the methods
described below. When applicable, further information about the assumptions made in determining fair
values is disclosed in the notes specific to that asset or liability.
(i) Derivatives
The fair value of listed options is determined by reference to their quoted closing bid price at the reporting
date. The fair value of unlisted options is determined using a valuation model.
(ii) Trade and Other Receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted
at the market rate of interest at the reporting date.
(iii) Share-based Payment Transactions
The fair value of the employee share options are estimated using the applicable valuation methodology.
Measurement inputs include share price on measurement date, exercise price of the instrument, expected
volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available
information), weighted average expected life of the instruments (based on historical experience and general
option holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds).
Service and performance conditions attached to vesting are not taken into account in determining fair value.
Where the service period commences prior to grant date the fair value is provisionally calculated and
subsequently revised upon grant date.
Note 5. Significant Accounting Policies
The Group has consistently applied the following accounting policies to all periods presented in these
consolidated financial statements.
(a) Basis of Consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group 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. The financial statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed when necessary to align them with policies adopted
by the Group.
(ii) Transactions Eliminated on Consolidation
Inter-Group balances and transactions and any unrealised income and expenses arising from intra-Group
transactions, are eliminated in preparing the consolidated financial statements.
(b) Foreign Currency
(i) Foreign Currency Transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at
exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional currency
at the foreign exchange rate at the reporting date. The foreign currency gain or loss on monetary items is the
difference between amortised cost in the functional currency at the beginning of the period, adjusted for
effective interest and payments during the period, and the amortised cost in foreign currency translated at the
exchange rate at the end of the period. Non-monetary assets and liabilities denominated in foreign currencies
that are measured at fair value are retranslated to the functional currency at the exchange rate at the date
that the fair value was determined.
Page 30 of 67
Annual Report – 31 December 2016
Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences
arising on the retranslation of available-for-sale equity instruments, a financial liability designated as a hedge
of the net investment in a foreign operation, or qualifying cash flow hedges, which are recognised in other
comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rate at the date of the transaction.
(ii) Foreign Operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
acquisition, are translated to Australian dollars at exchange rates at reporting date. The income and expenses
of foreign operations are translated to Australian dollars at average exchange rates for the period.
Foreign currency differences are recognised in other comprehensive income and presented in the foreign
currency translation reserve (translation reserve, or FCTR) within equity. When a foreign operation is disposed
of, in part or in full, the relevant amount in the FCTR is transferred to profit or loss as part of the profit or loss
on disposal.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned
nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are
considered to form part of a net investment in a foreign operation and are recognised in other comprehensive
income and are presented within equity in the FCTR.
(c) Financial Instruments
The Group classifies non-derivative financial assets into the following categories at fair value through profit
and loss, held-to-maturity financials assets, loans and receivables and available-for-sale financial assets.
The Group classifies non-derivative financial liabilities into the other financial liabilities category.
(i) Non- derivative Financial Assets and Financial Liabilities – Recognition and Derecognition
The Group initially recognises loans, receivables and deposits on the date when they are originated. All other
financial assets and financial liabilities are recognised initially on the trade date.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire,
or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of ownership of the financial asset are transferred, or it neither transfers
nor retains substantially all of the risks and rewards of ownership and does not retain control over the
transferred asset. Any interest in such derecognised financial assets that is created or retained by the Group is
recognised as a separate asset or liability.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or
expire.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position
when and only when, the Group has a legal right to offset the amounts and intends either to settle on a net
basis or to realise the asset and settle the liability simultaneously.
The Group has the following non-derivative financial assets: receivables, cash and cash equivalents and
available-for-sale financial assets.
Receivables
Receivables are financial assets with fixed or determinable payments that are not quoted in an active market.
Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to
initial recognition, receivables are measured at amortised cost using the effective interest method, less any
impairment losses.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or
less.
Page 31 of 67
Annual Report – 31 December 2016
(ii) Non derivative Financial Liabilities – Measurement
Non-derivative financial liabilities are initially recognised at fair value less any directly attributable transaction
costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective
interest method.
(iii) Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares
or share options are recognised as a deduction from equity, net of any tax effect.
(iv) Derivative Financial Instruments
Derivatives are recognised initially at fair value and any directly attributable transactions costs are recognised
in profit and loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value and
changes therein are recognised immediately in profit or loss.
(d) Property, Plant and Equipment
(i) Recognition and Measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and any
accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of
the asset.
If significant parts of an item of property, plant and equipment have different useful lives, they are accounted
for as separate items (major components) of property, plant and equipment.
Any gains or loss on disposal of an item of property, plant and equipment are recognised in profit or loss.
When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained
earnings.
(ii) Subsequent Expenditure
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with
the expenditure will flow to the Group. The costs of the day-to-day servicing of property, plant and equipment
are recognised in profit and loss as incurred.
(iii) Depreciation
Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated
residual values using the straight-line method over their estimated useful lives and is generally recognised in
profit or loss. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is
reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated.
The estimated useful lives of property, plant and equipment are 3 to 15 years.
Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if
appropriate.
(e) Exploration and Evaluation Expenditure
Exploration and evaluation costs are expensed in the year they are incurred. Acquisition costs are carried
forward where right of tenure of the area of interest is current and they are expected to be recouped through
sale or successful development and exploitation of the area of interest, or, where exploration and evaluation
activities in the area of interest have not reached a stage that permits reasonable assessment of the existence
of economically recoverable reserves.
Where an area of interest is abandoned, or the directors decide that it is not commercial, any accumulated
acquisition costs in respect of that area are written off in the financial period the decision is made. Each area
of interest is also reviewed at the end of each accounting period and accumulated costs written off to the
extent that they will not be recoverable in the future.
Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase
until production commences.
Page 32 of 67
Annual Report – 31 December 2016
Exploration and evaluation assets are transferred to Development Assets once technical feasibility and
commercial viability of an area of interest is demonstrable. Exploration and evaluation assets are assessed for
impairment and any impairment loss is recognised prior to being reclassified.
The carrying amount of the exploration and evaluation assets is dependent on successful development and
commercial exploitation, or alternatively, sale of the respective area of interest.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical
feasibility and commercial viability or facts and circumstances suggest that the carrying amount exceeds the
recoverable amount.
Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances
exist:
The term of exploration license in the specific area of interest has expired during the reporting period
or will expire in the near future and is not expected to be renewed;
Substantive expenditures on further exploration for and evaluation of mineral resources in the
specific area are not budgeted nor planned;
Exploration for and evaluation of mineral resources in the specific area has not led to the discovery of
commercially viable quantities of mineral resources and the decision was made to discontinue such
activities in the specified area; or
Sufficient data exists to indicate that although a development in the specific area is likely to proceed,
the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from
successful development or by sale.
Where a potential impairment is indicated, an assessment is performed for each cash-generating unit which is
no larger than the area of interest. The Group performs impairment testing in accordance with Accounting
Policy 5(g)(ii).
Farm-out Arrangements
Arrangements whereby an external party earns an ownership interest in an exploration or development
property via the sole-funding of a specified exploration, evaluation or development programme or by injection
of funds to be utilised for such a programme will be accounted so that the Group recognises its share of assets,
liabilities and equity associated with the property. Any gain or loss upon initial recognition of these items will
be recognised in the statement of profit or loss and other comprehensive income.
(f) Leases
(i) Determining Whether an Arrangement Contains a Lease
At inception of an arrangement, the Group determines whether the arrangement is or contains a lease.
(ii) Operating Lease Payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of
the lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term
of the lease.
(g) Impairment
(i) Non- derivative Financial Assets
Financial assets not classified at fair value through profit or loss are assessed at each reporting date to
determine whether there is objective evidence of impairment. A financial asset is impaired if objective
evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss
event had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.
For Financial Assets measured at amortised cost the Group considers evidence of impairment for receivables
at both a specific asset and collective level. All individually significant receivables are assessed for specific
impairment. All individually significant receivables found not to be specifically impaired are then collectively
assessed for any impairment that has been incurred but not yet identified.
Page 33 of 67
Annual Report – 31 December 2016
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference
between its carrying amount and the present value of the estimated future cash flows discounted at the
asset’s original effective interest rate. Losses are recognised in profit or loss and reflected in an allowance
account against receivables. Interest on the impaired asset continues to be recognised through the unwinding
of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in
impairment loss is reversed through profit or loss.
(ii) Non- financial Assets
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists, then
the asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value
less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually
are grouped together into the smallest group of assets that generates cash inflows from continuing use that
are largely independent of the cash inflows of other assets or groups of assets. The group of assets is referred
to as the Cash Generating Unit or CGU.
The Group’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate
asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset
belongs.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated
recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in
respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, and
then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis.
In respect of assets, other than goodwill, impairment losses recognised in prior periods are assessed at each
reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had
been recognised.
(h) Employee Benefits
(i) Defined Contribution Plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions
into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for
contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss in
the periods during which services are rendered by employees.
(ii) Other Long-term Employee Benefits
The Group’s net obligation in respect of long-term employee benefits other than defined benefit plans is the
amount of future benefit that employees have earned in return for their service in the current and prior
periods plus related on-costs; that benefit is discounted to determine its present value, and the fair value of
any related assets is deducted.
(iii) Termination Benefits
Termination benefits are recognised as an expense when the Group is demonstrably committed, without
realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal
retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary
redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Group has
made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of
acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting
period, then they are discounted to their present value.
Page 34 of 67
Annual Report – 31 December 2016
(iv) Short-term Benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the
amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a
result of past service provided by the employee and the obligation can be estimated reliably.
(v) Share-based Payment Transactions
The fair value of share-based payment awards granted to employees is recognised as an expense at grant date
with a corresponding increase in equity, over the period that employees become entitled to the awards. The
amount recognised as an expense is adjusted to reflect the number of awards for which the related service
and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an
expense is based on the number of awards that meet the related service and non-market performance
conditions at the vesting date. For share-based payment awards with non-market conditions, the grant date
fair value of the share-based payment is measured to reflect such conditions and there is no true-up for
differences between expected and actual outcomes.
Share-based payment arrangements in which the Group receives goods or services as consideration for its own
equity instruments are accounted for as equity-settled share-based payment transactions, regardless of how
the equity instruments are obtained by the Group.
When the Company grants options over its shares to employees of subsidiaries, the fair value at grant date is
recognised as an increase in the investments in subsidiaries, with a corresponding increase in equity over the
vesting period of the grant.
(i) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle
the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the liability. The
unwinding of the discount is recognised as a finance cost.
(j) Revenue
Revenue is measured at the fair value of the consideration received or receivable, net of returns, trade
allowances and duties and taxes paid. Interest revenue is recognised using the effective interest method.
Revenue is recognised when persuasive evidence exists, usually in the form of an executed sales agreement,
that the significant risks and rewards of ownership have been transferred to the buyer, recovery of the
consideration is probable, the associated costs and possible return of the sold item can be estimated reliably,
there is no continuing management involvement with the sold item, and the amount of revenue can be
measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably,
then the discount is recognised as a reduction of revenue as the sales are recognised.
(k) Finance Income and Finance Costs
Finance income comprises interest income on funds invested (including available-for-sale financial assets),
dividend income, gains on the disposal of available-for-sale financial assets, changes in the fair value of
financial assets at fair value through profit or loss, and gains on hedging instruments that are recognised in
profit or loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method.
Dividend income is recognised in profit or loss on the date that the Group’s right to receive payment is
established, which in the case of quoted securities is the ex-dividend date.
Finance costs comprise interest expense on borrowings, changes in the fair value of financial assets at fair
value through profit or loss and losses on hedging instruments that are recognised in profit or loss. Borrowing
costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are
recognised in profit or loss using the effective interest method.
Foreign currency gains and losses are reported on a net basis.
Page 35 of 67
Annual Report – 31 December 2016
(l)
Income Tax
Income tax expense comprises current and deferred tax. Current and deferred tax is recognised in profit or
loss except to the extent that it relates to a business combination, or items recognised directly in equity or in
other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates
enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of
previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred
tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets
and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to
the extent that it is probable that future taxable profits will be available against which they can be utilised.
Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer
probable that the related tax benefit will be realised.
(m) Goods and Services Tax and Equivalent Indirect Taxes
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST) and
equivalent indirect taxes, except where the amount of tax incurred is not recoverable from the taxation
authority. In these circumstances, the tax is recognised as part of the cost of acquisition of the asset or as part
of the expense. Receivables and payables are stated with the amount of tax included. The net amount of tax
recoverable from, or payable to, the taxation authority is included as a current asset or liability in the balance
sheet.
Cash flows are included in the statement of cash flows on a gross basis. The tax components of cash flows
arising from investing and financing activities which are recoverable from, or payable to, the tax authority are
classified as operating cash flows.
(n) Earnings per Share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the
profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares
outstanding for the effects of all dilutive potential ordinary shares, which comprise listed options and share
options granted to employees.
(o) Segment Reporting
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the
Group’s other components. All operating segments’ operating results are regularly reviewed by the Group’s
Managing Director (‘MD’) to make decisions about resources to be allocated to the segment and assess its
performance, and for which discrete financial information is available.
Segment results that are reported to the MD include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis. Unallocated items comprise minimal, not material corporate
assets (primarily the Group’s headquarters), head office expenses, and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and
equipment, and intangible assets other than goodwill.
Page 36 of 67
Annual Report – 31 December 2016
(p) Changes in accounting policies
The Group has adopted the following amendment to standards, including any consequential amendments to
other standards, with a date of initial application of 1 January 2016. AASB 2014-3 Amendments to Australian
Accounting Standards – Accounting for Acquisitions of Interests in Joint Operations , 2014-4 Clarification of
Acceptable Methods of Depreciation and Amortisation and 2014-9 Amendments to Australian Accounting
Standards – Equity Method in Separate Financial Statements. The adoption of these amendments has had no
material impact on the Group’s financial statements.
(q) New Standards and Interpretations Not Yet Adopted
The following standards, amendments to standards and interpretations have been identified as those which
may impact the entity in the period of initial application. They may be available for early adoption at 31
December 2016, but have not been applied in preparing this financial report.
AASB 15 Revenue from Contracts with Customers
AASB 15 establishes a comprehensive framework for determining whether, how much, and when revenue is
recognised. It replaces existing revenue recognition guidance, including IAS 18 Revenue and IAS 11
Construction Contracts. AASB 15 is effective for annual reporting periods beginning on or after 1 January 2018,
with early adoption permitted. The Group has not yet determined the extent of the impact of this standard.
AASB 16 Leases
AASB 16 removes the classification of leases as either operating or financing leases – for the lessee –
effectively treating all leases as financial leases. Short term leases (less than 12 months) and leases of low
value assets are exempt from the lease accounting requirements. Furthermore, there are changes in
accounting over the life of the lease as a front-loaded pattern of expense will be recognised for most leases,
even when a constant annual rental is paid. Lessor accounting remains similar to current practice. AASB 16 is
effective for periods commencing 1 July 2019, with early adoption permitted. The Group has not yet
determined the extent of the impact of this standard.
AASB 9 Financial Instruments
AASB 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and
Measurement. AASB 9 includes revised guidance on the classification and measurement of financial
instruments, a new expected credit loss model for calculating impairment on financial assets, and new general
hedge accounting requirements. It also carries forward the guidance on recognition and de-recognition of
financial instruments from IAS 39. AASB 9 is effective for annual reporting periods beginning on or after 1
January 2018, with early adoption permitted. The Group has not yet determined the extent of the impact of
this standard.
Note 6. Operating Segments
The Group operates in the mineral exploration industry. For management purposes the Group is organised
into one main operating segment which involves the exploration of minerals. All of the Group’s activities are
interrelated and financial information is reported to the Managing Director (Chief Operating Decision Maker)
as a single segment. Accordingly, all significant operating decisions are based upon an analysis on the Group as
one segment. The financial results and financial position from this segment are largely equivalent to the
financial statements of the Group as a whole.
Geographical Segment Information
Brazil
Australia
Total
2016
Non-current
Assets
$
3,331,346
26,631
3,357,977
2015
Non-current
Assets
$
3,307,533
105,334
3,412,867
The 2015 comparative figures have been reclassified to be consistent with 2016.
Page 37 of 67
Annual Report – 31 December 2016
Note 7. Other Income
Cost reimbursement from Joint Venture partner
Profit on sale of property plant and equipment
Grant of future lease of mineral rights (net of land access payments)
Gain on sale of investments
Total
31 December
2016
$
129,914
12,179
-
-
142,093
31 December
2015
$
-
-
1,340,355
4,960
1,345,315
The grant of future lease of mineral rights in the prior year relates to the lease of mineral rights over the
Candonga project of $1,467,500. The proceeds have been offset by land access payments totalling $127,145
that have been written off. As at 31 December 2015, R$2,000,000 (~A$745,500) of the sale proceeds had been
received with a further R$2,000,000 (~A$722,000) received during the 2016 year.
Note 8. Employee Benefits Expense
Salaries, fees and other benefits
Superannuation
Recognised in exploration expenditure expense
Total
Note 9. Depreciation
Depreciation
Recognised in exploration expenditure expense
Total
Note 10. Finance Income and Expense
Finance income
Interest income on bank deposits
Finance expense
Net foreign exchange loss
Interest expense
Net finance income recognised in profit or loss
Note 11. Share-based Payments
Employee Share Option Plan
31 December
2016
$
1,100,494
44,697
(433,837)
711,354
31 December
2015
$
2,283,438
189,945
(1,210,925)
1,262,458
31 December
2016
$
52,659
(21,971)
30,688
31 December
2015
$
125,068
(31,711)
93,357
31 December
2016
$
31 December
2015
$
43,076
43,076
(451)
(41)
(492)
42,584
39,907
39,907
(17,030)
(130)
(17,160)
22,747
The Employee Share Option Plan (“ESOP”) was approved by shareholders at the 2016 Annual General Meeting.
All employees (including directors) are eligible to participate in the ESOP. Options granted carry no dividend or
voting rights. When exercisable, each option is converted into one ordinary share of the Company with full
dividend and voting rights. During the reporting period there were 22,500,000 options issued to Employees
and a Consultant under the ESOP (2015: nil).
Page 38 of 67
Annual Report – 31 December 2016
Reconciliation of Outstanding Share Options
The number and weighted average exercise prices of share options issued under the employee share option
plan are as follows:
Outstanding at start of period
Forfeited during the period
Expired during the period
Issued during the period
Outstanding at balance date
Exercisable at balance date
Weighted
Average
Exercise Price
2016
$0.1250
-
-
$0.0082
$0.0177
$0.0262
Number of
Options
2016
2,000,000
-
-
22,500,000
24,500,000
6,500,000
Weighted
Average
Exercise Price
2015
$0.248
$0.125
$0.818
-
$0.125
$0.125
Number of
Options
2015
3,650,000
(1,000,000)
(650,000)
-
2,000,000
500,000
The options outstanding at 31 December 2016 have exercise prices of either $0.082 or $0.125 (2015: $0.125)
and the weighted average remaining contractual life is 2.5 years (2015: 2.67 years).
There were no ESOP options exercised during the year (2015: nil). There were 22,500,000 options issued
during the year (2015: Nil). Details of the ESOP options issued during the year are as follows.
Grant Date
Number of Options
Vesting Conditions
Option Term
Directors
10/06/16
10/06/16
10/06/16
Sub total
Employees & Consultants
10/06/16
10/06/16
10/06/16
Sub total
Total
4,000,000
6,250,000
6,250,000
16,500,000
1,500,000
2,250,000
2,250,000
6,000,000
22,500,000
See note 1
See note 2
See note 3
24 months
36 months
48 months
See note 1
See note 2
See note 3
24 months
36 months
48 months
Note 1: Options vest immediately
Note 2: Options vest 12 months from the date of issue subject to continued employment.
Note 3: Options vest 24 months from the date of issue subject to continued employment.
Inputs for Measurement of Grant Date Fair Values
The model inputs for options issued in 2016 include:
Grant Date
Expiry Date
Exercise
Price
Life of
option
Share
price at
grant date
10/06/16
10/06/16
10/06/16
10/06/18
10/06/19
10/06/20
$0.0082
$0.0082
$0.0082
2 years
3 years
4 years
$0.005
$0.005
$0.005
Expenses Arising From Share based Payment Transactions
Share options
Performance rights
Total expense/(reversal) recognised as share based payment
Expected
share
price
volatility
100%
100%
100%
Risk-free
interest
rate
Fair Value
at grant
date
1.67%
1.75%
1.82%
$0.0020
$0.0026
$0.0031
2016
$
48,176
-
48,176
2015
$
(63,604)
(340,811)
(404,415)
Page 39 of 67
Annual Report – 31 December 2016
During the year ended 31 December 2015 a number of options and performance rights were forfeited due to
failure to meet vesting conditions. Share based payment expenses in relation to the options and performance
rights were reversed in 2015.
Note 12. Income Tax
(a) Numerical Reconciliation of Income Tax Expense to Prima Facie Tax Payable
Loss from continuing operations before income tax expense
Tax at the Australian tax rate of 30%
Tax effect of amounts which are not deductible/(taxable)
calculating taxable income:
Overseas project generation and review costs
Share-based payments
Sundry items
in
Effect of tax rates in foreign jurisdictions
Under provision from prior year
Utilisation of carry forward losses - Note 12 (a)(i)
Deferred tax assets not recognised
Income tax benefit, being deferred tax
2016
$
2015
$
(3,318,902)
(995,671)
(3,704,222)
(1,111,267)
89,746
14,453
148,906
(742,566)
(308,391)
260,833
758,003
790,124
758,003
128,168
(121,325)
5,233
(1,099,191)
(77,031)
(36,175)
-
1,215,753
3,356
(i)
During the year the Company was able to clarify its position in relation to a potential employment tax liability in Brazil which was
previously recorded as a Provision. The recent gazettal of an administrative tax relief program in Brazil has resulted in the Company
forming a more definitive view of its position in respect of this potential liability which in turn has seen the Company able to utilise
some of its existing tax losses to offset the assessed liability. This has resulted in the Group recognising an income tax benefit
through the Consolidated Statement of Profit or Loss.
(b) Tax Losses
Tax losses
Potential tax benefit (between 30-34%)
2016
$
62,657,152
19,769,836
2015
$
52,094,058
16,298,234
The tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in
respect of remaining tax losses because it is not probable that future taxable profit will be available against
which the Group can utilise the benefit.
(c) Deferred Tax Assets and Liabilities
The following deferred tax balances have not been recognised:
Deferred Tax Assets
Exploration expenditure
Accrued expenses/provisions
Transaction costs relating to issue of capital
Tax losses carried forward (net of tax losses utilised) – Note 12 (a)(i)
2016
$
2015
$
8,773,191
3,571,814
150,991
19,769,836
32,265,832
8,771,844
6,302,785
122,691
16,298,234
31,495,554
Page 40 of 67
Annual Report – 31 December 2016
(c)
Deferred Tax Assets and Liabilities (cont)
The tax benefits of the above deferred tax assets will only be obtained if:
a) The Company derives future assessable income of a nature and of an amount sufficient to enable the
benefit to be utilized;
b) The Company continues to comply with the conditions for the deductibility imposed by law; and
c) No changes in income tax legislation adversely affect the Company in utilising the benefits.
Deferred Tax Liability
Accrued Interest income
Available for sale financial assets
2016
$
2015
$
926
6,183
7,109
-
26,955
26,955
The above deferred tax liabilities have not been recognised as they have given rise to the carry forward
revenue losses for which the deferred tax asset has not been recognised.
Income Tax Recognised Directly in Equity
Recovery of net tax assets is not considered probable. Accordingly, net deferred tax credited directly to other
comprehensive income for changes in the fair value of available-for-sale financial assets is nil: (2015: $nil).
Note 13. Dividends
There were no dividends paid or declared during the period (2015: nil).
Note 14. Earnings/(Loss) Per Share
Basic Loss per Share
The calculation of basic and diluted earnings per share at 31 December 2016 was based on the loss
attributable to ordinary shareholders of $2,560,899 (2015: $3,700,866) and a weighted average number of
ordinary shares outstanding of 658,312,429 (2015: 441,026,957), calculated as follows:
Loss Attributable to Ordinary Shareholders
Loss attributable to the shareholders
Weighted Average Number of Ordinary Shares
Issued ordinary shares at beginning of the period
Effect of shares issued
Weighted average number of ordinary shares at the end of the period
Diluted Earnings per Share
2016
$
2015
$
(2,560,899)
(3,700,866)
2016
Number
521,463,429
136,849,000
658,312,429
2015
Number
239,987,919
201,039,038
441,026,957
Potential ordinary shares were not considered to be dilutive as the Group made a loss for the year ended 31
December 2016 and the exercise of potential shares would not increase that loss.
Page 41 of 67
Annual Report – 31 December 2016
Note 15 (a). Cash and Cash Equivalents
Cash at bank and on hand
Deposits - short term
Deposits
2016
$
105,816
1,785,551
1,891,367
2015
$
478,291
63,580
541,871
The deposits are bearing floating and fixed interest rates between 2.35% and 13.2% (2015: between 2.0% and
13.97%).
Note 15 (b). Reconciliation of Cash Flows from Operating Activities
Loss for the period
Adjustments for:
Depreciation
Non-cash employee benefits expense/(reversal) – share based
payments
Impairment losses
Exploration and evaluation assets
Available-for-sale financial assets
Other receivables
Shares issued in lieu of remuneration
Change in fair value of derivative instruments
Gain on grant of future lease of mineral rights
Gain on sale of investments
(Profit)/loss on sale of plant and equipment
Income tax expense/(benefit)
Operating loss before changes in working capital and provisions
Change in other receivables
Change in trade creditors and provisions
Net cash used in operating activities
2016
$
2015
$
(2,560,899)
(3,700,866)
52,659
125,068
48,176
(404,415)
464,646
-
21,160
46,085
69,243
-
-
(12,179)
(758,003)
(2,629,112)
(114,506)
630,148
(2,113,470)
101,389
(35,556)
879,180
-
(50,554)
(1,340,355)
(4,960)
93,172
(3,356)
(4,341,251)
893,055
(117,927)
(3,566,123)
Page 42 of 67
Annual Report – 31 December 2016
Note 16. Other Receivables and Prepayments
Current
Receivable from grant of future lease of mineral rights
Other Receivables
Security deposits
Prepayments
Non – Current
Prepayments
Other Receivables
Provision for impairment
2016
$
2015
$
-
176,936
30,133
62,796
269,865
210,080
964,934
(964,934)
210,080
691,000
77,012
30,133
48,214
846,359
210,300
764,762
(764,762)
210,300
Non-current other receivables include Brazilian federal VAT (“PIS-Cofins”) levied on the Groups purchases.
Recoverability of PIS-Cofins assets is dependent upon the Group generating a federal company tax liability,
which may be offset against the Groups PIS-Cofins assets if the Group elects to do so. As at balance date
taxable profits in the ordinary course of business are not considered probable though one off taxable profits
may be generated on specific transactions. As at 31 December 2016 no such transactions have been entered
into. As such the Group has determined to fully impair the value of its PIS-Cofins tax asset. An impairment
expense of $21,160 was recognised in profit and loss in 2016 (2015: $879,180). Information about the Group’s
exposure to credit and market risk and impairment losses for other receivables is included in Note 25(c).
Note 17. Other Investments, Including Derivatives
Derivative instruments (1)
2016
$
20,609
20,609
2015
$
89,851
89,851
(1) Consists of unlisted options in ASX listed entities. The fair value of the unlisted options is determined
using the Black-Scholes methodology taking into account the terms and conditions upon which the
instruments were granted.
Page 43 of 67
Annual Report – 31 December 2016
Note 18. Property, Plant and Equipment
Cost
Balance at 1 January 2016
Additions
Disposals
Effect of movements in exchange rates
Balance at 31 December 2016
Balance at 1 January 2015
Additions
Disposals
Effect of movements in exchange rates
Balance at 31 December 2015
Depreciation
Balance at 1 January 2016
Depreciation for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2016
Balance at 1 January 2015
Depreciation for the year
Disposals
Effect of movements in exchange rates
Balance at 31 December 2015
Carrying amounts
At 1 January 2016
At 31 December 2016
At 1 January 2015
At 31 December 2015
Plant &
Equipment
$
Land
$
Total
$
881,102
4,386
(166,845)
84,372
803,015
1,587,609
9,451
(521,940)
(194,018)
881,102
674,747
52,659
(103,051)
53,383
677,738
839,104
125,068
(193,703)
(95,722)
674,747
206,355
125,277
748,505
206,355
244,012
-
-
56,639
300,651
322,101
-
-
(78,089)
244,012
-
-
-
-
-
-
-
-
-
-
244,012
300,651
322,101
244,012
1,125,114
4,386
(166,845)
141,011
1,103,666
1,909,710
9,451
(521,940)
(272,107)
1,125,114
674,747
52,659
(103,051)
53,383
677,738
839,104
125,068
(193,703)
(95,722)
674,747
450,367
425,928
1,070,606
450,367
Page 44 of 67
Annual Report – 31 December 2016
Note 19. Exploration and Evaluation Assets
Opening net book value
Additions
Impairment of capitalised exploration expenditure
Effect of movements in exchange rate
2016
$
2,662,349
-
(464,646)
503,657
2,701,360
2015
$
3,073,386
418,513
(101,389)
(728,161)
2,662,349
During the reporting period the Group recognised an impairment loss on the carrying value of its Itambe and
Mombuca projects. The projects were assessed for impairment following results of the drilling program during
the year. Whilst the Group retain tenure to these areas, no further evaluation work is planned and accordingly
the recoverable amounts for AASB 6 has been assessed as nil.
The ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on
successful development and commercial exploitation or, alternatively, sale of the respective project areas.
Note 20. Trade and Other Payables
Current
Trade and other creditors
Accrued expenses
Non Current
Trade and other creditors
Note 21. Employee Benefits
Current
Liability for annual leave
Non-Current
Liability for long service leave
Note 22. Provisions
Balance at beginning of the period
Provisions made during the year
Provisions used during the year
Provisions transferred to payables
Effect of movements in exchange rate
Balance at end of the period
Current
Non-Current
2016
$
2015
$
273,457
136,310
409,767
136,057
545,824
218,484
16,698
235,182
-
235,182
2016
$
2015
$
139,066
126,103
83,030
46,217
2016
$
519,265
-
(7,776)
(511,489)
-
-
-
-
-
2015
$
450,554
205,245
-
-
(136,534)
519,265
7,776
511,489
519,265
Page 45 of 67
Annual Report – 31 December 2016
Note 23. Capital and Reserves
On issue at beginning of period
Issue of ordinary shares for share placements(1)
Issue of ordinary shares for entitlements issue at $0.005 per share
Issue of ordinary shares for share placement fee at $0.005 per share
Issue of ordinary shares in lieu of remuneration at various prices
Issue of ordinary shares for entitlements issue at $0.025 per share
Issue of ordinary shares on listed option conversion at $0.05 per
share
Issue of ordinary shares for share purchase plan at $0.0059 per share
Issue of ordinary shares for mineral asset acquisition
On issue at the end of the period – Fully paid
2016
Number of
Shares
521,463,429
180,000,000
402,467,414
10,000,000
9,315,594
-
-
2015
Number of
Shares
239,987,919
129,298,305
-
-
12,803,542
7,715,251
4,333
-
-
1,123,246,437
85,152,603
46,501,476
521,463,429
(1) During the reporting period the Company undertook two share placements both at $0.005 per share for the issue of a
total of 180,000,000 shares. During the year ended 31 December 2015 three share placements issuing 44,200,000 shares at
$0.025 per share, 51,200,000 shares at $0.006 per share and 33,898,305 shares at $0.0059 per share we undertaken.
Ordinary Shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company
in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of
ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share
is entitled to one vote.
Employee Share Options and Performance Rights
Information relating to the Employee Share Option Plan and Performance Share Plan, including details of
options and rights issued, exercised or lapsed during the financial year and outstanding at the end of the
financial year are set out in Note 11.
Listed Options
In addition to the unissued shares under options disclosed in Note 11, the Company issued 226,233,707 listed
options (ASX: CTMOA) (2015: 20,304,999 – ASX: CTMO) with an exercise price of $0.01 (2015: $0.05) and an
expiry date of 30 April 2018 (2015: 31 March 2017). As at 31 December 2016, 246,534,373 listed options
remain unexercised.
Weighted
average
exercise
price
$0.05
$0.01
-
$0.013
2016
Number of
Listed
Options
20,300,666
226,233,707
-
246,534,373
Weighted
average
exercise
price
-
$0.05
$0.05
$0.05
2015
Number of
Listed
Options
-
20,304,999
(4,333)
20,300,666
On issue at beginning of period
Options granted
Options exercised
On issue at the end of the period
Nature and purpose of reserves
Share-based Payments Reserve
The share-based payments reserve is used to recognise the fair value of options and performance rights issued
but not exercised. During the year ended 31 December 2015 the expired portion of this reserve was
transferred to accumulated losses.
Page 46 of 67
Annual Report – 31 December 2016
Translation Reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations, as well as from the translation of liabilities that hedge the Group’s net
investment in a foreign subsidiary.
Note 24. Related Parties
(a) Key Management Personnel
(i) Key management personnel compensation is comprised of the following:
Short term employee-benefits
Shares issued in lieu of remuneration
Long term employee benefits
Post–employment benefits
Share-based payments expense/(reversals)
31 December
2016
$
524,003
28,000
7,326
19,308
31,293
609,930
31 December
2015
$
664,338
37,500
(7,043)
29,919
(196,726)
527,988
Individual Directors and Executives Compensation Disclosures
Information regarding individual directors’ and executives’ compensation and equity instruments disclosures
as required by Corporations Regulation 2M.3.03 is provided in the Remuneration Report section of the
Directors’ Report.
Key Management Personnel and Director Transactions
One of the key management personnel, or their related parties, hold positions in other entities that result in
them having control or significant influence over the financial or operating policies of these entities.
One of these entities transacted with the Group in the reporting period. The terms and conditions of the
transactions with key management personnel and their related parties were no more favourable than those
available, or which might reasonably be expected to be available, on similar transactions to non-key
management personnel related entities on an arm’s length basis.
The aggregate value of transactions and outstanding balances relating to key management personnel and
entities over which they have control or significant influence were as follows:
Key Management Person
Mr D M Murcia(1)
Total and current liabilities
Transaction
Legal fees
Transaction Value
2016
2015
$
$
77,917
66,268
Balance Outstanding As At
31 Dec 2016
31 Dec 2015
$
$
17,174
1,250
17,174
1,250
(1) Payable to MPH Lawyers, a firm in which Mr Murcia is a partner
(b) Transactions With Related Parties
Transactions between the parent company and its subsidiaries which are related parties of that company are
eliminated on consolidation and are not disclosed in this note.
Page 47 of 67
Annual Report – 31 December 2016
Note 25. Financial Instruments – Fair Values and Risk Management
(a) Accounting Classifications and Fair Values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include
fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.
31 December 2016
Financial assets measured at fair
value
Derivative instruments (i)
Financial assets not measured at
fair value
Trade and other receivables (ii)
Cash and cash equivalents
Financial liabilities not measured
at fair value
Trade and other payables
Carrying amount
Fair Value
Note
Held for
Trading
Loans and
Receivables
Available-
for-sale
Other
Financial
Liabilities
Total
Level 1
Level 2
Level 3
Total
17
16
15
20
20,609
20,609
-
-
-
-
-
-
-
207,069
1,891,367
2,098,436
-
-
-
-
-
-
-
-
-
-
-
-
-
-
20,609
20,609
-
-
20,609
20,609
-
-
20,609
20,609
207,069
1,891,367
2,098,436
545,824
545,824
545,824
545,824
There have been no transfers of assets from Levels during the year ended 31 December 2016.
(i)
(ii)
Valuation technique used in measuring Level 2 fair values is Black Scholes Option Pricing Model.
The carrying amount of all receivables is considered to approximate fair value.
Page 48 of 67
Annual Report – 31 December 2016
31 December 2015
Financial assets measured at
fair value
Derivative instruments (i)
Financial assets not measured
at fair value
Trade and other receivables (ii)
Cash and cash equivalents
Financial liabilities not
measured at fair value
Trade and other payables
Carrying amount
Fair Value
Note
Held for
Trading
Loans and
Receivables
Available-
for-sale
Other
Financial
Liabilities
Total
Level 1
Level 2
Level 3
Total
17
16
15
20
89,851
89,851
-
-
-
-
-
-
-
798,145
541,871
1,340,016
-
-
-
-
-
-
-
-
-
-
-
-
-
-
89,851
89,851
-
-
89,851
89,851
-
89,851
89,851
798,145
541,871
1,340,016
235,182
235,182
235,182
235,182
There have been no transfers of assets from Levels during the period ended 31 December 2015.
(i)
(ii)
Valuation technique used in measuring Level 2 fair values is Black Scholes Option Pricing Model.
The carrying amount of all receivables is deemed to approximate fair value.
Page 49 of 67
Annual Report – 31 December 2016
(b) Measurement of Fair Values
The following table shows the valuation technique used in measuring Level 2 fair values as well as significant
unobservable inputs used.
Type
Valuation Technique
Derivative instruments
Black-Scholes
Significant
Unobservable Inputs
Volatility
Inter-relationship Between
Significant Unobservable
Inputs and Fair Value
Measurement
The estimated
fair value
would increase / (decrease)
if there was an increase /
in the volatility
(decrease)
rate used, as well as
movements in the underlying
security price.
(c) Financial Risk Management
The Group has exposure to the following risks arising from the use of financial instruments:
Credit Risk (see (c)(ii))
Liquidity Risk (see (c)(iii))
Market Risk (see (c)(iv))
Currency Risk (see (c)(v)).
This note presents information about the Group’s exposure to each of the above risks, their objectives, policies
and processes for measuring and managing risk, and their management of capital. Further quantitative
disclosures are included throughout these consolidated financial statements.
(i) Risk Management Framework
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk
management framework.
Risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies
and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The
Group, through its training and management standards and procedures, aims to develop a disciplined and
constructive control environment in which all employees understand their role and obligations.
(ii) Credit Risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails
to meet its contractual obligations, and arises principally from the Group’s other receivables and investment
securities.
Other Receivables
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each counterparty.
However, management also considers the default risk of the industry and country in which counterparties
operate, as these factors may have an influence on credit risk.
The other receivables also include refundable deposits and tax credits which include Brazilian federal VAT
(“PIS-Cofins”). The recoverability of PIS-Cofins assets is dependent upon the Group generating a federal
company tax liability, which may be offset against the Groups PIS-Cofins assets. As at 31 December 2016, the
PIS-Cofins tax asset has been fully impaired as taxable profits in the ordinary course of business are not
considered probable though one off taxable profits may be generated on specific transactions. As at 31
December 2016 no such transactions have been entered into.
Page 50 of 67
Annual Report – 31 December 2016
Exposure to Credit Risk
The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s
maximum exposure to credit risk at the reporting date was:
Cash and cash equivalents (i)
Other receivables
2016
$
1,891,367
198,277
2,089,644
2015
$
541,871
793,763
1,335,634
(i)
The cash and cash equivalents are held with bank and financial institution counterparties, which are
rated BBB to AA based on rating agency Standard and Poor’s rating.
The Group’s maximum exposure to credit risk for other receivables at the reporting date by geographic region
was:
Australia
Brazil
Carrying Amount
2016
$
77,320
120,957
198,277
2015
$
30,133
763,630
793,763
These balances are net of provision for impairment (refer to Note 16).
(iii) Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with the
financial liabilities that are settled by delivering cash or another financial asset.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation.
As at 31 December 2016, the Group has current trade and other payables of $409,767 (31 December 2015:
$235,182). The Group believes it will have sufficient cash resources to meet its financial liabilities when due.
Refer to Note 2 Going Concern.
The following table shows the contractual maturities of financial liabilities, excluding the impact of netting
agreements. It is not expected that the cash flows included in the maturity analysis could occur significantly
earlier, or at significantly different amounts.
31 December 2016
Non- derivative financial
liabilities
Trade and other payables
31 December 2015
Non- derivative financial
liabilities
Trade and other payables
(iv) Market Risk
Carrying
amount
Contractual
cash flows
6 mths or
less
6-12 mths
1-2 years
545,824
(545,824)
(346,971)
(62,796)
(136,057)
235,182
(235,182)
(235,182)
-
-
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity
prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters, while
optimising the return.
Page 51 of 67
Annual Report – 31 December 2016
(v) Currency Risk
The Group is exposed to currency risk on purchases that are denominated in currency other than the
respective functional currencies of the Group entities, primarily the Australian dollar (AUD) and Brazilian Real
(BRL). The currencies in which these transactions are primarily denominated are AUD and BRL.
The Group’s investments in its Brazilian subsidiaries are denominated in AUD and are not hedged as those
currency positions are considered to be long term in nature.
Interest Rate Risk Profile
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
Fixed rate instruments
Financial assets
Variable rate instruments
Financial assets
Trade and other payables
2016
$
2015
$
1,785,551
105,816
(251,198)
1,640,169
-
541,871
-
541,871
Fair Value Sensitivity Analysis For Fixed Rate Instruments
The Group does not account for any fixed rate financial assets at fair value through profit or loss. Therefore, a
change in interest rates at the reporting date would not affect profit or loss or equity.
Cash Flow Sensitivity Analysis For Variable Rate Instruments
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, in particular
foreign currency rates, remain constant. The analysis is performed on the same basis for 2015.
31 December 2016
Variable rate instruments
Cash flow sensitivity (net)
31 December 2015
Variable rate instruments
Cash flow sensitivity (net)
Capital Management
Profit or Loss
Equity
100bp
Increase
100bp
Decrease
100bp
Increase
100bp
Decrease
(1,453)
(1,453)
5,418
5,418
1,453
1,453
(5,418)
(5,418)
-
-
-
-
-
-
-
-
The objectives for managing capital are to safeguard the Group’s ability to continue as a going concern and to
provide funding for the Group’s planned exploration activities. Centaurus Metals Limited is an exploration
company and it is dependent on its ability to raise capital from the issue of new shares and its ability to realise
value from its exploration and evaluation assets. The Board is responsible for capital management. This
involves the use of cash flow forecasts to determine future capital management requirements.
There were no changes in the Group’s approach to capital management during the period.
Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.
Note 26. Contingent Liabilities
Guarantees
Guarantees given in respect of bank security bonds amounting to $30,133 (2015: $30,133), secured by cash
deposits lodged as security with the bank.
No material losses are anticipated in respect of any of the above contingent liabilities.
There are no other contingent liabilities that require disclosure.
Page 52 of 67
Annual Report – 31 December 2016
Note 27. Operating Leases
Leases as Lessee
The Group leases its Perth and Brazil offices under operating lease. The leases run for a period of one to two
years, with an option to renew the lease after that date.
The Perth and Brazil office lease is a combined lease of land and buildings. Since the land title does not pass,
the rent paid to the landlord of the building is increased to market rent at regular intervals, and the Group
does not participate in the residual value of the building, it was determined that substantially all the risks and
rewards of the building are with the landlord. As such, the Group determined that the leases are operating
leases.
(i) Future Minimum Lease Payments
Non-cancellable operating lease rentals are payable as follows:
Less than one year
Between one and five years
More than five years
Note 28. Capital Commitments
2016
$
2015
$
58,857
35,996
-
94,853
109,631
2,686
-
112,317
During the period the Company entered into an agreement to acquire a 100% interest in the Serra Misteriosa
Gold Project under a strategic alliance with Terrativa Minerais SA. Centaurus will earn the right to acquire
100% of the project by undertaking R$2.5 million (A$1 million) of expenditure within 24 months. Once
Centaurus has met the minimum expenditure commitment, it will have the right to acquire 100% of the
project tenements through the issue of 30 million Centaurus Metals Limited shares and a 2% production
royalty over future production from any of the project tenements. Concurrent with the issue of the ordinary
shares will be 3 tranches of 30 million performance rights with the condition on each tranche being linked to
the definition of a specified JORC Mineral Resource.
During the year ended 31 December 2015 the Company secured a 100% interest in the Aurora Copper Project
under the strategic alliance with Terrativa Minerais SA. Under the deal structure Centaurus will manage all
exploration activities on the project area and be required to spend a minimum of R$1 million (A$350,000) on
exploration over an 18 month period ending 3 May 2017 to maintain 100% title to the Project. If Centaurus
does not meet its minimum obligations within the required time period, its equity interest will revert to a 15%
project interest.
Note 29. Group Entities
Parent Entity
Centaurus Metals Limited
Subsidiaries
Centaurus Resources Pty Ltd
San Greal Resources Pty Ltd
Centaurus Brasil Mineração Ltda
Centaurus Pesquisa Mineral Ltda
Centaurus Gerenciamento Ltda
Aliança Mineração Ltda
Associates
Nova Potash Pty Ltd
Country of
Incorporation
Ownership interest
2015
2016
Australia
Australia
Brazil
Brazil
Brazil
Brazil
100%
100%
100%
100%
100%
100%
Australia
50%
100%
100%
100%
100%
100%
-
100%
Page 53 of 67
Annual Report – 31 December 2016
Note 30. Subsequent Events
There has not arisen in the interval between the end of the financial year and the date of this report an item,
transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to
affect significantly the operations of the Group, the results of those operations, or the state of affairs of the
Group, in future financial years.
Note 31. Remuneration of Auditors
Audit Services
Audit and review of financial reports – KPMG
Services other than statutory audit
Auditors of the Company
Taxation compliance services - KPMG
Note 32. Parent Entity Disclosures
31 December
2016
$
31 December
2015
$
45,066
91,827
25,385
11,420
As at, and throughout, the financial year ended 31 December 2016 the parent entity of the Group was
Centaurus Metals Limited.
Results of the Parent Entity
Loss for the period (1)
Other comprehensive loss
Total comprehensive loss for the period
Company
31 December
2016
$
31 December
2015
$
(1,900,796)
-
(1,900,796)
(4,908,137)
(13,333)
(4,921,470)
(1)
During the year ended 31 December 2016 the parent entity provided for an impairment of $700,000
(2015:$2,700,000) relating to loans to subsidiaries based on an assessment of recoverability.
Financial Position of the Parent Entity at Year End
Current assets
Non-current assets(1)
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Share capital
Reserves
Accumulated losses
Total equity
2016
$
2015
$
1,287,757
3,771,817
5,059,574
268,469
83,030
351,499
4,708,075
513,586
3,599,617
4,113,203
259,756
46,217
305,973
3,807,230
109,419,656
110,551
(104,822,132)
4,708,075
106,666,191
62,375
(102,921,336)
3,807,230
Page 54 of 67
Annual Report – 31 December 2016
(1)
Included within non-current assets are investments in and loans to subsidiaries net of provision for impairment.
Ultimate recoupment is dependent on successful development and commercial exploitation or, alternatively, sale
of the respective project areas.
Parent Entity Contingencies
The parent entity had no contingent liabilities as at 31 December 2016 (2015: nil).
Parent Entity Capital Commitments
The parent entity had no capital commitments at 31 December 2016 (2015: nil).
Parent Entity Lease Commitments
The parent entity has the following lease commitments:
Leases as Lessee
Non-cancellable operating lease rentals are payable as follows:
Less than one year
Between one and five years
More than five years
2016
$
2015
$
50,681
35,996
-
86,677
54,473
2,686
-
57,159
Page 55 of 67
Annual Report – 31 December 2016
Directors’ Declaration
1.
In the opinion of the directors of Centaurus Metals Limited (the “Company”):
(a)
The consolidated financial statements and notes, and the Remuneration Report in the Directors’
Report are in accordance with the Corporations Act 2001, including:
(i)
(ii)
Giving a true and fair view of the Group’s financial position as at 31 December 2016 and
of its performance, for the financial year ended on that date; and
Complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001;
(b)
There are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable; and
2.
3.
The directors have been given the declarations required by section 295A of the Corporations Act 2001
from the Managing Director and the Chief Financial Officer for the financial year ended 31 December
2016.
The financial report also complies with International Financial Reporting Standards as disclosed in Note
2.
Signed in accordance with a resolution of the directors.
__________________
D P Gordon
Managing Director
Perth
24 March 2017
Page 56 of 67
Independent Auditor’s Report
To the shareholders of Centaurus Metals Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Centaurus Metals Limited (the Company).
In our opinion, the accompanying Financial Report
of the Company is in accordance with the
Corporations Act 2001, including
• giving a true and fair view of the Group’s
financial position as at 31 December 2016 and
of its financial performance for the year ended
on that date; and
•
complying with Australian Accounting
Standards and the Corporations Regulations
2001.
The Financial Report comprises:
• Consolidated statement of financial position as
at 31 December 2016
• Consolidated statement of profit or loss,
consolidated statement of changes in equity,
and consolidated statement of cash flows for
the year then ended
• Notes including a summary of significant
accounting policies
• Directors’ Declaration.
The Group consists of the Company and the
entities it controlled at the year end or from time
to time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the
audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We
have fulfilled our other ethical responsibilities in accordance with the Code.
Material Uncertainty related to Going Concern
We draw attention to Note 2, “Going Concern” in the financial report. The conditions disclosed in Note
2, indicate a material uncertainty exists that may cast doubt on the Group’s ability to continue as a going
concern and, therefore, whether it will realise its assets and discharge its liabilities in the normal course
of business, and at the amounts stated in the financial report. Our opinion is not modified in respect of
this matter.
In concluding there is a material uncertainty related to going concern we evaluated the extent of
uncertainty regarding events or conditions casting significant doubt in the Group’s assessment of going
concern. Our approach to this involved:
• Assessing the Group’s cash flow forecasts for incorporation of the Group’s operations and plans to
address going concern;
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Profession Standards Legislation.
• Evaluating the feasibility, quantum and timing of the Group’s plans to raise additional shareholder
funds or potentially divest assets to address going concern;
Determining the completeness of the Group’s going concern disclosures for the principle matters casting
significant doubt on the Group’s ability to continue as a going concern, the Group’s plans to address
these matters, and the material uncertainty.
Key Audit Matters
In addition to the matter described in the Material Uncertainty Related to Going Concern section, we
have determined the matter described below to be the Key Audit Matter to be communicated in our
report
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the Financial Report of the current period.
This matter was addressed in the context of our audit of the Financial Report as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on this matter.
Capitalised Exploration and Evaluation (“E&E”) assets $2,701,360
Refer to Note 19 to the financial report
The key audit matter
How the matter was addressed in our audit
The Company’s accounting policy in respect of
Exploration and evaluation expenditure capitalised
(E&E) is set out in Note 4(e) to the financial report.
Principally, only acquisition costs in relation to an
area of interest are capitalised less any impairment
charges recognised. E&E is a key audit matter due
to:
•
•
the significance of the balance (being 49% of
total assets); and
the greater level of audit effort to evaluate
management’s application of the requirements
of the industry specific accounting standard
AASB 6 Exploration for and Evaluation of
Mineral Resources, in particular the presence
of impairment indicators. The presence of
impairment indicators would necessitate a
detailed analysis by management of the value
of E&E, therefore given the criticality of this to
the scope and depth of our work, we involved
senior team members to challenge
management’s determination that no such
indicators existed.
In assessing the presence of impairment
indicators, we focused on those that may draw
into question the commercial continuation of E&E
activities for Jambreiro where significant carrying
value of E&E exists. We paid particular attention to:
Our audit procedures included, amongst others:
• Evaluating the Group’s accounting policy to
recognise exploration and evaluation assets to
the criteria in the accounting standard;
• We assessed management’s determination of
its areas of interest for consistency with the
definition in the accounting standard.
• For each area of interest, we assessed the
Group’s current rights to tenure by
corroborating the ownership of the relevant
license for mineral resources or reserves to
government registries and evaluating
agreements in place with other parties. We
also tested for compliance with conditions,
such as minimum expenditure requirements,
on a sample of licenses;
• We tested the Group’s additions to E&E for
the year by evaluating a statistical sample of
recorded expenditure for consistency to
underlying records, the capitalisation
requirements of the Group’s accounting policy
and the requirements of the accounting
standard;
• documentation available regarding rights to
tenure, via licensing, and compliance with
relevant conditions, to maintain current rights
to an area of interest and management’s
intention and capacity to continue the relevant
E&E activities
• We evaluated Group documents for
consistency with their stated intentions for
continuing E&E in certain areas. We
corroborated this through interviews with key
operational and finance personnel. The Group
documents we evaluated included:
• The ability of the Group to fund the
continuation of activities
• Results from latest activities regarding the
existence or otherwise of mineral resources or
reserves.
•
internal management plans and budgets
• minutes of board and internal
management meetings
• announcements made by the Group to the
Australian Securities Exchange
• We obtained project and corporate budgets
identifying areas with existing funding and
those requiring alternate funding sources. We
compared this for consistency with areas with
E&E, for evidence of the ability to fund
continued activities. We identified those areas
relying on alternate funding sources and
evaluated the capacity of the Group to secure
such funding.
Other Information
Other Information is financial and non-financial information in Centaurus Metals Limited’s annual
reporting which is provided in addition to the Financial Report and the Auditor's Report. The Directors are
responsible for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’ report.
The remaining Other Information is expected to be made available to us after the date of the Auditor's
Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, the auditor
does not and will not express an audit opinion or any form of assurance conclusion thereon, with the
exception of the Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report
or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information,
and based on the work we have performed on the Other Information that we obtained prior to the date
of this Auditor’s Report we have nothing to report.
Responsibilities of Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001;
•
implementing necessary internal control to enable the preparation of a Financial Report that gives a
true and fair view and is free from material misstatement, whether due to fraud or error; and
•
assessing the Group’s ability to continue as a going concern. This includes disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless they either
intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from material
misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this Financial Report.
A further description of our responsibilities for the Audit of the Financial Report is located at the Auditing
and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_files/ar2.pdf This
description forms part of our Auditor’s Report.
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration Report of
Centaurus Metals Limited for the year ended 31
December 2016, complies with Section 300A of
the Corporations Act 2001.
Directors’ responsibilities
The Directors of the Company are responsible for
the preparation and presentation of the
Remuneration Report in accordance with Section
300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report
included in pages 6 to 13 of the Director’s report
for the year ended 31 December 2016.
Our responsibility is to express an opinion on the
Remuneration Report, based on our Audit
conducted in accordance with Australian Auditing
Standards.
KPMG
Trevor Hart
Partner
Perth
24 March 2017
Annual Report – 31 December 2016
Shareholder Information
The shareholder information set out below was applicable as at 14 March 2017.
Substantial Shareholders
The Company’s only substantial shareholder as at the above date is Atlas Iron Limited which holds 60,320,264
shares (5.37%).
On 27 July 2011, the Company announced it had entered into a strategic alliance with Atlas Iron Limited
(“Atlas”) pursuant to which Atlas agreed to take a strategic 19.9% stake in the Company, and for Atlas to
provide technical, development and product marketing support as the Company develops its export and
domestic iron ore businesses in Brazil. Centaurus and Atlas entered into a subscription agreement with
respect to the strategic alliance. Pursuant to the strategic alliance, and subject to meeting various conditions
including Atlas continuing to hold a 5% interest in the share capital in the Company, ASX Limited have granted
Centaurus a waiver from the listing rules to permit Atlas to have a right to maintain its equity interest in the
Company in the event that further equity issues are undertaken for future funding requirements or as a means
of securing further assets (other than by a takeover bid or scheme of arrangement). Atlas will be given the
opportunity to participate in these future equity issues of the Company on the same terms as those being
offered to third parties.
Class of Shares and Voting Rights
There were 1,826 holders of ordinary shares in the Company as at the above date. The voting rights attaching
to the ordinary shares, set out in Clause 41 of the Company’s Constitution, are:
(a)
(b)
On a show of hands, every person present who is a shareholder or a proxy, attorney or representative
of a shareholder has one vote; and
On a poll, every person present who is a shareholder or a proxy, attorney or representative of a
shareholder shall, in respect of each fully paid share held by him, or in respect of which he is appointed
a proxy, attorney or representative, have one vote for the share, but in respect of partly paid shares,
shall have a fraction of a vote for each partly paid share. The fraction shall be equivalent to the
proportion which the amount paid is of the total amounts paid and payable, excluding amounts
credited, provided that the amounts paid in advance of a call are ignored when calculating a true
portion.
As at the above date the Company had 256 holders of listed options over 20,300,666 unissued ordinary shares
with an exercise price of $0.05 and expiry date of 31 March 2017 and 733 holders of listed options over
226,233,707 unissued ordinary shares with an exercise price of $0.01 and an expiry date of 30 April 2018.
There are no voting rights attached to the unissued ordinary shares. Voting rights will attach to the unissued
ordinary shares when the options have been exercised.
There were 2 holders of unlisted options over 2,000,000 unissued ordinary shares. The options have an
exercise price of $0.125 and expire on 31 August 2018. There were 6 holders of unlisted options over
22,500,000 unissued ordinary shares. The options have an exercise price of $0.0082 and expire on 10 June
2018 (5,500,000 options), 10 June 2019 (8,500,000 options) and 10 June 2020 (8,500,000 options). There are
no voting rights attached to the unissued ordinary shares. Voting rights will attach to the unissued ordinary
shares when the options have been exercised.
Restricted Securities
There are currently no restricted securities on issue.
On-market Buy Back
There is no current on-market buy back.
Page 61 of 67
Annual Report – 31 December 2016
Distribution of Equity Securities
The distribution of numbers of equity security holders by size of holding is shown in the table below. There
were 560 holders of less than a marketable parcel (being a minimum $500 parcel at $0.007 per share) of
ordinary shares.
Ordinary
Shares
107
101
64
547
1,007
1,826
Class of Equity Security
Listed Options
(CTMO)
73
99
31
31
22
256
Listed Options
(CTMOA)
45
93
54
317
224
733
Unlisted
Options
-
-
-
-
6
6
1
1,001
5,001
10,001
100,001
1,000
-
5,000
-
-
10,000
- 100,000
and over
Shareholders
The names of the twenty largest shareholders are listed below:
Ordinary Shares (CTM)
Name
1 Atlas Iron Limited
2 Shreeve Family Trust
3 Mr Bradley Bolin
4 Terrativa Minerais SA
5 Mr Darren Gordon
6 Tavarua International Inc
7 Mr Roger Fitzhardinge
8 Mr Ianaki Semerdziev
9 Mr Malcolm Thom
10 Mahe Investments Pty Ltd
11 Mrs Liliana Teofilova
12 Ms Tracey Marshall
13 Mr Antonio Aceti
14 Mr Warren Le Febour
15 Matzo Consulting Pty Ltd
16 Tohei Pty Ltd
17 Mr Domenico Zappia
18 Southern Cross Capital
19 Darley Pty Ltd
20
JP Morgan Nominees Australia Limited
Total Top 20 Shareholders
Other Shareholders
Total Number of Issued Shares
Number
Held
60,320,264
55,702,965
47,500,000
46,501,476
37,908,416
33,898,305
32,013,109
13,750,000
10,535,592
10,000,000
9,000,000
9,000,000
8,026,848
7,471,486
7,177,799
7,087,968
7,000,000
7,000,000
7,000,000
6,828,581
423,722,809
699,523,628
1,123,246,437
Percentage of
Issued Shares (%)
5.37
4.95
4.22
4.14
3.37
3.01
2.85
1.22
0.93
0.89
0.80
0.80
0.71
0.66
0.63
0.63
0.62
0.62
0.62
0.60
37.64
62.36
100.00
Page 62 of 67
Annual Report – 31 December 2016
Listed Option Holders
The names of the twenty largest holders of listed options (CTMO) are listed below:
Listed Options (CTMO)
Name
1 Mr RJ & Mrs NH Wellby
2 Atlas Iron Limited
3 Mr Darren Gordon
4 Citicorp Nominees Pty Limited
5 Tower Hill Investments Pty Ltd
6 Mr Daniel Symons
7
8 Mr David Paterson
9 Blucher Superannuation Pty Ltd
Lion Selection Group Limited
JP Morgan Nominees Australia Limited
10 Mr Bradley Bolin
11
12 Tohei Pty Ltd
13 EAS Advisors LLC
14
Stelc Pty Ltd
15 Mr BD Lawton & Mrs SJ Willersdorf
16 HM 2007 Pty Ltd
17 Mr Hong En Yang
18 Mr Geoffrey Laurence
19 Mr Mark Hancock
20 Mr Robert Smakman
Total Top 20 Optionholders
Other Optionholders
Total Number of Listed Options
Number
Held
5,565,329
3,333,333
2,116,666
1,014,763
1,000,000
1,000,000
566,666
500,000
488,333
433,333
372,916
343,067
333,333
333,333
300,000
200,000
168,000
133,333
133,333
133,333
18,469,071
1,831,595
20,300,666
Percentage of
Listed Options (%)
27.41
16.42
10.43
5.00
4.92
4.92
2.79
2.46
2.40
2.13
1.84
1.69
1.64
1.64
1.47
0.98
0.82
0.66
0.66
0.66
90.94
9.06
100.00
The names of the twenty largest holders of listed options (CTMOA) are listed below:
Listed Options (CTMOA)
Name
Shreeve Family Trust
1
2 Mr Bradley Bolin
3 Mr Darren Gordon
4 Mr Roger Fitzhardinge
5
Stockwork (Kal) Pty Ltd
6 Mahe Investments Pty Ltd
7 TCH Holdings Pty Ltd
8 Mr Ianaki Semerdziev
9 Mr OT & Mrs EH Yeoh
10 Mr Robert Raynes
11 Matzo Consulting Pty Ltd
12 Broadcoola Nominees Pty Ltd
13 Mrs Patricia Haigh
14 Mr Martin Music
15 Mr Kieran Barratt
16 Mr Warren Le Febour
17 Mr M & Mrs H Soucik
18 Mrs Liliana Teofilova
19 Mr Robert Vanden Bergh
20 Mr George Skaltsis
Total Top 20 Optionholders
Other Optionholders
Total Number of Listed Options
Number
Held
27,851,482
22,500,000
7,107,828
5,999,994
5,000,000
5,000,000
4,500,000
3,104,771
3,010,851
3,000,000
3,000,000
3,000,000
2,800,000
2,750,000
2,716,219
2,500,000
2,500,000
2,145,500
2,000,000
2,000,000
112,486,645
113,747,062
226,233,707
Percentage of
Listed Options (%)
12.31
9.94
3.14
2.65
2.21
2.21
1.98
1.37
1.33
1.32
1.32
1.32
1.23
1.21
1.20
1.10
1.10
0.94
0.88
0.88
49.64
50.36
100.00
Page 63 of 67
Annual Report – 31 December 2016
Tenement Information
Brazilian Tenements
Tenement
Project Name
Location
Interest
100%
800.444/2011
100%
800.442/2011
100%
800.480/2011
100%
800.471/2011
100%
800.469/2011
100%
800.487/2011
100%
800.474/2011
100%
800.468/2011
100%
800.470/2011
100%
831.638/2004
100%
831.639/2004
100%(1)
831.629/2004
100%
832.183/2014
100%
832.776/2006
100%
833.185/2006
100%
832.316/2005
100%
833.133/2014
100%
830.668/2015
100%
831.879/2015
100%
831.649/2004
100%
833.409/2007
100%
834.106/2010
100%
831.645/2006
100%
830.588/2008
100%
831.002/2007
100%
833.410/2007
100%
833.795/2013
100%
831.363/2014
100%
831.364/2014
CTM has a 100% Earn-in right(2)
851.548/2011
CTM has a 100% Earn-in right(2)
850.258/2013
CTM has a 100% Earn-in right(2)
850.130/2013
(1) Tenement is held 100% however a lease agreement is in place with Ecosinter – Industria de Beneficiamento
Ceará
Aurora
Ceará
Aurora
Ceará
Aurora
Ceará
Aurora
Ceará
Aurora
Ceará
Parambu
Ceará
Parambu
Ceará
Parambu
Ceará
Parambu
Minas Gerais
Canavial
Minas Gerais
Canavial
Minas Gerais
Candonga
Minas Gerais
Conquista
Minas Gerais
Conquista
Minas Gerais
Conquista
Minas Gerais
Itambé
Minas Gerais
Mombuca
Minas Gerais
Mombuca
Mombuca
Minas Gerais
Jambreiro (Mining Lease) Minas Gerais
Jambreiro (Mining Lease) Minas Gerais
Jambreiro (Mining Lease) Minas Gerais
Minas Gerais
Passabém
Minas Gerais
Passabém
Minas Gerais
Regional Guanhães
Minas Gerais
Regional Guanhães
Minas Gerais
Regional Guanhães
Minas Gerais
Tenda I
Minas Gerais
Tenda II
Pará
Serra Misteriosa
Pará
Serra Misteriosa
Pará
Parauapebas
de Residuos Ltda.
(2) Agreement signed during the December 2016 Quarter. Centaurus will earn the right to acquire 100% of the
tenements by undertaking R$2.5m of expenditure by December 2018.
Australian Tenements
Tenement
EPM14233
Project Name
Mt Guide
Location
Queensland
Interest
10%(3)
(3) Subject to a Farm-Out and Joint Venture Exploration Agreement with Summit Resources (Aust) Pty Ltd.
Summit has earned a 90% interest in the Project. Aston Metals (QLD) Limited is earning 80% of Summit’s
interest in the Project.
Page 64 of 67
Annual Report – 31 December 2016
Mineral Resources & Ore Reserves Information
Total Mineral Resources & Ore Reserves Statement
The Company’s Ore Reserves and Mineral Resource holdings are shown in the following tables.
Ore Reserves
Ore Reserves as at 31 December 2016
Ore Reserves as at 31 December 2015
Project
Million
Tonnes
Fe
%
SiO2
%
Al2O3
%
P
%
LOI
%
Million
Tonnes
Fe
%
SiO2
%
Al2O3
%
P
%
LOI
%
Jambreiro Project *
Proved
Probable
TOTAL
35.4
28.5
49.6
13.1
27.2
49.0
48.5
28.1
49.4
4.3
5.3
4.6
0.04
0.04
0.04
1.7
2.4
1.9
35.4
13.1
28.5
27.2
49.6
49.0
48.5
28.1
49.4
4.3
5.3
4.6
0.04
0.04
0.04
1.7
2.4
1.9
*20% Fe cut-off grade applied; Mine Dilution - 2% ; Mine Recovery - 98%;
Mineral Resources
Mineral Resources as at 31 December 2016
Mineral Resources as at 31 December 2015
Project
Million
Tonnes
Fe
%
SiO2
%
Al2O3
%
P
%
LOI
%
Million
Tonnes
Fe
%
SiO2
%
Al2O3 %
P
%
LOI
%
Jambreiro Project*
Measured
Indicated
Inferred
TOTAL
Canavial Project*
Indicated
Inferred
TOTAL
Passabém Project**
Indicated
Inferred
TOTAL
Itambé Project***
Indicated
Inferred
TOTAL
44.3
29.2
50.5
37.7
27.5
51.1
45.1
27.3
52.7
127.2
28.0
51.4
6.5
33.6
33.6
21.1
29.6
38.0
27.6
30.5
37.0
2.8
33.0
48.8
36.2
30.9
54.0
39.0
31.0
53.6
4.7
5.3
37.1
37.0
36.2
40.9
10.0
36.6
39.1
3.9
3.7
3.3
3.7
7.1
5.7
6.0
1.9
0.7
0.8
4.5
3.5
4.0
0.04
0.04
0.05
0.05
0.10
0.07
0.07
0.03
0.07
0.07
0.06
0.04
0.05
1.6
1.7
1.3
1.5
7.9
5.9
6.4
0.6
0.1
0.1
2.7
2.1
2.4
44.3
29.2
50.5
37.7
27.5
51.1
45.1
27.3
52.7
127.2
28.0
51.4
6.5
33.6
33.6
21.1
29.6
38.0
27.6
30.5
37.0
2.8
33.0
48.8
36.2
30.9
54.0
39.0
31.0
53.6
4.7
5.3
37.1
37.0
36.2
40.9
10.0
36.6
39.1
3.9
3.7
3.3
3.7
7.1
5.7
6.0
1.9
0.7
0.8
4.5
3.5
4.0
0.04
0.04
0.05
0.05
0.10
0.07
0.07
0.03
0.07
0.07
0.06
0.04
0.05
TOTAL
COMBINED
* 20% Fe cut-off grade applied; ** 27% Fe cut-off grade applied; *** 25% Fe cut-off grade applied
203.8
203.8
49.3
29.4
0.05
29.4
2.0
3.5
49.3
3.5
0.05
1.6
1.7
1.3
1.5
7.9
5.9
6.4
0.6
0.1
0.1
2.7
2.1
2.4
2.0
(a)
(b)
Mineral Resources are reported inclusive of Ore Reserves.
Rounding may generate differences in last decimal place.
Page 65 of 67
Annual Report – 31 December 2016
Mineral Resources and Ore Reserves Annual Statement and Review
The Company carries out an annual review of its Mineral Resources and Ore Reserves as required by the
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code)
2012 edition and the ASX Listing Rules. The review was carried out as at 31 December 2016. The Jambreiro
Resources estimate has been reported in accordance with the JORC Code 2012 edition and the ASX Listing
Rules. The remaining Ore Reserve and Mineral Resource estimates were prepared and disclosed under the
JORC Code 2004 edition.
The information prepared for the Jambreiro Reserve and Canavial, Itambé and Passabém Resource estimates
have not been updated to comply with the JORC Code 2012 edition on the basis that the information has not
materially changed since it was last reported.
The Jambreiro Ore Reserve was completed in November 2012 using highly conservative iron ore price and
exchange rate assumptions to determine the mine gate price. As of 31 December 2016 the mine gate price
remained appropriate. There were no further changes to the modifying factors for the Jambreiro Ore Reserve.
Given there was no material change in the Mineral Resource estimate or to the modifying factors for the Ore
Reserve, the Ore Reserve has not been updated to comply with the JORC Code 2012 edition.
The Candonga Resource and Reserve have been removed from the tables as the Project was divested during
the prior period.
There has been no additional work or change to the Canavial, Itambé and Passabém Mineral Resource
estimates during the year. Information prepared and disclosed under the JORC Code 2004 Edition and which
has not materially changed since last reported has not been updated.
The Company is not aware of any new information or data that materially affects the information included in
this Annual Statement and confirms that all material assumptions and technical parameters underpinning the
estimates in the relevant market announcement continue to apply and have not materially changed.
Estimation Governance Statement
The Company ensures that all Mineral Resource and Ore Reserve calculations are subject to appropriate levels
of governance and internal controls. Exploration Results are collected and managed by competent qualified
staff geologists and overseen by the Exploration General Manager. All data collection activities are conducted
to industry standards based on a framework of quality assurance and quality control protocols covering all
aspects of sample collection, topographical and geophysical surveys, drilling, sample preparation, physical and
chemical analysis and data and sample management.
Mineral Resource and Ore Reserve estimates are prepared by qualified independent Competent Persons and
further verified by the Company’s technical staff. If there is a material change in the estimate of a Mineral
Resource, the modifying factors for the preparation of Ore Reserves, or reporting an inaugural Mineral
Resource or Ore Reserve, the estimate and supporting documentation in question is reviewed by a suitably
qualified independent Competent Person.
Approval of Mineral Resources and Ore Reserve Statement
The Company reports its Mineral Resources and Ore Reserves on an annual basis in accordance with the JORC
Code 2012 Edition.
The Ore Reserves and Mineral Resources Statement is based on and fairly represents information and
supporting documentation prepared by competent and qualified independent external professionals and
reviewed by the Company’s technical staff. The Ore Reserves and Mineral Resources Statement has been
approved by Roger Fitzhardinge, a Competent Person who is a Member of the Australasia Institute of Mining
and Metallurgy. Roger Fitzhardinge is a permanent employee of Centaurus Metals Limited. Mr Fitzhardinge
has consented to the inclusion of the Statement in the form and context in which it appears in this Annual
Report.
Page 66 of 67
Annual Report – 31 December 2016
Competent Person’s Statement
The information in this Annual Report that relates to Exploration Results and Mineral Resources is based on
information compiled by Roger Fitzhardinge, a Competent Person who is a Member of the Australasia Institute
of Mining and Metallurgy and Volodymyr Myadzel, a Competent Person who is a Member of Australian
Institute of Geoscientists. Roger Fitzhardinge is a permanent employee of Centaurus Metals Limited and
Volodymyr Myadzel is the Senior Resource Geologist of Micromine BNA Consultoria e Sistemas Limited,
independent resource consultants engaged by Centaurus Metals.
Roger Fitzhardinge and Volodymyr Myadzel have sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as
Competent Persons as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’. Roger Fitzhardinge and Volodymyr Myadzel consent to the
inclusion in the report of the matters based on their information in the form and context in which it appears.
The information in this Annual Report that relates to Ore Reserves is based on information compiled by Beck
Nader, a Competent Person who is a professional Mining Engineer and a Member of Australian Institute of
Geoscientists. Beck Nader is the Managing Director of Micromine BNA Consultoria e Sistemas Ltda and is a
consultant to Centaurus.
Beck Nader has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012
Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
Beck Nader consents to the inclusion in the report of the matters based on his information in the form and
context in which it appears.
Page 67 of 67