ACN 009 468 099
Annual Report
31 December 2017
Centaurus Metals Limited ABN 40 009 468 099
And its controlled entities
Contents
Page
3
4
6
6
13
22
23
24
25
26
27
50
51
55
58
Corporate Directory
Director’s Report
Corporate Governance Statement
Remuneration Report
Operating and Financial Review
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Tenement Information
59 Mineral Resources and Ore Reserves Information
Page 2 of 61
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: CTMOA & CTMOB)
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
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
Annual Report – 31 December 2017
Corporate Directory
Directors
Mr D M Murcia AM, B. Juris, LL.B
Non-Executive Chairman
Mr D P Gordon B.Bus, FCA, AGIA, ACIS
Managing Director
Mr B R Scarpelli M.Sc, PMP
Executive Director
Mr M D Hancock B.Bus, CA, FFin
Non-Executive Director
Mr S A Parsons B.Sc(Hons) Geology, AusIMM
Non-Executive Director
Company Secretary
Mr P A Bridson B.Com, CA, AGIA, ACIS
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
Banco Inter
Rua da Bahia, 951 – 5º andar
Belo Horizonte – MG - CEP: 30.130.008
BRAZIL
Page 3 of 61
Annual Report – 31 December 2017
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 2017 together with the consolidated financial report and audit 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
B R Scarpelli
M D Hancock
S A Parsons
Independent Non-Executive Chairman
Managing Director
Executive Director
Non-Executive Director
Non-Executive Director (Appointed 31 March 2017)
Unless otherwise disclosed, all directors held their office from 1 January 2017 until the date of this report.
2 Directors and Officers
Mr Didier M Murcia, AM, B.Juris, LL.B
Non-Executive Chairman, Age 55
Experience and Expertise
Independent non-executive director appointed 16 April 2009 and appointed Chairman 28 January 2010.
Lawyer with over 30 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, ACIS
Managing Director, Age 46
Experience and Expertise
Managing Director appointed 4 May 2009. Chartered Accountant with over 25 years resource sector
experience as a senior finance and resources executive. Mr Gordon was formerly Chief Financial Officer for
Gindalbie Metals Limited (1999-2008).
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) – Non Executive Director
Mr Bruno R Scarpelli, M.Sc., PMP
Executive Director, Age 40
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 world class S11D Project.
Page 4 of 61
Annual Report – 31 December 2017
Special Responsibilities
Administrator of Centaurus’ Brazilian subsidiaries
Country Manager - Brazil
Mr Mark D Hancock, B.Bus, CA, FFin
Non-Executive Director, Age 49
Experience and Expertise
Non-executive director appointed 23 September 2011. Mr Hancock is currently Chief Commercial 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.
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 Steven A Parsons, B.Sc(Hons) Geology, AusIMM
Non-Executive Director, Age 45
Experience and Expertise
Non-executive director appointed 31 March 2017. Mr Parsons is a geologist with over 20 years’ experience in
the mining sector. He was formerly the Managing Director of Gryphon Minerals Ltd, which he founded and
listed on the Australian Stock Exchange. He is currently Managing Director of ASX Listed, Draig Resources Ltd
Other Directorships
During the last three years Mr Parsons held directorships in the following ASX listed companies:
Gryphon Minerals Limited (appointed 1 April 2004, resigned 2 December 2014) – Executive
Director.
Draig Resources Limited (appointed 31 March 2017) - Executive Director
Blackstone Minerals Ltd (appointed 30 October 2017) – Non Executive Director
Mr Paul A Bridson, B.Com, CA, AGIA , ACIS
Company Secretary, Age 50
Experience and Expertise
Mr Bridson was appointed as Company Secretary on 3 May 2016. Mr Bridson is a member of the Institute of
Chartered Accountants and the Governance Institute of Australia. He has over 25 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 2017 and the number of meetings attended by each director were:
Mr D M Murcia
Mr D P Gordon
Mr B R Scarpelli
Mr M D Hancock
Mr S A Parsons
Meetings of Directors
Held*
5
5
5
5
3
Attended
5
5
4
5
2
*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.
Page 5 of 61
Annual Report – 31 December 2017
4 Corporate Governance Statement
A copy of Centaurus’ 2017 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.
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:
2017
$
2016
$
2015
$
2014
$
2013
$
Net Loss
(3,632,809)
(2,560,899)
(3,700,866)
(10,460,299)
(32,714,987)
Change in share price
$0.00
$0.002
($0.046)
($0.15)
($0.13)
During the financial year ended 31 December 2017, 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.
Page 6 of 61
Annual Report – 31 December 2017
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.
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 2017 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 2017 was $300,000. 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 2017.
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 2017 was $165,000 reviewed
annually. Provision of four weeks annual leave.
Provision of a company-maintained motor vehicle.
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 2017.
Non- Executive Directors
Fees and payments to Non-Executive directors 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.
Page 7 of 61
Annual Report – 31 December 2017
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 8 of 61
Annual Report – 31 December 2017
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
%
S300A(1)(e)(vi)
Value of
Options as
Proportion of
Remuneration
%
45,000
45,000
30,000
30,000
22,500
300,692
272,692
164,551
163,357
562,743
511,049
-
-
-
-
-
8,560
16,188
11,912
(3,234)
20,472
12,954
-
-
-
-
-
-
-
-
-
-
-
28,000
19,308
19,308
-
-
-
-
-
28,000
19,308
19,308
-
-
-
-
-
7,306
7,326
-
-
7,306
7,326
39,358
3,347
27,685
2,766
84,358
48,347
57,685
32,766
25,667
48,167
81,406
11,065
63,858
14,115
237,974
31,293
417,272
354,579
240,321
174,238
847,803
609,930
-
6.9%
-
8.4%
-
-
3.1%
-
8.1%
46.7%
6.9%
48.0%
8.4%
53.3%
19.5%
3.1%
26.6%
8.1%
Non- Executive Directors
Mr D M Murcia
2017
2016
Mr M D Hancock
2017
2016
Mr S A Parsons (appointed 31 March 2017)
2017
Executive Directors
Mr D P Gordon
2017
2016
Mr B R Scarpelli
2017
2016
Total
2017
2016
(1) Other benefits include 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.
Page 9 of 61
Annual Report – 31 December 2017
5.3
Equity Instruments
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.
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.
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.
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. There were no options which expired or were forfeited during the year:
Number of
Options
Issued
Grant Date
Expiry
Date
Exercise
Price
% Vest in
Year
Fair value
per option
at grant
date
Financial
Year in
Which
Grant
Vests (1)
Mr D M Murcia
Mr D P Gordon
Mr B R Scarpelli
Mr M D Hancock
Mr S A Parsons
500,000
1,000,000
1,000,000
2,500,000
2,500,000
5,000,000
2,000,000
3,000,000
3,000,000
5,000,000
5,000,000
10,000,000
250,000
250,000
500,000
1,000,000
1,500,000
1,500,000
3,750,000
3,750,000
7,500,000
500,000
750,000
750,000
1,750,000
1,750,000
3,500,000
1,750,000
1,750,000
3,500,000
10/06/16
10/06/16
10/06/16
31/05/17
31/05/17
31/05/17
10/06/16
10/06/16
10/06/16
31/05/17
31/05/17
31/05/17
25/08/14
25/08/14
25/08/14
10/06/16
10/06/16
10/06/16
31/05/17
31/05/17
31/05/17
10/06/16
10/06/16
10/06/16
31/05/17
31/05/17
31/05/17
31/05/17
31/05/17
31/05/17
10/06/18
10/06/19
10/06/20
31/05/20
31/05/21
31/05/22
10/06/18
10/06/19
10/06/20
31/05/20
31/05/21
31/05/22
31/08/18
31/08/18
31/08/18
10/06/18
10/06/19
10/06/20
31/05/20
31/05/21
31/05/22
10/06/18
10/06/19
10/06/20
31/05/20
31/05/21
31/05/22
31/05/20
31/05/21
31/05/22
$0.0082
$0.0082
$0.0082
$0.0130
$0.0140
$0.0150
$0.0082
$0.0082
$0.0082
$0.0130
$0.0140
$0.0150
$0.1250
$0.1250
$0.1250
$0.0082
$0.0082
$0.0082
$0.0130
$0.0140
$0.0150
$0.0082
$0.0082
$0.0082
$0.0130
$0.0140
$0.0150
$0.0130
$0.0140
$0.0150
$0.0020
$0.0026
$0.0031
$0.0064
$0.0069
$0.0072
$0.0020
$0.0026
$0.0031
$0.0064
$0.0069
$0.0072
$0.0446
$0.0446
$0.0446
$0.0020
$0.0026
$0.0031
$0.0064
$0.0069
$0.0072
$0.0020
$0.0026
$0.0031
$0.0064
$0.0069
$0.0072
$0.0064
$0.0069
$0.0072
100%
-
100%
-
-
-
100%
-
100%
-
-
-
-
100%
-
100%
-
100%
-
-
-
100%
-
100%
-
-
100%
-
-
2016
2017
2018
2017
2018
2019
2016
2017
2018
2017
2018
2019
2014
2016
2017
2016
2017
2018
2017
2018
2019
2016
2017
2018
2017
2018
2019
2017
2018
2019
(1)
The options which vest in 2018 and 2019 are subject to the satisfaction of service conditions.
Page 10 of 61
Annual Report – 31 December 2017
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 Granted as Compensation
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
2017
2,500,000
8,000,000
5,000,000
2,000,000
-
Granted as
Compensation
Exercised
Vested
During the
Period
Held 31
December
2017
Vested and
Exercisable
31
December
2017
10,000,000
20,000,000
15,000,000
7,000,000
7,000,000
-
-
-
-
12,500,000
28,000,000
20,000,000
9,000,000
7,000,000
3,500,000
8,000,000
5,750,000
2,500,000
1,750,000
4,000,000
10,000,000
7,250,000
3,000,000
1,750,000
Directors
Mr D M Murcia
Mr D P Gordon
Mr B R Scarpelli
Mr M D Hancock
Mr S A Parsons
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:
Value of
Options
Granted $(A)
Value of
Options
Exercised in
Year $(B)
Value of
Options
Lapsed in
Year $(C)
69,250
138,500
103,875
48,475
48,475
-
-
-
-
-
-
-
-
-
-
Director
Mr D M Murcia
Mr D P Gordon
Mr B R Scarpelli
Mr M D Hancock
Mr S A Parsons
(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.
Page 11 of 61
Annual Report – 31 December 2017
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
2017
$
56,300
2016
$
77,917
31 Dec 2017
$
-
-
31 Dec 2016
$
17,174
17,174
(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:
Mr D M Murcia
Mr D P Gordon
Mr B R Scarpelli
Mr M D Hancock
Mr S A Parsons
Held 1
January
2017
8,487,968
37,908,416
-
2,363,930
-
Purchases
Sales
Other
2,500,000
18,766,877
-
1,313,294
1,111,111
-
-
-
-
-
-
-
-
-
2,000,000(1)
Held at 31
December
2017
10,987,968
56,675,293
-
3,677,224
3,111,111
(1) Balance on appointment on 31 March 2017.
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 July 2017 the Company announced a 5-for-9 Renounceable Rights Issue that included an issue of 1 free
attaching listed option for every new share subscribed for. The listed options (ASX: CTMOB) have an exercise
price of $0.01 and an expiry date of 31 August 2019.
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
2017
Purchases
Sales
Expired
1,934,561
9,224,494
-
602,124
-
2,500,000
18,766,877
-
1,313,294
1,111,111
-
-
-
-
-
(343,067)
(2,116,666)
-
(158,888)
-
Held at 31
December
2017
4,091,494
25,874,705
-
1,756,530
1,111,111
Director
Mr D M Murcia
Mr D P Gordon
Mr B R Scarpelli
Mr M D Hancock
Mr S A Parsons
6 Principal Activities
During the period the principal activities of the Group consisted of exploration and evaluation activities related
to mineral resources in Brazil. There were no significant changes in the nature of the activities of the Group
during the year.
Page 12 of 61
Annual Report – 31 December 2017
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
Loss attributable to members of Centaurus Metals Limited
Financial Performance
31 December
2017
$
31 December
2016
$
52,240
122,559
174,799
(3,632,809)
-
(3,632,809)
43,076
142,093
185,169
(3,318,902)
758,003
(2,560,899)
During the year ended 31 December 2017 the Group expensed Exploration and Evaluation costs totalling
$2,120,845 (2016: $1,478,842) in accordance with the Group’s accounting policy. The Exploration and
Evaluation costs primarily comprise costs in relation to exploration at the Serra Misteriosa Gold and the Salobo
West Copper – Gold Projects in Brazil.
Financial Position
At the end of the year the Group had a cash balance of $822,132 (2016: $1,891,367) and net assets of
$3,482,197 (2016: $4,751,289). Total liabilities amounted to $579,917 (2016: $767,920) and consisted of trade
and other payables and employee benefits.
Strategy
The key focus for the Group is currently to explore and develop mineral resource projects which the Company
believes are capable of delivering acceptable returns to its shareholders within a reasonable timeframe.
The 2017 calendar year saw the acquisition of the Pará Exploration Package (“Pará EP”) in Northern Brazil from
the Company’s strategic alliance partner Terrativa Minerais SA (“Terrativa”). The acquisition was made to open
up mineral rich resource opportunities outside of the iron ore sector as the Company continued to seek value
from its existing iron ore assets through either outright sale or joint development.
Project Activities
Overview
The 2017 year was a positive and productive period for Centaurus which saw the company significantly
enhance its asset portfolio with the acquisition of a number of properties in the world class Carajás Mineral
Province (Carajás) of northern Brazil. By completing a significant exploration program at the Serra Misteriosa
Gold Project (which was part of the Pará EP tenement package acquisition), the Company was able to satisfy its
earn in commitment over the highly prospective package of ground from strategic alliance partner Terrativa.
Upon meeting the earn in requirement in mid-2017, Centaurus exercised its option, via the issue of 30 million
CTM shares and a 2% production royalty over future production from any of the project tenements.
Whilst the initial phase of exploration at Serra Misteriosa did not result in an economic discovery, the spend on
the project did allow the Company to perfect ownership to a 100% interest in the highly prospective Salobo
West and Pebas Copper Gold Projects in the Carajás.
Page 13 of 61
Annual Report – 31 December 2017
The Salobo West Copper-Gold Project
The Salobo West Copper-Gold Project consists of two tenements, SW1 and SW2. SW1 was granted to the
Company in June 2017 and SW2 in November 2017. The combined total area covers 120km2 of highly
prospective ground only 12km along strike from Vale’s giant Salobo Copper-Gold Mine. Towards the end of the
year, Centaurus commenced non-ground disturbing field exploration activities over the SW1 tenement to
assist in validating an extensive historical database collected by the Company, while waiting for the approval of
necessary environmental licensing for drilling, which is anticipated in 2018.
The SW-1 tenement hosts at least three quality Cu-Au prospects – SW1-B, SW1-A and Serendipidade.
SW1-B
The SW1-B Prospect hosts an extensive +6.5km long Cu-Au(-Co) anomaly that is up to 600m wide. The soil
signature for the SW1-B Prospect, which is located in the Itacaiúnas Supergroup, is comparable to a number of
known IOCG deposits in the region.
Within the broader SW1-B Prospect, the Company has identified three distinct target zones – all of which have
multiple walk-up drill targets for copper-gold mineralisation, namely:
Cruzamento Zone
Located exactly where the east-west Banded Iron Formation (BIF) is intersected by the north-west
trending BIF unit of the SW1-A Prospect;
The Cu-Au(-Co) geochem signature is continuous across the Cruzamento Zone, where convergent
structural trends are clear; and
The highest gold and sulphur values are located at the convergence point, representing an excellent
target for future drilling.
Central Zone
A continuous +2.5km distinct magnetic signature that is coincident with the strongest and most
consistent Cu-Au(-Co) geochemical signature of the SW1-B Prospect.
Western Zone
This zone is delineated by the continuation of the Cu-Au(-Co) geochemical signature beyond the
western end of the magnetic signature;
The magnetic low response is likely due to the demagnetisation of the BIF host, either via the
formation of hematite or sulphides; and
The Western Zone hosts the highest grade copper and cobalt soil sampling values from the SW1-B
Prospect.
During the course of the Company’s exploration program at SW1-B, Centaurus’ field team identified a number
of tracks in the forest and two drill holes along the SW1-B trend. The first hole was identified just east of the
Cruzamento Zone and the other was located to the east, well outside of the copper-gold soil anomaly. The
Company was able to retrieve the data for these historical drill-holes. In addition, Centaurus was also able to
retrieve and review additional historical exploration data for the SW1-B Prospect including a detailed VTEM
(Airborne Electromagnetics) survey and multiple Induced Polarisation (IP) survey lines. This geophysical
dataset, which was re-processed by Southern Geoscience, significantly enhances the prospectivity of the three
target zones.
The results and location of historical drill hole DRI10-FD0010 are considered to be extremely encouraging for
the Company’s future exploration efforts at the Salobo West Project. Of particular relevance is not only the
fact that the hole encountered strong copper-gold and iron ore mineralisation at the end-of-hole, but also that
is was stopped 50 metres short of an outstanding IP chargeability anomaly.
SW1-A
The SW1-A Prospect is an extensive +3.2km long Cu-Au(-Co) anomaly that is locally up to 800m wide and which
represents an outstanding IOCG target. The extensive soil anomaly at SW1-A is hosted in the same
stratigraphic sequence and just 12km along strike from Vale’s giant Salobo Copper-Gold Mine.
Analysis completed by Southern Geoscience on regional magnetic data secured over the Salobo West area
demonstrates that the SW1-A Prospect has a magnetic susceptibility of 0.65 SI, which compares very
favourably with the Salobo Cu-Au Mine (0.66 SI).
Page 14 of 61
Annual Report – 31 December 2017
Given that the SW1-A Prospect is hosted in the same stratigraphic sequence as the Salobo mine, it is
reasonable to consider that the SW1-A Prospect features the same host rocks and potentially similar
mineralisation, although this will need to be tested with drilling.
The SW1-A Prospect is situated in a favourable structural corridor and associated with a number of oblique
regional structures.
Serendipidade
A comprehensive review of the DNPM (Brazilian Mines Department) archives resulted in the identification of a
new large-scale copper-cobalt exploration target at the Serendipidade Prospect.
The review work uncovered historical exploration data including the discovery of archived documents from
early stage exploration work undertaken on the SW1 tenement area in 2005-2009 by leading global mining
company Anglo American. The identification of the data was unexpected but was a significant boost to the
Company’s upcoming exploration plans.
The historical Anglo American soil samples were collected in two campaigns, initially along SW-NE regional
lines and then N-S lines that were spaced 400m apart and with samples collected every 100m. The
Serendipidade copper-in-soils anomaly is more than 2.5km long and up to 700m wide and has the highest
copper and gold soil anomalies collected by Anglo from the SW1 project area.
SW-2
During the last quarter of 2017, the Company secured the grant of the southern tenement (SW2) at Salobo
West with the Brazilian Mines Department (DNPM) gazetting the grant of this second key exploration licence.
The grant of the SW2 tenement will open up additional new fronts for the Company’s exploration activities
alongside the existing SW1 tenement.
For the SW2 tenement, Centaurus has re-processed CPRM airborne geophysical data and has already
identified multiple targets which require further ground based follow up exploration work. The re-processing
and analysis of the regional geophysical data was completed by highly regarded geophysical consulting group,
Southern Geoscience and Mr Alan King, former Chief Geophysicist for Global Exploration at Vale and Inco.
The Pebas Copper-Gold Project
The Pebas Project is located approximately 100km east of the Company’s large and highly prospective Salobo
West Copper Gold Project, ~20km north of the operating Antas Norte copper-gold mine, operated by ASX
listed copper miner Avanco Resources (ASX:AVB), and just 5km outside of the regional city of Parauapebas.
The Project is hosted within the highly prospective Itacaiúnas Supergroup, which hosts all IOCG deposits within
the Carajás Mineral Province. The Pebas Project is wedged between the regionally important Cigano and
Estrela Granite Complexes.
Soil sampling undertaken during the year confirmed the quality and consistency of a 2km long, +500ppm
copper-in-soils anomaly which is up to 400m wide and is coincident with a 1km long discrete magnetic
signature. New rock chip results from samples collected at Pebas include assays of up to 0.51% copper and
0.75% cobalt.
Diamond drilling carried out by a previous TSX-listed explorer in 2010 returned intersections of up to 3.74% Cu
within broad zones of lower grade mineralisation (146.9m at 0.21% Cu and 0.08 g/t Au from surface). The
drilling did not test a potential high-grade fault-related IOCG target and this work is planned to be undertaken
by the Company.
Given the favourable location and ease of access to the regional centre of Parauapebas, any drill program is
likely to be undertaken during the regional wet season, when work at the Salobo West Project may be
restricted.
Itapitanga Nickel-Cobalt Project
Subsequent to year end, Centaurus entered into an agreement to acquire a 100% interest in the Itapitanga
nickel-cobalt tenement from a private Brazilian vendor.
Page 15 of 61
Annual Report – 31 December 2017
The Project is located only 10km along strike from Anglo American’s large and high grade Jacaré Nickel Cobalt
Project which has a Resource of 307Mt at 1.3% Ni and 0.13% Co that includes a high-grade cobalt resource of
185Mt at 1.2% Ni and 0.18% Co1. The high grade nature of the Jacare project provides significant
encouragement as to what Centaurus may be able to define on its own tenure.
The Itapitanga Project is expected to be a major focus of exploration activity over the first half of 2018 until
exploration at Salobo West can commence.
Under the terms of the Acquisition Agreement for Itapitanga, Centaurus will pay up to R$150,000 (~A$60,000)
over a six-month period and commit to undertake R$150,000 of exploration work on the ground over the same
six-month period. At the end of this period and on the basis that Centaurus wishes to continue with the project
it will pay the vendor R$500,000 (~A$200,000). Further, should Centaurus elect to continue with the project it
will make milestone payments to the vendor of R$1 million (~A$400,000) on definition of a JORC Resource and
R$1.5 million (~A$600,000) on the grant of a Mining Lease by the Brazilian Mines Department.
Serra Misteriosa Gold Project
As referred to above, during the year a maiden diamond drill program was completed at Serra Misteriosa with
9 holes drilled for a total of 2,450m. Drilling indicated the presence of a large, shear-hosted hydrothermal
system where multiple zones of weak gold mineralisation were intersected along a strike length of some
1.6km. The decision was made to suspend exploration activities while the Company undertakes a detailed
review of the results before moving on with any further exploration.
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 premium pricing that exists in the market for high
grade ore (+65% Fe) like that which could be produced at Jambreiro.
During the year, Centaurus delivered a new product sample from the Jambreiro Project to potential steel mill
customers in Brazil for testing. The delivered product graded 64.6% Fe with very low impurities (4.7% SiO2,
0.7% Al2O3 and 0.02% P). The Company understands that this is recognised as a very high-quality product that
is being strongly sought after in the domestic market and is looking forward to receiving the results of testing
from the mills.
Centaurus intends to pursue all value realisation opportunities at Jambreiro whilst it continues exploration in
the Carajás Mineral Province.
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.
During the year, Centaurus granted a 12-month exclusive option over the Conquista Project to R3M Mineração
Ltda (R3M), a privately-owned Brazilian mining group, paving the way for the next phase of exploration and
potential future development of the Conquista Project. The structure of the Agreement provides Centaurus
with the ability, at no cost, to undertake the required drilling to advance the Conquista Project before
potentially generating a strong revenue stream from a 12% production royalty on any production from the
project tenements.
Under the terms of the Agreement, R3M has paid R$200,000 (~A$85,000) for a 12-month exclusive option over
the Conquista Project, will undertake a specified exploration program which has been designed in conjunction
with Centaurus’ technical team (“Qualifying Program”) and will keep the tenements in good standing. All
exploration work undertaken in connection with the Qualifying Program will be managed by Centaurus during
the option period.
1 Resource data sourced from Anglo American Presentations “O Depósito de Níquel Laterítico do Jacaré (PA), Brasil” – Simexmin 2010
and Ore Reserves and Mineral Resources Report 2016
Page 16 of 61
Annual Report – 31 December 2017
If R3M elects to exercise the option, it will grant a 12% gross production royalty to Centaurus on future
production from the Conquista Project tenements (“Royalty”), with an amount of R$3 million (~A$1.25 million)
being immediately payable on exercise by way of non-refundable Royalty pre-payment.
The option may be extended for a further 6 months at the end of the original option period if R3M has met the
Qualifying Program requirements.
Corporate
Board Appointment
In March 2017 the Company appointed senior mining executive Steve Parsons as a non- executive Director. Mr
Parsons was the founding Managing Director of Gryphon Minerals, which he listed on the Australian Securities
Exchange in 2004 and grew into an ASX-200 company before being taken over in 2016. Mr Parsons is currently
Managing Director of ASX Listed Draig Resources Limited.
Capital Raisings
In August the Company completed a 5-for-9 renounceable rights issue. Under the offer, eligible shareholders
could subscribe for 5 new shares for every 9 existing shares held at an issue price of $0.004 per share, together
with one free attaching option for every new share subscribed for with an exercise price of $0.01 and an expiry
date of 31 August 2019. The Company issued 624,025,798 New Shares and 624,025,798 New Options under
the Rights Issue, raising a total of $2.5 million before costs.
The proceeds of the Rights Issue were predominately used to continue the drilling program at Serra Misteriosa
as well as to commence a maiden exploration program at the recently acquired Salobo West Copper-Gold
Project which is also located within the Pará Exploration Package.
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 Australasian 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.
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.
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.
Page 17 of 61
Annual Report – 31 December 2017
Sale of Iron Ore Projects
The Company’s strategy in relation to its remaining iron ore assets is to maximise value from these assets with
preference for a joint development scenario. 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
deliver 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 joint venture arrangements in line with the timetable
established by the Company.
Emphasis of Matter
The audit opinion for the year ended 31 December 2017 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 value realisation 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
Subsequent to year end Centaurus completed a share placement, to sophisticated and professional investors,
and issued 295 million shares at $0.009 per share and 147.5 million free attaching unlisted options to raise
$2.65 million before costs. The unlisted options have an exercise price of $0.015 and an expiry date of 31
January 2020.
Subsequent to year end Centaurus entered into an agreement to acquire a 100% interest in the title of the
Itapitanga nickel-cobalt tenement from a private Brazilian vendor. Under the terms of the agreement
Centaurus will pay up to R$150,000 (~A$60,000) over a six-month period and commit to undertake R$150,000
of exploration work on the ground over the same six month period. At the end of this period and on the basis
that Centaurus wishes to continue with the project it will pay the vendor R$500,000 (~A$200,000). Further,
should Centaurus elect to continue with the project it will make milestone payments to the vendor of R$1
million (~A$400,000) on definition of a JORC Resource and R$1.5 million (~A$600,000) on the grant of a Mining
Lease by the Brazilian Mines Department.
Other than the above 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 18 of 61
Annual Report – 31 December 2017
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 B R Scarpelli
Mr M D Hancock
Mr S A Parsons
13 Share Options
Ordinary Shares
Employee Options
Listed Options
10,987,968
56,675,293
-
3,677,224
3,111,111
12,500,000
28,000,000
20,000,000
9,000,000
7,000,000
4,091,494
25,874,705
-
1,756,530
1,111,111
At the date of this report unissued ordinary shares of the Company under unlisted option are:
Expiry Date
Exercise Price
Vested
Unvested
Employee Options
Options
10/06/2018
31/08/2018
10/06/2019
10/06/2020
31/05/2020
31/05/2021
31/05/2022
31/01/2020
$0.0082
$0.1250
$0.0082
$0.0082
$0.0130
$0.0140
$0.0150
$0.0150
5,500,000
2,000,000
8,500,000
-
18,500,000
-
-
-
34,500,000
-
-
-
8,500,000
-
18,500,000
37,000,000
-
64,000,000
-
-
-
-
-
-
-
147,500,000
147,500,000
Total Number Of
Shares Under
Option
5,500,000
2,000,000
8,500,000
8,500,000
18,500,000
18,500,000
37,000,000
147,500,000
246,000,000
The unlisted options expiring on 31 January 2020 were issued as a 1 for 2 free attaching option as part of the
share placement announced on 2 February 2018.
At the date of this report unissued ordinary shares of the Company under listed option are:
Expiry Date
30/04/2018
31/08/2019
Exercise Price
Total Number Of Shares
Under Option
$0.010
$0.010
224,874,914
623,757,741
848,632,655
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 August 2019 were issued as a 1 for 1 free attaching option as part of the
rights issue announced on 12 July 2017. The full terms of the options are set out in the Prospectus lodged with
the ASX on 13 July 2017.
14 Performance Rights
ASX Waivers in regard to Issue of Shares and Performance Rights - Pará Exploration Package
In February and March 2017, the Company obtained ASX waivers under Listing Rule 7.3.2 in connection with
the issue of 30,000,000 Shares and 90,000,000 Performance Rights to Terrativa Minerais SA for the right to
acquire 100% of the Pará Exploration Package (Pará EP) in Brazil, so as to permit the relevant securities to be
issued up until 2 December 2018.
Page 19 of 61
Annual Report – 31 December 2017
The issue of the future Shares and Performance Rights were approved by shareholders at the Company’s 2017
AGM held on 24 May 2017 and on 6 September 2017, the Company announced that it had met the earn-in
obligation of R$2.5 million in expenditure on the tenements and issued the 30 million Shares and 90 million
Performance Rights to Terrativa.
There are no Shares or Performance Rights that remain to be issued. No Performance Rights were converted
during the period as the vesting conditions have yet to be met. No Performance Rights have been cancelled.
The Performance Rights on issue as at the date of this report comprise three tranches of 30 million
Performance Rights each, and each will be converted into one Ordinary Share upon the achievement in full of
the following milestones:
• Tranche A – 30,000,000 Performance Rights will be converted into Ordinary Shares if, within a period
of 5 years after the date of issue of the Performance Rights (5 September 2017), a JORC-compliant
Inferred Resource of 500,000oz of gold or gold equivalent is defined on the Para EP Project
tenements;
• Tranche B – 30,000,000 Performance Rights will be converted into Ordinary Shares if, within a period
of 5 years after the date of issue of the Performance Rights, a JORC-compliant Inferred Resource of
1,000,000oz of gold or gold equivalent is defined on the Para EP Project tenements;
• Tranche C – 30,000,000 Performance Rights will be converted into Ordinary Shares if, within a period
of 5 years after the date of issue of the Performance Rights, a JORC-compliant Inferred Resource of
1,500,000oz of gold or gold equivalent is defined on the Para EP Project tenements.
15 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.
16 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.
Page 20 of 61
Annual Report – 31 December 2017
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
2017
$
31 December
2016
$
37,059
45,066
6,150
25,385
17 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 2017.
This report is signed in accordance with a resolution of the directors.
_________________
D P Gordon
Managing Director
Perth
21 March 2018
Page 21 of 61
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 of Centaurus Metals
Limited for the financial year ended 31 December 2017 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
21 March 2018
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 2017
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December 2017
Note
31 December
2017
$
31 December
2016
$
Profit or Loss
Other income
Exploration expenditure
Impairment of exploration and evaluation
Impairment of other receivables
Employee benefits expense
Share based payments expense
Occupancy expenses
Listing and share registry fees
Professional fees
Depreciation
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
Exchange differences arising on translation of foreign
operations
Other comprehensive income/(loss) for the period
Total comprehensive loss for the period
Earnings per Share
Basic loss per share
Diluted loss per share
7
18
16
8
11
9
10
12
14
14
122,559
142,093
(2,120,845)
(40,000)
(55,525)
(641,268)
(303,848)
(49,038)
(77,051)
(285,391)
(15,062)
(20,609)
(198,971)
(3,685,049)
52,240
-
52,240
(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
(3,632,809)
-
(3,632,809)
(3,318,902)
758,003
(2,560,899)
(297,101)
636,217
(297,101)
(3,929,910)
636,217
(1,924,682)
Cents
(0.26)
(0.26)
Cents
(0.39)
(0.39)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes.
Page 23 of 61
Annual Report – 31 December 2017
Consolidated Statement of Financial Position
As at 31 December 2017
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 – annual leave
Total current liabilities
Non-current liabilities
Trade and other payables
Employee benefits – long service leave
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Accumulated losses
Total equity
Note
15(a)
16
16
17
18
19
19
2017
$
2016
$
822,132
170,165
992,297
148,119
-
361,473
2,560,225
3,069,817
4,062,114
314,169
163,548
477,717
7,298
94,902
102,200
579,917
3,482,197
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
111,776,626
(6,554,464)
(101,739,965)
3,482,197
109,419,656
(6,561,211)
(98,107,156)
4,751,289
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying
notes.
Page 24 of 61
Annual Report – 31 December 2017
Consolidated Statement of Changes in Equity
For the year ended 31 December 2017
Balance at 1 January 2017
Loss for the period
Foreign currency translation difference for foreign operation
Total comprehensive loss for the period
Share-based payment transactions
Issues of ordinary shares
Share issue costs
Total transactions with owners
Balance at 31 December 2017
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 transactions
Issues of ordinary shares
Share issue costs
Total transactions with owners
Balance at 31 December 2016
Share-Based
Payments
Reserve
$
110,551
-
-
-
303,848
-
-
303,848
414,399
Foreign
Currency
Translation
Reserve
$
(6,671,762)
-
(297,101)
(297,101)
-
-
-
-
(6,968,863)
Accumulated
Losses
$
(98,107,156)
(3,632,809)
-
(3,632,809)
-
-
-
-
(101,739,965)
62,375
-
-
-
48,176
-
-
48,176
110,551
(7,307,979)
-
636,217
636,217
-
-
-
-
(6,671,762)
(95,546,257)
(2,560,899)
-
(2,560,899)
-
-
-
-
(98,107,156)
Issued
Capital
$
109,419,656
-
-
-
-
2,616,103
(259,133)
2,356,970
111,776,626
106,666,191
-
-
-
-
3,010,089
(256,624)
2,753,465
109,419,656
Total
Equity
$
4,751,289
(3,632,809)
(297,101)
(3,929,910)
303,848
2,616,103
(259,133)
2,660,818
3,482,197
3,874,330
(2,560,899)
636,217
(1,924,682)
48,176
3,010,089
(256,624)
2,801,641
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 61
Annual Report – 31 December 2017
Consolidated Statement of Cash Flows
For the year ended 31 December 2017
Note
31 December
2017
$
31 December
2016
$
Cash flows from operating activities
Exploration and evaluation expenditure
Payments to suppliers and employees (inclusive of GST)
Cash receipts from project partners
Interest received
Net cash used in operating activities
15(b)
(2,382,926)
(1,053,737)
84,902
50,466
(3,301,295)
(1,264,846)
(979,427)
98,238
32,565
(2,113,470)
Cash flows from investing activities
Payments for plant & equipment
Proceeds from grant of option over tenement
Proceeds from grant of future lease of mining rights
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)
(13,854)
84,390
-
21,820
92,356
2,496,102
(292,930)
2,203,172
(1,005,767)
1,891,367
(63,468)
822,132
(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
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Page 26 of 61
Annual Report – 31 December 2017
Notes to the Consolidated Financial Statements
For the year ended 31 December 2017
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 2017 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 21 March 2018.
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 2017 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 $3,632,809 with net cash outflows of $1,005,767. The
Group has a working capital surplus of $514,580.
The Group’s strategy is to realise maximum value for its remaining iron ore projects in south-eastern Brazil
which may include some form of joint development or outright divestment.
The Group plans to continue exploration work on its other gold and copper projects during 2018 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 continue its exploration plans and meet planned ongoing
costs of the business. The Group intends to fund further exploration with new equity issues or via the joint
venture or 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 and did raise $2.65 million in a share
placement subsequent to year end;
The Group has the potential to raise additional funds, up to $2.25 million, from the exercise of listed
options which are in-the-money at this date of this report and due to expire or be exercised at the
end of April 2018;
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
Page 27 of 61
Annual Report – 31 December 2017
The Group has an ongoing value realisation process in place in respect to its remaining iron ore assets
and is engaged in discussions with interested parties and potential customers of the high-grade
Jambreiro product.
The form, value and timing of any future transactions that may provide funding – including the exercise of in
the money listed options - 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 the equity raise completed subsequent to year end to meet forecast
minimum expenditure required to maintain tenements and meet ongoing costs. The ability of the Company to
achieve its forecast cash flows, 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 18 - 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 24 - 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 2017 is included in Note 18 – 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 28 of 61
Annual Report – 31 December 2017
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) 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.
(ii) Share-based Payment Transactions
The fair value of the employee share options is 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.
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.
Page 29 of 61
Annual Report – 31 December 2017
(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.
(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.
Page 30 of 61
Annual Report – 31 December 2017
(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.
(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) 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. 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.
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;
Page 31 of 61
Annual Report – 31 December 2017
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 program or by injection of
funds to be utilised for such a program 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.
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
Page 32 of 61
Annual Report – 31 December 2017
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) 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.
(iv) 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-vesting 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.
Page 33 of 61
Annual Report – 31 December 2017
(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.
(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.
Page 34 of 61
Annual Report – 31 December 2017
(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.
(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 2017 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.
Page 35 of 61
Annual Report – 31 December 2017
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
Note 7. Other Income
Cost reimbursement from project partners
Profit on sale of property plant and equipment
Proceeds from grant of option over tenement
Total
2017
Non-current
Assets
$
3,065,314
4,503
3,069,817
2016
Non-current
Assets
$
3,331,346
26,631
3,357,977
31 December
2017
$
26,895
11,274
84,390
122,559
31 December
2016
$
129,914
12,179
-
142,093
The proceeds from grant of option over tenement relates to the option fee paid for 12 months of exclusivity to
review the prospectivity of the Conquista Project tenements.
Note 8. Employee Benefits Expense
Salaries, fees and other benefits
Superannuation
Recognised in exploration expenditure expense
Total
31 December
2017
$
1,388,072
67,832
(814,636)
641,268
31 December
2016
$
1,100,494
44,697
(433,837)
711,354
Page 36 of 61
Annual Report – 31 December 2017
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
2017
$
31 December
2016
$
36,844
(21,782)
15,062
52,659
(21,971)
30,688
31 December
2017
$
31 December
2016
$
52,240
52,240
-
-
-
52,240
43,076
43,076
(451)
(41)
(492)
42,584
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 74,000,000 options issued to Employees
under the ESOP (2016: 22,500,000).
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
Issued during the period
Outstanding at balance date
Exercisable at balance date
Weighted
Average
Exercise Price
2017
$0.0177
$0.0143
$0.0151
$0.0175
Number of
Options
2017
24,500,000
74,000,000
98,500,000
34,500,000
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
The options outstanding at 31 December 2017 have exercise prices ranging from $0.0082-$0.125 (2016: either
$0.082 or $0.125) and the weighted average remaining contractual life is 3.13 years (2016: 2.5 years).
Page 37 of 61
Annual Report – 31 December 2017
Note 11. Share-based Payments (continued)
There were no ESOP options exercised during the year (2016: nil). There were 74,000,000 options issued
during the year (2016: 22,500,000). Details of the ESOP options issued during the year are as follows:
Grant Date
Number of Options
Vesting Conditions
Option Term
Directors
31/05/17
31/05/17
31/05/17
Sub total
Employees
31/05/17
31/05/17
31/05/17
Sub total
Total
14,750,000
14,750,000
29,500,000
59,000,000
3,750,000
3,750,000
7,500,000
15,000,000
74,000,000
Immediately
12 months1
24 months1
36 months
48 months
60 months
Immediately
12 months1
24 months1
36 months
48 months
60 months
Note 1: From the date of issue subject to continued employment.
Inputs for Measurement of Grant Date Fair Values
The model inputs for options issued in 2017 include:
Grant Date
Expiry Date
Exercise
Price
Life of
option
Share
price at
grant date
31/05/17
31/05/17
31/05/17
31/05/20
31/05/21
31/05/22
$0.013
$0.014
$0.015
3 years
4 years
5 years
$0.008
$0.008
$0.008
Expenses Arising From Share Based Payment Transactions
Total expense recognised as share based payment – share options
Expected
share
price
volatility
160%
160%
160%
Risk-free
interest
rate
Fair Value
at grant
date
1.65%
1.90%
1.90%
$0.0064
$0.0069
$0.0072
2017
$
303,848
2016
$
48,176
Performance Rights
The following Performance Rights were issued on 5 September 2017 and are held by Terrativa Minerais SA
under the terms of the Company’s Agreement with Terrativa signed in December 2016 in relation to the
acquisition of 100% of the Para Exploration Package in Brazil.
Each tranche of Performance Rights will be converted into Ordinary Shares upon the achievement in full of the
following vesting conditions:
•
•
•
Tranche A – 30,000,000 Performance Rights will be converted into 30,000,000 Ordinary Shares if,
within a period of 5 years after the date of issue of the Performance Rights, a JORC-compliant Inferred
Resource of 500,000oz of gold or gold equivalent is defined on the Pará Exploration Package Project
tenements;
Tranche B – 30,000,000 Performance Rights will be converted into 30,000,000 Ordinary Shares if,
within a period of 5 years after the date of issue of the Performance Rights, a JORC-compliant Inferred
Resource of 1,000,000oz of gold or gold equivalent is defined on the Pará Exploration Package Project
tenements;
Tranche C – 30,000,000 Performance Rights will be converted into 30,000,000 Ordinary Shares if,
within a period of 5 years after the date of issue of the Performance Rights, a JORC-compliant Inferred
Resource of 1,500,000oz of gold or gold equivalent is defined on the Pará Exploration Package Project
tenements.
During the year none of the Performance Rights were converted or cancelled and no vesting conditions were
met.
Page 38 of 61
Annual Report – 31 December 2017
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 27.5% (2016: 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
Effect of change in tax rate
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
2017
$
2016
$
(3,632,809)
(999,023)
(3,318,902)
(995,671)
141,378
83,558
6,927
(767,160)
(22,882)
909,315
326,291
-
(445,564)
-
89,746
14,453
148,906
(742,566)
(308,391)
-
260,833
758,003
790,124
758,003
(i) During 2016 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 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 27.5-34%)
2017
$
61,023,016
18,336,210
2016
$
62,657,152
19,769,836
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
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 (b)
2017
$
2016
$
8,497,893
4,983,933
33,541
18,336,210
31,851,577
8,773,191
3,571,814
150,991
19,769,836
32,265,832
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.
Page 39 of 61
Annual Report – 31 December 2017
Note 12. Income Tax (continued)
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: (2016: $nil).
Note 13. Dividends
There were no dividends paid or declared during the period (2016: nil).
Note 14. Earnings/(Loss) Per Share
Basic Loss per Share
The calculation of basic and diluted earnings per share at 31 December 2017 was based on the loss
attributable to ordinary shareholders of $3,632,809 (2016: $2,560,899) and a weighted average number of
ordinary shares outstanding of 1,377,344,215 (2016: 658,312,429), 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
2017
$
2016
$
(3,632,809)
(2,560,899)
2017
Number
1,123,246,437
254,097,778
1,377,344,215
2016
Number
521,463,429
136,849,000
658,312,429
Potential ordinary shares were not considered to be dilutive as the Group made a loss for the year ended 31
December 2017 and the exercise of potential shares would not increase that loss.
Note 15 (a). Cash and Cash Equivalents
Cash at bank and on hand
Deposits - short term
Deposits
2017
$
59,725
762,407
822,132
2016
$
105,816
1,785,551
1,891,367
The deposits are bearing floating and fixed interest rates between 2.47% and 6.64% (2016: between 2.35% and
13.2%).
Page 40 of 61
Annual Report – 31 December 2017
Note 15 (b). Reconciliation of Cash Flows from Operating Activities
Loss for the period
Adjustments for:
Depreciation
Non-cash employee benefits expense– share based payments
Impairment losses
Exploration and evaluation assets
Other receivables
Shares issued in lieu of remuneration
Change in fair value of derivative instruments
Profit 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
Note 16. Other Receivables and Prepayments
Current
Other Receivables
Security deposits
Prepayments
Non – Current
Prepayments
Other Receivables
Provision for impairment
2017
$
2016
$
(3,632,809)
(2,560,899)
36,844
303,848
40,000
55,525
-
20,609
(11,274)
-
(3,187,257)
156,281
(270,319)
(3,301,295)
52,659
48,176
464,646
21,160
46,085
69,243
(12,179)
(758,003)
(2,629,112)
(114,506)
630,148
(2,113,470)
2017
$
2016
$
62,555
30,133
77,477
170,165
148,119
945,376
(945,376)
148,119
176,936
30,133
62,796
269,865
210,080
964,934
(964,934)
210,080
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 2017 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 $55,525 was recognised in profit and loss in 2017 (2016: $21,160). Information about the Group’s
exposure to credit and market risk and impairment losses for other receivables is included in Note 24.
Page 41 of 61
Annual Report – 31 December 2017
Note 17. Property, Plant and Equipment
At Cost
Accumulated depreciation
2017
$
1,020,959
(659,486)
361,473
2016
$
1,103,666
(677,738)
425,928
17(a)
(a) Movements in carrying amounts
Movement in the carrying amounts for each class of property, plant and equipment between beginning and
end of the current financial year.
Plant and Equipment
Carrying amount at beginning
Additions
Disposals
Depreciation
Effect of movements in exchange rates
Carrying amount at end
Land
Carrying amount at beginning
Effect of movements in exchange rates
Carrying amount at end
Total
Note 18. Exploration and Evaluation Assets
Opening net book value
Additions
Impairment of capitalised exploration expenditure
Effect of movements in exchange rate
2017
$
2016
$
125,277
10,218
(3,537)
(36,844)
(6,552)
88,562
300,651
(27,740)
272,911
361,473
2017
$
2,701,360
120,000
(40,000)
(221,135)
2,560,225
206,355
4,386
(63,794)
(52,659)
30,989
125,277
244,012
56,639
300,651
425,928
2016
$
2,662,349
-
(464,646)
503,657
2,701,360
During the reporting period the Group acquired the Para exploration tenements via the issue of 30 million
Centaurus shares at $0.004 per share and 90 million Performance Rights. During the period an impairment loss
on the carrying value of the Company’s Serra Misteriosa project was recognised. The project was assessed for
impairment following results of the drilling program during the year. Whilst the Group retain tenure to the
areas, no further evaluation work is currently planned and accordingly the recoverable amount under 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 19. Trade and Other Payables
Current
Trade and other creditors
Accrued expenses
Non Current
Trade and other creditors
2017
$
2016
$
254,877
59,292
314,169
7,298
321,467
273,457
136,310
409,767
136,057
545,824
Page 42 of 61
Annual Report – 31 December 2017
Note 20. Capital and Reserves
On issue at beginning of period
Issue of ordinary shares for entitlements issue at $0.004 per share
Issue of ordinary shares for mineral asset acquisition $0.004 per share
Issue of ordinary shares for share placements $0.005 per share
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
On issue at the end of the period – Fully paid
Ordinary Shares
2017
Number of
Shares
1,123,246,437
624,025,798
30,000,000
-
-
-
-
1,777,272,235
2016
Number of
Shares
521,463,429
-
-
180,000,000
402,467,414
10,000,000
9,315,594
1,123,246,437
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
Information relating to the Employee Share Option Plan, including details of options 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 624,025,798 listed
options (ASX: CTMOB) (2016: 226,233,707 – ASX: CTMOA) with an exercise price of $0.01 (2016: $0.01) and an
expiry date of 31 August 2019 (2016: 30 April 2018). As at 31 December 2017, 850,259,505 (2016:
246,534,373) listed options remain unexercised.
Weighted
average
exercise
price
$0.013
$0.010
$0.050
$0.010
2017
Number of
Listed
Options
246,534,373
624,025,798
(20,300,666)
850,259,505
Weighted
average
exercise
price
$0.050
$0.010
-
$0.013
2016
Number of
Listed
Options
20,300,666
226,233,707
-
246,534,373
On issue at beginning of period
Options granted
Options expired
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 issued but not exercised.
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 21. Contingent Liabilities
Guarantees
Guarantees given in respect of bank security bonds amounting to $30,133 (2016: $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 43 of 61
Annual Report – 31 December 2017
Note 22. Capital Commitments
The group has no capital commitments as at the year ended 31 December 2017.
Note 23. 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
31 December
2017
$
583,215
-
7,306
19,308
237,974
847,803
31 December
2016
$
524,003
28,000
7,326
19,308
31,293
609,930
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
2017
2016
$
$
56,300
77,917
Balance Outstanding As At
31 Dec 2017
31 Dec 2016
$
$
-
17,174
-
17,174
(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 44 of 61
Annual Report – 31 December 2017
Note 24. Financial Instruments – Fair Values and Risk Management
Financial Risk Management
The Group has exposure to the following risks arising from the use of financial instruments:
Credit Risk (see (ii))
Liquidity Risk (see (iii))
Market Risk (see (iv))
Currency Risk (see (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 2017, 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 2017 no such transactions have been entered into.
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
2017
$
822,132
89,461
911,593
2016
$
1,891,367
198,277
2,089,644
(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.
Page 45 of 61
Annual Report – 31 December 2017
Note 24. Financial Instruments – Fair Values and Risk Management (continued)
The Group’s maximum exposure to credit risk for other receivables at the reporting date by geographic region
was:
Australia
Brazil
Carrying Amount
2017
$
32,763
56,698
89,461
2016
$
77,320
120,957
198,277
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 2017, the Group has current trade and other payables of $314,169 (31 December 2016:
$409,767). 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 2017
Non- derivative financial
liabilities
Trade and other payables
31 December 2016
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
321,467
(321,467)
(256,189)
(57,980)
(7,298)
545,824
(545,824)
(346,971)
(62,796)
(136,057)
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.
(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.
Page 46 of 61
Annual Report – 31 December 2017
Note 24. Financial Instruments – Fair Values and Risk Management (continued)
Interest Rate Risk Profile
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
2016
$
2017
$
Fixed rate instruments
Financial assets
Variable rate instruments
Financial assets
Trade and other payables
700,000
1,785,551
131,573
(123,286)
708,287
105,816
(251,198)
1,640,169
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 2016.
31 December 2017
Variable rate instruments
Cash flow sensitivity (net)
31 December 2016
Variable rate instruments
Cash flow sensitivity (net)
Capital Management
Profit or Loss
Equity
100bp
Increase
100bp
Decrease
100bp
Increase
100bp
Decrease
(708)
(708)
(1,453)
(1,453)
708
708
1,453
1,453
-
-
-
-
-
-
-
-
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 25. 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
2016
2017
Australia
Australia
Brazil
Brazil
Brazil
Brazil
100%
100%
100%
100%
100%
100%
Australia
-
100%
100%
100%
100%
100%
100%
50%
Page 47 of 61
Annual Report – 31 December 2017
Note 26. Subsequent Events
Subsequent to year end Centaurus completed a share placement, to sophisticated and professional investors,
and issued 295 million shares at $0.009 per share and 147.5 million free attaching unlisted options to raise
$2.65 million before costs. The unlisted options have an exercise price of $0.015 and an expiry date of 31
January 2020.
Subsequent to year end Centaurus entered into an agreement to acquire a 100% interest in the title of the
Itapitanga copper gold tenement from a private Brazilian vendor. Under the terms of the agreement Centaurus
will pay up to R$150,000 (~A$60,000) over a six-month period and commit to undertake R$150,000 of
exploration work on the ground over the same six month period. At the end of this period and on the basis
that Centaurus wishes to continue with the project it will pay the vendor R$500,000 (~A$200,000). Further,
should Centaurus elect to continue with the project it will make milestone payments to the vendor of R$1
million (~A$400,000) on definition of a JORC Resource and R$1.5million (~A$600,000) on the grant of a Mining
Lease by the Brazilian Mines Department.
Other than the above 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 27. Remuneration of Auditors
Audit Services
Auditors of the Company
Audit and review of financial reports – KPMG
Services other than statutory audit
Taxation compliance services - KPMG
Note 28. Parent Entity Disclosures
31 December
2017
$
31 December
2016
$
37,059
45,066
6,150
25,385
As at, and throughout, the financial year ended 31 December 2017 the parent entity of the Group was
Centaurus Metals Limited.
Results of the Parent Entity
Loss for the period (1)
Total comprehensive loss for the period
31 December
2017
$
31 December
2016
$
(3,027,641)
(3,027,641)
(1,900,796)
(1,900,796)
(1)
During the year ended 31 December 2017 the parent entity provided for an impairment of $1,250,000 (2016:$
700,000) relating to loans to subsidiaries based on an assessment of recoverability.
Page 48 of 61
Annual Report – 31 December 2017
Note 28. Parent Entity Disclosures (continued)
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
2017
$
2016
$
811,255
3,865,099
4,676,354
240,200
94,902
335,102
4,341,252
1,287,757
3,771,817
5,059,574
268,469
83,030
351,499
4,708,075
111,776,626
414,399
(107,849,773)
4,341,252
109,419,656
110,551
(104,822,132)
4,708,075
(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 2017 (2016: nil).
Parent Entity Capital Commitments
The parent entity had no capital commitments as at 31 December 2017 (2016: 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
2017
$
2016
$
38,267
4,352
-
42,619
50,681
35,996
-
86,677
Page 49 of 61
Annual Report – 31 December 2017
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 2017 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
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
2017.
The financial report also complies with International Financial Reporting Standards as disclosed in Note
2.
2.
3.
Signed in accordance with a resolution of the directors.
__________________
D P Gordon
Managing Director
Perth
21 March 2018
Page 50 of 61
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 2017 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 2017
• Consolidated statement of profit or loss and
other comprehensive income, 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 and
• 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 significant 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.
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.
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:
• Evaluating the feasibility, quantum and timing of the Group’s plans to raise additional shareholder
funds to address going concern;
• Assessing the Group’s cash flow forecasts for incorporation of the Group’s operations and plans 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
The Key Audit Matter we identified is:
• Capitalised exploration and evaluation
assets
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current
period.
These matters were 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 these matters.
Capitalised Exploration and Evaluation (“E&E”) assets $2,560,225
Refer to Note 18 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 5(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 63%
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.
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;
The key audit matter
How the matter was addressed in our audit
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:
• 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
• 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.
• 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:
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.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report.
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 the 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
• assessing the Group and Company's ability to continue as a going concern and whether the use of the
going concern basis of accounting is appropriate. 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 and Company 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_responsibilities/ar1.pdf.
This description forms part of our Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
Centaurus Metals Limited for the year ended 31
December 2017, complies with Section 300A of
the Corporations Act 2001.
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 section 5 of the Directors’ report for the year
ended 31 December 2017.
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
21 March 2018
Annual Report – 31 December 2017
Shareholder Information
The shareholder information set out below was applicable as at 12 March 2018.
Substantial Shareholders
The Company has no substantial shareholders.
Class of Shares and Voting Rights
(b)
There were 2,553 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)
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 654 holders of listed options over 225,041,789 unissued ordinary
shares with an exercise price of $0.01 and expiry date of 30 April 2018 and 544 holders of listed options over
623,813,296 unissued ordinary shares with an exercise price of $0.01 and an expiry date of 31 August 2019.
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 7 holders of unlisted options over
96,500,000 unissued ordinary shares. 22,500,000 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).
18,500,000 options have an exercise price of $0.013 and expire on 31 May 2020. 18,500,000 options have an
exercise price of $0.014 and expire on 31 May 2021. 37,000,000 options have an exercise price of $0.015 and
expire on 31 May 2022. There were 81 holders of unlisted options over 147,500,000 unissued ordinary shares.
These options have an exercise price of $0.015 and expire on 31 January 2020. 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.
Distribution of Equity Securities
The distribution of numbers of equity security holders by size of holding is shown in the table below. There
were 459 holders of less than a marketable parcel (being a minimum $500 parcel at $0.012 per share) of
ordinary shares.
1
1,001
5,001
10,001
100,001
1,000
-
5,000
-
10,000
-
- 100,000
and over
Ordinary
Shares
117
95
56
753
1,532
2,553
Class of Equity Security
Listed Options
(CTMOA)
48
92
53
278
183
654
Listed
Options
(CTMOB)
11
17
20
149
347
544
Unlisted
Options
Unlisted
Options
(ESOP)
-
-
-
-
7
7
81
81
Page 55 of 61
Annual Report – 31 December 2017
Shareholders
The names of the twenty largest shareholders are listed below:
Name
1 Mr Bradley Bolin
2 Terrativa Minerais SA
3 Atlas Iron Limited
4 Mr Darren Gordon
5 Mr Roger Fitzhardinge
6 Tavarua International Inc
7 Equity Trustees Limited
8 Citicorp Nominees Pty Limited
9
J P Morgan Nominees Australia Limited
10 HSBC Custody Nominees (Australia) Limited
11 Mr Craig Graham
12 BNP Paribas Nominees Pty Ltd
13 Mr Malcolm Thom
14 Ms Tracey Marshall
Strategic Corp Investments Ltd
15
16
Jeff Towler Building Pty Ltd
17 Mr T & Mrs B A McMahon
18 Mr Janaki Semerdziev
19 Mrs Hema Naga Iyothi Danda
20
Loxden Pty Ltd
Total Top 20 Shareholders
Other Shareholders
Total Number of Issued Shares
Listed Option Holders
Ordinary Shares (CTM)
Number
Held
90,738,899
76,501,476
60,320,264
56,675,293
47,013,109
33,898,305
33,333,333
23,063,596
22,420,620
22,360,732
19,000,000
18,964,635
16,388,698
16,222,111
15,295,500
15,000,000
12,983,330
12,750,000
12,043,650
12,000,000
616,973,551
1,456,703,104
2,073,676,655
Percentage of
Issued Shares (%)
4.38
3.69
2.91
2.73
2.27
1.63
1.61
1.11
1.08
1.08
0.92
0.91
0.79
0.78
0.74
0.72
0.63
0.61
0.58
0.58
29.75
70.25
100.00
The names of the twenty largest holders of listed options (CTMOA) are listed below:
Listed Options (CTMOA)
Name
1 Mr Kevin Press
2 Mr Bradley Bolin
3 Mrs Elisa Brunacci
4 Bainpro Nominees Pty Limited
5 Mr Ashley William Robin Parker
6 Mr Darren Gordon
7
Lehav Pty Ltd
8 Mr Roger Fitzhardinge
9 Mr Daniel Baker
Stolen Hours Enterprises Pty Ltd
10
11 Mr Matthew Smithyman
12 Mr John Jenkins
13 Mrs Brooke Cohen
14 Mr Christopher Girling & Ms Yvette Clark
15 CSNA Pty Ltd
16 Mr Joseph Alexander
17 Mr Gopi Krishna Haran
18 Mr Tyran Preece
19
20 Mr A & Mrs W Couper
Sandbelt Investments Pty Ltd
Total Top 20 Optionholders
Other Optionholders
Total Number of Listed Options
Number
Held
20,000,000
18,000,000
9,000,000
8,237,997
8,000,000
7,107,828
6,000,000
5,999,994
5,662,500
5,500,000
5,000,000
4,500,000
4,480,003
4,000,000
3,500,000
3,300,000
3,000,000
2,986,771
2,500,000
2,000,000
128,775,093
96,266,696
225,041,789
Percentage of
Listed Options (%)
8.89
8.00
4.00
3.66
3.55
3.16
2.67
2.67
2.52
2.44
2.22
2.00
1.99
1.78
1.56
1.47
1.33
1.33
1.11
0.89
57.22
42.78
100.00
Page 56 of 61
Annual Report – 31 December 2017
The names of the twenty largest holders of listed options (CTMOB) are listed below:
Listed Options (CTMOB)
Name
1 Mr Bradley Bolin
2 Equity Trustees Limited
3 Mr Darren Gordon
4 Mr Peter Thorpe
5 Mr Simon Sein Kwang Niak
6 Mr Roger Fitzhardinge
7 Mr Scott Malone
8
9 Mrs Hema Naga Jyothi Danda
Scintilla Strategic Investments Limited
10 Mr Steven Mitter
11 Mr James Laird
12 Prof Paul O’Brien
13 Munrose Investments Pty Ltd
14 Mr Leon Jahn
15 Mr Nicholas Hughes-Jones
16 Vindin Investments Pty Ltd
17 Comsec Nominees Pty Limited
18 Mrs Elisa Brunacci
19 Mr T & Mrs B A McMahon
20 Mr D W & Mr R S Fox
Total Top 20 Optionholders
Other Optionholders
Total Number of Listed Options
Number
Held
80,000,000
25,000,000
18,766,877
15,500,000
15,050,000
15,000,000
14,000,000
12,500,000
12,043,650
11,670,921
10,941,795
10,000,000
9,200,000
9,000,000
7,500,000
7,277,776
7,107,610
7,000,000
6,833,330
6,600,000
300,991,959
322,821,337
623,813,296
Percentage of
Listed Options (%)
12.82
4.01
3.01
2.48
2.41
2.40
2.24
2.00
1.93
1.87
1.75
1.60
1.47
1.44
1.20
1.17
1.14
1.12
1.10
1.06
48.25
51.75
100.00
Page 57 of 61
Annual Report – 31 December 2017
Tenement Information
Brazilian Tenements
Tenement
800.444/2011
800.442/2011
800.480/2011
800.471/2011
800.469/2011
800.338/2016
800.487/2011
800.474/2011
800.468/2011
800.470/2011
831.638/2004
831.639/2004
831.629/2004
832.183/2014
832.776/2006
833.185/2006
831.002/2007
833.795/2013
832.316/2005
833.133/2014
830.668/2015
831.879/2015
831.649/2004
833.409/2007
834.106/2010
831.645/2006
830.588/2008
833.410/2007
850.197/2017
851.548/2011
850.258/2013
850.560/2016
850.735/2016
851.022/2016
850.999/2016
850.286/2017
850.429/2016
850.430/2013
850.130/2013
Project Name
Location
Interest
Aurora
Aurora
Aurora
Aurora
Aurora
Aurora
Parambu
Parambu
Parambu
Parambu
Canavial
Canavial
Candonga
Conquista
Conquista
Conquista
Candonga South
Guanhães East
Itambé
Mombuca
Mombuca
Mombuca
Jambreiro (Mining Lease)
Jambreiro (Mining Lease)
Jambreiro (Mining Lease)
Passabém
Passabém
Regional Guanhães
Serra Misteriosa
Serra Misteriosa
Serra Misteriosa
Serra Vermelho
Serra Vermelho
Serra Vermelho
Serra da Fumaça
Serra da Fumaça
Salobo West II
Salobo West I
Pebas
Ceará
Ceará
Ceará
Ceará
Ceará
Ceará
Ceará
Ceará
Ceará
Ceará
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Minas Gerais
Pará
Pará
Pará
Pará
Pará
Pará
Pará
Pará
Pará
Pará
Pará
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%(1)
100%(2)
100%(2)
100%(2)
100%(2)
100%(2)
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
(1) Tenement is held 100% however a Commitment to Lease is in place with Ecosinter – Industria de Beneficiamento de Residuos
Ltda.
(2) Option granted over tenement to R3M Mineração Ltda
Australian Tenements
Tenement
EPM14233
Project Name
Mt Guide
Location
Queensland
Interest
10%(1)
(1)
(1) 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. Aeon Metals Limited has acquired 80% of Summits Interest giving them a total interest of 72% of
the tenement.
Page 58 of 61
Annual Report – 31 December 2017
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 2017
Ore Reserves as at 31 December 2016
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 2017
Mineral Resources as at 31 December 2016
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
2.0
3.5
29.4
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 59 of 61
Annual Report – 31 December 2017
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 2017. 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 2017, 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 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 Australasian 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 60 of 61
Annual Report – 31 December 2017
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 Australasian
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 61 of 61