ACN 009 468 099
Annual Report
31 December 2018
Centaurus Metals Limited ABN 40 009 468 099
And its controlled entities
Contents
Page
3
4
6
6
13
23
24
25
26
27
28
51
52
57
59
Corporate Directory
Directors’ 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
60 Mineral Resources and Ore Reserves Information
Page 2 of 62
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: CTMOB)
Principal & Registered Office in Australia
Level 3, 10 Outram Street
West Perth WA 6005
PO Box 975
West Perth WA 6872
Telephone: (08) 6424 8420
Email: office@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 2018
Corporate Directory
Directors
Mr D M Murcia AM, B. Juris, LL.B
Non-Executive Chairman
Mr D P Gordon B.Bus, FCA, AGIA, ACIS, MAICD
Managing Director
Mr B R Scarpelli M.Sc, PMP
Executive Director
Mr M D Hancock B.Bus, CA, FFin
Non-Executive Director
Mr C A Banasik B.App.Sc (Physics), M.Sc (Geology),
Dip Ed, GAICD
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
Level 14, 100 St Georges Tce
Perth WA 6000
Brazil
Banco Inter
Avenida do Contorno, 7.777 – Lourdes Belo
Horizonte – MG – CEP: 30.110-051 BRAZIL
Page 3 of 62
Annual Report – 31 December 2018
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 2018 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:
Mr D M Murcia
Mr D P Gordon
Mr B R Scarpelli
Mr M D Hancock
Mr C A Banasik
Mr S A Parsons
Independent Non-Executive Chairman
Managing Director
Executive Director
Independent Non-Executive Director
Independent Non-Executive Director (appointed 28 February 2019)
Independent Non-Executive Director (resigned 28 February 2019)
Unless otherwise disclosed, all directors held their office from 1 January 2018 until the date of this report.
2 Directors and Officers
Mr Didier M Murcia, AM, B.Juris, LL.B
Non-Executive Chairman, Age 56
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, MAICD
Managing Director, Age 47
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, resigned 10 May 2018) – Non-Executive
Director
Page 4 of 62
Annual Report – 31 December 2018
Mr Bruno R Scarpelli, M.Sc., PMP
Executive Director, Age 41
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.
Special Responsibilities
Administrator of Centaurus’ Brazilian subsidiaries
Country Manager - Brazil
Mr Mark D Hancock, B.Bus, CA, FFin
Non-Executive Director, Age 50
Experience and Expertise
Independent non-executive director appointed 23 September 2011. Mr Hancock is currently Chief Commercial
Officer of Atlas Iron Pty Ltd. He has over 25 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
Nil.
Mr Chris A Banasik, B.App.Sc (Physics), M.Sc (Geology), Dip Ed, GAICD
Non-Executive Director, Age 57
Experience and Expertise
Independent non-executive director appointed 28 Feburary 2019. Mr Banasik is a geologist with more than 30
years’ experience across multiple disciplines and commodities. He was a founding Director of WA gold
producer Silver Lake Resources (ASX: SLR), where he held the key role of Director of Exploration and Geology
from 2007 to 2014. Prior to that, he held a range of senior geological and executive roles for companies
including Consolidated Minerals, Reliance Nickel and Western Mining Corporation. He has extensive experience
in nickel exploration, project development and operations, having held several geological and management
positions with WMC (1986-2001). He was also Senior Mine Geologist with Goldfields Mine Management (2001-
2004) and Chief Geologist at the Beta Hunt nickel operations (2004-2007).
Other Directorships
During the last three years Mr Banasik held directorships in the following ASX listed companies:
First Graphene Ltd (appointed 20 May 2015, resigned 12 February 2018)
Mr Steven A Parsons, B.Sc(Hons) Geology, AusIMM
Non-Executive Director, Age 46
Experience and Expertise
Non-executive director appointed 31 March 2017 and resigned 28 February 2019. 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, Bellevue Gold Ltd (formerly Draig Resources Ltd).
Other Directorships
During the last three years Mr Parsons held directorships in the following ASX listed companies:
Bellevue Gold Ltd (formerly Draig Resources Limited) (appointed 31 March 2017) - Executive
Director
Blackstone Minerals Ltd (appointed 30 October 2017) – Non Executive Director
African Gold Limited (appointed 1 February 2018) – Executive Director
Mr Paul A Bridson, B.Com, CA, AGIA , ACIS
Company Secretary, Age 51
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
Page 5 of 62
Annual Report – 31 December 2018
3 Directors Meetings
The number of meetings of the Company’s Board of Directors held during the year ended 31 December 2018
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*
3
3
3
3
3
Attended
3
3
3
3
3
*Denotes the number of meetings held during the time the director held office (excluding circular resolutions)
The Company does not have a formal Nomination Committee, Audit & Risk Committee or Remuneration
Committee. The functions of the Audit & Risk Committee and the Remuneration Committee are performed by
the full Board.
4 Corporate Governance Statement
A copy of Centaurus’ 2018 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 executive roles.
The remuneration framework currently consists of base pay and long-term incentives through participation in
the Employee Share Option Plan.
Page 6 of 62
Annual Report – 31 December 2018
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:
2018
$
2017
$
2016
$
2015
$
2014
$
Net Loss
(4,197,361)
(3,632,809)
(2,560,899)
(3,700,866)
(10,460,299)
Change in share price
$0.00
$0.00
$0.002
($0.046)
($0.15)
During the financial year ended 31 December 2018, no fee increases were awarded to non-executive directors,
however salary increases were awarded to executive directors and executives of the Company.
The executive pay and reward framework currently has three components:
base pay and benefits;
long term incentives through participation in the Employee Share Option Plan; and
other remuneration such as superannuation and insurances.
The combination of these components comprises the executive’s total remuneration.
Base Pay
Base pay is structured as a total employment cost package which may be delivered as a combination of cash
and prescribed non-financial benefits at the executive’s discretion. Executives are offered a competitive base
pay that is reflective of current market conditions, comprising a fixed component of pay and rewards. Base
pay for senior executives is reviewed annually to ensure the executive’s remuneration is competitive with the
market. An executive’s base pay is also reviewed on promotion. There are no guaranteed base pay increases
included in any senior executive contracts.
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.
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 2018 was $327,000. 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 prior periods.
Page 7 of 62
Annual Report – 31 December 2018
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 2018 was $185,000 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 prior periods.
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.
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 prior periods. 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 62
Annual Report – 31 December 2018
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
30,000
22,500
310,680
300,692
173,806
164,551
589,486
562,743
-
-
-
-
-
-
29,152
8,560
18,643
11,912
47,795
20,472
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
25,320
19,308
15,413
7,306
-
-
-
-
25,812
39,358
18,102
27,685
17,595
25,667
52,300
81,406
38,718
63,858
25,320
19,308
15,413
7,306
152,527
237,974
70,812
84,358
48,102
57,685
47,595
48,167
432,865
417,272
231,167
240,321
830,541
847,803
-
-
-
-
-
-
-
-
-
-
36.5%
46.7%
37.6%
48.0%
37.0%
53.3%
12.1%
19.5%
16.7%
26.6%
Non- Executive Directors
Mr D M Murcia
2018
2017
Mr M D Hancock
2018
2017
Mr S A Parsons
2018
2017
Executive Directors
Mr D P Gordon
2018
2017
Mr B R Scarpelli
2018
2017
Total
2018
2017
(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 62
Annual Report – 31 December 2018
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.
The Group has a policy that prohibits directors and employees who are granted share options 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 in prior periods as remuneration to key management
personnel of the Group are detailed below. There were 2,000,000 options with an exercise price of $0.1250
which expired on 31 August 2018. There were no options forfeited during the year. A total of 4,000,000
options with an exercise price of $0.0082 were exercised in June 2018 raising $32,800:
Number of
Options
Issued
1,000,000
1,000,000
2,500,000
2,500,000
5,000,000
3,000,000
3,000,000
5,000,000
5,000,000
10,000,000
1,500,000
1,500,000
3,750,000
3,750,000
7,500,000
750,000
750,000
1,750,000
1,750,000
3,500,000
1,750,000
1,750,000
3,500,000
Grant Date
Expiry
Date
Exercise
Price
% Vest in
Year
Fair value
per option
at grant
date
Financial
Year in
Which
Grant
Vests (1)
10/06/16
10/06/16
31/05/17
31/05/17
31/05/17
10/06/16
10/06/16
31/05/17
31/05/17
31/05/17
10/06/16
10/06/16
31/05/17
31/05/17
31/05/17
10/06/16
10/06/16
31/05/17
31/05/17
31/05/17
31/05/17
31/05/17
31/05/17
10/06/19
10/06/20
31/05/20
31/05/21
31/05/22
10/06/19
10/06/20
31/05/20
31/05/21
31/05/22
10/06/19
10/06/20
31/05/20
31/05/21
31/05/22
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
$0.0130
$0.0140
$0.0150
$0.0082
$0.0082
$0.0130
$0.0140
$0.0150
$0.0082
$0.0082
$0.0130
$0.0140
$0.0150
$0.0082
$0.0082
$0.0130
$0.0140
$0.0150
$0.0130
$0.0140
$0.0150
$0.0026
$0.0031
$0.0064
$0.0069
$0.0072
$0.0026
$0.0031
$0.0064
$0.0069
$0.0072
$0.0026
$0.0031
$0.0064
$0.0069
$0.0072
$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%
-
2017
2018
2017
2018
2019
2017
2018
2017
2018
2019
2017
2018
2017
2018
2019
2017
2018
2017
2018
2019
2017
2018
2019
Mr D M Murcia
Mr D P Gordon
Mr B R Scarpelli
Mr M D Hancock
Mr S A Parsons
(1)
The options which vest in 2019 are subject to the satisfaction of service conditions.
Exercise of Options Granted as Compensation
There were 4,000,000 shares issued on exercise of options which were previously granted as compensation to
key management personnel.
Page 10 of 62
Annual Report – 31 December 2018
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
2018
Exercised
Lapsed
Vested
During the
Period
Held 31
December
2018
Vested and
Exercisable
31
December
2018
12,500,000
28,000,000
20,000,000
9,000,000
7,000,000
(500,000)
(2,000,000)
(1,000,000)
(500,000)
-
-
-
(1,000,000)
-
-
12,000,000
26,000,000
18,000,000
8,500,000
7,000,000
3,500,000
8,000,000
5,250,000
2,500,000
1,750,000
7,000,000
16,000,000
10,500,000
5,000,000
3,500,000
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)
-
-
-
-
-
900
3,600
1,800
900
-
-
-
-
-
-
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 62
Annual Report – 31 December 2018
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
2018
$
19,392
2017
$
56,300
31 Dec 2018
$
10,651
10,651
31 Dec 2017
$
-
-
(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
2018
10,987,968
56,675,293
-
3,677,224
3,111,111
Purchases (1)
Sales
Other
2,091,494
9,107,828
1,000,000
943,236
-
-
-
-
-
-
Held at 31
December
2018
13,079,462
65,783,121
1,000,000
4,620,460
3,111,111
-
-
-
-
-
(1) Exercise of listed and unlisted options.
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
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
2018
4,091,494
25,874,705
-
1,756,530
1,111,111
Purchases
Exercised
Expired
-
-
-
-
-
(1,591,494)
(7,107,828)
-
(443,236)
-
Held at 31
December
2018
2,500,000
18,766,877
-
1,313,294
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 62
Annual Report – 31 December 2018
7 Operating and Financial Review
A summary of consolidated results is set out below
Interest Income
Other Income
31 December
2018
$
31 December
2017
$
67,097
19,712
86,809
52,240
122,559
174,799
Loss before income tax
Loss attributable to members of Centaurus Metals Limited
(4,197,361)
(4,197,361)
(3,632,809)
(3,632,809)
Financial Performance
During the year ended 31 December 2018 the Group expensed Exploration and Evaluation costs totalling
$2,463,216 (2017: $2,120,845) in accordance with the Group’s accounting policy. The Exploration and
Evaluation costs primarily comprise costs in relation to exploration at the Itapitanga Nickel-Cobalt Project and
the Salobo West and Pebas Copper – Gold Projects in Brazil.
Financial Position
At the end of the year the Group had a cash balance of $1,399,910 (2017: $822,132) and net assets of
$3,967,189 (2017: $3,482,197). Total liabilities amounted to $492,930 (2017: $579,917) 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 2018 calendar year saw the acquisition of the Itapitanga Nickel-Cobalt Project in the Carajás Mineral
Province in Northern Brazil from a private vendor. The acquisition was made to build on the base metal
presence in the Carajás Mineral Province whilst development/divestment options are assessed in relation to
the Company’s Iron Ore assets.
Project Activities
Overview
The year ending 31 December 2018 was an important period for Centaurus, with the acquisition of the
Itapitanga Nickel-Cobalt Project in the Carajás Mineral Province of northern Brazil and the subsequent
formation of the Itapitanga Joint Venture with Simulus. The strategic acquisition further expanded and
strengthened Centaurus’ existing mineral portfolio in the Carajás Mineral Province and opened up an exciting
new front for its exploration activities in 2018 alongside its existing Salobo West Copper-Gold and Pebas
Copper-Gold Projects.
Carajás Base Metal Projects
Itapitanga Nickel-Cobalt Project
During the period, Centaurus secured a 100% interest in the Itapitanga Nickel-Cobalt Project, a highly
prospective nickel-cobalt exploration project in the Carajás Mineral Province of northern Brazil located
immediately along strike from world-class nickel-cobalt deposits owned by global majors Anglo American and
Vale. The Itapitanga Project is located primarily on farm land, covers an area of approximately 50km2 and is
located 50km north-east of the regional centre of São Felix de Xingu and 110km west of Vale’s operating nickel
mine, Onça‐Puma.
The Project covers the southern extension of the same ultramafic-mafic intrusive complex that hosts both the
Jacaré Nickel-Cobalt Project and several unpublished nickel-cobalt resources held by Vale.
Since securing the Project in late January 2018, the Company has extensively explored the project area, initially
commencing with an auger drill program. The auger drilling was successful in defining significant zones of high-
grade nickel-cobalt mineralisation from surface and also indicating the interpreted limits of the mineralisation.
Page 13 of 62
Annual Report – 31 December 2018
At the Northern Target the hand-held auger defined a 3.5km long and 650m wide zone of mineralisation. The
auger drilling at the Northern Target also demonstrated that the nickel-cobalt laterite mineralisation occurs
from surface, with high grades of both nickel and cobalt mineralisation intersected to depths of 12m prior to
drill refusal occurring.
Following the positive auger drilling results the Company commenced its first RC drill program at the Project,
comprising 155 vertical drill holes for a total of 4,309m, to test beneath the extensive high-grade nickel-cobalt
mineralisation identified by the auger drilling. Drilling culminated in the identification of four significant
mineralised targets, with the key target being the Northern Target. Many of the drill intersections commence
at, or very close to, surface, which bodes well for a low strip open pit mining case.
With the completion of the drill program at Itapitanga the Company was able to establish a maiden
Exploration Target based on the strong and consistent high-grade results.
The Exploration Target comprises 35-45Mt at 0.80% to 1.10% nickel, 0.07% to 0.12% cobalt and 18g/t to 30g/t
scandium. Full details of the Exploration Target estimate are set out in the Company’s ASX Announcements
dated 1 August 2018 and 10 August 2018.
Centaurus cautions that the potential quantity and grade of the Exploration Target is conceptual in nature and
there has been insufficient exploration to define a JORC compliant Mineral Resource. It is also uncertain if
further exploration and resource development work will result in the estimation of a Mineral Resource.
The Exploration Target estimate for the Itapitanga Project comprises between 280,000-495,000 tonnes of
nickel, 24,500-54,000 tonnes of cobalt and 965-2,065 tonnes of scandium oxide.
Processing testwork has demonstrated that the Itapitanga mineralisation is amenable to multiple leaching
processes, with metal extractions for nickel consistently over 98% and cobalt over 94%.
Hand-held auger drilling continued to be undertaken at the Project to expand the scale and potential of the
discovery including potential new high-grade zones.
Following the positive exploration work completed during the year, the Company was able execute a binding
earn-in joint venture arrangement with Australian-based battery metals process leader, the Simulus Group
(“Simulus”), covering the future exploration, evaluation and development of Itapitanga.
Under the staged earn-in Agreement, Simulus can earn up to an 80% interest in the project and will manage it
through various study phases utilising its extensive in-house capabilities for process design on nickel-cobalt
projects with the ultimate aim of delivering a low capital intensity process design and completing a Definitive
Feasibility Study.
Centaurus will be free-carried throughout the various exploration, resource evaluation and feasibility phases
until project financing is arranged and a decision to mine is made.
With the execution of the binding Term Sheet, the parties will work to complete a formal earn-in Joint Venture
and Shareholders Agreement as soon as possible based on the key commercial points agreed in the Term
Sheet.
The earn-in will comprise up to four stages as follows:
Stage
Description of Stage
Simulus
Deliverable
Timeframe
1
2a
Scoping Study
Scoping Study
Report
6 months from execution of
Term Sheet
Feasibility Study Core Disciplines
including resource drill out and
flowsheet optimisation
FS Progress
Report
12 Months of delivering
Scoping Study
Simulus
Equity on
Completion
of Stage
21%
49%
2b
Definitive Feasibility Study
Final DFS Report Within 6 Months of delivering
70%
3
Finalising arms-length financing
and decision to Mine
Financing for the
Project
FS Progress Report
No prescribed time frame
80%
Page 14 of 62
Annual Report – 31 December 2018
The parties have agreed a high-level work plan for each stage which will be finalised as part of the formal
documentation process. Should the milestone payments to the original project vendor be triggered during the
earn-in phase, these payments will also be met by Simulus. There are only two milestone payments, being:
1. R$1.0 million on the definition of a JORC Resource; and
2. R$1.5 million on grant and gazettal of a Mining Lease.
From the time that Simulus earns its final equity position of 80%, the parties will then contribute to ongoing
development costs on a pro rata basis or dilute. Simulus can withdraw at any time.
Since signing the earn-in agreement Simulus have moved quickly to advance the project development
requesting 230kg of variability samples of Itapitanga mineralisation and this sample was air-freighted to the
Simulus laboratory in Perth in January 2019.
Furthermore, Simulus initiated the collection of a 40-tonne bulk sample that is to be run though their state-of-
the-art demonstration plant in Perth, Western Australia. The bulk sample is intended to provide a sufficiently
large and representative ore sample for Feasibility Study-level flowsheet optimisation to be undertaken,
allowing the flowsheet currently being proposed by Simulus for the Project to be confirmed and the requisite
engineering design data to be collected.
Simulus have an active program of works planned for the 2019 year.
Salobo West Copper-Gold Project
The Salobo West Copper-Gold Project consists of two tenements, SW1 and SW2, covering a combined total
area of 120km2 of highly prospective ground only 12km along strike from Vale’s giant Salobo Cu-Au Mine. The
project is also located in the world-class Carajás Mineral Province of northern Brazil. A total of fifteen (15)
world-class mineral deposits lie within an area of just 150 x 100km, including nine IOCG deposits with
resources of +100 million tonnes of copper-gold ore.
Whilst the SW1 tenement was granted in June 2017, the SW2 tenement was only granted in November 2017.
Following the grant of SW2, Centaurus reviewed historical geological, geochemical and geophysical survey
data over the tenement and based on the review work generated multiple walk-up drill targets which the
Company will look to drill in conjunction with the targets it previously generated on the SW1 tenement.
Generally, the priority-1 targets at both SW1 and SW2 focus on coincident geological, structural, geochemical
and geophysical targets.
The Company’s preliminary drill plan allows for 35 drill holes to test the targets on the SW1 and SW2
tenements.
Salobo West Licensing
In March 2018, the Company lodged its application to clear and drill with the environmental agency
responsible for the area (the Chico Mendes Institute for Biodiversity Conservation (ICMBio)) for the first phase
of drilling. Centaurus was advised by ICMBio’s local field office that the Company’s application for a drilling and
clearing licence at the Project had initially been denied based on a recent change of interpretation of the
relevant environmental regulations.
The Company took steps to elevate consideration of its drilling licence application to higher levels of the
ICMBio environmental agency and discussed the ICMBio initial decision with the National Mining Agency
(ANM) and the Ministry of Mines, given that there was no new environmental legislation or regulation
introduced relevant to the project area since it was last drilled at the end of 2010 by Anglo American.
The ICMBio reconsidered its preliminary finding handed down in May 2018 and cleared the way for the
licensing process to resume. The agency confirmed that the Salobo West Project does in fact meet the
requirements for clearing and drilling activities to occur, subject to the normal environmental approval process
required for exploration in forested areas.
During the September 2018 Quarter, Centaurus received the go-ahead to resume the environmental licensing
process for its maiden drill program at Salobo West. As a result, Centaurus recommenced all activities
associated with securing the licence – with the main activity being the completion of a vegetation inventory
over the areas where clearing and the initial 35-hole drill program is planned to be undertaken.
Page 15 of 62
Annual Report – 31 December 2018
The ICMBio decision also provided the Company with the confidence to plan the resumption of its non-ground
disturbing exploration activities at Salobo West.
The vegetation inventory survey field work covering the areas where clearing and the initial 35-hole drill
program is proposed was completed in early November 2018. This was a comprehensive survey covering more
than 50km over both tenements at Salobo West. The survey report was completed and lodged with ICMBio for
review and approval. This report is an integral part of the site access clearing and drill licence application
process for the Project.
Based on the results of the vegetation inventory, Centaurus is comfortable that there should be no
impediment to ICMBio granting the required environmental licence for clearing and drilling, with the Company
planning for the licence to be secured before the end of the regional wet season in 2019.
Drilling of the SW1 and SW2 Prospects can only be undertaken with an ICMBio approved clearing and drilling
licence.
3D VTEM Modelling
Processing of historical Versatile Time Domain Electromagnetic (VTEM) data over the Salobo West Project area
during the December 2018 quarter identified multiple new high-priority iron oxide copper-gold (IOCG)
exploration targets.
The Company engaged highly-experienced geophysical consultants, Southern Geoscience, to carry out 3D
modelling on a selection of profiles from the VTEM survey that was flown by Anglo American in 2009. The
survey covered 322 line-kilometres and was run on 200m-spaced profiles with a base frequency of 30Hz.
Preliminary work was carried out on four select sections that cover the SW1-A and SW1-B Prospects on the
SW1 tenement. In some cases, the sections were coincident with IP survey lines (also completed by Anglo
American in 2009).
The results of the first four sections modelled highlighted a number of outstanding potential high-grade drill
targets where the magnetic and EM conductor plates are coincident with IP chargeability anomalies and
previously defined Cu-Au(-Co) soil anomalies.
The results from the 3D VTEM modelling have been very encouraging and have provided an excellent platform
to allow the exploration team to vector in on the potential high-grade copper-gold mineralisation.
SW2 Tenement
The SW2 tenement at Salobo West was granted in November 2017. During the March Quarter, Centaurus
identified and reviewed historical exploration data for the SW2 Tenement, enabling it once again to fast-track
its evaluation of the exploration potential of the Salobo West Project by leveraging off historical exploration
data.
The Company’s geological team has a positive view of the prospectivity of the SW2 tenement given its location
relative to the Salobo mine and a number of regional structures that are coincident with multiple distinct
magnetic anomalies.
Results from a soil sampling and field mapping program on the SW2 tenement generated further large IOCG
targets.
Three prospects were delineated in the 2017 year on the SW1 tenement (SW1-A, SW1-B and Serendipidade)
with the soil sampling and mapping on the SW2 tenement in 2018 identifying two additional large-scale, and
highly prospective, prospects – the Dom and Gov Prospects.
The Dom Prospect is delineated by an extensive +4.5km long Cu-Au-in-soils anomaly that is up to 800m wide
locally with soil values of up to 650ppm Cu and 137ppb Au. The soil signature for the Dom Prospect is
comparable to a number of the known IOCG deposits in the Carajás. The Gov Prospect is delineated by a 2.0km
long copper-in-soils anomaly that is up to 400m wide with soil values of up to 502ppm Cu.
The southern 70% of the SW2 tenement remains un-sampled. Multiple EM conductors (digitized from Vale’s
historical exploration reports to the DNPM) and discrete magnetic anomalies are present throughout this area
and this highlights the potential for additional quality exploration targets to be generated in the future. The
Company is currently operating under a non-ground disturbing exploration licence and, as such, additional soil
sampling and mapping over these southern targets can be undertaken in upcoming field campaigns.
Page 16 of 62
Annual Report – 31 December 2018
Pebas Copper Gold Project
The Pebas Project is located approximately 8km outside of the regional city of Parauapebas and 20km north of
the operating Antas Norte copper-gold mine, operated by ASX-100 copper-gold miner Oz Minerals (ASX: OZL),
which completed a takeover of fellow ASX-listed miner Avanco Resources in mid-2018.
The Project is hosted within the highly prospective Itacaiúnas Supergroup, which hosts all Iron Oxide Copper-
Gold (IOCG) deposits within the Carajás Mineral Province. The Pebas Project area is wedged between the
regionally important Cigano and Estrela Granite Complexes.
Historical drill results at the Pebas Project by TSX listed INV Metals in 2010 included 146.9m at 0.21% Cu and
0.08 g/t Au from surface in drill hole PRN-DD-37 and 105.0m at 0.23% Cu from surface in drill hole PRN-DD-36
(refer to SMD ASX Announcement dated 10 September 2018).
Centaurus commenced a seven-hole drill program in September 2018 to test three of the four main targets.
Drilling intersected the copper-sulphide mineralisation locally as stringer veins but predominantly as
disseminations of chalcopyrite within strongly altered host rocks comprised of garnet-chlorite-magnetite-
grunerite schists, interpreted to be originally metasediments. This alteration style is typical of a number of
IOCG deposits in the region (e.g. Salobo and Furnas).
While the first phase of drilling did not encounter significant massive sulphides, the intense alteration and
broad chalcopyrite mineralisation intersected in the drilling was encouraging. Drill holes have been cased
which will allow downhole EM survey work to be undertaken in the future if warranted.
Presently, the Company’s focus is on the Salobo West Copper Gold Project, the Itapitanga Nickel-Cobalt Project
and the Jambreiro Iron Ore Project.
Minas Gerais Iron Ore Projects
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 premium pricing that exists in the market for high grade
ore (+65% Fe) such as that which could be produced at Jambreiro.
During the year Centaurus prepared and delivered a new product sample from Jambreiro 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).
Initial feedback from potential customers who tested the product confirm the high grade, low impurity nature
of the Jambreiro product and have indicated that the product would be a sought-after source of supply if it was
available for purchase in the domestic market.
Further supply discussions have more recently been held with other potential customers interested in the high-
quality product that can be produced from the Jambreiro Project. Each party that has reviewed the product
specification has indicated that they would be interested in the supply of the premium Jambreiro product if it
was available in the market.
In March 2019, the Company decided that it would rework the 2013 Feasibility on the Project given the
significant changes and marked improvements in a number of key parameters since the 2013 Feasibility Study
was completed, including:
Higher prices in the international market for premium 62% Fe ore;
Lower availability of high-grade iron ore in the Brazilian domestic market compared with 2013;
Improved domestic market pricing relative to 2013 as a result of the currency impact of a weaker
Brazilian Real against the US Dollar;
Significant premiums being realised for higher grade 65% Fe product, in light of tighter
environmental conditions for steel mills across the globe, which didn’t present in the domestic
market in 2013;
Greater access to open-access ports, logistics and infrastructure compared with 2013, which
should provide a greater opportunity for the Company to consider supply into the export market;
A number of new potential customers and partners in the domestic market which were not
available to the Company in 2013; and
A new pro-development government in Brazil which should provide strength for the domestic
steel industry in Brazil over the coming years.
Page 17 of 62
Annual Report – 31 December 2018
Conquista Iron Ore Project
During the December 2018 Quarter, Centaurus divested the Conquista Project to private Brazilian mining
group, R3M. Under the terms of the Agreement, R3M made an initial payment of R$500,000 (~A$185,000) and
has also granted the Company a 12% production royalty on all future production from Conquista and a number
of surrounding exploration tenements which are prospective for iron ore. As part of this royalty arrangement,
Centaurus will receive an upfront payment of R$1.5 million on the commencement of production from
Conquista as an advance of the production royalty.
It should be noted that the Conquista Project is still in the exploration phase and there is no certainty that
revenue will be realised from the production royalty.
All proceeds received by Centaurus from the sale of Conquista will be split 75% Centaurus, 25% Terrativa (the
original vendor of the Conquista tenements to Centaurus). Terrativa’s share of proceeds arises from the
termination of its previous royalty interest in the Project.
Corporate
Capital Raisings
In February 2018 the Company completed a share placement at $0.009 per share raising $2.655 million before
costs. The placement included one free attaching option for every two new shares issued with an exercise
price of $0.015 and an expiry date of 31 January 2020. The Company issued 295,000,000 new shares and
147,500,000 new options.
The proceeds of the share placement were predominately used to progress the exploration of the newly
acquired Itapitanga Nickel-Cobalt Project and the Salobo West Copper-Gold Project in the Carajás Mineral
Province.
In May 2018 the Company raised $2.27 million from the exercise of listed options. A total of 226,233,707 (ASX:
CTMOA) options and 976,223 (ASX: CTMOB) options were exercised both of which were exercisable at $0.01
per share. The CTMOA options expired on 30 April 2018 and the CTMOB options expire on 31 August 2019. A
total of 227,209,930 new shares were issued.
In June 2018 the Company raised a further $45,100 via the exercise of 5,500,000 unlisted director and
employee options at an exercise price of $0.0082 each.
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.
Exploration Target
This report comments on and discusses Centaurus Metals Limited’s exploration in terms of target size and type. The
information relating to Exploration Targets should not be misunderstood or misconstrued as an estimate of Mineral
Resources or Ore Reserves. The potential quantity and quality of material discussed as Exploration Targets is conceptual in
nature since there has been insufficient work completed to define them as Mineral Resources or Ore Reserves. It is uncertain
if further exploration work will result in the determination of a Mineral Resource or Ore Reserve.
Factors and Business Risks Affecting Future Business Performance
The following factors and business risks could have a material impact on the Company’s success in delivering
its strategy:
Access to Funding
The Company’s ability to successfully develop future projects is contingent on the ability to fund those projects
from operating cash flows or through affordable debt and equity raisings. Ongoing exploration of the
Company’s Projects is contingent on developing appropriate funding solutions.
Page 18 of 62
Annual Report – 31 December 2018
Commodity Prices
Commodity prices fluctuate according to changes in demand and supply. The Company is exposed to changes
in the price of a number of commodities, which could affect the future profitability of the Company’s projects.
Significant adverse movements in commodity prices could also affect the ability to raise debt and equity to
fund future exploration and development of projects.
Exchange Rates
The Company is exposed to changes in the US Dollar and the Brazilian Real. Sales of most commodities are
denominated in US Dollars. The Company’s CAPEX and OPEX costs will be primarily denominated in Brazilian
Real.
Sale or Joint Venture 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 2018 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 $2.2 million share placement issuing 400 million shares at
$0.0055 per share to sophisticated and professional investors. Each share includes a free attaching option
having an exercise price of $0.012 and an expiry date of 31 May 2021. The options are subject to shareholder
approval, which will be sought at the Company’s Annual General Meeting due to be held before the end of
May 2019. Subject to meeting applicable ASX and ASIC requirements, the Company intends to seek quotation
of the options.
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 19 of 62
Annual Report – 31 December 2018
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 C A Banasik
13 Share Options
Ordinary Shares
Employee Options
Listed Options
13,079,462
65,783,121
1,000,000
4,620,460
750,000
12,000,000
26,000,000
18,000,000
8,500,000
-
2,500,000
18,766,877
-
1,313,294
-
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
10/06/2019
10/06/2020
31/05/2020
31/05/2021
31/05/2022
31/01/2020
$0.0082
$0.0082
$0.0130
$0.0140
$0.0150
$0.0150
8,500,000
8,500,000
18,500,000
18,500,000
-
-
54,000,000
-
-
-
-
33,500,000
-
33,500,000
-
-
-
-
-
167,500,000
167,500,000
Total Number of
Shares Under
Option
8,500,000
8,500,000
18,500,000
18,500,000
33,500,000
167,500,000
255,000,000
A total of 147,500,000 unlisted options exercisable at $0.015 and 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. A total of
20,000,000 unlisted options exercisable at $0.015 and expiring on 31 January 2020 were issued as part of the
placement fee.
At the date of this report unissued ordinary shares of the Company under listed option are:
Expiry Date
Exercise Price
Total Number of Shares
Under Option
31/08/2019
$0.010
623,049,575
The listed options expiring on 31 August 2019 were issued as 1 for 1 free attaching options 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
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.
Page 20 of 62
Annual Report – 31 December 2018
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 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.
There are no 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.
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 Group, 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 21 of 62
Annual Report – 31 December 2018
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
2018
$
31 December
2017
$
36,182
37,059
6,150
6,150
17 Lead Auditor’s Independence Declaration
The lead auditor’s independence declaration is set out on page 23 and forms part of the directors’ report for
the period ended 31 December 2018.
This report is signed in accordance with a resolution of the directors.
_________________
D P Gordon
Managing Director
Perth
28 March 2019
Page 22 of 62
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 2018 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
28 March 2019
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 2018
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December 2018
Note
31 December
2018
$
31 December
2017
$
15
13
7
8
Profit or Loss
Other income
Exploration expenditure
Impairment of exploration and evaluation
Impairment of other receivables
Loss on sale of mineral asset
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
Interest income
Net finance income
Loss before income tax
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 loss for the period
Total comprehensive loss for the period
19,712
122,559
(2,463,216)
-
(64,874)
(66,522)
(723,936)
(191,753)
(46,030)
(92,695)
(325,276)
(9,120)
-
(300,748)
(4,264,458)
(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)
67,097
67,097
52,240
52,240
(4,197,361)
(4,197,361)
(3,632,809)
(3,632,809)
(177,353)
(297,101)
(177,353)
(4,374,714)
(297,101)
(3,929,910)
Earnings per Share
Basic loss per share
Diluted loss per share
11
11
Cents
(0.19)
(0.19)
Cents
(0.26)
(0.26)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes.
Page 24 of 62
Annual Report – 31 December 2018
Consolidated Statement of Financial Position
As at 31 December 2018
Current assets
Cash and cash equivalents
Other receivables and prepayments
Total current assets
Non-current assets
Other receivables and prepayments
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
12(a)
13
13
14
15
16
16
2018
$
2017
$
1,399,910
149,934
1,549,844
97,956
324,461
2,487,858
2,910,275
4,460,119
181,921
180,939
362,860
-
130,070
130,070
492,930
3,967,189
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
116,382,624
(6,388,926)
(106,026,509)
111,776,626
(6,554,464)
(101,739,965)
3,967,189
3,482,197
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying
notes.
Page 25 of 62
Annual Report – 31 December 2018
Consolidated Statement of Changes in Equity
For the year ended 31 December 2018
Balance at 1 January 2018
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 options exercised
Share issue costs
Transfer on exercise of options
Transfer of options lapsed
Total transactions with owners
Balance at 31 December 2018
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
Share-Based
Payments
Reserve
$
414,399
-
-
-
264,963
-
-
-
(11,255)
89,183
342,891
757,290
Foreign
Currency
Translation
Reserve
$
(6,968,863)
-
(177,353)
(177,353)
-
-
-
-
-
-
-
(7,146,216)
Accumulated
Losses
$
(101,739,965)
(4,197,361)
-
(4,197,361)
-
-
-
-
-
(89,183)
(89,183)
(106,026,509)
110,551
-
-
-
303,848
-
-
303,848
(6,671,762)
-
(297,101)
(297,101)
-
-
-
-
(98,107,156)
(3,632,809)
-
(3,632,809)
-
-
-
-
Issued
Capital
$
111,776,626
-
-
-
-
2,655,000
2,317,199
(377,456)
11,255
-
4,605,998
116,382,624
109,419,656
-
-
-
-
2,616,103
(259,133)
2,356,970
Total
Equity
$
3,482,197
(4,197,361)
(177,353)
(4,374,714)
264,963
2,655,000
2,317,199
(377,456)
-
-
4,859,706
3,967,189
4,751,289
(3,632,809)
(297,101)
(3,929,910)
303,848
2,616,103
(259,133)
2,660,818
111,776,626
414,399
(6,968,863)
(101,739,965)
3,482,197
The amounts recognised directly in equity are disclosed net of tax.
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Page 26 of 62
Annual Report – 31 December 2018
Consolidated Statement of Cash Flows
For the year ended 31 December 2018
Note
31 December
2018
$
31 December
2017
$
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
12(b)
(2,887,884)
(1,281,868)
21,638
66,549
(4,081,565)
(2,382,926)
(1,053,737)
84,902
50,466
(3,301,295)
Cash flows from investing activities
Payments for plant & equipment
Payment for project acquisitions
Proceeds from grant of option over tenement
Proceeds from sale of mineral assets
Proceeds from sale of plant & equipment
Net cash from /(used in) investing activities
Cash flows from financing activities
Proceeds from issue of equity securities
Proceeds from the exercise of options
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
(17,671)
(221,963)
-
181,927
52,600
(5,107)
2,655,000
2,317,199
(304,247)
4,667,952
581,280
822,132
(3,502)
Cash and cash equivalents at 31 December
12(a)
1,399,910
(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
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Page 27 of 62
Annual Report – 31 December 2018
Notes to the Consolidated Financial Statements
For the year ended 31 December 2018
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 2018 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 28 March 2019.
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; and
Share based payments are measured at fair value.
Going Concern
The financial statements for the year ended 31 December 2018 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 $4,197,361 with net cash inflows of $581,280. The
Group has a working capital surplus of $1,186,984.
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 development, joint or otherwise, or outright divestment.
The Group plans to rework the 2013 Jambreiro Feasibility Study and continue exploration work at its Salobo
West Copper Gold Project during 2019 whilst the Company’s Itapitanga Nickel-Cobalt Project will be worked
and funded during 2019 by JV partner, Simulus. Centaurus has flexibility 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
development, joint development or outright sale 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 successfully completed a share placement post year end to raise a total of $2.2 million
(before costs);
The Group has the potential to raise additional funds, up to $6.23 million, from the exercise of listed
options which are out-of-the-money at this date of this report and due to expire or be exercised at
the end of August 2019;
Page 28 of 62
Annual Report – 31 December 2018
The prospective nature of the Salobo West Copper Gold Project and the Itapitanga Nickel-Cobalt
project where a discovery has been made and an initial Exploration Target of 35-45Mt of Ni/Co
mineralisation has been estimated;
The improved environment domestically in Brazil for the merits of developing the Jambreiro Iron Ore
Project. The 2013 economics set out in the 1Mtpa Feasibility Study are likely to have improved over
the last 6-12 months;
The Group entered into a farm-out JV over the Itapitanga Project whereby Simulus are funding the
ongoing costs of this project until a decision to mine; and
The Group has an ongoing value realisation process in place in respect to its Jambreiro Iron Ore
Project with a rework of its 2013 Feasibility Study planned to assist in determining the best way
forward to deliver maximum value for the Company’s shareholders. The Company continues to be
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
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. Accordingly the ability to access funds
remains uncertain.
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
raise future funding in order to continue its plans represents a 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 13 - Other Receivables and Prepayments;
Note 15 - 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 21 - 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 2018 is included in Note 15 – 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.
Page 29 of 62
Annual Report – 31 December 2018
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.
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.
Page 30 of 62
Annual Report – 31 December 2018
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 financial instruments, a financial liability designated as a hedge of the net
investment in a foreign operation, or qualifying cash flow hedges, which are recognised in other
comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign
currency are translated using the exchange rate at the date of the transaction.
(ii) Foreign Operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
acquisition, are translated to Australian dollars at exchange rates at reporting date. The income and expenses
of foreign operations are translated to Australian dollars at average exchange rates for the period.
Foreign currency differences are recognised in other comprehensive income and presented in the foreign
currency translation reserve (translation reserve, or FCTR) within equity. When a foreign operation is disposed
of, in part or in full, the relevant amount in the FCTR is transferred to profit or loss as part of the profit or loss
on disposal.
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned
nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are
considered to form part of a net investment in a foreign operation and are recognised in other comprehensive
income and are presented within equity in the FCTR.
(c) Financial Instruments
The Group classifies non-derivative financial assets into the following categories at fair value through profit
and loss, at fair value through other comprehensive income and measured at amortised cost.
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 and cash and cash equivalents.
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.
Page 31 of 62
Annual Report – 31 December 2018
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.
(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.
Page 32 of 62
Annual Report – 31 December 2018
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical
feasibility and commercial viability or facts and circumstances suggest that the carrying amount exceeds the
recoverable amount.
Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances
exist:
The term of exploration license in the specific area of interest has expired during the reporting
period or will expire in the near future and is not expected to be renewed;
Substantive expenditures on further exploration for and evaluation of mineral resources in the
specific area are not budgeted nor planned;
Exploration for and evaluation of mineral resources in the specific area has not led to the
discovery of commercially viable quantities of mineral resources and the decision was made to
discontinue such activities in the specified area; or
Sufficient data exists to indicate that although a development in the specific area is likely to
proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered
in full from successful development or by sale.
Where a potential impairment is indicated, an assessment is performed for each cash-generating unit which is
no larger than the area of interest. The Group performs impairment testing in accordance with Accounting
Policy 5(g)(ii).
Farm-out Arrangements
Arrangements whereby an external party earns an ownership interest in an exploration or development
property via the sole-funding of a specified exploration, evaluation or development 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
A loss allowance for expected credit loss (ECL) is recognised on financial assets measured at amortised cost.
The loss allowances are measured at an amount equal to lifetime ECLs, except for, bank balances which are
measured at 12-month ECLs, for which credit risk (i.e. the risk of default occurring over the expected life of the
financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables are always measured at an amount equal to lifetime ECLs.
When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the Group considers reasonable and supportable information that is
relevant and available without undue cost or effort. This includes both quantitative and qualitative
information and analysis, based on the Group’s historical experience and informed credit assessment and
including forward-looking information.
The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days
past due.
The Group considers a financial asset to be in default when the financial asset is more than 90 days past due.
Page 33 of 62
Annual Report – 31 December 2018
Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial
instrument. 12-month ECLs are the portion of ECLs that result from default events that are possible within the
12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12
months).
The maximum period considered when estimating ECLs is the maximum contractual period over which the
Group is exposed to credit risk.
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of
all cash shortfalls. ECLs are discounted at the effective interest rate of the financial asset.
Credit-impaired financial assets
At each reporting date, the Group assesses whether financial assets carried at amortised costs are credit-
impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on
the estimated future cash flows of the financial asset have occurred.
Presentation of allowance for ECL in the statement of financial position
Loss allowances for financial assets measured at amortised costs are deducted from the gross carrying
amount of the assets.
Write-off
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations
of recovering a financial asset in its entirety or a portion thereof.
(ii) Non-financial Assets
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at each
reporting date to determine whether there is any indication of impairment. If any such indication exists, then
the asset’s recoverable amount is estimated.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value
less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually
are grouped together into the smallest group of assets that generates cash inflows from continuing use that
are largely independent of the cash inflows of other assets or groups of assets. The group of assets is referred
to as the Cash Generating Unit or CGU.
The Group’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate
asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset
belongs.
An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated
recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in
respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, and
then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis.
In respect of assets, other than goodwill, impairment losses recognised in prior periods are assessed at each
reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is
reversed if there has been a change in the estimates used to determine the recoverable amount. An
impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had
been recognised.
Page 34 of 62
Annual Report – 31 December 2018
(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 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.
(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 recognised when the goods are delivered and have been accepted by customers at their premises.
For contracts that permit the customer to return an item, revenue is recognised to the extent that it is highly
probably that a significant reversal in the amount of cumulative revenue recognised will not occur.
Therefore, the amount of revenue recognised is adjusted for expected returns, which are estimated based on
the historical data. In these circumstances, a refund liability and a right to recover returned goods asset are
recognised.
Page 35 of 62
Annual Report – 31 December 2018
(k) Finance Income and Finance Costs
Finance income comprises interest income on funds invested, dividend income, gains on the disposal of debt
securities measured at fair value through other comprehensive income, changes in the fair value of financial
assets at fair value through profit and 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, losses on the disposal of debt securities measured at
fair value through other comprehensive income, 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.
(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.
Page 36 of 62
Annual Report – 31 December 2018
(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 2018.
AASB 9 Financial Instruments
AASB 15 Revenue from Contracts with Customers
AASB 9 Financial Instruments
AASB 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some
contracts to buy or sell non-financial items. This standard replaces AASB 139 Financial Instruments:
Recognition and Measurement. AASB 9 largely retains the requirements of AASB 139 for the classification and
measurement of financial liabilities. However, it eliminates the previous AASB 139 categories for financial asset
of held to maturity, loans and receivables and available for sale.
The adoption of AASB 9 has not had a significant effect on the Group’s accounting policies related to financial
liabilities.
Under AASB 9, on initial recognition, a financial asset is classified as measured at: amortised cost, fair value
through other comprehensive income (“FVOCI”); or fair value through profit or loss (“FVTPL”). The
classification of financial assets under AASB 9 is generally based on the business model in which the financial
asset is managed and its contractual cash flow characteristics.
The following table explains the original measurement under AASB 139 and the new measurement categories
under AASB 9 for each class of the Group’s financial assets and liabilities as at 1 January 2018.
Classification under AASB 139
Classification under AASB 9
Financial assets
Cash and cash equivalents
Loans and receivables
Other receivables
Loans and receivables
Amortised cost
Amortised cost
Financial Liabilities
Trade and other payables
Other financial liabilities at amortised cost
Amortised cost
Additionally, the Group has adopted consequential amendments to IFRS 7 Financial Instruments Disclosures
that are applied to disclosure in regards to 2018 but have not generally been applied to comparative
information.
AASB 15 Revenue from Contracts with Customers
AASB 15 established a comprehensive framework for determining whether, how much and when revenue is
recognised. It replaced AASB 118 Revenue, AASB 111 Construction Contracts and related interpretations.
The group has considered the requirements of AASB 15 Revenue from Contracts with Customers and
concluded that the adoption of this standard from 1 January 2018 has no impact due to the Group not having
any revenue contracts with customers.
Page 37 of 62
Annual Report – 31 December 2018
(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 2018 but have not been applied in preparing this financial report.
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 January 2019, 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. Employee Benefits Expense
Salaries, fees and other benefits
Superannuation
Recognised in exploration expenditure expense
Total
Note 8. Share-based Payments
Employee Share Option Plan
2018
Non-current
Assets
$
2,905,394
4,881
2,910,275
2017
Non-current
Assets
$
3,065,314
4,503
3,069,817
31 December
2018
$
1,678,986
82,577
(1,037,627)
723,936
31 December
2017
$
1,388,072
67,832
(814,636)
641,268
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 no new options issued to Employees under
the ESOP (2017: 74,000,000).
Page 38 of 62
Annual Report – 31 December 2018
Note 8. Share-based Payments (continued)
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
Exercised during the period
Expired during the period
Issued during the period
Outstanding at balance date
Exercisable at balance date
Weighted
Average
Exercise Price
2018
$0.0151
$0.0082
$0.1250
-
$0.0133
$0.0118
Number of
Options
2018
98,500,000
(5,500,000)
(2,000,000)
-
91,000,000
54,000,000
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
The options outstanding at 31 December 2018 have exercise prices ranging from $0.0082-$0.0150 (2017:
between $0.0082-$0.125) and the weighted average remaining contractual life is 2.34 years (2017: 3.13 years).
There were 5,500,000 options exercised during the year (2017: nil). There were no options issued during the
year (2017: 74,000,000).
Expenses Arising from Share Based Payment Transactions
Total expense recognised as share-based payment – share options
2018
$
191,753
2017
$
303,848
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 39 of 62
Annual Report – 31 December 2018
Note 9. 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% (2017: 27.5%)
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
Deferred tax assets not recognised
Income tax benefit, being deferred tax
(b) Tax Losses
Tax losses
Potential tax benefit (between 27.5-34%)
2018
$
2017
$
(4,197,361)
(1,154,274)
(3,632,809)
(999,023)
153,405
52,732
(1,803)
(949,940)
(84,607)
-
329,397
705,150
-
141,378
83,558
6,927
(767,160)
(22,882)
909,315
326,291
(445,564)
-
2018
$
60,730,448
18,224,348
2017
$
61,023,016
18,336,210
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 9 (b)
2018
$
2017
$
8,295,797
4,571,886
37,040
18,224,348
31,129,071
8,497,893
4,983,933
33,541
18,336,210
31,851,577
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.
Note 10. Dividends
There were no dividends paid or declared during the period (2017: nil).
Page 40 of 62
Annual Report – 31 December 2018
Note 11. Earnings/(Loss) Per Share
Basic Loss per Share
The calculation of basic and diluted earnings per share at 31 December 2018 was based on the loss
attributable to ordinary shareholders of $4,197,361 (2017: $3,632,809) and a weighted average number of
ordinary shares outstanding of 2,197,258,184 (2017: 1,377,344,215), 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
2018
$
2017
$
(4,197,361)
(3,632,809)
2018
Number
1,777,272,235
419,985,949
2,197,258,184
2017
Number
1,123,246,437
254,097,778
1,377,344,215
Diluted Earnings per Share
Potential ordinary shares were not considered to be dilutive as the Group made a loss for the year ended 31
December 2018 and the exercise of potential shares would not increase that loss.
Note 12 (a). Cash and Cash Equivalents
Cash at bank and on hand
Deposits - short term
2018
$
60,151
1,339,759
1,399,910
2017
$
59,725
762,407
822,132
The deposits are bearing floating and fixed interest rates between 2.38% and 6.55% (2017: between 2.47% and
6.64%).
Note 12 (b). Reconciliation of Cash Flows from Operating Activities
Loss for the period
Adjustments for:
Depreciation
Non-cash employee benefits expense– share based payments
Impairment l of exploration and evaluation assets
Impairment of other receivables
Change in fair value of derivative instruments
Loss on sale of mineral asset
(Profit)/Loss on sale of plant and equipment
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
2018
$
2017
$
(4,197,361)
(3,632,809)
19,200
191,753
-
64,874
-
66,522
1,574
(3,853,438)
36,844
303,848
40,000
55,525
20,609
-
(11,274)
(3,187,257)
25,102
156,281
(253,229)
(4,081,565)
(270,319)
(3,301,295)
Page 41 of 62
Annual Report – 31 December 2018
Note 13. Other Receivables and Prepayments
Current
Other Receivables
Security deposits
Prepayments
Non – Current
Prepayments
Other Receivables
Provision for impairment
2018
$
2017
$
37,551
30,133
82,250
149,934
97,956
944,058
(944,058)
97,956
62,555
30,133
77,477
170,165
148,119
945,376
(945,376)
148,119
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. During the year the Company did utilise the PIS-Cofins asset to
compensate for the PIS-Cofins liability on the sale of the Conquista project. Taxable profits in the ordinary
course of business are not, however, considered probable and therefore the Group has determined to fully
impair the value of its PIS-Cofins tax asset. An impairment expense of $64,874 was recognised in profit and loss
in 2018 (2017: $55,525). Information about the Group’s exposure to credit and market risk and impairment
losses for other receivables is included in Note 21.
Note 14. Property, Plant and Equipment
At Cost
Accumulated depreciation
(a) Movements in carrying amounts
2018
$
703,201
(378,740)
324,461
2017
$
1,020,959
(659,486)
361,473
14 (a)
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
2018
$
2017
$
88,562
17,099
(14,832)
(19,200)
(5,190)
66,439
272,911
(14,889)
258,022
324,461
125,277
10,218
(3,537)
(36,844)
(6,552)
88,562
300,651
(27,740)
272,911
361,473
Page 42 of 62
Annual Report – 31 December 2018
Note 15. Exploration and Evaluation Assets
Opening net book value
Additions
Disposals
Impairment of capitalised exploration expenditure
Effect of movements in exchange rate
2018
$
2,560,225
226,596
(191,092)
-
(107,871)
2,487,858
2017
$
2,701,360
120,000
-
(40,000)
(221,135)
2,560,225
During the reporting period the Group acquired the Itapitanga exploration tenements from a private Brazilian
vendor.
Further, the Conquista Iron Ore project was divested to R3M Mineração Ltda. Under the terms of the
Conquista agreement, R3M Paid R$500,000 and granted the Group a 12% production royalty on all future
production from the Conquista and a number of surrounding exploration tenements which are prospective for
iron ore. As part of this arrangement, should the project be developed the Group will receive an upfront
payment of R$1.5 million on the commencement of production from Conquista as an advance of the
production royalty.
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 16. Trade and Other Payables
Current
Trade and other creditors
Accrued expenses
Non-Current
Trade and other creditors
Note 17. Capital and Reserves
On issue at beginning of period
Issue of ordinary shares for placement at $0.009
Issue of ordinary shares on exercise of listed options at $0.01 per
share
Issue of ordinary shares on exercise of unlisted options at $0.0082
per share
Issue of ordinary shares for entitlements issue at $0.004 per share
Issue of ordinary shares for mineral asset acquisition $0.004 per share
On issue at the end of the period – Fully paid
Ordinary Shares
2018
$
2017
$
162,820
19,101
181,921
-
181,921
254,877
59,292
314,169
7,298
321,467
2018
Number of
Shares
1,777,272,235
295,000,000
227,209,930
2017
Number of
Shares
1,123,246,437
-
-
5,500,000
-
-
-
2,304,982,165
624,025,798
30,000,000
1,777,272,235
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.
Page 43 of 62
Annual Report – 31 December 2018
Note 17. Capital and Reserves (continued)
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 8.
Listed Options
During the year 226,233,707 listed options (ASX: CTMOA) issued in 2016 and 976,223 listed options (ASX:
CTMOB) issued in 2017 were exercised both at a price of $0.01. As at 31 December 2018, 623,049,575 (2017:
850,259,505) listed options (ASX: CTMOB) remain unexercised with an expiry date of 31 August 2019.
Weighted
average
exercise
price
$0.010
$0.010
$0.010
-
-
$0.010
2018
Number of
Listed
Options
850,259,505
226,233,707
976,223
-
-
623,049,575
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
On issue at beginning of period
Options exercised - CTMOA
Options exercised - CTMOB
Options granted
Options expired
On issue at the end of the period
Unlisted Options
In addition to the unissued shares under options disclosed in Note 8, as part of the share placement in
February 2018 the Company issued 167,500,000 unlisted options (147,500,000 related to the share placement
and 20,000,000 related to the placement fee) with an exercise price of $0.015 and an expiry date of 31 January
2020. As at 31 December 2018, all of these unlisted options remain unexercised.
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 18. Contingent Liabilities
Guarantees
The Company has given guarantees in respect of bank security bonds amounting to $30,133 (2017: $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.
Note 19. Capital Commitments
The group has no capital commitments as at the year ended 31 December 2018.
Page 44 of 62
Annual Report – 31 December 2018
Note 20. Related Parties
(a) Key Management Personnel
(i) Key management personnel compensation is comprised of the following:
Short term employee-benefits
Long term employee benefits
Post–employment benefits
Share-based payments expense
31 December
2018
$
637,281
15,413
25,320
152,527
830,541
31 December
2017
$
583,215
7,306
19,308
237,974
847,803
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
2018
$
$
56,300
19,392
Balance Outstanding as at
31 Dec 2017
31 Dec 2018
$
$
-
10,651
-
10,651
(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.
Note 21. Financial Instruments – Fair Values and Risk Management
The effect of initially applying AASB 9 on the Group’s financial instruments is described in Note 5.
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.
Page 45 of 62
Annual Report – 31 December 2018
Note 21. Financial Instruments – Fair Values and Risk Management (continued)
(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 2018, 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. During the year
the Company did utilise the PIS-Cofins asset to compensate for the PIS-Cofins liability on the sale of the
Conquista project.
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
2018
$
1,399,910
70,392
1,470,302
2017
$
822,132
89,461
911,593
(i)
The cash and cash equivalents are held with bank and financial institution counterparties, which are
rated BBB to AA based on rating agency Standard and Poor’s rating.
The Group’s maximum exposure to credit risk for other receivables at the reporting date by geographic region
was:
Australia
Brazil
Carrying Amount
2018
$
32,959
37,433
70,392
2017
$
32,763
56,698
89,461
These balances are net of provision for impairment (refer to Note 13).
(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.
Page 46 of 62
Annual Report – 31 December 2018
Note 21. Financial Instruments – Fair Values and Risk Management (continued)
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 2018, the Group has current trade and other payables of $181,921 (31 December 2017:
$314,169). 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.
Carrying
amount
Contractual
cash flows
6 mths or
less
6-12 mths
1-2 years
31 December 2018
Non- derivative financial
liabilities
Trade and other payables
31 December 2017
Non- derivative financial
liabilities
Trade and other payables
(iv) Market Risk
181,921
(181,921)
(181,921)
-
-
321,467
(321,467)
(256,189)
(57,980)
(7,298)
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.
Interest Rate Risk Profile
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
2017
$
2018
$
Fixed rate instruments
Financial assets
Variable rate instruments
Financial assets
Trade and other payables
800,000
700,000
605,773
-
1,405,773
131,573
(123,286)
708,287
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.
Page 47 of 62
Annual Report – 31 December 2018
Note 21. Financial Instruments – Fair Values and Risk Management (continued)
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 2017.
31 December 2018
Variable rate instruments
Cash flow sensitivity (net)
31 December 2017
Variable rate instruments
Cash flow sensitivity (net)
Capital Management
Profit or Loss
Equity
100bp
Increase
100bp
Decrease
100bp
Increase
100bp
Decrease
(1,405)
(1,405)
(708)
(708)
1,405
1,405
708
708
-
-
-
-
-
-
-
-
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 22. Group Entities
Parent Entity
Centaurus Metals Limited
Subsidiaries
Centaurus Resources Pty Ltd
San Greal Resources Pty Ltd
Itapitanga Holdings Pty Ltd*
Centaurus Brasil Mineração Ltda
Centaurus Pesquisa Mineral Ltda
Centaurus Gerenciamento Ltda
Aliança Mineração Ltda
Itapitanga Mineração Ltda
Country of
Incorporation
Ownership interest
2017
2018
Australia
Australia
Australia
Brazil
Brazil
Brazil
Brazil
Brazil
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
100%
100%
100%
100%
-
*Itapitanga Holdings Pty Ltd was incorporated in December 2018 as a result of the agreement entered into
with the Simulus Group to Joint Venture the Itapitanga Nickel-Cobalt Project. Under the terms of the
agreement Simulus can earn up to an 80% interest in the project with the Group free carried throughout the
various exploration, resource evaluation and feasibility phases until project financing is arranged and a
decision to mine is made. The earn-in will be facilitated by the issue of equity in Itapitanga Holdings Pty Ltd
which will hold the majority equity in Itapitanga Mineração Ltda, the Brazilian subsidiary which will hold the
Itapitanga nickel-cobalt project tenement.
Page 48 of 62
Annual Report – 31 December 2018
Note 23. Subsequent Events
Subsequent to year end Centaurus completed a $2.2 million share placement issuing 400 million shares at
$0.0055 per share to sophisticated and professional investors. Each share includes a free attaching option
having an exercise price of $0.012 and an expiry date of 31 May 2021. The options are subject to shareholder
approval, which will be sought at the Company’s Annual General Meeting due to be held before the end of
May 2019. Subject to meeting applicable ASX and ASIC requirements, the Company intends to seek quotation
of the options.
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 24. 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 25. Parent Entity Disclosures
31 December
2018
$
31 December
2017
$
36,182
37,059
6,150
6,150
As at, and throughout, the financial year ended 31 December 2018 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
2018
$
31 December
2017
$
(4,842,509)
(4,842,509)
(3,027,641)
(3,027,641)
(1)
During the year ended 31 December 2018 the parent entity provided for an impairment of $2,900,000 (2017:
$1,250,000) relating to loans to subsidiaries based on an assessment of recoverability.
Page 49 of 62
Annual Report – 31 December 2018
Note 25. 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
2018
$
2017
$
981,572
3,731,620
4,713,192
224,673
130,070
354,743
4,358,449
811,255
3,865,099
4,676,354
240,200
94,902
335,102
4,341,252
116,382,624
668,107
(112,692,282)
4,358,449
111,776,626
414,399
(107,849,773)
4,341,252
(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.
Page 50 of 62
Annual Report – 31 December 2018
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 2018 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
2018.
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
28 March 2019
Page 51 of 62
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 2018
and of its financial performance for the year
ended on that date; and
The Financial Report comprises:
• Consolidated statement of financial position as
at 31 December 2018
• 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
•
complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
accounting policies
• Directors’ Declaration.
The Group consists of the Company and the
entities it controlled at the year-end or from time
to time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (the Code) that are relevant to our audit of the Financial Report in
Australia. We have fulfilled our other ethical responsibilities in accordance with the Code.
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.
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.
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 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
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.
This matter was addressed in the context of our audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on this matter.
In addition to the matter described in the Material uncertainty related to going concern section, we
have determined the matter described below to be the Key Audit Matter.
Capitalised exploration and evaluation assets ($2,487,858)
Refer to Notes 5(e) and 15 to the Financial Report
The key audit matter
How the matter was addressed in our audit
The Group’s policy is to capitalise acquisition
costs in relation to an area of interest, less any
impairment charges recognised.
E&E is a key audit matter due to:
•
the significance of the activity to the
Group’s business and the balance (being
56% of total assets); and
Our audit procedures included:
• evaluating the Group’s accounting policy to
recognise exploration and evaluation assets
using the criteria in the accounting standard;
• we assessed the Group’s determination of its
areas of interest for consistency with the
definition in the accounting standard. This
involved analysing the licenses in which the
Group holds an interest and the exploration
programmes planned for those;
•
the greater level of audit effort to evaluate
the Group’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 the Group
of the value of E&E assets. Given the
criticality of this to the scope and depth of
our work, we involved senior team
members to challenge the Group’s
determination that no such indicators
existed.
In assessing the presence of impairment
indicators, we focused on those that may draw
into question the commercial continuation of
E&E activities where significant carrying value
of E&E assets exists (i.e. Jambreiro). Given the
financial position of the Group, 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 the Group’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 economically
recoverable mineral resources or reserves.
•
for the significant areas of interest, we
assessed the Group’s current rights to tenure
by checking 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;
• 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 analysed the Group’s determination of
recoupment of E&E assets through successful
development and exploitation of the area or by
its sale by evaluating documentation of
planned future activities; including a feasibility
study for the Jambreiro project;
• we obtained 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 and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we consider whether the Other Information is materially inconsistent with
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of 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 the 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:
https://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 2018, 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 2018.
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
28 March 2019
Annual Report – 31 December 2018
Shareholder Information
The shareholder information set out below was applicable as at 21 March 2019.
Substantial Shareholders
The Company has no substantial shareholders.
Class of Shares and Voting Rights
(b)
There were 2,658 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 481 holders of listed options over 623,049,575 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 82 holders of unlisted options over 167,500,000 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.
There were 7 holders of unlisted options over 87,500,000 unissued ordinary shares. 17,000,000 options have
an exercise price of $0.0082 and expire on 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. 33,500,000 options have an exercise price of
$0.015 and expire on 31 May 2022.
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 702 holders of less than a marketable parcel (being a minimum $500 parcel at $0.007 per share) of
ordinary shares.
1
1,001
5,001
10,001
100,001
1,000
-
5,000
-
-
10,000
- 100,000
and over
Class of Equity
Security
Listed
Options
(CTMOB)
11
17
20
135
298
481
Ordinary
Shares
130
105
61
749
1,613
2,658
Unlisted
Options
Unlisted
Options
(ESOP)
Performance
Rights
-
-
-
-
82
82
-
-
-
-
7
7
-
-
-
-
1
1
Page 57 of 62
Annual Report – 31 December 2018
Shareholders
The names of the twenty largest shareholders are listed below:
Ordinary Shares (CTM)
Name
1 Mr Bradley Bolin
2 Terrativa Minerais SA
3 Mr Darren Gordon
4 Atlas Iron Limited
5 Mr Roger Fitzhardinge
6 Tavarua International Inc
7 Mr Rison Amin
8 Citicorp Nominees Pty Limited
9
J P Morgan Nominees Australia Pty Limited
10 Mr Luigi Reghelin
11 HSBC Custody Nominees (Australia) Limited
12 Ms Tracey Marshall
13 Mrs Hema Naga Jyothi Danda
14 Bond Street Custodians Limited
15 Mr Allen Rahman
16 Mrs Wei Wang
17 BNP Paribas Nominees Pty Ltd
18 Mr Neil & Mrs Fleur Campbell-Atkins
19 Mr Raymond Toohey
Loxden Pty Ltd
20
Total Top 20 Shareholders
Other Shareholders
Total Number of Issued Shares
Number
Held
97,500,088
76,501,476
65,783,121
60,320,264
53,013,103
33,898,305
26,000,000
25,004,436
24,040,232
20,000,000
19,943,655
18,222,111
18,093,660
17,714,285
16,000,000
15,000,000
13,514,561
13,442,500
13,000,000
13,000,000
639,991,797
1,664,990,368
2,304,982,165
Percentage of
Issued Shares (%)
4.23
3.32
2.85
2.62
2.30
1.47
1.13
1.08
1.04
0.87
0.87
0.79
0.78
0.77
0.69
0.65
0.59
0.58
0.56
0.56
27.75
72.25
100.00
Listed Option Holders
The names of the twenty largest holders of listed options (CTMOB) are listed below:
Listed Options (CTMOB)
Name
1 Mr Bradley Bolin
2 Mrs Hema Naga Jyothi Danda
3 Mr Kevin Press
4 Equity Trustees Limited
5 Mr Darren Gordon
6 Vindin Investments Pty Ltd
7 Mr Andrew Tate
8 Mr Roger Fitzhardinge
9 Mr James Laird
10 Mr Simon Sein Kwang Niak
11 Mr Steven Mitter
12 Prof Paul O’Brien
13 Mr David & Mr Rohan Fox
14 Mr John Murphy
15 Mr Amarjeet Sandhu
16 Mrs Elisa Brunacci
17
18 Mr Terence & Mrs Beverley McMahon
19
20 A and R Assets Pty Ltd
Sandbelt Investments Pty Ltd
Lehav Pty Ltd
Total Top 20 Optionholders
Other Optionholders
Total Number of Listed Options
Number
Held
70,000,000
31,844,150
25,000,000
25,000,000
18,766,877
15,972,221
15,000,000
15,000,000
14,757,328
13,000,000
11,670,921
10,000,000
8,850,000
7,500,000
7,000,000
7,000,000
7,000,000
6,833,330
6,335,274
6,250,000
322,780,101
300,269,474
623,049,575
Percentage of
Listed Options (%)
11.24
5.11
4.01
4.01
3.01
2.56
2.41
2.41
2.37
2.09
1.87
1.61
1.42
1.20
1.12
1.12
1.12
1.10
1.02
1.00
51.81
48.19
100.00
Page 58 of 62
Annual Report – 31 December 2018
Tenement Information
Brazilian Tenements
Tenement
800.444/2011
800.442/2011
800.480/2011
800.471/2011
800.338/2016
831.638/2004
831.639/2004
831.649/2004
833.409/2007
834.106/2010
833.410/2007
831.645/2006
830.588/2008
851.548/2011
850.258/2013
850.430/2013
850.486/2017
850.429/2016
850.130/2013
850.475/2016
Project Name
Location
Interest
Aurora
Aurora
Aurora
Aurora
Aurora
Canavial
Canavial
Ceará
Ceará
Ceará
Ceará
Ceará
Minas Gerais
Minas Gerais
Jambreiro (Mining Lease)
Minas Gerais
Jambreiro (Mining Lease)
Minas Gerais
Jambreiro (Mining Lease)
Minas Gerais
Guanhães Regional
Passabém
Passabém
Serra Misteriosa
Serra Misteriosa
Salobo West I
Salobo West I
Salobo West II
Pebas
Itapitanga
Minas Gerais
Minas Gerais
Minas Gerais
Pará
Pará
Pará
Pará
Pará
Pará
Pará
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%(1)
(1) Itapitanga Project joint ventured out to Simulus Group whereby they can earn 80% by free carrying Centaurus to a decision to mine
Australian Tenements
Tenement
EPM14233
Project Name
Mt Isa
Location
Queensland
Interest
10% (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 59 of 62
Annual Report – 31 December 2018
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 2018
Ore Reserves as at 31 December 2017
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 2018
Mineral Resources as at 31 December 2017
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
-
-
-
-
-
-
-
-
-
3.9
3.7
3.3
3.7
7.1
5.7
6.0
1.9
0.7
0.8
-
-
-
0.04
0.04
0.05
0.05
0.10
0.07
0.07
0.03
0.07
0.07
-
-
-
1.6
1.7
1.3
1.5
7.9
5.9
6.4
0.6
0.1
0.1
-
-
-
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. (Tenure relinquished in 2018)
193.7
203.8
29.0
0.05
49.3
49.8
29.4
0.05
1.9
3.5
3.4
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 60 of 62
Annual Report – 31 December 2018
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 2018. The Jambreiro
Resources estimate has been reported in accordance with the JORC Code 2012 edition and the ASX Listing
Rules. The remaining Mineral Resource estimates were prepared and disclosed under the JORC Code 2004
edition. The Jambreiro Ore Reserve was also prepared and disclosed under the JORC Code 2004 edition.
The information prepared for the Jambreiro Reserve and Canavial, 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 2018, 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 61 of 62
Annual Report – 31 December 2018
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 62 of 62