-
(ABN 22 102 912 783)
AND CONTROLLED ENTITIES
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2015
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Annual Report 2015
CONTENTS
CORPORATE DIRECTORY ______________________________________________________________________________________ 1
DIRECTORS’ REPORT _________________________________________________________________________________________ 2
AUDITOR’S INDEPENDENCE DECLARATION ______________________________________________________________________ 21
CORPORATE GOVERNANCE STATEMENT ________________________________________________________________________ 22
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ________________________________________________________ 23
CONSOLIDATED STATEMENT OF FINANCIAL POSITION _____________________________________________________________ 24
CONSOLIDATED STATEMENT OF CASH FLOWS ___________________________________________________________________ 25
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY _____________________________________________________________ 26
NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________________________ 27
DIRECTORS’ DECLARATION ___________________________________________________________________________________ 60
INDEPENDENT AUDITOR’S REPORT ____________________________________________________________________________ 61
ADDITIONAL ASX INFORMATION ______________________________________________________________________________ 63
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Annual Report 2015
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CORPORATE DIRECTORY
EXECUTIVE CHAIRMAN
Antony Sage
NON-EXECUTIVE DIRECTORS
Qiu Derong
Judy Li
Mark Gwynne
COMPANY SECRETARY
Catherine Grant
PRINCIPAL & REGISTERED OFFICE
32 Harrogate Street
West Leederville WA 6007
Telephone: (08) 9380 9555
Facsimile: (08) 9380 9666
AUDITORS
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco WA 6008
SHARE REGISTRAR
Advanced Share Registry
110 Stirling Hwy
Nedlands WA 6009
Telephone: (08) 9389 8033
Facsimile: (08) 9262 3723
STOCK EXCHANGE LISTING
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
Code: CXU
BANKERS
National Australia Bank
100 St Georges Terrace
Perth WA 6000
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Annual Report 2015
DIRECTORS’ REPORT
The directors of Cauldron Energy Limited (“Cauldron”) submit their report, together with the consolidated financial statements
comprising Cauldron and its controlled entities (together the “Consolidated Entity”) for the financial year ended 30 June 2015.
1.
INFORMATION ON DIRECTORS
The names and particulars of the directors of the Consolidated Entity during or since the end of the financial year are as
follows. Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
Antony Sage
Qualifications
Experience
Directorships of listed companies
held within the last 3 years
Interest in Shares & Options
Qiu Derong
Experience
Executive Chairman
B.Bus, FCPA, CA, FTIA
Mr Sage has in excess of 30 years’ experience in the fields of corporate advisory
services, funds management and capital raising. Mr Sage is based in Western Australia
and has been involved in the management and financing of listed mining and
exploration companies for the last 19 years. Mr Sage has operated in Argentina, Brazil,
Peru, Romania, Russia, Sierra Leone, Guinea, Cote d’Ivoire, Congo, South Africa,
Indonesia, China and Australia. Mr Sage is currently chairman of listed ASX-listed
companies, Cape Lambert Resources Ltd (which was AIM Company of the year in 2008),
Cauldron Energy Ltd and Fe Ltd. Mr Sage is also a Non-Executive Director of the
following ASX-listed companies, Kupang Resources Ltd, Caeneus Minerals Ltd; and
National Stock Exchange of Australia (“NSX”) listed International Petroleum Ltd. Mr
Sage is also the sole owner of A League football club Perth Glory that plays in the
National competition in Australia.
Cape Lambert Resources Limited
Fe Limited
Kupang Resources Limited
Caeneus Minerals Limited
International Petroleum Limited*
Global Strategic Metals NL
African Petroleum Corporation Limited *
International Goldfields Limited
* Listed on National Stock Exchange of Australia
Fully Paid Ordinary Shares
Unlisted Options
Non-Executive Director
December 2000 to present
August 2009 to present
September 2010 to present
December 2010 to present
January 2006 to present
June 2012 to August 2014
October 2007 to June 2013
February 2009 to May 2013
5,894,600
3,900,000
Mr Qiu is a highly experienced industrialist with more than 26 years’ experience in the
architecture, construction and real estate industries in China as well as over 17 years of
experience in the management of enterprises and projects throughout the country.
Mr Qiu has a MBA obtained from the Oxford Commercial College, a joint program
operated by Oxford University in China.
Directorships of listed companies
held within the last 3 years
None
Interest in Shares & options
Fully Paid Ordinary Shares
Unlisted Options
30,595,532
3,000,000
Judy Li
Experience
Directorships of listed companies
held within the last 3 years
Non-Executive Director (Appointed 17 December 2014)
Judy Li has over 8 years of extensive international trading experience in hazardous
chemical products. She has also been involved in international design works for global
corporates and government clients while working for Surbana that has been jointly
held by two giant Singapore companies—CapitaLand and Temasek Holdings.
Throughout her career, Judy has contributed to building tighter relationship between
corporates and governments. Judy earned her masters degree in art with Honors
Architecture from University of Edinburgh in the United Kingdom.
None
Interest in Shares & options
None
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Annual Report 2015
Mark Gwynne
Non-Executive Director (Appointed 23 June 2015)
Experience
Mr Gwynne has been involved in gold exploration and mining for over 19 years,
predominantly in Western Australia. Mr Gwynne has held management positions on
mine sites and in the private sector of the mining industry, including general manager
of an exploration consultancy company.
Directorships of listed companies
held within the last 3 years
Kupang Resources Limited
International Goldfields Limited
Iron Mountain Mining Limited
January 2013 to August 2013
January 2013 to May 2013
May 2014 to Present
Interest in Shares & options
Fully Paid Ordinary Shares
Unlisted Options
100,000
500,000
Brett Smith
Qualifications
Experience
Executive Director (Resigned 23 June 2015)
B.Sc(Geol), M.AusIMM MAIG.
Mr Smith has over 22 years of experience in the mining and exploration industry as a
geologist, manager, consultant and director. His industry experience is broad,
dominated by exploration and resource definition for mining operations. Mr Smith is
primarily responsible for Cauldron's strategic move into Argentina.
Directorships of listed companies
held within the last 3 years
Jacka Resources Limited
Corazon Mining Limited
Metals of Africa Limited
Blackham Resources Limited
Interest in Shares & Options
Interests held at date of resignation:
Fully Paid Ordinary Shares
Unlisted Options
October 2009 to present
July 2010 to present
October 2012 to present
July 2007 to June 2013
11,844
500,000
Anson Huang
Experience
Non-Executive Director (Appointed 29 July 2014, Resigned 17 December 2014)
Mr Huang is a Chinese national with Australian permanent residence. He holds a
Bachelor of Commerce from the University of Melbourne and Masters of Applied
Finance from the University of Macquarie.
Mr Huang has more than ten years investment banking experience in both Australia
and China. He has assisted many companies in public listings and financing
transactions through IPO, M&A, PIPE pre Pre-IPO types.
Directorships of listed companies
held within the last 3 years
None
Interest in Shares & options
Interests held at date of resignation:
Fully Paid Ordinary Shares
Nil
Amy Wang
Experience
Non-Executive Director (Appointed 9 June 2014, Resigned 1 October 2014)
Dr Wang is an Australian national who holds a Bachelor of Materials Engineering from
the Shanghai Jiaotong University, P.R. China, a Master of Materials Engineering from
the Shanghai Jiaotong University, P.R. China and a Doctorate of Philosophy from
Monash University, Australia.
Directorships of listed companies
held within the last 3 years
None
Interest in Shares & options
Interests held at date of resignation:
Fully Paid Ordinary Shares
80,000
COMPANY SECRETARY
Ms Catherine Grant has been Chief Financial Officer of Cauldron since July 2013, and its Company Secretary since 31
January 2014. She commenced her career at Ernst & Young, where she qualified as an Accountant with the Institute of
Chartered Accountants Australia (ICAA) in 2007. Ms Grant has over 10 years’ experience in accounting and finance and
currently provides accounting and company secretarial services to several listed resource companies.
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Annual Report 2015
Remuneration of key management personnel
Information about the remuneration of directors and senior management is set out in the remuneration report of this
director’s report, on pages 15 to 20. The term key management personnel refers to those persons having authority and
responsibility for planning, directing and controlling the activities of the Consolidated Entity, directly or indirectly, including
any director (executive or otherwise) of the Consolidated Entity.
2.
PRINCIPAL ACTIVITIES AND SIGNIFICANT CHANGES IN NATURE OF ACTVITIES
The principal activity of the Consolidated Entity during the financial year was uranium exploration.
There were no significant changes in the nature of the Consolidated Entity’s principal activities during the financial year.
3.
OPERATING RESULTS
The loss of the Consolidated Entity after providing for income tax amounted to $6,712,800 (30 June 2014: $4,290,893 loss).
The loss for the year includes impairment losses in respect of capitalised exploration and evaluation to the extent of
$1,604,898 for the year ended 30 June 2014 (30 June 2014: $1,731,119) following the decision not to continue exploration
and for costs associated with tenements not granted in certain areas of Western Australia and Argentina.
4.
REVIEW OF OPERATIONS
Cauldron is an Australian exploration company resulting from the merger of Scimitar Resources Limited and Jackson
Minerals Limited. Cauldron retains an experienced board of directors with proven success in the resources sector.
Cauldron controls over 6,000km2 of uranium prospective tenements across South Australia and Western Australia, and
large projects with defined uranium mineralisation in Argentina; this allows for diversification, both geologically and with
regards to differing political sentiment and policy towards uranium exploration and mining within each region.
CORPORATE
The following significant transactions and events occurred during the financial year:
Board changes
Mr Anson Huang was appointed as Non-executive Director with effect from 29 July 2014 and resigned with effect from 17
December 2014.
Dr Amy Wang resigned from her position as Non-executive Director with effect from 1 October 2014.
Ms Judy Li was appointed as Non-executive Director with effect from 17 December 2014.
Mr Brett Smith resigned from his position as Executive Director with effect from 23 June 2015.
Mr Mark Gwynne was appointed as Non-executive Director with effect from 23 June 2015.
General Meeting
The Company held a general meeting on 30 September 2014 (“General Meeting”). All resolutions put to shareholders
were passed.
Annual General Meeting
The Company held its annual general meeting on 27 November 2014 (“AGM”). All resolutions put to shareholders were
passed.
Research and Development refund
In June 2015, Cauldron received A$0.8 million from the Australian Taxation Office under the Research and Development
Tax Incentive Programme relating to the 2014 financial year.
Conversion of convertible notes
During the prior year, two major Cauldron shareholders advanced the Consolidated Entity short term loans totaling
$400,000 ($200,000 each from Cape Lambert Resources Ltd (“Cape Lambert”) and Mr Qiu Derong) for operating expenses
that are either repayable or convertible into shares. Following receipt of shareholder approval at the Company’s General
Meeting on 30 September 2014 (“General Meeting”), 3,345,538 fully paid shares at $0.13 per share were issued in
satisfaction of the loans (plus interest) (“Converting Loan Shares”).
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Annual Report 2015
Converting loan repaid
As at 30 June 2014, $650,000 had been drawn down by the Consolidated Entity under a converting loan agreement with
Cape Lambert. On 4 August 2014, $325,000 was repaid in cash to Cape Lambert and on 1 October 2014, the remaining
$349,851 (including interest) was repaid.
Funding
As previously announced 10 June 2014 and 1 July 2014, the Company had entered into a series of placement agreements
(“Placement Agreements”) with a range of Chinese investors to issue a total of 127,118,756 Shares (“Placement Shares”) at
an issue price of $0.118 per share (“Issue Price”) to raise a total of $15 million (“Placement Funds”) (before capital raising
costs) (“Placements”).
The Placement Shares were to be issued (and the Placement Funds received) in various tranches, the final tranche due to
be received in December 2015. ASX Listing Rule 7.3.2 requires the issue of securities approved by shareholders pursuant to
Listing Rule 7.1 to be completed within 3 months of the relevant shareholder meeting. As such, the Company sought and
received shareholder approval for the issue of Placement Shares in respect of the initial $11 million Placement Funds
(received and to be received at the time) at its General Meeting (with shareholder approval for the issue of future
Placement Shares to be sought at the subsequent Shareholder meeting/s, as required).
Funds received
Of the $15,000,000 Placements, a total of $10,000,000 has been received as at 30 June 2015, summarised as follows
(amounts referred to are before capital raising costs):
On 19 June 2014, the Company issued:
16,476,621 fully paid ordinary shares to Guangzhou City Guangrong Investment Management Co. Ltd
(“Guangzhou City”) using its remaining capacity under Listing Rule 7.1 at the time, in respect of $1,944,241
funding received in June 2014. The issue of these shares were later ratified by shareholders at the General
Meeting.
On 30 September 2014, following receipt of shareholder approval at the General Meeting, the Company issued:
17,421,697 fully paid ordinary shares to Guangzhou City in respect of $2,055,759 funding received in June 2014;
and
8,474,579 fully paid ordinary shares to Starry World Investments Ltd (“Starry World”) in respect of $1,000,000 in
funding received in July 2014.
On 30 December 2014, the Company issued:
21,440,678 fully paid ordinary shares to Starry World in respect of $2,530,000 funding received in December
2014.
On 30 March 2015, the Company issued:
3,983,061 fully paid ordinary shares to Starry World in respect of $470,000 funding received in March 2015
(these shares were issued using the Company’s capacity under Listing Rule 7.1).
During June 2015, the Company received pursuant to a Placement Agreement:
$1,714,932 in cash from Mr Derong Qiu, with the balance $285,068 planned to settle director fee payments
owing to Mr Qiu in respect of his services (together, $2,000,000). In accordance with the Placement Agreement,
the 16,949,178 fully paid ordinary shares to be issued to Mr Qiu are subject to shareholder approval. The cash
component of these Placement Funds are held in trust by the Company until shareholder approval is obtained
and the shares issued.
Funds not yet received/receivable
The remaining $5,000,000 in funding due from the various investors under the Placement Agreements at 30 June 2015 is
as follows:
$2,000,000 from Beijing Joseph Investment Co Ltd / Joseph Investment International Co Ltd (“Joseph
Investment”) due in equal tranches of $1,000,000 on 2 October 2014 and 1 December 2014 respectively). To
date, these funds have not been received by the Company;
$1,000,000 from Guangzhou City due 3 November 2014. To date, these funds have not been received by the
Company;
$300,000 from Guangzhou Joseph Investment Co Ltd due 1 December 2014. To date, these funds have not been
received by the Company; and
$1,700,000 from Guangzhou Joseph Investment Co Ltd due 1 December 2015.
The Company intends to take action to enforce its rights under the Placement Agreement to receive the Placement Funds.
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LEGAL PROCEEDINGS
On 14 October 2014, the securities of Cauldron were placed in trading halt at the request of the Company, pending the
outcome of a court hearing scheduled at the Supreme Court of New South Wales.
The Company announced on the afternoon of the 15 October 2014, the Supreme Court of New South Wales discharged ex
parte orders obtained by Beijing Joseph Investment Co., Ltd, Joseph Investment International Co., Ltd and Guangzhou City
Guangrong Investment Management Co., Ltd (the “Plaintiffs”) without notice to Cauldron on Sunday 12 October 2014.
The legal proceedings followed on from a written demand Cauldron made to Beijing Joseph Investment Co., Ltd and Joseph
Investment International Co., Ltd on 3 October 2014 to pay $1,000,000 for the subscription of shares due to the Company
on 2 October 2014 pursuant to a placement agreement dated 6 June 2014.
On 11 December 2014, the Supreme Court of New South Wales (Equity Division) made orders in favour of Cauldron that:
The legal proceedings commenced by the Plaintiffs against Cauldron (“the Proceedings”) be immediately
transferred to the Supreme Court of Western Australia; and
The Plaintiffs pay Cauldron’s costs of the application to transfer the Proceedings.
On 27 May 2015 the Supreme Court of Western Australia made orders in the Proceedings with the effect that:
The action by the Plaintiffs against Cauldron be discontinued;
Cauldron have the ability to counterclaim for unpaid subscription sums in the amount of $3 million plus
damages, interest and costs against the Plaintiffs without the delay of requiring services overseas;
The injunctive orders previously made against Cauldron be completely discharged; and
The Plaintiffs pay Cauldron’s costs to 25 March 2015, including all reserved costs.
On 5 August 2015, the Supreme Court of Western Australia made an order that a trial of Cauldron’s counterclaim against
the Plaintiffs be listed for trial on 2 December 2015 at 10:00am.
Cauldron continues to vigorously pursue its counterclaim.
Issue of shares
The Company issued the following during the year ended 30 June 2015:
3,345,538 fully paid shares at $0.13 per share issued in satisfaction of loans previously provided to the Company
totalling $400,000 (plus interest) (Converting Loan Shares); and
51,320,015 fully paid shares at $0.118 per share to raise $6,055,759 (before capital raising costs) (part of the
Placement Shares).
Shareholder approval for issue of 50,682,492 of these shares was obtained at the General Meeting. The remaining
3,345,538 shares were issued using the Company’s capacity under Listing Rule 7.1.
Issue of options
The Company issued the following during the year ended 30 June 2015:
4,400,000 unlisted options exercisable at $0.138 on or before 31 December 2015 to directors (“Director
Options”). The Director Options will vest upon:
a)
b)
the Company achieving a JORC resource at the Company’s Yanrey Project in Western Australia containing
more than 30 million lbs of Uranium; or
the commencement of drilling by the Company at the Rio Colorado project in Argentina.
14,000,000 unlisted options exercisable at $0.138 on or before 31 December 2015 to Australian employees and
consultants (“Australian Options”). The Australian Options vest on the same terms as the Director Options.
1,450,000 unlisted options exercisable at $0.138 on or before 31 December 2015 to Argentinian employees and
consultants (“Argentinian Options”). The Argentinian Options will vest upon:
a)
the commencement of drilling by the Company at the Rio Colorado project in Argentina.
32,000,000 unlisted options to investor Starry World (“Placement Options”). The key terms of the Placement
Options are as follows:
a) Half of the Placement Options will vest immediately upon issue with an:
(i) exercise price of $0.118 each; and
(ii) expiry date of 31 December 2015
(the “Upfront Options”); and
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b)
the remaining half of the options (“Vesting Options”) will vest on 1 January 2016 provided that the
holder’s Upfront Options are not exercised (in the event that only a portion of the holder’s Upfront
Options are exercised by the holder, the number of Vesting Options that actually vest will be equal to the
number of un-exercised Upfront Options) with an:
(i) exercise price of $0.138 each; and
(ii) expiry date of 31 December 2016.
Accordingly, Starry World can only exercise a maximum of 16,000,000 Placement Options.
These options have been issued following receipt of shareholder approval at its General Meeting.
Options exercised
There were no shares issued as a result of exercise of share options during the year.
Options lapsed
The following options expired or lapsed during the year:
5,000,000 unlisted options exercisable at $0.20 expiring 30 June 2015; and
850,000 unlisted options exercisable at $0.138 expiring 31 December 2015.
PROJECT INFORMATION
In Australia, Cauldron has two project areas (Figure 1) covering more than 4,500 km2 in two known uranium provinces in
South Australia and Western Australia. Projects include:
Yanrey Project (Yanrey) in Western Australia
comprises 12 granted exploration
licences
(1,847 km2) and 7 applications for exploration
licences (1,107 km2). Yanrey is prospective for
large sedimentary-hosted uranium deposits. A
joint venture securing two of the exploration
licences in the Yanrey Project tenement group
(called the Uaroo Joint Venture) dissolved upon
their expiry on 2 July 2015. The Bennet Well
Uranium Deposit is located within the Yanrey
Project area
Joint Venture
in South Australia
Marree
comprising five granted exploration
licences
(2,794 km2) prospective for sedimentary-hosted
uranium deposits of both the Beverley Uranium
and Four Mile Uranium style, and for base metal
mineralisation.
BENNET WELL (YANREY REGION)
Figure 1: Major Project Locations in Australia
The mineralisation at Bennet Well is a shallow accumulation of uranium hosted in unconsolidated sands close to surface
(less than 100 m downhole depth) in Cretaceous sedimentary units of the Ashburton Embayment.
The Bennet Well deposit is comprised of three spatially separate deposits; namely Bennet Well East, Bennet Well Central,
and Bennet Well South
2.
1.
Work completed during the reporting period comprised a drilling program at the Bennet Well Uranium Deposit that led to:
the revision of the interpreted geological setting, by using information gained from deposit wide drilling and
interpretation from drilling sample and data from a comprehensive suite of downhole geophysical tools;
the development of a three-dimensional mineralisation model of the deposit, by using the information gained
from re-logging core;
a significant revision of the Mineral Resource (JORC 2012) estimate of Bennet Well, revealing an upgrade to the
contained mass of the deposit;
the development of a systems style exploration model for the Yanrey region.
4.
3.
Cauldron achieved its dual objective of improving the understanding of the mineralisation at Bennet Well, including its
Mineral Resource category and in developing a regional scale mineral systems style exploration model capable of
improving decision making and drill targeting of mineralisation.
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Ravensgate Mining Industry Consultants completed a Mineral Resource (JORC 2012) estimate for the Bennet Well deposit,
using the results of new drilling and interpretation which was published in an ASX Announcement dated 14 July 2015. The
upgraded Mineral Resource (JORC 2012) estimate is 36.1 million tonne (Mt) at 270 ppm uranium oxide (eU3O8) for a
contained metal content of 21.5 Mlb uranium oxide, using a cut-off of 150 ppm, summarised in Table 1.
Total Bennet Well Resource Category Mass Resource Grade Resource Mass U oxide Mass U oxide
Measured
Indicated
Inferred
TOTAL
kt
-
18,126
17,994
36,120
ppm eU3O8
t eU3O8
Mlb eU3O8
-
300
240
270
-
5,440
4,320
9,760
-
11.99
9.52
21.51
Note: Use of rounded values may not allow for exact unit conversion or summation; cut-off is 150 ppm eU3O8
Table 1: Bennet Well Mineral Resource (JORC 2012) estimate
This is an increase in the total uranium content of the deposit as a consequence of a significant improvement in geological
confidence level. The improved geological confidence has also allowed for an increase in the proportion of mineralised
material reporting to the Indicated Resource classification level, an increase of about 90%.
Development of the Exploration Model
Geological Model
Cauldron used drill core to characterise downhole geophysical data with the purpose of modelling sedimentary grain size
that ultimately determined the location of porous (which host mineralisation) and non-porous (which aid in-situ leach
extraction methodology) sedimentary packages. Physical sample from drill chips and core was used to develop the
geological model. The newly revised lithological framework for Bennet Well consists of the following units:
1. Alluvial, transported sands and clays; colluvial gravels and cobbles, mostly heavily haematised (red iron oxde) –
terrestrial cover
Sands, light green-yellow clays, fine-medium sized gravels, calcretes – terrestrial cover
2.
3. Greensand Unit – tightly packed, clayey sands and silts, often bioturbated, very glauconitic. Currently interpreted
to act as an “aquiclude”, or impermeable cap, to the underlying mineralisation – marine setting, varying from
deeper marine to near-shore, possibly estuarine
4. Organic-rich, often lignitic, interbedded sands, silts and clays. Wood and coal fragments are common, as well as
sulphide minerals such as pyrite and marcasite. This unit is the main host to the uranium mineralisation –
estuarine or lagoonal in places
5. Basement – mostly granitic gneiss, mostly weathered. Historically, drilling has revealed the top approx. 20m of
the basement to be moderately to strongly weathered and appearing as kaolinitic, bleached quartz sands and
clays in many places. Some drill holes on the eastern-most side of Bennet Well East intersecting what is currently
interpreted as a pegmatitic granite intrusion
REDOX conditions, as modelled from physical sample, appear to alternate frequently (representing fluctuations in fluid
movement, or maybe a pulsing of fluids from a source below or through the permeable horizon), changing quickly from
oxidised (orange-yellow) to reduced (grey-black).
Mineralisation Model
Cauldron modelled the uranium mineralisation at Bennet Well in a similar way to the process followed for the
establishment of the geological model. Fifteen mineralised lenses have been identified and modelled, and provide a
framework on which an upcoming resource revision can be based.
This process also showed where mineralisation remains open having potential for further extension of deposit boundary.
With the development of the mineralisation model for Bennet Well, information can be extrapolated into more regional
locations within the larger Yanrey area, which will assist targeting for potential new mineralised bodies.
YANREY PROJECT
The Yanrey Project comprises a collection of twelve exploration tenements in north-west Western Australia, one of which
secures the Bennet Well Uranium Deposit. The project is prospective of sandstone-style uranium mineralisation capable of
extraction by in-situ recovery mining techniques.
Cauldron completed a major in-house technical appraisal of all regional areas in the Yanrey Project with the aim of
developing a systems style exploration model to generate targets for further exploration work. This involved the use of the
significantly updated mineralisation and geological model of the Bennet Well Uranium Deposit, compilations of regional
and local scale geophysical data.
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Annual Report 2015
The objective of this technical appraisal is to:
rank the potential for uranium mineralisation in under-explored areas of the tenement group;
generate target areas for follow-up geophysical surveys; and
generate targets for further drill testing.
The result of this improvement of the exploration model, allowed for:
the successful application of up to $150,000 grant for regional drilling from the Western Australian Department
of Mines and Petroleum, as awarded to Cauldron under their Exploration Incentive Scheme; and
the selection of areas for further airborne electromagnetic data acquisition which will be used to identify target
areas capable of hosting uranium mineralisation that require further follow-up exploration
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Figure 2: Yanrey Project – Deposit, Prospect and Target Locations
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MARREE PROJECT, SOUTH AUSTRALIA
Following a comprehensive review of all historically collected exploration data along with a field inspection, Cauldron has
put on hold a proposed drill test into a gravity anomaly beneath the historical Ooloo Mine. More information is required
to reduce any risk of poor targeting of the anomaly. This will be achieved after mapping out the structural architecture of
the area; either by mapping of surficial outcrop and mine exposures or through interpretation of higher resolution
geophysical survey/s.
Cauldron is investigating an appropriate geophysical technique or combination of techniques that together with mapping
will improve the understanding of the Ooloo and Mount Freeling anomalies (Figure 3). It is envisaged that a metalliferous
systems style of approach will improve the process of generating drill targets.
Figure 3 : Marree Project – Location of identified prospects
TENEMENT ADMINISTRATION: AUSTRALIA
Objection to Cauldron’s Applications for exploration licences 08/2385-2387
Cauldron lodged applications for exploration licences 08/2385-2387 (Exploration Licences) on 4 April 2012. Forrest &
Forrest Pty Ltd lodged objections against the Cauldron applications on 8 May 2012. The applications and objections were
heard before the Perth Mining Warden over 9 to 12 December 2013. As announced on 14 February 2014, the Mining
Warden recommended that the uranium exploration licences sought by Cauldron to conduct exploration on and adjacent
to pastoral leases on the Minderoo pastoral station in Western Australia’s Pilbara region be refused. As announced on 7
January 2015, Cauldron received confirmation, from the Department of Mines and Petroleum on 5 January 2015, that the
Minister reversed the Warden’s decision and that there is sufficient grounds to allow the Cauldron applications to proceed
through the determination process under the Mining Act 1978. The applications completed the native title process on 10
June 2015. On 1 April 2015, Forrest & Forrest Pty Ltd made a submission to the Warden and the Minister, requesting they
return the matter to Warden’s court. Cauldron submitted a response to this request on 27 July 2015 and is currently
awaiting a response from the Department of Mines & Petroleum (DMP). The DMP assessment of these applications is in
abeyance at present.
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Annual Report 2015
Energia Mineral’s Objection and Application for Forfeiture
On 14 August 2013 Energia Minerals Limited (ASX: EMX) lodged objections to applications for exemption from expenditure
and lodged applications for forfeiture affecting exploration licences 08/2160, 08/2161 and 08/2165 held by Cauldron
(Tenements). The applications for exemption (and associated objections) and applications for forfeiture relate to the
expenditure year ending 20 May 2013 (in relation to exploration licence 08/2160) and 14 June 2013 (in relation to
exploration licences 08/2161 and 08/2165). Warden Court proceedings commenced under the Mining Act 1978 (WA).
The matter of the exemptions was heard by Warden Maughan 15-16 April 2015. On 22 May 2015, the Warden
recommended that the exemptions be refused in each instance. Cauldron has since surrendered E08/2165 in its entirety
and lodged a submission to the Minister, requesting his approval of the exemption applications for E08/2160 and E08/2161.
Cauldron now awaits the decision of the Minister, as to whether the exemption applications will be granted.
The matter of the forfeiture applications against E08/2160 and E08/2161 by EMX has been listed for mention on 6
November 2015. This date may be re-scheduled dependent on the decision of the Minister with regard to the objection to
the exemption applications.
Objection to Cauldron’s Applications for exploration licences 08/2666-2668
Cauldron lodged applications for Exploration Licences 08/2666-2668 (E08/2666-2668) on 5 December 2014. Forrest &
Forrest Pty Ltd lodged objections against E08/2666-2668 on 6 January 2015. The Warden adjourned the first mention of the
objections to 6 November 2015, due to the DPM requirement to assess other applications that were first in line before
Cauldron’s applications for the same land.
Since the adjournment on 6 March 2015, first in line applications with regard to the land under E08/2667 and E08/2668
have been refused, which now puts Cauldron’s applications at the forefront for grant. Cauldron has contacted Forrest &
Forrest Pty Ltd for provision of an access agreement to procure the withdrawal of objections against E08/2667-2668 and is
currently awaiting a response.
E08/2666 remains second in line for assessment at this point in time.
These legal proceedings are currently at an early stage, with negotiation between the parties stalled at this point in time.
Gnulli and Budina Native Title Claimants Objection to Expedited Procedure for E08/2665
On 12 February 2015, both the Gnulli and Budina Native Title Claimants lodged objections to the expedited Native Title
procedure being applied to the grant of Cauldron’s application for Exploration Licence 08/2665. The matters are now under
the guidance of the National Native Title Tribunal to oversee the negotiation of heritage agreements with both Claimants.
The parties are currently negotiating in good faith. The matter is scheduled for a Status Conference on 7 October 2015.
EXPLORATION ACTIVITES: ARGENTINA
In Argentina, Cauldron controls, through its wholly-owned subsidiary Cauldron Minerals Limited (“Cauldron Minerals”), and
an agreement with Caudillo Resources S.A. (“Caudillo”) more than 3,400 km2 of ground in 6 project areas (Figure 4) in 4
provinces. The most advanced project, Rio Colorado, is a Cu-Ag target exhibiting characteristics similar to the globally
significant sedimentary copper deposits.
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Figure 4: Argentina – Location of Prospects
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Annual Report 2015
During the reporting period, Cauldron completed further significant steps towards gaining statutory approval for drilling at
the Rio Colorado Cu-Ag Project.
In anticipation of imminent commencement of fieldwork at Rio Colorado, Cauldron has finalised a thorough desk-top
review of historical surface geochemistry and mapping, and a photo-geological structural interpretation. This review has
identified:
geochemically anomalous (Cu/Ag/U) outcrop covering 6 km of strike; with copper assay up to 3.7%;
identification of a total about 16 km zone of prospective unexplored outcrop; and
Thirteen distinct prospect areas capable of hosting polymetallic mineralisation.
There are three priorities of prospects and targets, summarised as:
Priority 1 – Rio Colorado Phase 1: drill-test ready; six outcropping geochemical and structural targets ready for drill testing;
Priority 2 – Rio Colorado Phase 2: near drill-test ready; further refinement through more detailed mapping and
geochemical sampling of seven target zones of leached outcrop; and
Priority 3 – Rio Colorado Regional: target generation; further mapping and geochemical sampling to identify new regional
targets along strike that may, or may not, be concealed beneath Holocene cover.
Priority 1 and 2 targets will be subject to field mapping and follow-up 3,000 m combined reverse circulation and core
drilling program, with planned completion by end of December 2015 quarter.
Below is a summary of the Company’s project areas in Argentina:
Cauldron Minerals Ltd
The Rio Colorado Project, Catamarca Province: covers an area of 448 km2 and comprises 4
Manifestations of Discovery (MDs), 6 granted exploration
The deposit
intermittently outcrops over a strike of 17 km with numerous small scale historical workings focused
on the sandstone-hosted uranium-copper-silver mineralisation; and
licences (cateos).
Las Marias, San Juan Province: comprises one granted exploration licence (cateo) and 12 cateo
applications covering an area of 747 km2. The project displays outcropping sandstone hosted
uranium deposits, but is also prospective for copper, silver and gold.
Caudillo Resources S.A.
Los Colorados Project, La Rioja Province: comprises four Manifestations of Discovery (MDs). The
project includes the old Los Colorados Uranium Mine, which has a quoted production of
approximately 55 tonnes of uranium concentrate (1992 and 1996), from roll-front, sandstone-hosted
uranium mineralisation.
Esperanza Project, La Rioja Province: comprising 7 Manifestations of Discovery (MDs) and 8 granted
exploration licences (cateo) for an aerial coverage of 1,018 km2, prospective for sandstone hosted
uranium deposits.
The Company also has several applications pending for exploration licences in the Catamarca, San Juan, La Rioja and Santa
Cruz provinces.
Disclosure Statements
Competent Person Statement
The information in this report that relates to exploration results is based on information compiled by Mr Jess Oram,
Exploration Manager of Cauldron Energy. Mr Oram is a Member of the Australasian Institute of Geoscientists who has
sufficient experience that is relevant to the style of mineralisation, 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 Resource and Ore Reserves (JORC Code 2012). Mr Oram consents to the inclusion in the
report of the matters based on this information in the form and context in which it appears.
The information in this report that relates to the Mineral Resource for the Bennet Well Uranium Deposit is based on
information compiled by Mr Jess Oram, Exploration Manager of Cauldron Energy and Mr Stephen Hyland, who is a
Principal Consultant of Ravensgate. Mr Oram is a Member of the Australasian Institute of Geoscientists and Mr Hyland is a
Fellow of the Australasian Institute of Mining and Metallurgy. Mr Oram has sufficient experience that is relevant to the
style of mineralisation, 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 Resource and
Ore Reserves (JORC Code 2012). Mr Oram and Mr Hyland consent to the inclusion in the report of the matters based on
this information in the form and context in which it appears.
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Annual Report 2015
Notes to Accompany Mineral Resource Estimate table:
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Resource assaying data sets derived from deconvolved gamma derived from downhole logging of aircore, mud
rotary and diamond drilling. Physical assay from core drilling used as a check againd the deconvolved gamma
assay.
The Downhole gamma Probe data collected in-field to a precision as small as 0.02 m measurement intervals was
processed by Mr David Wilson (Principal Consultant - 3D Exploration Ltd – Adelaide) who is expert in these data
Drilling density at Yanrey are variable and are highest at Bennet Well East and Bennet Well Central which have
drilling densities of about 50x100 m and extending out to 100x100 m and out to about 200x400 m and up to 800
m section spacing in the Bennet Well South and Deep South Areas.
The detailed deconvolved assay determination data was composited to 0.5 m down-hole lengths used for block
model interpolation for all deposit areas.
Mineralisation wire-frames based on a nominal 100-150 ppm eU3O8 (deconvolved downhole gamma) assay
determinations were used to constrain the majority of observed and interpreted mineralisation and construct
mineralisation lens wire-frames.
Spatial distribution analysis of eU3O8 ppm (deconvolved) data for each specific mineralisation domain was
carried out through an updated review of population distribution statistics and variography building upon
previous analysis conducted in August 2014.
A resource block model was constructed to assist estimating resources for the Yanrey Uranium Project
containing the Bennet Well East, Central, South and Deep South designated sub-areas.
The resource block model was constructed using Minesight software. The resource estimates for these deposits
utilised a block model with block dimensions of 10 m by 10 m by 0.5 m blocks – [(East(X), North(Y), Bench(Z)];
(uniform block – no sub-blocks).
Ordinary Kriging block interpolation was carried out within mineralisation wire-frames with restrictions of outlier
composites limited to typically 80 m if above a localised composite population 99th percentile level.
Resource classification has been considered with respect to various reporting ‘modifying factors’ as outlined in
the JORC Code (2012). Consideration has been given to data quality, drilling and sample density, distances of
interpolated blocks from assays points and the associated statistical local spatial distribution of uranium and
estimation (kriging) variances.
Block to composite threshold distances of 80 to 150 m were used as an initial quality of interpolation confidence
parameter used ultimately to guide resource classification. The Bennet Well East Area with the highest density
drilling as well as the Bennet Well Central area contain the bulk of the reported Indicated Resources
Data density varies and is reflected in the resource category which has been applied. The mineralisation domains
constrained by the detailed mineralisation wire-frames contains all of the Indicated resources where drilling
density and associated spatial distribution aspects in conjunction with appropriate reporting modifying factors
are considered adequate. Inferred resources are reported for additional material typically beyond the 80-150 m
threshold depending on the interpreted underlying geological and mineralisation distribution confidence.
Some interpolation of outlying or peripheral mineralisation within larger geological domains where drilling and
assay data was present was also carried out as necessary.
Geology ‘sediment facies’ models have been used to describe or constrain mineralisation as appropriate.
Bulk density has been estimated from density measurements Archimedes method of dry weight verses weight in
water carried out on diamond core samples obtained in 2008 from diamond core from the Bennet Well Central
Area where a total of 62 samples were collected and measured predominantly on the main highest grade
mineralised (more sandy) and where porosity and permeability ranged from 26.7% to 42.7% with an average of
34.0% have been observed. Cauldron has elected to use a conservative average porosity of 30% which derives a
conservative value of 1.74t/m3 for bulk density.
The check or parallel resource estimation was also carried out be Cauldron using a Inverse Distance squared
interpolation methodology to assess the overall tenor and levels of estimated grades and mineralisation domain
interpretation and designation sensitivities.
Future Mining or mineral extraction at the Bennet Well deposit is anticipated and likely to be by In-Situ Leaching
(ISL) methods using a series of leaching solution injection bores and pregnant solution extraction bores. No
other assumptions on mining methodology have been made.
5.
BUSINESS STRATEGIES AND PROSPECTS FOR THE FORTHCOMING YEAR
The Consolidated Entity intends to continue its focus on the uranium sector.
6.
SIGNFICANT CHANGES IN STATE OF AFFAIRS
There have been no changes in the state of affairs of the Consolidated Entity other than those disclosed in the review of
operations.
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Annual Report 2015
7.
SUBSEQUENT EVENTS
No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly
affect the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated
Entity in future financial years.
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ENVIRONMENTAL ISSUES
The Consolidated Entity is aware of its environmental obligations with regards to its exploration activities and ensures that
it complies with all regulations when carrying out any exploration work.
9.
DIVIDENDS PAID OR RECOMMENDED
The directors do not recommend the payment of a dividend and no amount has been paid or declared by way of a
dividend to the date of this report.
10.
SHARES UNDER OPTION
Details of unissued shares under option as at the date of this report are:
Grant Date
20 October 2010
19 September 2012
22 November 2013
30 September 2014
20 October 2014
20 October 2014
19 December 2014
19 December 2014
Class of Shares
Exercise
Price
Number of
Options
Expiry Date
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
$0.45
$0.20
$0.20
$0.138
$0.118
$0.138
$0.138
$0.138
500,000
1,000,000
3,000,000
4,400,000
16,000,000
16,000,000
13,250,000
1,350,000
20 October 2015
18 September 2015
30 September 2015
31 December 2015
31 December 2015
31 December 2016
31 December 2015
31 December 2015
Listed /
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Option holders do not have any rights to participate in any issues of shares or other interests in the company or any other
entity.
No person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue of
any other body corporate.
During the year ended 30 June 2015 there were no ordinary shares issued as a result of the exercise of options (2014:
1,900,000 ordinary shares issued for $380,000 consideration).
11.
INDEMNITY AND INSURANCE PREMIUMS FOR DIRECTORS AND OFFICERS
In accordance with the constitution, except as may be prohibited by the Corporations Act 2001 every Officer or agent of
the Consolidated Entity shall be indemnified out of the property of the Consolidated Entity against any liability incurred by
him in his capacity as Officer, auditor or agent of the Consolidated Entity or any related corporation in respect of any act or
omission whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal. The contracts of
insurance contain confidentiality provisions that preclude disclosure of the premiums paid, the nature of the liability
covered by the policies, the limit of liability and the name of the insurer.
12.
MEETINGS OF DIRECTORS
Three directors meetings were held during the year and all directors in office at the time were in attendance. The
Consolidated Entity does not have a formally constituted audit committee or remuneration committee as the board
considers that the Consolidated Entity’s size and type of operation do not warrant such committees.
13.
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 30 June 2015 has been received and is included on page 21 of
the annual report.
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14.
REMUNERATION REPORT
This remuneration report, which forms part of the directors’ report, sets out information about the remuneration of
Cauldron’s directors for the financial year ended 30 June 2015.
KEY MANAGEMENT PERSONNEL
The following persons acted as directors of Cauldron during or since the end of the financial year:
Antony Sage (Executive Chairman)
Qiu Derong (Non-executive Director)
Judy Li (Non-executive Director) – appointed 17 December 2014
Mark Gwynne (Non-executive Director) – appointed 23 June 2015
Brett Smith (Executive Director) – resigned 23 June 2015
Anson Huang (Non-executive Director) – appointed 29 July 2014, resigned 17 December 2014
Amy Wang (Non-executive Director) – appointed 9 June 2014, resigned 1 October 2014
The named persons held their positions for the duration of the financial year and up to the date of this report, unless
otherwise indicated.
REMUNERATION POLICY
The remuneration policy of Cauldron has been designed to align director objectives with shareholder and business
objectives by providing a fixed remuneration component which is assessed on an annual basis in line with market rates.
The board believes the remuneration policy to be appropriate and effective in its ability to attract and retain appropriately
skilled directors to run and manage the Consolidated Entity, as well as create goal congruence between directors and
shareholders.
The board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. The executive directors in consultation with independent advisors determine payments
to the non-executive directors and review their remuneration annually, based on market practice, duties and
accountability. The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval
by shareholders at the Annual General Meeting. Fees for non-executive directors are not linked to the performance of the
Consolidated Entity. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold
shares in the Consolidated Entity.
COMPANY PERFORMANCE, SHAREHOLDER WEALTH AND DIRECTORS AND EXECUTIVES’ REMUNERATION
The remuneration policy has been tailored to increase goal congruence between shareholders and directors. This has
been achieved by the issue of options to select directors to encourage the alignment of personal and shareholder interest.
Key Management Personnel (KMP) remuneration for the years ended 30 June 2015 and 30 June 2014:
30 JUNE 2015
SHORT-TERM BENEFITS
POST EMPLOYMENT
SHARE-BASED
PAYMENTS
OPTIONS (xii)
TOTAL
Remuneration
share based
payment
Salary,
Fees &
Leave
120,000
58,619
6,000
800
104,466
-
-
289,885
150,000
200,000
176,422
526,422
816,307
Directors (i)
Anthony Sage (ii)
Qiu Derong (iii)
Judy Li (iv)
Mark Gwynne (v)
Brett Smith (vi)
Anson Huang (vii)
Amy Wang (viii)
Other KMP
Simon Youds (ix)
Catherine Grant (x)
Jess Oram (xi)
TOTAL
Other
Non-
Monetary
Super-
annuation
Retirement
Benefits
$
$
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,000
16,760
35,760
35,760
-
-
-
-
-
-
-
-
-
-
-
-
-
15
-
-
-
-
-
-
-
-
-
-
-
-
-
362,634
-
-
-
46,491
-
-
409,125
278,949
185,966
92,983
557,898
482,634
58,619
6,000
800
150,957
-
-
699,010
428,949
404,966
286,165
1,120,080
967,023
1,819,090
75%
-
-
-
31%
-
-
59%
65%
46%
32%
50%
53%
Annual Report 2015
30 JUNE 2014
SHORT-TERM BENEFITS
POST EMPLOYMENT
SHARE-BASED
PAYMENTS
OPTIONS
TOTAL
Remuneration
share based
payment
Salary,
Fees &
Leave
120,000
100,000
-
-
109,008
-
-
329,008
150,000
114,749
-
264,749
593,757
Directors (i)
Anthony Sage (ii)
Qiu Derong (iii)
Judy Li (iv)
Mark Gwynne (v)
Brett Smith (vi)
Anson Huang (vii)
Amy Wang (viii)
Other KMP
Simon Youds (ix)
Catherine Grant (x)
Jess Oram (xi)
TOTAL
Other
Non-
Monetary
Super-
annuation
Retirement
Benefits
$
$
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,940
-
7,940
7,940
-
-
-
-
-
-
-
-
-
-
-
-
-
-
230,801
-
-
-
-
-
230,801
51,540
29,206
-
80,746
120,000
330,801
-
-
109,008
-
-
559,809
201,540
151,895
-
353,435
311,549
913,244
-
70%
-
-
-
-
-
41%
26%
19%
-
23%
34%
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
There are no employment contracts between the company and the directors.
In his capacity as Executive Chairman, Mr Antony Sage is entitled to a fee of $120,000 per annum.
In his capacity as Non-Executive Director, Mr Qiu Derong was entitled to a fee of $100,000 per annum up to 6
November 2014. From 7 November 2014 onwards, Mr Qiu Derong is entitled to a fee of $36,000 per annum.
Ms Judy Li was appointed 17 December 2014. In her capacity as Non-Executive Director, Ms Li is entitled to a
fee of $36,000 per annum effective from 1 May 2015.
Mr Mark Gwynne was appointed 23 June 2015. In his capacity as Non-Executive Director, Mr Gwynne is
entitled to a fee of $36,000 per annum effective from date of appointment.
Mr Brett Smith resigned 23 June 2015.
Mr Anson Huang was appointed 29 July 2014 and resigned 17 December 2014. During his appointment, Mr
Huang did not receive any remuneration.
Ms Amy was appointed 9 June 2014 and resigned 1 October 2014. During her appointment, Ms Wang did not
receive any remuneration.
Mr Simon Youds is Cauldron’s Head of Operations, and is included in the Company’s Key Management
Personnel. Mr Youds is entitled to a consultancy fee of $150,000 per annum.
Ms Catherine Grant is an employee of Cauldron and has been Chief Financial Officer of Cauldron since July
2013, and its Company Secretary since 31 January 2014, and is included in the Company’s Key Management
Personnel. A portion of Ms Grant’s salary was recharged to related entities Fe Limited (2014) and Kupang
Resources Limited (2014); and another non-related entity (2014 and 2015).
Mr Jess Oram is an employee of Cauldron and has been Exploration Manager since 11 August 2014. Mr Oram
is included in the Company’s Key Management Personnel.
Relates to the portion of the total value of options issued during the year recognised as a share based expense
in the year ended 30 June 2015.
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ADDITIONAL DISCLOSURE RELATING TO OPTION HOLDINGS AND SHARE HOLDINGS
OPTIONS AWARDED, VESTED AND LAPSED DURING THE YEAR
The table below discloses the number of share options granted to executives as remuneration during the year ended 30
June 2015 as well as the number of options that vested or lapsed during the year.
Share options do not carry any voting or dividend rights and can be exercised once the vesting conditionals have been met
until their expiry date.
30 JUNE 2015
Year
Options
awarded
during the
year
No.
Award
date
Fair
value of
options
at award
date
$
Directors
Antony Sage (ii)
Brett Smith (ii)
Other KMP
Simon Youds
Simon Youds
Catherine Grant
Catherine Grant
Jess Oram
2015
2015
3,900,000
500,000
30-Sep-14
30-Sep-14
$0.156
$0.156
2015
2014
2015
2014
2015
3,000,000
-
2,000,000
-
1,000,000
30-Sep-14
25-Feb-14
30-Sep-14
25-Feb-14
30-Sep-14
$0.156
$0.03
$0.156
$0.03
$0.156
Vesting
date
Exercise
price
Expiry
date
No. vested
during the
year
No. lapsed
during the
year
(iii)
(iii)
(iii)
(i)
(iii)
(i)
(iii)
$0.138
$0.138
31-Dec-15
31-Dec-15
$0.138
$0.20
$0.138
$0.20
$0.138
31-Dec-15
30-Jun-15
31-Dec-15
30-Jun-15
31-Dec-15
-
-
-
-
-
-
-
-
-
-
1,500,000
-
850,000
-
(i)
Share options shall vest as follows:
a. One half shall vest on the Company achieving a JORC resource at the Company’s Yanrey Project in WA
containing more than 30 million lbs of Uranium;
b. One quarter shall vest on the progression of the Bennet well resource area to pre-feasibility;
c. One quarter shall vest on the commencement of drilling by the Company at the Rio Colorado project in
Argentina.
(ii)
(iii)
Unlisted options were issued to Mr Antony Sage and Mr Brett Smith following receipt of shareholder approval at
the General Meeting held on 30 September 2014.
Share options will vest upon:
a.
the Company achieving a JORC resource at the Company’s Yanrey Project in Western Australia containing
more than 30 million lbs of Uranium; or
the commencement of drilling by the Company at the Rio Colorado project in Argentina.
b.
VALUE OF OPTIONS AWARDED, EXERCISED AND LAPSED DURING THE YEAR
30 JUNE 2015
Value of options
granted (i)
Directors
Antony Sage
Brett Smith
Other KMP
Simon Youds
Catherine Grant
Jess Oram
$
607,046
77,826
466,959
311,306
155,653
Value of options
exercised during the
year
$
Value of options
lapsed during the
year
$
Remuneration
consisting of share
options for the year
%
-
-
-
-
-
-
-
51,540
29,206
-
75%
31%
65%
46%
32%
(i)
Relates to the total value of options issued during the year.
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Annual Report 2015
SHARES ISSUED ON EXERCISE OF OPTIONS
There were no options exercised during the year ended 30 June 2015.
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Shares issued
Paid per share
Unpaid per share
Other KMP
Simon Youds
1,350,000
$0.20
-
No.
$
$
OPTION HOLDINGS OF KEY MANAGEMENT PERSONNEL
30 JUNE 2015
Balance
1 July 2014
Granted
Exercised
Lapsed
Other
Balance
30 June
2015
Vested and
Exercisable
30 June 2015
Un-exercisable
30 June 2015
Directors
Antony Sage
Brett Smith (i)
Qiu Derong
Mark Gwynne (ii)
Other KMP
Simon Youds
Catherine Grant
Jess Oram
-
-
3,000,000
-
3,900,000
500,000
-
-
1,500,000
850,000
-
5,350,000
3,000,000
2,000,000
1,000,000
10,400,000
-
-
-
-
-
-
-
-
-
-
-
-
-
(500,000)
-
500,000
3,900,000
-
3,000,000
500,000
-
-
3,000,000
-
3,900,000
-
-
(1,500,000)
(850,000)
-
(2,350,000)
-
-
-
-
3,000,000
2,000,000
1,000,000
13,400,000
-
-
3,000,000
850,000
3,000,000
10,400,000
(i)
(ii)
At date of resignation, Mr Smith held 500,000 unlisted options exercisable at $0.138 expiring 31 December 2015
(subject to vesting conditions).
Prior to his appointment, Mr Gwynne received 500,000 unlisted options exercisable at $0.138 expiring 31
December 2015 (subject to vesting conditions). As Mr Gwynne did not receive these options in the capacity as a
key management personnel, they have not been disclosed as such in the above tables.
SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
30 JUNE 2015
Directors
Antony Sage
Brett Smith (i)
Qiu Derong (ii)
Mark Gwynne (iii)
Amy Wang (iv)
Other KMP
Simon Youds (v)
Catherine Grant
Balance
1 July 2014
Issued
Received on
exercise of
options
Net Change
Other
Balance
30 June 2015
5,894,600
11,844
28,930,324
-
80,000
1,152,864
8,888
36,078,520
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(11,844)
1,665,208
100,000
(80,000)
20,000
-
1,693,364
5,894,600
-
30,595,532
100,000
-
1,172,864
8,888
37,771,884
(i)
(ii)
(iii)
(iv)
(v)
At the date resignation, Mr Smith held 11,844 shares.
1,665,208 shares were issued in satisfaction of a loan of $200,000 (plus interest) to the Company, as approved by
shareholders at the General Meeting held 30 September 2014.
Mr Gwynne held shares at the date of his appointment as Non-Executive Director on 23 June 2015.
At date of resignation, Ms Wang held 80,000 shares.
During the year, Mr Youds acquired 20,000 shares on market.
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Annual Report 2015
LOANS WITH KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES
Details of loans made to Cauldron Energy Limited by directors and entities related to them are set out below.
Balance at
the start of
the year
Loan advanced
/ (repaid)
Interest paid
and payable
for the year
Conversion of
loan to shares
Balance at
the end of
the year
212,948
211,032
663,038
1,087,018
Balance at
the start of
the year
-
-
(674,851)
(674,851)
5,495
5,445
11,813
22,753
(218,443)
(216,477)
-
(234,920)
Loan advanced
Interest paid
and payable
for the year
Conversion of
loan to shares
Balance at
the end of
the year
-
-
-
-
-
-
655,685
844,315
200,000
200,000
650,000
2,550,000
24,431
31,459
12,948
11,032
13,038
92,908
(680,116)
(875,774)
-
-
-
212,948
211,032
663,038
(1,555,890)
1,087,018
-
-
-
-
-
-
30 June 2015
Cape Lambert Resources Limited (b)
Mr Qiu Derong (b)
Cape Lambert Resources Limited (c)
TOTAL
30 June 2014
Cape Lambert Resources Limited (a)
Mr Qiu Derong (a)
Cape Lambert Resources Limited (b)
Mr Qiu Derong (b)
Cape Lambert Resources Limited (c)
TOTAL
(a)
In July 2013, the Consolidated Entity secured $1,500,000 in funding via the execution of converting loan
agreements with two of its major shareholders ($655,685 from Cape Lambert and $844,315 from Mr Qiu
Derong). Pursuant to the terms of the converting loan agreements, the Consolidated Entity received a total of
$1,500,000, which automatically converted into ordinary shares in the Consolidated Entity, upon receipt of
shareholder approval at the Consolidated Entity’s 2013 Annual General Meeting on 22 November 2013. The
converting loans, plus interest at 10% per annum ($1,555,890) were converted into 13,824,102 fully paid
ordinary shares, at a conversion price of $0.1125 per share (refer note 17). The conversion price was calculated
based on 80% 10 day VWAP of shares on ASX before the date of the shareholder approval on 22 November
2013. Mr Sage is a director of Cape Lambert Resources Limited.
(b)
In November 2013, the Consolidated Entity entered into short term loan agreements with Cape Lambert
Resources Limited (Cape Lambert) and Mr Qiu Derong (Mr Qiu). Cape Lambert and Mr Qiu Derong have each
lent the Consolidated Entity $200,000 which may be converted into shares at a conversion rate of $0.13 per
share (with an interest rate of 10% per annum).
On 30 September 2014 at a General Meeting, shareholders approved the conversion of:
loan (plus interest) of $218,433 by issuing 1,680,330 shares to Cape Lambert; and
loan (plus interest) of $216,477 by issuing 1,665,208 shares to Mr Qiu.
(c)
In March 2014, the Consolidated Entity entered into a converting loan agreement. Pursuant to the Converting
Loan Agreement, the loan funds, subject to receipt of shareholder approval at the Company’s 2014 Annual
General Meeting, will automatically convert into ordinary shares in the Company. Subject to receipt of
shareholder approval, the conversion will be 80% of the volume weighted average closing price of the Shares as
quoted on the ASX over the last ten trading days immediately preceding the day of receipt of shareholder
approval. If shareholder approval is not obtained, the loan (together with interest accrues daily at 10% per
annum) is repayable by the Company by 31 December 2014. As at 30 June 2014, $650,000 had been drawn
down by the Consolidated Entity. On 4 August 2014, $325,000 was repaid in cash to Cape Lambert Resources
Limited and on 1 October 2014, the remaining $349,851 (including interest) was repaid.
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Annual Report 2015
OTHER TRANSACTIONS AND BALANCES WITH KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES
Details and terms and conditions of other transactions with key management personnel and their related parties (other
than payments to directors as remuneration disclosed above):
Sales to
related parties
Purchases
from related
parties
Amounts
owed by
related
parties*
Amounts owed
to related
parties*
Director related entities
Fe Limited
Fe Limited
Cape Lambert Resources Limited
Cape Lambert Resources Limited
Kupang Resources Limited
Kupang Resources Limited
Okewood Pty Ltd
Okewood Pty Ltd
2015
2014
2015
2014
2015
2014
2015
2014
-
45,329
-
-
-
61,146
-
-
18,318
-
390,044
166,035
-
-
30,975
-
* Amounts are classified as trade receivables and trade payables, respectively.
-
-
-
-
-
-
-
-
-
-
5,119
33,135
-
-
-
-
Mr Sage is a director of Fe Limited, Cape Lambert Resources Limited, Kupang Resources Limited, and Okewood Pty Ltd.
End of Remuneration Report.
15.
NON AUDIT SERVICES
The following non-audit services were provided by the Company’s auditor BDO (WA) Pty Ltd. The directors are satisfied
that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by
the Corporations Act 2001. The nature and scope of each type of non-audit service provided means that auditor
independence was not compromised. BDO (WA) Pty Ltd received the following amounts for the provision of non-audit
services:
2015
$
2014
$
Tax advice
7,271
-
This report of the Directors, incorporating the Remuneration Report is signed in accordance with a resolution of the Board
of Directors.
Mr Antony Sage
Executive Chairman
PERTH
25 August 2015
20
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF CAULDRON ENERGY
LIMITED
As lead auditor of Cauldron Energy Limited for the year ended 30 June 2015, I declare that, to the best
of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Cauldron Energy Limited and the entities it controlled during the
period.
Phillip Murdoch
Director
BDO Audit (WA) Pty Ltd
Perth, 25 August 2015
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BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
Annual Report 2015
CORPORATE GOVERNANCE STATEMENT
In March 2014, the ASX Corporate Governance Council released a third edition of the ASX Corporate Governance Council’s
Principles and Recommendations (ASX Principles).
The Company’s Corporate Governance Statement for the year ended 30 June 2015 (which reports against these ASX Principles)
may be accessed from the Company’s website at www.cauldronenergy.com.au.
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Annual Report 2015
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2015
Note
3(a)
3(b)
27
8
8
4
5
6
Revenue
Other income
Administration expenses
Employee benefits expenses
Directors fees
Share based payments
Compliance and regulatory expenses
Consultancy expenses
Legal fees
Occupancy expenses
Travel expenses
Exploration expenditure
Net fair value gain/(loss) on financial assets
Gain on disposal of financial assets
Loss on disposal of fixed asset
Depreciation
Finance costs
Realised foreign exchange loss
Impairment losses
Loss before income tax expense
Income tax expense
Loss for the year
Other comprehensive income; net of income tax
Items that will not be reclassified subsequently
to profit or loss:
-
Items that may be reclassified subsequently to profit or
loss:
Exchange differences arising on translation of foreign
operations
Other comprehensive income for the year
after income tax
2015
$
2014
$
6,352
10,491
(457,145)
(437,312)
(239,512)
(1,972,026)
(121,883)
(564,306)
(412,100)
(52,752)
(198,166)
(9,012)
(601,706)
194,867
(4,148)
(124,625)
(22,634)
(12,567)
(1,694,616)
3,639
-
(256,488)
(284,050)
(274,504)
(288,229)
(127,783)
(342,870)
(853,560)
(10,332)
(52,435)
-
268,425
5,295
-
(17,014)
(92,908)
(36,627)
(1,931,452)
(6,712,800)
(4,290,893)
-
-
(6,712,800)
(4,290,893)
-
-
3,292
3,292
(436,009)
(436,009)
Total comprehensive income attributable to members of
the Company
(6,709,508)
(4,726,902)
Earnings/(loss) Per Share
Basic earnings/(loss) per share (cents per share)
20
(2.91)
(2.50)
The accompanying notes form part of these financial statements.
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Annual Report 2015
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
CURRENT ASSETS
Cash and cash equivalents
Restricted cash
Trade and other receivables
Financial assets at fair value through profit or loss
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Restricted cash
Exploration and evaluation expenditure
Property, plant and equipment
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Financial liabilities
Subscription funds
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
25(b)
9
7
8
9
11
12
13
14
15
16
17
18
19
2015
$
2014
$
1,216,478
1,714,932
136,013
419,667
1,873,667
2,055,748
134,690
826,506
3,487,090
4,890,611
-
10,204,649
442,356
69,000
8,869,590
25,076
10,647,005
8,963,666
14,134,095
13,854,277
840,757
-
1,714,932
33,500
706,349
1,087,018
2,055,759
50,534
2,589,189
3,899,660
2,589,189
3,899,660
11,544,906
9,954,617
48,029,486
3,273,077
(39,757,657)
41,701,715
1,297,759
(33,044,857)
11,544,906
9,954,617
The accompanying notes form part of these financial statements.
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Annual Report 2015
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015
Note
2015
$
2014
$
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
(2,409,873)
6,697
(2,065,730)
4,573
Net cash used in operating activities
25(a)
(2,403,176)
(2,061,157)
Cash Flows from Investing Activities
Payments for exploration and evaluation
R&D Tax Incentive received
Reimbursement for exploration and evaluation incurred on
behalf of other parties
Payments for plant and equipment
Refund of environmental bonds and deposits
Funding provided to Caudillo Resources SA
Repayment from Caudillo Resources SA
Proceeds from sales of equity investments
11
(3,928,206)
814,557
(2,064,713)
346,906
-
(541,466)
68,989
(195,564)
121,380
-
17,028
-
148,761
(216,681)
-
20,265
Net cash used in investing activities
(3,660,310)
(1,748,434)
Cash Flows from Financing Activities
Proceeds from issue of shares and options, net of
transaction costs
Proceeds from issue of convertible loan note
Repayment of convertible loan
Net cash from financing activities
Net increase/ (decrease) in cash held
Effects of exchange rate changes on cash
Cash and cash equivalents at beginning of financial year
14
6,055,759
-
(650,000)
2,924,241
2,550,000
-
5,405,759
5,474,241
(657,727)
538
1,873,667
1,664,650
(4,989)
214,006
Cash and cash equivalents at end of financial year
1,216,478
1,873,667
The accompanying notes form part of these financial statements.
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Annual Report 2015
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR YEAR ENDED 30 JUNE 2015
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Balance at 1 July 2014
Loss attributable to members of the parent entity
Other comprehensive income
Total comprehensive income for the year
Transaction with owners, directly in equity
Shares issued during the year, net of costs
Share based payments expense recognised for value of
options issued/vested during the year
Balance at 30 June 2015
Balance at 1 July 2013
Loss attributable to members of the parent entity
Other comprehensive income
Total comprehensive income for the year
Transaction with owners, directly in equity
Shares issued during the year, net of costs
Share based payments expense recognised for value of
options issued/vested during the year
Balance at 30 June 2014
Issued Capital
Accumulated
Losses
Share Based
Payment
Reserve
Foreign
Currency
Translation
Reserve
Total
$
$
$
$
$
41,701,715
(33,044,857)
2,645,728
(1,347,969)
9,954,617
-
-
-
(6,712,800)
-
(6,712,800)
-
-
-
-
(6,712,800)
3,292
3,292
3,292
(6,709,508)
6,327,771
6,327,771
-
-
1,972,026
-
1,972,026
48,029,486
(39,757,657)
4,617,754
(1,344,677)
11,544,906
Issued Capital
Accumulated
Losses
Share Based
Payment
Reserve
Foreign
Currency
Translation
Reserve
Total
$
$
$
$
$
37,348,796
(28,753,964)
2,357,499
(911,960)
10,040,371
-
-
-
(4,290,893)
-
(4,290,893)
4,352,919
-
-
-
-
-
-
-
288,229
-
(4,290,893)
(436,009)
(436,009)
(436,009)
(4,726,902)
-
-
4,352,919
288,229
41,701,715
(33,044,857)
2,645,728
(1,347,969)
9,954,617
The accompanying notes form part of these financial statements.
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Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Basis of Preparation
The financial report covers Cauldron Energy Limited (“Cauldron”) and its controlled entities (“the Consolidated Entity”)
for the year ended 30 June 2014 and was authorised for issue in accordance with a resolution of the directors on 25
August 2015.
Cauldron is a public listed company, incorporated and domiciled in Australia.
Cauldron is a for-profit entity for the purposes of preparing these financial statements.
The financial report is a general purpose financial report that has been prepared in accordance with the requirements
of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the
Australian Accounting Standards Board. The financial report has been prepared on an accruals basis and is based on
historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial
assets and financial liabilities.
The financial report is presented in Australian dollars.
b. Compliance with IFRS
The financial report complies with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board.
c. Going concern
The financial statements have been prepared on a going concern basis which contemplates the continuity of normal
business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.
The Consolidated Entity incurred a loss for the year of $6,712,800 and net cash outflows of $657,727. At 30 June 2015,
the Consolidated Entity has cash and cash equivalents of $1,216,478, and a further restricted cash amount of
$1,714,932 received pursuant to a share placement agreement. This funding will become available to the Company and
the shares issued following receipt of shareholder approval.
The ability of the Consolidated Entity to continue as a going concern and to fulfil its planned exploration program in the
next twelve months is dependent upon the ability of the Consolidated Entity to secure additional funding.
The directors are confident that the Consolidated Entity will be able to secure additional funding to enable it to meet its
obligations as and when they fall due.
Should the Consolidated Entity not achieve the matters set out above, there is material uncertainty whether it would
continue as a going concern and therefore whether it would realise its assets and extinguish its liabilities in the normal
course of business and at the amounts stated in the financial statements. The financial statements do not include any
adjustment relating to the recoverability or classification of recorded asset amounts nor to the amounts or
classifications of liabilities that might be necessary should the Consolidated Entity not be able to continue as a going
concern and meet its debts as and when they fall due.
d. Application of New and Revised Accounting Standards
Changes in accounting policies on initial application of Accounting Standards
The accounting policies adopted are consistent with those of the previous financial year, with the exception of R&D Tax
Incentive. From 1 July 2014, the Consolidated Entity has adopted all the standards and interpretations mandatory for
annual periods beginning on or after 1 July 2014. Adoption of these standards and interpretations did not have any
effect on the statements of financial position or performance of the Consolidated Entity. The Consolidated Entity has
not elected to early adopt any new standards or amendments.
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Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
The following standards and interpretations would have been applied for the first time for entities with period ending
30 June 2015 (unless early adopted):
Reference
Title
AASB 2012-3
Amendments to Australian Accounting Standards - Offsetting Financial Assets and Financial Liabilities
AASB 2012-3 adds application guidance to AASB 132 Financial Instruments: Presentation to address
inconsistencies identified in applying some of the offsetting criteria of AASB 132, including clarifying the meaning
of "currently has a legally enforceable right of set-off" and that some gross settlement systems may be
considered equivalent to net settlement.
Interpretation 21
Levies
This Interpretation confirms that a liability to pay a levy is only recognised when the activity that triggers the
payment occurs. Applying the going concern assumption does not create a constructive obligation.
AASB 2013-3
Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets
AASB 2013-3 amends the disclosure requirements in AASB 136 Impairment of Assets. The amendments include
the requirement to disclose additional information about the fair value measurement when the recoverable
amount of impaired assets is based on fair value less costs of disposal.
AASB 2013-4
Amendments to Australian Accounting Standards – Novation of Derivatives and Continuation of Hedge
Accounting [AASB 139]
AASB 2013-4 amends AASB 139 to permit the continuation of hedge accounting in specified circumstances where
a derivative, which has been designated as a hedging instrument, is novated from one counterparty to a central
counterparty as a consequence of laws or regulations.
AASB 1031
Materiality
The revised AASB 1031 is an interim standard that cross-references to other Standards and the Framework
(issued December 2013) that contain guidance on materiality.
AASB 1031 will be withdrawn when references to AASB 1031 in all Standards and Interpretations have been
removed.
AASB 2014-1 Part C issued in June 2014 makes amendments to eight Australian Accounting Standards to delete
their references to AASB 1031. The amendments are effective from 1 July 2014*.
AASB 2013-9
Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments
AASB 2014-1
Part A -Annual
Improvements
2010–2012 Cycle
The Standard contains three main parts and makes amendments to a number Standards and Interpretations.
Part A of AASB 2013-9 makes consequential amendments arising from the issuance of AASB CF 2013-1.
Part B makes amendments to particular Australian Accounting Standards to delete references to AASB 1031 and
also makes minor editorial amendments to various other standards.
Part C makes amendments to a number of Australian Accounting Standards, including incorporating Chapter 6
Hedge Accounting into AASB 9 Financial Instruments.
AASB 2014-1 Part A: This standard sets out amendments to Australian Accounting Standards arising from the
issuance by the International Accounting Standards Board (IASB) of International Financial Reporting Standards
(IFRSs) Annual Improvements to IFRSs 2010–2012 Cycle and Annual Improvements to IFRSs 2011–2013 Cycle.
Annual Improvements to IFRSs 2010–2012 Cycle addresses the following items:
► AASB 2 - Clarifies the definition of 'vesting conditions' and 'market condition' and introduces the definition of
'performance condition' and 'service condition'.
► AASB 3 - Clarifies the classification requirements for contingent consideration in a business combination by
removing all references to AASB 137.
► AASB 8 - Requires entities to disclose factors used to identify the entity's reportable segments when
operating segments have been aggregated. An entity is also required to provide a reconciliation of total
reportable segments' asset to the entity's total assets.
► AASB 116 & AASB 138 - Clarifies that the determination of accumulated depreciation does not depend on the
selection of the valuation technique and that it is calculated as the difference between the gross and net
carrying amounts.
AASB 124 - Defines a management entity providing KMP services as a related party of the reporting entity. The
amendments added an exemption from the detailed disclosure requirements in paragraph 17 of AASB 124 for
KMP services provided by a management entity. Payments made to a management entity in respect of KMP
services should be separately disclosed.
AASB 2014-1
Part A -Annual
Annual Improvements to IFRSs 2011–2013 Cycle addresses the following items:
28
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Reference
Title
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Improvements
2011–2013 Cycle
► AASB13 - Clarifies that the portfolio exception in paragraph 52 of AASB 13 applies to all contracts within the
scope of AASB 139 or AASB 9, regardless of whether they meet the definitions of financial assets or financial
liabilities as defined in AASB 132.
AASB 140 - Clarifies that judgment is needed to determine whether an acquisition of investment property is
solely the acquisition of an investment property or whether it is the acquisition of a group of assets or a business
combination in the scope of AASB 3 that includes an investment property. That judgment is based on guidance in
AASB 3.
New accounting standards and interpretations issued but yet effective
The following standards and interpretations have been issued by the AASB but are not yet effective for the period ending 30
June 2015.
Application
date of
standard
Application
date for
Group
1 January
2018
1 July 2018
Reference
Title
Summary
AASB 9
Financial Instruments
AASB 9 (December 2014) is a new Principal standard which
replaces AASB 139. This new Principal version supersedes AASB 9
issued in December 2009 (as amended) and AASB 9 (issued in
December 2010) and includes a model for classification and
measurement, a single, forward-looking ‘expected loss’
impairment model and a substantially-reformed approach to
hedge accounting.
AASB 9 is effective for annual periods beginning on or after 1
January 2018. However, the Standard is available for early
application. The own credit changes can be early applied in
isolation without otherwise changing the accounting for financial
instruments.
The final version of AASB 9 introduces a new expected-loss
impairment model that will require more timely recognition of
expected credit losses. Specifically, the new Standard requires
entities to account for expected credit losses from when financial
instruments are first recognised and to recognise full lifetime
expected losses on a more timely basis.
Amendments to AASB 9 (December 2009 & 2010 editions and
AASB 2013-9) issued in December 2013 included the new hedge
accounting requirements, including changes to hedge
effectiveness testing, treatment of hedging costs, risk
components that can be hedged and disclosures.
AASB 9 includes requirements for a simpler approach for
classification and measurement of financial assets compared
with the requirements of AASB 139.
The main changes are described below.
a.
Financial assets that are debt instruments will be classified
based on (1) the objective of the entity's business model
for managing the financial assets; (2) the characteristics of
the contractual cash flows.
b.
c.
Allows an irrevocable election on initial recognition to
present gains and losses on investments in equity
instruments that are not held for trading in other
comprehensive income. Dividends in respect of these
investments that are a return on investment can be
recognised in profit or loss and there is no impairment or
recycling on disposal of the instrument.
Financial assets can be designated and measured at fair
value through profit or loss at initial recognition if doing so
eliminates or significantly reduces a measurement or
recognition inconsistency that would arise from measuring
assets or liabilities, or recognising the gains and losses on
them, on different bases.
d. Where the fair value option is used for financial liabilities
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Reference
Title
Summary
Application
date of
standard
Application
date for
Group
the change in fair value is to be accounted for as follows:
►
The change attributable to changes in credit risk are
presented in other comprehensive income (OCI)
►
The remaining change is presented in profit or loss
AASB 9 also removes the volatility in profit or loss that was
caused by changes in the credit risk of liabilities elected to be
measured at fair value. This change in accounting means that
gains caused by the deterioration of an entity’s own credit risk
on such liabilities are no longer recognised in profit or loss.
Consequential amendments were also made to other standards
as a result of AASB 9, introduced by AASB 2009-11 and
superseded by AASB 2010-7, AASB 2010-10 and AASB 2014-1 –
Part E.
AASB 2014-7 incorporates the consequential amendments
arising from the issuance of AASB 9 in Dec 2014.
AASB 2014-8 limits the application of the existing versions of
AASB 9 (AASB 9 (December 2009) and AASB 9 (December 2010))
from 1 February 2015 and applies to annual reporting periods
beginning on after 1 January 2015.
AASB 2014-3 amends AASB 11 to provide guidance on the
accounting for acquisitions of interests in joint operations in
which the activity constitutes a business. The amendments
require:
(a) the acquirer of an interest in a joint operation in which the
activity constitutes a business, as defined in AASB 3 Business
Combinations, to apply all of the principles on business
combinations accounting in AASB 3 and other Australian
Accounting Standards except for those principles that conflict
with the guidance in AASB 11; and
(b) the acquirer to disclose the information required by AASB 3
and other Australian Accounting Standards for business
combinations.
This Standard also makes an editorial correction to AASB 11
AASB 116 and AASB 138 both establish the principle for the basis
of depreciation and amortisation as being the expected pattern
of consumption of the future economic benefits of an asset.
The IASB has clarified that the use of revenue-based methods to
calculate the depreciation of an asset is not appropriate because
revenue generated by an activity that includes the use of an
asset generally reflects factors other than the consumption of
the economic benefits embodied in the asset.
The amendment also clarified that revenue is generally
presumed to be an inappropriate basis for measuring the
consumption of the economic benefits embodied in an intangible
asset. This presumption, however, can be rebutted in certain
limited circumstances.
In May 2014, the IASB issued IFRS 15 Revenue from Contracts
with Customers, which replaces IAS 11 Construction Contracts,
IAS 18 Revenue and related Interpretations (IFRIC 13 Customer
Loyalty Programmes, IFRIC 15 Agreements for the Construction of
Real Estate, IFRIC 18 Transfers of Assets from Customers and SIC-
31 Revenue—Barter Transactions Involving Advertising Services).
The core principle of IFRS 15 is that an entity recognises revenue
to depict the transfer of promised goods or services to customers
in an amount that reflects the consideration to which the entity
expects to be entitled in exchange for those goods or services.
An entity recognises revenue in accordance with that core
principle by applying the following steps:
(a) Step 1: Identify the contract(s) with a customer
(b) Step 2: Identify the performance obligations in the contract
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1 January
2016
1 July 2016
1 January
2016
1 July 2016
1 January
2017
1 July 2017
AASB 2014-3 Amendments to Australian
Accounting Standards –
Accounting for Acquisitions of
Interests in Joint Operations
[AASB 1 & AASB 11]
AASB 2014-4 Clarification of Acceptable
Methods of Depreciation and
Amortisation (Amendments
to
AASB 116 and AASB 138)
AASB 15
Revenue from Contracts with
Customers
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Reference
Title
Summary
Application
date of
standard
Application
date for
Group
AASB 2014-9 Amendments to Australian
Accounting Standards – Equity
Method in Separate Financial
Statements
(c) Step 3: Determine the transaction price
(d) Step 4: Allocate the transaction price to the performance
obligations in the contract
(e) Step 5: Recognise revenue when (or as) the entity satisfies a
performance obligation
Early application of this standard is permitted.
AASB 2014-5 incorporates the consequential amendments to a
number Australian Accounting Standards (including
Interpretations) arising from the issuance of AASB 15.
AASB 2014-9 amends AASB 127 Separate Financial Statements,
and consequentially amends AASB 1 First-time Adoption of
Australian Accounting Standards and AASB 128 Investments in
Associates and Joint Ventures, to allow entities to use the equity
method of accounting for investments in subsidiaries, joint
ventures and associates in their separate financial statements.
AASB 2014-9 also makes editorial corrections to AASB 127.
AASB 2014-9 applies to annual reporting periods beginning on or
after 1 January 2016. Early adoption permitted.
1 January
2016
1 July 2016
AASB 2014-
10
Amendments to Australian
Accounting Standards – Sale
or Contribution of Assets
between an Investor and its
Associate or Joint Venture
AASB 2014-10 amends AASB 10 Consolidated Financial
Statements and AASB 128 to address an inconsistency between
the requirements in AASB 10 and those in AASB 128 (August
2011), in dealing with the sale or contribution of assets between
an investor and its associate or joint venture. The amendments
require:
1 January
2016
1 July 2016
AASB 2015-1 Amendments to Australian
Accounting Standards –
Annual Improvements to
Australian Accounting
Standards 2012–2014 Cycle
(a) a full gain or loss to be recognised when a transaction
involves a business (whether it is housed in a subsidiary or not);
and
(b) a partial gain or loss to be recognised when a transaction
involves assets that do not constitute a business, even if these
assets are housed in a subsidiary.
AASB 2014-10 also makes an editorial correction to AASB 10.
AASB 2014-10 applies to annual reporting periods beginning on
or after 1 January 2016. Early adoption permitted.
The subjects of the principal amendments to the Standards are
set out below:
1 January
2016
1 July 2016
AASB 5 Non-current Assets Held for Sale and Discontinued
Operations:
•
Changes in methods of disposal – where an entity
reclassifies an asset (or disposal group) directly from
being held for distribution to being held for sale (or
visa versa), an entity shall not follow the guidance in
paragraphs 27–29 to account for this change.
AASB 7 Financial Instruments: Disclosures:
•
Servicing contracts - clarifies how an entity should
apply the guidance in paragraph 42C of AASB 7 to a
servicing contract to decide whether a servicing
contract is ‘continuing involvement’ for the purposes
of applying the disclosure requirements in paragraphs
42E–42H of AASB 7.
• Applicability of the amendments to AASB 7 to
condensed interim financial statements - clarify that
the additional disclosure required by the
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Reference
Title
Summary
Application
date of
standard
Application
date for
Group
amendments to AASB 7 Disclosure–Offsetting
Financial Assets and Financial Liabilities is not
specifically required for all interim periods. However,
the additional disclosure is required to be given in
condensed interim financial statements that are
prepared in accordance with AASB 134 Interim
Financial Reporting when its inclusion would be
required by the requirements of AASB 134.
AASB 119 Employee Benefits:
• Discount rate: regional market issue - clarifies that the
high quality corporate bonds used to estimate the
discount rate for post-employment benefit
obligations should be denominated in the same
currency as the liability. Further it clarifies that the
depth of the market for high quality corporate bonds
should be assessed at the currency level.
AASB 134 Interim Financial Reporting:
• Disclosure of information ‘elsewhere in the interim
financial report’ -amends AASB 134 to clarify the
meaning of disclosure of information ‘elsewhere in
the interim financial report’ and to require the
inclusion of a cross-reference from the interim
financial statements to the location of this
information.
The Standard makes amendments to AASB 101 Presentation of
Financial Statements arising from the IASB’s Disclosure Initiative
project. The amendments are designed to further encourage
companies to apply professional judgment in determining what
information to disclose in the financial statements. For example,
the amendments make clear that materiality applies to the
whole of financial statements and that the inclusion of
immaterial information can inhibit the usefulness of financial
disclosures. The amendments also clarify that companies should
use professional judgment in determining where and in what
order information is presented in the financial disclosures.
1 January
2016
1 July 2016
AASB 2015-2 Amendments to Australian
Accounting Standards –
Disclosure Initiative:
Amendments to AASB 101
AASB 2015-3 Amendments to Australian
Accounting Standards arising
from the Withdrawal of AASB
1031 Materiality
The Standard completes the AASB’s project to remove Australian
guidance on materiality from Australian Accounting Standards.
1 July 2015
1 July 2015
The Consolidated Entity is in the process of determining the impact of the above on its financial statements. The Consolidated
Entity has not elected to early adopt any new Standards or Interpretations. At the date of this report, management does not
anticipate significant impact from adopting the new standards and interpretations.
e. Principles of Consolidation
Subsidiaries
(i)
Subsidiaries are all entities over which the group has control. The group controls an entity when the group 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 to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the group. They are deconsolidated from the date that control ceases. A list of controlled entities is
contained in note 23 to the financial statements.
All inter-group balances and transactions between entities in the Consolidated Entity, including any unrealised profits or
losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary
to ensure consistency with those adopted by the Parent Entity.
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Joint arrangements
(ii)
Under AASB 11, Joint Arrangements investments in joint arrangements are classified as either joint operations or joint
ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal
structure of the joint arrangement.
Joint operations
Cauldron Energy Limited recognises its direct right to the assets, liabilities, revenues and expenses of joint operations
and its share of any jointly held or incurred assets, liabilities, revenues and expenses. These have been incorporated in
the financial statements under the appropriate headings.
Joint ventures
Interests in joint ventures are accounted for using the equity method, after initially being recognised at cost in the
consolidated balance sheet.
f.
Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of each of the Consolidated Entity’s companies is measured using the currency of the primary
economic environment in which that company operates. The consolidated financial statements are presented in
Australian dollars which is the parent entity’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of
the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of
exchange ruling at the reporting date. Non-monetary items measured at historical cost continue to be carried at the
exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange
rate at the date when fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the statement of comprehensive
income, except where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent
that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the statement of
comprehensive income.
Group companies
The financial results and position of foreign operations whose functional currency is different from the Consolidated
Entity’s presentation currency are translated as follows:
-
-
-
assets and liabilities are translated at year-end exchange rates prevailing at the end of the reporting period;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the Consolidated Entity’s
foreign currency translation reserve in the statement of financial position. These differences are recognised in the
statement of comprehensive income in the period in which the operation is disposed.
g. Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:
(i)
(ii)
where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the
cost of acquisition of an asset or as part of an item of expense; or
for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or
payables.
Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from
investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as
operating cash flows.
h.
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax
expense (income).
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Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable
income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets)
are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year
as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss
when the tax relates to items that are credited or charged directly to equity.
Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where
amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised
from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on
accounting or taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset
is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting
period. Their measurement also reflects the manner in which management expects to recover or settle the carrying
amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is
probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be
controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets
and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where
it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will
occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or
settled.
Tax consolidation
Cauldron Energy Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group
under tax consolidation legislation. Each entity in the Consolidated Entity recognises its own current and deferred tax
assets and liabilities. Such taxes are measured using the ‘stand-alone taxpayer’ approach to allocation. Current tax
liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are
immediately transferred to the head entity. The Group notified the Australian Taxation Office that it had formed an
income tax consolidated group to apply from 1 July 2009.
i.
Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand, cash in banks and investments in money market instruments. Cash
equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, which are
subject to an insignificant risk of changes in value and have an original maturity of three months or less.
j.
Financial Instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the Consolidated Entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the Consolidated Entity commits
itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified
‘at fair value through profit or loss’, in which case transaction costs are expensed to profit or loss immediately.
Classification and subsequent measurement
Finance instruments are subsequently measured at either fair value, amortised cost using the effective interest rate
method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between
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knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In
other circumstances, valuation techniques are adopted.
Amortised cost is calculated as:
the amount at which the financial asset or financial liability is measured at initial recognition;
less principal repayments;
plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised
and the maturity amount calculated using the effective interest method; and
less any reduction for impairment.
The effective interest method is used to allocate interest income or interest expense over the relevant period and is
equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction
costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the
contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability.
Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential
recognition of an income or expense in profit or loss.
The Consolidated Entity does not designate any interests in subsidiaries, associates or joint venture entities as being
subject to the requirements of accounting standards specifically applicable to financial instruments.
The Consolidated Entity has the following financial instruments:
Financial Assets at Fair Value through Profit or Loss
Financial assets are classified at ‘fair value through profit or loss’ when they are either held for trading for the purpose of
short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an
accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key
management personnel on a fair value basis in accordance with a documented risk management or investment strategy.
Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.
Loans and Receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, except for those which are not expected to mature within 12
months after the end of the reporting period. (All other loans and receivables are classified as non-current assets.)
Debt and equity instruments
Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the
contractual arrangement.
Impairment
At the end of each reporting period, the Consolidated Entity assesses whether there is objective evidence that a financial
instrument has been impaired.
Derecognition of financial assets
Financial assets are derecognised when the contractual rights to the cash flows from the asset expire, or it transfers the
financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Consolidated
Entity neither transfers nor retains substantially all the risks or rewards of ownership and continues to control the
transferred asset, the Consolidated Entity recognises its retained interest in the asset and an associated liability for
amounts it may have to pay. If the Consolidated Entity retains substantially all the risk and rewards to ownership of a
transferred financial asset, the Consolidated Entity continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
k. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset (i.e. an asset that
takes a substantial period of time to get ready for its intended use or sale) are capitalised as part of the cost of that
asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other
costs that an entity incurs in connection with the borrowing of funds.
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l.
Property, Plant and Equipment
Plant and equipment are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is
directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase
consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as
at the date of acquisition.
Depreciation is provided on plant and equipment. Depreciation is calculated on a diminishing value basis so as to write
off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. The
estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Plant and equipment
Office furniture and equipment
Motor vehicle
2015
33.3%
33.3%
33.3%
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses
are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the
revaluation surplus relating to that asset are transferred to retained earnings.
m. Exploration and Evaluation Expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable area of
interest. These costs are only carried forward to the extent that they are expected to be recouped through the
successful development of the area or where activities in the area have not yet reached a stage that permits reasonable
assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision
to abandon the area is made. When production commences, the accumulated costs for the relevant area of interest are
amortised over the life of the area according to the rate of depletion of the economically recoverable reserves.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward
costs in relation to that area of interest.
n.
Impairment of Assets
The Consolidated Entity periodically reviews the carrying amounts of its assets to determine whether there is any
indication that those assets may be impaired. If any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Consolidated Entity estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
Goodwill, intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for
impairment annually and whenever there is an indication that the asset may be impaired. An impairment of goodwill is
not subsequently reversed.
o. R&D Tax Incentive
The Consolidated Entity previously accounted for refundable R&D tax incentives as an income tax benefit. The
Consolidated Entity has determined that these incentives are more akin to government grants because they are not
conditional upon earning taxable income. The Consolidated Entity has therefore made a voluntary change in accounting
policy during the reporting period (refer Note 1(d)). Refundable tax incentives are now accounted for as government
grants under AASB 120 Accounting for Government Grants and Disclosure of Government Assistance because the
directors consider this policy to provide more relevant information to meet the economic decision-making needs of
users, and to make the financial statements more reliable.
p.
Trade and Other Payables
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and services
received by the Consolidated Entity during the reporting period which remains unpaid. The balance is recognised as a
current liability with the amount being normally paid within 30 days of recognition of the liability.
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q. Revenue Recognition
Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it is
probable that the economic benefits will flow to the Consolidated Entity and the revenue can be reliably measured. The
following specific recognition criteria must also be met before revenue is recognised:
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the
rate inherent in the instrument.
Royalty revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement. All
revenue is stated net of the amount of goods and services tax (GST).
r.
Provisions and Employee Benefits
Provisions are recognised when the Consolidated Entity has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are measures at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the reporting date. The discount rate used to determine the present value reflects current
assessments of the time value of money and the risks specific to the liability. The increase in the provision resulting from
the passage of time is recognised in finance costs.
Provision for restoration and rehabilitation
A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of exploration
activities undertaken, it is probable that an outflow of economic benefits will be required to settle the obligation, and
the amount of the provision can be measured reliably. The estimated future obligation includes the costs of removing
facilities, abandoning sites and restoring the affected areas.
Employee leave benefits
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled wholly within
12 months of the reporting date are recognised in respect of employees’ services up to the reporting date. They are
measured at the amounts expected to be paid when the liabilities are settled.
s.
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
t.
Share based payments
Equity-settled share based payments are measured at fair value at the date of grant. Fair value is measured by use of
the Black-Scholes options pricing model. The expected life used in the model has been adjusted, based on
management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line
basis over the vesting period, based on the Consolidated Entity’s estimate of shares that will eventually vest.
For cash-settled share-based payments, a liability equal to the portion of the goods and services received is recognised
at the current fair value determined at each reporting date.
u. Critical accounting judgements, estimates and assumptions
The Consolidated Entity makes estimates and assumptions concerning the future. The resulting accounting estimates
will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of
causing a material adjustment to carrying amounts of assets and liabilities within the next financial year are discussed
below.
Share based payment transactions
The Consolidated Entity measures the cost of equity-settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value of options is determined by an internal valuation using
Black-Scholes option pricing model, while the fair value of shares is determined based on the market bid price at date of
issue.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Exploration and evaluation costs
Exploration and evaluation expenditure incurred is accumulated in respect of each identifiable area of interest. These
costs are carried forward in respect of an area that has not at balance date reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in
or relating to, the area of interest are continuing.
Environmental Issues
Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted
environmental legislation, and the directors understanding thereof. At the current stage of the Consolidated Entity’s
development and its current environmental impact the directors believe such treatment is reasonable and appropriate.
Income taxes
The Consolidated Entity is subject to income taxes in Australia and jurisdictions where it has foreign operations.
Significant judgement is required in determining the worldwide provision for income taxes. There are many transactions
and calculations undertaken during the ordinary course of business for which the ultimate tax determination is
uncertain. The Consolidated Entity estimates its tax liabilities based on the Consolidated Entity’s understanding of the
tax laws in the relevant jurisdictions. Where the final tax outcome of these matters is different from the amounts that
were initially recorded, such difference will impact the current and deferred income tax assets and liabilities in the
period in which such determination is made.
In addition, the Consolidated Entity has recognised deferred tax assets relating to carried forward tax losses to the
extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority
and the same subsidiary against which the unused tax losses can be utilised. However, utilisation of the tax losses also
depends on the ability of the entity to satisfy certain tests at the time the losses are recouped.
v.
Comparative Figures
Comparative figures have been adjusted to conform to changes in presentation for the current financial year.
w. Operating Segments
An operating segment is a component of an entity that engages in business activities from which it may earn revenues
and incur expenses (including revenues and expenses relating to transactions with other components of the same
entity), whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions
about resources to be allocated to the segment and assess their performance and for which discrete financial
information is available. This includes start-up operations which are yet to earn revenues.
Operating segments have been identified based on the information provided to the chief operating decision makers –
being the board of directors.
Information about other business activities and operating segments that do not meet the quantitative criteria set out in
AASB 8 “Operating Segments” are combined and disclosed in a separate category called “other.”
2.
SEGMENT INFORMATION
The Consolidated Entity has identified its operating segments based on the internal reports that are reviewed and used by
the board of directors (chief operating decision makers) in assessing performance and determining the allocation of
resources. During the year, the Consolidated Entity operated in one business segment (for primary reporting) being mineral
exploration and principally in two geographical segments (for secondary reporting) being Australia and Argentina.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the board of directors as the chief decision maker with respect to
operating segments are determined in accordance with accounting policies that are consistent to those adopted in the
annual financial statements of the Consolidated Entity.
Inter-segment transactions
Inter-segment loans payable and receivable are initially recognised as the consideration received net of transaction costs. If
inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on
market interest rates. This policy represents a departure from that applied to the statutory financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Segment assets
Unless indicated otherwise in the segment assets note, investments in financial assets, deferred tax assets and intangible
assets have not been allocated to operating segments.
Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence of the liability and the operations of
the segment. Borrowings and tax liabilities are generally considered to relate to the Consolidated Entity as a whole and are
not allocated to specific segments. Segment liabilities include trade and other payables and certain direct borrowings.
Other items
The following items of revenue, expense, assets and liabilities are not allocated to the Mineral Exploration segment as they
are not considered part of the core operations of that segment:
-
-
-
-
-
-
-
administration and other operating expenses not directly related to uranium exploration
interest income
interest expense
convertible loan notes
subscription funds
loans to other entities
held for trading investments
Mineral exploration
2014
2015
$
$
Other
Total
2015
$
2014
$
2015
$
2014
$
Interest received
Fuel tax credits
Total segment revenue and other
income
-
10,491
10,491
-
-
-
6,352
-
6,352
3,639
-
6,352
10,491
3,639
16,843
3,639
-
3,639
Segment net operating profit/ (loss)
after tax
Segment net operating profit/ (loss)
after tax includes the following
significant items:
Interest and other finance charges
Share based payments expense
Net fair value gain/(loss) on financial
assets
Gain/(loss) on disposal of financial
assets
Impairment of loans and receivables
Impairment of exploration assets
Depreciation
Employee benefits expense
Directors fees
Consultancy expenses
Legal fees
Other
(2,010,635)
(1,837,615)
(4,702,164)
(2,453,278)
(6,712,800)
(4,290,893)
-
-
-
-
-
-
(22,634)
(1,972,026)
(92,908)
(288,229)
(22,634)
(1,972,026)
(92,908)
(288,229)
(601,706)
268,425
(601,706)
268,425
-
-
(1,604,898)
(124,625)
-
-
-
-
(281,112)
-
-
(1,731,119)
(17,014)
-
-
-
-
(89,482)
194,867
(89,718)
-
-
(437,312)
(239,512)
(564,306)
(412,100)
(557,717)
5,295
(200,333)
-
-
(284,050)
(274,504)
(342,870)
(853,560)
(390,544)
194,867
(89,718)
(1,604,898)
(124,625)
(437,312)
(239,512)
(564,306)
(412,100)
(838,829)
5,295
(200,333)
(1,731,119)
(17,014)
(284,050)
(274,504)
(342,870)
(853,560)
(480,026)
Segment assets
10,770,343
9,012,285
3,363,752
4,841,990
14,134,095
13,854,277
Segment assets include:
Capitalised exploration expenditure
Financial assets
Restricted cash
Other assets
10,204,649
-
-
565,694
10,770,343
8,869,590
-
69,000
73,695
9,012,285
-
419,667
1,714,932
1,229,153
3,363,752
-
826,506
2,055,748
1,959,738
4,841,992
10,204,649
419,667
1,714,932
1,794,847
14,134,095
8,869,590
826,506
2,214,748
2,033,433
13,854,277
Segment liabilities
(117,240)
(706,349)
(2,471,949)
(3,193,311)
(2,589,189)
(3,899,660)
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Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Segment information by geographical region
The analysis of the location of total assets is as follows:
Australia
Argentina
3.
REVENUE AND OTHER INCOME
(a) Revenue
Interest received
(b) Other Income
Fuel tax credits
4.
FINANCE COSTS
Interest on convertible notes
5.
IMPAIRMENT LOSSES
Impairment of exploration and evaluation expenditure (a)
Impairment of loans
Impairment of other receivables
Reversal of previously impaired loans and receivables
2015
$
2014
$
13,415,351
718,744
14,134,095
13,331,571
522,636
13,854,277
2015
$
2014
$
6,352
6,352
10,491
10,491
3,639
3,639
-
-
2015
$
2014
$
22,634
22,634
92,908
92,908
2015
$
2014
$
1,604,898
195,564
16,443
(122,289)
1,694,616
1,731,119
200,333
-
-
1,931,452
(a) The Consolidated Entity has assessed the carrying amount of the exploration and evaluation expenditure in accordance with
AASB 6 Exploration for and Evaluation of Mineral Resources and has recognised an impairment expense of $1,604,898
during the year (30 June 2014: $1,731,119) following the decision not to continue exploration in certain areas and costs
associated with tenements not yet granted within Western Australia and in Argentina.
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6.
INCOME TAX EXPENSE
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
(a)
The components of tax expense comprise:
Current tax benefit / (expense)
Deferred tax benefit / (expense)
2015
$
2014
$
-
-
-
-
-
-
(b)
The prima facie tax benefit on loss from ordinary activities before income tax
is reconciled to the income tax as follows:
2015
$
2014
$
Loss before tax
(6,712,800)
(4,290,893)
Prima facie tax (benefit) on loss from ordinary activities before income tax at
30% (2013: 30%)
(2,013,840)
(1,287,268)
Add tax effect of:
Non-deductible expenses
Current year tax losses not recognised
Less tax effect of:
Under/(over) provision for prior year
Total income tax (income)/expense attributable to entity
(c)
Recognised deferred tax balances
Deferred tax balances have been recognised in respect of the following:
Deferred tax assets
Annual Leave
Investments
Other receivables
Other accruals
Loan receivable
Capital raising costs
Tax losses
Deferred tax liabilities
Exploration
Unearned income
601,193
1,412,647
373,708
913,560
-
-
-
-
2015
$
2014
$
10,050
2,165,374
66,277
24,717
368,217
68,406
176,824
2,879,865
15,160
2,047,588
61,658
75,490
309,548
35,363
89,586
2,634,393
(2,879,865)
-
(2,879,865)
(2,634,290)
(103)
(2,634,393)
Net recognised deferred tax assets/(liabilities)
-
-
(d) Unrecognised deferred tax balances
The Consolidated Entity has $21,358,875 (2014: $18,855,701) gross tax losses arising in Australia that are available
indefinitely for offset against future profit of the Company in which the losses arose.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
7.
TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Provision for non-recovery of trade receivables
Accrued interest
Prepayments
Provision for non-recovery of trade receivables
Movements:
Opening balance at beginning of the year
Recovery of previously impaired receivable
Provision for doubtful debts
2015
$
2014
$
344,260
(220,922)
-
12,675
136,013
322,799
(205,524)
345
17,070
134,690
2015
$
2014
$
(205,524)
3,969
(19,367)
(220,922)
(61,352)
-
(144,172)
(205,524)
A provision for impairment is recognised when there is objective evidence that an individual receivable is impaired.
Credit risk
The Consolidated Entity has no significant concentration of credit risk with respect to any single counterparty or group of
counterparties.
The following table details the Group’s trade and other receivables exposure to credit risk with ageing analysis. Amounts are
considered ‘past due’ when the debt has not been settled, with the terms and conditions agreed between the Consolidated Entity
and the counter party to the transaction. Receivables that are past due are assessed for impairment is ascertaining solvency of the
debtors and are provided for where there are specific circumstances indicating that the debt may not be fully recoverable by the
Group.
2015
Trade receivables
2014
Trade receivables
8.
FINANCIAL ASSETS
Financial assets
Financial assets at fair value through profit or loss
Gross amount
Past due and
impaired
Within initial
trade terms
344,260
220,922
123,338
322,799
205,524
117,275
2015
$
2014
$
419,667
419,667
826,506
826,506
Financial assets comprise investments in the ordinary issued capital of various entities. There are no fixed returns or fixed
maturity dates attached to these investments.
The fair value of investments is calculated with reference to current market prices at balance date.
Movements:
Opening balance at beginning of the year
Recognition of equity securities
Disposal of equity securities
Fair value gain/(loss) through profit or loss
42
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$
2014
$
826,506
-
194,867
(601,706)
419,667
572,302
750
(14,971)
268,425
826,506
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9.
RESTRICTED CASH
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Current
Restricted cash
Subscription funds held in trust (a)
Subscription funds held in trust (b)
Non-Current
Bank guarantees (c)
2015
$
2014
$
1,714,932
-
1,714,932
-
2,055,748
2,055,748
-
-
69,000
69,000
(a)
(b)
As previously announced, the Company had entered into a placement agreement with Cauldron’s Non-
executive Director Mr Derong Qiu $2,000,000 (Placement Funds) at an issue price of $0.118 per share
(16,949,178 shares). In June 2015, the Company confirmed it had received $1,714,932 in cash from Mr Qiu
(Subscription Sum), with the balance of $285,068 planned to settle director fee payments owing to Mr Qiu in
respect of his services (together, $2,000,000). The cash component of the Subscription Sum ($1,714,932) is
being held in trust by the Company until the Placement Shares can be issued. Refer note 15. A Notice of
Meeting will be dispatched to all Shareholders in due course to seek approval for the issue of these shares.
As announced on 20 June 2014, the Company received an initial $4,000,000 in Placement Funds from new
investor Guangzhou City Guangrong Investment Management Co., Ltd (“Guangrong Investment”). The Company
used its remaining capacity under Listing Rule 7.1 to issue 16,476,621 fully paid shares to Guangrong
Investment, making $1,944,241 (of the $4,000,000) immediately available to the Company (before capital
raising costs) (being Tranche 1 of the Placement Funds) during the year ended 30 June 2014. The balance of
these funds ($2,055,759) was held in trust by the Company at 30 June 2014 until the Placement Shares were
issued in September 2014. Refer note 15 and note 17.
(c)
Restricted cash balances relates to term deposits held with financial institutions as security for bank guarantees
issued to various environmental regulatory departments in respect of the potential rehabilitation exploration
areas.
10.
LOAN RECEIVABLES
Non-current
Caudillo Resources SA (a)
Provision for non-recovery (a)
2015
$
2014
$
1,386,382
(1,386,382)
-
1,287,459
(1,287,459)
-
a)
The Consolidated Entity’s wholly owned subsidiary Jakaranda Minerals Limited (“Jakaranda”) previously provided a draw-
down facility (“First Loan”) up to $650,000 to Caudillo Resources SA (“Caudillo”), which is included in this balance. The
First Loan and interest (LIBOR + 2%) was required to be repaid in cash by 21 February 2013, or Jakaranda may elect to
convert the First Loan into an 80% interest in the issued capital of Caudillo. At 30 June 2014, this draw-down facility had
been utilised. The Consolidated Entity intends to elect to convert the First Loan into an 80% equity interest in Caudillo,
and the execution of this is currently in the process of being completed.
During the years ended 30 June 2014 and 30 June 2015, the Consolidated Entity agreed to provide further draw-down
facilities from Jakaranda to Caudillo for $650,000 and $150,000 respectively (“Second Loan” and “Third Loan”). The
Second Loan and Third Loan and interest (LIBOR + 2%) is repayable, at the election of Caudillo, by way of:
(i)
(ii)
cash; or
subject to Caudillo and Jakaranda obtaining all necessary shareholder and regulatory approvals, the
issue to the Jakaranda of fully paid ordinary shares in the capital of Caudillo based on a deemed issue
price per Caudillo share of $100 (Argentinean pesos).
Until such time as the First Loan, Second Loan and Third Loan are repaid or converted to an equity interest in Caudillo the
Consolidated Entity has conservatively provided for the non-recovery of the loans in full. As a result of this, an impairment
expense of $195,564 (30 June 2014: $216,681) has been recognised in the Statement of Profit or Loss and Other
Comprehensive Income. During the year, $121,380 was repaid by Caudillo (reversal of previously impaired amount), which
has been recognised in the Statement of Profit or Loss and Other Comprehensive Income.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
11.
EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation expenditure
10,204,649
8,869,590
2015
$
2014
$
Movements:
Carrying value at beginning of year
Exploration expenditure incurred
Exploration expenditure reimbursed
Impairment of exploration expenditure (a)
Foreign exchange movements
R&D Tax Incentive (b)
Carrying value at end of year
8,869,590
3,712,390
-
(1,604,898)
42,124
(814,557)
10,204,649
9,384,605
2,064,713
(17,028)
(1,731,119)
(484,922)
(346,659)
8,869,590
a)
The Consolidated Entity has assessed the carrying amount of exploration and evaluation expenditure in
accordance with AASB 6 Exploration for and Evaluation of Mineral Resources and has recognised an impairment
expense of $1,604,898 during the year (30 June 2014: $1,731,119) following the decision not to continue
exploration in certain areas and costs associated with tenements not yet granted within Western Australia and in
Argentina. The impairment expense is shown as a separate line item in the Statement of Profit or Loss and Other
Comprehensive Income.
The carrying value of the Consolidated Entity’s interest in exploration expenditure is dependent upon:
-
-
-
the continuance of the Consolidated Entity’s rights to tenure of the areas of interest;
the results of future exploration; and
the recoupment of costs through successful development and exploitation of the areas of interest, or
alternatively, by their sale.
The Consolidated Entity’s Australian exploration properties may be subjected to claims under native title, or
contain sacred sites, or sites of significance to Aboriginal people. As a result, exploration properties or areas
within the tenements may be subject to exploration restrictions, mining restrictions and/or claims for
compensation. At this time, it is not possible to quantify whether such claims exist, or the quantum of such
claims.
b)
During the year the Consolidated Entity reviewed its policy with respect to the classification of research and
development tax incentive and has offset claims received with respect to exploration expenditure against the
carrying value. The comparative period has been adjusted for consistency.
12.
PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
Movements:
Carrying value at beginning of year
Additions
Depreciation expense
Impairment expense
Foreign currency differences arising from translating functional currency to
presentation currency
Carrying value at end of year
44
2015
$
2014
$
666,296
(223,940)
442,356
177,955
(152,879)
25,076
2015
$
2014
$
25,076
541,466
(124,625)
(4,148)
4,587
442,356
46,105
-
(17,014)
(496)
(3,519)
25,076
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
13.
TRADE AND OTHER PAYABLES
Current
Trade payables
Other payables and accruals
Trade payables are non interest bearing and are normally settled on 30 day terms.
14.
BORROWINGS
Current
Unsecured
Convertible loan notes
Interest payable on convertible loan notes
Movements:
Carrying value at beginning of year
Converting loan funds received (a)
Fully paid shares issued upon conversion (a)
Converting loan funds received (b)
Fully paid shares issued upon conversion (b)
Converting loan funds received (c)
Repayment of converting loan funds and interest (c)
Interest on converting loans
Balance at the end of the year
2015
$
2014
$
732,602
108,155
840,757
163,236
543,113
706,349
2015
$
2014
$
-
-
-
1,050,000
37,018
1,087,018
1,087,018
-
-
-
(434,801)
-
(674,851)
22,634
-
-
1,500,000
(1,555,890)
400,000
-
650,000
-
92,908
1,087,018
(a)
In July 2013, the Consolidated Entity secured $1,500,000 in funding via the execution of converting loan
agreements with two of its major shareholders ($655,685 from Cape Lambert and $844,315 from Mr Qiu Derong).
Pursuant to the terms of the converting loan agreements, the Consolidated Entity received a total of $1,500,000,
which automatically converted into ordinary shares in the Consolidated Entity, upon receipt of shareholder
approval at the Consolidated Entity’s 2013 Annual General Meeting on 22 November 2013. The converting loans,
plus interest at 10% per annum ($1,555,890) were converted into 13,824,102 fully paid ordinary shares, at a
conversion price of $0.1125 per share. The conversion price was calculated based on 80% 10 day VWAP of shares
on ASX before the date of the shareholder approval on 22 November 2013. Refer note 17.
(b)
In November 2013, the Consolidated Entity entered into short term loan agreements with Cape Lambert
Resources limited and Mr Qiu Derong. Cape Lambert and Mr Qiu Derong have each lent the Consolidated Entity
$200,000 which may be converted into shares at a conversion rate of $0.13 per share (with an interest rate of
10% per annum).
These converting loans ($400,000), plus interest at 10% per annum ($34,801) (together, $434,801) were
converted into 3,345,538 fully paid ordinary shares following receipt of shareholder approval on 30 September
2014. Refer note 17.
(c)
In March 2014, the Consolidated Entity entered into a converting loan agreement. Pursuant to the Converting
Loan Agreement, the loan funds, subject to receipt of shareholder approval at the Company’s 2014 Annual
General Meeting, will automatically convert into ordinary shares in the Company. Subject to receipt of
shareholder approval, the conversion will be 80% of the volume weighted average closing price of the Shares as
quoted on the ASX over the last ten trading days immediately preceding the day of receipt of shareholder
approval. If shareholder approval is not obtained, the loan (together with interest accrues daily at 10% per
annum) was repayable by the Company by 31 December 2014. As at 30 June 2014, $650,000 had been drawn
down by the Consolidated Entity. On 4 August 2014, $325,000 was repaid in cash to Cape Lambert Resources
Limited and on 1 October 2014, the remaining $349,851 (including interest) was repaid.
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15.
SUBSCRIPTION FUNDS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Subscription funds received (refer note 9(a))
Subscription funds received (refer note 9(b))
16.
PROVISIONS
Current
Employee benefits
17.
ISSUED CAPITAL
2015
$
2014
$
1,714,932
-
1,714,932
-
2,055,759
2,055,759
2015
$
2014
$
33,500
33,500
50,534
50,534
2015
$
2014
$
Ordinary shares issued and fully paid
48,029,486
41,701,715
Issued and fully paid up ordinary
shares
Opening balance
Shares issued (a)
Shares issued (b)
Shares issued (c)
Shares issued (d)
Shares issued (e)
Shares issued upon conversion of
convertible notes (f)
Shares issued upon conversion of
convertible notes (g)
Shares issued upon exercise of options
(h)
Share issue costs
2015
No.
2015
$
2014
No.
2014
$
196,438,713
41,701,715
17,421,697
8,474,579
21,440,678
3,983,061
2,055,759
1,000,000
2,530,000
470,000
159,622,605
4,615,385
16,476,621
-
-
-
37,348,796
600,000
1,944,241
-
-
-
-
-
13,824,102
1,555,890
3,345,538
434,801
-
-
-
-
251,104,266
-
(162,789)
48,029,486
1,900,000
-
196,438,713
380,000
(127,212)
41,701,715
Shares issued pursuant to placement agreements
(a)
(b)
In December 2013, the Consolidated Entity completed a placement of 4,615,385 fully paid ordinary shares at $0.13 per
share to Joseph Investments to raise $600,000 (before capital raising costs). The issue of these shares was
subsequently ratified by shareholders at the 30 September 2014 General Meeting.
As announced on 10 June 2014 and 1 July 2014, the Company entered into a series of placement agreements
(“Placement Agreements”) with a range of Chinese investors to issue a total of 127,118,756 Shares (“Placement
Shares”) at an issue price of $0.118 per share (“Issue Price”) to raise A$15 million (“Placement Funds”) (before capital
raising costs). The Issue Price of the Placement Shares was determined at 80% of the volume weighted average closing
price of Shares as quoted on ASX over the last ten (10) trading days immediately preceding 29 May 2014. The
Placement Shares were to be issued (and the Placement Funds received) in various tranches, with the final tranche
due to be received in December 2015.
As announced on 20 June 2014, the Company received an initial $4,000,000 in Placement Funds from new investor
Guangzhou City Guangrong Investment Management Co., Ltd (“Guangrong Investment”).
The Company used its remaining capacity under Listing Rule 7.1 to issue 16,476,621 fully paid shares to Guangrong
Investment, making $1,944,241 (of the $4,000,000) immediately available to the Company (before capital raising
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Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
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costs) (being Tranche 1 of the Placement Funds) during the year ended 30 June 2014. The issue of these shares was
subsequently ratified by shareholders at the 30 September 2014 General Meeting.
In September 2014, following receipt of shareholder approval at the general meeting held 30 September 2014
(“General Meeting”) the remaining 17,421,697 fully paid shares were issued and the balance of these funds
($2,055,759) held in trust by the Company was released.
(c)
(d)
(e)
In July 2014, the Company received $1,000,000 of the Placement Funds from Starry World and issued 8,474,579 fully
paid shares. Shareholder approval for the issue of these shares was obtained at the 30 September 2014 General
Meeting.
In December 2014, the Company received a further $2,530,000 of the Placement Funds from Starry World under the
Share Placement Agreement and issued 21,440,678 fully paid shares. Shareholder approval for the issue of these
shares was obtained at the 30 September 2014 General Meeting.
In March 2015, the Company received the final instalment Placement Funds from Starry World, and used its remaining
capacity under Listing Rule 7.1 to issue 3,983,061 fully paid shares.
Shares issued pursuant to converting loan agreements
(f)
(g)
In July 2013, the Consolidated Entity secured $1.5 million in funding via the execution of converting loan agreements
with two of its major shareholders (Cape Lambert Resources Limited and Mr Qiu Derong). Pursuant to the terms of the
converting loan agreements, the Consolidated Entity received a total of $1.5 million, which automatically converted
into ordinary shares in the Consolidated Entity upon receipt of shareholder approval at the Consolidated Entity’s 2013
Annual General Meeting on 22 November 2013. The converting loans, plus interest at 10% per annum were converted
into 13,824,102 fully paid ordinary shares, at a conversion price of $0.1125 per share. The conversion price was
calculated based on 80% 10 day VWAP of shares on ASX before the date of shareholder approval on 22 November
2013.
In November 2013, the Consolidated Entity entered into short term loan agreements with Cape Lambert Resources
limited and Mr Qiu Derong. Cape Lambert and Mr Qiu Derong each lent the Consolidated Entity $200,000 which may
be converted into shares at a conversion rate of $0.13 per share (with an interest rate of 10% per annum). On 30
September 2014, the Consolidated Entity converted $434,801 (including interest) into shares, following receipt of
shareholder approval at the General Meeting.
Shares issued upon exercise of unlisted options
(h)
In June 2014, 1,900,000 share options were exercised at $0.20 each providing $380,000 funding.
The Company has authorised share capital amounting to 251,104,266 shares with no par value.
Terms and Conditions
Holders of ordinary shares are entitled to dividends as declared from time to time and are entitled to one vote per share
at shareholder meetings. In the event of winding up of the Consolidated Entity, ordinary shareholders rank after all other
shareholders and creditors and are fully entitled to any proceeds of liquidation.
Capital risk management
Capital managed by the Board includes shareholder equity, which was $48,029,486 at 30 June 2015 (2014: $41,701,715).
The Consolidated Entity’s objectives when managing capital are to safeguard its ability to continue as a going concern, so
that it may continue to provide returns to shareholders and benefits to other stakeholders. The Company’s capital
includes ordinary share capital and financial liabilities, supported by financial assets.
Due to the nature of the Consolidated Entity’s activities, being mineral exploration, it does not have ready access to credit
facilities, with the primary source of funding being equity raisings. Accordingly, the objective of the Consolidated Entity’s
capital risk management is to balance the current working capital position against the requirements of the Consolidated
Entity to meet exploration programmes and corporate overheads.
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Annual Report 2015
18.
RESERVES
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Reserves
Share based payment reserve (a)
Foreign currency translation reserve (b)
(a)
Share based payment reserve
Reserve balance at beginning of year
Share based payments (refer note 27)
Reserve balance at end of year
2015
$
2014
$
4,617,754
(1,344,677)
3,273,077
2,645,728
(1,347,969)
1,297,759
2015
$
2014
$
2,645,728
1,972,026
4,617,754
2,357,499
288,229
2,645,728
The share based payment reserve arises on the grant of share options to employees, directors and consultants (share
based payments) and to record the issue, exercise and lapsing of listed options.
(b)
Foreign currency translation reserve
Reserve balance at beginning of the year
Foreign currency exchange differences arising on translation
of foreign operations
Reserve balance at end of year
2015
$
2014
$
(1,347,969)
(911,960)
3,292
(1,344,677)
(436,009)
(1,347,969)
Exchange differences relating to the translation from the functional currencies of the Consolidated Entity’s foreign
controlled entities into Australian dollars are recognised directly in the foreign currency translation reserve.
19.
ACCUMULATED LOSSES
Balance at beginning of year
Loss for the year
Balance at end of year
20.
LOSS PER SHARE
Basic loss per share
Continuing operations
Loss used in calculation of basic loss per share
Continuing operations
2015
$
2014
$
(33,044,857)
(6,712,800)
(39,757,657)
(28,753,964)
(4,290,893)
(33,044,857)
2015
Cents per share
2014
Cents per share
(2.91)
(2.91)
(2.50)
(2.50)
$
$
(6,712,800)
(6,712,800)
(4,290,893)
(4,290,893)
No.
No.
Weighted average number of ordinary shares outstanding during the year used in
the calculation of basic loss per share
230,509,441
171,474,347
There are 55,500,000 share options (2014: 9,500,000) excluded from the calculation of diluted earnings per share (that
could potentially dilute basic earnings per share in the future) because they are anti-dilutive for each of the periods
presented.
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Annual Report 2015
21.
COMMITMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Office Rental Commitments
The Consolidated Entity entered into a sub-lease for office premises for a period of 5 years terminating on
31 March 2017.
Total office rental commitments for the Consolidated Entity are:
Within one year
Between one and five years
Longer than five years
22.
CONTINGENT ASSETS AND LIABILITIES
The Consolidated Entity has no contingent liabilities or assets at the year end.
23.
CONTROLLED ENTITIES
Details of Cauldron Energy Limited’s subsidiaries are:
Name
Country of
Incorporation
Date/Company of
Incorporation
Shares
2015
$
2014
$
51,064
38,298
-
89,362
51,099
91,796
-
142,895
Ownership
Interest
Investment Carrying
Amount
2015
%
2014
%
2015
$
2014
$
Ronin Energy Ltd
Cauldron Minerals Ltd
Jakaranda Minerals Ltd
Raven Minerals Ltd
Australia
Australia
Australia
Australia
24 April 2006
24 April 2006
24 April 2006
24 April 2006
Ord
Ord
Ord
Ord
100
100
100
100
100
100
100
100
5
1
1
5
12
5
1
1
5
12
24.
JOINT OPERATION
Marree - 60% (increasing)
The Marree Project was formed by way of a joint venture agreement between Cauldron and a Korean consortium,
comprising of the Korean Government (KORES), Daewoo International Corporation and LG International Corporation.
Cauldron is the Manager of the project. The terms of the joint venture agreement enabled the Korean participants to earn up
to an aggregate 50% interest in the Marree Project by funding $6.0 million of exploration activities over an earn-in period.
Exploration activities commenced in mid-2009. The earn-in period of this joint venture agreement ended in January 2013, at
which point the Korean participants had contributed a total of $4.9 million. At the end of the earn-in period, the parties’
interests in the tenements were as follows:
-
-
Cauldron 60%; and
Korean participants 40%.
In line with the terms of the joint venture agreement, following the earn-in period, the parties are required to participate in
expenditure of the Marree Project pro-rata to their ownership interests, otherwise the parties interests will be diluted. Since
January 2013, Cauldron has continued to fund the exploration works, thus diluting the Korean participants’ interests. As at
31 December 2014 (being the most recent period for which audited financial statements are available in respect of the
Maree Project), the parties’ interests in the tenements were:
-
-
Cauldron 62.32%
Korean Participants 37.68%.
The Maree JV joint arrangement was set up as an unincorporated joint venture. The joint venture agreement in relation to
the Maree JV requires unanimous consent from all parties for all relevant activities. The parties own the assets of the
incorporate JV as tenants in common and are jointly and severally liable for the liabilities incurred by the JV. This JV is
therefore classified as a joint operation and the consolidated entity recognises its direct right to the jointly held assets,
liabilities, revenue and expenses.
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Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
25.
CASH FLOW INFORMATION
(a)
Reconciliation of cash flows from operating activities with loss from ordinary
activities after income tax
Loss from ordinary activities after income tax
(6,712,800)
(4,290,893)
2015
$
2014
$
Non-cash flows in operating loss:
Depreciation
Equity settled share based payments
Net fair value (gain)/loss on investments
Realised gain on disposal of financial assets
Foreign exchange (gain)/loss
Impairment losses
Interest accrued
Other
Changes in assets and liabilities:
Decrease/(increase) in trade and other receivables
Decrease/(increase) in interest receivable
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions
Increase/(decrease) in interest payable
Net cash inflows/(outflows) from operating activities
(b)
Reconciliation of cash and cash equivalents
124,625
1,972,026
601,706
(194,867)
12,567
1,816,905
22,634
-
(136,708)
345
(132,277)
(17,034)
(24,852)
(2,403,176)
17,014
288,229
(268,425)
(5,295)
36,627
1,931,452
92,908
17,084
(103,063)
935
151,706
33,546
37,018
(2,061,157)
For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in banks and
investments in money market instruments, net of outstanding bank overdrafts. Cash and cash equivalents at the end of
the financial year as shown in the cash flow statement is reconciled to the related items in the balance sheet as follows:
Cash at bank
Cash and cash equivalents
26.
FINANCIAL RISK MANAGEMENT
Financial risk management
2015
$
2014
$
1,216,478
1,216,478
1,873,667
1,873,667
The Consolidated Entity’s financial instruments consist mainly of deposits with banks, accounts receivable, loan receivables,
accounts payable, convertible loan notes and shares in listed companies.
The Consolidated Entity does not speculate in the trading of derivative instruments.
The totals for each category of financial instruments, measured in accordance with AASB 139 are as follows:
Financial Assets
Cash and cash equivalents
Financial assets at fair value through profit or loss
Trade and other receivables
Financial Liabilities
Trade and other payables
Financial liabilities
50
2015
$
2014
$
1,216,478
419,667
136,013
1,772,158
840,757
-
840,757
1,873,667
826,506
134,690
2,834,863
706,349
1,087,018
1,793,367
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Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Financial risk management policies
The Consolidated Entity’s activities expose it to a variety of financial risks: market risk (including interest rate risk), credit rate
risk and liquidity risk.
The Consolidated Entity’s overall risk management program focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the Consolidated Entity. The Consolidated Entity uses
different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the
case of interest rate, foreign exchange and other price risks and aging analysis for credit risk. Risk management is carried out
by the Board and they provide written principles for overall risk management.
Financial risk exposures and management
The main risks arising from the Consolidated Entity’s financial instruments are credit risk, liquidity risk and market risk
consisting of interest rate risk, foreign currency risk and equity price risk.
(a) Foreign currency risk
The Consolidated Entity undertakes certain transactions denominated in foreign currencies, hence exposures to exchange
rate fluctuations arise. Given the few transactions the Board does not consider there to be a need for policies to hedge
against foreign currency risk. The Consolidated Entity’s has no significant exposure to foreign currency risk as at the
reporting date.
(b)
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period
whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments.
Cash and cash equivalents on deposit at variable rates expose the Consolidated Entity to cash flow interest rate risk. The
Consolidated Entity is exposed to movements in market interest rates on short term deposits. The policy is to monitor the
interest rate yield curve out to 120 days to ensure a balance is maintained between the liquidity of cash assets and the
interest rate return.
The effect on loss and equity as a result of changes in the interest rate.
Change in loss:
Increase in interest rate by 200 basis points
Decrease in interest rate by 200 basis points
2015
Change
$
2014
Change
$
+24,330
-24,330
+37,473
-37,473
The above interest rate sensitivity analysis has been performed on the assumption that all other variables remain
unchanged.
(c) Price risk
The Consolidated Entity is exposed to equity securities price risk. This arises from investments held by the Consolidated
Entity and classified on the statement of financial position as current financial assets at fair value through profit or loss. The
Consolidated Entity is not exposed to commodity price risk.
To manage its price risk arising from investments in equity securities, the Consolidated Entity diversifies its portfolio which is
done in accordance with the limits set by the Consolidated Entity.
The majority of the Consolidated Entity’s equity investments are publicly traded and are included on the ASX 200 Index.
The table below summarises the impact of increases/decreases of the index on the Consolidated Entity’s post tax profit for
the year and on equity. The analysis is based on the assumption that the equity indexes had increased/decreased by 10%
(2014 – 10%) with all other variables held constant and all the Consolidated Entity’s equity instruments moved according to
the historical correlation with the index.
Index
ASX 200
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Impact on Post-Tax Profit/(Loss)
2015
$
2014
$
41,967
82,651
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Annual Report 2015
(d) Credit risk
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Credit risk is managed on a consolidated basis. Credit risk arises from cash and cash equivalents and credit exposures to
wholesale and retail customers and suppliers. The Consolidated Entity has adopted the policy of only dealing with credit
worthy counterparties and obtaining sufficient collateral or other security where appropriate, as a means of mitigating the
risk of financial loss from defaults.
The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit
ratings:
Financial assets
Cash and cash equivalents (AA)
Trade and other receivables
(e) Liquidity risk
2015
$
2014
$
1,216,478
136,013
1,352,491
1,873,667
134,690
2,008,357
The Consolidated Entity manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and
liabilities.
Financial instrument composition and maturity analysis
The table below reflects the undiscounted contractual settlement terms for financial instruments of a fixed period of
maturity, as well as management’s expectations of the settlement period for all other financial instruments.
2015
Financial assets
Cash
Restricted cash
Held for trading investments
Receivables and loans
Financial Liabilities
Trade and other payables
Financial liabilities
2014
Financial assets
Cash
Held for trading investments
Receivables and loans
Financial Liabilities
Trade and other payables
Financial liabilities
(f) Fair value estimation
Within 1
Year
$
1,216,478
1,714,932
419,667
136,013
3,487,090
840,757
-
840,757
Within 1
Year
$
1,873,667
826,506
134,690
2,834,863
706,349
1,087,018
1,793,367
1 to 5 Years
Over 5 Years
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1 to 5 Years
Over 5 Years
$
$
2,124,749
-
-
2,124,749
-
-
-
-
-
-
-
-
-
-
2015
Total
$
1,216,478
1,714,932
419,667
136,013
3,487,090
840,757
-
840,757
2014
Total
$
3,998,416
826,506
134,690
4,959,612
706,349
1,087,018
1,793,367
The fair value of financial assets and liabilities must be estimated for recognition and measurement or for disclosure
purposes. The Directors consider that the carrying amount of financial assets and financial liabilities recorded in the financial
statements approximates their fair values as the carrying value less impairment provision of trade receivables and payables
are assumed to approximate their fair values due to their short-term nature.
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Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Financial Instruments Measured at Fair Value
The financial instruments recognised at fair value in the statement of financial position have been analysed and classified
using a fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value
hierarchy consists of the following levels:
-
-
-
quoted prices in active markets for identical assets or liabilities (Level 1);
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(as prices) or indirectly (derived from prices) (Level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3)
2015
Financial assets:
Level 1
$
Level 2
$
Level 3
$
Total
$
Financial assets at fair value through profit or loss:
Held for trading investments
419,667
2014
Financial assets:
Level 1
$
Level 2
$
Financial assets at fair value through profit or loss:
Held for trading investments
826,506
-
-
-
419,667
Level 3
$
Total
$
-
826,506
27.
SHARE BASED PAYMENTS
Total costs arising from share based payment transactions recognised as expense during the year were as follows:
Options issued to employees and consultants
Options issued to directors
2015
$
2014
$
1,562,900
409,126
1,972,026
57,428
230,801
288,229
(a) Summary of movements in options granted as share based payments
The following table details the number and weighted average exercise price (WAEP) of, and movements in, unlisted options
issued as share based payments during the year:
Outstanding at the beginning of the year
Granted during the year (i)
Exercised during the year
Expired during the year (ii)
Outstanding at year end (iii)
Exercisable at the end of the year
Not exercisable at the end of the year
2015
No.
2015
WAEP
9,500,000
19,850,000
-
(5,850,000)
23,500,000
4,500,000
19,000,000
$0.210
$0.138
-
$0.191
$0.155
$0.228
$0.138
i.
Options Granted during the year
The Company issued the following during the year ended 30 June 2015:
4,400,000 unlisted options exercisable at $0.138 on or before 31 December 2015 to directors (“Director Options”).
The Director Options will vest upon:
a)
the Company achieving a JORC resource at the Company’s Yanrey Project in Western Australia containing
more than 30 million lbs of Uranium; or
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Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
b)
the commencement of drilling by the Company at the Rio Colorado project in Argentina.
14,000,000 unlisted options exercisable at $0.138 on or before 31 December 2015 to Australian employees and
consultants (“Australian Options”). The Australian Options vest on the same terms as the Director Options.
1,450,000 unlisted options exercisable at $0.138 on or before 31 December 2015 to Argentinian employees and
consultants (“Argentinian Options”). The Argentinian Options will vest upon:
a)
the commencement of drilling by the Company at the Rio Colorado project in Argentina.
These options have been issued following receipt of shareholder approval at its General Meeting.
ii.
Options expired during the year
The following options expired during the year ended 30 June 2015:
5,000,000 unlisted options exercisable at $0.20 expiring 30 June 2015; and
850,000 unlisted options exercisable at $0.138 expiring 31 December 2015.
iii.
Options on issue at 30 June 2015 granted as share based payments
The outstanding balance at 30 June 2015 is represented by:
-
-
-
-
-
-
1,000,000 Consultant Options with an exercise price of $0.20 each exercisable on or before
18 September 2015;
500,000 Employee Options with an exercise price of $0.45 each exercisable on or before
20 October 2015;
3,000,000 Director Options with an exercise price of $0.20 and an expiry date of on or before
30 September 2015;
1,350,000 Consultant and Employee Options with an exercise price of $0.138 and an expiry date of on or before 31
December 2015, with vesting conditions attached;
13,250,000 Consultant and Employee Options with an exercise price of $0.138 and an expiry date of on or before 31
December 2015, with vesting conditions attached; and
4,400,000 Director Options with an exercise price of $0.138 and an expiry date of on or before 31 December 2015,
with vesting conditions attached.
(b) Remaining contractual life
The remaining contractual life for Options outstanding at 30 June 2015 is 0.46 years.
(c) Fair value
The fair value of the Options granted during the year were:
Director Options
Australian Options
Argentinian Options
Fair Value Per
Option
$
$0.156
$0.156
$0.156
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Annual Report 2015
(d) Option pricing model
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
The fair value of the Options issued during the year is estimated as at the date of grant using the Black Scholes option
pricing model taking into account the terms and conditions upon which the Options were granted.
The following table lists the inputs to the model for the Director Options, Australian Options and Argentinian Options:
Options
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Exercise price ($)
Marketability discount (%)
Expected life of options (years)
Share price at grant date ($)
Value per Option ($)
28.
OTHER UNLISTED OPTIONS
Options Granted during the year
Nil
109%
2.47%
$0.138
Nil
1.25
$0. 25
$0.156
In addition to options granted as share based payments (as detailed at note 27), the Company also issued the following
unlisted options during the year ended 30 June 2015:
32,000,000 unlisted options to investor Starry World (“Placement Options”). The key terms of the Placement
Options are as follows:
a) Half of the Placement Options will vest immediately upon issue with an:
(i) exercise price of $0.118 each; and
(ii) expiry date of 31 December 2015
(the “Upfront Options”); and
b)
the remaining half of the options (“Vesting Options”) will vest on 1 January 2016 provided that the holder’s
Upfront Options are not exercised (in the event that only a portion of the holder’s Upfront Options are
exercised by the holder, the number of Vesting Options that actually vest will be equal to the number of
un-exercised Upfront Options) with an:
(i) exercise price of $0.138 each; and
(ii) expiry date of 31 December 2016.
Accordingly, Starry World can only exercise a maximum of 16,000,000 Placement Options.
These options have been issued following receipt of shareholder approval at its General Meeting.
Options on issue at 30 June 2015
The outstanding balance of options at 30 June 2015 (other than those granted as a share based payment) is represented by:
-
-
16,000,000 Investor Options with an exercise price of $0.118 and an expiry date of on or before 31 December 2015;
and
16,000,000 Investor Options with an exercise price of $0.138 and an expiry date of on or before 31 December 2016,
with vesting conditions attached.
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Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
29.
PARENT ENTITY DISCLOSURES
Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Option Premium Reserve
Total equity
Financial Performance
Profit/(loss) for the year
Total comprehensive income/(loss)
Loans to Controlled Entities
2015
$
2014
$
2,989,946
11,118,383
14,108,329
1,970,676
11,405,619
13,376,295
2,563,423
-
2,563,423
3,822,294
-
3,822,294
48,029,486
(41,102,333)
4,617,753
11,544,906
41,701,715
(34,793,441)
2,645,728
9,554,002
(6,308,892)
(6,308,892)
(5,127,519)
(5,127,519)
Loans are provided by the Parent Entity to its controlled entities for their respective operating activities. Amounts receivable
from controlled entities are non-interest bearing with no fixed term of repayment. The eventual recovery of the loan will be
dependent upon the successful commercial application of these projects or the sale to third parties. Details of loans
provided are listed below:
Subsidiaries
Ronin Energy Ltd
Cauldron Minerals Ltd
Jakaranda Minerals Ltd
Raven Minerals Ltd
Total value of loans provided to subsidiaries
Commitments
2015
$
2014
$
23,329
8,205,591
1,259,312
25,775
9,514,007
23,329
7,545,579
1,063,812
25,775
8,658,495
The commitments of the Parent Entity are consistent with the Consolidated Entity (refer to note 21).
Contingent Liabilities and Assets
The contingent liabilities and assets of the Parent Entity are consistent with the Consolidated Entity (refer to note 22).
30.
RELATED PARTY INFORMATION
Balances between the company and its subsidiaries which are related parties of the company, have been eliminated on
consolidation and are not disclosed in this note. Details of percentage of ordinary shares held in subsidiaries are disclosed in
note 23 to the financial statements.
Note 23 provides information about the Group’s structure including the details of the subsidiaries and the holding
company. The following table provides the total amount of transactions and outstanding balances that have been entered
into with related parties for the relevant year.
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Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Sales and Purchases between Related Parties
Director related entities
Fe Limited
Fe Limited
Cape Lambert Resources Limited
Cape Lambert Resources Limited
Kupang Resources Limited
Kupang Resources Limited
Okewood Pty Ltd
Okewood Pty Ltd
Sales to
related parties
Purchases
from related
parties
Amounts
owed by
related
parties*
Amounts owed
to related
parties*
2015
2014
2015
2014
2015
2014
2015
2014
-
45,329
-
-
-
61,146
-
-
18,318
-
390,044
166,035
-
-
30,975
-
-
-
-
-
-
-
-
-
-
-
5,119
33,135
-
-
-
-
* Amounts are classified as trade receivables and trade payables, respectively.
Mr Sage is a director of Fe Limited, Cape Lambert Resources Limited, Kupang Resources Limited, and Okewood Pty Ltd.
Sales to and purchases from director related entities are for the reimbursement of employee, consultancy, occupancy costs
and other costs.
Loans between Related Parties
Details of loans made to Cauldron Energy Limited by directors and entities related to them are set out below.
Balance at
the start of
the year
Loan advanced
/ (repaid)
Interest paid
and payable
for the year
Conversion of
loan to shares
Balance at
the end of
the year
30 June 2015
Cape Lambert Resources Limited (b)
Mr Qiu Derong (b)
Cape Lambert Resources Limited (c)
TOTAL
212,948
211,032
663,038
1,087,018
-
-
(674,851)
(674,851)
5,495
5,445
11,813
22,753
(218,443)
(216,477)
-
(434,920)
Loan advanced
Balance at
the start of
the year
Interest paid
and payable
for the year
Conversion of
loan to shares
Balance at
the end of
the year
30 June 2014
Cape Lambert Resources Limited (a)
Mr Qiu Derong (a)
Cape Lambert Resources Limited (b)
Mr Qiu Derong (b)
Cape Lambert Resources Limited (c)
TOTAL
(a)
-
-
-
-
-
-
655,685
844,315
200,000
200,000
650,000
2,550,000
24,431
31,459
12,948
11,032
13,038
92,908
(680,116)
(875,774)
-
-
-
212,948
211,032
663,038
(1,555,890)
1,087,018
In July 2013, the Consolidated Entity secured $1,500,000 in funding via the execution of converting loan
agreements with two of its major shareholders ($655,685 from Cape Lambert and $844,315 from Mr Qiu Derong).
Pursuant to the terms of the converting loan agreements, the Consolidated Entity received a total of $1,500,000,
which automatically converted into ordinary shares in the Consolidated Entity, upon receipt of shareholder
approval at the Consolidated Entity’s 2013 Annual General Meeting on 22 November 2013. The converting loans,
plus interest at 10% per annum ($1,555,890) were converted into 13,824,102 fully paid ordinary shares, at a
conversion price of $0.1125 per share (refer note 17). The conversion price was calculated based on 80% 10 day
VWAP of shares on ASX before the date of the shareholder approval on 22 November 2013. Mr Sage is a director
of Cape Lambert Resources Limited.
(b)
In November 2013, the Consolidated Entity entered into short term loan agreements with Cape Lambert
Resources Limited (Cape Lambert) and Mr Qiu Derong (Mr Qiu). Cape Lambert and Mr Qiu Derong have each lent
the Consolidated Entity $200,000 which may be converted into shares at a conversion rate of $0.13 per share
(with an interest rate of 10% per annum).
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-
-
-
-
-
-
Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
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On 30 September 2014 at a General Meeting, shareholders approved the conversion of:
loan (plus interest) of $218,433 by issuing 1,680,330 shares to Cape Lambert; and
loan (plus interest) of $216,477 by issuing 1,665,208 shares to Mr Qiu.
(c)
In March 2014, the Consolidated Entity entered into a converting loan agreement. Pursuant to the Converting
Loan Agreement, the loan funds, subject to receipt of shareholder approval at the Company’s 2014 Annual
General Meeting, will automatically convert into ordinary shares in the Company. Subject to receipt of
shareholder approval, the conversion will be 80% of the volume weighted average closing price of the Shares as
quoted on the ASX over the last ten trading days immediately preceding the day of receipt of shareholder
approval. If shareholder approval is not obtained, the loan (together with interest accrues daily at 10% per
annum) is repayable by the Company by 31 December 2014. As at 30 June 2014, $650,000 had been drawn down
by the Consolidated Entity. On 4 August 2014, $325,000 was repaid in cash to Cape Lambert Resources Limited
and on 1 October 2014, the remaining $349,851 (including interest) was repaid.
The ultimate parent
The ultimate parent of the Group is Cauldron Energy Limited and is based on and listed in Australia. There were no
transactions between the Group and Cauldron Energy Limited during the financial year.
Terms and conditions of transactions with related parties other than KMP
The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length
transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There
have been no guarantees provided or received for any related party receivables or payables. For the year ended 30 June
2015, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (2014: nil).
This assessment is undertaken each financial year through examining the financial position of the related party and the
market in which the related party operates.
Financial Assets
At 30 June 2015, Cauldron held 23,773,112 shares in Fe Limited (ASX: FEL) (2014: 15,695,835) with a market value of
$309,050 (2014: $659,225). Mr Antony Sage is a director of FEL.
Significant shareholders
Qiu Derong holds a significant interest of 12.20% in the issued capital of Cauldron Energy at 30 June 2015 (30 June 2014:
14.73%). Mr Qiu Derong is a director of Cauldron.
Cape Lambert, via its wholly owned subsidiary Dempsey Resources Pty Ltd (“Dempsey”), holds a significant interest of
17.10% (30 June 2014: 21.00%) in the issued capital of Cauldron at 30 June 2015. Mr Antony Sage is a director of Cape
Lambert.
Compensation of Key Management Personnel of the Group
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or payable to each
member of the Consolidated Entity’s key management personnel (“KMP”) for the year ended 30 June 2015.
The totals of remuneration paid to KMP of the Consolidated Entity during the year are as follows:
Short-term employee benefits
Post employment benefits
Share based payments
2015
$
2014
$
816,307
35,760
967,023
1,819,090
593,757
7,940
311,547
913,244
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Annual Report 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
31.
REMUNERATION OF AUDITORS
Audit or review of the Consolidated Entity financial report
Audit or review of the financial report
Paid or payable to BDO (WA) Pty Ltd for:
-
Remuneration of the auditors of subsidiary/joint venture for:
-
Paid or payable to Bentleys for:
-
Remuneration of the BDO (WA) Pty Ltd for:
-
Audit or review of the Consolidated Entity financial report
Non-audit services
2015
$
2014
$
34,331
13,957
-
7,271
55,559
48,249
8,329
850
57,428
32.
EVENTS SUBSEQUENT TO REPORTING DATE
No matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly
affect the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the Consolidated
Entity in future financial years.
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Annual Report 2015
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Cauldron Energy Limited, I state that:
1.
In the opinion of the directors:
a)
the financial statements and notes of Cauldron Energy Limited for the financial year ended 30 June 2015 are in
accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of its financial position as at 30 June 2015 and its performance for the year
ended on that date of the Consolidated Entity; and
(ii) complying with Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001;
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in
note 1(b);
subject to the matters described in note 1(c), there are reasonable grounds to believe that the company will be
able to pay its debts as and when they become due and payable;
b)
c)
2.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance with
section 295A of the Corporations Act 2001 for the financial year ended 30 June 2015.
On behalf of the board
Mr Antony Sage
Executive Director
PERTH
25 August 2015
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Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
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INDEPENDENT AUDITOR’S REPORT
To the members of Cauldron Energy Limited
Report on the Financial Report
We have audited the accompanying financial report of Cauldron Energy Limited, which comprises the
consolidated statement of financial position as at 30 June 2015, the consolidated statement of profit or
loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements comply with International
Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the company’s
preparation of the financial report that gives a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of Cauldron Energy Limited, would be in the same terms if given to the
directors as at the time of this auditor’s report.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
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Opinion
In our opinion:
(a)
the financial report of Cauldron Energy Limited is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015
and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 1.
Emphasis of matter
Without modifying our opinion, we draw attention to Note 1 in the financial report, which indicates
that the ability of the consolidated entity to continue as a going concern is dependent upon the future
successful raising of necessary funding through equity. This condition, along with other matters as set
out in Note 1, indicate the existence of a material uncertainty that may cast significant doubt about
the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity
may be unable to realise its assets and discharge its liabilities in the normal course of business.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2015. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Cauldron Energy Limited for the year ended 30 June 2015
complies with section 300A of the Corporations Act 2001.
BDO Audit (WA) Pty Ltd
Phillip Murdoch
Director
Perth, 25 August 2015
Annual Report 2015
Shareholding
ADDITIONAL ASX INFORMATION
The distribution of members and their holdings of equity securities in the Company as at 5 August 2015 were as follows:
Number Held
1-1,000
1,001 - 5,000
5,001 -10,000
10,001 -100,000
100,001 and over
TOTAL
Class of Equity Securities
Fully Paid Ordinary Shares
Number of shareholders
96,240
1,399,178
2,253,946
15,245,165
232,109,737
251,104,266
201
520
281
424
114
1,540
There are 1,540 shareholders holding a total of 251,104,266 shares.
There are 523 shareholders holding less than a marketable parcel of shares.
Substantial Shareholders
The names of the substantial shareholders listed in the Company’s register as at 5 August 2015:
Shareholder
Cape Lambert Resources Limited (Dempsey Resources Pty Ltd)
Guangzhou City Guangrong Investment Management Co Ltd
Starry World Investment Ltd
Joseph Investment International Limited
Mr Derong Qiu
Options
Details of unissued shares under option as at the date of this report are:
Number
42,942,218
33,898,318
33,898,318
24,256,324
30,595,532
Grant Date
20 October 2010
19 September 2012
22 November 2013
30 September 2014
30 September 2014
30 September 2014
30 September 2014
30 September 2014
Class of
Shares
Exercise
Price
Number of
Options
Expiry Date
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
$0.45
$0.20
$0.20
$0.138
$0.138
$0.138
$0.118
$0.138
500,000
1,000,000
3,000,000
1,350,000
13,250,000
4,400,000
16,000,000
16,000,000
20 October 2015
18 September 2015
30 September 2015
31 December 2015
31 December 2015
31 December 2015
31 December 2015
31 December 2016
Listed /
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Option holders do not have any rights to participate in any issues of shares or other interests in the company or any other
entity.
No person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue of
any other body corporate.
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Annual Report 2015
Voting Rights
Ordinary Shares
ADDITIONAL SHAREHOLDER INFORMATION
In accordance with the Company’s Constitution, on a show of hands every member present in person or by proxy or attorney or duly
authorised representative has one vote. On a poll every member present in person or by proxy or attorney or duly authorised
representative has one vote for every fully paid ordinary share held.
Options
Holders of options do not have a right to vote.
Restricted Securities
The Company does not currently have any restricted securities on issue.
Twenty Largest Shareholders
The names of the twenty largest ordinary fully paid shareholders in the Company as at 5 August 2015 are as follows:
Shareholder
Dempsey Resources Pty Ltd
Guangzhou City Guangrong Investment Management Co Ltd
Starry World Investment Ltd
Joseph Investment International Limited
Mr Derong Qiu
Pershing Australia Nominees Pty Ltd
Mr Derong Qiu
Citicorp Nominees Pty Limited (Group #647070)
Okewood Pty Ltd
Lanoti Pty Limited
Mr Yuanrong Luo
Mr Antony William Paul Sage
Maximise Your Body Pty Ltd
Canifare Pty Ltd
HSBC Custody Nominees (Australia) Limited (Group #889118)
Sams Watchmaker Jeweller Pty Ltd
Health Communications Australia Pty Ltd
Mr Andre Kunz & Mrs Grace Kunz
Australian Capital Markets Pty Ltd
Number
% Held of
Ordinary Capital
Issued
42,942,218
33,898,318
33,898,318
24,256,324
21,149,061
12,458,905
9,446,471
5,052,669
3,300,000
3,000,000
2,726,257
2,594,600
2,247,500
1,917,450
1,761,238
1,287,078
1,172,864
1,050,000
1,006,625
850,000
206,015,896
17.10%
13.50%
13.50%
9.66%
8.42%
4.96%
3.76%
2.01%
1.31%
1.20%
1.09%
1.03%
0.90%
0.76%
0.70%
0.51%
0.47%
0.42%
0.40%
0.34%
82.04%
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Annual Report 2015
SCHEDULE OF MINERAL TENEMENTS
AS AT 5 AUGUST 2015
Tenement reference
Project & Location
Interest held
E08/1489
E08/1490
E08/1493
E08/1501
E08/2017
E08/2081
E08/2160
E08/2161
E08/2205
E45/2405
E08/2478
E08/2479
E08/2480
E08/2496
E08/2638
393/2010
YANREY - WESTERN AUSTRALIA
YANREY - WESTERN AUSTRALIA
YANREY - WESTERN AUSTRALIA
YANREY - WESTERN AUSTRALIA
YANREY - WESTERN AUSTRALIA
YANREY - WESTERN AUSTRALIA
YANREY - WESTERN AUSTRALIA
YANREY - WESTERN AUSTRALIA
YANREY - WESTERN AUSTRALIA
BEADELL - WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
BOOLALOO – WESTERN AUSTRALIA
BOOLALOO – WESTERN AUSTRALIA
Catamarca, Argentina
1124-546-2010
Las Marías Project - San Juan, Argentina
Mining tenements with beneficial interest held in farm-in/farm-out agreements:
100%
100%
100%
100%
100%
100%
100%
100%
100%
20%
100%
100%
100%
100%
100%
100%
100%
Farm-in Agreement and
Tenement reference
Project & Location
Interest held
140/2007
141/2007
142/2007
143/2007
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
144/2007-581/2009
Rio Colorado Project - Catamarca, Argentina
176/1997
232/2007
270/1995
271/1995
43/2007
EL4609
EL4610
EL4746
EL4794
EL5442
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
MAREE - SOUTH AUSTRALIA
MAREE - SOUTH AUSTRALIA
MAREE - SOUTH AUSTRALIA
MAREE - SOUTH AUSTRALIA
MAREE - SOUTH AUSTRALIA
92.50%*
92.50%*
92.50%*
92.50%*
92.50%*
92.50%*
92.50%*
92.50%*
92.50%*
92.50%*
62.32%** (increasing)
62.32%** (increasing)
62.32%** (increasing)
62.32%** (increasing)
62.32%** (increasing)
*Cauldron has signed an exclusive option agreement through its wholly owned subsidiary Cauldron Minerals Ltd (formerly Jackson
Global Ltd) with a private party (Dr Horacio Solis), to earn 92.5% in 230km2 of the Rio Colorado uranium project in Argentina. The
remainder of the project is (532km2) is held by Cauldron in the name of a related entity. Together, both areas will form the Rio
Colorado Joint Venture. Cauldron will earn its Initial Interest of 51% in the project by completing a minimum work program,
including 3,000 metres of drilling. The Company can earn 92.5% of the project by completing exploration expenditure of $500,000
within three years following earning of the initial interest.
**As at 31 December 2014
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