-
(ABN 22 102 912 783)
AND CONTROLLED ENTITIES
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2016
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Annual Report 2016
CONTENTS
CORPORATE DIRECTORY ______________________________________________________________________________________ 1
DIRECTORS’ REPORT _________________________________________________________________________________________ 2
AUDITOR’S INDEPENDENCE DECLARATION ______________________________________________________________________ 50
CORPORATE GOVERNANCE STATEMENT ________________________________________________________________________ 51
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ________________________________________________________ 52
CONSOLIDATED STATEMENT OF FINANCIAL POSITION _____________________________________________________________ 53
CONSOLIDATED STATEMENT OF CASH FLOWS ___________________________________________________________________ 54
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY _____________________________________________________________ 55
NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________________________ 56
DIRECTORS’ DECLARATION ___________________________________________________________________________________ 88
INDEPENDENT AUDITOR’S REPORT ____________________________________________________________________________ 89
ADDITIONAL SHAREHOLDER INFORMATION _____________________________________________________________________ 91
SCHEDULE OF MINERAL TENEMENTS __________________________________________________________________________ 93
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Annual Report 2016
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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 2016
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 2016.
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
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 20 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
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***
* Company was delisted August 2015
** Listed on National Stock Exchange of Australia
*** Company was delisted August 2014
December 2000 to present
August 2009 to present
September 2010 to September 2015
December 2010 to January 2016
January 2006 to present
June 2012 to August 2014
Interest in Shares & Options
Fully Paid Ordinary Shares
5,894,600
Qiu Derong
Experience
Non-Executive Director
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
Judy Li
Experience
Directorships of listed companies
held within the last 3 years
Fully Paid Ordinary Shares
Unlisted Options
Non-Executive Director
47,544,710
8,000,000
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 2016
Mark Gwynne
Non-Executive Director
Experience
Mr Gwynne has been involved in gold exploration and mining for over 20 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
Fe Limited
Iron Mountain Mining Limited
Kupang Resources Limited
August 2009 to Present
May 2014 to Present
January 2013 to August 2013
Interest in Shares & options
Fully Paid Ordinary Shares
100,000
COMPANY SECRETARY
Ms Catherine Grant has been Chief Financial Officer of Cauldron since July 2013, and its Company Secretary since 31
January 2014. Ms Grant has a Bachelor of Commerce degree from the University of Western Australia, majoring in
Accounting and Finance. 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 12 years’ experience in accounting and
finance and currently provides accounting and company secretarial services to several listed resource companies.
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 44 to 49. 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 $3,978,324 (30 June 2015: $6,712,800 loss).
The loss for the year includes impairment losses in respect of capitalised exploration and evaluation to the extent of
$1,641,604 for the year ended 30 June 2016 (30 June 2015: $1,604,898) following the decision not to continue exploration
and for costs associated with tenements not granted in certain areas of South Australia, 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:
Annual General Meeting
The Company held its annual general meeting on 9 November 2015 (“AGM”). All resolutions put to shareholders were
passed.
Research and Development refund
In December 2015, Cauldron received $1,649,378 from the Australian Taxation Office under the Research and
Development Tax Incentive Programme relating to the 2015 financial year.
Royalties for Regions funding
During the year, Cauldron received $150,000 from the Department of Mines & Petroleum under the Royalties for Regions
– Industry Drilling Program 2015-16 in respect to drilling at the Yanrey Project.
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Funding
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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.
The Company received Placement Funds and issued Placement Shares in respect of the Placements, as follows:
19 June 2014: 16,476,621 fully paid ordinary shares to Guangzhou City Guangrong Investment Management Co.
Ltd (“Guangzhou City”) for $1,944,241;
30 September 2014: 17,421,697 fully paid ordinary shares to Guangzhou City for $2,055,759;
30 September 2014: 8,474,579 fully paid ordinary shares to Starry World Investments Ltd (“Starry World”) for
$1,000,000;
30 December 2014: 21,440,678 fully paid ordinary shares to Starry World for $2,530,000;
30 March 2015: 3,983,061 fully paid ordinary shares to Starry World for $470,000;
9 November 2015: 16,949,178 fully paid ordinary shares to Mr Derong Qiu for $2,000,000. Of this amount,
$1,714,932 was received in cash from Mr Derong Qiu in June 2015, with the balance $285,068 agreed 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 were subject to
shareholder approval, and as such the cash component of these Placement Funds were held in trust by the
Company until shareholder approval was obtained. Shareholders approved the issue of these shares at the
Company’s 9 November 2015 Annual General Meeting.
As detailed in the previous Annual Report, Placement Funds were due from various investors under the Placement
Agreements as follows:
$2,000,000 from Beijing Joseph Investment Co Ltd / Joseph Investment International Co Ltd (“Joseph
Investment”) were due in equal tranches of $1,000,000 on 2 October 2014 and 1 December 2014 respectively).
This debt was settled in March 2016 following legal proceedings (detailed below);
$1,000,000 from Guangzhou City due 3 November 2014. The Guangzhou City debt was partially recovered in
July 2016 following legal proceedings (detailed below);
$300,000 and $1,700,000 from Guangzhou Joseph Investment Co Ltd (“Guangzhou Joseph”) due 1 December
2014 and 1 December 2015 respectively. These funds were not received by the Company.
LEGAL PROCEEDINGS
The Company took legal action against Joseph Investment and Guangzhou City to enforce its rights under the Placement
Agreements to receive the unpaid funds. On 28 January 2016, His Honour Justice Mitchell of the Supreme Court of
Western Australia found in favour of Cauldron in respect of its claim that Joseph Investment and Guangzhou City had
breached their respective Placement Agreements in 2014 and entered judgment in favour of the Company in the following
amounts:
$3,000,000 plus interest (of which $2,000,000 pertained to Joseph Investment, and $1,000,000 pertained to
Guangzhou City);
damages of $55,000 plus interest; and
85% of the Company’s legal costs.
Recovery of judgment debt from Joseph Investment
On 24 March 2016, Cauldron reached an agreement whereby payment of interest, damages and costs in the amount of
$530,539 was made by Joseph Investment and the remaining $2,000,000 was paid by a third party, MGT Resources Limited
(ASX: MGS) (“MGT Resources”), in exchange for the shares and options which were to the issue to Joseph Investment. This
represents 100% of the amount owed by Joseph Investment.
Following receipt of funds, the Company issued to MGT Resources:
16,949,176 fully paid ordinary shares at $0.118 for $2,000,000; and
20,000,000 unlisted options exercisable at $0.138 expiring 31 December 2016.
Partial recovery of judgment debt from Guangzhou City
Guangzhou City was the registered holder of 33,898,812 shares in Cauldron (“Shares”).
On 17 May 2016, upon the Company’s ex parte application, Master Sanderson made orders appointing a receiver (Mr Kim
Waldman of HLB Mann Judd (Insolvency WA) (“Receiver”)) over the Shares to recover payment of the judgment debt in
accordance with the powers by the Civil Judgments Enforcement Act.
On 5 July 2016, the Receiver completed the sale of the Shares to investors who have agreed to a six-month escrow period
in respect of the Shares. The Company recovered $488,000 of the judgment debt (net of $20,475 Receiver costs) from the
sale of Shares by the Receiver, and the funds were received by the Company during July 2016.
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Annual Report 2016
The Company is seeking to enforce payment of the outstanding balance of the judgment debt in accordance with the
powers under the Civil Judgments Enforcement Act.
CHANGES IN CAPITAL STRUCTURE
Issue of shares
The Company issued the following during the year ended 30 June 2016:
16,949,178 fully paid shares at $0.118 per share in accordance with a Placement Agreement with Mr Derong Qiu
for $2,000,000 (before capital raising costs) (part of the Placement Shares);
3,000,000 fully paid shares were issued upon exercise of options at $0.138 for $414,000; and
16,949,176 fully paid shares at $0.118 per share for $2,000,000 received from MGT Resources (as detailed
above).
The shares issued to MGT Resources 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 2016:
16,000,000 unlisted options to investor Mr Qiu Derong (“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.
20,000,000 unlisted options to investor MGT Resources. The key terms of these options are the same as those
of the Vesting Options noted above.
The options issued to MGT Resources were issued using the Company’s capacity under Listing Rule 7.1.
Options exercised
There were 3,000,000 shares issued as a result of exercise of share options at an exercise price of $0.138 for $414,000
during the year.
Options lapsed
The following options expired or lapsed during the year:
1,000,000 unlisted options exercisable at $0.20 with an expiry date of 18 September 2015;
3,000,000 unlisted options exercisable at $0.20 with an expiry date of 30 September 2015;
500,000 unlisted options exercisable at $0.45 with an expiry date of 31 December 2015;
16,000,000 unlisted options exercisable at $0.138 with an expiry date of 31 December 2015; and
24,000,000 unlisted options exercisable at $0.118 with an expiry date of 31 December 2016.
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Annual Report 2016
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 13 granted exploration licences (2,209 km2)
and 7 applications for exploration licences (912 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) has expired.
The Bennet Well Uranium Deposit is located within the
Yanrey Project area
Marree Joint Venture in South Australia comprising
(2,794 km2)
five granted exploration
prospective for sedimentary-hosted uranium deposits
of both the Beverley Uranium and Four Mile Uranium
style, and for base metal mineralisation.
licences
Boolaloo Project (Boolaloo)
in Western Australia
comprises 2 granted exploration licences (104.13km2)
prospective for gold 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 four spatially separate deposits; namely Bennet Well East, Bennet Well Central,
Bennet Well South and Bennet Well Channel, refer to Figure 4.
Work completed during the reporting period comprised a drilling program at the Bennet Well Uranium Deposit that led to:
Initial discovery of mineralised Bennet Well Channel
delineation drilling of the Bennet Well Channel
1.
2.
3. Mineral Resource (JORC 2012) upgrade of entire Bennet Well mineralised system;
4.
drill testing a palaeochannel to the northeast of Bennet Well with intersection of mineralisation that warrants
further follow-up drilling.
completion of Radiation Management Plan and Radiation Waste Management Plan for proposed in-situ field
leach test site at Bennet Well
commencement of a passive seismic orientation survey over Bennet Well
5.
6.
Cauldron achieved its objective of increasing the Mineral Resource estimate of the Bennet Well Uranium deposit.
Ravensgate Mining Industry Consultants completed the Mineral Resource (JORC 2012) estimate for the Bennet Well
deposit, using the results of new drilling and interpretation. The upgraded Mineral Resource (JORC 2012) estimate is:
Inferred Resource: 16.9 Mt at 335 ppm eU3O8 for total contained uranium-oxide of 12.5 Mlb (5,670 t) at 150
ppm cut-off;
Indicated Resource: 21.9 Mt at 375 ppm eU3O8 for total contained uranium-oxide of 18.1 Mlb (8,230 t) at 150
ppm cut-off;
total combined Mineral Resource: 38.9 Mt at 360 ppm eU3O8, for total contained uranium-oxide of 30.9 Mlb
(13,990 t) at 150 ppm cut-off.
The improvement mass and grade made to the Mineral Resource of the Bennet Well deposit is attributable to:
the successful delineation of newly discovered mineralisation at Bennet Well Channel returned from mud rotary
drilling;
improved correlation of mineralised lenses following interpretation of recently completed drilling in between
Bennet Well East and Bennet Well Central; and
further refinement of mineralisation domains to guide grade interpolation of laterally extensive mineralised
lenses situated adjacent to impermeable sedimentary units.
The grade-tonnage plots of Figure 2 demonstrate the robustness of the Mineral Resource, because elevating cut-off grades
has relatively small effect on the estimated contained uranium oxide content. Increasing the cut-off grade (150 ppm
eU3O8) by 100% decreases metal content by just 33% (refer to the red curve of Figure 1 and data presented in Table 1).
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Cutoff Grade (ppm eU3O8)
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Figure 2: Grade-Tonnage curve for the Mineral Resource; deposit mass above cut-off in blue, deposit grade
above cut-off in orange, deposit contained metal-oxide mass above cut-off in red
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30Mlb
25Mlb
20Mlb
15Mlb
10Mlb
5 Mlb
300
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1100
1300
Deposit Grade (ppm eU3O8)
Figure 3: Deposit mass versus grade for various cut-off, the large dot is the 150 ppm eU3O8 economic cut-
off; dotted lines are contours of equal metal-oxide mass in imperial unit
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Figure 4: Bennet Well distribution of mineralisation
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Figure 5: Bennet Well Central; cross-section line A-A’; distribution of mineralisation
Figure 6: Bennet Well East; cross-section line B-B’; distribution of mineralisation
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Figure 7: Bennet Well South; cross-section line C-C’; distribution of mineralisation
Figure 8: Bennet Well Channel; cross-section line D-D’; distribution of mineralisation
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Table 1: Mineral Resource at various cut-off, table used to make Figure 2 and 3
Deposit
Cutoff
(ppm eU3O8)
Deposit Mass (t)
Deposit Grade
(ppm eU3O8)
Mass U3O8 (kg)
Mass U3O8
(lbs)
Bennet Well_Total
Bennet Well_Total
Bennet Well_Total
Bennet Well_Total
Bennet Well_Total
Bennet Well_Total
Bennet Well_Total
Bennet Well_Total
Bennet Well_Total
125
150
175
200
250
300
400
500
800
39,207,000
38,871,000
36,205,000
34,205,000
26,484,000
19,310,000
10,157,000
6,494,000
1,206,000
355
360
375
385
430
490
620
715
13,920,000
30,700,000
13,990,000
30,900,000
13,580,000
29,900,000
13,170,000
29,000,000
11,390,000
25,100,000
9,460,000
20,900,000
6,300,000
13,900,000
4,640,000
10,200,000
1175
1,420,000
3,100,000
Deposit
Cutoff
Deposit Mass (t)
(ppm U3O8)
Deposit Grade
(ppm U3O8)
Mass U3O8
(kg)
Mass U3O8
(lbs)
BenWell_Indicated
BenWell_Indicated
BenWell_Indicated
BenWell_Indicated
BenWell_Indicated
BenWell_Indicated
BenWell_Indicated
BenWell_Indicated
BenWell_Indicated
125
150
175
200
250
300
400
500
800
22,028,000
21,939,000
21,732,000
20,916,000
17,404,000
13,044,000
7,421,000
4,496,000
353,000
375
375
380
385
415
465
560
635
910
8,260,000
18,200,000
8,230,000
18,100,000
8,260,000
18,200,000
8,050,000
17,800,000
7,220,000
15,900,000
6,070,000
13,400,000
4,160,000
9,200,000
2,850,000
6,300,000
320,000
700,000
Deposit
Cutoff
Deposit Mass (t)
(ppm U3O8)
Deposit Grade
(ppm U3O8)
Mass U3O8
(kg)
Mass U3O8
(lbs)
BenWell_Inferred
BenWell_Inferred
BenWell_Inferred
BenWell_Inferred
BenWell_Inferred
BenWell_Inferred
BenWell_Inferred
BenWell_Inferred
BenWell_Inferred
125
150
175
200
250
300
400
500
800
17,179,000
16,932,000
14,474,000
13,288,000
9,080,000
6,266,000
2,736,000
1,998,000
853,000
335
335
365
380
455
535
780
900
5,750,000
12,700,000
5,670,000
12,500,000
5,280,000
11,600,000
5,050,000
11,100,000
4,130,000
9,100,000
3,350,000
7,400,000
2,130,000
4,700,000
1,800,000
4,000,000
1285
1,100,000
2,400,000
Note: table shows rounded numbers therefore units may not convert nor sum exactly
Notes to Accompany the Mineral Resource Estimate of Bennet Well
Drilling and Assay Data
Drilling technique: The drilling used to complete the Mineral Resource estimate is a combination of mud rotary and
diamond core with assay data collected by downhole geophysical probes from open hole; and aircore drilling with
geophysically derived grade data collected from inside rods. The assay data set used for the Mineral Resource is derived
from deconvolved gamma logs from downhole geophysical logs obtained from all drillholes with a set of models defined in
section ‘sample analysis method’. The Mineral Resource was estimated from the results of 285 aircore holes for 29,320 m,
217 rotary mud holes for 19,245 m and 23 diamond core holes for 2,104 m (a total of 252 holes for 50,669 m of drilling).
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Drilling density: the drilling density covering the deposit is variable and is highest at Bennet Well East and Bennet Well
Central having drill-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.
Sampling and sub-sampling techniques: the principal sampling method for assay was by downhole geophysical gamma
logging in mud rotary drillholes and diamond core holes and in-rod aircore holes. The downhole gamma probe data is
collected at 0.01 m, 0.02 m and 0.05 m measurement intervals (which varied depending on drilling-logging program).
Using these methods there is no requirement to collect a physical sample to assay at a commercial laboratory. The
downhole geophysically derived assay is used in the interpolation process used to derive the Mineral Resource estimate.
Physical assay from core drilling is not used for grade interpolation because recovery of sample from unconsolidated
lithology is poor and variable; and the cost obtaining the sample is too high. Assays from core, however, are used as a
check against the deconvolved gamma-derived assay.
Sample analysis method: the uranium grade (in units of parts per million uranium oxide) is measured using natural gamma
logging by downhole geophysical probes, and denoted ppm eU3O8. At depth increments of five to ten centimetres the
downhole gamma probes measures the gamma emission from specific decay elements of the uranium radioactive decay
series. If the parent uranium is in secular equilibrium with its decay progeny the natural gamma response is directly
proportional to the amount of uranium detected from the formation by the logging. In practice there are a specific set of
calibration factors, correction factors and a deconvolution process that enable the use of gamma logging to estimate
uranium grade:
calibrated total count gamma logs (using sodium iodide crystal) collected by various downhole geophysical
logging contractors
calibration models derived by various downhole geophysical logging contractors using the uranium grade model
and hole size correction model of the calibration facility in Glenside, Adelaide, administered by the South
Australian Department of Environment, Water and Natural Resources
non-deadtime corrected polynomial grade models of pit grade versus tool count
deconvolution of gamma response to remove the ‘shoulder effect’ of the radiometric signal, caused by:
o
o
o
o
thin bed radiometric signal from thinly bedded uraniferous mineralisation
gamma probe capable of detecting mineralisation prior to passing its starting interval
gamma probe capable of detecting mineralisation after passing its ending interval
a gamma probe that has measured a ‘diluted (and therefore reduced) radiometric response’ whilst
inside the mineralised interval
deconvolution of the gamma response effected by:
o
o
o
a high pass filter, used to deconvolve the radiometric response, that reduces the effective width of
the detected interval but increases the peak response of the signal derived from the mineralised zone
a low pass filter, used to smooth the noise introduced by the high pass filter applied to gamma data
the process developed in 1978 by the Geological Survey of Canada and described by Bristow,
Conaway & Killeen in 1984.
the parameters of the high pass and low pass filters are derived by independent consultant, David
Wilson of 3D Exploration Pty Ltd, who is expert in these data
rod correction factor for historic aircore holes that were logged inside drill rods:
o
o
o
o
the steel of the rods cause an attenuation of the radiometric signal measured at the probe
the rod correction factor is derived from data collected from both in-hole and open-hole logging for a
portion of each respective aircore program
the rod correction model was derived by independent consultant, David Wilson of 3D Exploration Pty
Ltd, who is expert in these data
hole size correction model derived from data collected the calibration facility in Glenside, Adelaide, and applied
to:
o
o
nominal drill hole diameter for historic holes (prior to BW series drilling)
caliper measured drill hole diameter collected by logging contractor Borehole Wireline for the ‘BW
series’ drilling completed in 2014 and 2015
moisture correction factor of 1.11 applied to all data to account for the moisture (and therefore density)
difference between the cement calibration model and the unconsolidated water filled environment that is host
to mineralisation
disequilibrium correction factor of 1.07 to account for variation caused by secular disequilibrium
Mineral Resource Estimation Methodology
Estimation methodology: The mineralisation at Bennet Well is shown to be closely associated with the sediments filling the
depression of palaeo-valleys incised into once-exposed basement; the mineralisation is wholly contained within the up-
projected margins of the palaeo-valley. This palaeo-valley depression is able to be modelled on a local scale by drilling,
high resolution gravity data and on wider expanses by airborne electromagnetic data.
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Ravensgate Mineral Consultants completed three dimensional grade interpolation using the following parameters:
the detailed assay data (deconvolved gamma logs) was composited to 0.4 m down-hole lengths used for block
model interpolation for all deposit areas
mineralisation wire-frames constructed from a nominal 150 ppm eU3O8 assay (composited deconvolved
downhole gamma) and used to constrain all of the observed zones of mineralisation, that subset mineralisation
into eight domains
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 the Mineral Resource for the Bennet Well Deposit
which contains the Bennet Well East, Bennet Well Central, Bennet Well South, Bennet Well Deep South and
Bennet Well Channel 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 15 m by 20 m by 0.4 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 160 m if above a localised composite population 99th percentile level
Parallel mineral resource estimate checks: Cauldron completed a parallel two-dimensional resource estimation using an
inverse distance squared interpolation methodology as a check model to assess the overall tenor and levels of estimated
grades and mineralisation domain interpretation and designation sensitivities.
Resource classification: 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.
Bulk Density: A conservative average porosity of 30% is assumed for the host sediments to mineralisation, which derives a
conservative dry bulk density value of 1.74 t/m3. Independent laboratory, Corelabs in Perth, has measured the volume and
mass taken from core plugs of diamond core sample to derive dry bulk density on 62 samples from Bennet Well Central
and Bennet Well East. The dry bulk density measurements of theses samples averaged 1.81 t/m3 and ranged from 1.44 to
2.20 t/m3.
Economic Framework
Estimation of mineral extraction: future mining or mineral extraction at the Bennet Well deposit is likely to be by in-situ
recovery methods using a series of leaching solution injection bores and pregnant solution extraction bores. No other
assumptions on mining methodology have been made.
Cut-off grade and the basis for the selected cut-off: financial modelling completed by Cauldron using rudimentary cost
assumptions for in-situ recovery mining style has shown that a cut-off of 150 ppm uranium oxide for Bennet Well is able to
be mined economically for a uranium sale price of US$ 40 per pound. The mining cost assumptions used in this estimation
are:
well spacing in five-spot pattern, having 25 m centres, at a cost of US$10,000 per well
annual production rate of 1.5 Mlb uranium oxide (~680,000 kg)
in-situ recovery uranium oxide recovery of 67%
operating cost of US$ 25/lb
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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.
A major technical review of potential mineralisation in the Yanrey tenement group produced 17 target areas as shown in
Figure 9.
Figure 9: Bennet Well Channel; cross-section line D-D’; distribution of mineralisation
Cauldron completed two mud rotary drillholes in Area 14 and intersected ore grade mineralisation:
BW0096: 0.75 m @ 288.91 ppm eU3O8, from 53.0 m
BW0097: 0.45 m @ 235.80 ppm eU3O8, from 53.4 m
Target area 14 is now called Manyingee South and requires further follow-up, as a mineral deposit of substantial size may
exist, refer to Figure 10.
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Figure 10: Manyingee South Channel - plan view showing summary of mineralisation from drilling on EM
image showing interpreted channel bounds
Exploration Incentive Scheme
The Western Australian Department of Minerals and Petroleum (DMP) has approved the recent drilling completed at
Yanrey under their Exploration Incentive Scheme, This scheme allows up to $150,000 of DMP funding for drill testing of
greenfields type targets, and is awarded on the technical justification of the drill program.
Cauldron received payment of $150,000 from for the Exploration Incentive Scheme from the DMP for an exploration
program that comprised a total of 39 mud rotary drillholes for a total of 3,601 m.
The funding under this scheme facilitated the discovery of the Bennet Well Channel and the ore grade intercepts received
from the Manyingee South prospect.
As part of Exploration Incentive Scheme (EIS), eight uranium exploration targets across the Yanrey Project were drill tested,
located on tenements E08/1493, E08/1489, E08/1490 and E08/1501, situated within the Yanrey and Uaroo Pastoral Leases.
The EIS drill program at Yanrey has significantly extended the strike length of mineralisation in the Bennet Well Channel,
demonstrating its extension for at least 7 km. The Bennet Well Channel remains open to the southeast extending through
E08/1490 and is interpreted to also extend into Cauldron’s new application area within E08/2774. Following the discovery
of the Bennet Well Channel, further non-subsidised follow-up drilling collected the data required to significantly improve
the Mineral Resource (JORC 2012) for Bennet Well.
Cauldron reports significant drill intercepts from two drillholes on E08/1489 (BW0096 and BW0097) near Manyingee
South, and coupled with the 2007 programme (YNMR006 and YNMR007) opens the potential for uranium accumulation
within E08/1489.
Drilling at the other five prospects did not return economic accumulations of uranium.
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Bennet Well Channel (E08/1493):
The Bennet Well Channel was an under-explored, approximately 7 km-long, linear EM anomaly to the south-east of
Cauldron’s Bennet Well Uranium Resource Area. The anomaly contained sparse historic drilling from 1981-1982, with
unconfirmed collar locations, indicating the presence of potentially economic uranium mineralisation.
As part of the co-funded drilling, five mud rotary holes were planned to test the strike extent of the EM-high anomaly,
thought to represent a palaeochannel and possibly hosting economic uranium mineralisation. The five holes, BW0077-
BW0081, were successful in intercepting uranium at grades economic for extraction via In-situ Leach (ISL), as shown in
Figure 11. Drillhole BW0082 was drilled to the east of this EM anomaly, targeting another, more northerly striking anomaly
of high EM response however this hole intersected only shallow pegmatitic, granite basement with no mineralisation.
Assay highlights from this first drilling tranche included:
BW0077 returned 4.15m @ 597ppm eU3O8 from 88.75m;
BW0078 returned 2.80m @ 466ppm eU3O8 from 72.45m;
BW0079 returned 0.40m @ 525 ppm eU3O8 from 54.95m;
BW0080 returned 1.60m @ 538 ppm eU3O8 from 70.20m; and
BW0081 returned 0.50m @ 268 ppm eU3O8 from 67.65m.
Due to the favourable results a further seventeen co-funded drillholes (specifically BW0098-0099, BW0102-103, BW0106,
BW0115-120 and BW0123 within E08/1493 and BW0107-109 and BW0140+142 in E08/1490) were drilled into the
anomaly, down the axis of the palaeochannel, with most holes intersecting elevated uranium grades. Highlights from this
second tranche of drilling included:
BW0098 returned 1.45m @ 267ppm eU3O8 from 82.45m;
BW0099 returned 4.40m @ 522 ppm eU3O8 from 76.45m;
BW0103 returned 1.20m @ 558 ppm eU3O8 from 72.40m;
BW0106 returned 2.40m @ 504 ppm eU3O8 from 79.90m; and
BW0116 returned 1.20m @ 308 ppm eU3O8 from 65.95m.
Figure 11: E08/1493 Bennet Well Channel Cross Section
Figure 11 shows co-funded drillholes BW0077-BW0081 within E08/1493, along the previously untested EM anomaly, now
named Bennet Well Channel.
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Figure 12- E08/1493 Bennet Well Channel EIS Drill Results
The zone of mineralisation drilled (mentioned above) is adjacent to the Bennet Well uranium deposit and is outside the
limits of the first Mineral Resource estimate (JORC 2012) upgraded in July 2015. Encouraging drill results from the second
tranche of drilling, as aforementioned, has now allowed the inclusion of the Bennet Well Channel into the main Bennet
Well Deposit, thus providing further extension to the existing size of the Mineral Resource estimate (JORC 2012) (Figure
12).
Manyingee South Channel (E08/1489):
In October 2015, Cauldron drilled two mud rotary holes within the boundaries of E08/1489 for 197.5 metres. The holes
were completed at the Manyingee South Channel target, an EM-high thought to represent a north-south trending
palaeochannel to the south-west of Paladin Energy’s Manyingee deposit (Figure 13). Historic drilling from the early 1980’s
indicated the presence of elevated uranium however the location of these historic drillholes has not been confirmed.
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Figure 13: Manyingee Sth Channel – drilled mineralisation on EM + Channel Interpretation
Drillholes BW0096 and BW0097 were drilled ~1.5km apart along the axis of the interpreted channel, both successfully
defining uranium mineralisation at economic levels (>150ppm eU3O8). These results attest to the potential for
mineralisation of considerable size within the channel and the tenement boundaries (Figure 14).
Figure 14: Cross Section Manyingee Sth - mineralisation continuity approx 1.5km strike length
Highlights from the drilling of the two Manyingee South holes are as follows:
BW0096: 0.70 m @ 303.00 ppm eU3O8, from 53.05 m
BW0096: 0.75 m @ 378.17 ppm eU3O8, from 58.45 m
BW0097: 0.35 m @ 270.17 ppm eU3O8, from 53.45 m
BW0097: 0.40 m @ 206.69 ppm eU3O8, from 54.50 m
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E08/1490:
Cauldron drilled five mud rotary drill holes within the boundaries of E08/1490, at the southeastern portion of the Bennet
Well Channel, for 379.15 metres, between November and December 2015. The assays returned the following significant
results:
BW0107 returned 0.50 m @ 540 ppm eU3O8 from 41.95 m;
BW0108 returned 2.40 m @ 299 ppm eU3O8 from 38.15 m;
BW0109 returned 2.00 m @ 227 ppm eU3O8 from 34.00 m;
BW0140 returned 1.20 m @ 325 ppm eU3O8 from 48.35 m; and
BW0142 returned 1.60 m @ 184 ppm eU3O8 from 40.80 m.
The results from this drilling confirm the existence of high-grade mineralisation within the newly discovered Bennet Well
Channel that extends into E08/1490.
Mineralisation of significant tenor within the Bennet Well Channel is currently interpreted to extend for at least 8 to 10 km
to the southeast of the currently defined Bennet Well Deposit. This hypothesis results from the recent drilling completed
over tenements E08/1490 and 1493, interpretation of regional EM geophysics and the results of historical drilling by
Dynasty Metals on open file (Figure 15).
The mineralisation in Bennet Well Channel extends to the southeast from Bennet Well across E08/1490 into an area not
currently held by any form of mining title. Initial drilling success provided Cauldron with the justification to lodge an
application for E08/2774 on 29 September 2015, to capture the area that it believes may be an extension of the Bennet
Well Channel.
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Figure 15: E08/2774 Application on EM Imagery +E08/1490 Drill Results
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Bennet Well North-East (E08/1493):
The Bennet Well North-East drilling consisted of four mud rotary drillholes, two holes testing ineffective air-core drilling,
and the remaining two testing geophysical anomalies thought to represent a poorly explored palaeochannel.
Drillholes BW0083 and BW0089 were successful in testing the theory that historic aircore drilling was ineffective in defining
low-grade uranium mineralisation. During an aircore drill program, the downhole geophysical survey will often be
conducted within the steel drill rods. The thickness of the steel rods greatly reduces, or attenuates, the gamma response,
resulting in a loss of signal for low-grade uranium mineralisation. Downhole geophysical surveying for the mud rotary
drilling technique is only conducted after the extraction of the drill rods from the drillhole (i.e. “open-hole” surveying)
which enables the detection of low-grade uranium – in this case, up to 330ppm eU3O8, located in a single lens.
Drillholes BW0084 and BW0088 tested EM and gravity anomalies thought to represent a palaeochannel to the north of the
Bennet Well Resource. Both holes failed to intersect uranium mineralisation above the 150ppm eU3O8 minimum cut-off.
Cheetara (E08/1493):
Three mud rotary drillholes, BW0085, BW0086 and BW0087, were completed in the Cheetara prospect testing coincidental
magnetic-lows and EM-highs thought to represent structurally controlled palaeochannels.
All three holes were unsuccessful in defining uranium mineralisation, intersecting shallow pegmatitic granite basement,
with all cover sediments highly oxidised from surface to bottom of hole. Reduced environments are required for uranium
deposition and therefore these particular structures are considered unlikely to host uranium mineralisation.
Bennet Well West (E08/1493):
Mud rotary holes BW0090 and BW0091 targeted uranium mineralisation to the north-west of the Bennet Well Resource,
located along a gravity-low, thought to represent a uranium bearing palaeochannel.
Both holes were unsuccessful in intersecting uranium mineralisation, terminated early due to blade refusal caused by
cemented bands of what is currently interpreted as fresh silcrete. Due to the hard nature of these bands, stronger drilling
blades and bits will be required to break through to the underlying sediments in these holes, however this will be
completed at a later date. The Bennet Well West prospect is still considered to be a prospective target for uranium
mineralisation given the association between fresh silcrete and mineralisation of significant tenor, as proven in other ISR
deposits such as Beverley and Four Mile, South Australia.
Bennet Well South (E08/1493):
A poorly explored gravity-low anomaly, thought to represent a palaeochannel to the west of Bennet Well South, was drill
tested with two mud rotary holes, BW0093 and BW0094.
Both drillholes intersected favourable reduced, organic-rich, clean channel sands; however were unsuccessful in defining
uranium at economic levels. Given the proximity of both drillholes to known mineralisation and prospective geology, it’s
likely that mineralised ground waters have not flown through these sediments either because of the presence of a cross-
cutting structure or simply because of an over-abundance of reduced, organic material. As the gravity anomaly remains
open and untested to the west it’s possible that the channel may still contain economic mineralisation. Further
investigation of Bennet Well South is required.
Bennet Well Deep South (E08/1493):
Drillhole BW0095 was completed to the north of Bennet Well Deep South to test for north-west – south-east striking
mineralisation extending from Bennet Well South. Current interpretations indicate mineralisation is striking north-east –
south-west, opposite to the majority of mineralisation within the Bennet Well deposit.
Drilling was unsuccessful in intersecting uranium mineralisation at economic levels however favourable lithologies were
intersected including lignites and carbonaceous channel sands. Further testing is still required along the same orientation
as there could be cross-cutting structures that may be offsetting the palaeochannels in this area.
Main Road Channel & New Palaeochannel (E08/1501):
The Main Road Channel and New Palaeochannel prospects, located on E08/1501, are regional exploration targets which
remain underexplored. A single mud rotary drill hole was completed at each exploration target (see Figure 8), testing EM-
high anomalies in proximity to historic drilling.
Both drillholes were unsuccessful in intersecting anomalous uranium; however did intersect favourable sulphide-rich
sediments.
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Table 2 – EIS Drill Hole Collar Details
Hole_ID
Tenement
Target
MGA_East
MGA_North
Orig_RL
Azimuth
Dip
Max_
Depth
(metres)
BW0077
E08/1493
BW Channel
303,098
7,506,260
BW0078
E08/1493
BW Channel
303,633
7,505,786
BW0079
E08/1493
BW Channel
303,849
7,505,563
BW0080
E08/1493
BW Channel
304,359
7,504,936
BW0081
E08/1493
BW Channel
304,923
7,504,339
BW0082
E08/1493
BW Channel
305,180
7,506,068
BW0083
E08/1493
BW0084
E08/1493
BW NE
BW NE
BW0085
E08/1493
Cheetara
BW0086
E08/1493
Cheetara
BW0087
E08/1493
Cheetara
BW0088
E08/1493
BW0089
E08/1493
BW NE
BW NE
BW0090
E08/1493
BW West
BW0091
E08/1493
BW West
BW0093
E08/1493
BW South
BW0094
E08/1493
BW South
302,549
302,493
305,414
304,555
304,481
303,051
302,496
299,320
299,885
299,580
299,141
7,509,948
7,510,358
7,508,931
7,510,081
7,509,037
7,510,788
7,509,934
7,509,302
7,508,988
7,506,940
7,506,751
BW0095
E08/1493
Deep South
298,998
7,504,357
BW0096
E08/1489
BW0097
E08/1489
Manyingee
South
Manyingee
South
BW0098
E08/1493
BW Channel
BW0099
E08/1493
BW Channel
BW0102
E08/1493
BW Channel
BW0103
E08/1493
BW Channel
BW0106
E08/1493
BW Channel
BW0107
E08/1490
BW Channel
BW0108
E08/1490
BW Channel
BW0109
E08/1490
BW Channel
BW0111
E08/1501
BW0112
E08/1501
New
Palaeochannel
Main Road
Channel
310,471
7,515,814
310,156
7,517,343
303367
303258
303775
303482
304148
307057
306875
307244
7506097
7506376
7505850
7505770
7505246
7501808
7501733
7501889
298,601
7,493,602
297,502
7,486,294
BW0115
E08/1493
BW Channel
304,044
7,504,827
BW0116
E08/1493
BW Channel
305110
7504397
BW0117
E08/1493
BW Channel
305,469
7,503,705
BW0118
E08/1493
BW Channel
BW0119
E08/1493
BW Channel
305769
305276
7503401
7504054
BW0120
E08/1493
BW Channel
306,014
7,503,031
BW0123
E08/1493
BW Channel
BW0140
E08/1490
BW Channel
BW0142
E08/1490
BW Channel
306275
306786
306561
7502731
7502111
7502445
22
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
48
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
-90
110
102
102
102
96
67
91
121
49
73
61
91
91
103
97
85
127
97
87
72
107
108
120
114
114
84
79
78
60
91
116
102
84
104
86
75
78
74
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Figure 16: Yanrey Project – Deposit, Prospect and Target Locations
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MARREE PROJECT, SOUTH AUSTRALIA
Cauldron completed no work at the Marree project during the period.
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Figure 17 : 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, 08/2386 and 08/2387 on 4 April 2012. Forrest & Forrest Pty
Ltd lodged objections to the applications under the Mining Act. On 5 January 2015 the Minister for Mines decided there
were sufficient grounds to allow the applications to proceed through the determination process under the Mining Act and
the Native Title Act. On 1 April 2015, Forrest & Forrest Pty Ltd requested the applications return to the warden. The
warden declined to have any further hearing of the applications and the applications have successfully passed through the
Native Title process. On 27 August 2015, Forrest & Forrest Pty Ltd made application to the Supreme Court of Western
Australia for judicial review of the Minister’s decision to progress each application through the determination process
under the Mining Act and the Native Title Act. The application for judicial review was heard on 19 April 2016, and its
judgment is reserved.
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 (for exploration
licences 08/2161 and 08/2165). The proceedings are administrative in nature and are commenced under the Mining Act
1978 (WA) (Act).
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Annual Report 2016
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. On 9 March 2016 the Minister for Mines refused Cauldron’s applications for exemption from expenditure for the
Tenements.
Exploration Licences 08/2160 and 08/2161 are currently proceeding through the warden’s court process for the Forfeiture
applications and are scheduled for mention on 26 August 2016.
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 has accepted several
adjournments of the first mention of the objections, due to the DMP requirement to assess other applications that were
first in line before Cauldron’s applications for the same land. The matters are to be adjourned to October 2016 for
mention.
Since the adjournment, 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. However, E08/2666 remains second in line for
assessment.
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. These legal proceedings are currently at an early
stage, and no negotiation between the parties has commenced.
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. Cauldron agreed to terms
for a heritage agreement with both Gnulli and Budina on 11 March 2016, and the agreements were finalized on 4 April
2016. The objections were withdrawn on 8 April 2016 and E08/2665 was granted to Cauldron on 12 April 2016.
Red Sky Stations Pty Ltd Objection to Tenement Application for E08/2733
Red Sky lodged an objection against the application for E08/2733 (applied for by Ashrock Nominees Pty Ltd) on the basis
that exploration on the tenement would be detrimental to their pastoral lease (Uaroo). In December 2015, Red Sky
provided Ashrock with a draft access agreement to resolve the issue and withdraw the objection. Negotiations were
paused whilst another Ashrock tenement went through a ballot process. Cauldron purchased E08/2733 from Ashrock in
May 2016 and has taken over this matter. The Objection is proceeding through Warden’s court and is expected to be
heard on a date in September 2016, to allow negotiation of an access agreement.
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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.
During the reporting period, Cauldron completed the first earn-in stage of the Rio Colorado project, now owning a 51%
equity stake in the joint venture. No work was completed in Argentina as Cauldron is awaiting approval for drilling at the
Rio Colorado Project.
Figure 18: Argentina – Location of Prospects
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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JORC Code, 2012 Edition – Table 1
Bennet Well Mineral Resource - December 2015
Section 1 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections.)
Part
Criteria
Explanation
Comment
1-1
Sampling
Techniques
Nature and quality of
sampling (e.g. cut
channels, random
chips, or specialised
industry standard
measurement tools
appropriate to the
minerals under
investigation, such as
downhole gamma
sondes, or handheld
XRF instruments etc.).
These examples should
not be taken as
limiting the broad
meaning of sampling.
The principal sampling method for all drilling conducted at the Bennet Well and
larger Yanrey projects has been by downhole geophysical gamma logging to
determine uranium assay and in-situ formation density data. Data collected at
1 cm sample rate comprised gamma ray (two calibrated sondes on two
separate sonde stacks), caliper, dual lateral resistivity, dual induction and triple
density. Downhole geophysical log data was collected by contractors, Borehole
Wireline Logging Services of Adelaide using GeoVista made downhole slim-line
tools.
Core samples were also collected for the diamond drilling conducted in 2013
and 2014 however these data have not been deemed as being representative
of the entire project area and have therefore not been used in the derivation
of the Exploration Target.
All uranium assay grade is determined from deconvolved gamma logs; using
non dead-time corrected calibrated gamma sondes, the consecutive
application of a smoothing and sharpening filter on the raw data, hole-size
correction, moisture correction, and a correction for secular disequilibrium.
All in-situ formation density estimated from data was collected by a triple
density probe; using calibrated density sondes from the three channels of the
probe (short spaced, long spaced and bed resolution density). These data were
corrected for the high background gamma environment of the mineralised
zone (by running the probe without the source in grades above 800 ppm
eU3O8) and for variations in hole-size by applying a hole-size correction model
derived from the AMDEL calibration facility.
Include reference to
measures taken to
ensure sample
representivity and the
appropriate calibration
of any measurement
tools or systems used.
Downhole gamma logging for the BW series drillholes was performed by
Borehole Wireline Pty Ltd using a Geovista 38mm total count gamma probe..
The data used to calibrate the gamma probes was collected by Duncan
Cogswell BSc, MSc who is a Member of the Australasian Institute of Mining and
Metallurgy. Duncan Cogswell is a full time employee of Borehole Wireline Pty
Ltd and has sufficient experience in the area of downhole gamma probe
calibration and borehole corrections. Calibration of two gamma sondes was
completed using non-dead-time corrected grade and hole-size correction
models, and for the density sonde using a density model and a hole-size
correction model.
Aspects of the
determination of
mineralisation that are
Material to the Public
Report.
Data was collected at 1 cm sample intervals down the length of the drillhole.
Uranium assay grades were determined from deconvolved gamma logs using
non dead-time corrected calibrated gamma sondes, the consecutive
application of a smoothing and sharpening filter on the raw data, hole-size
correction, moisture correction, and a correction for secular disequilibrium.
Downhole geophysical logging was undertaken by contractors, Borehole
Wireline Logging Services of Adelaide using GeoVista made downhole slim-line
tools.
Drilling
Drill type (e.g. core,
reverse circulation,
open-hole hammer,
Drilling within the Bennet Well – Yanrey project consists of various phases of
rotary mud, aircore and diamond core drilling conducted between 1979
(historical) and 2014 (CXU). All holes were drilled vertically. The breakdown of
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Explanation
Techniques
rotary air blast, auger,
Bangka, sonic, etc) and
details (eg core
diameter, triple or
standard tube, depth
of diamond tails, face-
sampling bit or other
type, whether core is
oriented and if so, by
what method, etc).
Comment
programs is as follows:
pre-2013: historical drilling consisting mostly of aircore, comprising
285 holes for a total of 29,065 m and rotary mud, consisting of 95
holes for 8,993 m .
2013: diamond core drilling comprising a total of 8 holes, consisting
of 356 m rotary mud pre-collars and 257 m of HQ diamond core
tails. The rotary mud pre-collars were drilled at a diameter of 5 ¼”
while the diamond core tails were drilled with triple-tube PQ
(diameter 83mm) in areas of hard drilling, and subsequently HQ
(61mm) when the target zone of mineralisation was intersected.
2014: approximately 90 % of the drill program was comprised of
rotary mud (diameter for a total of 67 holes (5,785 m), while 10%
consisted of triple tube diamond-drilled PQ core for a total of 6
holes (534m). The bore wall was stabilised by bentonite muds and
chemical polymers.
1-2
Drill Sample
Recovery
Method of recording
and assessing core and
chip sample recoveries
and results assessed.
Core processing for the 2013 and 2014 diamond drill programs involved
checking every run for accuracy on drilling blocks to identify areas of core
loss/gain that would then assist with determination of total core recovery.
Recoveries of core were measured inside the splits before transferring it to the
core trays. The measured recoveries were then logged in a database and later
used to determine recovery percentages. Average core recoveries for the 2013
and 2014 programs were 93.6% and 87.8%, respectively.
Measures taken to
maximise sample
recovery and ensure
representative nature
of the samples.
Sample recovery from mud rotary drilling is not required for assay, but during
the 2014 program a sample was collected in 1 m downhole increments and laid
out near the drill collar for use in logging the downhole lithology, redox state,
alteration and the stratigraphic sequence. A specimen sample of each
downhole increment for each drillhole remains on-site.
Sample recovery from the mud rotary drilling has never been recorded because
a physical sample is unnecessary for assay determination.
Triple tube PQ core has been determined as the most effective drilling method
(outside of potential use of sonic drilling) to maximize recovery of the mostly
unconsolidated interbedded sand and clay sequences hosting the
mineralisation. The 2013 and 2014 diamond core programs involved drilling
run lengths of 3.0 m outside of the target ore zone and then decreasing the run
length to 1.5, 1.0 and even 0.5 m on approach to and within the ore zone itself.
The short runs were found to achieve the best overall recovery.
Whether a relationship
exists between sample
recovery and grade
and whether sample
bias may have
occurred due to
preferential loss/gain
of fine/coarse
material.
Cauldron has not identified any relationship between sample recovery and the
determination of uranium assay from deconvolved gamma ray data.
Variations in uranium grade caused by changing drillhole size is minimised
through an accurate measurement of hole diameter using the caliper tool and
application of a hole-size correction factor. Hole-size correction models have
been determined by Borehole Wireline, using data collected at the PIRSA
calibration facility in Adelaide; with a hole-size correction factor derived as a
function of drillhole diameter.
1-3
Logging
Whether core and chip
samples have been
geologically and
geotechnically logged
to a level of detail to
support appropriate
Mineral Resource
estimation, mining
All mud rotary chips are geologically logged and used to assist in the
interpretation of the resistivity, induction and density profiles derived from the
downhole geophysical sondes. Uranium assay for a potential in-situ recovery
project requires mineralisation to be hosted in a porous sedimentary sequence
that is readily leachable, and is determined for the former geophysical data and
the mud rotary chips.
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Explanation
studies and
metallurgical studies.
Whether logging is
qualitative or
quantitative in nature.
Core (or costean,
channel, etc.)
photography.
The total length and
percentage of the
relevant intersections
logged.
Comment
The drill core was also geologically logged in greater detail than that
undertaken during the logging of the mud rotary chips. This information was
later used in a deposit-wide geological interpretation exercise and the
subsequent establishment of a working 3D exploration model that has also
been used in the derivation of the Exploration Target as well the planning and
design of the proposed work to test these Targets.
No geotechnical data was collected due to the generally flat-lying geology and
mostly unconsolidated sediments.
The geological logging completed was both qualitative (sediment/rock type,
colour, degree of oxidation, etc.) and quantitative (recording of specific depths
and various geophysical data).
The chip samples were sieved and photographed wet (lightly sprayed with
water) and dry. Selected half-core zones were also photographed by Core Labs
Australia, (Kewdale, W.A.), showing the cut and cleaned surfaces.
All mud rotary chip samples and core samples were geologically logged. All
drillholes from the 2013 and 2014 programs were logged with the downhole
geophysical probes.
1-4
Sub-Sampling
Techniques
and Sample
Preparation
If core, whether cut or
sawn and whether
quarter, half or all core
taken.
Most of the core from the 2013 program was cut on-site in half using an angle
grinder and chisels by the Site Geologist since the core was loosely
consolidated. More consolidated core was cut at Core Labs (Kewdale, W.A.)
using a diamond blade saw.
Core from the 2014 program was treated differently. Immediately after the
drilled core was measured and logged, the trays containing the target
mineralised zones would be separated from the ‘barren’ core. Core from the
mineralised zone were wrapped in cling-wrap and the whole trays were then
stored and transported within freezers for delivery to Core Labs, Kewdale W.A.
Drill core samples from both the 2013 and 2014 diamond core programs were
processed at Core Labs (during their respective exploration periods) and
selected intervals chosen for porosity/density and permeability testing (PdpK)
which involved the drilling of a half-inch length plug removed from the interval
of core.
Intervals were later selected for geochemical assay sampling which involved
the collection of half core for normal samples and quarter core as duplicate
(QAQC) samples. The geochemical assay results have not been used in the
calculations behind the derivation of the Exploration Target in this report and
therefore have not been included here.
After the sampling process, the surfaces of the remaining half-core intervals
were cleaned and smoothened by the use of very small, thin razor blades and
thin brushes (for the removal of the resulting dust and debris). This procedure
is part of the “slabbing” procedure routinely conducted by Core Labs. Once the
core was sufficiently cleaned, profile permeability measurements were taken
to establish amenability to the passage of fluids through the mineralised target
zones.
No mud rotary chip samples were collected for geochemical assay.
If non-core, whether
riffled, tube sampled,
rotary split, etc. and
whether sampled wet
or dry.
For all sample types,
the nature, quality and
appropriateness of the
sample preparation
Rotary mud drilling does not require a physical sample to assay nor would it
provide a sufficiently clean sample if there was a need for geochemical
assaying (because it involves an open hole with no control on contamination or
smearing of the sample between metres). However, this type of drilling does
allow the passage of geophysical probes which can derive assay for uranium
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Explanation
Comment
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technique.
mineralisation. A check against assay and density derived from gamma and
density probes, respectively, will be completed using physical sampling derived
from core drilled during the 2014 program.
Geochemical assays from the diamond core have not been used in the
derivation of the Exploration Targets. Sampling information will therefore not
be included here as it is deemed irrelevant for the purpose of this report.
Quality control
procedures adopted
for all sub-sampling
stages to maximise
representivity of
samples.
Two calibrated gamma probes run in separate stacks were utilised to derive
uranium assay from every hole. Assay from only one probe (the grade probe)
is used in grade determination; the alternate probe is used to check the result
derived from the grade probe. This cross-check is used to check if the correct
calibration models are applied to the data, and to ascertain potential spurious
results from a damaged probe or a probe that drifts out of calibration range.
Measures taken to
ensure that the
sampling is
representative of the in
situ material collected,
including for instance
results for field
duplicate/second-half
sampling.
Whether sample sizes
are appropriate to the
grain size of the
material being
sampled.
1-5
Quality of
Assay Data
and
Laboratory
Tests
The nature, quality and
appropriateness of the
assaying and
laboratory procedures
used and whether the
technique is considered
partial or total.
For geophysical tools,
spectrometers,
handheld XRF
instruments, etc., the
parameters used in
Geochemical assays from the diamond core have not been used in the
derivation of the Exploration Targets. Sampling information will therefore not
be included here as it is deemed irrelevant for the purpose of this report.
All holes drilled during the 2014 rotary mud / diamond core program were
assayed with two different calibrated gamma probes.
Geochemical assays from the diamond core have not been used in the
derivation of the Exploration Targets. Sampling information will therefore not
be included here as it is deemed irrelevant for the purpose of this report.
During the downhole logging process, the gamma and density probe used for
uranium assay determination and in situ density measurement is retracted past
in-situ material accessed by the drillhole. No sorting of sample by grain size
will occur under these conditions.
Cauldron used well known laboratories for geochemical assessment of the core
samples to ensure that all sample preparation including crushing and
pulverizing was suitable for the material being tested.
The profile permeability measurements were taken every 15 centimetres,
where possible, along the cut face of the remaining one-half core section,
throughout each of the 8 x drill core holes. The grain size of the sampled
material is therefore not relevant to the selection of sample points for this type
of analysis.
Samples selected for the porosity/grain and bulk density testwork were
trimmed, dried and cooled (see “Sampling Techniques” section) according to
standard Core Lab sampling procedures. Material grain size is also irrelevant to
the selection of samples for these testworks.
Borehole Wireline Logging Services have strict quality assurance procedures to
ensure tool reliability and tool calibration. Borehole Wireline has collected
recent data to allow calibration of the gamma, density and caliper probes, and
has supplied these data to Cauldron.
Provided appropriate correction factors and assay control, deconvolved
downhole gamma assay provide the best assay for uranium hosted in
unconsolidated sedimentary material, because of low sample quality derived
from RC drilling and potential low recovery from core drilling.
The PdpK technique is a well-used procedure throughout the oil and gas
industry and is widely used by Core Labs for many Petroleum companies
throughout the world. As such, this analytical method is usually considered to
result in a very accurate, representative and precise data set.
Deconvolved uranium grade from gamma logging comprises the following:
each gamma tool is calibrated for tool count (gamma scintillations)
against uranium response in the PIRSA calibration pits, Adelaide; using
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determining the
analysis including
instrument make and
model, reading times,
calibrations factors
applied and their
derivation, etc.
Nature of quality
control procedures
adopted (e.g.
standards, blanks,
duplicates, external
laboratory checks) and
whether acceptable
levels of accuracy (i.e.
lack of bias) and
precision have been
established.
The verification of
significant
intersections by
independent or
alternative company
personnel.
The use of twinned
holes.
1-6
Verification of
Sampling and
Assaying
Comment
the revised pit grades of Dickson 2012
hole size correction factor is applied; which is generated from the PIRSA
calibration pits, Adelaide; applied to every hole based on the measured
hole diameter of the drillhole
moisture correction factor of 1.11 is applied because of the difference in
dry weight uranium grade between the relatively dry calibration pits
compared to the saturated unconsolidated sediments that are host to
the deposit
disequilibrium factor of 1.07 is applied to all holes based on minimal
data that needs further analysis and quantification
Profile permeability was measured on the cut face of the remaining one-half
core section of each of the core holes using the PdpK TM 300 Profile
Permeameter. Measurements were made approximately every 15 centimetres,
where possible, along the core. A total of only 514 point measurements were
made from the 2013 program, as the core in each hole was in a very
deteriorated condition. The 2014 core samples submitted for PdpK testing
returned a total of 258 point measurements because of more constrained
sampling procedures in line with budgetary limitations.
Samples selected for porosity, grain and bulk density measurement were first
weighed and then processed through the Ultrapore TM 400 Porosimeter to
first determine Grain Volume, using a combination of Helium gas and
calculations involving Boyle’s Law. A calibration check plug was run after every
5th sample. Grain density data was subsequently calculated from the grain
volume and sample weight results.
Bulk volume data for each of the samples were obtained by the use of Mercury
displacement (using a Volumetric Displacement Pump) and Grain Volume data.
Dry bulk density data was subsequently calculated using these resulting bulk
volumes and the sample weights.
The porosity of each sample was finally calculated from the same dataset using
the bulk volume results and the grain volume data obtained at the beginning of
the process.
In every hole, duplicate deconvolved gamma assay data is derived from two
distinct probes and used to check for potential inaccuracy caused by electronic
malfunction of any probe at any possible time.
Core Labs, Perth, performed their own in-house calibration checks (such as
running the calibration check plugs every 5th sample on the Ultrapore 400
Porosimeter) and re-running samples through the respective machines, as part
of their quality control procedures.
Independent checks were completed on these data by Borehole Wireline;
which were cross-checked by Cauldron against deconvolved gamma grades
derived by Cauldron.
Eight core holes drilled in 2013 comprised a mix of twinned holes and new
exploration holes in geologically and mineralogically significant areas. The core
holes that served as twins were situated between 2.0 m to 10.0 m from the
original holes.
Documentation of
primary data, data
entry procedures, data
verification, data
storage (physical and
Data used to derive deconvolved gamma assay (depth, gamma reading and
caliper, tool ID, calibration ID) is stored in .LAS files (a common industry space
delimited format for downhole geophysical data) and viewed in WellCad (saved
as WellCad .WCL files) which is then later uploaded to SQL database. The
database and server is backed up regularly.
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electronic) protocols.
Preliminary and final PdpK data are stored as ‘.csv’ files on the Cauldron server
for future reference. All data is verified by senior personnel and then entered
into an in-house SQL database by a designated database consultant who
manages all data entry. All data is saved as electronic copies with server
backups completed.
Discuss any
adjustment to assay
data.
Profile permeability data is reported in units of milli Darcies or Darcies
A disequilibrium factor of 1.07 is applied to the gamma deconvolved grade to
account for secular disequilibrium as measured by ANSTO on limited samples
in 2007; and by the difference between wet chemical assay derived from core
and deconvolved assay derived from gamma logging as seen in the core drilling
completed in 2013. Spatial variations in secular disequilibrium in any orebody
is common; and can range from a value both greater and less than 1. More
work is required to map the variations in secular disequilibrium.
The calculations used to obtain the grain, bulk and porosity data, and the
respective reported units given to each data set, are as follows:
Grain density and volume: GD = W1/GV where: GD = Grain Density (grams per
cubic centimeter – g/cc) W1 = Weight of sample (grams - g) GV = Grain Volume
(cubic centimetres – cc)
Porosity: Ø = ((BV-GV)/BV) x 100 where: Ø = Porosity (percent - %) BV = Bulk
Volume (cubic centimetres – cc) GV = Grain Volume (cubic centimetres – cc)
Bulk Density: BD = W1/BV where: BD = Bulk Density (grams per cubic
centimeter – g/cc) W1 = Weight of sample (grams – g) BV = Bulk Volume (cubic
centimetres – cc)
1-7
Location of
Data Points
Accuracy and quality of
surveys used to locate
drill holes (collar and
down-hole surveys),
trenches, mine
workings and other
locations used in
Mineral Resource
estimation.
The method to locate collars is by a real-time kinematic GPS system having an
accuracy of plus or minus 0.5 m in the X-Y-Z plane, collected by qualified
surveyor, Phil Richards of MHR Surveyors, WA. The relative level is determined
from levelling to a grid derived from LIDAR survey having an RL accuracy of 0.2
m.
No downhole surveys were completed since all holes were drilled vertically and
the shallow drillhole depths relative to wide drill spacing would have minimal
effect on potential mis-position of mineralised intercepts.
Specification of the
grid system used.
The grid system used at the Bennet Well-Yanrey project area is MGA_GDA94,
Zone 50. All data is recorded using Easting and Northing and AHD.
Quality and adequacy
of topographic control.
The primary topographic control is from a high resolution LIDAR survey flown
in early 2015.
Spacing of holes drilled historically is variable between 30 and 200 m on
individual fence lines, and 50 m to 1,100 m between fence lines along strike.
Spacing of the core holes from the 2013 drilling program varied between 350 m
and 800 m within individual prospects.
The spacing of the drill holes from the 2014 program varied between 100 m
and 800 m within individual prospects.
The area occupied by the deposit is very large and therefore drill spacing has
always been variable.
1-8
Data Spacing
and
Distribution
Data spacing for
reporting of
Exploration Results.
Whether the data
spacing and
distribution is sufficient
to establish the degree
of geological and
grade continuity
appropriate for the
Mineral Resource and
Ore Reserve estimation
procedure(s) and
classifications applied.
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Whether sample
compositing has been
applied.
Downhole geophysical data was collected on 0.01 m increments; a running five
point average was subsequently applied to these data for the purposes of
reducing file storage sizes.
All downhole geophysical data was later composited to 0.50 m increments for
the purpose of block modelling for the revision of the mineral resource
estimate.
The only compositing undertaken for core thus far was conducted in 2013 in
relation to leach testing by ANSTO over a selected interval. A total of 34 and 10
assay pulp samples for YNDD018 and YNDD022 respectively were composited
to make the leach test samples. These results however have not been used in
the derivation of the Exploration Target supplied in this report.
All drill holes were drilled vertically since the sediments are mostly
unconsolidated and generally flat-lying. All holes therefore sample the true
width of mineralisation.
No sampling bias is observed by the orientation of the drill holes.
1-9
Orientation of
Data in
Relation to
Geological
Structure
Whether the
orientation of
sampling achieves
unbiased sampling of
possible structures and
the extent to which
this is known,
considering the deposit
type.
If the relationship
between the drilling
orientation and the
orientation of key
mineralised structures
is considered to have
introduced a sampling
bias, this should be
assessed and reported
if material.
1-10
Sample
Security
The measures taken to
ensure sample
security.
Chips collected from each rotary mud and aircore drill hole are stored securely
in a locked sea container at the Bennet Well Exploration Camp. Diamond drill
core from the 2008 and 2013 drill programs is also stored at a secure location
on the project site, in lockable sea containers.
If there is a requirement to transport core to Perth for sampling and assaying,
the following procedure is followed:
core is frozen, wrapped and stacked on pallets and strapped with
secure metal strapping;
A Ludlum Alpha/Gamma Surface meter is then used to measure the
concentration of alpha/gamma particles (if any) being emitted from
each of the pallets.
Pending the results of these surveys, and in accordance with the
Safe Transport of Radioactive Material (2008) guidelines issued by
the Australian Radiation Protection and Nuclear Safety Agency
(ARPANSA), the appropriate transport documentation was inserted
into the top layer of plastic pallet wrap in such a way as to be visible
to the transporter, if required.
Upon arrival at the desired destination in Perth, the core is finally
inspected by senior Cauldron personnel to check that sample
integrity has been maintained.
1-11
Audits or
The results of any
audits or reviews of
Cauldron’s Competent Person has verified all sampling techniques and data
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Reviews
sampling techniques
and data.
collection is of high standard and no reviews are required at this stage.
Section 2 Reporting of Exploration Results
(Criteria listed in the preceding section also apply to this section.)
Part
Criteria
Explanation
Comment
All drilling was completed, at various times, on exploration
tenements E08/1493, E08/1489, E08/1490 and E08/1501, which
are wholly owned by Cauldron.
A Native Title Agreement is struck with the Thalanyji Traditional
Owners which covers 100% of the tenements listed above.
These tenements are in good standing and Cauldron is unaware of
any impediments for exploration on these leases.
A 70 km long regional redox front and several palaeochannels
were identified by open hole drilling by CRA Exploration Pty Ltd
(CRAE) during the 1970s and early 1980s. CRAE drilled over 200
holes in the greater Yanrey Project area, resulting in the discovery
of the Manyingee Deposit and the identification of uranium
mineralisation in the Bennet Well channel and the Spinifex Well
Channel. Uranium mineralisation was also identified in the
Ballards and Barradale Prospects.
At least 15 major palaeochannels have been identified in the
greater Yanrey project area at the contact between the
Cretaceous aged marine sediments of the Carnarvon Basin and
the Proterozoic Yilgarn Block which lies along the granitic and
metamorphic ancient coastline.
These palaeochannels have incised the underlying Proterozoic-
aged granite and metamorphic rocks, which are subsequently
filled and submerged by up to 150m of mostly unconsolidated
sand and clay of Mesozoic, Tertiary and Quaternary age. The
channels sourced from the east enter into a deep north-south
trending depression that was probably caused by regional faulting
and may be a depression formed at the former Mesozoic-aged
coastline.
Refer to table below titled: “BW Extended Area and Yanrey
Regional Area - drilling intercepts, location”
2-1
Mineral Tenement
and Land Tenure
Status
Type, reference
name/number, location and
ownership including
agreements or material
issues with third parties such
as joint ventures,
partnerships, overriding
royalties, native title
interests, historical sites,
wilderness or national park
and environmental settings.
The security of the tenure
held at the time of reporting
along with any known
impediments to obtaining a
licence to operate in the
area.
2-2
Exploration Done
by Other Parties
Acknowledgment and
appraisal of exploration by
other parties.
2-3
Geology
Deposit type, geological
setting and style of
mineralisation.
2-4
Drill Hole
Information
A summary of all
information material to the
understanding of the
exploration results including
a tabulation of the following
information for all Material
drill holes:
Easting and northing
of the drill hole collar;
Elevation or RL
(Reduced Level –
elevation above sea
level in metres) of the
drill collar;
Dip and azimuth of the
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hole;
Down hole length and
interception depth;
Hole length
If the exclusion of this
information is justified on
the basis that the
information is not Material
and this exclusion does not
detract for the
understanding of the report,
the Competent Person
should clearly explain why
this is the case.
In reporting Exploration
Results, weighting
averaging techniques,
maximum and/or minimum
grade truncations (e.g.
cutting of high grades) and
cut-off grades are usually
Material and should be
stated.
Where aggregate intercepts
incorporate short lengths of
high grade results and
longer lengths of low grade
results, the procedure used
for such aggregation should
be stated and some typical
examples of such
aggregations should be
shown in detail.
The assumptions used for
any reporting of metal
equivalent values should be
clearly stated.
These relationships are
particularly important in the
reporting of Exploration
Results.
2-5
Data Aggregation
Methods
2-6
Relationship
Between
Mineralisation
Widths and
Intercept Lengths
Average reporting intervals are derived from applying a cut-off
grade of 150 ppm U3O8 for a minimum thickness of 0.40 m.
The length of assay sample intervals varies for all results,
therefore a weighted average on a 0.40 m composite has been
applied when calculating assay grades to take into account the
size of each interval.
The intervals quoted in Table 2 are derived by length weighted
averaging assay intervals greater than 0.4 m in width that have
assays above 150 ppm. A maximum internal dilution of 0.4 m was
used to aggregate a thin barren zone within bounding higher
grade material as long as the grade-thickness of the entire interval
was above cutoff (= 150 x 0.4).
No metal equivalents are used.
All drilling at Bennet Well is vertical. The recent 3D interpretation
and establishment of a mineralisation model has determined that
the uranium mineralisation dips very shallowly (no more than 2-
3°) to the west at Bennet Well East, yet at Bennet Well Central the
mineralisation is observed to follow the contours of the
underlying granitic basement.
The overall dip of the mineralisation in the Bennet Well Resource
Area could be described as sub-horizontal therefore, all
mineralisation values could be considered to be true width.
If the geometry of the
mineralisation with respect
to the drill hole angle is
known, its nature should be
reported.
The recent 3D interpretation and establishment of a
mineralisation model has determined that the uranium
mineralisation dips very shallowly (no more than 2-3°) to the west
at Bennet Well East, yet at Bennet Well Central the mineralisation
is observed to follow the contours of the underlying granitic
basement.
The overall dip of the mineralisation in the Bennet Well Resource
Area could be described as sub-horizontal therefore, all
mineralisation values could be considered to be true width.
If it is not known and only
the down hole lengths are
reported, there should be a
clear statement to this
effect (e.g. ‘down hole
length, true width not
The recent 3D interpretation and establishment of a
mineralisation model has determined that the uranium
mineralisation dips very shallowly (no more than 2-3°) to the west
at Bennet Well East, yet at Bennet Well Central the mineralisation
is observed to follow the contours of the underlying granitic
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known’).
basement.
2-7
Diagrams
Appropriate maps and
sections (with scales) and
tabulations of intercepts
should be included for any
significant discovery being
reported These should
include, but not be limited to
a plan view of drill hole
collar locations and
appropriate sectional views.
2-8
Balanced Reporting Where comprehensive
reporting of all Exploration
Results is not practicable,
representative reporting of
both low and high grades
and/or widths should be
practiced to avoid
misleading reporting of
Exploration Results.
Other exploration data, if
meaningful and material,
should be reported including
(but not limited to):
geological observations;
geophysical survey results;
geochemical survey results;
bulk samples – size and
method of treatment;
metallurgical test results;
bulk density, groundwater,
geotechnical and rock
characteristics; potential
deleterious or
contaminating substances.
The nature and scale of
planned further work (e.g.
tests for lateral extensions
or depth extensions or large-
scale step-out drilling).
2-9
Other Substantive
Exploration Data
2-10
Further Work
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Diagrams clearly
highlighting the areas of
possible extensions,
including the main
geological interpretations
The overall dip of the mineralisation in the Bennet Well Resource
Area could be described as sub-horizontal therefore, all
mineralisation values could be considered to be true width.
Included in this report
All drill locations are shown in Table 2; intercepts that are greater
than 150 ppm for at least 0.4 m in thickness.
Metallurgical sighter testing was completed by the Australian
Nuclear Science and Technology Organisation (ANSTO) for the
diamond core drilled in 2013, with further testing planned for
core drilled in 2014.
Geochemical assaying was also completed for the diamond core
from both 2013 and 2014.
These data however have not been used in the derivation of the
Exploration Targets reported here. Sampling information will
therefore not be included here as it is deemed irrelevant for the
purpose of this report.
The core obtained from recent drilling will provide samples for
density and profile permeability testing and geochemical assay;
with further metallurgical characterisation. The former physical
and chemical characterisation testing will be used to cross-check
the data collected by the downhole geophysics system, the latter
metallurgical testing will expand on the core work completed in
2013.
The aims of proposed metallurgical work include: characterisation
of the modal mineralogy of mineralisation using QEMSCAN/SEM
or similar; quantification of the elemental composition of
mineralisation and host sequences; quantify the degree of secular
disequilibrium; test for the presence and behaviour of organic
material, carbonate material or pyrite that may affect efficiency of
leaching; further test the leach performance of mineralisation in
acid and in alkali/carbonate media.
Further core and mud rotary drilling to improve the Mineral
Resource category of the Bennet Well deposit. Further
exploration drilling is required to identify extensions to
mineralisation.
Plans and sections have been included in this report.
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and future drilling areas,
provided this information is
not commercially sensitive.
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Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in Section 1, and where relevant in Section 2, also apply to this section.)
Part
Criteria
Explanation
Comment
3-1
Database Integrity
Measures taken to ensure
that data has not been
corrupted by, for example,
transcription or keying
errors, between its initial
collection and its use for
Mineral Resource
estimation purposes.
Downgole gamma probe data collected in-field was processed by
Mr David Wilson (Principal Consultant - 3D Exploration Ltd –
Adelaide) and directly input by Cauldron personnel into a
database. Ravensgate received the data from Cauldron Energy
Limited in Microsoft Access Database files. There has been at least
three recent reviews and revision of the database carried out
through normal updates of data and these updates were loaded
and reviewed as part of ongoing lithological modelling carried out
by Cauldron primarily using Micromine Software. Ravensgate
transferred the radlog data and lithological unit modelling data
completed by Cauldron data into an interim Microsoft Access and
MineSight® databases for internal review. Validated data was
combined into a single database before loading into MineSight®
prior to block model construction and resource estimation.
Data validation procedures
used.
Suitable care and diligence was employed when entering all older
and new data into project working databases.
3-2
Site Visits
Comment on any site visits
undertaken by the
Competent Person and the
outcome of those visits.
Ravensgate completed a check of the databases as was possible
for missing coordinates, duplicate assay, collar, geology and
survey intervals, duplicated drill holes and missing assays and
surveys. A visual validation was undertaken by displaying the data
in 3D on computer screen using MineSight® geological modelling
software.
A site visit to the Bennet Well Areas has not yet been conducted
by Ravensgate. Ravensgate is satisfied that given the early stage
of resource development at the Yanrey Project, only limited
additional benefit will be derived from a site visit at this stage. The
project area terrain is relatively flat and featureless with little in
the way of outcrops or related geology features evident. Drill
sites, and evidence of drilling operations and sampling operations
are evident from selected photos observed of the site.
If no site visits have been
undertaken indicate why
this is the case.
A site visit by Ravensgate personnel has not yet been carried out
with respect to recent resource-estimate. The exploration
manager of Cauldron has visited the site recently in Nov 2015. A
site visit by Ravensgate is anticipated in the near future when new
drilling program commences.
3-3
Geological
Interpretation
Confidence in (or
conversely, the uncertainty
of) the geological
interpretation of the
mineral deposit.
The confidence in the geological interpretation is good. The
geological setting has been clearly established as a basinal and
palaeochannel scoured granite basement constrained sediment
hosted environment with uranium deposited through hydro-
geochemical uranium deposition in oxidising conditions.
From within the channel, the uranium moves through adjacent
sand units and even smaller sand lenses within some of the
terrestrial swamp units. The uranium-rich fluids meet with
changing chemical conditions caused by the presence of reduced
material such as pyrite, wood fragments, reduced lignitic clays,
where the uranium is caused to precipitate.
The transport pathway for the uranium is not just confined to one
lithological unit. The uranium can move from one unit to
surrounding units if there are permeable zones that will allow this
to happen. Most of the uranium seen at Bennet Well East is
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located within about four main units that are all connected by
permeable zones.
Nature of the data used
and of any assumptions
made.
No assumptions on the historic data have been made except that
whilst it is not now directly verifiable, is still represents cumulative
data for the area.
The effect, if any, of
alternative estimation
interpretations on Mineral
Resource estimation
The use of geology in
guiding and controlling
Mineral Resource
estimation.
The factors affecting
continuity both of grade
and geology.
Cauldron has subsequently carried out recent Mud Rotary, Air-
Core and Diamond Drilling programs that have gone towards
verifying and confirming the general tenor of the historic project
development work.
The Bennet Well deposit areas are close to horizontally disposed
with only very minor dipping typically of less than 2-3 degrees
observed locally with some minor undulating in geometry evident.
The lithological units are interpreted for have distinct boundaries
based on an extensive drill-logging data-set. The lithological units
and their material type composition primarily define the position
and relative size of the uranium mineralised domains. The
exploration programs carried out at the Bennet Well areas
comprise a reasonably large drilling data-set which is adequate to
clearly outline the majority of the mineralisation geometries. It is
unlikely an alternative mineralisation geometry interpretation
could depart significantly from the interpretation arrived at to
date.
Experience modelling similar sediment hosted and
stratigraphically controlled deposits was utilised in guiding and
controlling the estimation. The mineralised envelopes for were
based on a nominal minimum range of 125-150 ppm eU3O8
(deconvolved gamma with disequilibrium factor) lower cut-off
and were appropriated using maximum of +/-0.8 m internal
dilution definition threshold.
The mineralised zone wireframes were only extrapolated to
distances approximately equivalent to half of a typical drill-grid
section spacing (or slightly less) used at Bennet Well East, Central
and South.
Palaeochannel basement scour features are interpreted to affect
the geology and therefore uranium grade at the local scale. In
addition the stratigraphic sequence and composition of the
various sediment units also affects uranium mineralisation
distribution. The uncertainties caused by these factors will have
only a small impact on the global resource estimates at this stage
of project development. More closely spaced drilling will be
required in the future to define the short range variability of the
mineralisation. For the resource classification levels derived for
this report these factors been adequately addressed via the
resource estimation process applied.
3-4
Dimensions
The extent and variability
of the Mineral Resource
expressed as length (along
strike or otherwise), plan
width, and depth below
surface to the upper and
lower limits of the Mineral
Resource.
Bennet Well East – Main Zone is approximately 3000 m along
strike – Grid Azimuth 330-345 degrees (North-South) by 1100m
perpendicular to strike (East-West). Individual lithological units
within this area typically vary between 2m and 10m in thickness.
Bennet Well Central – Main Zone is approximately 4200m along
strike - Grid Azimuth 320-335 degrees (North-South) by 2200m
perpendicular to strike (North-South). Individual lithological units
within this area typically vary between 2m and 20m in thickness.
Bennet Well South – Main Zone is approximately 2900m along
strike Grid Azimuth 330-340 degrees (North-South) by 500-1000m
perpendicular to strike (East-West). Individual lithological units
within this area typically and vary between 2m and 20m in
thickness.
Bennet Well Deep South – Main Zone is approximately 500m
along strike Grid Azimuth 330-335 degrees (North-South) by 500-
700m perpendicular to strike (East-West). Individual lithological
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3-5
Estimation and
Modelling
Techniques
The nature and
appropriateness of the
estimation technique(s)
applied and key
assumptions, including
treatment of extreme
grade values, domaining,
interpolation parameters
and maximum distance of
extrapolation from data
points. If a computer
assisted estimation
method was chosen
include a description of
computer software and
parameters used.
The availability of check
estimates, previous
estimates and/or mine
production records and
whether the Mineral
Resource estimate takes
appropriate account of
such data.
units within this area typically and vary between 2m and 5m in
thickness.
The most current interpretation of the mineralisation units that
have been formed within the overall marginal marine
environment, in conjunction with the interpreted uranium
mineralisation distribution (based on a nominal minimum range of
125-150 ppm U3O8 deconvolved (deconvolved gamma with
disequilibrium factor) cut-off has been used to interpret and
construct wireframes of mineralisation within the Main Bennet
Well Area. These have been allocated ZON1 (zone) code numbers
for modelling use and have been designated as ZON1=1-BWGSD,
2-BWMAINA1, 3-BWMAIND1, 4-BWMAINA2, 5-BWMAINB1,
6-BWMAINC1, 7-BWMAINE1, 8-BWBASAL1.
Grade estimation using ordinary kriging was completed for one
main reportable element item; DSEQ1 for eU3O8 deconvolved
gamma with disequilibrium factor. Drill hole downhole gamma
probe radlog data (DSEQ1) was flagged using domain codes
generated from 3D mineralisation domains and geological
surfaces.
Radlog data was composited per DSEQ1 item element to 0.4m
downhole lengths within the major lithological units. There were
no residual composites using the lithological coding approach.
Intervals without assays were excluded and designated with null
values as determined from the compositing routine. The
influence of extreme grade values were examined utilising top
cutting analyst tools (grade histograms; log probably plots and
coefficients of variation) on a detailed ZON1 designation basis.
The grade / cut-off distance restriction regime utilised during
interpolation to limit the influence of very high grade outliers for
Bennet Well was set at varying cut-off thresholds depending on
ZON1 designation of 400-4,400 ppm eU3O8 (Deconv) (deconvolved
gamma with disequilibrium factor). The distance of outlier
restriction for the main Bennet Well zones was set at a spherical
160 m.
Grade continuity for each zone (lithological unit) was measured
using geostatistical techniques. Directional variograms were
modelled using traditional and co-variance transformation
variograms. Nugget values for all elements were observed to
range from moderate through to high depending on zone
designation. Estimation search ellipsoids were also defined
according to the local geometry orientation as defined by an
additional AREA domain code. The main Bennet Well (ZON1=1-8),
Bennet Well Central (ZONE=5-8),Bennet Well South (ZONE=9-12)
and Bennet Well Deep South (ZONE=13-15),mineralisation
domains were interpreted and treated from a modelling
perspective as a ‘continuous mineralisation event’.
No previous economic mining activity has taken place within the
Bennet Well Areas. A previous set of resource estimates for the
Bennet Well Areas and have been undertaken in the past.
An early JORC (2004) Mineral Resource Estimate carried out by
Ravensgate at a 150ppm eU3O8 lower cut-off was:
Bennet Well All Areas Inferred Resource - 26,707Mt @
267 ppm U3O8 (DisEq).
A more recent subsequent JORC (2012) Mineral Resource
Estimate carried out by Ravensgate (September 2014) at a
150ppm eU3O8 lower cut-off was:
Bennet Well All Areas Combined Indicated and
Inferred Resource – 32.4Mt @ 260 ppm U3O8 (DisEq) Comprised
of Indicated Resource - 9.4Mt @ 300 ppm U3O8 (DisEq) and
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Inferred Resource - 23.0Mt @ 240 ppm U3O8 (DisEq) A previous
early stage mineral resource estimate for the Bennet Well Central
Area only was carried out by Hellman & Schofield (H&S) during
May 2008. At the time, the drilling density was a nominal 100m by
100m in the resource area. H&S also utilised Ordinary Kriging and
composited to 0.5 metre downhole lengths however no capping
or cutting of outlier values was used possibly leading
inadvertently to elevated resource estimated tonnages and
grades.
H&S reported an Inferred Mineral Resource under
the JORC 2004 Code of 7.296Mt at a cut-off of 150ppm eU3O8 an
average grade of 296ppm eU3O8 (DisEq).
The Yanrey Project is not expected to produce excess or saleable
by-products.
No significant deleterious elements have been identified or
reported to date.
Multiple interpolation runs and search passes depending on ZON1
and / or AREA domain were used for interpolation of grade into
the 20mN by 15mE by 0.4mRL blocks. Each Area domain for
ZON1=1 to ZON1=8 and AREA=1 to AREA=7 based on observed
mineralisation orientation and were treated as hard boundaries.
The main ZON1 (mineralised unit) domains were treated as hard
boundaries.
The assumptions made
regarding recovery of by-
products.
Estimation of deleterious
elements or other non-
grade variables of
economic significance (eg
sulphur for acid mine
drainage characterisation).
In the case of block model
interpolation, the block
size in relation to the
average sample spacing
and the search employed.
Any assumptions behind
modelling of selective
mining units.
No firm selective mining units have been assumed particularly
given an in-situ recovery extraction technology is to be
considered.
Any assumptions about
correlation between
variables.
No statistical analysis was undertaken to determine the
relationship between U3O8 and any minor analytical elements as
no significant element correlation factors have been identified as
being critical.
Description of how the
geological interpretation
was used to control the
resource estimates.
Discussion of basis for
using or not using grade
cutting or capping.
The process of validation,
the checking process used,
the comparison of model
data to drill hole data, and
use of reconciliation data if
available.
All blocks within the mineralisation wire-frame were estimated.
Mostly Hard, boundaried were used for the major designated
mineralized lenses (ZON1=1-8.
Statistical analysis showed the populations in the main ZON1=1-
16 domains to generally have moderate, ranging to high,
coefficients of variation. Therefore, a moderated grade / cut off
and associated distance restriction regime was applied during
kriging interpolation individually on a zone by zone basis.
Model validation was carried out graphically and statistically to
ensure that the block model grades accurately represent the input
drill-hole data. A number of methods were employed to validate
the block model including:
Global mean comparison;
Visual comparison, and
Bench trend plot comparison.
The global mean comparison between drill composite grades and
model grades within each of the mineralised zone wireframes for
the eU3O8 item shows that, globally, the estimates compare
favourably within all the well drilled parts of the main mineralised
domain. Some localised bench variations are observed with the
bench trend plots. These areas of variation are due to the
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3-6
Moisture
3-7
Cut-off Parameters
Whether the tonnages are
estimated on a dry basis or
with natural moisture, and
the method of
determination of the
moisture content.
The basis of the adopted
cut-off grade(s) or quality
parameters applied.
3-8
Mining Factors or
Assumptions
Assumptions made
regarding possible mining
methods, minimum mining
dimensions and internal
(or, if applicable, external)
mining dilution.
3-9
Metallurgical
Factors or
Assumptions
The basis for assumptions
or predictions regarding
metallurgical amenability.
inherent bench variability and non-stationarily of the analytical
deconvolved eU3O8 data.
Cross sections were viewed on-screen and showed a good
comparison between the drill hole data and the block model
grades. A volume comparison between the volume of the block
model cells within each mineralised zone and the volume of the
corresponding wireframe was carried out to ensure coding
methods were within acceptable limits.
The tonnages are estimated on a dry basis; and has been
reviewed by Mr David Wilson who suggested using a conservative
average porosity of factor of 30% for current resource estimation
purposes until more definitive in-situ data is acquired.
A nominal cut-off range of 125-150 ppm eU3O8 (deconvolved) in
conjunction with lithological logging was used to define the
mineralised envelopes based on a visual significant change of
mineralisation distribution and to some extent some localised
population statistics thresholds. A financial model completed by
Cauldron using the Ravensgate September 2014 Mineral Resource
estimate and widely published production costs for in-situ
recovery operations has shown that 125 ppm eU3O8 is
economically viable at a uranium sale price of $US45/lb. The use
of a lower cutoff of 150 ppm eU3O8 is therefore justified.
No previous mining other or mineral extraction other than the
recent program of exploration and resource model development
has taken place; therefore no reconciliation data is available.
Future Mining or mineral extraction at the Bennet Well deposit
areas 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.
Minor metallurgical test work has been completed for Bennet
Well Area samples. The results suggest that the uranium
mineralisation is readily soluble in either acid or alkali/carbonate
leaching solution returning greater than 95% extraction in either
leaching media. Acid and alkali/consumption were both very low.
Cauldron plans more detailed test work in the future with the aim
of identifying and optimising the best processing route for the
production of high grade yellowcake.
3-10
Environmental
Factors or
Assumptions
3-11
Bulk Density
Assumptions made
regarding possible waste
and process residue
disposal options.
It has been assumed that there are no significant environmental
factors which would prevent the eventual economic extraction of
uranium from the Bennet Well deposit areas. Environmental
surveys and assessments will form a part of future prefeasibility
study.
Whether assumed or
determined. If assumed,
the basis for the
assumptions. If
determined, the method
used, whether wet or dry,
the frequency of the
measurements, the nature,
size and
representativeness of the
samples.
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
drilling available at the time from within the Bennet Well Central
Area. A total of 62 samples have been measured predominantly
on the main highest grade mineralised (more sandy) units
accounting for the porosity and permeability where porosity
ranges from 26.7% to 42.7% with an average of 34.0% have been
observed. When considered in conjunction with the geology, the
porosity data indicates the presence of confining lithologies such
as interbedded sandstones and clays. The inherent porosity levels
observed suggest that the eU3O8 mineralisation at Bennet Well
mineralisation is amenable to In-Situ Recovery (‘ISR’) although
additional test work will be required to confirm the mining and
processing techniques. Mr David Wilson has considered and used
a conservative average porosity of 30% which derives a
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Criteria
Part
Explanation
Comment
conservative value of 1.74t/m3 for bulk density used in this
current August 2014 resource estimation.
This average bulk density value, was applied to all the block model
cells within the appropriate zone using a direct code approach.
As per above, the estimated bulk density used for resource
estimation has been measured by techniques that have
adequately considered and account for void space.
The bulk density for bulk
material must have been
measured by methods that
adequately account for
void spaces (vugs, porosity,
etc), moisture and
differences between rock
and alteration zones within
the deposit.
Discuss assumptions for
bulk density estimates
used in the evaluation
process of the different
materials.
It is acknowledged there may be minor differences in bulk
densities locally and between different material mineralised unit
types (ie high sand content versus high silt / mud content). There
is further work to be carried out in the future to resolve sandy
bulk density variations with higher resolution.
3-12
Classification
The basis for the
classification of the
Mineral Resources into
varying confidence
categories.
Whether appropriate
account has been taken of
all relevant factors (ie
relative confidence in
tonnage/grade
estimations, reliability of
input data, confidence in
continuity of geology and
metal values, quality,
quantity and distribution
of the data).
Whether the result
appropriately reflects the
Competent Person’s view
of the deposit.
Estimation parameters including kriging variance, number of
composites informing the interpolated block and distance of block
centroid from nearest drill-hole were considered during the
classification process. These parameters were condensed into a
‘quality of estimate’ (QLTY) item which was used as a starting
basis for decisions relating to resource classification. This was
further condensed into a RCAT (resource reporting item) derived
after consideration of additional resource estimation ‘modifying
factors’.
The input data is comprehensive in its coverage of the
mineralisation and does not favour or misrepresent in-situ
mineralisation. The mineralisation within the different units at
the Bennet Well Areas are contained in a stratigraphically defined
horizontally disposed series of lithological units with varying
amounts of internal eU3O8 mineralisation.
The definition of the mineralised zones was relatively constant
from section to section and based on a good level of geological
understanding producing a robust model of mineralised domains.
The validation of the block model shows relatively good
correlation of the input data to the estimated grades.
The Mineral Resource estimate appropriately reflects the view of
the Competent Person.
3-13
Audits or Reviews.
The results of any audits or
reviews of Mineral
Resource estimates.
Resource model data has been internally reviewed by Cauldron
using a parallel estimation and similar verification estimation
technique, No external reviews or audits of the resource
estimation have been undertaken at this stage.
3-14
Discussion of
Relative Accuracy /
Confidence
Where appropriate a
statement of the relative
accuracy and confidence
level in the Mineral
Resource estimate using an
approach or procedure
deemed appropriate by the
Competent Person.
The relative accuracy of the Mineral Resource estimate is
reflected in the reporting of the Mineral Resource into the
Inferred categories as per the guidelines of the JORC Code 2012.
Less than 10% of the inferred material for the Bennet Well Area
deposits has been extrapolated.
Preparation of Section 3 of JORC - Table 1 has been undertaken by
Ravensgate; a consultancy which is fully independent from
Cauldron. Preparation of this report has incorporated a previous
peer review process as part of Ravensgate’s QA procedures. This
report has included an independent QA/QC review of the drill
data collected by Cauldron.
The statement should
This statement relates to both global and local estimates of
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Criteria
Part
Explanation
Comment
tonnes and grades.
No production data is available as no mining has taken place.
specify whether it relates
to global or local
estimates, and, if local,
state the relevant
tonnages, which should be
relevant to technical and
economic evaluation.
These statements of
relative accuracy and
confidence of the estimate
should be compared with
production data, where
available.
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.
7.
SUBSEQUENT EVENTS
As detailed above, on 5 July 2016, the Company recovered $488,000 (after $20,455 Receiver costs) of the Guangzhou City
judgment debt from sale of Shares by Receiver. The Shares were sold to investors who have agreed to a six-month escrow
period in respect of the Shares. On 5 July 2016, 33,898,318 fully paid ordinary Shares were escrowed.
No other 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.
8.
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
Class of Shares
Exercise
Price
Number of
Options
Expiry Date
Listed /
Unlisted
20 October 2014
9 November 2015
29 March 2016
Ordinary
Ordinary
Ordinary
$0.138
$0.138
$0.138
16,000,000
8,000,000
20,000,000
31 December 2016
31 December 2016
31 December 2016
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 2016 there were 3,000,000 ordinary shares issued for $414,000 consideration as a result of
the exercise of options (2015: nil).
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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
There was one directors meeting held during the year and all but one of the directors in office at the time were in
attendance (Mr Gwynne). 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 2016 has been received and is included on page 50 of
the annual report.
14.
REMUNERATION REPORT (AUDITED)
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 2016.
KEY MANAGEMENT PERSONNEL
Key Managnement Personnel includes:
Antony Sage (Executive Chairman)
Qiu Derong (Non-executive Director)
Judy Li (Non-executive Director)
Mark Gwynne (Non-executive Director)
Catherine Grant (Company Secretary and Chief Financial Officer)
Jess Oram (Exploration Manager)
Simon Youds (Head of Operations) (terminated 10 February 2016)
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.
During the year, the Company did not have a separately established remuneration committee. The Board is responsible for
determining and reviewing remuneration arrangements for the executive and non-executive directors. The Board assesses
the appropriateness of the nature and amount of remuneration of such officers on a yearly basis by reference to relevant
employment market conditions with the overall objective of ensuring maximum stakeholder benefit from retention of a
high quality board.
The board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. The executive director determines payments to the non-executive directors and reviews
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.
Shareholders approved the maximum total aggregate fixed sum per annum to paid to non-executive directors be set at
$750,000 at the 2015 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.
REMUNERATION REPORT AT 2015 AGM
The 2015 remuneration report received positive shareholder support at the 2015 Annual General Meeting whereby of the
proxies received 96.1% voted in favour of the adoption of the remuneration report.
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COMPANY PERFORMANCE, SHAREHOLDER WEALTH AND DIRECTORS AND EXECUTIVES’ REMUNERATION
Below is a table summarizing key performance and shareholder wealth statistics for the Consolidated Entity over the last
five financial years.
Financial Year
Profit / (Loss) after tax
$
Profit / (Loss) per share
(cents)
Share Price
(cents)
30 June 2012
30 June 2013
30 June 2014
30 June 2015
30 June 2016
(380,737)
(7,896,865)
(3,944,234)
(6,712,800)
(3,978,324)
(0.40)
(5.16)
(2.30)
(2.91)
(1.49)
16.5
10.0
36.0
11.0
6.6
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 2016 and 30 June 2015:
30 JUNE 2016
SHORT-TERM BENEFITS
POST EMPLOYMENT
SHARE-BASED
PAYMENTS
OPTIONS
TOTAL
Remuneration
share based
payment
Salary,
Fees &
Leave
120,000
36,000
36,000
36,000
228,000
104,310
210,000
193,000
507,310
735,310
Directors (i)
Anthony Sage (ii)
Qiu Derong (iii)
Judy Li (iv)
Mark Gwynne (v)
Other KMP
Simon Youds (vi)
Catherine Grant (vii)
Jess Oram (viii)
TOTAL
Other
Non-
Monetary
Super-
annuation
Retirement
Benefits
$
$
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,000
18,335
37,335
37,335
-
-
-
-
-
-
-
-
-
-
244,412
-
-
-
244,412
188,010
125,340
62,670
376,020
364,412
36,000
36,000
36,000
472,412
292,320
354,340
274,005
920,665
620,432
1,393,077
67%
-
-
-
52%
64%
35%
23%
41%
45%
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 (ix)
Anson Huang (x)
Amy Wang (xi)
Other KMP
Simon Youds (vi)
Catherine Grant (vii)
Jess Oram (viii)
TOTAL
Other
Non-
Monetary
Super-
annuation
Retirement
Benefits
$
$
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,000
16,760
35,760
35,760
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
-
-
-
-
-
-
-
-
-
-
-
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 2016
(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. With effect
from 1 July 2016, Mr Sage is entitled to a fee of $240,000 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.
The consultancy contract between the Company and Mr Simon Youds was terminated 10 February 2016. Up
until this date, Mr Youds was engaged as Cauldron’s Head of Operations, and is included in the Company’s Key
Management Personnel. Mr Youds was 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 other non-related entities during the year (2016:
$54,000) (2015: $59,750).
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.
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.
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.
ADDITIONAL DISCLOSURE RELATING TO OPTION HOLDINGS AND SHARE HOLDINGS
OPTION HOLDINGS OF KEY MANAGEMENT PERSONNEL
30 JUNE 2016
Directors
Antony Sage
Qiu Derong (i)
Mark Gwynne
Other KMP
Simon Youds
Catherine Grant
Jess Oram
Balance
1 July 2015
3,900,000
3,000,000
500,000
3,000,000
2,000,000
1,000,000
13,400,000
Granted
Exercised
Lapsed
Other
Balance
30 June
2016
Vested and
Exercisable
30 June 2016
Un-exercisable
30 June 2016
-
-
-
-
-
-
-
-
-
-
(3,900,000)
(3,000,000)
(500,000)
-
8,000,000
-
-
8,000,000
-
-
8,000,000
-
(3,000,000)
-
-
(3,000,000)
-
(2,000,000)
(1,000,000)
(10,400,000)
-
-
-
8,000,000
-
-
-
8,000,000
-
-
-
8,000,000
-
-
-
-
-
-
-
(i)
During the year Mr Qiu Derong received 16,000,000 unlisted options (8,000,000 unlisted options exercisable at
$0.118 which expired 31 December 2015; and 8,000,000 unlisted options at $0.138 expiring 31 December 2016).
These options were issued in accordance with a placement agreement between the Company and Mr Qiu. As
Mr Qiu did not receive these options in his capacity as a key management personnel, they have not been
disclosed as such in the above table.
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VALUE OF OPTIONS AWARDED, EXERCISED AND LAPSED DURING THE YEAR
30 JUNE 2016
Directors
Antony Sage
Qiu Derong
Mark Gwynne
Other KMP
Simon Youds (i)
Catherine Grant
Jess Oram
30 JUNE 2015
Directors
Antony Sage
Brett Smith
Other KMP
Simon Youds
Catherine Grant
Jess Oram
Value of options
granted (ii)
$
Value of options
exercised during the
year
$
Value of options
lapsed during the
year
$
-
-
-
-
-
-
-
-
-
(54,000)
-
-
607,046
230,801
77,826
-
311,306
155,563
Value of options
granted (iii)
$
607,046
77,826
466,959
311,306
155,653
Value of options
exercised during the
year
$
Value of options
lapsed during the
year
$
-
-
-
-
-
-
-
51,540
29,206
-
(i)
(ii)
(iii)
During the year, Mr Youds exercised 3,000,000 options at $0.138 for $414,000 consideration. The share price on
the date of exercise was $0.12, translating to a market value of $360,000. The net position of the market value
and the consideration on exercise of the options is negative $54,000.
There were no options granted as remuneration during the year ended 30 June 2016.
Relates to the total value of options granted during the year ended 30 June 2015.
SHARES ISSUED ON EXERCISE OF OPTIONS
30 JUNE 2016
Shares issued
Paid per share
Unpaid per share
Other KMP
Simon Youds
3,000,000
$0.138
-
No.
$
$
There were no options exercised during the year ended 30 June 2015.
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SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
30 JUNE 2016
Directors
Antony Sage
Qiu Derong (i)
Mark Gwynne
Other KMP
Simon Youds (ii)
Catherine Grant
Balance
1 July 2015
Issued
Received on
exercise of
options
Net Change
Other
Balance
30 June 2016
5,894,600
30,595,532
100,000
1,172,864
8,888
37,771,884
-
-
-
-
-
-
-
-
-
-
16,949,178
-
3,000,000
-
3,000,000
(4,172,864)
-
12,776,314
5,894,600
47,544,710
100,000
-
8,888
53,548,198
(i)
16,949,178 shares were issued in in accordance with a placement agreement for $2,000,000, as approved by
shareholders at the AGM held 9 November 2015.
(ii)
At the date of termination 10 February 2016, Mr Youds held 4,172,864 shares.
LOANS WITH KEY MANAGEMENT PERSONNEL AND THEIR RELATED PARTIES
There were no loan made to Cauldron Energy by directors and entities related to them during the year ended 30 June
2016. Details regarding loan arrangements in the year ended 30 June 2015 are as follow:
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
-
-
(674,851)
(674,851)
5,495
5,445
11,813
22,753
(218,443)
(216,477)
-
(434,920)
-
-
-
-
30 June 2015
Cape Lambert Resources Limited (a)
Mr Qiu Derong (a)
Cape Lambert Resources Limited (b)
TOTAL
(a)
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.
(b)
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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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
Okewood Pty Ltd
Okewood Pty Ltd
2016
2015
2016
2015
2016
2015
-
-
-
-
-
-
2,500
18,318
238,422
390,044
28,523
30,975
-
-
-
-
-
-
-
-
6,066
5,119
-
-
* Amounts are classified as trade receivables and trade payables, respectively.
Mr Sage is a director of Fe Limited, Cape Lambert Resources Limited, and Okewood Pty Ltd.
End of Audited 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:
2016
$
2015
$
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
26 August 2016
49
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 2016, 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, 26 August 2016
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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 2016
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 2016 (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 2016
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Note
3(a)
3(b)
26
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
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 / (loss) for the year
after income tax
2016
$
2015
$
7,375
1,233,829
(126,301)
(493,892)
(228,000)
(1,190,727)
(254,884)
(263,616)
(510,997)
(133,333)
(67,733)
(118,105)
-
(154,476)
-
-
(1,677,464)
6,352
(396,348)
(457,145)
(437,312)
(239,512)
(1,972,026)
(121,883)
(564,306)
(412,100)
(52,752)
(198,166)
(9,012)
(4,148)
(124,625)
(22,634)
(12,567)
(1,694,616)
(3,978,324)
(6,712,800)
-
-
(3,978,324)
(6,712,800)
-
-
(147,995)
(147,995)
3,292
3,292
Total comprehensive loss attributable to members of the
Company
(4,126,319)
(6,709,508)
Loss per share for the year attributable to the members of
Cauldron Energy Ltd
Basic earnings/(loss) per share (cents per share)
Diluted earnings/(loss) per share (cents per share)
19
19
(1.49)
(1.49)
(2.91)
(2.91)
The above consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
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Annual Report 2016
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
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
Exploration and evaluation expenditure
Property, plant and equipment
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Subscription funds
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
24(b)
9
7
8
11
12
13
14
15
16
17
18
2016
$
2015
$
2,808,356
-
128,345
1,103,046
1,216,478
1,714,932
136,013
419,667
4,039,747
3,487,090
9,227,557
286,850
10,204,649
442,356
9,514,407
10,647,005
13,554,154
14,134,095
463,496
-
67,344
840,757
1,714,932
33,500
530,840
2,589,189
530,840
2,589,189
13,023,314
11,544,906
52,443,486
4,315,809
(43,735,981)
48,029,486
3,273,077
(39,757,657)
13,023,314
11,544,906
The above consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
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Annual Report 2016
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
Note
2016
$
2015
$
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
(1,494,659)
6,295
(2,409,873)
6,697
Net cash used in operating activities
24(a)
(1,488,364)
(2,403,176)
Cash Flows from Investing Activities
Payments for exploration and evaluation
R&D Tax Incentive received
Payments for plant and equipment
Acquisition of equity investments
Proceeds from sales of equity investments
Refund of environmental bonds and deposits
Funding provided to Caudillo Resources SA
Repayment from Caudillo Resources SA
Funding provided to Black Mountain Resources Limited
(2,615,958)
1,649,378
-
(44,512)
54,650
-
(88,336)
51,862
(50,000)
(3,928,206)
814,557
(541,466)
-
-
68,989
(195,564)
121,380
-
7(b)
Net cash used in investing activities
(1,042,916)
(3,660,310)
Cash Flows from Financing Activities
Proceeds from issue of shares and options, net of
transaction costs
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
4,128,932
-
6,055,759
(650,000)
4,128,932
5,405,759
1,597,652
(5,774)
1,216,478
(657,727)
538
1,873,667
Cash and cash equivalents at end of financial year
2,808,356
1,216,478
The above consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
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Annual Report 2016
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR YEAR ENDED 30 JUNE 2016
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Balance at 1 July 2015
Loss attributable to members of the parent entity
Other comprehensive loss
Total comprehensive loss 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 2016
Balance at 1 July 2014
Loss attributable to members of the parent entity
Other comprehensive income
Total comprehensive loss 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
Issued Capital
Accumulated
Losses
Share Based
Payment
Reserve
Foreign
Currency
Translation
Reserve
Total
$
$
$
$
$
48,029,486
(39,757,657)
4,617,754
(1,344,677)
11,544,906
-
-
-
(3,978,324)
-
(3,978,324)
4,414,000
-
-
-
-
-
-
-
1,190,727
-
(3,978,324)
(147,995)
(147,995)
(147,995)
(4,126,319)
-
-
4,414,000
1,190,727
52,443,486
(43,735,981)
5,808,481
(1,492,672)
13,023,314
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
The above consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
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Annual Report 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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 2016 and was authorised for issue in accordance with a resolution of the directors on 26
August 2016.
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 $3,978,324 and net cash inflows of $1,597,652. At 30 June 2016,
the Consolidated Entity has cash and cash equivalents of $2,808,356.
Whilst sufficient cash is available to meet general and administrative requirements, additional funding may be
necessary for the Consolidated Entity to fulfil its planned exploration activities in the next twelve months. These
conditions indicate a material uncertainty that may cast significant doubt about the Consolidated Entity’s ability to
continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the
normal course of business. As such, 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 through a capital raising. The directors are confident that the Consolidated Entity will be able
to secure additional funding to enable it to continue its planned exploration and evaluation activities and to meet its
obligations as and when they fall due.
Should the Consolidated Entity not be able to continue as a going concern, it may be required to realise its assets and
discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the
financial statements. The financial report does not include any adjustments relating to the recoverability and
classification of recorded asset amounts or liabilities that might be necessary should the entity not continue as a going
concern.
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. From 1 July 2015, the
Consolidated Entity has adopted all the standards and interpretations mandatory for annual periods beginning on or
after 1 July 2015. 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 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
The following standards and interpretations would have been applied for the first time for entities with year ending 30
June 2016:
Reference
Title
AASB 2013-9
Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments
The Standard contains three main parts and makes amendments to a number of Standards and Interpretations.
Part C makes amendments to a number of Australian Accounting Standards, including incorporating Chapter 6
Hedge Accounting into AASB 9 Financial Instruments.
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.
AASB 2015-4
Amendments to Australian Accounting Standards – Financial Reporting Requirements for Australian Groups with
a Foreign Parent
The amendment aligns the relief available in AASB 10 Consolidated Financial Statements and AASB 128
Investments in Associates and Joint Ventures in respect of the financial reporting requirements for Australian
groups with a foreign parent.
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 2016.
Application
date of
standard*
Application
date for CXU*
1 January 2018 1 July 2018
Reference
Title
Summary
AASB 9
Financial Instruments
AASB 9 (December 2014) is a new standard which replaces AASB
139. This new 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
adoption. The own credit changes can be early adopted in
isolation without otherwise changing the accounting for
financial instruments.
Classification and measurement
AASB 9 includes requirements for a simpler approach for
classification and measurement of financial assets compared
with the requirements of AASB 139. There are also some
changes made in relation to financial liabilities.
The main changes are described below.
Financial assets
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
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Annual Report 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Reference
Title
Summary
Application
date of
standard*
Application
date for CXU*
them, on different bases.
Financial liabilities
Changes introduced by AASB 9 in respect of financial liabilities
are limited to the measurement of liabilities designated at fair
value through profit or loss (FVPL) using the fair value option.
Where the fair value option is used for financial liabilities, 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 or losses attributable to changes in the entity’s own credit
risk would be recognised in OCI. These amounts recognised in
OCI are not recycled to profit or loss if the liability is ever
repurchased at a discount.
Impairment
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.
Hedge accounting
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.
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 Joint Arrangements 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
(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 Property Plant and Equipment and AASB 138
Intangible Assets 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.
58
1 January 2016 1 July 2016
1 January 2016 1 July 2016
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
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Annual Report 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Reference
Title
Summary
Application
date of
standard*
Application
date for CXU*
AASB 116 and AASB 138)
AASB 15
Revenue from Contracts
with Customers
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.
AASB 15 Revenue from Contracts with Customers replaces the
existing revenue recognition standards AASB 111 Construction
Contracts, AASB 118 Revenue and related Interpretations
(Interpretation 13 Customer Loyalty Programmes, Interpretation
15 Agreements for the Construction of Real Estate,
Interpretation 18 Transfers of Assets from Customers,
Interpretation 131 Revenue—Barter Transactions Involving
Advertising Services and Interpretation 1042 Subscriber
Acquisition Costs in the Telecommunications Industry). AASB 15
incorporates the requirements of IFRS 15 Revenue from
Contracts with Customers issued by the International Accounting
Standards Board (IASB) and developed jointly with the US
Financial Accounting Standards Board (FASB).
AASB 15 specifies the accounting treatment for revenue arising
from contracts with customers (except for contracts within the
scope of other accounting standards such as leases or financial
instruments).The core principle of AASB 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:
1 January 2018
1 July 2018
(a) Step 1: Identify the contract(s) with a customer
(b)
Step 2: Identify the performance obligations in the
contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance
obligations in the contract
Step 5: Recognise revenue when (or as) the entity satisfies
a performance obligation
(c)
(d)
(e)
AASB 2015-8 amended the AASB 15 effective date so it is now
effective for annual reporting periods commencing on or after 1
January 2018. Early application 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 2016-3 Amendments to Australian Accounting Standards –
Clarifications to AASB 15 amends AASB 15 to clarify the
requirements on identifying performance obligations, principal
versus agent considerations and the timing of recognising
revenue from granting a licence and provides further practical
expedients on transition to AASB 15.
This Standard lists the application paragraphs for each other
Standard (and Interpretation), grouped where they are the
same. Accordingly, paragraphs 5 and 22 respectively specify the
application paragraphs for Standards and Interpretations in
general. Differing application paragraphs are set out for
individual Standards and Interpretations or grouped where
possible.
59
1 January 2016 1 July 2016
AASB 1057
Application of Australian
Accounting Standards
Annual Report 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Reference
Title
Summary
AASB 2014-9 Amendments to
Australian Accounting
Standards – Equity
Method in Separate
Financial Statements
AASB 2014-10 Amendments to
Australian Accounting
Standards – Sale or
Contribution of Assets
between an Investor and
its Associate or Joint
Venture
AASB 2015-1 Amendments to
Australian Accounting
Standards – Annual
Improvements to
Australian Accounting
Standards 2012–2014
Cycle
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Application
date of
standard*
Application
date for CXU*
1 January 2016 1 July 2016
1 January 2018 1 July 2018
The application paragraphs do not affect requirements in other
Standards that specify that certain paragraphs apply only to
certain types of entities.
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.
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:
(a) A full gain or loss to be recognised when a
transaction involves a business (whether it is housed
in a subsidiary or not)
(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 2015-10 defers the mandatory effective date (application
date) of AASB 2014-10 so that the amendments are required to
be applied for annual reporting periods beginning on or after 1
January 2018 instead of 1 January 2016.
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
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.
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Annual Report 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Reference
Title
Summary
Application
date of
standard*
Application
date for CXU*
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.
This Standard makes amendments to AASB 124 Related Party
Disclosures to extend the scope of that Standard to include not-
for-profit public sector entities.
1 January 2016 1 July 2016
1 July 2016
1 July 2016
AASB 2015-2 Amendments to
Australian Accounting
Standards – Disclosure
Initiative: Amendments to
AASB 101
AASB 2015-6 Amendments to
Australian Accounting
Standards – Extending
Related Party Disclosures
to Not-for-Profit Public
Sector Entities
[AASB 10, AASB 124 &
AASB 1049]
AASB 2015-9 Amendments to
Australian Accounting
Standards – Scope and
Application Paragraphs
[AASB 8, AASB 133 &
AASB 1057]
This Standard inserts scope paragraphs into AASB 8 and AASB
133 in place of application paragraph text in AASB 1057. This is
to correct inadvertent removal of these paragraphs during
editorial changes made in August 2015. There is no change to
the requirements or the applicability of AASB 8 and AASB 133.
1 January
2016
1 July 2016
AASB 16
Leases
The key features of AASB 16 are as follows:
1 January 2019 1 July 2019
Lessee accounting
•
•
•
•
Lessees are required to recognise assets and liabilities
for all leases with a term of more than 12 months,
unless the underlying asset is of low value.
A lessee measures right-of-use assets similarly to
other non-financial assets and lease liabilities
similarly to other financial liabilities.
Assets and liabilities arising from a lease are initially
measured on a present value basis. The
measurement includes non-cancellable lease
payments (including inflation-linked payments), and
also includes payments to be made in optional
periods if the lessee is reasonably certain to exercise
an option to extend the lease, or not to exercise an
option to terminate the lease.
AASB 16 contains disclosure requirements for lessees.
Lessor accounting
•
AASB 16 substantially carries forward the lessor
accounting requirements in AASB 117. Accordingly, a
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Reference
Title
Summary
Application
date of
standard*
Application
date for CXU*
•
lessor continues to classify its leases as operating
leases or finance leases, and to account for those two
types of leases differently.
AASB 16 also requires enhanced disclosures to be
provided by lessors that will improve information
disclosed about a lessor’s risk exposure, particularly
to residual value risk.
AASB 16 supersedes:
(a) AASB 117 Leases
(b) Interpretation 4 Determining whether an Arrangement
contains a Lease
(c) SIC-15 Operating Leases—Incentives
(d) SIC-27 Evaluating the Substance of Transactions Involving the
Legal Form of a
Lease
The new standard will be effective for annual periods beginning
on or after 1 January 2019. Early application is permitted,
provided the new revenue standard, AASB 15 Revenue from
Contracts with Customers, has been applied, or is applied at the
same date as AASB 16.
This Standard amends AASB 112 Income Taxes (July 2004) and
AASB 112 Income Taxes (August 2015) to clarify the
requirements on recognition of deferred tax assets for
unrealised losses on debt instruments measured at fair value.
1 January 2017 1 July 2017
This Standard amends AASB 107 Statement of Cash Flows
(August 2015) to require entities preparing financial statements
in accordance with Tier 1 reporting requirements to provide
disclosures that enable users of financial statements to evaluate
changes in liabilities arising from financing activities, including
both changes arising from cash flows and non-cash changes.
This standard amends to IFRS 2 Share-based Payment, clarifying
how to account for certain types of share-based payment
transactions. The amendments provide requirements on the
accounting for:
1 January 2017 1 July 2017
1 January 2018 1 July 2018
•
•
The effects of vesting and non-vesting conditions on
the measurement of cash-settled share-based
payments
Share-based payment transactions with a net
settlement feature for withholding tax obligations
A modification to the terms and conditions of a share-based
payment that changes the classification of the transaction from
cash-settled to equity-settled
AASB 2016-1 Amendments to
Australian Accounting
Standards – Recognition
of Deferred Tax Assets for
Unrealised Losses
[AASB 112]
AASB 2016-2 Amendments to
Australian Accounting
Standards – Disclosure
Initiative: Amendments to
AASB 107
IFRS 2
(Amendment
s)
Classification and
Measurement of
Share-based Payment
Transactions
[Amendments to IFRS 2]
*
Designates the beginning of the applicable annual reporting period unless otherwise stated.
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.
e. Principles of Consolidation
(i)
Subsidiaries
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 22 to the financial statements.
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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.
(ii)
Joint arrangements
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 statement of financial position.
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 profit or loss and
other 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
profit or loss and other 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 profit or loss and other 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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
h.
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax
expense (income).
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.
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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
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.
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FOR THE YEAR ENDED 30 JUNE 2016
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.
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
2016
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 profit or loss and other 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
Refundable tax incentives are 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. The
Consolidated Entity has determined that these incentives are akin to government grants because they are not
conditional upon earning taxable income.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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.
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.
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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.
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.
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FOR THE YEAR ENDED 30 JUNE 2016
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.
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
Legal costs, damages, and interest
Interest received
Other
Realised (profit)/loss on FX
Fuel tax credits
Net fair value gain/(loss) on financial
assets
Gain on disposal of financial assets
Gain on disposal of exploration
assets
Total segment revenue and other
income
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
Impairment of loans and receivables
Impairment of exploration assets
Depreciation
Employee benefits expense
Directors fees
Consultancy expenses
Legal fees
Tenement expenditure
Other expenses
Mineral exploration
2015
2016
$
$
Other
Total
2016
$
2015
$
2016
$
2015
$
-
-
-
(921)
4,817
-
31,892
-
-
-
-
10,491
-
-
-
530,538
7,375
5,878
-
-
-
6,352
-
-
-
530,538
7,375
5,878
(921)
4,817
-
6,352
-
-
10,491
648,617
13,008
(601,706)
194,867
648,617
13,008
(601,706)
194,867
-
-
31,892
-
35,788
10,491
1,205,416
(400,487)
1,241,204
(389,996)
(1,878,397)
(2,010,635)
(2,099,927)
(4,702,165)
(3,978,324)
(6,712,800)
-
-
-
(1,641,604)
(154,476)
-
-
-
-
(118,105)
-
-
-
-
(1,604,898)
(124,625)
-
-
-
-
-
(291,603)
-
(1,190,727)
(35,860)
-
-
(493,892)
(228,000)
(263,616)
(510,997)
-
(582,251)
(22,634)
(1,972,026)
(89,718)
-
-
(437,312)
(239,512)
(564,306)
(412,100)
(9,012)
(555,058)
-
(1,190,727)
(35,860)
(1,641,604)
(154,476)
(493,892)
(228,000)
(263,616)
(510,997)
(118,105)
(582,251)
(22,634)
(1,972,026)
(89,718)
(1,604,898)
(124,625)
(437,312)
(239,512)
(564,306)
(412,100)
(9,012)
(846,661)
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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Mineral exploration
2015
2016
$
$
Other
Total
2016
$
2015
$
2016
$
2015
$
Segment assets
9,635,052
10,770,343
3,919,102
3,363,752
13,554,154
14,134,095
Segment assets include:
Capitalised exploration expenditure
Financial assets
Restricted cash
Other assets
9,227,557
-
-
407,495
9,635,052
10,204,649
-
-
565,694
10,770,343
-
1,103,046
-
2,816,056
3,919,102
-
419,667
1,714,932
1,229,153
3,363,752
9,227,557
1,103,046
-
3,223,551
13,554,154
10,204,649
419,667
1,714,932
1,794,847
14,134,095
Segment liabilities
(32,752)
(117,240)
(498,088)
(2,471,949)
(530,840)
(2,589,189)
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
Legal costs, damages, and interest
Fuel tax credits
Realised (profit)/loss on FX
Other
Net fair value gain/(loss) on financial assets
Gain on disposal of exploration assets
Gain on disposal of financial assets
4.
FINANCE COSTS
Interest on convertible notes
5.
IMPAIRMENT LOSSES
Impairment of exploration and evaluation expenditure (a)
Impairment of loans and other receivables
Reversal of previously impaired loans and receivables
2016
$
2015
$
13,521,554
32,600
13,554,154
13,415,351
718,744
14,134,095
2016
$
2015
$
7,375
7,375
6,352
6,352
530,538
4,817
(921)
5,878
648,617
31,892
13,008
1,233,829
-
10,491
-
-
(601,706)
-
194,867
(396,348)
2016
$
2015
$
-
-
22,634
22,634
2016
$
2015
$
1,641, 604
87,721
(51,861)
1,677,464
1,604,898
212,007
(122,289)
1,694,616
(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 $1,641,604
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FOR THE YEAR ENDED 30 JUNE 2016
during the year (30 June 2015: $1,604,898) attributable to (i) the decision not to continue exploration in certain areas of
South Australia, Western Australia and Argentina; (ii) costs associated with tenements not yet granted in Western Australia;
and (iii) continued drilling approval delays in respect of the Company’s Rio Colorado project in Argentina.
6.
INCOME TAX EXPENSE
(a)
The components of tax expense comprise:
Current tax benefit / (expense)
Deferred tax benefit / (expense)
2016
$
2015
$
-
-
-
-
-
-
(b)
The prima facie tax benefit on loss from ordinary activities before income tax
is reconciled to the income tax as follows:
2016
$
2015
$
Loss before tax
(3,978,324)
(6,712,800)
Prima facie tax (benefit) on loss from ordinary activities before income tax at
30% (2015: 30%)
(1,193,497)
(2,013,840)
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
Other receivables
Unearned income
519,906
673,591
601,193
1,412,647
-
-
-
-
2016
$
2015
$
20,203
1,960,360
-
26,422
394,718
44,612
341,341
2,787,656
10,050
2,165,374
66,277
24,717
368,217
68,406
176,824
2,879,865
(2,768,267)
(19,065)
(324)
(2,787,656)
(2,879,865)
-
-
(2,879,865)
Net recognised deferred tax assets/(liabilities)
-
-
(d) Unrecognised deferred tax balances
The Consolidated Entity has $22,900,707 (2015: $21,180,405) 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 CONSOLIDATED FINANCIAL STATEMENTS
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7.
TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Provision for non-recovery of trade receivables (a)
Loan to ASX-listed company (b)
Prepayments
(a) Provision for non-recovery of trade receivables
Movements:
Opening balance at beginning of the year
Adjustment to provision for doubtful debts
Recovery of previously impaired receivable
2016
$
2015
$
122,514
(52,949)
51,080
7,700
128,345
344,260
(220,922)
-
12,675
136,013
2016
$
2015
$
(220,922)
167,359
614
(52,949)
(205,524)
(19,367)
3,969
(220,922)
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.
2016
Trade receivables
2015
Trade receivables
(b) Loan to ASX-listed company:
Movements:
Opening balance at beginning of the year
Converting loan funds advanced
Interest on converting loan
Gross amount
Past due and
impaired
Within initial
trade terms
122,514
(52,949)
69,565
344,260
220,922
123,338
2016
$
2015
$
-
50,000
1,080
51,080
-
-
-
-
On 14 April 2016, Cauldron entered into a converting loan agreement with Black Mountain Resources Limited (ASX:
BMZ) (“BMZ Loan Agreement”). Pursuant to the BMZ Loan Agreement, the principal loan funds of $50,000, together
with any interest (“Loan Funds”) are repayable, at Cauldron’s election, by either:
cash; or
conversion to fully paid ordinary shares in BMZ at a conversion price of $0.075 per share, subject to BMZ’s
receipt of any required shareholder approvals,
at the repayment date.
The repayment date per the BMZ Loan Agreement was 13 July 2016. As at this date, the Loan Funds were not repaid.
Cauldron has provided BMZ an extension to the repayment date to 13 September 2016. The loan is interest-bearing at
a rate of 10% per annum compounding daily for the initial three months, increasing to 16% per annum compounding
daily from 14 July 2016 onwards.
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FOR THE YEAR ENDED 30 JUNE 2016
In consideration for Cauldron making the loan available to BMZ, BMZ has agreed to issue Cauldron with unlisted
options (“Options”), the number of which will be determined in accordance with the following formula:
A = ( B / ( $0.075 ) ) x ( 1 / 3 )
Whereby:
A = Number of Options
B = Amount of Loan Funds at repayment date
8.
FINANCIAL ASSETS
Financial assets
Financial assets at fair value through profit or loss (listed investments)
Financial assets at fair value through profit or loss (unlisted investments)
2016
$
2015
$
1,065,334
37,712
1,103,046
419,667
-
419,667
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 listed investments is calculated with reference to current market prices at balance date.
Movements:
Opening balance at beginning of the year
Acquisition of equity securities (non-cash)
Acquisition of equity securities (cash)
Disposal of equity securities
Fair value gain/(loss) through profit or loss
9.
RESTRICTED CASH
Current
Restricted cash
Subscription funds held in trust (a)
2016
$
2015
$
419,667
31,892
44,512
(41,642)
648,617
1,103,046
826,506
-
-
194,867
(601,706)
419,667
2016
$
2015
$
-
-
1,714,932
1,714,932
(a)
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) was
held in trust by the Company until the Placement Shares were issued (refer note 14). Shareholder approval to
issue these shares was obtained in November 2015 (refer note 16(e)).
10.
LOAN RECEIVABLES
Non-current
Caudillo Resources SA (a)
Provision for non-recovery (a)
2016
$
2015
$
1,376,782
(1,376,782)
-
1,386,382
(1,386,382)
-
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
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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.
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 $88,336 (30 June 2015: $195,564) has been recognised in the Statement of Profit or Loss and Other
Comprehensive Income. During the year, $51,862 was repaid by Caudillo (reversal of previously impaired amount) (2015:
$121,380), which has been recognised in the Statement of Profit or Loss and Other Comprehensive Income.
11.
EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation expenditure
9,227,557
10,204,649
2016
$
2015
$
Movements:
Carrying value at beginning of year
Exploration expenditure incurred
Impairment of exploration expenditure (a)
Foreign exchange movements
Royalties for Regions grant
R&D Tax Incentive
Carrying value at end of year
10,204,649
2,561,467
(1,641,604)
(97,577)
(150,000)
(1,649,378)
9,227,557
8,869,590
3,712,390
(1,604,898)
42,124
-
(814,557)
10,204,649
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 $1,641,604 during the year (30 June 2015: $1,604,898) attributable to (i) the decision not to continue
exploration in certain areas of South Australia, Western Australia and Argentina; (ii) costs associated with
tenements not yet granted in Western Australia; and (iii) continued drilling approval delays in respect of the
Company’s Rio Colorado project 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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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
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.
SUBSCRIPTION FUNDS
Subscription funds received (refer note 9(a))
15.
PROVISIONS
Current
Employee benefits
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2016
$
2015
$
657,091
(370,241)
286,850
666,296
(223,940)
442,356
2016
$
2015
$
442,356
-
(154,476)
-
(1,030)
286,850
25,076
541,466
(124,625)
(4,148)
4,587
442,356
2016
$
2015
$
368,450
95,046
463,496
732,602
108,155
840,757
2016
$
2015
$
-
-
1,714,932
1,714,932
2016
$
2015
$
67,344
67,344
33,500
33,500
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Annual Report 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
16.
ISSUED CAPITAL
Ordinary shares issued and fully paid
52,443,486
48,029,486
2016
$
2015
$
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 (f)
Shares issued upon conversion of
convertible notes (g)
Shares issued upon exercise of options (h)
Share issue costs
2016
No.
2016
$
2015
No.
2015
$
251,104,266
-
-
-
-
16,949,178
16,949,176
-
3,000,000
-
288,002,620
48,029,486
-
-
-
-
2,000,000
2,000,000
-
414,000
-
52,443,486
196,438,713
17,421,697
8,474,579
21,440,678
3,983,061
-
-
3,345,538
-
-
251,104,266
41,701,715
2,055,759
1,000,000
2,530,000
470,000
-
-
434,801
-
(162,789)
48,029,486
Shares issued pursuant to placement agreements
(a)
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 at the time 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 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.
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. Shareholders ratified the issue of these shares at
the 9 November 2015 Annual General Meeting.
Mr Qiu Derong was a party to a Placement Agreement for a total of $2,000,000 (“Subscription Sum”). In June 2015,
The Company received $1,714,932 in cash from Mr Qiu Derong, with the balance of $285,068 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) was held in trust by the Company until the Placement Shares were issued (included in current
payables as at 30 June 2015). Following receipt of Shareholder approval at the 9 November 2015 Annual General
Meeting, 16,949,178 fully paid shares were issued.
(b)
(c)
(d)
(e)
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Annual Report 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
(f)
In March 2016, Cauldron received $2,000,000 from MGT Resources pursuant to a placement agreement and issued
16,949,176 fully paid shares using the Company’s capacity under Listing Rule 7.1.
Shares issued pursuant to converting loan agreements
(g)
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 a General Meeting.
Shares issued upon exercise of unlisted options
(h)
In December 2015, 3,000,000 share options were exercised at $0.138 each providing $414,000 funding.
The Company has authorised share capital amounting to 288,002,620 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 $52,443,486 at 30 June 2016 (2015: $48,029,486).
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.
17.
RESERVES
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 26)
Reserve balance at end of year
2016
$
2015
$
5,808,481
(1,492,672)
4,315,809
4,617,754
(1,344,677)
3,273,077
2016
$
2015
$
4,617,754
1,190,727
5,808,481
2,645,728
1,972,026
4,617,754
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
2016
$
2015
$
(1,344,677)
(1,347,969)
(147,995)
(1,492,672)
3,292
(1,344,677)
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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
18.
ACCUMULATED LOSSES
Balance at beginning of year
Loss for the year
Balance at end of year
19.
LOSS PER SHARE
Basic loss per share
Continuing operations
Loss used in calculation of basic loss per share
Continuing operations
Weighted average number of ordinary shares outstanding during the year used in
the calculation of basic loss per share
2016
$
2015
$
(39,757,657)
(3,978,324)
(43,735,981)
(33,044,857)
(6,712,800)
(39,757,657)
2016
Cents per share
2015
Cents per share
(1.49)
(1.49)
(2.91)
(2.91)
$
$
(3,978,324)
(3,978,324)
(6,712,800)
(6,712,800)
No.
No.
267,792,981
230,509,441
There are 44,000,000 share options (2015: 55,500,000) 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.
20.
COMMITMENTS
Office Rental Commitments
The Consolidated Entity entered into a sub-lease for office premises for a period of 8 years terminating on 31 March 2020.
Total office rental commitments for the Consolidated Entity are:
Within one year
Between one and five years
Longer than five years
21.
CONTINGENT ASSETS AND LIABILITIES
The Consolidated Entity has no contingent liabilities or assets at the year end.
22.
CONTROLLED ENTITIES
Details of Cauldron Energy Limited’s subsidiaries are:
Name
Country of
Incorporation
Date/Company of
Incorporation
Shares
2016
$
2015
$
129,180
355,245
-
484,425
51,064
38,298
-
89,362
Ownership
Interest
Investment Carrying
Amount
2016
%
2015
%
2016
$
2015
$
Australia
Ronin Energy Ltd
Australia
Cauldron Minerals Ltd
Australia
Jakaranda Minerals Ltd
Raven Minerals Ltd
Australia
Cauldron Energy (Bermuda) Limited Bermuda
Cauldron Energy (SL) Limited
Sierra Leone
24 April 2006
24 April 2006
24 April 2006
24 April 2006
2 February 2012
12 March 2012
Ord
Ord
Ord
Ord
Ord
Ord
100
100
100
100
100
100
100
100
100
100
100
100
5
1
1
5
1
1
14
5
1
1
5
1
1
14
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
23.
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 2015 (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 62.56%
Korean Participants 37.44%.
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.
24.
CASH FLOW INFORMATION
2016
$
2015
$
(a)
Reconciliation of cash flows from operating activities with loss from ordinary
activities after income tax
Loss from ordinary activities after income tax
(3,978,324)
(6,712,800)
154,476
1,190,727
(648,617)
(13,008)
(31,892)
-
1,677,464
285,068
-
157,394
(1,080)
(314,415)
33,843
-
(1,488,364)
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)
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
Gain on sale of exploration assets
Foreign exchange (gain)/loss
Impairment losses
Director fees settled via issue of shares
Interest accrued
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
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Annual Report 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
(b)
Reconciliation of cash and cash equivalents
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 statement of financial
position as follows:
Cash at bank
Cash and cash equivalents
25.
FINANCIAL RISK MANAGEMENT
Financial risk management
2016
$
2015
$
2,808,356
2,808,356
1,216,478
1,216,478
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 (listed investments)
Financial assets at fair value through profit or loss (unlisted investments)
Trade and other receivables
Financial Liabilities
Trade and other payables
Financial risk management policies
2016
$
2015
$
2,808,356
1,065,334
37,712
128,345
4,039,747
1,216,478
419,667
-
136,013
1,772,158
463,496
463,496
840,757
840,757
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.
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Annual Report 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
(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
2016
Change
$
2015
Change
$
56,167
(56,167)
+24,330
-24,330
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%
(2015 – 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 listed
(d) Credit risk
Impact on Post-Tax Profit/(Loss)
2016
$
2015
$
106,533
41,967
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
2016
$
2015
$
2,808,356
128,345
2,936,701
1,216,478
136,013
1,352,491
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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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.
2016
Financial assets
Cash
Held for trading investments
Receivables and loans
Financial Liabilities
Trade and other payables
2015
Financial assets
Cash
Restricted cash
Held for trading investments
Receivables and loans
Financial Liabilities
Trade and other payables
(f) Fair value estimation
Within 1
Year
$
2,808,356
1,103,046
128,345
4,039,747
463,496
463,496
Within 1
Year
$
1,216,478
1,714,932
419,667
136,013
3,487,090
840,757
840,757
1 to 5 Years
Over 5 Years
$
$
-
-
-
-
-
-
-
-
-
-
-
-
1 to 5 Years
Over 5 Years
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2016
Total
$
2,808,356
1,103,046
128,345
4,039,747
463,496
463,496
2015
Total
$
1,216,478
1,714,932
419,667
136,013
3,487,090
840,757
840,757
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.
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)
2016
Financial assets:
Financial assets at fair value through profit or loss:
Held for trading investments
Level 1
$
Level 2
$
Level 3
$
Total
$
1,065,3341
-
37,7122
1,103,046
1 Level 1 held for trading investments includes an investment in Fe Ltd shares that have been based on a quoted
price on 8 April 2016, being the last date of trading prior to Fe Ltd being suspended from trading pending
compliance with Chapters 1 and 2 of the ASX Listing.
2 The fair value of financial instruments that are not traded in active markets is determined using valuation
techniques based on the present value of net cash inflows from future profits and subsequent disposal of the
securities.
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Annual Report 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
2015
Financial assets:
Financial assets at fair value through profit or loss:
Held for trading investments
26.
SHARE BASED PAYMENTS
Level 1
$
Level 2
$
Level 3
$
Total
$
419,667
-
-
419,667
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
2016
$
2015
$
914,980
275,747
1,190,727
1,562,900
409,126
1,972,026
(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:
2016
No.
2016
WAEP
23,500,000
-
(3,000,000)
(20,500,000)
-
-
-
$0.155
-
$0.138
$0.158
-
-
-
Outstanding at the beginning of the year
Granted during the year (i)
Exercised during the year (ii)
Expired during the year (iii)
Outstanding at year end
Exercisable at the end of the year
Not exercisable at the end of the year
i.
Options granted during the year
There were no options granted during the year.
ii.
Options exercised during the year
The following options were exercised during the year ended 30 June 2016:
3,000,000 unlisted options exercisable at $0.138 expiring 31 December 2015.
iii.
Options expired during the year
The following options expired during the year ended 30 June 2016:
1,000,000 unlisted options exercisable at $0.20 expired 18 September 2015;
500,000 unlisted options exercisable at $0.45 expired 20 September 2015;
3,000,000 unlisted options exercisable at $0.20 expired 30 September 2015; and
16,000,000 unlisted options exercisable at $0.138 expired 31 December 2015.
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Annual Report 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
27.
OTHER UNLISTED OPTIONS
Options Granted during the year
The Company also issued the following unlisted options (not share based payments) during the year ended 30 June 2016:
16,000,000 unlisted options to investor Mr Derong Qiu (“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, Mr Derong Qiu can only exercise a maximum of 8,000,000 Placement Options.
20,000,000 unlisted options to investor MGT Resources exercisable at $0.138 expiring 31 December 2016 (no
vesting conditions).
Options expired during the year
The following options expired during the year ended 30 June 2016:
24,000,000 unlisted options exercisable at $0.118 expired 31 December 2015.
Options on issue at 30 June 2016
The outstanding balance of options at 30 June 2016 (other than those granted as a share based payment) is represented by:
44,000,000 Investor Options with an exercise price of $0.118 and an expiry date of on or before 31 December
2016 with no vesting conditions.
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Annual Report 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
28.
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
2016
$
2015
$
2,886,666
10,647,046
13,533,712
2,989,946
11,118,383
14,108,329
510,398
-
510,398
2,563,423
-
2,563,423
52,443,486
(45,228,652)
5,808,480
13,023,314
48,029,486
(41,102,333)
4,617,753
11,544,906
(4,126,319)
(4,126,319)
(6,308,892)
(6,308,892)
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
2016
$
2015
$
23,329
8,495,868
1,346,312
25,775
9,891,284
23,329
8,205,591
1,259,312
25,775
9,514,007
The commitments of the Parent Entity are consistent with the Consolidated Entity (refer to note 20).
Contingent Liabilities and Assets
The contingent liabilities and assets of the Parent Entity are consistent with the Consolidated Entity (refer to note 21).
29.
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 22 to the financial statements.
Note 22 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 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
Sales and Purchases between Related Parties
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
Okewood Pty Ltd
Okewood Pty Ltd
2016
2015
2016
2015
2016
2015
-
-
-
-
-
-
2,500
18,318
238,422
390,044
28,523
30,975
-
-
-
-
-
-
-
-
6,066
5,119
-
-
* Amounts are classified as trade receivables and trade payables, respectively.
Mr Sage is a director of Fe Limited, Cape Lambert Resources Limited, and Okewood Pty Ltd. Mr Gwynne is a director of Fe
Limited.
Sales to and purchases from director related entities are for the reimbursement of employee, consultancy, occupancy costs
and other costs.
Loans between Related Parties
There were no loan made to Cauldron Energy by directors and entities related to them during the year ended 30 June 2016.
Details regarding loan arrangements in the year ended 30 June 2015 are as follow:
Balance at 1
July 2014
Loan advanced
/ (repaid)
Interest paid
and payable
for the year
Conversion of
loan to shares
Balance at
30 June
2015
30 June 2015
Cape Lambert Resources Limited (a)
Mr Qiu Derong (a)
Cape Lambert Resources Limited (b)
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)
-
-
-
-
(a)
In November 2013, the Consolidated Entity entered into short term loan agreements with Cape Lambert
Resources Limited (“Cape Lambert”) and Mr Derong Qiu. Cape Lambert and Mr Qiu 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.
(b)
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
2016, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (2015: nil).
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Annual Report 2016
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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 2016, Cauldron held 23,128,112 shares in Fe Limited (ASX: FEL) (2015: 23,773,112) with a market value of
$832,612 (2015: $309,050). Mr Antony Sage and Mr Mark Gwynne are directors of FEL.
Significant shareholders
Qiu Derong holds a significant interest of 16.51% in the issued capital of Cauldron Energy at 30 June 2016 (30 June 2015:
12.20%). 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 14.9%
(30 June 2015: 17.10%) in the issued capital of Cauldron at 30 June 2016. 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 2016.
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
30.
REMUNERATION OF AUDITORS
Audit or review of the Consolidated Entity financial report
Paid or payable to BDO (WA) Pty Ltd for:
-
Remuneration of the auditors of subsidiary/joint venture for:
-
Audit or review of the financial report
Remuneration of the BDO (WA) Pty Ltd for:
-
Non-audit services
31.
EVENTS SUBSEQUENT TO REPORTING DATE
2016
$
2015
$
735,310
37,335
620,432
1,393,077
816,307
35,760
967,023
1,819,090
2016
$
2015
$
33,600
14,760
-
48,360
34,331
13,957
7,271
55,559
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On 5 July 2016, the Company recovered $488,000 (after $20,455 Receiver costs) of the Guangzhou City judgment debt from
sale of Shares by Receiver. The Shares were sold to investors who have agreed to a six-month escrow period in respect of the
Shares. On 5 July 2016, 33,898,318 fully paid ordinary Shares were escrowed.
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 2016
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 2016 are in
accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of its financial position as at 30 June 2016 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), the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
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 2016.
On behalf of the board
Mr Antony Sage
Executive Director
PERTH
26 August 2016
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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 2016, 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 2016
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(c) in the financial report which describes
the conditions which give rise to 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 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 pages 44 to 49 of the directors’ report for the
year ended 30 June 2016. 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 2016
complies with section 300A of the Corporations Act 2001.
BDO Audit (WA) Pty Ltd
Phillip Murdoch
Director
Perth, 26 August 2016
2
Annual Report 2016
Shareholding
ADDITIONAL SHAREHOLDER INFORMATION
The distribution of members and their holdings of equity securities in the Company as at 5 August 2016 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
89,841
1,276,922
2,196,487
14,801,139
269,638,231
288,002,620
193
481
275
425
122
1,496
There are 1,496 shareholders holding a total of 288,002,620 shares.
There are 805 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 2016:
Shareholder
Cape Lambert Resources Limited (Dempsey Resources Pty Ltd)
Mr Derong Qiu
Starry World Investment Ltd
Joseph Investment International Limited
Sky Shiner Investment Limited
MGT Resouces Limited
Options
Details of unissued shares under option as at the date of this report are:
Number
52,470,036
47,544,710
33,898,318
24,256,324
23,400,000
16,949,176
Grant Date
Class of
Shares
Exercise
Price
Number of
Options
Expiry Date
Listed /
Unlisted
30 September 2014
9 November 2015
29 March 2016
Ordinary
Ordinary
Ordinary
$0.138
$0.138
$0.138
16,000,000
8,000,000
20,000,000
31 December 2016
31 December 2016
31 December 2016
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 2016
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 has 33,898,318 shares on issue the subject to voluntary escrow period ending 4 January 2017.
Twenty Largest Shareholders
The names of the twenty largest ordinary fully paid shareholders in the Company as at 5 August 2016 are as follows:
Shareholder
Dempsey Resources Pty Ltd
Mr Derong Qiu
Starry World Investment Ltd
Joseph Investment International Limited
Sky Shiner Investment Limited
MGT Resources Limited
Pershing Australia Nominees Pty Ltd
Citicorp Nominees Pty Limited (Group #889634)
Systematic Nominees Pty Ltd
Okewood Pty Ltd
Lanoti Pty Limited
Mr Yuanrong Luo
Antony William Paul Sage + Lucy Fernandes Sage
Canifare Pty Ltd
Sams Watchmaker Jeweller Pty Ltd
JP Morgan Nominees Australia Limited (Group #889608)
Quam Securities Company Limited
Health Communications Australia Pty Ltd
Mr Andre Kunz & Mrs Grace Kunz
Interview Holdings Pty Ltd
Number
% Held of
Ordinary Capital
Issued
52,470,036
47,544,710
33,898,318
24,256,324
23,400,000
16,949,176
10,707,622
5,548,241
4,172,864
3,300,000
3,000,000
2,726,257
2,594,600
1,917,450
1,783,663
1,655,655
1,431,018
1,109,967
1,006,625
1,000,000
240,472,526
18.22%
16.51%
11.77%
8.42%
8.12%
5.89%
3.72%
1.93%
1.45%
1.15%
1.04%
0.95%
0.90%
0.67%
0.62%
0.57%
0.50%
0.39%
0.35%
0.35%
83.50%
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Annual Report 2016
SCHEDULE OF MINERAL TENEMENTS
AS AT 5 AUGUST 2016
Tenement reference
Project & Location
Interest held
E08/1489
E08/1490
E08/1493
E08/1501
E08/2017
E08/2081
E08/2160
E08/2161
E08/2205
E08/2478
E08/2479
E08/2480
E08/2665
E08/2774
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
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
YANREY – WESTERN AUSTRALIA
BOOLALOO – WESTERN AUSTRALIA
BOOLALOO – WESTERN AUSTRALIA
Catamarca, Argentina
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Mining tenements with beneficial interest held in farm-in/farm-out agreements:
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
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
EL4609 (now EL5789)
MAREE - SOUTH AUSTRALIA
EL4610 (now EL5788)
MAREE - SOUTH AUSTRALIA
EL4746
EL4794
EL5442
MAREE - SOUTH AUSTRALIA
MAREE - SOUTH AUSTRALIA
MAREE - SOUTH AUSTRALIA
51%*
51%*
51%*
51%*
51%*
51%*
51%*
51%*
51%*
51%*
62.56%** (increasing)
62.56%** (increasing)
62.56%** (increasing)
62.56%** (increasing)
62.56%** (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 has earned its Initial Interest of 51% in the project. 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 2015
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