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(ABN 22 102 912 783)
AND CONTROLLED ENTITIES
ANNUAL REPORT
FOR THE YEAR ENDED
30 JUNE 2017
Annual Report 2017
CONTENTS
CORPORATE DIRECTORY ______________________________________________________________________________________ 1
DIRECTORS’ REPORT _________________________________________________________________________________________ 2
AUDITOR’S INDEPENDENCE DECLARATION ______________________________________________________________________ 34
CORPORATE GOVERNANCE STATEMENT ________________________________________________________________________ 35
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ________________________________________________________ 36
CONSOLIDATED STATEMENT OF FINANCIAL POSITION _____________________________________________________________ 37
CONSOLIDATED STATEMENT OF CASH FLOWS ___________________________________________________________________ 38
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY _____________________________________________________________ 39
NOTES TO THE FINANCIAL STATEMENTS ________________________________________________________________________ 40
DIRECTORS’ DECLARATION ___________________________________________________________________________________ 65
INDEPENDENT AUDITOR’S REPORT ____________________________________________________________________________ 66
ADDITIONAL SHAREHOLDER INFORMATION _____________________________________________________________________ 69
SCHEDULE OF MINERAL TENEMENTS __________________________________________________________________________ 71
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Annual Report 2017
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CORPORATE DIRECTORY
EXECUTIVE CHAIRMAN
Antony Sage
NON-EXECUTIVE DIRECTORS
Qiu Derong
Judy Li
Nicholas Sage
Chenchong Zhou
COMPANY SECRETARY
Catherine Grant-Edwards
PRINCIPAL & REGISTERED OFFICE
32 Harrogate Street
West Leederville WA 6007
Telephone: (08) 9380 9555
Facsimile: (08) 9380 9666
Website: www.cauldronenergy.com.au
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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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 2017.
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 Antony Sage has in excess of 30 years’ experience in the fields of corporate advisory
services, funds management and capital raising. Mr Antony 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 ASX-listed companies,
Cape Lambert Resources Ltd (which was AIM Company of the year in 2008), Fe Ltd, and
European Lithium Limited. Mr Antony Sage is also a Non-Executive Director of the
National Stock Exchange of Australia (NSX) listed International Petroleum Ltd. He 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
European Lithium Limited
Kupang Resources Limited*
Caeneus 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 2016 to present
September 2010 to August 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
Fully Paid Ordinary Shares
47,544,710
Judy Li
Experience
Non-Executive Director
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.
Directorships of listed companies
held within the last 3 years
None
Interest in Shares & options
None
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Nicholas Sage
Experience
Non-Executive Director (Appointed 20 February 2017)
Mr Nicholas Sage was appointed as a Non-Executive Director effective 20 February 2017.
Mr Nicholas Sage is an experienced marketing and communications professional with in
excess of 25 years in various management and consulting roles. Mr Nicholas Sage is
based in Western Australia and currently consults to various companies and has held
various managements roles with Tourism Western Australia. He also runs his
management consulting business.
Directorships of listed companies
held within the last 3 years
Fe Limited
Interest in Shares & options
None
October 2016 to Present
Chenchong Zhou
Non-Executive Director (Appointed 2 May 2017)
Experience
Mr Zhou is an experienced financial analyst in the materials and energy sector. In his
career, Mr Zhou covers an extensive list of junior to mature mining companies and has
developed a good understanding of industry financing. Mr Zhou received his Bachelor
of Science in Economics degree from Wharton Business School in 2013.
Directorships of listed companies
held within the last 3 years
None
Interest in Shares & options
None
Xinyi Zhang
Experience
Non-Executive Director (Appointed 1 January 2017, Resigned 2 May 2017)
Ms Zhang is a practising architect with over 15 years of experience. Xinyi has developed
strong technical and management skills during her career and has experience with all
aspects of the design and construction process. Xinyi has held positions at the Chinese
branch of international companies, HASSELL Studio, Mulvanny G2, and M.A.O.,
undertaking work for many established developers, including, China Eastern Airlines
Group, Greentown Real Estate Co. Ltd, Suning Real Estate Group Co. Ltd and Keppel Land
China. Xinyi has a bachelor degree in architecture from Tongji University, China.
Directorships of listed companies
held within the last 3 years
None
Interest in Shares & options at date
of resignation
None
Mark Gwynne
Non-Executive Director (Resigned 20 February 2017)
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 at date
of resignation
Fully Paid Ordinary Shares
100,000
COMPANY SECRETARY
Ms Catherine Grant-Edwards has been Chief Financial Officer of Cauldron since July 2013, and its Company Secretary since
31 January 2014. Ms Grant-Edwards 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-Edwards has over 13 years’ experience in accounting
and finance and currently provides accounting and company secretarial services to several listed resource companies.
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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 28 to 32. 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 $11,954,682 (30 June 2016: $3,978,324 loss).
The loss for the year includes an impairment loss in respect of capitalised exploration and evaluation to the extent of
$9,589,592 for the year ended 30 June 2017 (30 June 2016: $1,641,604), the majority of which is attributable to the
impairment trigger being the 20 June 2017 announced implementation of a ban on uranium mining on all future mining
leases by the McGowen Government of Western Australia.
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 1,280 km2 of uranium prospective tenements and a smaller gold prospective project covering over
100km2 within Western Australia. The Company also has an interest in a large project with defined uranium mineralisation
and prospects for copper and gold in Argentina.
CORPORATE
The following significant transactions and events occurred during the financial year:
Board Changes
During the year, the Company made the following changes to the board of directors:
(cid:131) Ms Xinyi Zhang was appointed as a Non-Executive Director on 1 January 2017, and later resigned 2 May 2017;
(cid:131) Mr Mark Gwynne resigned as a Non-Executive Director on 20 February 2017;
(cid:131) Mr Nicholas Sage was appointed as a Non-Executive Director on 20 February 2017; and
(cid:131) Mr Chenchong Zhou was appointed as Non-Executive Director on 2 May 2017.
Annual General Meeting
The Company held its annual general meeting on 24 November 2016 (AGM). All resolutions put to shareholders were
passed.
Research and Development refund
In March 2017, Cauldron received $946,102 from the Australian Taxation Office under the Research and Development Tax
Incentive Programme relating to the 2016 financial year.
Placement
As announced 19 September 2016, the Company entered into a $2.5 million placement agreement with a new Chinese
sophisticated investor Yidi Tao (Tao Placement Agreement) for 31,250,000 fully paid ordinary shares (Tao Shares) at an issue
price of $0.08 per share (Tao Placement).
The Tao Placement Agreement included an offer of 20 million unlisted options exercisable at $0.08 on or before 31 December
2018 (Placement Options).
The Tao Shares and Placement Options were issued following receipt of shareholder approval at the Company’s AGM.
Recovery of Judgment Debt
As previously announced 6 July 2016, Cauldron advised it had received judgment in its favour in respect of its claims against
Guangzhou City Investment Management Co. Ltd (Guangzhou City). The judgment debt due and payable to the Company
was for $1 million plus interest (Judgment Debt). On 5 July 2016, the Company recovered $508,455 (net of costs) of the
Judgement Debt.
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Annual Report 2017
As announced 9 December 2016, the Company advised it sought to enforce payment of the outstanding balance of the
Judgment Debt in accordance with the powers afforded by the Civil Judgments Enforcement Act. On 8 December 2016,
Cauldron issued 8,474,588 shares (Guangzhou Shares) to Guangzhou City, in full satisfaction of the Company’s obligations
pursuant to a placement agreement (Guangzhou City Placement Agreement). In accordance with court orders (Orders)
obtained by the Company, upon issue of the Guangzhou Shares to Guangzhou City, an immediate holding lock was placed
over the Guangzhou Shares, and receiver (Mr Kim Wallman of HLB Mann Judd (Insolvency WA) (Receiver)) was appointed
over the Guangzhou Shares.
The Receiver exercised his power for the purpose of realising a portion of the outstanding balance of the Judgment Debt.
On 4 April 2017, the Receiver completed the sale of the Guangzhou Shares to investors who have agreed to a six-month
escrow period in respect of the Guangzhou Shares (Escrowed Shares B), recovering $161,785 of the outstanding balance
(before Receiver costs) from the sale of Guangzhou Shares by the Receiver.
CHANGES IN CAPITAL STRUCTURE
Issue of shares
The Company issued the following during the year:
(cid:131)
(cid:131)
(cid:131)
31,250,000 fully paid shares at $0.08 per share in accordance with the Tao Placement Agreement for $2,500,000
(being the Tao Shares);
1,562,500 fully paid shares at $0.05 per share to a consultant as consideration for services provided to the
Company (Consultant Shares); and
8,474,588 fully paid shares were issued in full satisfaction of the Company’s obligations in respect of the
Guangzhou Placement Agreement (being the Guangzhou Shares).
The Tao Shares and Consultant Shares were issued following receipt of shareholder approval at the Company’s AGM. The
Guangzhou Shares were issued using the Company’s capacity under Listing Rule 7.1.
Issue of options
The Company issued the following during the year:
(cid:131)
20,000,000 unlisted options at $0.08 expiring 31 December 2018 (being the Placement Options).
The Placement Options were issued following receipt of shareholder approval at the Company’s AGM.
Options exercised
There were no options exercised during the year.
Options lapsed
The following options expired during the year:
(cid:131)
44,000,000 unlisted options exercisable at $0.138 with an expiry date of 31 December 2016.
Escrowed shares
On 5 January 2017, 33,898,318 fully paid ordinary shares (Escrowed Shares A) were released from escrow. The Escrowed
Shares A, which were acquired by a series of investors via off market transfers, were subject to voluntary escrow provisions
for six months from 5 July 2016.
On 4 April 2017, a total of 8,474,588 fully paid ordinary shares, the subject of off market transfer agreements, were escrowed
for six months pursuant to voluntary escrow agreements (being the Escrowed Shares B).
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PROJECT INFORMATION
In Western Australia, Cauldron currently has two project areas
(Figure 1) covering more than 1,380 km2 in two areas. Projects
include:
(cid:120) Yanrey Project (Yanrey) in Western Australia comprises 12
granted exploration licences (1.280km2) and 7 applications for
exploration licences (913 km2). Yanrey is prospective for large
sedimentary-hosted uranium deposits. The Bennet Well
Uranium Deposit is located within the Yanrey Project area
(cid:120) Boolaloo Project (Boolaloo) in Western Australia comprises 2
granted exploration licences (104km2) prospective for gold
mineralisation.
In November 2016, Cauldron relinquished the last of its tenements that formed the Marree Project in South Australia and
subsequently terminated the Joint Venture Agreement associated with this Project.
Figure 1: Map Location of Cauldron Projects
BENNET WELL (YANREY REGION)
The mineralisation at Bennet Well is a shallow accumulation of uranium hosted in unconsolidated sands (less than 100 m
downhole depth) in Cretaceous sedimentary units of the North Carnarvon Basin.
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.
Work completed during the 2016 - 2017 period consisted of a metallurgical leaching study of mineralisation at Bennet Well
and collection of geophysical (Passive Seismic) survey data over the Yanrey Project area.
CSIRO Leaching Study:
The first of a two-phase, joint Cauldron-MRIWA funded research program was completed by CSIRO in the June quarter.
The first stage of investigation (shown by the green column of Table 1) used existing sample and project data to test
the leaching properties of mineralisation which would in turn aid in designing a field leach trial. The second stage of
the study (shown by the four brown coloured columns of Table 1) is aimed to support the activities of the field leach
trial, and is yet to be commenced. The results of the first phase of study show the deposit is favourable for recovery
by in-situ recovery (ISR) style mining; because:
(cid:120) mineralisation is readily leachable by both acid and alkaline leachates;
(cid:120)
(cid:120)
Activity
the gangue has a chemistry that does not produce scale, generally a detriment of the leaching process;
there is very little leachate consumption caused by unfavourable host-to-leachate chemical interaction.
Table 1: The activities of the CSIRO research program
Laboratory
Preparation
Field
Pump
Test
Push-Pull
Test
Recirculation
Test
Recovery
Test
x
x
x
x
x
Sample characterisation
Leach tests
Downstream processing
Hydrogeology
Reactive transport modelling
Downstream process
optimisation
Process flow sheet development
Support field test work
x
x
x
x
x
x
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x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
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CSIRO completed ten column leach tests on five mineralised zones sampled by core taken from Bennet Well East and
Bennet Well Central. Both acid leach and alkali leach was tested in separate columns made from each of the five
mineralised drillholes, namely BW0061, BW0056, BW0071 from Bennet Well East, and BW0073 and BW0072 from
Bennet Well Central. Oxidant was added to each leachate (both acid and alkali) mid-way through the leaching cycle.
The results of leaching for each zone of mineralisation is shown in Figure 2, with the acid leach marked by dark blue
and the alkaline leach marked by the light blue curve.
Figure 2: Column leach test recovery curves – mineralised core at Bennet Well
These data show:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
acid leach achieves higher uranium extraction than alkali leach;
use of oxidant improves uranium extraction in acid leachate;
oxidant may not be necessary because very high extraction rates are achieved by acid leaching solutions
without oxidant;
column test results concur with bottle roll recoveries measured by ANSTO in a previous study completed in
2014.
In addition to the column leach testing, CSIRO completed testing on the ion exchange properties of ten commercially
available resins, used for stripping uranium from a pregnant leach soution. The results show:
(cid:120)
(cid:120)
(cid:120)
near 100% adsorption of uranium from acid solution from one of the commercially available resins;
suitable resins are available for alkali leach solutions, although resins generally perform better for acid leach
than for alkali leach solutions;
in the acid leach solution, a resin generally performs better in low oxidant conditions.
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Passive Seismic Data Collection:
The passive seismic survey technique utilises the natural high frequency seismicity in the ground to map depth to basement,
the contact between the cover sediments and the underlying basement bedrock, with the aim of detecting areas of
depression that indicate potential mineralised palaeochannels. The survey itself was conducted in a two-phases; with the
first comprising an orientation survey over the Bennet Well Uranium Deposit (Figure 2), to test the suitability of the survey
technique by comparing the resulting depths to basement with that intersected by drilling. The orientation consisted of six
survey lines with a station spacing of 50 to 100 m. Both station spacings were trialled and the spacing of 100 m was deemed
the most appropriate based on initial results. The results from the orientation survey:
1.
Showed the system can provide an important input into the exploration model developed for understanding the
localisation of mineralisation. The results of the orientation survey showed:
a.
b.
c.
d.
the topographic surface of the basement sequence (that underlays the sequence that is host to
mineralisation) could be mapped to relatively high accuracy;
that an inexpensive non-drilling technique can be used to expand the exploration model and generate
drilling targets in proximity to Bennet Well as well as into areas that have no previous drilling;
that an inexpensive non-drilling technique can be used to establish an important parameter of the
hydro-geological framework of the deposit;
the line spacing needed to delineate areas where mineralisation may be hosted;
2. Helped design a survey to collect passive seismic data proximal to the Bennet Well deposit in strike extensions of
known channelised portions of the deposit, and in lateral juxtaposition to the west of the deposit.
3.
The lithological framework for Bennet Well was enhanced by incorporating the basement topographic surface
derived from the results of the passive seismic survey collected in areas having no drilling. The lithological
framework will provide the basis for hydro-geological modelling fundamental to understanding groundwater fluid
flow, in general; and mining-fluid flow from potential in-situ recovery type mining operations, in particular. The
hydro-geological modelling (yet to be completed) will help to:
a.
b.
optimise the design of the field leach test (FLT); and
de-risk the environmental impact of potential mining operations.
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Figure 2: Yanrey Project – Passive Seismic Survey Stations. Image insert (pink border) outlines in red the 1st Phase Orientation
Survey over the Bennet Well Deposit
The second phase of the passive seismic survey involved the following components:
1. Continuation of the passive seismic survey over the Bennet Well Deposit, incorporating areas of infill and
extension to known mineralisation in and around the deposit.
2. Results of the infill/extensional passive seismic survey successfully highlighted areas of basement depression,
indicating likely palaeochannels (Figure 3) and thus potential for the extension of known uranium mineralisation
into these areas.
3.
These results correlate well with observations from previous exploration that:
a.
b.
c.
the palaeochannels hosting the Bennet Well Deposit do have a northwest-southeast strike, confirming
the current lithological and morphological model for the deposit;
there is an area of shallow basement in the eastern part of Bennet Well East that correlates with
observations from previous drilling and airborne magnetics data, in which a coarse-grained, pegmatitic
granite has been intersected at very shallow depths;
there is a significant and sudden deepening of the basement in the western part of the deposit that has
been observed previously from drilling at Bennet Well South. This is likely caused by large regional fault
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structures that cross-cuts the area of the deposit, and may provide structural pathway for reducing
agents such as hydrocarbon-bearing fluids or gas; and
4.
The palaeochannel depressions revealed by the survey also correlate well with the currently-defined uranium
mineralisation outlines, confirming that the mineralisation is not just confined to the deeper parts of the
palaeochannels but is also situated on the shoulders of the channels.
Figure 3: Passive Seismic Survey results from the Bennet Well Deposit. Basement topography grid has been derived from the
passive seismic data.
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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, project-scale, technical review of the potential mineralisation in the Yanrey tenement group was undertaken in
2015 and updated in the first half of 2016. A total of seventeen targets were produced from this work, as shown in Figure 4.
The derivation of these Exploration Targets has already been reported previously and will not be reiterated here (please
refer to ASX announcement dated 22 September 2015). These areas were utilised to design the Passive Seismic survey
conducted in the current reporting period.
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Figure 4: Plan view of the Exploration Targets surrounding the Bennet Well Deposit and within the larger
Yanrey Project area
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Passive seismic surveying was also conducted within the more regional areas of the Yanrey Project, covering Exploration
Targets 15 and 17, shown in Figure 4. The results showed:
a.
b.
c.
d.
three areas of basement depression in the southern part of the Yanrey tenement package, between the Bennet
Well Deposit and the NW Coastal Highway;
the suggested strike of
northwest/southeast, like that seen at Bennet Well;
these southern
targets
is between west-northwest/south-southeast and
two areas of basement depression situated approximately 13 km northeast of Bennet Well, at the Manyingee
South prospect, that coincide with the interpreted extension of the Paladin-owned Manyingee Deposit into
Cauldron-owned tenements; and
the suggested strike of the Manyingee South targets currently appears to be between west-east and northwest-
southeast, however further survey work is required to add more information to this model and further constrain
future drill targets at this prospect.
BOOLALOO PROJECT, WESTERN AUSTRALIA
The Boolaloo project (Boolaloo Project), held by Cauldron Energy, is a greenfields base metal (Cu, Pb, Zn) and gold project
located in the Ashburton Mineral Field, Western Australia. The Boolaloo Project is currently comprised of a two exploration
licences, E08/2496 and E08/2638. The Boolaloo Project has not been extensively explored historically. It is prospective for
structurally-hosted mineralisation located in fault jogs and cross cutting features, such as dolerite dykes and shears.
A geological review completed in 2014 identified several prospective structural and lithological targets within the Boolaloo
Project that are thought to be prospective for base metal and gold mineralisation. There is potential for gold (Au), silver
(Ag), copper (Cu) and/or antimony (Sb), and base metal mineralisation within favourable NW-SE structures, SW-NE intrusives
and their intersections. Evidence of local mineralisation (Au, Ag, Cu +/- Sb, base metals) is found in the Ashburton Formation
associated with east-west and north-south fault/shear structures. Potential for mineralisation extending into the project
area exists with the same structures as well as within the metamorphosed rocks associated with the granite intrusion and
possibly even along the unconformity.
No ground work was completed on the Boolaloo tenements during the year. However, a desktop review was commenced
to assess the exploration potential for commodities within the Boolaloo project area. The Company determined that the
Boolaloo Project was outside its exploration strategy and both tenements were surrendered outright on 17 August 2017.
MARREE PROJECT, SOUTH AUSTRALIA
On 22 June 2016, Cauldron offered to divest its percentage interest in the Marree Project to its Korean Joint Venture
partners. The Koreans declined to take up the Cauldron offer on 20 September 2016. After failing to locate a potential
buyer for the Project through WA contacts, Cauldron contacted a broker in South Australia to seek potential divestment
parties for the Project, with no positive response. The Marree Joint Venture partners elected to dissolve the project on 15
November 2016.
Cauldron allowed three (EL4746, EL4794 and EL5442) of the Maree tenements to expire without renewal and surrendered
the remaining two tenements (EL5788 and EL5789) on 18 November 2016.
The relinquishment of the Marree Project has relieved the Company of the requirement for over $2 million in expenditure
obligations and permits Cauldron to focus on progressing its Yanrey/Bennet Well uranium project.
TENEMENT ADMINISTRATION: AUSTRALIA
Objection to Cauldron’s Applications for exploration licences 08/2385-2387
As announced 29 August 2016, the Company received judgment in its favour against Forrest & Forrest Pty Ltd (Forrest) in
respect of the Cauldron’s application for exploration licences 08/2385, 08/2386 and 08/2387 (ELAs).
Cauldron lodged applications for ELAs on 4 April 2012. Forrest lodged objections to the applications. On 5 January 2015, the
Minister for Mines decided there were sufficient grounds to allow the applications to proceed through the determination
process under provisions of the Mining Act and the Native Title Act. On 1 April 2015, Forrest requested the applications
return to the warden, who declined any further hearing, and the applications have successfully passed through the Native
Title process. On 27 August 2015, Forrest 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 (Forrest Application). The Forrest Application was heard on 19 April 2016.
On 26 August 2016, The Honourable Justice Tottle handed down his decision dismissing the Forrest Application and making
formal orders for Forrest to pay the Company’s costs.
Subsequently, as announced 16 September 2016, the Company received notice that Forrest lodged an appeal in the Western
Australian Court of Appeal against the decision. The appeal was heard on 9 June 2017 and the Judge’s decision was released
on 17 August 2017 (refer Subsequent Events for details of this decision).
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Energia Mineral’s Objection and Application for Forfeiture
On 14 August 2013 Energia Minerals Limited (ASX: EMX) (Energia) 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 matter of the exemptions was heard by Warden Maughan on 15-16 April 2015. On 22 May 2015, the Warden
recommended that the exemptions be refused. Cauldron surrendered E08/2165 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,
Industry Regulation and Safety refused Cauldron’s applications for exemption from expenditure for E08/2160 and E08/2161.
The substantive hearing of the forfeiture applications against Exploration Licences 08/2160 and 08/2161 was held on 9 and
10 May 2017.
Cauldron and Energia entered into a confidential Deed of Settlement and Release on 18 May 2017, to settle both the
Forfeiture Proceedings and Exemption Proceedings. Cauldron surrendered Exploration Licences 08/2160 and 08/2161
outright on 19 May 2017, to enable it to focus on its other tenements.
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 matters are proceeding through the
Warden’s Court process and are currently scheduled for mention on 1 September 2017.
The Company will inform shareholders of any material developments.
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). Cauldron
purchased E08/2733 from Ashrock in May 2016 and took over this matter. The tenement application was withdrawn on 17
February 2017 and the Objection subsequently lapsed.
African Royalty Company Pty Ltd Application for Forfeiture against Cauldron’s E08/2638 (Boolaloo)
On 10 October 2016, African Royalty Company Pty Ltd (ASX: ARC) lodged an application for forfeiture #495145 (Forfeiture)
against Cauldron’s Boolaloo tenement E08/2638. ARC withdrew their application for forfeiture on 20 June 2017. The
tenement remains granted to Cauldron.
Red Sky Stations Pty Ltd Objection to Tenement Application for E08/2899
Cauldron lodged an application for Exploration Licence 08/2899, on 1 February 2017. Red Sky Stations Pty Ltd lodged
Objection #501163 on 15 February 2017 against the tenement application. The matter was heard at the first mention hearing
on 11 August 2017, and will proceed through the Warden’s Court process over the coming months.
The Company will inform shareholders of any material developments.
EXPLORATION ACTIVITES: ARGENTINA
In Argentina, Cauldron controls, through its wholly-owned subsidiary Cauldron Minerals Limited (“Cauldron Minerals”), 443
km2 at the Rio Colorado Project, in Catamarca. Cauldron has an exclusive option agreement through its wholly owned
subsidiary Cauldron Minerals with a private party (Dr Horacio Solis), to earn 92.5% in 243 km2 of the Rio Colorado uranium
project in Argentina. The remainder of the project is (200 km2) is held by Cauldron in the name of Jackson Global Limited
(now Cauldron Minerals). Together, both areas form the Rio Colorado Joint Venture. Cauldron has earned its Initial Interest
of 51% in the project. The Company has the option to earn 92.5% of the project by completing exploration expenditure of
$500,000 within three years following earning of the Initial Interest. In May 2017, Cauldron initiated an agreement to
terminate the current joint venture arrangement and complete acquisition of 100% interest in the Rio Colorado Project. The
transaction is expected to be completed during 2017. The Project is also a Cu-Ag target exhibiting characteristics similar to
the globally significant sedimentary copper deposits. No work was completed in Argentina during the 2016- 2017 period,
as Cauldron is awaiting approval for drilling at the Rio Colorado Project.
During the Year the Argentinian government confirmed the completion of transfer of mining tenement “Mina Colorada” (file
393-S-2010) in Catamarca from Pablo Sanz Baroni to Cauldron Minerals Limited (wholly owned subsidiary of Cauldron Energy
Ltd), after several years of internal processing. The acquisition of Mina Colorada was initially approved in early 2015. The
tenement has now been re-assessed and found to be outside the parameters of the Company’s exploration strategy.
Cauldron requested the Argentine government to surrender Mina Colorada outright on 10 August 2017 and approval of this
relinquishment is pending at the time of this report.
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The Company has been assisting with re-negotiating an agreement with Caudillo Resources S.A. (Caudillo) for four mining
tenements at the Los Colorados Project in La Rioja, Argentina. Caudillo has revised its intentions and has completed actions
to relinquish the Project. The transaction is ongoing at present.
During the period, Cauldron received confirmation of the release of applications for tenements in both its Bella Vista and Las
Marias Projects in San Juan, Argentina. The grant of the applications had been stalled for several years and the Company
relinquished these properties to focus its attention on the most prospective projects in Rio Colorado in Argentina and Yanrey
in Western Australia.
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.
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 Passive Seismic geophysical survey technique does not involve the
collection of a physical sample. Instead, it relies on the measurement of the
natural seismicity in the ground to map the contact between the soft cover
sediments (in which the uranium mineralisation is hosted) and the
underlying, generally more fresh and hard, bedrock of the basement (known,
at Bennet Well, to be granitic gneiss).
The survey technique involves the establishment of station lines, spaced 400
metres (m) apart, and individual station points with a nominal spacing of 100
metres (m). (The orientation survey conducted in July 2016 also trialled the
effectiveness of a 50 metres (m) station spacing, however this proved to be
too time-consuming and reduced the cost-effective nature of the survey
technique. A spacing of 100 m was then selected and found to be adequate
for first-pass exploration purposes. If, however, any rocky outcrop was
discovered, the station spacing was extended to 200 m in order to account
for the poor quality of data resulting from the occurrence of shallow
basement. Given that the thickness of cover sediments above these areas of
shallow basement is less than elsewhere in the deposit, the resulting
frequency plots are often distorted and it can be difficult to deduce a single
peak resonance frequency.
If required at a later date, the station spacing could then always be
decreased to the 50 m spacing in order to provide more information on an
interesting target.)
The survey involved the use of 2 Tromino seismometers, hired through the
Resource Potentials Pty Ltd geophysical consultancy company, based in
Perth, WA. Each Tromino unit is a small, shoe-box sized, instrument which is
secured by pushing the three, pointed metal “legs” of the unit into the
ground at the pre-designated “sample” (i.e. station) coordinate and set to
record for a period of 16 minutes. When the instrument has finished
recording data, the unit is removed from the station point and moved 100 m
to the next station. The process is repeated until the end of the working day,
or until the survey line has been completed.
At the end of each survey day, both instruments are taken to two Control
points, established during the orientation survey for the purpose of Quality
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Explanation
Comment
Control and to check the repeatability of the units. Both instruments are
placed each Control point and another set of recordings are taken.
The data collected during the day is then downloaded onto a field computer
and processed to give a resulting resonant frequency value that represents
the contact between the overlying unconsolidated sediments and the
underlying fresher basement. The processed data appear in the form of 2
graphs:
1.
2.
an Amplitude graph that plots the speed of the horizontal and
vertical components against the resonant frequencies measured
during the survey;
a ratio graph known as a HVSR plot (or Horizontal-over-Vertical
Spectral Ratio) that plots the ratio of the horizontal divided by the
vertical component against frequency.
The boundary between the softer “cover” sediments and the fresher
basement lithologies creates a difference in acoustic resonance between the
horizontal and vertical seismic waves, due to the difference in density
contrast between the 2 respective “Layers”. This difference appears on the
Amplitude plot (graph 1) as a small, eye-shaped feature that produces a
corresponding peak in the HVSR plot (graph 2). The frequency at which that
peak occurs is then the resonant frequency at that particular survey station.
This resonant frequency value is then used in the depth modelling step to
give a final Depth to Basement value.
Include reference to
measures taken to
ensure sample
representivity and the
appropriate
calibration of any
measurement tools or
systems used.
Although no physical samples are collected during the Passive Seismic
survey, a Quality Control procedure was still established in order to test the
repeatability of the resulting data.
Two Control points were chosen, during the orientation survey, based on
fixed (i.e. permanent) structures, close to the field office, with a fixed
coordinate location that is highly unlikely to change. As the locations of these
two Control points are known and permanent, the resulting measured peak
frequencies and derived depths to basement are assumed to always be
within a tight and consistent range.
At the end of every day during the survey period, a reading was taken by
placing both instruments down at each Control point. When the data were
later downloaded and analysed, the results of these Control checks were
then plotted against time and any observed variation in the resulting peak
frequencies would indicate a corresponding change (if any) in the
instruments’ recording capabilities.
Resource Potentials Pty Ltd, a Perth-based geophysical consultant company,
is currently the West Australian representative for the Italian company,
Micromed, who owns the Tromino instrumentation. Accordingly, Cauldron
acquired the two Tromino units on hire for the duration of the survey (i.e. 3 –
4 months).
At the end of the field season in December 2016, both instruments were
brought back to the Resource Potentials office in Perth and checked for
calibration requirements.
Aspects of the
determination of
mineralisation that
are Material to the
Public Report.
The Passive Seismic survey does not directly detect or determine the
existence of uranium mineralisation in the survey area. This exploration tool
instead maps out the basement depressions indicative of potentially
mineralised palaeochannels and palaeovalleys. The following describes the
data collection process:
Data was collected at 100 m spaced intervals (stations) along survey lines
spaced 400 m apart. Each unit (Tromino) was positioned at a pre-designated
survey station and set to record for a period of 16 minutes. When the
instrument has finished recording data, the unit is removed from the station
point and moved 100 m to the next station. The process is repeated until the
survey line has been completed. If, however, any rocky outcrop was
discovered, the station spacing was extended to 200 m in order to account
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Criteria
Explanation
Comment
for the poor quality of data resulting from the occurrence of shallow
basement. Given that the thickness of cover sediments above these areas of
shallow basement is less than elsewhere in the deposit, the resulting
frequency plots are often distorted and it can be difficult to deduce a single
peak resonance frequency.
Once all of the data is collected, it is processed to extract a resonance
frequency value which is then put into the numerical depth calibration
model. This model was constructed by plotting the known depths from
drilling (completed in 2014 and 2015) against the peak frequencies resulting
from the passive seismic survey of the same drillholes in July 2016. A linear
trendline was fitted to the resulting scatter plot and the gradient equation of
this line gave the depth calibration model.
Results from both the orientation survey and the subsequent extension and
infill surveys, over Bennet Well, were applied to this depth calibration model
to generate a set of depth to basement values for the deposit. The depths
were found to be consistent with the exploration model of the basement
derived from drilling data, thereby indicating that the survey technique was
successfully and accurately representative of the in-situ information
collected during drilling.
A second modelling and interpretation technique was also utilised that
involved the use of a Resonance Frequency equation and density information
representative of the in-situ formations. The Resonance Frequency equation
is:
ƒ= [Vs/(4*H)] where:
ƒ = resonance frequency (Hz)
Vs = shear wave velocity (m/s) of the cover sediment sequence (“Layer 1”),
and / or the basement (“Layer 2”, known to be granitic at Bennet Well)
H = depth to basement (m)
Once the peak frequencies were collected from the survey, the depth
calibration model was applied to give a set of depth-to-basement values.
These depths (“H” in the above equation) and the initial resonance
frequencies were then used to rearrange the above equation to produce a
shear wave velocity value for “Layer 1” as the cover sediments. In most
cases, this velocity value would be between 600 and 700 m/s. An average,
arbitrary density value was assigned to each layer based on density
measurements collected from a combination of downhole geophysical
surveying and core testwork conducted during the 2013 and 2014
exploration programs. An average value of 1.9 g/cc was assigned to the
unconsolidated sediments of Layer 1, whereas the harder, more fresh
granitic Layer 2 was assigned the average density value of 2.2 g/cc.
The software used to process the raw data has an additional tool to produce
depth and velocity models for Layers 1 and 2 (cover and basement,
respectively). A model was produced for each survey station and then
plotted against the corresponding depths-to-basement derived using the
numerical depth calibration model. The results from both modelling
techniques were found to correlate very well with each other and with the
depth-to-basement values observed from drilling.
No drilling was conducted during the reporting period of July to December
2016. All drill data used in the derivation of the depth to basement model,
was collected during the 2014 and 2015 exploration programs and has
already been reported on (refer to ASX Announcement 27 February 2015,
CXU Half Year Financial Report – 31 December 2014, and ASX Announcement
12 February 2016, CXU Half Yearly Financial Report – 31 December 2015).
Drilling
Techniques
Drill type (e.g. core,
reverse circulation,
open-hole hammer,
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).
Method of recording
and assessing core
No drilling was conducted during the reporting period of July to December
2016. All drill data used in the derivation of the depth to basement model,
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Explanation
Comment
1-2
Drill Sample
Recovery
and chip sample
recoveries and results
assessed.
was collected during the 2014 and 2015 exploration programs and has
already been reported on (refer to ASX Announcement 27 February 2015,
CXU Half Year Financial Report – 31 December 2014, and ASX Announcement
12 February 2016, CXU Half Yearly Financial Report – 31 December 2015).
No physical samples are collected during the Passive Seismic geophysical
survey method. A measurement is taken by a small, shoebox-sized
instrument that is secured into the ground at the designated coordinate and
set to record the ground’s natural seismicity for a period of 16 minutes.
Measures taken to
maximise sample
recovery and ensure
representative nature
of the samples.
No drilling was conducted during the reporting period of July to December
2016. All drill data used in the derivation of the depth to basement model,
was collected during the 2014 and 2015 exploration programs and has
already been reported on (refer to ASX Announcement 27 February 2015,
CXU Half Year Financial Report – 31 December 2014, and ASX Announcement
12 February 2016, CXU Half Yearly Financial Report – 31 December 2015).
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.
Whether core and chip
samples have been
geologically and
geotechnically logged
to a level of detail to
support appropriate
Mineral Resource
estimation, mining
studies and
metallurgical studies.
1-3
Logging
No physical samples are collected during the Passive Seismic geophysical
survey method. A measurement is taken by a small, shoebox-sized
instrument that is secured into the ground at the designated coordinate and
set to record the ground’s natural seismicity for a period of 16 minutes.
No drilling was conducted during the reporting period of July to December
2016. All drill data used in the derivation of the depth to basement model,
was collected during the 2014 and 2015 exploration programs and has
already been reported on (refer to ASX Announcement 27 February 2015,
CXU Half Year Financial Report – 31 December 2014, and ASX Announcement
12 February 2016, CXU Half Yearly Financial Report – 31 December 2015).
No physical samples are collected during the Passive Seismic geophysical
survey method. A measurement is taken by a small, shoebox-sized
instrument that is secured into the ground at the designated coordinate and
set to record the natural seismicity of the host sediments for a period of 16
minutes.
No drilling was conducted during the reporting period of July to December
2016. All drill data used in the derivation of the depth to basement model,
was collected during the 2014 and 2015 exploration programs and has
already been reported on (refer to ASX Announcement 27 February 2015,
CXU Half Year Financial Report – 31 December 2014, and ASX Announcement
12 February 2016, CXU Half Yearly Financial Report – 31 December 2015).
All geological data used in the derivation of the Depth To Basement model
were from the drilling conducted in 2014 and 2015. From these 2 drilling
programs, all mud rotary chips were geologically logged and used to assist in
the interpretation of the downhole geophysical data. 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.
Part of the geological information utilised in the Depth To Basement model
derivation came from the drill core collected during the 2014-2015
exploration drilling programs referred to above. This drill core was also
geologically logged in greater detail than that undertaken during the logging
of the mud rotary chips. The information collected 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 design of the regional-scale Passive Seismic geophysical survey.
No geotechnical data was collected due to the generally flat-lying geology
and mostly unconsolidated sediments.
No physical samples are collected during the Passive Seismic geophysical
survey method. A measurement is taken by a small, shoebox-sized
instrument that is secured into the ground at the designated coordinate and
set to record the ground’s natural seismicity for a period of 16 minutes.
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Part
Criteria
Explanation
Comment
Whether logging is
qualitative or
quantitative in nature.
Core (or costean,
channel, etc.)
photography.
As reported in 2014 and 2015, 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.
No drilling was conducted during the reporting period of July to December
2016. All drill data used in the derivation of the depth to basement model,
was collected during the 2014 and 2015 exploration programs and has
already been reported on (refer to ASX Announcement 27 February 2015,
CXU Half Year Financial Report – 31 December 2014, and ASX Announcement
12 February 2016, CXU Half Yearly Financial Report – 31 December 2015).
The total length and
percentage of the
relevant intersections
logged.
No drilling was conducted during the reporting period of July to December
2016. All drill data used in the derivation of the depth to basement model,
was collected during the 2014 and 2015 exploration programs and has
already been reported on (refer to ASX Announcement 27 February 2015,
CXU Half Year Financial Report – 31 December 2014, and ASX Announcement
12 February 2016, CXU Half Yearly Financial Report – 31 December 2015).
1-4
Sub-Sampling
Techniques
and Sample
Preparation
If core, whether cut or
sawn and whether
quarter, half or all
core taken.
All mud rotary chip samples and diamond core samples from the 2014 – 2015
exploration programs were logged both geologically and with the downhole
geophysical sondes.
No drilling was conducted during the reporting period of July to December
2016. All drill data used in the derivation of the depth to basement model,
was collected during the 2014 and 2015 exploration programs and has
already been reported on (refer to ASX Announcement 27 February 2015,
CXU Half Year Financial Report – 31 December 2014, and ASX Announcement
12 February 2016, CXU Half Yearly Financial Report – 31 December 2015).
No physical samples are collected during the Passive Seismic geophysical
survey method. A measurement is taken by a small, shoebox-sized
instrument that is secured into the ground at the designated coordinate and
set to record the ground’s natural seismicity for a period of 16 minutes.
If non-core, whether
riffled, tube sampled,
rotary split, etc. and
whether sampled wet
or dry.
No drilling was conducted during the reporting period of July to December
2016. All drill data used in the derivation of the depth to basement model,
was collected during the 2014 and 2015 exploration programs and has
already been reported on (refer to ASX Announcement 27 February 2015,
CXU Half Year Financial Report – 31 December 2014, and ASX Announcement
12 February 2016, CXU Half Yearly Financial Report – 31 December 2015).
No physical samples are collected during the Passive Seismic geophysical
survey method. A measurement is taken by a small, shoebox-sized
instrument that is secured into the ground at the designated coordinate and
set to record the ground’s natural seismicity for a period of 16 minutes.
For all sample types,
the nature, quality
and appropriateness
of the sample
preparation
technique.
No drilling was conducted during the reporting period of July to December
2016. All drill data used in the derivation of the depth to basement model,
was collected during the 2014 and 2015 exploration programs and has
already been reported on (refer to ASX Announcement 27 February 2015,
CXU Half Year Financial Report – 31 December 2014, and ASX Announcement
12 February 2016, CXU Half Yearly Financial Report – 31 December 2015).
Quality control
procedures adopted
for all sub-sampling
stages to maximise
representivity of
samples.
No physical samples are collected during the Passive Seismic geophysical
survey method. A measurement is taken by a small, shoebox-sized
instrument that is secured into the ground at the designated coordinate and
set to record the ground’s natural seismicity for a period of 16 minutes.
Although no physical samples are collected during the Passive Seismic
survey, a Quality Control procedure was still established in order to test the
repeatability of the resulting data.
Two Control points were chosen, during the orientation survey, based on
fixed (i.e. permanent) structures, close to the field office, with a fixed
coordinate location that is highly unlikely to change. As the locations of these
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Explanation
Comment
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.
two Control points are known and permanent, the resulting measured peak
frequencies and derived depths to basement are assumed to always be
within a tight and consistent range.
At the end of every day during the survey period, a reading was taken by
placing both instruments down at each Control point. When the data were
later downloaded and analysed, the results of these Control checks were
then plotted against time and any observed variation in the resulting peak
frequencies would indicate a corresponding change (if any) in the
instruments’ recording capabilities.
The initial Passive Seismic orientation conducted over the Bennet Well
Deposit also involved the survey of 71 drillholes which involved placing both
instruments into the ground at the concrete drill collar marker. All 71
drillholes were drilled during the 2014 and 2015 drilling campaigns (refer to
ASX Announcement 27 February 2015, CXU Half Year Financial Report – 31
December 2014, and ASX Announcement 12 February 2016, CXU Half Yearly
Financial Report – 31 December 2015).
The depths to basement had already been physically confirmed during the
drilling of these holes. A numerical Depth-To-Basement model was then
derived by plotting the known depth to basement from the drillholes against
the resulting peak frequencies from the passive seismic survey of the same
drillholes. A linear trendline was fitted to the resulting scatter plot and the
gradient equation of this line gave the depth calibration model.
Results from both the orientation survey and the subsequent extension and
infill surveys, over Bennet Well, were applied to this depth calibration model
to generate a set of depth to basement values for the deposit. The depths
were found to be consistent with the exploration model of the basement
derived from drilling data, thereby indicating that the survey technique was
successfully and accurately representative of the in-situ information
collected during drilling.
A second modelling and interpretation technique was also utilised that
involved the use of a Resonance Frequency equation and density information
representative of the in-situ formations. The Resonance Frequency equation
is:
ƒ= [Vs/(4*H)] where:
ƒ = resonance frequency (Hz)
Vs = shear wave velocity (m/s) of the cover sediment sequence (“Layer 1”),
and / or the basement (“Layer 2”, known to be granitic at Bennet Well)
H = depth to basement (m)
Once the peak frequencies were collected from the survey, the depth
calibration model was applied to give a set of depth-to-basement values.
These depths (“H” in the above equation) and the initial peak frequencies
were then used to rearrange the above resonance frequency equation to
produce a shear wave velocity value for “Layer 1” as the cover sediments. In
most cases, this velocity value would be between 600 and 700 m/s. An
average, arbitrary density value was assigned to each layer based on density
measurements collected from a combination of downhole geophysical
surveying and core testwork conducted during the 2013 and 2014
exploration programs. An average value of 1.9 t/m3 was assigned to the
unconsolidated sediments of Layer 1, whereas the harder, more fresh
granitic Layer 2 was assigned the average density value of 2.2 t/m3.
The software used to process the raw data has an additional tool to produce
depth and velocity models for Layers 1 and 2 (cover and basement,
respectively). A model was produced for each survey station and then
plotted against the corresponding depths-to-basement derived using the
numerical depth calibration model. The results from both modelling
techniques was found to correlate very well with each other and with the
depth-to-basement values observed from drilling.
Whether sample sizes
are appropriate to the
grain size of the
No physical samples are collected during the Passive Seismic geophysical
survey method. A measurement is taken by a small, shoebox-sized
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material being
sampled.
instrument that is secured into the ground at the designated coordinate and
set to record the ground’s natural seismicity for a period of 16 minutes.
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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
determining the
analysis including
instrument make and
model, reading times,
calibrations factors
applied and their
derivation, etc.
“Station spacing” will be used here instead of “sample size” as there are no
physical samples collected. “Grain size” is not relevant here also as the
passive seismic exploration tool surveys the macro scale of palaeochannels
rather than the micro scale of individual grain sizes.
The orientation survey involved testing the suitability of the survey method
and involved the following:
(cid:131)
(cid:131)
(cid:131)
Station spacings of 50 m and 100 m were trialled. The smaller-scale,
50 m spaced station data produced high resolution information
however the length of time taken to measure each station was
doubled and the
number of stations surveyed in a day was halved, thus doubling the
total length of time to survey a single line, which was no longer cost-
effective;
A nominal spacing of 100 m per station was therefore chosen as the
most suitable spacing to allow good data collection, good resolution
of data and a good rate of productivity.
If, however, any rocky outcrop was discovered, the station spacing
was extended to 200 m in order to account for the poor quality of
data resulting from the occurrence of shallow basement. Given that
the thickness of cover sediments above these areas of shallow
basement is less than elsewhere in the deposit, the resulting
frequency plots are often distorted and it can be difficult to deduce a
single peak resonance frequency.
No physical samples are collected during the Passive Seismic geophysical
survey method. A measurement is taken by a small, shoebox-sized
instrument that is secured into the ground at the designated coordinate and
set to record the ground’s natural seismicity for a period of 16 minutes.
The data collected is purely quantitative and based on a numerical result
from the station surveyed. The technique is therefore not considered to be
“partial” or “total” in the same sense as a geochemical assay. However, this
survey technique is considered to be a very effective, regional-scale
exploration tool.
The initial Passive Seismic orientation conducted over the Bennet Well
Deposit also involved the survey of 71 drillholes which involved placing both
instruments into the ground at the concrete drill collar marker. All 71
drillholes were drilled during the 2014 and 2015 drilling campaigns (refer to
ASX Announcement 27 February 2015, CXU Half Year Financial Report – 31
December 2014, and ASX Announcement 12 February 2016, CXU Half Yearly
Financial Report – 31 December 2015).
The depths to basement had already been physically confirmed during the
drilling of these holes. A numerical Depth-To-Basement model was then
derived by plotting the known depth to basement from the drillholes against
the resulting peak frequencies from the passive seismic survey of the same
drillholes. A linear trendline was fitted to the resulting scatter plot and the
gradient equation of this line gave the depth calibration model, which is as
follows:
y = 149.78x^-1.046 where:
“y” = depth to basement
“x” = resonant frequency from the passive seismic survey for that particular
station
Results from both the orientation survey and the subsequent extension and
infill surveys, over Bennet Well, were applied to this depth calibration model
to generate a set of depth to basement values for the deposit. The depths
were found to be consistent with the exploration model of the basement
derived from drilling data, thereby indicating that the survey technique was
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successfully and accurately representative of the in-situ information
collected during drilling.
A second modelling and interpretation technique was also utilised that
involved the use of a Resonant Frequency equation and density information
representative of the in-situ formations. The Resonant Frequency equation
is:
ƒ= [Vs/(4*H)] where:
ƒ = Resonant frequency (Hz)
Vs = shear wave velocity (m/s) of the cover sediment sequence (“Layer 1”),
and / or the basement (“Layer 2”, known to be granitic at Bennet Well)
H = depth to basement (m)
Once the peak frequencies were collected from the survey, the depth
calibration model was applied to give a set of depth-to-basement values.
These depths (“H” in the above equation) and the initial peak frequencies
were then used to rearrange the above resonance frequency equation to
produce a shear wave velocity value for “Layer 1” as the cover sediments. In
most cases, this velocity value would be between 600 and 700 m/s. An
average, arbitrary density value was assigned to each layer based on density
measurements collected from a combination of downhole geophysical
surveying and core testwork conducted during the 2013 and 2014
exploration programs. An average value of 1.9 t/m3 was assigned to the
unconsolidated sediments of Layer 1, whereas the harder, more fresh
granitic Layer 2 was assigned the average density value of 2.2 t/m3.
The software used to process the raw data has an additional tool to produce
depth and velocity models for Layers 1 and 2 (cover and basement,
respectively). A model was produced for each survey station and then
plotted against the corresponding depths-to-basement derived using the
numerical depth calibration model. The results from both modelling
techniques was found to correlate very well with each other and with the
depth-to-basement values observed from drilling.
Although no physical samples were collected during the Passive Seismic
survey, a Quality Control procedure was still established in order to test the
repeatability of the resulting data.
Two Control points were chosen, during the orientation survey, based on
fixed (i.e. permanent) structures, close to the field office, with a fixed
coordinate location that is highly unlikely to change. As the locations of these
two Control points are known and permanent, the resulting measured peak
frequencies and derived depths to basement are assumed to always be
within a tight and consistent range.
At the end of every day during the survey period, a reading was taken by
placing both instruments down at each Control point. When the data were
later downloaded and analysed, the results of these Control checks were
then plotted against time and any observed variation in the resulting peak
frequencies would indicate a corresponding change (if any) in the
instruments’ recording capabilities.
As no drilling was conducted during the reporting period, and no physical
samples were collected, the geophysical data do not produce any significant
intersection information.
The data resulting from the passive seismic survey, however, have been
cross-checked and verified by Resource Potentials Pty Ltd, Perth, and also
cross-checked with Cauldron by alternative personnel.
No drilling was completed during the reporting period.
Data is collected on the Tromino units in the form of 2 seismograph “trace”
files, with the extensions of “.ASS” and “.TRC”.
Each Tromino unit is hired out along with a software package named GRILLA.
When the data is processed, GRILLA automatically forms a “TRACES”
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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.
Documentation of
primary data, data
entry procedures, data
verification, data
1-6
Verification of
Sampling and
Assaying
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storage (physical and
electronic) protocols.
database on the computer into which the individual trace files from each
station are saved.
Once the individual trace files are processed, a resonance frequency can then
be interpreted from the correlation between the eye-shaped feature on the
Amplitude plot and the Horizontal-to-Vertical Spectral Ratio (HVSR) plot. The
resonance frequency is measured in Hertz (Hz).
The last step of the process involves the modelling of the depth to basement
value, consisting of:
1.
2.
assigned shear wave velocities for Layers 1 and 2 (cover and
basement, respectively), in metres/second (m/s)
average densities for each layer in tonnes per cubic metre (t/m3)
and
3. depth to basement (or contact with basement) in metres (m)
During field collection, hard copy paper log sheets are used to record:
a.
b.
c.
d.
e.
line name
station name
partition number (file number on the Tromino unit)
time of recording
comments – into which observations such as ground conditions,
lithology (e.g. sand, or clay), atmospheric conditions such as
wind
These field log sheets and all of the individual peak frequencies and modelled
depths are then entered directly into a MS Access database for subsequent
upload into the main SQL database and server.
The raw GRILLA files and all modelling files are kept on the main server, and
backed up at regular intervals.
The equation derived for the depth calibration model is as follows:
y = 149.78x^-1.046 where:
“y” = depth to basement
“x” = resonant frequency from the passive seismic survey for that particular
station
The calculation used to derive shear velocities from resonant frequencies is
as follows:
ƒ= [Vs/(4*H)] where:
ƒ = resonant frequency (Hz)
Vs = shear wave velocity (m/s) of the cover sediment sequence (“Layer 1”),
and / or the basement (“Layer 2”, known to be granitic at Bennet Well)
H = depth to basement (m)
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 conducted on the holes used in the derivation of
depth calibration model. These holes were completed in the 2014 and 2015
exploration periods and were all drilled vertically, with theshallow drillhole
depths relative to wide drill spacing having minimal effect on potential mis-
position of mineralised intercepts.
Discuss any
adjustment to assay
data.
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.
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.
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Quality and adequacy
of topographic
control.
The primary topographic control is from a high resolution LIDAR survey flown
in early 2015.
1-8
Data Spacing
and
Distribution
Data spacing for
reporting of
Exploration Results.
The orientation survey comprised stations spacings of 50 m and 100 m. Field
results from the orientation soon revealed that the 50 m station spacing was
not necessary and that the 100 m spacing would be sufficient for the purpose
of using the passive seismic survey technique.
For the extensional/infill surveys and more regional surveys, a nominal
spacing of 100 m was utilised. This was shown by the orientation to be the
most appropriate spacing to give adequate coverage and resolution of the
target palaeochannels.
If, however, any rocky outcrop was discovered, the station spacing was
extended to 200 m in order to account for the poor quality of data resulting
from the occurrence of shallow basement. Given that the thickness of cover
sediments above these areas of shallow basement is less than elsewhere in
the deposit, the resulting frequency plots are often distorted and it can be
difficult to deduce a single peak resonance frequency.
Previous drilling campaigns have shown that the channels forming the
Bennet Well Deposit are often between 200 m and 1 km wide. The 100 m
station spacing has been shown to be adequate for providing good resolution
of basement topography for the purpose of highlighting potential
palaeochannel features.
In areas of potential shallow basement subcrop and noticeable outcrop, the
extended 200 m station spacing has also been shown to provide a good
enough resolution over the target areas.
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.
1-9
Orientation of
Data in
Relation to
Geological
Structure
1-10
Sample
Security
Whether sample
compositing has been
applied.
No drilling was conducted and no physical samples were collected in the July
– December 2016 half-yearly reporting period, therefore the method of
sample compositing was not implemented.
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.
The measures taken to
ensure sample
security.
No drilling was conducted during the reporting period, however all drillholes
utilised in the derivation of the depth calibration model were drilled
vertically and sample the true width of uranium mineralisation.
All drillholes used for the depth calibration model were drilled during the
2014 and 2015 exploration periods and have already been reported on (refer
to ASX Announcement 27 February 2015, CXU Half Year Financial Report – 31
December 2014, and ASX Announcement 12 February 2016, CXU Half Yearly
Financial Report – 31 December 2015).
No sampling bias is observed by the orientation of the drill holes.
No sampling bias is observed by the orientation and / or spacing of the
passive seismic survey stations and lines, as they were specifically designed
to provide full coverage of potential channel features and fault structures
observed on regional-scale, airborne magnetics and electromagnetic survey
data.
No drilling was conducted during the reporting period, nor were any physical
samples collected.
Survey station data (i.e. “samples”) collected during the passive seismic
survey were downloaded at the end of everyday onto a secured field laptop
and backed up onto a portable hard drive. After data entry was completed
into a MS Access database, this was also backed up on the field laptop and
the portable hard drive. On arrival back in the central Perth office, all of this
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data was placed onto the main Perth server, which is backed up on a regular
basis.
1-11
Audits or
Reviews
The results of any
audits or reviews of
sampling techniques
and data.
Cauldron’s Competent Person has verified all 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
2-1
Mineral Tenement
and Land Tenure
Status
All of the passive seismic surveying was completed on
exploration tenements E08/1493, E08/1489, E08/1490,
E08/1501, E08/2160, E08/2161, E08/2205 and E08/2774, all of
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.
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.
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.
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:
No drilling was conducted during the reporting period of July to
December 2016. All drill data used in the derivation of the depth
to basement model, was collected during the 2014 and 2015
exploration programs and has already been reported on (refer
to ASX Announcement 27 February 2015, CXU Half Year
Financial Report – 31 December 2014, and ASX Announcement
12 February 2016, CXU Half Yearly Financial Report – 31
December 2015).
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(cid:120)
(cid:120)
(cid:120)
(cid:120)
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 hole;
Down hole length and
interception depth;
(cid:120)
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.
2-5
Data Aggregation
Methods
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.
No drilling was conducted during the reporting period of July to
December 2016. All drill data used in the derivation of the depth
to basement model, was collected during the 2014 and 2015
exploration programs and has already been reported on (refer
to ASX Announcement 27 February 2015, CXU Half Year
Financial Report – 31 December 2014, and ASX Announcement
12 February 2016, CXU Half Yearly Financial Report – 31
December 2015).
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.
However, all average reporting intervals are derived from
applying a cut-off grade of 150 ppm U3O8 for a minimum
thickness of 0.40 m.
No drilling was conducted during the reporting period of July to
December 2016. All drill data used in the derivation of the depth
to basement model, was collected during the 2014 and 2015
exploration programs and has already been reported on (refer
to ASX Announcement 27 February 2015, CXU Half Year
Financial Report – 31 December 2014, and ASX Announcement
12 February 2016, CXU Half Yearly Financial Report – 31
December 2015).
No physical samples are collected during the Passive Seismic
geophysical survey method. A measurement is taken by a small,
shoebox-sized instrument that is secured into the ground at the
designated coordinate and set to record the ground’s natural
seismicity for a period of 16 minutes.
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
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
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2-6
Relationship
Between
Mineralisation
Widths and
Intercept Lengths
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known, its nature should be
reported.
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
known’).
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.
2-7
Diagrams
2-8
Balanced
Reporting
2-9
Other Substantive
Exploration Data
2-10
Further Work
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.
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
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
No drilling was conducted during the reporting period of July to
December 2016. All drill data used in the derivation of the depth
to basement model, was collected during the 2014 and 2015
exploration programs and has already been reported on (refer
to ASX Announcement 27 February 2015, CXU Half Year
Financial Report – 31 December 2014, and ASX Announcement
12 February 2016, CXU Half Yearly Financial Report – 31
December 2015).
No physical samples are collected during the Passive Seismic
geophysical survey method. A measurement is taken by a small,
shoebox-sized instrument that is secured into the ground at the
designated coordinate and set to record the ground’s natural
seismicity for a period of 16 minutes.
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
Depth to Basement model reported here. Sampling information
will therefore not be included here as it is deemed irrelevant for
the purpose of this report.
The Yanrey/Bennet Well Passive Seismic Survey is scheduled to
recommence in the June 2017 quarter, as there are still several
targets surrounding the currently defined Bennet Well Deposit
that require testing for potential extensions to known
mineralisation.
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Comment
large-scale step-out
drilling).
Additionally, there are still areas in the greater, regional Yanrey
Project that remain to be tested with the Passive Seismic survey
tool.
It is currently envisaged that drilling will occur in future
exploration programs in order to fully test the promising
palaeochannel targets that are highlighted by the Passive
Seismic survey conducted in the 2nd Half Yearly reporting period
of 2016.
All appropriate plans have been included in this report.
Diagrams clearly
highlighting the areas of
possible extensions,
including the main
geological interpretations
and future drilling areas,
provided this information is
not commercially sensitive.
5.
BUSINESS STRATEGIES AND PROSPECTS FOR THE FORTHCOMING YEAR
The Company is involved in the mineral exploration industry on its retained tenements and interests. It is also investigating
projects for future acquisition.
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
On 17 August 2017, the Company announced that, in respect of the Forrest objection to Cauldron’s applications for
exploration licences 08/2385-2387 (detailed above), the Court of Appeal handed down its unanimous decision in favour of
the Company. The Court of Appeal dismissed Forrest’s appeal and ordered Forrest to pay the Company’s legal costs of the
appeal.
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:
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Grant Date
Class of Shares
Exercise
Price
Number of
Options
Expiry Date
Listed /
Unlisted
24 November 2016
Ordinary
$0.08
20,000,000
31 December 2018
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.
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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 2017 there no ordinary shares issued as a result of exercise of options (2016: 3,000,000).
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
The following table sets out the number of directors’ meetings held during the year and the number of meetings attended
by each director (while they were a director).
Director
Antony Sage
Qiu Derong
Judy Li
Nicholas Sage
Chenchong Zhou
Xinyi Zhang
Mark Gwynne
Eligible to Attend
Attended
4
4
4
1
-
1
3
4
4
2
-
-
-
-
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 34 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 2017.
KEY MANAGEMENT PERSONNEL
Key Management Personnel includes:
Antony Sage (Executive Chairman)
Qiu Derong (Non-executive Director)
Judy Li (Non-executive Director)
Nicholas Sage (Non-executive Director) (Appointed 20 February 2017)
Chenchong Zhou (Non-executive Director) (Appointed 2 May 2017)
Xinyi Zhang (Non-executive Director) (Appointed 1 January 2017) (Resigned 2 May 2017)
Mark Gwynne (Non-executive Director) (Resigned 20 February 2017)
Catherine Grant (Company Secretary and Chief Financial Officer)
Jess Oram (Exploration Manager)
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.
28
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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 2016 AGM
The 2016 remuneration report received positive shareholder support at the 2016 Annual General Meeting whereby of the
proxies received 99.1% voted in favour of the adoption of the remuneration report.
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
30 June 2013
30 June 2014
30 June 2015
30 June 2016
30 June 2017
Loss after tax
$
(7,896,865)
(3,944,234)
(6,712,800)
(3,978,324)
(11,954,682)
Loss per share
(cents)
Share Price
(cents)
(5.16)
(2.30)
(2.91)
(1.49)
(3.83)
10.0
36.0
11.0
6.6
3.4
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 2017 and 30 June 2016:
30 JUNE 2017
SHORT-TERM BENEFITS
POST EMPLOYMENT
SHARE-BASED
PAYMENTS
OPTIONS
TOTAL
Remuneration
share based
payment
Salary,
Fees &
Leave
240,000
36,000
36,000
12,964
5,903
12,194
23,143
366,204
200,000
193,000
393,000
759,204
Directors
Anthony Sage (i)
Qiu Derong (ii)
Judy Li (iii)
Nicholas Sage (iv)
Chenchong Zhou (v)
Xinyi Zhang (vi)
Mark Gwynne (vii)
Other KMP
Catherine Grant-
Edwards (viii)
Jess Oram (ix)
TOTAL
Other
Non-
Monetary
Super-
annuation
Retirement
Benefits
$
$
%
-
-
-
-
-
-
-
-
-
-
-
-
240,000
36,000
36,000
12,964
5,903
12,194
23,143
366,204
219,000
211,355
430,355
796,559
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,000
18,355
37,355
37,355
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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30 JUNE 2016
SHORT-TERM BENEFITS
POST EMPLOYMENT
SHARE-BASED
PAYMENTS
OPTIONS
TOTAL
Remuneration
share based
payment
Directors
Anthony Sage (i)
Qiu Derong (ii)
Judy Li (iii)
Mark Gwynne (vii)
Other KMP
Catherine Grant-
Edwards (viii)
Jess Oram (ix)
Simon Youds (x)
Salary,
Fees &
Leave
120,000
36,000
36,000
36,000
228,000
210,000
193,000
104,310
507,310
735,310
Other
Non-
Monetary
Super-
annuation
Retirement
Benefits
$
$
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,000
18,335
-
37,335
37,335
-
-
-
-
-
-
-
-
-
-
244,412
-
-
-
244,412
125,340
62,670
188,010
376,020
364,412
36,000
36,000
36,000
472,412
354,340
274,005
292,320
920,665
620,432
1,393,077
67%
-
-
-
52%
35%
23%
64%
41%
45%
TOTAL
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
In his capacity as Executive Chairman, Mr Antony Sage was previously 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. The Company has entered
into a consulting agreement with Okewood Pty Ltd (Okewood), a company controlled by Mr Antony Sage, for
the provision of these services.
In his capacity as Non-Executive Director, Mr Qiu Derong is entitled to a fee of $36,000 per annum. The
Company has entered into a consulting agreement for the provision of these services. Amounts included in this
table represent accrued fees.
In her capacity as Non-Executive Director, Ms Judy Li is entitled to a fee of $36,000 per annum. The Company
has entered into a consulting agreement for the provision of these services.
In his capacity as Non-Executive Director, Mr Nicholas Sage is entitled to a fee of $36,000 per annum from date
of his appointment 20 February 2017. The Company has entered into a consulting agreement with Pembury
Nominees Pty Ltd (Pembury), a company controlled by Mr Nicholas Sage, for the provision of these services.
In his capacity as Non-Executive Director, Mr Chenchong Zhou is entitled to a fee of $36,000 per annum from
the date of his appointment 2 May 2017. A consulting agreement for the provision of services is yet to be
executed. Amounts included in this table represent accrued fees.
In her capacity as Non-Executive Director, Ms Xinyi was entitled to a fee of $36,000 per annum during the course
of her appointment as a director from 1 January 2017 to 2 May 2017. A consulting agreement for the provision
of services was not executed. Amounts included in this table represent accrued fees.
In his capacity as Non-Executive Director, Mr Gwynne was entitled to a fee of $36,000 per annum up until date
of his resignation 20 February 2017. The Company entered into a consulting agreement for the provision of
these services.
Ms Catherine Grant-Edwards 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-Edwards’ salary was recharged to other non-related entities during the year
(2017: $16,000) (2016: $54,000).
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. A portion of Mr Oram’s salary was recharged to
related entity Fe Limited during the year (2017: $2,087) (2016: nil).
The consultancy contract between Mr Simon Youds was terminated 10 February 2016. Up until this date, Mr
Youds was engaged as Cauldron’s Head of Operations, and was included in the Company’s Key Management
Personnel. Mr Youds was entitled to a consultancy fee of $150,000 per annum.
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Annual Report 2017
ADDITIONAL DISCLOSURE RELATING TO OPTION HOLDINGS AND SHARE HOLDINGS
OPTION HOLDINGS OF KEY MANAGEMENT PERSONNEL
30 JUNE 2017
Directors
Qiu Derong (i)
Balance
1 July 2016
Granted
Exercised
Lapsed
Other
Balance
30 June
2017
Vested and
Exercisable
30 June 2017
Un-exercisable
30 June 2017
8,000,000
8,000,000
-
-
-
-
(8,000,000)
(8,000,000)
-
-
-
-
-
-
-
-
(i)
On 31 December 2016, 8,000,000 unlisted options at $0.138 expired. These options were previously issued to Mr
Qiu in accordance with a placement agreement between the Company and Mr Qiu (that is, Mr Qiu did not receive
these options in his capacity as a key management personnel.
VALUE OF OPTIONS AWARDED, EXERCISED AND LAPSED DURING THE YEAR
There were no remuneration options granted, exercised or lapsed during the year ended 30 June 2017.
30 JUNE 2016
Directors
Antony Sage
Qiu Derong
Mark Gwynne
Other KMP
Simon Youds (i)
Catherine Grant-Edwards
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
(i)
During the year ended 30 June 2016, 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.
(ii)
There were no options granted as remuneration during the year ended 30 June 2016.
SHARES ISSUED ON EXERCISE OF OPTIONS
There were no options exercised during the year ended 30 June 2017.
30 JUNE 2016
Shares issued
Paid per share
Unpaid per share
Other KMP
Simon Youds
3,000,000
$0.138
-
No.
$
$
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SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
30 JUNE 2017
Directors
Antony Sage
Qiu Derong
Mark Gwynne (i)
Other KMP
Catherine Grant-Edwards
30 JUNE 2016
Directors
Antony Sage
Qiu Derong (ii)
Mark Gwynne
Other KMP
Simon Youds (iii)
Catherine Grant-Edwards
Balance
1 July 2016
Issued
Received on
exercise of
options
Net Change
Other
Balance
30 June 2017
5,894,600
47,544,710
100,000
8,888
53,548,198
-
-
-
-
-
Balance
1 July 2015
Issued
Received on
exercise of
options
-
-
(100,000)
5,894,600
47,544,710
-
-
(100,000)
8,888
53,448,198
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)
(ii)
At the date of his resignation, Mr Mark Gwynne held 100,000 shares.
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.
(iii)
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 2017
or 30 June 2016.
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):
Director related entities
Fe Limited
Fe Limited
Cape Lambert Resources Limited
Cape Lambert Resources Limited
Okewood Pty Ltd
Okewood Pty Ltd
Sales to
related parties
Purchases
from related
parties
Amounts
owed by
related
parties*
Amounts owed
to related
parties*
2017
2016
2017
2016
2017
2016
2,087
-
-
-
-
-
-
2,500
219,288
238,422
30,623
28,523
-
-
-
-
-
-
-
-
4,928
6,066
-
-
* Amounts are classified as trade receivables and trade payables, respectively.
Mr Antony Sage is a director of Cape Lambert Resources Limited and Okewood Pty Ltd. Messrs Antony Sage and Nicholas
Sage are directors of Fe Limited, as was Mr Gwynne until 6 February 2017.
End of Audited Remuneration Report.
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Annual Report 2017
15.
NON AUDIT SERVICES
There were no non-audit services were provided by the Company’s auditor BDO (WA) Pty Ltd.
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
6 September 2017
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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
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 2017, 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, 6 September 2017
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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 2017
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 2017 (which reports against these ASX Principles) may
be accessed from the Company’s website at www.cauldronenergy.com.au.
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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2017
Note
3(a)
3(b)
22
7
4
5
Revenue
Other income
Administration expenses
Employee benefits expenses
Directors fees
Share based payments
Compliance and regulatory expenses
Consultancy expenses
Legal fees
Occupancy expenses
Travel expenses
Exploration expenditure
Net fair value loss on financial assets through profit and loss
Depreciation
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 loss for the year
after income tax
2017
$
2016
$
36,682
18,188
(123,412)
(378,241)
(366,204)
(78,125)
(221,109)
(184,355)
(203,221)
(134,818)
(25,809)
(39,457)
(342,684)
(97,340)
(575)
(9,814,202)
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)
(11,954,682)
(3,978,324)
-
-
(11,954,682)
(3,978,324)
-
-
(25,862)
(147,995)
(25,862)
(147,995)
Total comprehensive loss attributable to members of the
Company
(11,980,544)
(4,126,319)
Loss per share for the year attributable to the members of
Cauldron Energy Ltd
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
16
16
(3.83)
(3.83)
(1.49)
(1.49)
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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CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2017
CURRENT ASSETS
Cash and cash equivalents
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
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
20(b)
6
7
9
10
11
12
13
14
15
2017
$
2016
$
3,294,806
56,949
1,539,175
2,808,356
128,345
1,103,046
4,890,930
4,039,747
-
11,884
9,227,557
286,850
11,884
9,514,407
4,902,814
13,554,154
569,056
58,555
463,496
67,344
627,611
530,840
627,611
530,840
4,275,203
13,023,314
55,675,919
4,289,947
(55,690,663)
52,443,486
4,315,809
(43,735,981)
4,275,203
13,023,314
The above consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
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CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2017
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
Note
2017
$
2016
$
(1,663,949)
36,682
(1,494,659)
6,295
Net cash used in operating activities
20(a)
(1,627,267)
(1,488,364)
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
Funding provided to Caudillo Resources SA
Repayment from Caudillo Resources SA
Funding provided to Black Mountain Resources Limited
(1,225,029)
946,102
(10,761)
(989,245)
273,183
(32,572)
-
-
(2,615,958)
1,649,378
-
(44,512)
54,650
(88,336)
51,862
(50,000)
6(b)
Net cash used in investing activities
(1,038,322)
(1,042,916)
Cash Flows from Financing Activities
Proceeds from issue of shares and options, net of
transaction costs
Net cash from financing activities
Net increase in cash held
Effects of exchange rate changes on cash
Cash and cash equivalents at beginning of financial year
3,154,308
4,128,932
3,154,308
4,128,932
488,719
(2,269)
2,808,356
1,597,652
(5,774)
1,216,478
Cash and cash equivalents at end of financial year
3,294,806
2,808,356
The above consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR YEAR ENDED 30 JUNE 2017
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Balance at 1 July 2016
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 2017
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
Issued Capital
Accumulated
Losses
Share Based
Payment
Reserve
Foreign
Currency
Translation
Reserve
Total
$
$
$
$
$
52,443,486
(43,735,981)
5,808,481
(1,492,672)
13,023,314
-
-
-
(11,954,682)
-
(11,954,682)
3,232,433
-
-
-
-
-
-
-
-
-
(11,954,682)
(25,862)
(25,862)
(25,862)
(11,980,544)
-
-
3,232,433
-
55,675,919
(55,690,663)
5,808,481
(1,518,534)
4,275,203
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
The above consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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 2017 and was authorised for issue in accordance with a resolution of the directors on 5
September 2017.
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. 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 2016, the
Consolidated Entity has adopted all the standards and interpretations mandatory for annual periods beginning on or after
1 July 2016. 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.
New accounting standards and interpretations not yet adopted
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2017
reporting periods and have not been early adopted by the Group. The Group’s assessment of the impact of these new
standards and interpretations is set out below.
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Impact
This standard is
not expected to
have a material
impact on the
Group's financial
statements and
disclosures.
Mandatory
application
date/ Date of
Mandatory for
financial
years
commencing
on or after 1
January 2018,
but
available for early
adoption
Expected date
of adoption by
the group: 1 July
2018.
Title of
standard
AASB 9
Financial
Instruments
Nature of change
AASB 9 replaces AASB 139 Financial Instruments: Recognition and Measurement.
Except for certain trade receivables, an entity initially measures a financial asset at its
fair value plus, in the case of a financial asset not at fair value through profit or loss,
transaction costs.
Debt instruments are subsequently measured at fair value through profit or loss
(FVTPL), amortised cost, or fair value through other comprehensive income (FVOCI),
on the basis of their contractual cash flows and the business model under which the
debt instruments are held.
There is a fair value option (FVO) that allows financial assets on initial recognition to
be designated as FVTPL if that eliminates or significantly reduces an accounting
mismatch.
Equity instruments are generally measured at FVTPL. However, entities have an
irrevocable option on an instrument-by-instrument basis to present changes in the
fair value of non-trading instruments in other comprehensive income (OCI) without
subsequent reclassification to profit or loss.
For financial liabilities designated as FVTPL using the FVO, the amount of change in
the fair value of such financial liabilities that is attributable to changes in credit risk
must be presented in OCI. The remainder of the change in fair value is presented in
profit or loss, unless presentation in OCI of the fair value change in respect of the
liability’s credit risk would create or enlarge an accounting mismatch in profit or loss.
All other AASB 139 classification and measurement requirements for financial
liabilities have been carried forward into AASB9, including the embedded derivative
separation rules and the criteria for using the FVO.
The incurred credit loss model in AASB 139 has been replaced with an expected credit
loss model in AASB 9.
The requirements for hedge accounting have been amended to more closely align
hedge accounting with risk management, establish a more principle-based approach
to hedge accounting and address inconsistencies in the hedge accounting model in
AASB 139.
The new standard also introduces expanded disclosure requirements and changes in
presentation. These are expected to change the nature and extent of the group’s
disclosures about its financial instruments particularly in the year of the adoption of
the new standard.
AASB 15
Revenue
from
Contracts
with
Customers
The AASB has issued a new standard for the recognition of revenue. This
will replace AASB 118 which covers revenue arising from the sale of goods and the
rendering of services and AASB 111 which covers construction
contracts.
The new standard is based on the principle that revenue is recognised when control
of a good or service transfers to a customer.
This standard is
not expected to
have a material
impact on the
Group's financial
statements and
disclosures.
The standard permits either a full retrospective or a modified retrospective
approach for the adoption.
Mandatory for
financial
years
commencing
on or after 1
January 2018,
but
available for early
adoption
Expected date
of adoption by
the group: 1 July
2018.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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AASB 16
(issued
February
2016) Leases
AASB 16 eliminates the operating and finance lease classifications for lessees currently
accounted for under AASB 117 Leases. It instead requires an entity to bring most
leases into its statement of financial position in a similar way to how existing finance
leases are treated under AASB
117. An entity will be required to recognise a
lease liability and a right of
use asset in its statement of financial position for most leases.
The Group is
still assessing
the potential
impact of the
adoption of this
standard.
There are some optional exemptions for leases with a period of 12 months or less and
for low value leases.
Lessor accounting remains largely unchanged from AASB 117.
Mandatory for
financial years
commencing on
or after 1
January 2019,
but available for
early adoption
Expected date
of adoption by
the group: 1 July
2019.
There are no other standards that are not yet effective and that would be expected to have a material impact on the
Consolidated Group in the current or future reporting periods and on foreseeable future transactions
d. 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 19 to the financial statements.
All inter-group balances and transactions between entities in the Consolidated Entity, including any unrealised profits or
losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with those adopted by the Parent Entity.
(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.
e.
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.
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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.
f. 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.
g.
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
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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.
h. 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.
i.
Financial Instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the Consolidated Entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the Consolidated Entity commits itself
to either the purchase or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified
‘at fair value through profit or loss’, in which case transaction costs are expensed to profit or loss immediately.
Classification and subsequent measurement
Finance instruments are subsequently measured at either fair value, amortised cost using the effective interest rate
method, or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between
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:
(cid:131)
(cid:131)
(cid:131)
(cid:131)
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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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.
j.
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.
k.
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.
l.
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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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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.
m.
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.
n. 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.
o.
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.
p. 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).
q. 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.
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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.
r.
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.
s.
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.
t.
Critical accounting judgements, estimates and assumptions
The Consolidated Entity makes estimates and assumptions concerning the future. The resulting accounting estimates will,
by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing
a material adjustment to carrying amounts of assets and liabilities within the next financial year are discussed below.
Share based payment transactions
The Consolidated Entity measures the cost of equity-settled transactions by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value of options is determined by an internal valuation using
Black-Scholes option pricing model, while the fair value of shares is determined based on the market bid price at date of
issue.
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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
u. Comparative Figures
Comparative figures have been adjusted to conform to changes in presentation for the current financial year.
v. Operating Segments
An operating segment is a component of an entity that engages in business activities from which it may earn revenues and
incur expenses (including revenues and expenses relating to transactions with other components of the same entity),
whose operating results are regularly reviewed by the entity’s chief operating decision maker to make decisions about
resources to be allocated to the segment and assess their performance and for which discrete financial information is
available. This includes start-up operations which are yet to earn revenues.
Operating segments have been identified based on the information provided to the chief operating decision makers –
being the board of directors.
Information about other business activities and operating segments that do not meet the quantitative criteria set out in
AASB 8 “Operating Segments” are combined and disclosed in a separate category called “other.”
2.
SEGMENT INFORMATION
The Consolidated Entity has identified its operating segments based on the internal reports that are reviewed and used by the
board of directors (chief operating decision makers) in assessing performance and determining the allocation of resources.
During the year, the Consolidated Entity operated in one business segment (for primary reporting) being mineral exploration
and principally in two geographical segments (for secondary reporting) being Australia and Argentina.
Basis of accounting for purposes of reporting by operating segments
Accounting policies adopted
Unless stated otherwise, all amounts reported to the board of directors as the chief decision maker with respect to operating
segments are determined in accordance with accounting policies that are consistent to those adopted in the annual financial
statements of the Consolidated Entity.
Inter-segment transactions
Inter-segment loans payable and receivable are initially recognised as the consideration received net of transaction costs. If
inter-segment loans receivable and payable are not on commercial terms, these are not adjusted to fair value based on market
interest rates. This policy represents a departure from that applied to the statutory financial statements.
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
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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Legal costs, damages, and interest
Interest received
Other
Realised (profit)/loss on FX
Fuel tax credits
Net fair value gain 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:
Share based payments expense
Net fair value loss on financial assets
Impairment of loans and receivables
Impairment of exploration assets
Impairment of plant and equipment
Depreciation
Employee benefits expense
Directors fees
Consultancy expenses
Legal fees
Tenement expenditure
Other expenses
Mineral exploration
2016
2017
$
$
Other
Total
2017
$
2016
$
2017
$
2016
$
-
-
-
-
-
-
-
-
-
-
-
-
(921)
4,817
-
-
-
36,682
8,175
-
-
-
10,012
530,538
7,375
5,878
-
-
648,617
13,008
-
36,682
8,175
-
-
-
10,012
530,538
7,375
5,878
(921)
4,817
648,617
13,008
31,892
-
-
-
31,892
35,788
54,869
1,205,416
54,869
1,241,204
(9,914,673)
(1,878,397)
(2,040,009)
(2,099,927)
(11,954,682)
(3,978,324)
-
-
-
(9,589,592)
(188,284)
(97,340)
-
-
-
-
(39,457)
-
-
-
-
(1,641,604)
-
(154,476)
-
-
-
-
(118,105)
-
(78,125)
(342,684)
(36,326)
-
-
-
(378,241)
(366,204)
(184,355)
(203,221)
-
(505,722)
(1,190,727)
-
(35,860)
-
-
-
(493,892)
(228,000)
(263,616)
(510,997)
-
(582,251)
(78,125)
(342,684)
(36,326)
(9,589,592)
(188,284)
(97,340)
(378,241)
(366,204)
(184,355)
(203,221)
(39,457)
(505,722)
(1,190,727)
-
(35,860)
(1,641,604)
-
(154,476)
(493,892)
(228,000)
(263,616)
(510,997)
(118,105)
(582,251)
Mineral exploration
2016
2017
$
$
Other
Total
2017
$
2016
$
2017
$
2016
$
Segment assets
11,884
9,635,052
4,890,930
3,919,102
4,902,813
13,554,154
Segment assets include:
Capitalised exploration expenditure
Financial assets
Other assets
-
-
11,884
11,884
9,227,557
-
407,495
9,635,052
-
1,539,175
3,351,755
4,890,930
-
1,103,046
2,816,056
3,919,102
-
1,539,175
3,363,639
4,902,814
9,227,557
1,103,046
3,223,551
13,554,154
Segment liabilities
(130,519)
(32,752)
(497,092)
(498,088)
(627,611)
(530,840)
Segment information by geographical region
The analysis of the location of total assets is as follows:
Australia
Argentina
2017
$
2016
$
4,883,431
19,382
4,902,813
13,521,554
32,600
13,554,154
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
3.
REVENUE AND OTHER INCOME
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(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 on financial assets
Gain on disposal of exploration assets
Gain on disposal of financial assets
4.
IMPAIRMENT LOSSES
Impairment of exploration and evaluation expenditure (a)
Impairment of plant and equipment (b)
Impairment of loans and other receivables
Reversal of previously impaired loans and receivables
2017
$
2016
$
36,682
36,682
-
-
-
8,176
-
-
10,012
18,188
7,375
7,375
530,538
4,817
(921)
5,878
648,617
31,892
13,008
1,233,829
2017
$
9,589,592
188,284
36,326
-
9,814,202
2016
$
1,641, 604
-
87,721
(51,861)
1,677,464
(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 $9,589,592 during
the year (30 June 2016: $1,641,604). The majority of this impairment expense recognised is attributable to an impairment
trigger event, being the 20 June 2017 announced implementation of a ban on uranium mining on all future mining leases by
the McGowen Government of Western Australia (Uranium Mining Ban). As a result of this, the Company has written down
its Western Australian Yanrey projects (including Bennet Well) to nil.
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.
(b)
In light of the Uranium Mining Ban, the Consolidated Entity has recorded a further impairment expense of $188,284 (30 June
2016: nil) in relation to the plant and equipment located at the Bennet Well camp.
5.
INCOME TAX EXPENSE
(a)
The components of tax expense comprise:
Current tax benefit / (expense)
Deferred tax benefit / (expense)
2017
$
2016
$
-
-
-
-
-
-
50
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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(b)
The prima facie tax benefit on loss from ordinary activities before income tax
is reconciled to the income tax as follows:
2017
$
2016
$
Loss before tax
(11,954,682)
(3,978,324)
Prima facie tax (benefit) on loss from ordinary activities before income tax at
30% (2016: 30%)
(3,586,405)
(1,193,497)
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
Net recognised deferred tax assets/(liabilities)
(d) Unrecognised deferred tax balances
26,241
3,560,164
519,906
673,591
-
-
-
-
2017
$
2016
$
17,566
1,839,950
17,011
46,527
404,490
38,303
(2,363,847)
-
-
-
-
-
-
20,203
1,960,360
-
26,422
394,718
44,612
341,341
2,787,656
(2,768,267)
(19,065)
(324)
(2,787,656)
-
The Consolidated Entity has $11,141,355 gross tax losses arising in Australia that are available indefinitely for offset
against future profit of the Company in which the losses arose.
6.
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
Impairment of receivable
Adjustment to provision for doubtful debts
Recovery of previously impaired receivable
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2017
$
2016
$
100,557
(56,703)
-
13,095
56,949
122,514
(52,949)
51,080
7,700
128,345
2017
$
2016
$
(52,950)
(3,753)
-
-
(56,703)
(220,922)
-
167,359
614
(52,949)
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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.
2017
Trade receivables
2016
Trade receivables
(b) Loan to ASX-listed company:
Movements:
Opening balance at beginning of the year
Converting loan funds advanced
Interest on converting loan
Converted to equity (shares)
Gross amount
Past due and
impaired
Within initial
trade terms
100,557
56,703
43,874
122,514
52,949
69,565
2017
$
2016
$
51,080
-
1,660
(52,740)
-
-
50,000
1,080
51,080
On 14 April 2016, Cauldron entered into a converting loan agreement with Black Mountain Resources Limited (ASX:
BMZ) for a principal loan amount of $50,000. On 18 October 2016, Cauldron agreed to conversion of the debt (and
accrued interest) to equity in BMZ (Debt Conversion). Upon settlement of the Debt Conversion, Cauldron acquired
527,398 ordinary shares in BMZ at an issue price of $0.10 each, and 166,667 unlisted options at $0.125 expiring 30
June 2018.
7.
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)
2017
$
2016
$
1,539,175
-
1,539,175
1,065,334
37,712
1,103,046
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) (refer note 6(b))
Acquisition of equity securities (cash)
Disposal of equity securities
Fair value gain/(loss) through profit or loss
52
2017
$
2016
$
1,103,046
52,740
989,245
(263,172)
(342,684)
1,539,175
419,667
31,892
44,512
(41,642)
648,617
1,103,046
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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8.
LOAN RECEIVABLES
Non-current
Caudillo Resources SA (a)
Provision for non-recovery (a)
2017
$
2016
$
1,401,819
(1,401,819)
-
1,376,782
(1,376,782)
-
a)
The Consolidated Entity’s wholly owned subsidiary Jakaranda Minerals Limited (“Jakaranda”) previously provided a draw-
down facility (“First Loan”) up to $650,000 to Caudillo Resources SA (“Caudillo”), which is included in this balance. The First
Loan and interest (LIBOR + 2%) was required to be repaid in cash by 21 February 2013, or Jakaranda may elect to convert
the First Loan into an 80% interest in the issued capital of Caudillo. At 30 June 2014, this draw-down facility had been
utilised. The Consolidated Entity intends to elect to convert the First Loan into an 80% equity interest in Caudillo, and the
execution of this is currently in the process of being completed.
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 $25,037 (30 June 2016: $88,336) has been recognised in the Statement of Profit or Loss and Other
Comprehensive Income. During the year, nil was repaid by Caudillo (2016: $51,862 was repaid by Caudillo (reversal of
previously impaired amount), which has been recognised in the Statement of Profit or Loss and Other Comprehensive
Income).
9.
EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation expenditure
Exploration and evaluation expenditure – provision for impairment
Movements:
Carrying value at beginning of year
Exploration expenditure incurred
Impairment of exploration expenditure - written off (refer note 4(a))
Impairment of exploration expenditure - provision (refer note 4(a))
Foreign exchange movements
Royalties for Regions grant
R&D Tax Incentive
Carrying value at end of year
10.
PLANT AND EQUIPMENT
Plant and equipment
At cost
Accumulated depreciation
53
2017
$
2016
$
8,713,087
(8,713,087)
-
9,227,557
1,308,137
(876,505)
(8,713,087)
-
-
(946,102)
-
9,227,557
-
9,227,557
10,204,649
2,561,467
(1,641,604)
-
(97,577)
(150,000)
(1,649,378)
9,227,557
2017
$
2016
$
45,866
(33,982)
11,884
657,091
(370,241)
286,850
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Movements:
Carrying value at beginning of year
Additions
Depreciation expense
Impairment expense (refer note 4(b))
Foreign currency differences arising from translating functional currency to
presentation currency
Carrying value at end of year
11.
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.
12.
PROVISIONS
Current
Employee benefits
13.
ISSUED CAPITAL
2017
$
2016
$
286,850
10,761
(97,340)
(188,284)
(103)
11,884
442,356
-
(154,476)
-
(1,030)
286,850
2017
$
2016
$
403,339
165,717
569,056
368,450
95,046
463,496
2017
$
2016
$
58,555
58,555
67,344
67,344
2017
$
2016
$
Ordinary shares issued and fully paid
55,675,919
52,443,486
2017
No.
2017
$
2016
No.
2016
$
Issued and fully paid up ordinary shares
Opening balance
Shares issued (a)
Shares issued (b)
Shares issued (c)
Shares issued (d)
Shares issued (e)
Shares issued upon exercise of options (f)
Share issue costs
288,002,620
-
-
31,250,000
8,474,588
1,562,500
-
-
329,289,708
52,443,486
-
-
2,500,000
670,240
78,125
-
(15,932)
55,675,919
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
Shares issued pursuant to placement agreements
(a)
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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
(b)
(c)
(d)
In March 2016, Cauldron received $2,000,000 from MGT Resources Limited pursuant to a placement agreement and
issued 16,949,176 fully paid shares using the Company’s capacity under Listing Rule 7.1. This share issue was
subsequently ratified by Shareholders at the Company’s 24 November 2016 annual general meeting (AGM).
In September 2016, Cauldron entered into a placement agreement with a new Chinese investor Yidi Tao for 31,250,000
fully paid ordinary shares at an issue price of $0.08 per share for a total of $2,500,000 (Tao Placement). The shares were
issued following receipt of Shareholder approval at the AGM.
The Tao Placement Agreement included an offer of 20 million unlisted options exercisable at $0.08 on or before 31
December 2018 (Placement Options) (refer note 23).
As previously announced 6 July 2016, Cauldron advised it had received judgment in its favour in respect of its claims
against Guangzhou City Investment Management Co. Ltd (Guangzhou City). The judgment debt due and payable to the
Company was for $1 million plus interest (Judgment Debt). On 5 July 2016, the Company recovered $508,455 (before
costs) of the Judgement Debt.
As announced 9 December 2016, the Company advised it sought to enforce payment of the outstanding balance of the
Judgment Debt in accordance with the powers afforded by the Civil Judgments Enforcement Act. On 8 December 2016,
Cauldron issued 8,474,588 shares (Guangzhou Shares) to Guangzhou City, in full satisfaction of the Company’s
obligations pursuant to a placement agreement (Guangzhou City Placement Agreement). In accordance with court
orders (Orders) obtained by the Company, upon issue of the Guangzhou Shares to Guangzhou City, an immediate holding
lock was placed over the Guangzhou Shares, and receiver (Mr Kim Wallman of HLB Mann Judd (Insolvency WA)
(Receiver)) was appointed over the Guangzhou Shares.
The Receiver exercised his power for the purpose of realising a portion of the outstanding balance of the Judgment Debt.
On 4 April 2017, the Receiver completed the sale of the Guangzhou Shares to investors who have agreed to a six-month
escrow period in respect of the Guangzhou Shares, recovering $161,785 of the outstanding balance (before Receiver
costs) from the sale of Guangzhou Shares by the Receiver.
Shares issued to consultant
(e)
Following receipt of shareholder approval at the Company’s annual general meeting on 24 November 2016, the
Company issued 1,562,500 fully paid ordinary shares to a consultant (Consultant Shares) as consideration for investor
relations and marketing support services. This share issue constitutes an equity-settled share based payment transaction
and have been valued in reference to the market price of the shares on date of grant, being $0.05 per share (refer note
22), on the basis of the value of the services provided.
Shares issued upon exercise of unlisted options
(f)
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 329,289,708 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 $55,675,919 at 30 June 2017 (2016: $52,443,486).
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.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
14.
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 – options (refer note 22)
Reserve balance at end of year
2017
$
2016
$
5,808,481
(1,518,534)
4,289,947
5,808,481
(1,492,672)
4,315,809
2017
$
2016
$
5,808,481
-
5,808,481
4,617,754
1,190,727
5,808,481
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
2017
$
2016
$
(1,492,672)
(1,344,677)
(25,862)
(1,518,534)
(147,995)
(1,492,672)
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.
15.
ACCUMULATED LOSSES
Balance at beginning of year
Loss for the year
Balance at end of year
16.
LOSS PER SHARE
Basic loss per share
Continuing operations
Loss used in calculation of basic loss per share
Continuing operations
2017
$
2016
$
(43,735,981)
(11,954,682)
(55,690,663)
(39,757,657)
(3,978,324)
(43,735,981)
2017
Cents per share
2016
Cents per share
(3.83)
(3.83)
(1.49)
(1.49)
$
$
(11,954,682)
(11,954,682)
(3,978,324)
(3,978,324)
No.
No.
Weighted average number of ordinary shares outstanding during the year used in
the calculation of basic loss per share
312,403,557
267,792,981
There are 20,000,000 share options (2016: 44,000,000) excluded from the calculation of diluted earnings per share (that
could potentially dilute basic earnings per share in the future) because they are anti-dilutive for each of the periods
presented.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
17.
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
18.
CONTINGENT ASSETS AND LIABILITIES
The Consolidated Entity has no contingent liabilities or assets at the year end.
19.
CONTROLLED ENTITIES
Details of Cauldron Energy Limited’s subsidiaries are:
2017
$
2016
$
132,056
231,098
-
363,154
129,180
355,245
-
484,425
Name
Country of
Incorporation
Date/Company of
Incorporation
Shares
Ownership
Interest
Investment Carrying
Amount
2017
%
2016
%
2017
$
2016
$
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
20.
CASH FLOW INFORMATION
2017
$
2016
$
(a)
Reconciliation of cash flows from operating activities with loss from ordinary
activities after income tax
Loss from ordinary activities after income tax
(11,954,682)
(3,978,324)
Non-cash flows in operating loss:
Depreciation
Equity settled share based payments
Net fair value (gain)/loss on investments
Realised (gain)/loss on disposal of financial assets
Gain on sale of exploration assets
Impairment losses
Director fees settled via issue of shares
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
Net cash outflows from operating activities
(b)
Reconciliation of cash and cash equivalents
97,340
78,125
342,684
(10,012)
-
9,814,202
-
(38,863)
-
52,728
(8,789)
(1,627,267)
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)
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:
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Annual Report 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Cash at bank
Cash and cash equivalents
21.
FINANCIAL RISK MANAGEMENT
Financial risk management
2017
$
2016
$
3,294,806
3,294,806
2,808,356
2,808,356
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
2017
$
2016
$
3,294,806
1,539,175
-
56,949
4,890,930
2,808,356
1,065,334
37,712
128,345
4,039,747
569,057
569,057
463,496
463,496
The Consolidated Entity’s activities expose it to a variety of financial risks: market risk (including interest rate risk), credit rate
risk and liquidity risk.
The Consolidated Entity’s overall risk management program focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the Consolidated Entity. The Consolidated Entity uses
different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the
case of interest rate, foreign exchange and other price risks and aging analysis for credit risk. Risk management is carried out
by the Board and they provide written principles for overall risk management.
Financial risk exposures and management
The main risks arising from the Consolidated Entity’s financial instruments are credit risk, liquidity risk and market risk
consisting of interest rate risk, foreign currency risk and equity price risk.
(a) Foreign currency risk
The Consolidated Entity undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate
fluctuations arise. Given the few transactions the Board does not consider there to be a need for policies to hedge against
foreign currency risk. The Consolidated Entity’s has no significant exposure to foreign currency risk as at the reporting date.
(b)
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting period
whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial instruments. Cash
and cash equivalents on deposit at variable rates expose the Consolidated Entity to cash flow interest rate risk. The
Consolidated Entity is exposed to movements in market interest rates on short term deposits. The policy is to monitor the
interest rate yield curve out to 120 days to ensure a balance is maintained between the liquidity of cash assets and the interest
rate return.
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Annual Report 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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
2017
Change
$
2016
Change
$
65,896
(65,896)
56,167
(56,167)
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% (2016 –
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)
2017
$
2016
$
153,918
106,533
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
2017
$
2016
$
3,294,806
56,949
3,351,755
2,808,356
128,345
2,936,701
The Consolidated Entity manages liquidity risk by maintaining adequate reserves by continuously monitoring forecast and
actual cash flows and matching the maturity profiles of financial assets and liabilities.
Financial instrument composition and maturity analysis
The table below reflects the undiscounted contractual settlement terms for financial instruments of a fixed period of maturity,
as well as management’s expectations of the settlement period for all other financial instruments.
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Annual Report 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
2017
Financial assets
Cash
Held for trading investments
Receivables and loans
Financial Liabilities
Trade and other payables
2016
Financial assets
Cash
Held for trading investments
Receivables and loans
Financial Liabilities
Trade and other payables
(f) Fair value estimation
Within 1
Year
$
3,294,806
1,539,175
56,949
4,890,930
569,057
569,057
Within 1
Year
$
2,808,356
1,103,046
128,345
4,039,747
463,496
463,496
1 to 5 Years
Over 5 Years
$
$
-
-
-
-
-
-
-
-
-
-
-
-
1 to 5 Years
Over 5 Years
$
$
-
-
-
-
-
-
-
-
-
-
-
-
2017
Total
$
3,294,806
1,539,175
56,949
4,890,930
569,057
569,057
2016
Total
$
2,808,356
1,103,046
128,345
4,039,747
463,496
463,496
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)
2017
Financial assets:
Financial assets at fair value through profit or loss:
Held for trading investments
2016
Financial assets:
Financial assets at fair value through profit or loss:
Held for trading investments
Level 1
$
Level 2
$
Level 3
$
Total
$
1,539,1751
-
-
1,539,175
Level 1
$
Level 2
$
Level 3
$
Total
$
1,065,3341
-
37,7122
1,103,046
1 Level 1 held for trading investments at 30 June 2016 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 on
ASX at that reporting date. On 15 December 2016, suspension of trading of Fe Ltd securities on the ASX was lifted,
and the company was reinstated to official quotation.
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 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
22.
SHARE BASED PAYMENTS
Total costs arising from share based payment transactions recognised as expense during the year were as follows:
Options issued to employees and consultants
Options issued to directors
Shares issued to consultant (refer note 13(e))
2017
$
2016
$
-
78,125
78,125
914,980
275,747
-
1,190,727
(a) Summary of movements in options granted as share based payments
There were no share based payment options granted, exercised or expired during the year end 30 June 2017.
23.
OTHER UNLISTED OPTIONS
The following refers to unlisted options issued by the Company, other than those issue as share based payment
transactions.
Options Granted during the year
The Company issued the following unissued options during the year ended 30 June 2017:
(cid:131)
20,000,000 unlisted options at $0.08 expiring 31 December 2018 (being the Placement Options)
The Placement Options were issued following receipt of shareholder approval at the Company’s AGM.
Options expired or lapsed during the year
On 31 December 2016, 44,000,000 unlisted options with an exercise price of $0.138 expired.
Options on issue at 30 June 2017
The outstanding balance of options at 30 June 2017 is represented by:
-
20,000,000 Placement Options with an exercise price of $0.08 and an expiry date of on or before 31 December 2018.
24.
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
Loss for the year
Total comprehensive loss
61
2017
$
2016
$
3,332,507
1,555,647
4,888,154
2,886,666
10,647,046
13,533,712
612,951
-
612,951
510,398
-
510,398
55,675,919
(57,209,196)
5,808,480
4,275,203
52,443,486
(45,228,652)
5,808,480
13,023,314
(11,980,544)
(11,980,544)
(4,126,319)
(4,126,319)
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Annual Report 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
Loans to Controlled Entities
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
2017
$
2016
$
23,329
8,652,665
1,378,312
25,775
10,080,081
23,329
8,495,868
1,346,312
25,775
9,891,284
The commitments of the Parent Entity are consistent with the Consolidated Entity (refer to note 17).
Contingent Liabilities and Assets
The contingent liabilities and assets of the Parent Entity are consistent with the Consolidated Entity (refer to note 18).
25.
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 19 to the financial statements.
Note 19 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.
Sales and Purchases between Related Parties
Director related entities
Fe Limited
Fe Limited
Cape Lambert Resources Limited
Cape Lambert Resources Limited
Okewood Pty Ltd
Okewood Pty Ltd
Sales to
related parties
Purchases
from related
parties
Amounts
owed by
related
parties*
Amounts owed
to related
parties*
2017
2016
2017
2016
2017
2016
2,087
-
-
-
-
-
-
2,500
219,288
238,422
30,623
28,523
-
-
-
-
-
-
-
-
4,928
6,066
-
-
* Amounts are classified as trade receivables and trade payables, respectively.
Mr Antony Sage is a director of Cape Lambert Resources Limited and Okewood Pty Ltd. Messrs Antony Sage and Nicholas
Sage are directors of Fe Limited, as was Mr Gwynne until 6 February 2017.
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 2017
and 30 June 2016.
The ultimate parent
The ultimate parent of the Group is Cauldron Energy Limited which is based in and listed in Australia.
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Annual Report 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
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
2017, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (2016: nil). This
assessment is undertaken each financial year through examining the financial position of the related party and the market in
which the related party operates.
Financial Assets
At 30 June 2017, Cauldron held 25,828,112 shares in Fe Limited (ASX: FEL) (2016: 23,128,112) with a market value of $619,875
(2016: $832,612). The movement during the year in shares held includes Cauldron’s participation in a placement to acquire
2,500,000 shares (and 625,000 free-attaching options) in FEL for $50,000 consideration. Messrs Antony Sage and Nicholas
Sage are directors of FEL, as was Mr Gwynne until 6 February 2017.
At 30 June 2017, Cauldron held 8,944,910 shares in European Lithium Limited (ASX: EUR) (2016: nil) with a market value of
$393,576. The movement during the year in shares held includes Cauldron’s participation in two separate placements to
acquire 3,472,222 shares in EUR for $200,000 consideration. Mr Antony Sage is a director of EUR.
At 30 June 2017, Cauldron held 17,416,667 shares in Cape Lambert Resources Ltd (ASX: CFE) (2016: nil) with a market value
of $505,083.34. The movement during the year of shares held includes Cauldron’s participation in two separate placements
to acquire 9,416,667 shares in CFE for $233,000 consideration. Mr Antony Sage is a director of CFE.
Significant shareholders
Qiu Derong holds a significant interest of 14.44% in the issued capital of Cauldron Energy at 30 June 2017 (30 June 2016:
16.51%). 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 15.93%
(30 June 2016: 14.9%) in the issued capital of Cauldron at 30 June 2017. 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 2017.
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
26.
REMUNERATION OF AUDITORS
Paid or payable to BDO (WA) Pty Ltd for:
-
Audit or review of the Consolidated Entity financial report
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
2017
$
2016
$
759,204
37,355
-
796,559
735,310
37,335
620,432
1,393,077
2017
$
2016
$
34,280
11,019
-
45,299
33,600
14,760
-
48,360
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Annual Report 2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2017
27.
EVENTS SUBSEQUENT TO REPORTING DATE
On 17 August 2017, the Company announced that, in respect of the Forrest & Forrest Pty Ltd (Forrest) objection to Cauldron’s
applications for exploration licences 08/2385-2387, the Court of Appeal handed down its unanimous decision in favour of the
Company. The Court of Appeal dismissed Forrest’s appeal and ordered Forrest to pay the Company’s legal costs of the appeal.
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.
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64
Annual Report 2017
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 2017 are in
accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of its financial position as at 30 June 2017 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);
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 2017.
On behalf of the board
Mr Antony Sage
Executive Director
PERTH
6 September 2017
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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
INDEPENDENT AUDITOR'S REPORT
To the members of Cauldron Energy Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Cauldron Energy Limited (the Company) and its subsidiaries
(the Group), which comprises the consolidated statement of financial position as at 30 June 2017, 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, and notes
to the financial report, including a summary of significant accounting policies and the directors’
declaration.
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
(i)
Giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its
financial performance for the year ended on that date; and
(ii)
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
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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.
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Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. We have determined the matters described below to be the key
audit matters to be communicated in our report.
Valuation of Exploration and Evaluation Assets
Key audit matter
How the matter was addressed in our audit
At 30 June 2017 the carrying value of the capitalised
Our audit procedures in respect of this area included,
exploration and evaluation asset was NIL (30 June 2016
but were not limited to, the following:
$9,227,557) as a result of an impairment expense of
$9,589,592, as disclosed in Notes 9 and 4 of the
financial report.
•
Considering whether any facts or
circumstances existed to suggest impairment
testing was required in light of the Uranium
The majority of this impairment expense has been
Mining ban;
attributed to an impairment trigger event, being the 20
June 2017 announced implementation of a ban on
uranium mining on all future mining leases by the
Government of Western Australia (Uranium Mining
Ban), resulting in the Group’s Western Australian
Yanrey projects being written down to nil.
We focused on this area as a key audit matter because
the assessment to determine whether an impairment
charge is necessary involves significant judgements by
management in relation to the evaluation for any
impairment indicators in accordance with Australian
Accounting Standard AASB 6 Exploration for and
Evaluation of Mineral Resources.
Other information
•
Holding discussions with management to
obtain an understanding of the strategic
decision taken by management not to
proceed with the Western Australian Yanrey
projects as a result of the Uranium Mining
Ban;
•
Assessing the adequacy of the related
disclosures in Notes 9 and 4 to the Financial
Report.
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2017, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors 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
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financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 28 to 32 of the directors’ report for the
year ended 30 June 2017.
In our opinion, the Remuneration Report of Cauldron Energy Limited, for the year ended 30 June 2017,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit (WA) Pty Ltd
Phillip Murdoch
Director
Perth, 6 September 2017
Annual Report 2017
Shareholding
ADDITIONAL SHAREHOLDER INFORMATION
The distribution of members and their holdings of equity securities in the Company as at 11 August 2017 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
86,722
1,203,671
2,162,023
13,306,341
312,530,951
329,289,708
189
456
270
383
120
1,418
There are 1,418 shareholders holding a total of 329,289,708 shares.
There are 953 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 11 August 2017:
Shareholder
Cape Lambert Resources Limited (Dempsey Resources Pty Ltd)
Mr Derong Qiu
Starry World Investment Ltd
Sky Shiner Investment Limited
Yidi Tao
Joseph Energy (Hong Kong) Limited
MGT Resources 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
31,400,000
31,250,000
24,256,324
16,949,176
Grant Date
Class of
Shares
Exercise
Price
Number of
Options
Expiry Date
Listed /
Unlisted
24 November 2016
Ordinary
$0.08
20,000,000
31 December 2018
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 2017
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 8,474,588 shares on issue the subject to voluntary escrow period ending 3 October 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
Number
% Held of
Ordinary Capital
Issued
Joseph Energy (Hong Kong) Limited
Systematic Nominees Pty Ltd
Starry World Investment Ltd
Sky Shiner Investment Limited
1 Dempsey Resources Pty Ltd
2 Mr Derong Qiu
3
4
5 Yidi Tao
6
7 MGT Resources Limited
8 Pershing Australia Nominees Pty Ltd
9
10 BNP Paribas Nominees Pty Ltd
11 Lanoti Pty Limited
12 Okewood Pty Ltd
13 Mr Yuanrong Luo
14 Antony William Paul Sage + Lucy Fernandes Sage
15 J P Morgan Nominees Australia Limited
16 Sams Watchmaker Jeweller Pty Ltd
17 Canifare Pty Ltd
18 Nuveen (Shanghai) Asset Management Co Ltd
19 Citicorp Nominees Pty Limited
20 Quam Securities Company Limited
52,470,036
47,544,710
33,898,318
31,400,000
31,250,000
24,256,324
16,949,176
10,534,545
4,172,864
3,371,439
3,304,977
3,300,000
2,726,257
2,594,600
2,165,931
2,031,663
2,017,450
1,562,500
1,532,957
1,431,018
278,514,765
15.93%
14.44%
10.29%
9.54%
9.49%
7.37%
5.15%
3.20%
1.27%
1.02%
1.00%
1.00%
0.83%
0.79%
0.66%
0.62%
0.61%
0.47%
0.47%
0.43%
84.58%
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Annual Report 2017
SCHEDULE OF MINERAL TENEMENTS
AS AT 11 AUGUST 2017
Tenement reference
Project & Location
Interest held
E08/1489
E08/1490
E08/1493
E08/1501
E08/2017
E08/2081
E08/2205
E08/2478
E08/2479
E08/2480
E08/2665
E08/2774
E08/2496
E08/2638
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
393-S-2010
Catamarca, Argentina
Mining tenements with beneficial interest held in farm-in/farm-out agreements:
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Farm-in Agreement and
Tenement reference
Project & Location
Interest held
140/2007
141/2007
142/2007
143/2007
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
Rio Colorado Project - Catamarca, Argentina
144/2007-581/2009
Rio Colorado Project - Catamarca, Argentina
176/1997
232/2007
270/1995
271/1995
43/2007
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
51%*
51%*
51%*
51%*
51%*
51%*
51%*
51%*
51%*
51%*
*Cauldron has signed an exclusive option agreement through its wholly owned subsidiary Cauldron Minerals 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.
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