Cazaly Resources Limited
ABN: 23 101 049 334
and
Controlled Entities
Annual Report
For the Year Ended
30 June 2015
CONTENTS
Cazaly Resources Limited Annual Report 2015
Corporate Directory
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Shareholder Information
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2
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18
19
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49
51
CORPORATE DIRECTORY
Cazaly Resources Limited Annual Report 2015
MANAGING DIRECTOR
Nathan McMahon
MANAGING DIRECTOR
Clive Jones
NON-EXECUTIVE DIRECTOR
Kent Hunter
COMPANY SECRETARY
Mike Robbins
PRINCIPAL & REGISTERED OFFICE
Level 2, 38 Richardson Street
WEST PERTH WA 6005
Telephone: (08) 9322 6283
Facsimile: (08) 9322 6398
AUDITORS
Bentleys Audit & Corporate (WA) Pty Ltd
Level 1, 12 Kings Park Road
WEST PERTH WA 6005
Telephone: (08) 9226 4500
Facsimile: (08) 9226 4300
SHARE REGISTRAR
Advanced Share Registry Services
110 Stirling Highway
NEDLANDS WA 6009
Telephone: (08) 9389 8033
Facsimile: (08) 9389 7871
STOCK EXCHANGE LISTING
Australian Securities Exchange
(Home Exchange: Perth, Western Australia)
Code: CAZ
BANKERS
National Australia Bank
100 St Georges Terrace
PERTH WA 6000
DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
Your directors present their report, together with the financial statements of Cazaly Resources
Limited (‘the Company’ or ‘Cazaly’) and its controlled entities (‘the Group’) for the financial
year ended 30 June 2015.
1.
DIRECTORS AND COMPANY SECRETARY
Directors
The names of directors in office at any time during or since the end of the year are:
Nathan McMahon
Clive Jones
Kent Hunter
Directors have been in office since the start of the financial year to the date of this report
unless otherwise stated.
Company Secretary
Mike Robbins
2.
PRINCIPAL ACTIVITIES
The principal activity of the Group during the financial period was mineral exploration.
There were no significant changes in the nature of the Group’s principal activities during the
financial period.
3.
OPERATING RESULTS & FINANCIAL POSITION
The loss after tax for the year was $1,388,795 (2014:$1,776,871). The Group’s net assets at the
end of the year are $20,640,083 (2014: $22,028,878).
Cash and cash equivalents as at year end were $620,947 (2014 - $147,731).
Exploration expenditure for the year was $239,813 (2014 - $1,464,971). The majority of this
expenditure was on the Halls Creek and Parker Range projects. Exploration expenditure
written off for the year was $1,104,148 compared to $2,543,058 in the previous financial year.
The main writes off this year were the Huckitta JV expenditure of $310,248, Marillana $57,397,
Mt Stuart $88,402, Hamersley $58,283, Albion Downs $50,324 and the previously capitalised
expenditures relating to the various tenements that were relinquished during the financial
year.
Net administration expenses and employee benefits for the year totalled $883,965 (2014 -
$1,088,203).
During the next financial year the Group intends to continue to further develop its core
projects (Parker Range and McKenzie Springs) and explore new mining opportunities both in
Australia and overseas. These opportunities are being explored by the Board and corporate
consultants who operate on a success fee basis only.
4.
RISKS
There are specific risks associated with the activities of the Group and general risks which are
largely beyond the control of the Group and the Directors. The risks identified below, or other
risk factors, may have a material impact on the future financial performance of the Group
and the market price of the Company’s shares.
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
All mining ventures are exposed to risks and the Board continues to monitor risks associated
with current projects whilst also analysing the risks associated with any new mining
opportunities. These risks may cover such areas as:
Title Risk
This may specifically cover mining tenure whereby country specific mining laws and
legislation apply.
Any opportunity in Australia and overseas will be subject to particular risks associated with
operating in Australia or the respective foreign country. These risks may include economic,
social or political instability or change, hyperinflation, currency non-convertibility or instability
and changes of law affecting foreign ownership, exchange control, exploration licensing,
export duties, investment into a foreign country and repatriation of income or return of
capital, environmental protection, land access and environmental regulation, mine safety,
labour relations as well as government control over mineral properties or government
regulations that require the employment of local staff or contractors or require other benefits
be provided to local residents.
Exploration Risk
The Board realises that mineral exploration and development are high risk
undertakings due to the high level of inherent uncertainty. There can be no
assurance that exploration of the Group’s tenements, or of any other tenements that
may be acquired by the Group in the future, will result in the discovery of economic
mineralisation. Even if economic mineralisation is discovered there is no guarantee
that it can be commercially exploited.
Any future exploration activities of the Group may be affected by a range of factors
including geological conditions, limitations on activities due to seasonal weather
patterns, unanticipated operational and technical difficulties,
industrial and
environmental accidents, native title process, changing government regulations and
many other factors beyond the control of the Group.
Resource Estimates
The Group’s main projects contain JORC Code compliant resources. There is no
guarantee that a JORC Code compliant resource will be discovered on any of the
Group’s other tenements. Resource estimates are expressions of judgement based
on knowledge, experience and industry practice. Estimates which were valid when
originally calculated may alter significantly when new information or techniques
become available. In addition, by their very nature, resource estimates are
imprecise and depend to some extent on interpretations which may prove to be
inaccurate. As further information becomes available through additional fieldwork
and analysis the estimates are likely to change. This may result in alterations to
development and mining plans which may, in turn, adversely affect the Group’s
operations and the value of the Company’s Listed Shares.
Access Risks – Cultural Heritage and Native Title
The Group must comply with various country specific cultural heritage and native
title legislation including access agreements which require various commitments,
such as base studies and compliant survey work, to be undertaken ahead of the
commencement of mining operations.
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
It is possible that some areas of those tenements may not be available for
exploration due to cultural heritage and native title legislation or invalid access
agreements. The Group may need to obtain the consent of the holders of such
interests before commencing activities on affected areas of the tenements. These
consents may be delayed or may be given on conditions which are not satisfactory
to the Group.
JV and Contractual Risk
The Group has and may have additional options where it can increase its holding in
the selective assets by achieving or undertaking selected milestones. The Group’s
ability to achieve its objectives and earn or maintain an interest in these projects is
dependent upon it and the registered holders of those tenements complying with
their respective contractual obligations under joint venture agreements in respect of
those tenements, and the registered holders complying with the terms and
conditions of the tenements and any other relevant legislation.
Economic
General economic conditions, introduction of tax reform, new legislation, the
general level of activity within the resources industry, movements in interest and
inflation rates and currency exchange rates may have an adverse effect on the
Group’s exploration, development and possible production activities, as well as on
its ability to fund those activities.
Market conditions
Share market conditions may affect the value of the Company’s quoted securities
regardless of the Group’s operating performance. Share market conditions are
affected by many factors such as:
introduction of tax reform or other new legislation;
interest rates and inflation rates;
- general economic outlook;
-
-
- changes in investor sentiment toward particular market sectors;
-
-
the demand for, and supply of, capital; and
terrorism or other hostilities.
The market price of securities can fall as well as rise and may be subject to varied
and unpredictable influences on the market for equities in general and resource
exploration stocks in particular. Neither the Company nor the Directors warrant the
future performance of the Group or any return on an investment in the Company.
Volatility in Global Credit and Investment Markets
Global credit, commodity and investment markets have recently experienced a
high degree of uncertainty and volatility. The factors which have led to this situation
have been outside the control of the Group and may continue for some time
resulting in continued volatility and uncertainty in world stock markets (including the
ASX). This may impact the price at which any Listed Options and Shares trade
regardless of operating performance and affect the Company’s ability to raise
additional equity and/or debt to achieve its objectives, if required.
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
Commodity Price Volatility and Exchange Rates Risks
If the Group achieves success leading to mineral production, the revenue it will
derive through the sale of gold, iron ore or any other minerals it may discover
exposes the potential income of the Group to commodity price and exchange rate
risks. Commodity prices fluctuate and are affected by many factors beyond the
control of the Group. Such factors include supply and demand fluctuations for
commodities and metals, technological advancements, forward selling activities
and other macro-economic factors such as inflation expectations, interest rates and
general global economic conditions.
Furthermore, international prices of various commodities are denominated in United
States dollars whereas the income and expenditure of the Group are and will be
taken into account in Australian currency. This exposes the Group to the fluctuations
and volatility of the rate of exchange between the United States dollar and the
Australian dollar as determined in international markets.
If the price of commodities declines this could have an adverse effect on the
Group’s exploration, development and possible production activities, and its ability
to fund these activities, which may no longer be profitable.
Environmental Risks
The operations and proposed activities of the Group are subject to each project’s
jurisdiction, laws and regulations concerning the environment. As with most
exploration projects and mining operations, the Group’s activities are expected to
have an impact on the environment, particularly if advanced exploration or mine
development proceeds. Future legislation and regulations governing exploration,
development and possible production may impose significant environmental
obligations on the Group.
The cost and complexity of complying with the applicable environmental laws and
regulations may prevent the Group from being able to develop potential
economically viable mineral deposits. The Group may require approval from the
relevant authorities before it can undertake activities that are likely to impact the
environment. Failure to obtain such approvals or to obtain them on terms
acceptable to the Group may prevent the Group from undertaking its desired
activities. The Group is unable to predict the effect of additional environmental laws
and regulations, which may be adopted in the future, including whether any such
laws or regulations would materially increase the Group’s cost of doing business or
affect its operations in any area.
There can be no assurances that new environmental laws, regulations or stricter
enforcement policies, once implemented, will not oblige the Group to incur
significant expenses and undertake significant investments in such respect which
could have a material adverse effect on the Group’s business, financial condition
and results of operations.
The above risks are not exhaustive but are the minimum exposure areas observed by the
Group. Outside of the above, the Group is continually assessing Industry type risk (covering
resources, commercial, commodity prices & volatility, insurance and environmental) and
general type risk (economic, share markets, government & legal and global volatility).
5.
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.
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
6.
REVIEW OF OPERATIONS
Corporate
The Company received its full entitlement ($2 million) under the contingency royalty payment
scheme with Phoenix Gold Limited. The last $250,000 quarterly contingency payment was
received on 2 January 2015.
On 9 June 2015 the Company announced that it had sold a package of royalties for a
potential total of $2.35M comprising royalties held over the Kalgoorlie Gold project (“KGP”)
and the Halls Creek Copper project (“HCCP”). The sale was to a private mining investment
group and comprises various payments subject to a range of conditions including third party
waivers of pre-emptive rights and production hurdles. In summary, the schedule of payments
is as follows:
(a) Payment of $453,000 received upon signing;
(b) Payment of $147,000 received following satisfaction of third party rights with respect to
the HCCP;
(c) Payment of $750,000 upon the commencement of commercial mining at the KGP by
June 2017; and
(d) Payment of $1,000,000 upon satisfaction of conditions relating to the production of
140,000ozs gold from the KGP.
Payments (a) and (b) were received on 29 June 2015. The sale of the royalties ensures the
early realisation of cashflows and enables the Company to focus on its existing projects.
In December 2014 the Company also entered into a Controlled Placement Agreement
(CPA). The CPA provides Cazaly with up to $2 million of standby equity capital over the
coming 12 months. Importantly, Cazaly retains full control of the placement process,
including having sole discretion as to whether or not to utilise the CPA.
The CPA provides Cazaly with the flexibility to quickly and efficiently raise capital, including
the ability to take advantage of suitably attractive opportunities should they arise. Cazaly is
under no obligation to raise capital under the CPA. If Cazaly does decide to utilise the CPA,
the Company has control, allowing Cazaly to decide the frequency, timing, maximum size
and minimum issue price of any capital raisings under the CPA.
The Group has continued to reduce its tenement holdings and is focussed on its most
advanced projects. Cost cutting measures were initiated early in the financial year and are
ongoing.
Projects
Parker Range (CAZ 100%)
Despite the recent downturn in the iron ore market, the Company continues to seek avenues
to commence the development of the Parker Range iron ore project.
The Parker Range project is the only “mine ready” iron ore deposit in the region not currently
in operation. Parker Range has a fully completed definitive feasibility study and all key
approvals are in place to commence development. In May 2014, the WA Transport Minister,
Mr Dean Nalder, announced that Yilgarn Esperance Solution (YES) Limited, a consortium
headed up by Asciano had been chosen to design, build and operate the new Multi-User
Iron Ore Facility (MUIOF) planned for the Port of Esperance. Given the state of the iron ore
market during the financial year no progress has been made on the development by
Asciano.
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
Cazaly intends to update the DFS once the YES consortium and the port have completed
formal documentation.
Discussions with potential project finance and commercial partners are continuing.
McKenzie Springs (CAZ 100%)
The nickel potential of the area previously defined priority targets that contained nickel,
copper and cobalt mineralisation in geological settings similar to the nearby Savannah Nickel
operation (3.1 Mt @ 1.5% Ni, 0.89% Cu and 0.08% Co, Panoramic Resources, July 2013).
The Savannah Nickel Operation has been in production since 2004 and exports concentrate
to China via the port of Wyndham (240km to the north via the Great Northern Highway).
Recent near mine exploration by Panoramic has indicated potential to extend the resource
and mine life beyond 2017 with the discovery of a new lode at Savannah North.
Mineralisation identified within the Company’s McKenzie Springs tenement is associated with
the basal contact of mafic-ultramafic rocks in a similar geological setting to the Savannah
Nickel Mine situated ~9km to the north. Gossan outcrops were sampled returning results
confirming the potential for ore grade mineralisation and previous results. Of particular note is
one very high grade result which returned 12.8% Cu, 1.92% Ni and 0.17% Co taken from the
Mackenzie Springs No.1 gossan.
Following reconnaissance work and research of historic data the Company identified
evidence of graphite bearing units associated with high grade metamorphic rocks of the
Tickalara Metamorphic suite which trend throughout the McKenzie Springs project for ~15
kilometres. This is the same unit hosting Lamboo Resources Limited’s neighbouring Macintosh
Graphite Project (7.135Mt @ 4.73% TGC) (ASX:LMB, January 2014).
The host graphitic schist it is rarely seen in outcrop although the prospective stratigraphy is
thought to trend for some ~15km throughout the project. Samples assayed returned Total
Graphitic Carbon (TGC) grades of 22.4 and 23.9% TGC.
The Company also received encouraging first pass results from the petrographic analyses of
graphite samples collected from the project. The Company intends to collect further samples
with a view to performing flotation testwork in due course. It is also planned to further define
the acquisition and assessment of an airborne
this stratigraphic horizon
electromagnetic (EM) survey to more accurately define targets for future drill testing.
through
Burbridge Gold Deposits (CAZ 100%)
Cazaly has taken the opportunity to assess the gold potential of its holdings in the Southern
Cross region. This has led to the recognition of a group of small but potentially viable gold
prospects situated immediately north of the Mount Caudan iron ore deposit called the
Burbidge Group. The prospects are located on granted mining leases M77/765 and M77/766
nearby to existing haul roads and associated infrastructure all within 15 kilometres of the
2.5Mtpa Marvel Loch gold mill which was recently recommissioned by Hanking.
In-house resource estimates were updated on a series of adjacent gold prospects. The
updated resource estimates (as announced to the ASX in the CAZ June 2015 quarterly
activities report) are shown in Table 1 below:
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
Table 1 – Burbidge Gold Resource Estimate
Ounces Au
RESOURCE CATEGORY Tonnes
BURBIDGE GROUP
PROSPECT
ZEUS
BURBIDGE
ZEUS SOUTH
LITTLE BURBIDGE EAST
BURBIDGE EAST
TOTAL
Above resources reported at a lower cut-off grade of 1.0 g/t gold. No upper grade cuts have been applied. Assay
results are from reverse circulation (RC) and diamond drilling (DDH). Totals may show variation due to rounding.
Further details are contained in the June 2015 and March 2015 ASX quarterly activities reports. Refer Competent
Person’s Statement (*).
Grade
(g/t Au)
2.76
1.64
1.08
1.59
1.99
1.97
INFERRED
INFERRED
INFERRED
INFERRED
INFERRED
142,900
121,700
29,100
129,300
45,500
468,600
12,680
6,420
1,010
6,610
2,910
29,600
INFERRED
Gold mineralisation at the Zeus prospect was identified in the late 1980’s, south of the Bronco
and Great Victoria open cut gold mines. Drilling along the geological contact intersected
gold mineralisation in a vertical structure, above an oxidised massive sulphide unit on a
contact between metasediments and mafic volcanics. Previous
tenement holders
Gondwana Resources Limited followed up high grade gold intersects and conducted three
rounds of RC in-fill drilling at Zeus, Burbidge and Burbidge East prospects.
Hamersley Iron Ore Project (CAZ 30%/WFE 70%)
The Company reduced its holding in this project during the year as reported to the ASX by
Winmar Resources Ltd (‘WFE’) on 6 February 2015.
The Hamersley Iron project contains the Winmar Deposit which includes both Channel Iron
(‘CID’) and Detrital Iron (‘DID’) styles of mineralisation. The CID covers an area of 2.0 by 2.5
km and, in the southwest, is overlain by the DID. The overall indicated/inferred resource for
the project is 343Mt @ 54.5% Fe (57.9% CaFe)(refer WFE ASX announcement dated 22 May
2013).
Halls Creek Copper Project (CAZ 20%/DDD 80%)
The Company has an agreement with 3D Resources Limited (‘DDD’) to earn up to a 75%
interest in the Halls Creek Copper Project, located in the Kimberley region of Western
Australia. The Halls Creek Project comprises a large package of six tenements covering an
area of approximately 298 km², near the township of Halls Creek covering part of the Halls
Creek Mobile Zone which is highly prospective for a range of commodities including base
metals, gold, diamonds and nickel.
The project hosts the Mount Angelo North Cu-Zn-Ag volcanogenic massive sulphide deposit.
Cazaly has access to a large tenement package which is particularly prospective for the
discovery of further similar copper and copper-zinc mineralisation. Mineralisation at Mount
Angelo North occurs as significant pod of zoned (Zn - Cu/Zn - Cu) massive sulphide the upper
extents of which is characterised by a near surface to surface zone of oxidised mineralisation.
The Halls Creek project also hosts the Mt Angelo Porphyry Copper deposit which comprises
widespread low grade copper mineralisation occurring with the granophyric phase of the
Angelo Microgranite.
A maiden resource estimate for the deposit (see table 2) was announced to the ASX in the
CAZ September 2013 quarterly activities report. Pickands Mather had previously estimated a
low grade Cu resource of approximately 21 million short tonnes grading 0.44% Cu.
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
Table 2 - Mount Angelo North Resource Estimate
Classification
Tonnes
CuEqu.
(Mt)
%
Oxide Mineralisation
Indicated
Inferred
0.17
0.07
Fresh Mineralisation
Indicated
Inferred
0.93
0.60
Lower Mineralisation
1.57
1.41
1.92
1.38
Cu
%
1.13
1.07
1.46
1.02
Zn
%
0.96
1.12
1.67
1.33
Ag
g/t
26.1
11.1
12.5
9.0
Inferred
0.04
0.97
0.63
1.22
8.5
TOTAL
1.78
1.60
1.21
1.39
11.6
Above resources reported at a lower cut-off grade of 0.8%CuEqu.Refer Competent Person’s Statement (**). This
information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply
with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.
Huckitta JV (CAZ 20%/MTH 80%)
Located immediately south of the Leaky Bore tenement, the project comprised two
tenements (EL25643 and 25653) which were subject to the Sammy Joint Venture with Mithril
Resources Limited (‘MTH’).
Following the relinquishment of both tenements in July and August 2015, the joint venture has
been dissolved and associated exploration expenditure has been written off in the financial
year ended 30 June 2015.
7.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
The Group will continue its mineral exploration activity at and around its exploration projects
with the object of identifying commercial resources.
The Group also intends to identify new mineral exploration opportunities within Australia and
the rest of the world for further potential acquisitions which may offer value enhancing
opportunities for shareholders.
8.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group during the financial
year.
9.
AFTER BALANCE DATE EVENTS
The Directors are not aware of any matters or circumstances at the date of the report, other
than those referred to in this report or the financial statements or notes thereto, that has
significantly affected or may significantly affect the operations, the results of operations or the
state of affairs of the Group in subsequent financial years.
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
10.
ENVIRONMENTAL ISSUES
The Group’s exploration activities are subject to the 1978 (WA) Mining Act. The Group has a
policy of complying with or exceeding its environmental performance obligations. The Board
of Cazaly believes that the Group has adequate systems in place for the management of its
environmental requirements. The Group aims to ensure the appropriate standard of
environmental care is achieved, and in doing so, that it is aware of and is in compliance with
all environmental legislation. The Directors are not aware of any breach of environmental
legislation for the financial year under review.
11.
INFORMATION ON DIRECTORS
Nathan McMahon
Managing Director (Corporate and Administration)
Qualifications
B.Com
Experience
Mr McMahon has provided tenement management advice to
the mining industry for approximately 17 years to in excess of 20
public listed mining companies. Mr McMahon has specialised in
native title negotiations, joint venture negotiations and project
acquisition due diligence. Mr McMahon is a Director of several
listed companies.
Equity Holdings
Fully Paid Ordinary Shares – 18,355,154
Unlisted Options – 1,500,000 exercisable at $0.18 expiring 26
November 2016
Other Directorships
Hodges Resources Ltd (since May 2008)
Dempsey Minerals Ltd (since February 2011)
Clive Jones
Managing Director (Technical)
Qualifications
B.App.Sc(Geol), M.AusIMM.
Experience
Mr Jones has been involved in mineral exploration for over 25
years and has worked on the exploration for a range of
commodities including gold, base metals, mineral sands, uranium
and iron ore. Mr Jones is a Director of several ASX listed
companies as well as being Chairman of Unity Mining Ltd.
Equity Holdings
Fully Paid Ordinary Shares – 10,075,114
Unlisted Options – 1,500,000 exercisable at $0.18 expiring 26
November 2016
Other Directorships
Corazon Mining Ltd (since February 2005)
Cortona Resources Ltd (from January 2006 to January 2013)
Bannerman Resources Ltd (since January 2007)
Unity Mining Ltd (since January 2013)
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
Kent Hunter
Non-Executive Director
Qualifications
B.Bus, CA.
Experience
Mr Hunter is a Chartered Accountant with over 17 years’
corporate and company secretarial experience. He has been
involved in the listing of over 20 exploration companies on ASX in
the past decade. He has experience in capital raisings, ASX
compliance and regulatory requirements and is also a Company
Secretary for other ASX Listed entities.
Equity Holdings
Fully Paid Ordinary Shares – 212,501
Unlisted Options – 500,000 exercisable at $0.18 expiring 26
November 2016
Other Directorships
Mike Robbins
Company Secretary
Classic Minerals Ltd (since November 2013)
Krakatoa Resources Ltd (from January 2012 to December 2013)
Stratum Metals Ltd (from December 2010 to October 2013)
Western Manganese Ltd (from June 2010 to July 2013)
Carbon Conscious Ltd (from November 2010 to August 2014)
Mr Robbins has over 20 years resource industry experience gathered at both operational and
corporate levels, both within Australia and overseas. During that time, he has held numerous
project and head office management positions and is currently Company Secretary for three
other listed entities.
12. REMUNERATION REPORT - AUDITED
This report details the nature and amount of remuneration for each director of the Company.
Remuneration Policy
The remuneration policy of Cazaly 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 of the Company believes the
remuneration policy to be appropriate and effective in its ability to attract and retain the
best directors to run and manage the company, as well as create goal congruence
between directors and shareholders.
The Board’s policy for determining the nature and amount of remuneration for board
members is set out below.
The remuneration policy, setting the terms and conditions for the executive directors and
other senior staff members, was developed by the managing directors and approved by the
board after seeking professional advice from independent external consultants.
In determining competitive remuneration rates, the Board seeks independent advice on local
and international trends among comparative companies and industry generally. It examines
terms and conditions for employee incentive schemes benefit plans and share plans.
Independent advice is obtained to confirm that executive remuneration is in line with market
practice and is reasonable in the context of Australian executive reward practices.
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DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
12.
REMUNERATION REPORT – AUDITED (Cont’d)
The Group is exploration and development focussed, and therefore speculative in terms of
performance. Consistent with attracting and retaining talented executives, directors and
senior executives are paid market rates associated with individuals in similar positions, within
the same industry.
The Board acquired and were issued shares as part of the terms of the Initial Public Offer in
2003. Board members have retained these securities which assist in aligning their objectives
with overall shareholder value.
Options and performance incentives will be issued in the event that the entity moves from an
exploration entity to a producing entity, and key performance indicators such as profits and
growth can be used as measurements for assessing Board performance.
All remuneration paid to directors is valued at the cost to the Company and expensed or
carried forward on the balance sheet for time that is attributable to exploration and
evaluation. Options are valued using the Black-Scholes methodology.
The Board policy is to remunerate non-executive directors at market rates for comparable
companies for time, commitment and responsibilities. The managing directors in consultation
with independent advisors determine payments to the non-executive directors and review
their remuneration annually, based on market practice, duties and accountability. The
maximum aggregate amount of fees that can be paid to non-executive directors is subject
to approval by shareholders at the Annual General Meeting. Fees for non-executive directors
are not linked to the performance of the Company. However, to align directors’ interests with
shareholder interests, all directors are encouraged to hold shares in the company.
Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration
The remuneration policy has been tailored to
increase goal congruence between
shareholders and directors and executives. This has been achieved by the issue of shares to
the majority of the directors and executives to encourage the alignment of personal and
shareholder interest.
Employment Contracts of Directors and Senior Executives
The employment conditions of the joint Managing Directors, Nathan McMahon and Clive
Jones, are each formalised in contracts of employment. These contracts commenced on 1
July 2010 and have a 3 year terms (with an option for a 3 year extension). The contracts
provide Messrs. McMahon and Jones with annual salaries of $180,000 each. The company
may terminate these agreements at any time and without prior notice if serious misconduct
has occurred. In this event only the fixed proportion of the remuneration is payable and only
up until the date of the termination.
There is no formal contract in place for the non-executive director, Kent Hunter. Mr Hunter
was paid under terms agreed to by a directors’ resolution at $27,250 per year. This fee has
remained the same since 2010.
The employment contracts stipulate a range of one to three-month resignation periods. The
Company may terminate an employment contract without cause by providing one to three
months written notice or making payment in lieu of notice, based on the individual’s annual
salary component.
Termination payments are not payable on resignation or under the circumstances of
unsatisfactory performance.
12
DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
12.
REMUNERATION REPORT – AUDITED (Cont’d)
Details of Remuneration for Year Ended 30 June 2015
The remuneration for key management personnel of the company during the year was as
follows:
Short-term Benefits
Post-
Employ-
ment
Benefits
Other
Long-term
Benefits
Share based
Payment
Total
Performance
Related
Cash,
salary &
commiss
-ions
Cash
profit
share
Non-cash
Other
Benefit
Super-
annuation
Other
Equity Options
$
$
$
$
$
$
$
Nathan McMahon – Managing Director (ii)
2015
2014
180,000
180,000
-
-
Clive Jones – Managing Director (iii)
2015
2014
180,000
180,000
-
-
-
-
-
-
Kent Hunter – Non Executive Director
2015
2014
27,250
27,250
Total Remuneration
2015
2014
387,250
387,250
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(i)
$
-
$
180,000
%
-
47,622
227,622
20.9%
-
180,000
-
47,622
227,622
20.9%
-
27,250
-
15,874
43,124
36.8%
-
387,250
-
111,118
498,368
22.2%
The fair value of the Options was calculated at the date of grant using a Black-Scholes model.
i)
ii) An aggregate amount of $180,000 (2014:$ 180,000) was paid, or was due and payable to Kingsreef Pty Ltd, a
company controlled by Mr Nathan McMahon, for the provision of corporate and tenement management
services to the Company.
iii) An aggregate amount of $180,000 (2014:$ 180,000) was paid, or was due and payable to Widerange
Corporation Pty Ltd, a company controlled by Mr Clive Jones, for the provision of geological services to the
Company.
Related Party Information
Transactions between related parties are on commercial terms and conditions, no more
favourable than those available to other parties unless otherwise stated.
Remuneration (excluding the reimbursement of costs) received or receivable by the directors
of the Group and aggregate amounts paid to superannuation plans in connection with the
retirement of directors are disclosed in Note 4 to the accounts.
Mr McMahon was at any time during the financial years ended 30 June 2015 and 30 June
2014, a director and shareholder of Hodges Resources Limited (“Hodges”) and Dempsey
Minerals Limited (“Dempsey”). Hodges and Dempsey have an agreement in place, based on
normal commercial terms and conditions, to reimburse the Company for office rental and
administration and overheads.
13
DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
12.
REMUNERATION REPORT – AUDITED (Cont’d)
Aggregate amounts of each of the above types of other transaction with related parties of
the Company:
Sales
Rent, administrative and office overheads:
Hodges Resources Limited
Dempsey Minerals Limited
Key Management Personnel (KMP) Shareholdings
2015
$
2014
$
56,084
39,980
96,064
61,566
42,860
104,426
The number of ordinary shares in Cazaly Resources Limited held by each KMP of the Group
during the financial year is as follows:
30 June 2015
N McMahon
C Jones
K Hunter
30 June 2014
N McMahon
C Jones
K Hunter
Balance
1 July 2014
Granted as
Remuneration
Options
Exercised
Net Change
Other
Balance
30 June 2015
17,191,690
10,075,114
37,501
27,304,305
-
-
-
-
Balance
1 July 2013
Granted as
Remuneration
Options
Exercised
16,822,939
9,563,862
2,052,103
28,438,904
-
-
-
-
-
-
-
-
-
-
-
-
509,464
-
175,000
684,464
17,701,154
10,075,114
212,501
27,988,769
Net Change
Other
Balance
30 June 2014
368,751
511,252
(2,014,602)
(2,014,602)
17,191,690
10,075,114
37,501
27,304,305
Key Management Personnel (KMP) Option Holdings
The number of options over ordinary shares held by each KMP of the Group during the
financial year is as follows.
30 June 2015
N McMahon
C Jones
K Hunter
Balance
01-07-14
1,500,000
1,500,000
500,000
3,500,000
Issued
Exercised
Lapsed
Balance
30-06-15
Vested
during
the year
Vested
and
exercisable
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
1,500,000
500,000
3,500,000
-
-
-
-
1,500,000
1,500,000
500,000
3,500,000
14
DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
12.
REMUNERATION REPORT – AUDITED (Cont’d)
30 June 2014
Balance
01-07-13
Issued
Exercised
Lapsed
N McMahon
C Jones
K Hunter
-
-
-
-
1,500,000
1,500,000
500,000
3,500,000
End of Remuneration Report (Audited).
13. MEETINGS OF DIRECTORS
-
-
-
-
-
-
-
-
,000)(250
,000)
Balance
30-06-14
Vested
during
the year
Vested
and
exercisable
1,500,000
1,500,000
500,000
3,500,000
-
-
-
-
1,500,000
1,500,000
500,000
3,500,000
The number of directors' meetings and/or circular resolutions held and/or conducted during
the financial year, each director held office during the financial year and the number of
meetings and/or circular resolutions attended and/or signed off by each director is:
Director
N McMahon
C Jones
K Hunter
Directors Meetings/Resolutions
Number Eligible
6
6
6
Number Attended
5
6
6
The Group does not have a formally constituted audit committee as the Board considers that
the Group’s size and type of operation do not warrant such a committee.
14.
INDEMNIFYING OFFICERS OR DIRECTORS
In accordance with the constitution, except as may be prohibited by the Corporations Act
2001 every Officer, or agent of the Group shall be indemnified out of the property of the
Group against any liability incurred by him in his capacity as Officer or agent of the Group 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 Group has insurance policies in place for Directors and Officers insurance. The premium
paid on this policy was $10,285.
15. OPTIONS
Options on Issue
At the date of this report unissued ordinary shares of the Company under option are:
Expiry Date
Exercise Price
Number Under
Option
Grant Date
31/07/2016
26/11/2016
$0.107
$0.180
100,000
3,500,000
01/08/2013
25/11/2013
Option holders do not have any rights to participate in any issue of shares or other interests in
the Company or any other entity.
There have been no unissued shares or interest under option of any controlled entity within
the Group during or since the reporting date.
15
DIRECTORS’ REPORT
Cazaly Resources Limited Annual Report 2015
Options Expired or Lapsed
On 11 January 2015, 925,000 unlisted options exercisable at $0.33 expired.
On 4 February 2015, 100,000 unlisted options exercisable at $0.49 expired.
On 31 July 2015, 100,000 unlisted options exercisable at $0.10 expired.
Options forfeited or cancelled
During, or since the end of the financial year, no options were forfeited or cancelled.
16.
PROCEEDINGS ON BEHALF OF GROUP
No person has applied for leave of Court to bring proceedings on behalf of the Group or
intervene in any proceedings to which the Group is a party for the purpose of taking
responsibility on behalf of the Group for all or any part of those proceedings.
The Group was not a party to any such proceedings during the year.
17. AUDITORS INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2015 has been
received and can be found on page 16.
18. NON AUDIT SERVICES
The Board of Directors is satisfied that the provision of non-audit services performed during the
year by the Group’s auditors is compatible with the general standard of independence for
auditors imposed by the Corporations Act 2001.
No other fees were paid or payable to the auditors for non-audit services performed during
the year ended 30 June 2015.
This report of the Directors, incorporating the Remuneration Report, is signed in accordance
with a resolution of the Board of Directors.
Nathan McMahon
Managing Director
30 September 2015
Competent Persons Statement
(*) This information that relates to exploration targets, exploration results, resource reporting and drilling data of
Cazaly operated projects is based on information compiled by Mr Clive Jones and Mr Don Horn who are Members of
The Australasian Institute of Mining and Metallurgy and/or The Australian Institute of Geoscientists and are employees
of the Company. Mr Jones and Mr Horn have sufficient experience which is relevant to the style of mineralisation and
type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent
Persons as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’. Mr Jones and Mr Horn consent to the inclusion in their names in the matters based on
their information in the form and context in which it appears.
(**) This information that relates to exploration targets, exploration results, resource reporting and drilling data of
Cazaly operated projects is based on information compiled by Ms Felicity Repacholi who is a Member of The
Australian Institute of Geoscientists and was an employee of the Company. Ms Repacholi has sufficient experience
which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she
is undertaking to qualify as a Competent Persons as defined in the 2004 Edition of the ‘Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Ms Repacholi consents to the inclusion of her
name in the matters based on their information in the form and context in which it appears.
16
To The Board of Directors
As lead audit director for the audit of the financial statements of Cazaly Resources
Limited for the financial year ended 30 June 2015, I declare that to the best of my
knowledge and belief, there have been no contraventions of:
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
any applicable code of professional conduct in relation to the audit.
Yours faithfully
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Director
Dated at Perth this 30th day of September 2015
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For Year Ended 30 June 2015
Cazaly Resources Limited Annual Report 2015
Note
2015
$
2014
$
2
2
6
Revenue from continuing operations
Other Income
Employee benefits
Depreciation
Administrative expenses
Compliance and regulatory expenses
Occupancy expenses
Written-off exploration expenditure
Equity based payments
Loss on sale of financial assets
Reversal /(Impairment) of financial assets
Loss before income tax
Income tax (expense)/ benefit
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Loss for the year attributable to:
Members of the parent entity
Non-controlling interest
Total comprehensive income attributable to:
Members of the parent entity
Non-controlling interest
237,833
613,668
1,100,000
1,149,798
(564,860)
(26,083)
(319,105)
(175,419)
(336,845)
(1,104,148)
-
(28,759)
(171,409)
(630,327)
(37,578)
(457,426)
(266,110)
(329,311)
(2,543,058)
(119,642)
77,241
(1,388,795)
-
(1,388,795)
-
(1,388,795)
(2,542,745)
765,874
(1,776,871)
-
(1,776,871)
(1,384,856)
(3,939)
(1,388,795)
(1,775,571)
(1,300)
(1,776,871)
(1,384,856)
(3,939)
(1,388,795)
(1,775,571)
(1,300)
(1,776,871)
Earnings/(loss) per share from continuing
and discontinued operations
Basic earnings/ (loss) per share
Diluted earnings per share
18
18
Cents
(1.06)
(1.06)
Cents
(1.37)
(1.37)
The accompanying notes form part of these financial statements.
18
CONSOLIDATED STATEMENT OF
FINANCIAL POSITION
As at 30 June 2015
Cazaly Resources Limited Annual Report 2015
Note
2015
$
2014
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
7
8
620,947
172,849
147,731
377,399
TOTAL CURRENT ASSETS
793,796
525,130
NON CURRENT ASSETS
Trade and other receivables
Financial assets
Property, plant and equipment
Exploration and evaluation assets
Deferred tax assets
8
9
10
11
6
146,168
316,790
46,387
19,917,756
-
146,168
1,070,182
72,470
20,782,091
6,154,058
TOTAL NON CURRENT ASSETS
20,427,101
28,224,969
TOTAL ASSETS
21,220,897
28,750,099
CURRENT LIABILITIES
Trade and other payables
Provisions
12
13
504,763
76,051
517,127
50,036
TOTAL CURRENT LIABILITIES
580,814
567,163
NON CURRENT LIABILITIES
Deferred tax liabilities
6
TOTAL NON CURRENT LIABILITIES
-
-
6,154,058
6,154,058
TOTAL LIABILITIES
580,814
6,721,221
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
Controlling entity interest
Non-controlling interest
20,640,083
22,028,878
14
15
16
24,889,282
119,642
(4,355,599)
20,653,325
(13,242)
24,889,282
374,280
(3,225,381)
22,038,181
(9,303)
TOTAL EQUITY
20,640,083
22,028,878
The accompanying notes form part of these financial statements.
19
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
For the year ended 30 June 2015
Cazaly Resources Limited Annual Report 2015
Issued Capital
(Accumulated
Losses)
And
Retained
Earnings
$
$
Option
Reserve
Non-
Controlling
Interest
Total
$
$
$
Balance at 1 July 2013
24,800,080
(1,553,497)
358,325
(8,003)
23,596,905
Loss for the year
Other comprehensive
income for the year
Total comprehensive income
for the year
Transactions with owners, in
their capacity as owners, and
other transfers:
Shares issued during the
year
Equity based payments
Option reserve
Transaction costs
Tax effect of equity raising
cost
Balance at 30 June 2014
Loss for the year
Other comprehensive
income for the year
Total comprehensive
income/(loss) for the year
Transactions with owners, in
their capacity as owners, and
other transfers:
Shares issued during the
year
Equity based payments
Option reserve
Transaction costs
Tax effect of equity raising
cost
Balance at 30 June 2015
-
-
-
(1,775,571)
-
(1,775,571)
-
-
-
(1,300)
(1,776,871)
-
-
(1,300)
(1,776,871)
140,800
-
-
(12,000)
-
-
103,687
-
-
119,642
(103,687)
-
-
-
-
-
140,800
119,642
-
(12,000)
(39,598)
24,889,282
-
(3,225,381)
-
374,280
-
(9,303)
(39,598)
22,028,878
-
-
-
-
-
-
-
(1,384,856)
-
(1,384,856)
-
-
-
(3,939)
(1,388,795)
-
-
(3,939)
(1,388,795)
-
-
254,638
-
-
-
(254,638)
-
-
-
-
-
-
-
-
-
-
24,889,282
-
(4,355,599)
-
119,642
-
(13,242)
-
20,640,083
The accompanying notes form part of these financial statements.
20
CONSOLIDATED CASH FLOW
STATEMENT
For the year ended 30 June 2015
Cazaly Resources Limited Annual Report 2015
Note
2015
$
2014
$
Cash Flows from Operating Activities
Payments to suppliers and employees
Interest received
Other revenue
Proceeds from gold sale
Payments for exploration and evaluation
(1,015,271)
5,394
-
-
(420,131)
(953,028)
9,398
-
290,040
(1,336,156)
Net cash used in operating activities
19
(1,430,008)
(1,989,746)
Cash Flows From Investing Activities
Proceeds from sale of exploration assets
Proceeds from sale of royalty
Proceeds from sale of equity investments
Purchase of plant and equipment
Purchase of equity investments
Purchase of tenement
Proceeds for Joint Venture Management
750,000
600,000
553,224
-
-
-
-
1,335,500
-
65,195
(969)
-
-
-
Net cash provided by investing activities
1,903,224
1,399,726
Cash Flows from Financing Activities
Proceeds from issue of securities
Payment for costs of issue of securities
Net cash provided by financing activities
-
-
-
151,668
(12,000)
139,668
Net increase/(decrease) in cash held
473,216
(450,352)
Cash and cash equivalents at beginning
of the financial year
147,731
598,083
Cash and cash equivalents at end of the
financial year
7
620,947
147,731
The accompanying notes form part of these financial statements.
21
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements and notes represent those of Cazaly Resources Limited
(‘the Company’ or ‘Cazaly’) and Controlled Entities (‘the Group’). Cazaly Resources Limited is a
listed public company, incorporated and domiciled in Australia.
The financial statements were authorised for issue on 30 September 2015 by the directors of the
Company.
Basis of Preparation
The financial report is a general purpose financial report that has been prepared in accordance
with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.
The Group is a for-profit entity for financial reporting purposes under Australian Accounting
Standards.
Australian Accounting Standards set out in accounting policies that the AASB has concluded
would result in financial statements containing relevant and reliable information about
transactions, events and conditions. Compliance with Australian Accounting Standards ensures
that the financial statements and notes also comply with International Financial Reporting
Standards as issued by the IASB. Material accounting policies adopted in the preparation of
these financial statements are presented below and have been consistently applied unless
otherwise stated.
These financial statements have been prepared on an accruals basis and are based on
historical costs, modified, where applicable, by the measurement at fair value of selected non-
current assets, financial assets and financial liabilities.
Going Concern
The financial report has been prepared on a going concern basis, which contemplates the
continuity of normal business activity and the realisation of assets and the settlement of liabilities
in the ordinary course of business.
The Group incurred a loss after tax for the year of $1,388,795 (2014: Loss of $1,776,871) and net
cash outflows from operating activities of $1,430,008 (2014: $1,989,746). There was a working
capital surplus of $212,982 at 30 June 2015 compared to a working capital deficit of $42,033 at
30 June 2014.
Pending the outcome of various applications, the Group could have lease and exploration
commitments of $2,463,436 (2014: $6,164,151) due within the next twelve months.
The directors have prepared a cash flow forecast, which indicates that the Group will have
sufficient cash flows to meet all commitments and working capital requirements for the 12
month period from the date of signing this financial report. Based on the cash flow forecasts
and other factors referred to above, the directors are satisfied that the going concern basis of
preparation is appropriate because:
-
-
-
the Directors have an appropriate plan to raise additional funds as and when it is required.
In light of the Group’s current exploration projects, the Directors believe that the additional
capital required can be raised in the market; and
the Directors have an appropriate plan to contain certain operating and exploration
expenditure if appropriate funding is unavailable; and
the Directors will divest its interest in financial assets held for trading as and when required
to fund ongoing expenditure.
22
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
Should the Group not achieve the matters set out above, there is material uncertainty whether
the Group will continue as a going concern and therefore whether it will realise its assets and
extinguish its liabilities in the normal course of business and at the amounts stated in the financial
report.
The financial report does not contain any adjustments relating to the recoverability and
classification of recorded assets or to the amounts or classification of recorded assets or liabilities
that might be necessary should the Group not be able to continue as going concern.
(a)
Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities
controlled by the Company at the end of the reporting period. A controlled entity is any entity
over which the Company has the power to govern the financial and operating policies so as to
obtain benefits from the entity’s activities. Control will generally exist when the parent owns,
directly or indirectly through subsidiaries, more than half of the voting power of an entity. In
assessing the power to govern, the existence and effect of holdings of actual and potential
voting rights are also considered.
Where controlled entities have entered or left the Group during the year, the financial
performance of those entities are included only for the period of the year that they were
controlled. A list of controlled entities is contained in Note 21 to the financial statements.
In preparing the consolidated financial statements, all inter-group balances and transactions
between entities in the Group have been eliminated on consolidation. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with those adopted by
the Company.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to
a parent, are shown separately within the Equity section of the consolidated Statement of
Financial Position and Statement of Profit or Loss and other Comprehensive Income. The non-
controlling interest in the net assets comprises their interests at the date of the original business
combination and their share of changes in equity since that date.
(b)
Plant and Equipment
Plant and equipment are stated at cost less accumulated depreciation and impairment. The
carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in
excess of the recoverable amount from these assets. The recoverable amount is assessed on the
basis of the expected net cash flows that will be received from the asset’s employment and
subsequent disposal. The expected net cash flows have been discounted to their present values
in determining recoverable amounts.
(c)
Depreciation
Depreciation is provided on plant and equipment. Depreciation is calculated on a straight line
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 depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Plant and equipment
Office furniture and equipment
Motor vehicle
Depreciation Rate
40.0%
18.0%
22.5%
23
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end
of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount.
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
reserve relating to that asset are transferred to retained earnings.
(d)
Exploration, Evaluation and Development Expenditure
Costs incurred during exploration and evaluations relating to an area of interest are
accumulated. Costs are carried forward to the extent they are expected to be recouped
through successful development, or by sale, or where exploration and evaluation activities have
not yet reached a stage to allow a reasonable assessment regarding the existence of
economically recoverable reserves. In these instances the entity must have rights of tenure to
the area of interest and must be continuing to undertake exploration operations in the area.
Accumulated costs carried forward in respect of an area of interest that is abandoned 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 will be
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 capitalise costs in relation to that area of interest.
Costs of site restoration are provided over the life of the project from when exploration
commences and are included in the costs of that stage. Site restoration costs include the
dismantling and removal of mining plant, equipment and building structures, waste removal,
and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have
been estimated of future costs, current legal requirements and technology on an undiscounted
basis.
(e)
Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of
the asset, but not the legal ownership, are transferred to entities in the consolidated group are
classified as finance leases. Finance leases are capitalised by recording an asset and a liability
equal to the present value of the minimum lease payments, including any guaranteed residual
values. Leased assets are depreciated on a straight-line basis over the shorter of their estimated
useful lives or the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with
the lessor, are charged as expenses in the periods in which they are incurred.
(f)
Financial Instruments
Initial Recognition and Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when
the entity becomes a party to the contractual provisions of the instrument. Trade date
accounting is adopted for financial assets that are delivered within timeframes established by
marketplace convention.
24
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
Financial instruments are initially measured at fair value plus transactions costs, except where the
instrument is classified as “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 of fair value, amortised cost using the
effective interest rate method, or cost.
Fair value is determined based on current bid prices for all quoted investments. Valuation
techniques are applied to determine the fair value for all unlisted securities, including recent
arm’s length transactions, reference to similar instruments and option pricing models.
Amortised cost is the amount at which the financial asset or financial liability is measured at
initial recognition less principal repayments and any reduction for impairment, and adjusted for
any cumulative amortisation of the difference between that initial amounts calculated using the
effective interest method.
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 Group 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.
(i) Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category ‘financial assets at fair
value through profit or loss’. Financial assets are classified as held for trading if they are acquired
for the purpose of selling in the near term. Derivatives are also classified as held for trading unless
they are designated as effective hedging instruments. Gains or losses on investments held for
trading are recognised in profit or loss.
(ii) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are
classified as held-to-maturity when the Group has the positive intention and ability to hold to
maturity. Investments that are intended to be held-to-maturity, such as bonds, are subsequently
measured at amortised cost.
Held-to-maturity investments are included in non-current assets, except for those which are
expected to mature within 12 months after the end of the reporting period. (All other
investments are classified as current assets.)
(iii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. Such assets are carried at amortised cost using the
effective interest method. Gains and losses are recognised in profit or loss when the loans and
receivables are derecognised or impaired, as well as through the amortisation process.
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).
25
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(iv) Available-for-sale investments
Available-for-sale investments are those non-derivative financial assets that are designated as
available-for-sale or are not classified as any of the three preceding categories. They comprise
investments in the equity of other entities where there is neither a fixed maturity nor fixed or
determinable payments.
They are subsequently measured at fair value with gains or losses being recognised in other
is
impairment
comprehensive
derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other
comprehensive income is reclassified into profit or loss.
income (except
financial asset
losses). When
the
for
Available-for-sale financial assets are included in non-current assets where they are expected to
be sold within 12 months after the end of the reporting period. All other financial assets are
classified as current assets.
(v) Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured
at amortised cost.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence
that a financial instrument has been impaired. In the case of available-for-sale financial
instruments, a prolonged decline in the value of the instrument is considered to determine
whether impairment has arisen. Impairment losses are recognised in profit or loss. Also, any
cumulative decline in fair value previously recognised in other comprehensive income is
reclassified to profit or loss at this point.
Financial guarantees
Where material, financial guarantees issued, which require the issuer to make specified
payments to reimburse the holder for a loss it incurs because a specified debtor fails to make
payment when due, are recognised as a financial liability at fair value on initial recognition. The
Group has no such financial guarantees.
De-recognition
Financial assets are de-recognised where the contractual rights to receipt of cash flows expires
or the asset is transferred to another party whereby the entity no longer has any significant
continuing involvement in the risks and benefits associated with the asset. Financial liabilities are
de-recognised where the related obligations are discharged, cancelled or expired. The
difference between the carrying value of the financial liability extinguished or transferred to
another party and the fair value of consideration paid, including the transfer of non-cash assets
or liabilities assumed, is recognised in profit or loss.
(g)
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks, other short-
term highly liquid investments with original maturities of three months or less, and bank
overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the
statement of financial position.
26
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(h)
Trade and Other Receivables
Trade receivables, which generally have 30-90 day terms, are recognised and carried at original
invoice amount less an allowance for any uncollectible amounts. An allowance for doubtful
debts is made when there is objective evidence that the entity will not be able to collect the
debts. Bad debts are written off when identified.
(i)
Revenue and Other Income
Revenue from the sale of goods is recognised upon the delivery of goods to customers. Interest
revenue is recognised on a proportional basis taking into account the interest rates applicable
to the financial assets. Revenue from the rendering of a service is recognised upon the delivery
of the service to the customers.
All revenue is stated net of the amount of goods and services tax (GST).
(j)
Impairment of Assets
At the end of each reporting period, the Group assesses whether there is any indication that an
asset may be impaired. The assessment will include the consideration of external and internal
sources of information including dividends received from subsidiaries, associates or jointly
controlled entities deemed to be out of pre-acquisition profits. If such an indication exists, an
impairment test is carried out on the asset by comparing the recoverable amount of the asset,
being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying
value. Any excess of the asset’s carrying value over its recoverable amount is recognised
immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with
another standard (eg in accordance with the revaluation model in AASB 116). Any impairment
loss of a revalued asset is treated as a revaluation decrease in accordance with that other
standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
(k)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the
amount of GST incurred is not recoverable from the Australian Tax Office (“ATO”). In these
circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of
an item of the expense. Receivables and payables in the statement of financial position are
shown inclusive of GST. The net amount of GST recoverable from, or payable to, the ATO is
included as a current asset or liability in the statement of financial position.
Cash flows are included in the cash flow statement on a gross basis. The GST components of
cash flows arising from investing and financing activities which are recoverable from, or payable
to, the ATO are classified as operating cash flows.
(l)
Taxation
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 reporting
date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid
to (recovered from) the relevant taxation authority.
27
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
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 reporting date. Their measurement also reflects the manner in which
management expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only
to the extent that it is probable that future taxable profit will be available against which the
benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates,
and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the
reversal of the temporary difference can be controlled and it is not probable that the reversal
will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it
is intended that net settlement or simultaneous realisation and settlement of the respective asset
and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable
right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the
same taxation authority on either the same taxable entity or different taxable entities where it is
intended that net settlement or simultaneous realisation and settlement of the respective asset
and liability will occur in future periods in which significant amounts of deferred tax assets or
liabilities are expected to be recovered or settled.
Tax Consolidation
Cazaly and its wholly-owned Australian subsidiaries have formed an income tax consolidated
group under tax consolidation legislation. Each entity in the group 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.
(m)
Trade and Other Payables
Trade payables and other payables are carried at amortised costs and represent liabilities for
goods and services provided to the company prior to the end of the financial year that are
unpaid and arise when the company becomes obliged to make future payments in respect of
the purchase of these goods and services.
28
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(n)
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of
past events, for which it is probable that an outflow of economic benefits will result and that
outflow can be reliably measured.
The amount recognised as a provision is the best estimate of the consideration required to settle
the present obligation at reporting date, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured using the cash flows estimated to
settle the present obligation, its carrying amount is the present value of those cash flows.
(o)
Equity Based Payments
The Group operates equity-settled share-based payment employee share and option schemes.
The fair value of the equity to which employees become entitled is measured at grant date and
recognised as an expense over the vesting period, with a corresponding increase to an equity
account. Share-based payments to non-employees are measured at the fair value of goods or
services received or the fair value of the equity instruments issued, if it is determined the fair
value of the good or services cannot be reliably measured, and are recorded at the date the
goods or services are received. The corresponding amount is shown in the option reserve.
The fair value of shares is ascertained as the market bid price. The fair value of options is
ascertained using a Black–Scholes pricing model which incorporates all market vesting
conditions. The number of shares and options expected to vest is reviewed and adjusted at the
end of each reporting period such that the amount recognised for services received as
consideration for the equity instruments granted shall be based on the number of equity
instruments that eventually vest.
(p)
Issued Capital
Issued and paid up capital is recognised at the fair value of the consideration received by the
Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in
equity as a reduction of the share proceeds received.
(q)
Earnings Per Share
Basic earnings per share is calculated as net earnings attributable to members, adjusted to
exclude costs of servicing equity (other than dividends) and preference share dividends, divided
by the weighted average number of ordinary shares, adjusted for an bonus element.
Diluted earnings per share is calculated as net earnings attributable to members, adjusted for
costs of servicing equity (other than dividends) and preference share dividends; the after tax
effect of dividends and interest associated with dilutive potential ordinary shares that would
have been recognised as expenses; and other non-discretionary changes in revenues or
expenses during the period that would result from the dilution of potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary
shares, adjusted for any bonus element.
29
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(r)
Employee Benefits
Provision is made for the Group’s liability for employee benefits arising from services rendered by
employees to the end of the reporting period. Employee benefits that are expected to be
settled within one year have been measured at the amounts expected to be paid when the
liability is settled.
(s)
Interest in Joint Operations
A joint operation is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the assets, and obligations for the liabilities, relating to the
arrangement. Joint control is the contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities require unanimous consent of the
parties sharing control.
When a Group entity undertakes its activities under joint operations, the Group as a joint
operator recognises in relation to its interest in a joint operation:
its assets, including its share of any assets held jointly;
its liabilities, including its share of any liabilities incurred jointly;
its revenue from the sale of its share of the output arising from the joint operation;
its share of the revenue from the sale of the output by the joint operation; and
its expenses, including its share of any expenses incurred jointly.
The Group accounts for the assets, liabilities, revenues and expenses relating to its interest in a
joint operation in accordance with the AASBs applicable to the particular assets, liabilities,
revenues and expenses.
When a Group entity transacts with a joint operation in which a Group entity is a joint operator
(such as a sale or contribution of assets), the Group is considered to be conducting the
transaction with the other parties to the joint operation, and gains and losses resulting from the
transactions are recognised in the Group's consolidated financial statements only to the extent
of other parties' interests in the joint operation.
When a Group entity transacts with a joint operation in which a Group entity is a joint operator
(such as a purchase of assets), the Group does not recognise its share of the gains and losses
until it resells those assets to a third party.
(t)
Critical Accounting Estimates and Judgements
The preparation of financial statements requires management to make judgements, estimates
and assumptions that affect the application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised and in any
future periods affected.
The directors evaluate estimates and judgments incorporated into the financial report based on
historical knowledge and best available current information. Estimates assume a reasonable
expectation of future events and are based on current trends and economic data, obtained
both externally and within the group.
30
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
Key Judgements –Exploration and evaluation expenditure
Exploration and evaluation costs are carried forward where right of tenure of the area of interest
is current. These costs are carried forward in respect of an area that has not at balance sheet
date reached a stage that permits reasonable assessment of the existence of economically
recoverable reserves, refer to the accounting policy stated in note 1(d).
Key Judgements - Share based payment transactions
The Company measures the cost of equity-settled transactions with employees by reference to
the fair value of the equity instruments at the date at which they are granted. The fair value is
determined by an internal valuation using a Black-Scholes option pricing model.
Key Judgments – 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 company’s development and its current environmental impact the
directors believe such treatment is reasonable and appropriate.
Key Estimate – Taxation
Balances disclosed in the financial statements and the notes thereto, related to taxation, are
based on the best estimates of directors. These estimates take into account both the financial
performance and position of the company as they pertain to current income taxation
legislation, and the directors understanding thereof. No adjustment has been made for pending
or future taxation legislation. The current income tax position represents that directors’ best
estimate, pending an assessment by the Australian Taxation Office.
(u)
Fair value measurements
The Group measures and recognises the following assets and liabilities at fair value on a
recurring basis after initial recognition:
Financial assets held for trading
The Group does not subsequently measure any liabilities at fair value on a non-recurring basis.
(i) Fair Value Hierarchy
AASB 13: Fair Value Measurement requires the disclosure of fair value information by level of
the fair value hierarchy, which categorises fair value measurements into one of three possible
levels based on the lowest level that an input that is significant to the measurement can be
categorised into as follows:
Level 1
Level 2
Level 3
Measurements based on
quoted prices (unadjusted)
in active markets for
identical assets or liabilities
that the entity can access at
the measurement date.
Measurements based on
inputs other than quoted
prices included in Level 1 that
are observable for the asset or
liability, either directly or
indirectly.
Measurements based on
unobservable inputs for the
asset or liability.
31
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
The fair values of assets and liabilities that are not traded in an active market are determined
using one or more valuation techniques. These valuation techniques maximise, to the extent
possible, the use of observable market data. If all significant inputs required to measure fair
value are observable, the asset or liability is included in Level 2. If one or more significant
inputs are not based on observable market data, the asset or liability is included in Level 3.
(ii) Valuation techniques
The Company selects a valuation technique that is appropriate in the circumstances and for
which sufficient data is available to measure fair value. The availability of sufficient and
relevant data primarily depends on the specific characteristics of the asset or liability being
measured. The valuation technique selected by the Company is the Market approach
whereby valuation techniques use prices and other relevant information generated by
market transactions for identical or similar assets or liabilities.
When selecting a valuation technique, the Company gives priority to those techniques that
maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs
that are developed using market data (such as publicly available information on actual
transactions) and reflect the assumptions that buyers and sellers would generally use when
pricing the asset or liability are considered observable, whereas inputs for which market data
is not available and therefore are developed using the best information available about such
assumptions are considered unobservable.
The following table provides the fair values of the Company’s assets and liabilities measured
and recognised on a recurring basis after initial recognition and their categorisation within
the fair value hierarchy:
30 June 2015
Note
Level 1
$
Level 2
$
Level 3
$
Total
$
Recurring fair value measurements
Financial assets at fair value
through profit or loss:
- held-for-trading Australian
listed shares
Recurring fair value measurements
Financial assets at fair value
through profit or loss:
- held-for-trading Australian
listed shares
316,790
-
-
316,790
30 June 2014
Note
Level 1
$
Level 2
$
Level 3
$
Total
$
1,070,182
-
-
1,070,182
32
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)
(v) New accounting standards for application in future periods
New standards, amendments to standards and interpretations are effective for annual periods
beginning after 1 July 2015, and have not been applied in preparing these consolidated
financial statements. Those which may be relevant to the Company are set out below. The
Company does not plan to adopt these standards early.
Standard/Interpretation
AASB 9 ‘Financial Instruments’, and the
relevant amending standards
AASB 15 ‘Revenue from Contracts with
Customers’
Effective for annual
reporting periods
beginning on or after
Expected to be
initially applied in the
financial year ending
1 January 2018
30 June 2018
1 January 2018
30 June 2018
33
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
2.
2.
REVENUE & OTHER INCOME
interest received
Revenue
-
- option fees
-
- profit on sale of shares
- other revenue
recoupment of office costs on-charged
Other Income
- proceeds on sale of tenement
- production royalty
- proceeds on sale of royalty
- contingency royalty
3.
PROFIT (LOSS) FOR THE YEAR
2015
$
2014
$
5,394
-
227,782
-
4,657
237,833
-
-
600,000
500,000
1,100,000
9,398
260,494
286,596
4,430
52,750
613,668
93,150
56,648
-
1,000,000
1,149,798
Profit (loss) before income tax from continuing operations includes the following specific
expenses:
Expenses
Administrative expenses
Consulting
Advertising, printing and stationery
Travel and accommodation
Insurance
Memberships
Other
Compliance and regulatory expenses
ASX, ASIC, registry and secretarial
Legal
Employee Benefits
Superannuation
Termination benefits
4.
KEY MANAGEMENT PERSONNEL
Interests of Key Management Personnel
132,129
47,548
18,202
18,155
27,444
75,627
319,105
127,709
47,710
175,419
133,553
69,373
29,856
42,639
23,603
158,402
457,426
223,027
43,083
266,110
11,624
-
45,044
21,960
Refer to the remuneration report contained in the directors’ report for details of the
remuneration paid or payable to each member of the Group’s key management personnel for
the year ended 30 June 2015.
The totals of remuneration paid to key management personnel of the Company during the year
are as follows:
34
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
4.
KEY MANAGEMENT PERSONNEL (Cont’d)
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share based payments
No compensation was paid in respect to KMP in termination benefits
5. AUDITORS REMUNERATION
Remuneration of the auditor for:
- Auditing or reviewing the financial report
6.
INCOME TAX EXPENSE
The components of the tax expense/(income) comprise:
Current tax
Deferred tax
2015
$
387,250
-
-
-
387,250
2014
$
387,250
-
-
111,118
498,368
28,000
28,000
42,900
42,900
-
-
-
-
(765,874)
(765,874)
(a)Numerical reconciliation of income tax expense to
prima facie tax payable:
Profit from continuing operations
(1,388,795)
(2,542,745)
Prima facie tax benefit on loss from ordinary activities
before income tax at 30% (2014: 30%)
(416,639)
(762,824)
Add:
Tax effect of:
Current year capital losses not recognised
Movement in unrecognised temporary differences
Effect of tax losses derecognised
Derecognition of previously recognised tax losses
Other non-allowable items
-
(65,380)
491,513
40,383
7,521
104,000
(128,561)
3,904
-
44,754
Less:
Tax effect of:
Tax benefit of deductible equity raising costs
Utilisation of previously unrecognised capital losses
Income (tax benefit)/loss attributable to entity
(5,204)
(52,194)
-
(27,147)
-
(765,874)
35
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
6.
INCOME TAX EXPENSE (Cont’d)
(b) Deferred tax assets at 30% (2014: 30%)
comprise the following
2015
$
2014
$
Carry forward revenue losses
Carry forward capital losses
Unrealised Fair Value Adjustment
Capital raising and future black hole
deductions
Provisions and accruals
Other
Less: Set off of deferred tax liabilities
5,850,880
-
-
8,207
32,286
73,567
5,964,940
(,5,964,940)
-
Deferred tax liabilities at 30% (2014: 30%) comprise the following
Exploration expenditure
Other
Less: Set off of deferred tax asset
(c) Deferred tax recognised directly in equity:
Relating to equity raising costs
5,964,940
-
5,964,940
(5,964,940)
-
5,891,263
-
-
11,581
176,384
74,830
6,154,058
-
6,154,058
6,154,058
-
6,154,058
-
6,154,058
-
-
(39,597)
(39,597)
(d) Unrecognised deferred tax assets at 30% (2014: 30%) comprise the following:
Deferred tax assets have not been recognized
in respect to the following as they are not
considered to have met the recognition criteria:
Investments
Tax revenue losses
Capital losses
7.
CASH AND CASH EQUIVALENTS
Cash at bank
Petty cash
8.
TRADE AND OTHER RECEIVABLES
Current
Trade receivables (i)
Other debtors
Non-Current
Bonds (ii)
(i) Trade receivables have 30 to 90 day terms.
(ii) Bonds are term deposits, held by way of bank guarantee.
There were no trade receivables past due but not impaired.
544,672
535,800
51,910
1,132,382
633,852
3,904
104,105
741,861
620,747
200
620,947
147,531
200
147,731
86,200
86,649
172,849
334,635
42,764
377,399
146,168
146,168
146,168
146,168
36
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
9.
FINANCIAL ASSETS
Current
Financial assets, at fair value through profit or loss:
Held-for-trading Australian listed shares
10.
PROPERTY, PLANT AND EQUIPMENT
2015
$
2014
$
316,790
316,790
1,070,182
1,070,182
Land & Property at Cost
-
-
Plant and Equipment
At cost
Accumulated depreciation
Office Furniture and Equipment
At cost
Accumulated depreciation
Motor Vehicle
At cost
Accumulated depreciation
316,091
(297,920)
18,171
316,091
(279,123)
36,968
42,703
(33,789)
8,914
68,287
(48,985)
19,302
42,703
(31,672)
11,031
68,287
(43,816)
24,471
46,387
72,470
Movement in the carrying amounts for each class of plant and equipment between the
beginning and end of the current financial year.
Balance at the beginning of the year
Additions
Disposals
Depreciation expense
Carrying amount at the end of the year
Balance at the beginning of the year
Additions
Disposals
Depreciation expense
Carrying amount at the end of the year
Land &
Property
$
-
-
-
-
-
Land &
Property
$
5,000
-
(5,000)
-
-
Plant and
Equipment
$
36,968
-
-
(18,797)
18,171
Plant and
Equipment
$
63,679
968
-
(27,679)
36,968
2015
Office
Furniture
$
11,031
-
-
(2,117)
8,914
2014
Office
Furniture
$
13,850
-
-
(2,819)
11,031
Motor
Vehicles
$
24,471
-
-
(5,169)
19,302
Total
$
72,470
-
-
(26,083)
46,387
Motor
Vehicles
$
31,551
-
-
(7,080)
24,471
Total
$
114,080
968
(5,000)
(37,578)
72,470
37
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
11.
EXPLORATION AND EVALUATION ASSETS
Non-Current
Costs carried forward in respect of areas of
interest in:
Exploration and evaluation phases at cost
Movement – exploration and evaluation
Brought forward
Exploration expenditure capitalised during the
year
Exploration expenditure written off (i)
2015
$
2014
$
19,917,756
20,782,091
20,782,091
21,860,178
239,813
(1,104,148)
1,464,971
(2,543,058)
19,917,756
20,782,091
(i) Exploration expenditure written off for the year was $1,104,148 compared to $2,543,058 in
the 2014 financial year. The main areas written off in 2015 were the Huckitta JV, Marillana,
Mt Stuart, Hamersley, Albion Downs and previously capitalised expenditures relating to the
various tenements relinquished during the financial year.
The value of the Group’s interest in exploration expenditure is dependent upon:
-
-
-
the continuance of the Group’s rights to tenure of the areas of interest;
the results of future exploration; and
the recoupment of costs through successful development and exploitation of the areas of
interest, or alternatively, by their sale.
The Group’s exploration properties may be subjected to claim(s) under native title, or contain
sacred sites, or sites of significance to Aboriginal people. As a result, exploration properties or
areas within the tenements may be subject to exploration restrictions, mining restrictions and/or
claims for compensation. At this time, it is not possible to quantify whether such claims exist, or
the quantum of such claims.
12.
TRADE AND OTHER PAYABLES
Current
Trade creditors
Other creditors and accrued expenses
Creditors are non-interest bearing and settled at 30 day terms.
13. PROVISIONS
Current
Provision for annual leave
Provision for long service leave
371,020
133,743
399,159
117,968
504,763
517,127
52,084
23,967
76,051
38,450
11,586
50,036
38
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
14.
ISSUED CAPITAL
130,477,121 fully paid ordinary shares (2014:
130,477,121) with no par value
24,889,282
24,889,282
2015
$
2014
$
Movements in Ordinary Shares
30 June
2015
Number
30 June
2015
$
30 June
2014
Number
30 June
2014
$
Balance at the beginning of the year
Issue of shares at $0.16 each
Less: tax effect of equity raising costs
Less: transaction costs
Balance at the end of the year
(i)
(ii)
130,477,121 24,889,282 129,597,118 24,800,080
140,800
-
(39,598)
-
(12,000)
-
130,477,121 24,889,282 130,477,121 24,889,282
880,003
-
-
-
-
-
(i)
(ii)
Shares issued on 12 July 2013 under the Company Non-Renounceable Entitlement Issue. The
entitlement was based on the issue of 1 new share for every 12 shares held, at an issue price
of $0.16 per new share.
Deferred tax recognised directly in equity relating to equity raising costs.
Ordinary shares participate in dividends and the proceeds on winding up of the Company in
proportion to the number of shares held and in proportion to the amount paid up on the shares
held.
At shareholders meetings each ordinary share is entitled to one vote in proportion to the paid up
amount of the share when a poll is called, otherwise each shareholder has one vote on a show
of hands.
Movements in Options over Ordinary Shares
Exercise Period
Exercise
Price
Number on
issue at 30
June 2014
Issued
during the
year
Exercised/
Expired/
Cancelled
Number on
issue at 30
June 2015
On or before 11 January 2015
On or before 4 February 2015
On or before 31 July 2015
On or before 31 July 2016
On or before 26 November 2016
$0.330
$0.490
$0.100
$0.107
$0.180
925,000
100,000
100,000
100,000
3,500,000
4,725,000
-
-
-
-
-
-
(925,000)
(100,000)
-
-
-
(1,025,000)
-
-
100,000
100,000
3,500,000
3,700,000
Capital risk management
The Board controls the capital of the Group in order to provide the shareholders with adequate
returns and ensure that the Group can fund its operations and continue as a going concern. The
Group’s capital includes ordinary share capital. There are no externally imposed capital
requirements.
39
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
14.
ISSUED CAPITAL (Cont’d)
The working capital position of the Group at 30 June 2015 and 30 June 2014 are as follows:
Pare
Cash and cash equivalents
Trade and other receivables
Financial assets
Trade and other payables
Working capital position
15. OPTION RESERVE
Opening balance
Equity based payments
Transfers to accumulated losses
Closing balance
2015
$
620,947
172,849
316,790
(504,763)
605,823
2014
$
147,731
377,399
1,070,182
(517,127)
1,078,185
374,280
-
(254,638)
119,642
358,325
119,642
(103,687)
374,280
This reserve is used to record the value of equity benefits provided to the employees and
directors as part of their remuneration.
16. ACCUMULATED LOSSES
Opening balance
Net loss attributable to members
Transfers from option reserve
Closing balance
17.
FINANCIAL RISK MANAGEMENT
(3,225,381)
(1,384,856)
254,638
4,355,599
(1,553,497)
(1,775,571)
103,687
(3,225,381)
The Group’s principal financial instruments comprise receivables, payables, held-for-trading
investments, cash and short-term deposits.
The Board of Directors has overall responsibility for the oversight and management of the
Group’s exposure to a variety of financial risks (including fair value interest rate risk, credit risk,
liquidity risk and cash flow interest rate risk).
The Group’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
Group.
Interest rate risks
The Group’s exposure to market interest rates relates to cash deposits held at variable rates.
The Board constantly analyses its interest rate exposure. Within this analysis consideration is given
to potential renewals of existing positions.
Credit risk
The maximum exposure to credit risk at balance date is the carrying amount (net of provision of
doubtful debts) of those assets as disclosed in the Statement of Financial Position and notes to
the financial statements. The Consolidated group has adopted a policy of only dealing with
creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means
of mitigating the risk of financial loss from defaults. The Group’s exposure and the credit ratings
of its counterparties are continuously monitored and the aggregate value of transactions
concluded is spread amongst approved counterparties.
Credit risk related to balances with banks and other financial institutions is managed by the
board. The board’s policy requires that surplus funds are only invested with counterparties with
a Standard & Poor’s rating of at least A+. All of the Group’s surplus funds are invested with AA
and A+ Rated financial institutions, the amount is $620,947 (2014: $147,731).
40
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
17. FINANCIAL RISK MANAGEMENT (Cont’d)
Liquidity risk
The responsibility for liquidity risk management rests with the Board of Directors. The
Consolidated group manages liquidity risk by maintaining sufficient cash or credit facilities to
meet the operating requirements of the business and investing excess funds in highly liquid short
term investments.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest
rates and equity prices will affect the Group’s income or the value of its holdings of financial
instruments. The objective of market risk management is to manage and control market risk
exposures within acceptable parameters, while optimising the return.
Maturity profile of financial instruments
The following tables detail the Group’s exposure to interest rate risk as at 30 June 2015 and 30
June 2014:
30 June 2015
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets – held for trading
Floating
Interest
Rate
$
620,747
-
-
620,747
Fixed
Interest
maturing
in 1 year
or less
$
-
146,168 (i)
-
146,168
Non-
interest
bearing
2015
Total
$
$
200
172,849
316,790
489,839
620,947
319,017
316,790
1,256,754
Weighted average effective interest rate
0.60%
Financial Liabilities
Trade and other payables
30 June 2014
Financial assets
Cash and cash equivalents
Trade and other receivables
Financial assets – held for trading
-
-
-
-
504,763
504,763
504,763
504,763
Floating
Interest
Rate
$
147,531
-
-
147,531
Fixed
Interest
maturing
in 1 year
or less
$
-
146,168(i)
-
146,168
Non-
interest
bearing
2014
Total
$
$
200
377,399
1,070,182
1,447,781
147,731
523,567
1,070,182
1,741,480
Weighted average effective interest rate
2.29%
Financial Liabilities
Trade and other payables
-
-
517,127
517,127
517,127
517,127
(i)
Term deposits associated with office rent bond and bonds on mining tenements.
41
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
17. FINANCIAL RISK MANAGEMENT (Cont’d)
Net Fair Values
The carrying value and net fair values of financial assets and liabilities at balance date are:
Financial assets
Cash and deposits
Receivables
Investment held for trading
Financial liabilities
Payables
2015
2014
Carrying
Amount
$
620,947
319,017
316,790
1,256,754
504,763
504,763
Net fair
Value
$
620,947
319,017
316,790
1,256,754
504,763
504,763
Carrying
Amount
$
147,731
523,567
1,070,182
1,741,480
517,127
517,127
Net fair
Value
$
147,731
523,567
1,070,182
1,741,480
517,127
517,127
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. All financial instruments measured at fair value are level one,
meaning fair value is determined from quoted prices in active markets for identical assets.
Sensitivity Analysis
Interest Rate Risk
The Company has performed sensitivity analysis relating to its exposure to interest rate risk at
balance date. This sensitivity analysis demonstrates the effect on the current year results and
equity which could result from a change in these risks.
Interest Rate Sensitivity Analysis
At 30 June 2015, the effect on loss as a result of changes in the interest rate, with all other
variables remaining constant would be as follows:
Change in loss
Increase in interest rate by 100 basis points
Decrease in interest rate by 100 basis points
Change in equity
Increase in interest rate by 100 basis points
Decrease in interest rate by 100 basis points
218.
EARNINGS PER SHARE
a)
Reconciliation of earnings to profit or loss:
2015
$
7,660
(7,660)
7,660
(7,660)
2014
$
3,015
(3,015)
3,015
(3,015)
Loss for the year
Loss used to calculate basic and diluted EPS
(1,384,856)
(1,384,856)
(1,775,571)
(1,775,571)
42
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
18.
EARNINGS PER SHARE (Cont’d)
2014
No. of Shares No. of Shares
2015
b) Weighted average number of ordinary shares
outstanding during the period used in the
calculation of basic EPS
130,477,121
130,442,996
Weighted average number of dilutive options
outstanding
-
-
Weighted average number of ordinary shares
outstanding during the year used in calculating
dilutive EPS
130,477,121
130,442,996
19.
CASH FLOW INFORMATION
Reconciliation of cash flows from operating
activities with profit/(loss) after income tax
Profit/(Loss) after income tax
Non-operating cash flows in loss for the year:
Depreciation
Net Loss on sale of shares
Net Profit on sale of exploration assets
Employee & Consultant equity settled
transactions
Fair value adjustment to investments
Exploration write-off
Income tax expense recognised in profit or
loss
Changes in assets and liabilities:
Decrease/(increase) in trade receivables
and prepayments
Increase/(decrease) in trade payables, accruals
and employee entitlements
Decrease/(increase) in exploration
2015
$
2014
$
(1,388,795)
(1,776,871)
26,083
28,759
(1,100,000)
37,578
-
(1,335,500)
-
171,409
1,104,148
119,642
(77,241)
2,543,058
-
(765,874)
(45,450)
710,570
13,651
(239,813)
19,864
(1,464,972)
Cash outflow from operations
(1,430,008)
(1,989,746)
20. COMMITMENTS
On 25 February 2010, the Group entered into a lease agreement with CB Richard Ellis (C) Pty Ltd
for the premises at Level 2, 38 Richardson Street, West Perth, Western Australia. The initial term,
was for a three (3) years expiring on 1 April 2013, this has been extended for a further term which
expires on 31 May 2016 in consideration for a rental fee of $225,350 per annum.
In order to maintain rights of tenure to mining tenements, the Group would have the following
discretionary exploration expenditure requirements up until expiry of leases. These obligations,
which are subject to renegotiation upon expiry of the leases, are not provided for in the financial
statements and are payable:
43
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
20.
COMMITMENTS (Cont’d)
No longer than one year
Longer than one year, but not longer than five years
Longer than five years
2015
$
2014
$
2,463,436
6,736,623
-
9,200,059
6,164,151
15,651,245
-
21,815,396
At the moment the Group has commitments in excess of cash, however the Board believes it will
be able to raise the additional funds to satisfy the commitments for the future.
If the Group decides to relinquish certain leases and/or does not meet these obligations, assets
recognised in the statement of financial position may require review to determine the
appropriateness of carrying values. The sale, transfer or farm-out of exploration rights to third
parties will reduce or extinguish these obligations.
21. CONTROLLED ENTITIES
Parent Entity
Cazaly Resources Limited
Controlled Entities
Cazaly Iron Pty Ltd
Sammy Resources Pty Ltd
Cazroy Pty Ltd
Baker Fe Pty Ltd
Baldock Fe Pty Ltd
Lockett Fe Pty Ltd
Hase Fe Pty Ltd
Caz Yilgarn Pty Ltd
Discovery Minerals Pty Ltd
22. OPERATING SEGMENTS
Country of Incorporation Percentage Owned
2014
2015
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
80%
100%
100%
100%
100%
100%
100%
100%
100%
80%
The Group has identified its operating segments based on the internal reports that are reviewed
and used by the Board of Directors in assessing performance and determining the allocation of
resources.
The Group is managed primarily on the basis of its exploration and corporate activities.
Operating segments are therefore determined on the same basis.
Exploration
Segment assets, including acquisition cost of exploration licenses, all expenses related to the
tenements and profit on sale of tenements are reported on in this segment.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that
receives the majority of economic value from the asset. In the majority of instances, segment
assets are clearly identifiable on the basis of their nature and physical location.
Unless indicated otherwise in the segment assets note, deferred tax assets and intangible assets
have not been allocated to operating segments.
44
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
22.
OPERATING SEGMENTS (Cont’d)
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 Group as a whole and are not allocated. Segment liabilities include
trade and other payables.
Unallocated items
The following items of revenue, expense, assets and liabilities are not allocated to operating
segments as they are not considered part of the core operations of any segment:
non-recurring items of revenue or expense;
deferred tax assets and liabilities.
2015
Revenue
Interest received
Other
Total segment revenue
Segment net operating profit
(loss) before tax
Depreciation
Impairment of exploration
assets
Share based payments
Segment assets
Exploration expenditure
Capital expenditure
Segment liabilities
2014
Revenue
Interest received
Other
Total segment revenue
Segment net operating profit
(loss) before tax
Depreciation
Impairment of exploration
assets
Share based payments
Segment assets
Exploration expenditure
Capital expenditure
Segment liabilities
Exploration
$
Unallocated
$
Total
$
-
1,100,000
1,100,000
5,394
232,439
237,833
5,394
1,332,439
1,337,833
(4,148)
-
(1,384,647)
26,083
(1,388,795)
26,083
1,104,148
-
19,917,756
-
269,460
-
-
1,104,148
-
-
46,387
311,354
19,917,756
46,387
580,814
Exploration
$
Unallocated
$
Total
$
-
1,149,798
1,149,798
9,398
604,270
613,668
9,398
1,754,068
1,763,466
(1,393,260)
-
(1,149,485)
37,578
(2,542,745)
37,578
2,543,058
-
20,782,091
-
-
-
119,642
2,543,058
119,642
-
72,470
6,721,221
20,782,091
72,470
6,721,221
45
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
23.
EVENTS SUBSEQUENT TO REPORTING DATE
There has not been any other matter or circumstance that has arisen since the end of the
financial Year that has significantly affected, or may significantly affect, the operations of the
Group, the results of those operations, or the state of affairs of the Group in future financial years.
24.
PARENT ENTITY DISCLOSURES
(a) Statement of financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Reserves:
Equity settled employee benefits
Retained profits
Total Equity
(b) Statement of Profit or Loss and Other
Comprehensive Income
Total profit/ (loss)
Total comprehensive income
Loans to Controlled Entities
2015
$
2014
$
797,182
9,030,278
459,944
9,620,574
9,827,460
10,080,518
580,571
608,181
567,399
608,181
1,118,752
1,175,580
24,889,282
24,889,282
119,642
(16,370,216)
477,967
(16,462,311)
8,638,708
8,904,938
(266,217)
(967,266)
(266,217)
(967,266)
Loans are provided by Cazaly (‘the Parent’) 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.
25.
SHARE BASED PAYMENTS
There were no options issued to directors, employees, consultants or suppliers during the year.
46
NOTES TO THE FINANCIAL STATEMENTS
Cazaly Resources Limited Annual Report 2015
25.
SHARE BASED PAYMENTS (Cont’d)
The following table illustrates the number and weighted average exercise prices of and
movements in share options issued under the Employee Incentive Plan during the year:
2015
2014
Number of
Options
Weighted
Ave Exercise
Price
$
Number of
Options
Weighted
Ave Exercise
Price
$
4,725,000
0.21
1,875,000
0.39
-
-
-
(1,025,000)
3,700,000
3,700,000
-
-
-
0.35
0.18
200,000
3,500,000
-
(850,000)
4,725,000
4,725,000
0.10
0.18
-
0.44
0.21
Balance at beginning of reporting
period
Granted during the period
Employee & consultants
Directors
Exercised during the period
Expired during the period
Balance at end of
period
Exercisable at end of reporting
period
reporting
(i)
(ii)
The compensation options outstanding at 30 June 2015 had a weighted average
remaining life of 1.37 years (2014 – 1.97 years).
The weighted average fair value of the options outstanding at 30 June 2015 was $0.04
(2014 - $0.065).
26. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Except as referred below, there are no other contingent liabilities or contingent assets
outstanding at the end of the year:
Contingent Assets
As announced to the market on 9 June 2015, the Company sold a package of royalties for a
potential total of $2.35M comprising royalties held over the Kalgoorlie Gold project (“KGP”) and
the Halls Creek Copper project (“HCCP”). The sale was to a private mining investment group
and comprises various payments subject to a range of conditions including third party waivers of
pre-emptive rights and production hurdles. In summary, the schedule of payments is as follows:
(a) Payment of $453,000 received upon signing;
(b) Payment of $147,000 received following satisfaction of third party rights with respect to
the HCCP;
(c) Payment of $750,000 upon commencement of mining at the KGP; and
(d) Payment of $1,000,000 upon satisfaction of conditions relating to the production of
140,000ozs gold from the KGP.
Payment parts (a) and (b) were received on the 29 June 2015. The remaining payments are
contingent assets and are dependent upon the liquidity of the private investment group and the
production profile from the KGP.
47
DIRECTORS’ DECLARATION
Cazaly Resources Limited Annual Report 2015
In accordance with a resolution of the directors of Cazaly Resources Limited, the directors of the
Company declare that:
1.
the financial statements and notes, as set out, are in accordance with the Corporations
Act 2001 and:
a.
b.
comply with Australian Accounting Standards, which, as stated in accounting
policy Note 1 to the
financial statements, constitutes compliance with
International Financial Reporting Standards (IFRS); and
give a true and fair view of the financial position as at 30 June 2015 and of the
performance for the year ended on that date of the consolidated group;
2.
3.
in the directors’ opinion there are reasonable grounds to believe that the company will
be able to pay its debts as and when they become due and payable; and
the directors have been given the declarations required by s 295A of the Corporations
Act 2001 from the Chief Executive Officer and Chief Financial Officer.
On behalf of the Directors
Nathan McMahon
Managing Director
Perth,
30 September 2015
48
We have audited the accompanying financial report of Cazaly Resources Limited (“the
Company”) and Controlled Entities (“the Consolidated Entity”), which comprises the
statement of financial position as at 30 June 2015, and the statement of profit or loss and
other comprehensive income, statement of changes in equity and statement of cash
flows for the year then ended, notes comprising a summary of significant accounting
policies and other explanatory information, and the directors’ declaration of the
Consolidated Entity, comprising the Company and the entities it controlled at the year’s
end or from time to time during the financial year.
The directors of the Company are responsible for the preparation of the financial report
that gives a true and fair view in accordance with Australian Accounting Standards and
the Corporations Act 2001 and for such internal control as the directors determine is
necessary to enable the preparation of the financial report that gives a true and fair view
and is free from material misstatement, whether due to fraud or error. In Note 1, the
directors also state, in accordance with Accounting Standards AASB 101: Presentation
of Financial Statements, that the financial statements comply with International Financial
Reporting Standards.
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. These Auditing
Standards require that we comply with relevant ethical requirements relating to audit
engagements and plan and perform the audit to obtain reasonable assurance whether
the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation of the financial report that
gives a true and fair view in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the
directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
In our opinion:
a. The financial report of Cazaly Resources Limited is in accordance with the Corporations Act 2001,
including:
i.
giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2015 and of its
performance for the year ended on that date; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001;
b. The financial statements also comply with International Financial Reporting Standards as disclosed in
Note 1.
Without qualifying our opinion, we draw attention to Note 1 in the financial report which indicates that the
Consolidated Entity incurred a loss of $1,388,795. This condition, along with other matters as set forth in Note
1, indicate the existence of a material uncertainty which may cast significant doubt about the ability of the
Consolidated Entity to continue as a going concern and whether it will realise its assets and extinguish its
liabilities in the normal course of business and at the amounts stated in the financial report.
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2015.
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on
the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
In our opinion, the Remuneration Report of Cazaly Resources Limited for the year ended 30 June 2015,
complies with section 300A of the Corporations Act 2001.
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Director
Dated at Perth this 30th day of September 2015
ADDITIONAL SHAREHOLDER INFORMATION
Cazaly Resources Limited Annual Report 2015
Additional information required by Australian Securities Exchange Limited and not shown
elsewhere in this Annual Report is as follows. The information is made up to 18 September 2015.
DETAILS OF HOLDERS OF EQUITY SECURITIES
ORDINARY SHAREHOLDERS
There are 130,477,121 fully paid ordinary shares on issue, held by 2,311 individual shareholders.
Each member entitled to vote may vote in person or by proxy or by attorney and on a show of
hands every person who is a member or a representative or a proxy of a member shall have
one vote and on a poll every member present in person or by proxy or attorney or other
authorised representative shall have one vote for each share held.
TWENTY LARGEST SHAREHOLDERS (AS AT 18 SEPTEMBER 2015)
Ordinary Shareholders
Kingsreef Pty Ltd (NB & DL Family A/C)
New Page Investments Ltd
Clive Bruce Jones
Anthony Robert Ramage
Nathan McMahon
Widerange Corporation P/L
Maximise Your Body Pty Ltd (JSH Family A/C)
GGDT Developments Pty Ltd
Anthony Ramage (ARR Super Fund)
Citicorp Nominees Pty Ltd
Debra Lee McMahon
HSBC Custody Nominees (Australia) Ltd
Kris Chambers
Apollinax Inc
Michael John Hamill
Fusion Resources Pty Ltd
Xiao Xiao Li
Rivelle Hasson
Kingsreef P/L
TJ Gardiner & VH Gardiner (Terry James Gardiner Super Fund)
Fully Paid Ordinary
Number
Percentage
11,624,932
8,000,000
6,646,256
5,825,000
4,793,755
2,913,856
2,564,602
2,500,000
2,250,000
1,628,870
1,552,595
1,529,781
1,150,000
1,000,000
1,000,000
1,000,000
860,000
743,000
731,466
650,000
8.91%
6.13%
5.09%
4.46%
3.67%
2.23%
1.97%
1.92%
1.72%
1.25%
1.19%
1.17%
0.88%
0.77%
0.77%
0.77%
0.66%
0.57%
0.56%
0.50%
58,964,113
45.19%
VOTING RIGHTS
Subject to any rights or restrictions for the time being attached to any class or classes (at
present there are none) at general meetings of shareholders or classes of shareholders:
(a) each shareholder entitled to vote, may vote in person or by proxy, attorney or
representative;
(b) on a show of hands, every person present who is a shareholder or a proxy, attorney or
representative of a shareholder has one vote; and
51
ADDITIONAL SHAREHOLDER INFORMATION
Cazaly Resources Limited Annual Report 2015
(c) on a poll, every person present who is a shareholder or a proxy, attorney or representative
of a shareholder shall, in respect of each fully paid share held, or in respect of which
he/she has appointed a proxy, attorney or representative, have one vote for the share, but
in respect of partly paid shares shall have a fraction of a vote equivalent to the proportion
which the amount paid up bears to the total issue price for the share.
HOLDERS OF NON-MARKETABLE PARCELS
There are 1,608 shareholders who hold less than a marketable parcel of shares.
STOCK EXCHANGE INFORMATION
DISTRIBUTION OF SHARE HOLDERS (AS AT 18 SEPTEMBER 2015)
1 to
1,001 to
5,001 to
1,000
5,000
10,000
10,001 to 100,000
100,001 and over
SUBSTANTIAL SHAREHOLDERS
Ordinary
Shares
145,630
2,037,230
3,253,077
23,511,544
101,529,640
130,477,121
As at report date, the following shareholders are recorded as Substantial Shareholders:
Substantial Shareholder
Ordinary Shares held
% Held
Nathan McMahon
Clive Jones
Anthony Robert Ramage
New Page Investments Ltd
SHARE BUY-BACKS
18,355,154
10,075,114
8,075,000
8,000,000
14.07%
7.72%
6.19%
6.13%
There is no current on-market buy-back scheme.
OTHER INFORMATION
Cazaly Resources Limited, incorporated and domiciled in Australia, is a public listed
Company limited by Shares.
52
ADDITIONAL SHAREHOLDER INFORMATION
Cazaly Resources Limited Annual Report 2015
INTEREST IN MINING TENEMENTS AS AT 18 SEPTEMBER 2015
TID
PROJECT
ENTITY
% INT
TID
PROJECT
ENTITY
% INT
Not
Managed
E31/1019
E31/1020
E36/0733
E37/1037
E38/1540
E47/1617
M47/1450
E51/1290
E69/2230
M31/0427
P46/1360
P46/1361
P46/1362
P46/1363
P46/1364
P46/1365
P46/1366
E38/1541
CAROSUE
CAROSUE
YEELIRRIE
TEUTONIC BORE
JUTSON ROCKS
HAMERSLEY
HAMERSLEY
RUBY WELL
NEBO
CAROSUE
QUARTZ CIRCLE
QUARTZ CIRCLE
QUARTZ CIRCLE
QUARTZ CIRCLE
QUARTZ CIRCLE
QUARTZ CIRCLE
QUARTZ CIRCLE
JUTSON ROCKS
CAZR
CAZR
SAMR
SAMR
CAZR
LOFE
LOFE
SAMR
SAMR
CAZR
CAZR
CAZR
CAZR
CAZR
CAZR
CAZR
CAZR
CAZR
10
10
100
100
30
49
49
100
100
10
20
20
20
20
20
20
20
30
Managed
E80/4772
E80/4774
E80/3370
E80/3496
E80/3517
E80/3938
M80/0247
E47/1561
E52/3020
E77/1101
E77/1235
E77/1403
E77/2135
E77/2142
L77/0220
L77/0228
L77/0229
M77/0741
M77/0742
M77/0764
M77/0765
M77/0766
E63/1689
P77/3700
P77/3702
P77/4046
P77/4047
P77/4162
P77/4164
E80/4811
E80/4773
E80/4808
E47/2774
E47/2884
E39/1829
ALICE DOWNS
HALLS CREEK
MT ANGELO
MT ANGELO
MT ANGELO
MT ANGELO
MT ANGELO
MT WALKINS
ROBINSON RANGES
PARKER RANGE
PARKER RANGE
PARKER RANGE
PARKER RANGE
JILBADJI
PARKER RANGE
PARKER RANGE
PARKER RANGE
PARKER RANGE
PARKER RANGE
PARKER RANGE
PARKER RANGE
PARKER RANGE
LEAKE
PARKER RANGE
PARKER RANGE
PARKER RANGE
PARKER RANGE
PARKER RANGE
PARKER RANGE
LAMBOO
HALLS CREEK
MABEL DOWNS
MT FARQUHAR
GREGORY
TROPICANA
CAZR
CAZR
CAZR
CAZR
CAZR
CAZR
CAZR
CAZI
CAZR
CAZI
CAZR
CAZI
CAZI
SAMR
CAZI
CAZI
CAZI
CAZI
CAZI
CAZI
SAMR
SAMR
CAZR
CAZI
CAZI
CAZI
CAZI
SAMR
SAMR
SAMR
SAMR
SAMR
CAZR
CAZR
SAMR
100
100
20
20
20
20
20
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
53