ANNUAL REPORT
For the year ended 30 June 2015
Crater Gold Mining Limited (ASX: CGN) ABN 75 067 519 779
Contents
Chairman’s Statement
Review of Operations
Directors' Report
Auditor's Independence Declaration
Consolidated Statement of Profit and Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Auditor's Report
ASX Additional Information
Corporate Directory
Page
3
4
15
25
26
27
28
29
30
59
60
62
64
Photographs on the front and inside covers are of:
Front cover: Portal complex at High Grade Zone
Inside front cover (L to R): Main drive from west, Gemini table in action, looking out of the portal towards mill area
Chairman’s Statement
Dear Shareholders,
On behalf of the Board, I take pleasure in sharing with you the major milestones reached during the
year.
The Board took a major decision to switch the Company’s priority from being a pure gold explorer
to a gold developer/producer with focus placed on gold production at the High Grade Zone to
generate cash flow as the emphasis. It was decided that expensive exploration work in the Mixing
Zone will only resume once a more healthy financial position has been evolved.
Mining operations at the High Grade Zone in PNG commenced in March and small scale
development/production began in earnest thereafter with the first modest gold sale taking place
on 6 May 2015. Management efforts have concurrently been exerted to harness strong relations
with the landowners and government authorities as we rate the trust established from such
relationships to be of paramount importance.
During recent months, gold production has accelerated progressively as higher grade gold veins
were identified with technical sampling results in support. More frequent and higher grade gold
sales have been accelerating with each passing month.
2015 is therefore regarded as an important watershed year as a platform has been formed from
which to grow exponentially. From this platform, the Board views the future prospect with
optimism. Increasing production growth with attendant cash inflow is foreseen over the next
financial year.
The Company recently announced a two stage capital raising made up of two separate tranches, the
first of which having been successfully completed with A$1.3 million issued to a selection of
international institutional investors and family offices, thereby broadening our shareholder base
globally. The Board would like to welcome all new shareholders and at the same time thank all
existing shareholders for their support.
The Board wishes to take this opportunity to express our sincere appreciation to the management
and all our staff for their hard work and contributions. We owe our growing success to them.
Samuel Chan Wing‐Sun
Chairman
30 September 2015
Crater Gold Mining Limited
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Review of Operations
Company Focus – Maiden Gold Production from HGZ mine at Crater Mountain, Papua New Guinea
The year ending 30 June 2015 was one of major significance for Crater Gold Mining Limited (“CGN” or the “Company”) and its
subsidiary companies (“the Group”). The Company commenced gold mining production at the HGZ mine. In addition, excellent
drilling results continued as did excellent development sampling results, as outlined in the various announcements to the Australian
Securities Exchange during the past year.
The objective of the Company is ongoing cash flow to establish the Company as a profitable gold producer. When we reach mining
plant capacity, we anticipate producing some 10,000 ounces of gold in the first full year of production, at an all‐in cash cost of below
AUD $400 per ounce average over the mining lease term. The HGZ project is a high margin operation. The HGZ mine will generate
strong cashflows, which will fund further expansion at the HGZ mine and enable further exploration activities at the Company's other
assets.
Crater Mountain is located 50 km southwest of Goroka in the Eastern Highlands Province of PNG. Formerly a tier‐1 BHP asset, there
has been in excess of 14,500 metres of diamond drilling to date, the majority focussed on the Nevera prospect, which hosts the HGZ
mine.
HGZ mine (100%)
Key Points
Gold mining production commenced
Mining Plant upgrade
Mining Lease ( ML 510 ) granted
Environment Permit granted
High grade gold drilling results
Subsequent to end of year
Bonanza grade gold sampling results
Activities
High Grade Zone Mine
Gold mining production
During the year the Company announced that gold mining production at the High Grade Zone mine had commenced.
On 6 May 2015 the Company made its first gold sale of 17.4 ozs from the processing of ore at the High Grade Zone mine. The average
recovered grade was 6.0 g/t Au. The gold was recovered from a combination of mostly low and some high grade development drives.
This was a major milestone for the Company as it represented its first gold sale in the history of the Company. Gold production is
continuing on an ongoing basis.
Drive development commenced on three gold bearing veins within the HGZ delineated from previous underground development and
diamond drilling.
Mining development has now been undertaken on 8 drives on mineralised gold bearing structures at the 1960 RL Adit. The drives
are on the NV1 (North Vein No1), NV2, NV4, EV2 (East Vein No2), EV4, JL (Jeremiah Lode), JL2 and JL3 veins. These veins were
identified from exploration development in 2013 and diamond drilling in 2014 and sampling results from 2015 as being the most
consistent structures both in extent and gold mineralisation. They showed very good correlation with the artisanal workings up to
30m above and are consistent with those workings which were reported to have yielded the best gold. Additional drives are
scheduled to be commenced as site infrastructure is upgraded. The drives have been prioritised to target identified zones of higher
grade gold mineralisation and laid out to provide the basis for commencement of stoping on high grade shoots from 1960 RL to
surface.
The Company is prioritising locating the downwards extensions of the high grade shoots and their connecting structures in order to
stope upwards on them and efficiently extract between the 1960RL level and the surface. The nature of mineralisation localised by
intersecting fracture sets such as the HGZ is such that additional high grade shoots and splays can be expected to be identified in the
course of ongoing development.
The Company has also planned to commence strategic haulage drives to the south close to the eastern margin of the main zone of
mineralisation. These will enable exploration and exploitation of the southern extension of the HGZ.
Crater Gold Mining Limited
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Review of Operations
The current mining priority is the intersection of two N‐S trending structures, NV1 and NV2, with the E‐W trending structure EV2.
This was the site of bonanza grade channel samples up to 847 g/t Au (refer ASX release of 19 November 2013 “Bonanza gold grades
intersected at High Grade Zone” and ASX release of 4 May 2015 “High Grade Zone Mining development and Drilling Update”).
Vein material is extracted and batch processed through the mining plant comprising a hammer mill and centrifugal gravity
concentrator. Batch processing provides continuous sampling and recovery data, and important controls for ongoing production
planning.
The HGZ is an area of recent artisanal gold mining in which an estimated 15,000 ounces of gold was produced by local miners largely
from shallow underground workings and simple gravity processing between 2005 and early 2013.
The predominant trend is approximately N‐S. There are also a number of steeply dipping cross cutting mineralised structures with
an approximate EW orientation. Underground observations have also been made of relatively shallow dipping structures noted to
be link structures between the NS and EW sets. All of these sets of structures have returned high gold values. The intersection of
the steeply dipping NS and EW structures together with the occurrence of shallow dipping link structures is considered to play an
important role in the control to mineralisation resulting in bonanza gold grades. The intersection of these structures correlates very
well with previous artisanal mining in shallow surface workings directly above the current mining development
The objective of the Company is ongoing cash flow to establish the Company as a profitable gold producer. When we reach mining
plant capacity, we anticipate producing some 10,000 ounces of gold in the first full year of production, at an all‐in cash cost of below
AUD $400 per ounce average over the mining lease term. The HGZ project is a high margin operation. The HGZ mine will generate
strong cashflows, which will fund further expansion at the HGZ mine and enable further exploration activities at the Company's other
assets.
Mining Plant Upgrade
Site infrastructure is being upgraded. During May 2015 the company contracted the fabrication of an expanded modular process
plant incorporating a crusher, hammer mills, primary centrifugal gravity concentrators and table for secondary concentration. The
incorporation of the new process plant plus increased underground development rates will result in higher mining production. This
plant has been assembled and inspected in the factory for engineering compliance. It is due to be shipped shortly.
Mixing Zone
While the current focus remains on the HGZ mine, there remains potential to increase the current JORC compliant resource of 24Mt
at 1.0 g/t Au for 790,000 ounces at the nearby Mixing Zone project at Crater Mountain (refer ASX Release of 24 November 2011:
“Crater Mt – Initial Resource Estimate”. 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. The Company is not aware of any new information or data that materially affects the information contained in that
ASX release. All material assumptions and technical parameters underpinning the resource estimate continue to apply and have not
materially changed).
Mining Lease granted
During the year the Company’s PNG subsidiary Anomaly Limited (“Anomaly”) was granted Mining Lease (ML 510) for the Company’s
High Grade Zone gold project.
Following a rigorous technical and environmental assessment process involving the PNG Mineral Resources Authority and
Department of Environment, the Minister for Mining, the Hon Byron Chan, granted the Mining Lease for the Company’s HGZ project.
The Mining Lease enables the Company to continue mining for 5 years with the right to extend the Mining Lease.
The Environment Permit for the Company’s HGZ project was also issued during the year by the PNG Director of Environment and
Conservation.
In addition the Company also successfully concluded a Compensation Agreement with the HGZ landowners and formally registered
it with the PNG Mineral Resources Authority.
The Company advised in late December 2014 that the PNG Mines Safety Inspectorate had instructed that mining activities be ceased
at the Company’s High Grade Zone Project, pending the Inspectorate’s review of safety procedures at the Project and the Company’s
implementation of systems and procedures at the Project to meet the Inspectorate’s requirements.
The Mines Safety Inspectorate undertook an inquiry into the circumstances surrounding a motor vehicle accident which occurred at
the Crater Mountain site on 23 November 2014, which ultimately led to the death of the driver of the motor vehicle. There has been
no suggestion that any failure of the Company caused or contributed to the accident, and the Company believes that at all relevant
times it provided a safe system of work and had appropriate operating procedures. The Company co‐operated closely with the
Inspectorate during the investigation.
The Company was pleased to advise that it received a notice of Relaxation of Cessation Order from the Inspectorate permitting the
Company to commence operations at the High Grade Zone subject to the conditions listed below;
1. All work is to be carried out by competent and ‘fit for work’ persons only.
2. ATR Argo vehicle shall not be put into use for any purpose. All work shall be carried out by fit for purpose equipment only
which shall be kept properly maintained.
Crater Gold Mining Limited
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Review of Operations
3. Hand shovel and wheelbarrow shall not be used. Only mechanized system shall be used to load and transport material
within the mine including underground workings.
4. Underground workings shall be kept adequately supported, secured, ventilate, lighted, tidy and free from any unnecessary
obstruction.
5. All persons shall perform their work only under the constant supervision of competent and sole supervisor(s) who shall
ensure that all work is carried out in a safe and healthy manner.
6. Proper risk assessment shall be carried out before commencement of any work and all necessary measures shall be taken
to eliminate or effectively manage residual risks.
7. All appropriate health facilities and equipment identified by the International SOS site review report titled ‘Site Clinic Review
Crater Gold Mining, Papua New Guinea’ dated February 2015 shall be made adequately available on site and be kept
properly maintained.
8. An effective communication plan shall be implemented to ensure quick response for attending to emergencies.
9. All geotechnical aspects of the mine shall be managed by qualified and competent geotechnical personnel.
10. No work shall be undertaken without the appointment of a duly certified and registered mine manager.
11. Monthly updates shall be provided to the Inspectorate on the above listed issues and works.
12. In case the Company decides to make public announcement in relation to recommencement of works in accordance with
this relaxation order, it shall also mention about the conditions under which this relaxation has been granted.
13. This relaxation is valid only up to 30th September 2015 and is being granted without prejudice to any other provisions of the
Mining (Safety) Act 1977 and Regulation or any other law or court order that is or might become applicable in this regard,
and it can be withdrawn at any time if considered necessary in the interest of safety or health of persons or for matters
connected therewith or incidental thereto.”
The Company attended to each of the matters listed above satisfactorily.
Drilling Programme at HGZ
Excellent high grade gold assay results continued from the ongoing diamond drilling programme at the HGZ mine.
The results in Table 1 are from infill drill holes to reduce drill spacing to improve confidence in the interpretation of the gold‐bearing
structures.
Drill holes Nev42, Nev43 and Nev44 were drilled to a depth of approximately 60m below the underground drive development on
bearings from 85° through to 134°. The results in combination with historical results from drill hole Nev22 confirm that high grade
mineralised structures continue down dip at least 90m and on strike by at least 60m.
Diamond drill holes Nev45 through to Nev48 inclusive were drilled on bearings of 96° and 126° respectively at dips which effectively
close the drill spacing below the underground development to approximately 10 – 15m and to a depth of 50m below the underground
development.
Drill holes Nev49 and Nev50 were down holes confirming depth continuity below the underground development.
The results from diamond drill holes Nev51 and Nev52 confirm the upward continuity of gold mineralisation above the underground
development through to the ground surface in the vicinity of the artisanal workings on the 96° and 126° sections respectively.
The drilling campaign effectively identified a number of mineralised NS structures. Three drill holes intersected broad zones of low
grade gold mineralisation. Nev34a reported 0.8g/t over 20.0m from 42.0m, Nev34b (twin of Nev34a) reported 0.8g/t over 30.0m
from 28.0m and Nev38 reported 1.0g/t over 55.0m from 17.0m.
Seven diamond drill hole results reported were drilled in a rough N‐S direction in order to test E‐W trending structures and to look
for their confluence with N‐S trending structures and the potential for high grade shoots. High grade intercepts were recorded in
four drill holes including two with bonanza grades. Nev 54 of 39.8 g/t over 1.0m and 26.6 g/t over 1.0m, Nev 55 of 32.5 g/t over 0.5m,
Nev 57 of 95.0 g/t over 1.0m and Nev 59 of 33.1 g/t over 5.0m including 103.0 g/t over 1.0m and 45.4 g/t over 1.0m and 44.3 g/t over
2.5m including 100.0 g/t over 1.0m.
The key outcome of the drilling results is that they highlight the very strong correlation with the geology and grades encountered
directly above in the underground development. Excellent results are all in the planned mining zone. Drilling confirms a broad 15m
brecciated mineralised zone hosting narrow high grade structures over a strike currently of at least 60m and down dip of
approximately 90m which remains open.
Crater Gold Mining Limited
6
Review of Operations
Table of drill hole results reported during the year to 30 June 2015
Interval (m)
grade (g/t)
From
depth
(m)
Section Diagram
Reason for Interval Significance
Nev42
Figure 2
85 Deg Section
1.0
0.5
1.0
Nev43
3.5
incl 1.0
and 0.5
1.0
Nev44
1.0
7.0
Incl 1.0
Nev45
1.0
5.0
incl 2.0
Nev46
1.0
0.0
3.0
incl 0.5
3.0
incl 1.0
Nev47
1.5
incl 1.0
13.3
14.0
16.3
49.5
65.5
79.0
Figure 4
110 Deg Section
9.4
21.5
15.4
9.8
59.5
59.5
62.5
70.0
Figure 6
134 Deg Section
8.3
5.3
18.7
41.0
45.0
49.0
Correlates with Nev22
Correlates with Nev22, Nev36 & Nev38
Correlates with Nev35
Discrete mineralised structure
Discrete mineralised structure
Correlates with Nev35
Correlates with Nev40
Figure3
096 Deg Section
Infill Drill Section
8.7
8.7
14.0
25.0
53.5
55.5
Figure 3
096 Deg Section
Infill Drill Section
11.5
5.4
16.5
40.7
6.0
10.5
19.5
44.0
67.0
67.0
78.5
79.5
High grade intercept of narrow vein
Figure 5
126 Deg Section
Infill Drill Section
46.8
64.2
37.5
38.0
Correlates with Nev35 on Sect 110 Deg & Nev40
on 134 Deg
Bonanza grade intercept of narrow vein
Nev48
Figure 5
126 Deg Section
Infill Drill Section
1.0
1.0
1.0
Nev49
1.0
0.5
5.2
7.0
7.9
35.5
38.5
53.0
Correlates with Nev47
Correlates with Nev47
Figure 5
126 Deg Section
Infill Drill Section
9.8
7.9
30.0
47.0
Crater Gold Mining Limited
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Review of Operations
Interval (m)
Nev50
grade (g/t)
Figure 3
3.0
Incl 1.0
4.5
Incl 3.0
1.0
13.4
18.9
9.2
12.5
8.4
From
depth
(m)
20.0
22.0
39.5
40.0
49.0
Section Diagram
96 Deg Section
Reason for Interval Significance
Infill Drill Section
Correlates with Nev46
Correlates with Nev46
Nev51
Figure 3
96 Deg Section
Infill Drill Section
0.5
0.8
1.0
Nev52
0.5
2.0
Nev54
1.0
1.5
Incl 1.0
Nev55
0.5
1.0
Nev56
0.5
Nev57
1.0
1.0
Correlates with Main Drive Sampling
Correlates with East Cross Cut Sampling
Possible East West structure
126 Deg Section
Infill Drill Section
Figure 3
160 Deg Section
Correlates with East Cross Cut Sampling
New structure
Correlates with N S structure NV3
56.3
7.4
7.2
Figure 5
11.8
6.2
35.2
54.5
72.5
13.0
35.0
39.8
18.6
26.6
Figure 3
32.5
9.9
9.0
59.0
59.5
34.5
41.0
160 Deg Section
Correlates with JL (Jeremiah) structure
Correlation with NS structure NV1
Figure 4
177 Deg Section
8.9
17.0
Possible East West structure
177 Deg Section
Figure 4
13.0
12.4
19.0
57.5
Correlates with JL (Jeremiah) structure
Correlation with NS structure
Nev58
Figure 4
177 Deg Section
1.0
1.0
4.0
Incl 0.5
Nev59
5.0
Incl 1.0
95.2
10.4
6.1
22.3
Figure 3
33.1
103.0
9.5
27.5
42.5
42.5
28.5
30.0
Correlates with JL (Jeremiah) structure
Part of JL group
Intersection of EW & NS structures
160 Deg Section
Intersection of NS & EW structures
Table 1 ‐ Table of drill hole results reported during the year to 30 June 2015
Crater Gold Mining Limited
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Review of Operations
Future strategy
The Company’s strategy at Crater Mountain is to expand gold production at the HGZ mine. Gold production is expected to generate
a positive cash flow for the Company enabling it to become self‐sustaining and to further develop its other prospects.
Corporate
Underwritten Non‐Renounceable 1 Convertible Note for 1,000 Shares Rights Issue
The Company completed a non‐renounceable pro rata rights issue of one (1) convertible note for every one thousand (1,000) shares
held at A$25.00 per convertible note raising $3,454,750.
Underwritten Non‐Renounceable 1 for 4 Rights Issue
The Company also completed a non‐renounceable pro rata rights issue of one (1) share for every four (4) shares at AUD$0.09 (9
cents) per share raising $3,069,794.70
Change to Board of Directors & Executive Management
Mr. Greg Starr resigned from the Board and as Managing Director on 31st March, a decision he took on the basis that he fulfilled his
mission when the Company was granted the HGZ Mining Lease, and operational management for gold production became the
Company’s current priority.
The Board wish to thank Mr. Starr for his contribution and we wish him all the success in the future.
The Board of Directors of Crater also announced the following appointments with effect from 1st April 2015:
Mr. Tom Fermanis, a Director of the Company, was appointed the Deputy Chairman;
Mr. Russ Parker, a Director of the Company, was appointed Managing Director;
Mr. Lawrence Lee, a Director of the Company, was appointed Finance Director.
EGM Shareholder Meeting
The Company held a general meeting on the 3rd of July. All 8 resolutions put to Shareholders were passed.
Subsequent to end of period
Bonanza gold sampling results from HGZ project
Bonanza grade development sampling results up to 1,740 g/t Au
Continuous zones of high grade development on strike
Three high grade shoots identified
The Company reported that channel sampling of development on mineralised gold bearing structures returned bonanza gold grades
on at least three separate structures.
Drive
EV4 ‐ West
NV1 ‐ North
NV2 ‐ North
Sample Position @
Start + m
8.60
2.70
1.45
Channel Width m
0.3
0.5
0.3
Grade g/t
Au
1,740
570
518
Refer to Fig
2
4
1
Channel sampling of mineralised gold bearing structures in development drives confirmed contiguous zones of high grade
mineralisation along strike suitable for selective mining. To date, three distinct zones on the NV1, EV4 and JL have been targeted for
stoping. Refer to table 2 below.
Crater Gold Mining Limited
9
Review of Operations
Drive
Strike length
Wtd Ave Channel
Width (CW)
Wtd Ave CW Grade
NV1 Nth
Including
EV4 East
Including
JL Nth
Including
NV2 ex EV2
m
4.35
2.20
7.40
2.95
10.90
5.00
3.63
M
0.44
0.50
0.31
0.40
0.71
0.42
0.37
g/t Au
147.7
245.5
221.6
410.7
21.2
52.5
140.9
Wtd Ave SW Grade
(assume 0.6m minimum
width)
g/t Au
108.3
204.6
116.9
273.8
11.7
37.1
86.1
Table 2 ‐ Significant Sampling and Assay Results from Drive Development
Development is underway to prepare these high grade zones for stoping.
We are exceptionally pleased with the success of these sampling results. It enables the Company to move rapidly towards increasing
gold production. Underground development is underway to enable stoping of the identified high grade shoots.
Drive development on mineralised gold bearing structures confirmed the interpretation made from diamond drilling carried out in
2014. Two prominent roughly north south trending structures, the NV1 Vein (North Vein 1) and the JL Vein (Jeremiah Lode) were
identified as the significant controlling structures within a known 20m to 25m wide north south trending zone. These structures are
continuous over at least 50m of strike at this stage. Several East West trending structures, EV1 to EV5 (East Vein 1 – 5) have been
shown to link the north south structures. A number of lesser developed NE – SW and NW – SE link structures have also been
identified. Refer to Figures 1 to 4.
The confluence of each of these structures is favourable for increased mineralisation and significantly elevated gold values. This is
particularly evident at the junction of EV4 with NV1 returning a bonanza grade of 1,740 g/t Au over a channel width of 0.3m. High
gold grades have been found to persist for up to 10m from these junctions. As an example, the EV4 Vein returned a strike length of
7.4m with a weighted average grade of 221.6 g/t Au over a channel width of 0.31m. Refer to Figure 2 and Table 2.
The JL North has returned a weighted average grade of 52.5 g/t Au over a channel width of 0.42m for a strike length of 5.00m either
side of the confluence with the EV2 Vein. Refer to Figure 3 and Table 2.
It is also common to encounter coarse visible free gold in these areas.
Mining and Production
Given the identification of discrete continuous zones of high grade strike length, development and stoping layouts have been
established to exploit these shoots upwards to surface. It is significant that the high grade shoots so far identified correlate well with
the diggings by artisanal miners exploiting the same structures from surface from 2005 to 2012. One such working has been
encountered in development of the EVx‐1 structure. Refer to Figure 1.
Drive development and limited trial stoping is being carried out with a combination of jack picking, where ground conditions allow,
and drill and blast where the rock is more competent. This allows narrow self‐ supporting excavations to be made. Excellent ground
conditions have been encountered for this type of mining with little need for supplementary support.
Crater Gold Mining Limited
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Review of Operations
Figure 1 ‐ High Grade Zone Drive Development on 1960 RL
Figure 2 ‐ EV4 – East. Channel Sampling Results
Crater Gold Mining Limited
11
Review of Operations
Figure 3 ‐ JL – North Channel Sampling Results
Crater Gold Mining Limited
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Review of Operations
Figure 4 ‐ NV1 – North Channel Sampling Results
Crater Gold Mining Limited
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Review of Operations
Schedule of Tenements
Set out below is the schedule of tenements that the Company and its subsidiaries hold as at 30 September 2015:
Particulars
Project Name
EPM 8795
Croydon
EPM 9438
Mount Angus
EPM 10302
Gilded Rose
EPM 13775
Wallabadah
EPM 16002
Foote Creek
EPM 18616
Black Mountain
EPM 25186
Croydon Gold
Registered
Holder
CGN
CGN
CGN
CGN
CGN
CGN
CGN
EL 1115
Crater Mountain
Anomaly Ltd 2
EL 1353
EL 2249
EL 1972
EL 2180
Crater Mountain
Anomaly Ltd 2
Crater Mountain
Anomaly Ltd 2
Fergusson Island
Anomaly Ltd 2
Fergusson Island
CGN
% Owned
Status
Expiry
Area (Km2)
100
100
100
100
100
94 1
100
100
100
90
100
100
Granted
Granted
Granted
Granted
Granted
Renewal lodged
Granted
Application
Granted
Renewal lodged
6/09/2016
14/07/2016
31/12/2015
5/03/2017
30/01/2013
18/06/2018
25/09/2014
Renewal lodged
20/06/2012
Granted
Granted
Granted
11/11/2015
20/12/2014
27/06/2015
19.2
19.2
6.4
32
28.8
96
60.8
41
113
10
67
37
1 6% owned by Global Resources Corporation Limited
2 Anomaly Limited is CGN’s 100% owned PNG subsidiary
The information contained in this report relating to exploration results and mineral resource estimate at Crater Mountain PNG is
based on and fairly represents information and supporting documentation prepared by Mr Richard Johnson, PNG General Manager
of Crater Gold Mining Limited. Mr Johnson is a Fellow of The Australasian Institute of Mining and Metallurgy and has the relevant
experience in relation to the mineralisation being reported upon to qualify as a Competent Person as defined in the 2012 Edition of
the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Johnson consents to the inclusion
in this report of the matters based on his information in the form and context in which it appears.
“The HGZ mine will generate strong cashflows, which will fund further
expansion at the HGZ mine and enable further exploration activities at
the Company's other assets”
Crater Gold Mining Limited
14
Directors’ Report
The Directors present their report on the consolidated entity (referred to hereafter as "the Group") consisting of Crater Gold Mining
Limited (referred to hereafter as "the Company") and its controlled entities for the year ended 30 June 2015.
Directors
The following persons were Directors of Crater Gold Mining Limited during the whole of the financial year and up to the date of this
report, unless otherwise stated:
S W S Chan (Non‐executive Chairman)
R D Parker (Managing Director, appointed 1 April 2015) 1
T M Fermanis (Non‐executive Deputy Chairman, appointed
1 April 2015)
L K K Lee (Finance Director, appointed 1 April 2015) 1
R P Macnab (Non‐executive Director)
D T Y Sun (Non‐executive Director)
1 Messrs Parker and Lee were non‐executive Directors for the period from the start of the financial year to 31 March 2015. They
were appointed to their current executive roles on 1 April 2015.
Mr G B Starr was Managing Director until his resignation on 31 March 2015.
Activities
The principal activities of the Group consist of the exploration, evaluation and exploitation of potential world class gold and other
base metal projects. Further details of the Group’s activities are included in the Review of Operation on pages 5‐15 of this report.
Review of Operations and Results
The Group incurred a loss of $2,517,249 for the year ended 30 June 2015 (2014: loss of $2,236,315). Further details of the Group’s
operations are included on pages 4‐14 of this report.
Dividends
No dividends of the Company or any entity of the Group have been paid, declared or recommended since the end of the preceding
year. The Directors do not recommend the payment of any dividend for the year ended 30 June 2015.
Significant Changes in the State of Affairs
The Company commenced gold mining production at the HGZ mine. In addition excellent drilling results continued as did excellent
development sampling results, as outlined in the various announcements to the Australian Securities Exchange during the past year.
The Directors are not aware of any other significant change in the state of affairs of the Company that occurred during the financial
year other than as reported elsewhere in the Annual Report.
Events Subsequent To Balance Date
At a general meeting of the Company held on 3 July 2015 it was resolved to issue:
A total of 7,800,000 options over ordinary shares in the Company the six current Director’s noted above exercisable at $0.25
and expiring on 27 July 2019.
800,000 options over ordinary shares in the Company to Mr G B Starr, former Managing Director, exercisable at $0.25 and
expiring on 30 September 2017.
On 9 September 2015 a total of 5,800,000 options over ordinary shares in the Company were issued which are exercisable at $0.25
and expire on 27 July 2019.
Since 1 July 2015 Freefire Technology Limited has advanced to the Company a total of $1,061,844 in further short term loans.
On 24 September 2015 the Company announced that it had successfully coordinated a two stage capital raising of A$3.4 million. This
Capital Raising was made up of two tranches with the first tranche of A$1.3 million issued to a selection of international institutional
investors and family offices. The second tranche of A$2.1 million will be issued to Freefire Technology Limited on the same terms
thereby maintaining Freefire’s 62% holding in the company.
Likely Developments
Likely developments in the Group’s operations in future financial years and the expected results of those operations are referred to
on pages 4‐14.
Future financial performance and outcomes depend on a number of things such as the Group’s ability to continue to attract funding
and/or one or more joint venture partners, or alternatively to be bought out by a suitor.
Crater Gold Mining Limited
15
Directors’ Report
Material business risks that could adversely affect the Company’s financial performance include unavailability of funding and/or
inability to attract one or more joint venture partners; political risk in the Company’s overseas country of operation.
Information on Directors and Secretary
The Directors and Secretary of the Company in office at the date of this report, unless otherwise stated, and their qualifications,
experience and special responsibilities are as follows:
S W S Chan (Non‐Executive Chairman), age 67
Mr Chan has been a Director of the Company since 29 January 2013 and was appointed
as Non‐Executive Chairman on 11 March 2013.
Mr Chan is a director and the controller of Freefire Technology Limited (“Freefire”), the
major shareholder in the Company.
Mr Chan received a Bachelor’s degree from the University of Manchester, UK in 1970
and qualified as a chartered accountant in 1973. He was the company secretary of
Yangtzekiang Garment Limited from 1974 to 1988 and has been a director of
Yangtzekiang Garment Limited since 1977. Mr Chan was appointed the Managing
Director of YGM Trading Limited from 1987 to 2006 and the Chief Executive Officer of
YGM Trading Limited from 2006 to 2010. He has been the Vice Chairman of the board
of YGM Trading Limited since 2010.
Mr Chan was formerly a Director of Hang Ten Group Holdings Limited (listed in Hong
Kong) from January 2003 to March 2012.
Mr Chan has an interest of 106,737,341 ordinary shares in the Company through his
control of Freefire Technology Limited and 500,000 options over ordinary shares in the
Company.
R D Parker (Managing Director), age 45
Mr Parker has been a Director of the Company since 12 March 2013 and was appointed
Managing Director on 1 April 2015.
Mr Parker lives in Hong Kong. He is a qualified Marine Engineer and Marine Industries
Manager having graduated from Southampton Institute of Higher Education, Marine
Division, in Warsash, United Kingdom. Mr Parker is a professional Company Director.
Mr Parker has an interest in 85,365 ordinary shares and 500,000 options over ordinary
shares in the Company.
T M Fermanis F Fin, MSAA (Non‐executive Deputy Chairman), age 52
Mr Fermanis has been a Director of the Company since 2 November 2009 and was
appointed Deputy Chairman on 1 April 2015.
Mr Fermanis has extensive experience in stockbroking and has been an advisor since
1985 with extensive experience in the resource sector. He has been involved in gold
exploration in PNG for a number of years.
Mr Fermanis is a member of the Remuneration and Nomination Committee.
Mr Fermanis has an interest in 602,311 ordinary shares and 500,000 options over
ordinary shares in the Company.
L K K Lee MCom, MAppFin, CPA (Finance Director), age 55
Mr Lee has been a Director of the Company since 6 June 2014 and was appointed
Finance Director on 1 April 2015.
Mr Lee received a Bachelor of Commerce degree and a Master of Commerce degree
from the University of New South Wales, Australia. He also holds a Master of Applied
Finance degree from the Macquarie University, Australia. He has over 25 years of
experience in finance, corporate finance, management, auditing and accounting. He
worked in an international accounting firm for several years and has worked as group
financial controller, chief financial officer and director of listed companies on the Hong
Kong Stock Exchange for over 10 years.
Mr Lee is a member of the Hong Kong Institute of Certified Public Accountants and a
member of CPA Australia.
Mr Lee is a member of the Audit Committee.
Mr Lee has an interest in 500,000 options over ordinary shares in the Company.
Crater Gold Mining Limited
16
Directors’ Report
R P Macnab BSc (Geology) (Non‐executive Director), age 73
Mr Macnab has been a Director of the Company since 2 November 2009. Mr Macnab
has had a lifetime geological association with PNG including roles as the country’s
Government Geologist, and an independent geological contractor and consultant. He
discovered, or participated in the discovery of a long list of PNG minerals resources the
most significant of which is the world‐class Ladolam gold mine on Lihir Island. Mr
Macnab has had extensive worldwide experience in mineral exploration as well as
financing and developing mineral resource exploitation. Mr Macnab has maintained
his close links with PNG and continues to live on Buka Island, Autonomous Region of
Bougainville, PNG.
Mr Macnab has an interest in 800,000 options over ordinary shares in the Company.
D T Y Sun (Non‐executive Director), age 68
Mr Sun has been a Director of the Company since 29 January 2013.
Mr Sun obtained a Bachelor of Economics from the University of Tasmania and held
management positions with the Ford Motor Company in Melbourne and in Brisbane,
as well as with Citibank NA and Lloyds Bank Plc in Hong Kong. He has been an executive
director of several listed companies in Hong Kong and has been engaged in advisory
services on strategic planning and corporate development, mainly in corporate finance,
since 1991.
Mr Sun is Chairman of the Audit Committee and of the Remuneration and Nomination
Committee.
Mr Sun has an interest in 500,000 options over ordinary shares in the Company.
G B Starr BBus, CPA (Managing Director), age 49
Mr Starr was a Director of the Company from 19 February 2008, initially as Executive
Chairman, and then as Managing Director until his resignation on 31 March 2015.
Mr Starr has over 30 years’ experience in corporate and operational financial
management, with the last 21 years focused on the resources and mining sector.
He is also currently a Non Executive Director of KBL Mining Limited (since November
2013). He has previously been Chief Executive Officer/Managing Director of Golden
China Resources Corporation, Michelago Limited and Emperor Mines Limited.
Mr Starr is a member of the Australian Society of Certified Practising Accountants and
a member of the Australian Institute of Company Directors.
Mr Starr was a director of Kenai Resources Limited from March 2011 to June 2013.
Mr Starr has an interest of 301,000 ordinary shares and 800,000 options over ordinary
shares in the Company.
J D Collins‐Taylor BA Bus, ACA (Alternate Director to Mr Fermanis), age 58
Mr Collins‐Taylor was a Director from 20 October 2005 until his resignation on
16 September 2014.
He is a Chartered Accountant and was formerly with Deloitte Touche Tohmatsu for 12
years. Mr Collins‐Taylor has worked in the private equity and venture capital fields in
Asia since 1992. He has extensive finance experience, and has been involved in a
number of major transactions involving companies listed on the London and Hong Kong
Stock Exchanges.
Mr Collins‐Taylor has an interest of 172,364 ordinary shares and 500,000 options over
ordinary shares in the Company.
Heath Roberts Dip Law (SAB), Grad. Dip Legal Practice (UTS) (Company Secretary)
Mr Heath Roberts was appointed Company Secretary on 14 August 2015. Mr Roberts is a commercial solicitor with eighteen years
ASX listed company experience, to Executive Director level. He has acted as Company Secretary and/or Director for numerous ASX
listed and private companies.
J A Lemon BA LLB (Hons), Grad Dip App Fin (Finsia), Grad Dip App Corp Gov, ACSA (Company Secretary)
Mr Lemon was Company Secretary from 13 February 2006 until his resignation on 14 August 2015. Mr Lemon is a qualified solicitor
and has held a number of positions as Company Secretary and/or Legal Counsel with various companies, including roles with MIM
Holdings Limited, General Electric Company and Bank of Queensland Limited. Mr Lemon is currently company secretary of several
ASX‐listed and other companies and a director of another company. He was also formerly a director of several ASX‐listed companies.
Mr Lemon has an interest of 45,700 ordinary shares and 300,000 options over ordinary shares in the Company.
Crater Gold Mining Limited
17
Directors’ Report
Directors’ Meetings
The Company held 12 Board meetings, 2 Audit Committee meetings and 2 Remuneration and Nomination Committee meetings
during the year. The number of meetings attended by each Director was:
Name
S W S Chan
G B Starr
T M Fermanis
L K K Lee
R P Macnab
R D Parker
D T Y Sun
Board
Audit Committee
Remuneration and Nomination
Committee
Eligible to
Attend
12
10
12
12
12
12
12
Attended
11
10
12
12
8
12
12
Eligible to
Attend
‐
‐
2
2
‐
‐
‐
Attended
‐
‐
2
2
‐
‐
‐
Eligible to
Attend
‐
‐
1
‐
‐
1
1
Attended
‐
‐
1
‐
‐
1
1
The Eligible to Attend column represents the number of meetings held during the time the Director held office or was a member of
the Committee during the year.
Environmental Regulation and Performance
The Group is subject to environmental regulation in relation to its former mining activities in North Queensland by the Environmental
Protection Agency of Queensland. The Company complies with the Mineral Resources Act (1989) and Environmental Protection Act
(1994). It is also subject to the Environmental Act (2000) (Papua New Guinea) on its activities in PNG.
Shares under Option
Unissued ordinary shares of the Company under option at the date of this report are as follows:
Grant date
Expiry date
23 December 2014
23 December 2014
28 July 2015
9 September 2015
30 September 2017
30 September 2017
27 July 2019
27 July 2019
Issue price of
shares ($)
$0.25
$0.25
$0.25
$0.25
Number of shares
under option
5,400,000
2,100,000
7,800,000
5,800,000
Type
Fair value($)
Unlisted
Unlisted
Unlisted
Unlisted
$0.01
$0.01
$0.02
$0.02
Option holders do not have any rights under the options to participate in any share issue of the Company.
Shares Issued on the Exercise of Options
No shares have been issued on the exercise of options during the course of the year (2014: Nil) or subsequent to the year end.
Indemnification and Insurance of Directors
During the year, the Company paid premiums of $19,220 (2014: $17,506) to insure the Directors and Officers of the Company in
relation to all liabilities and expenses arising as a result of the performance of their duties in their respective capacities to the extent
permitted by the Corporations Act 2001.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the company
or any related entity against a liability incurred by the auditor.
During the financial year, the company has not paid a premium in respect of a contract to insure the auditor of the company or any
related entity.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the
company, or to intervene in any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the
company for all or part of those proceedings.
Crater Gold Mining Limited
18
Directors’ Report
Non‐Audit Services
The Company may decide to engage the auditor of the Company, BDO, on assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the Company are important.
No amounts were paid or are payable to BDO for non‐audit services provided during the year.
Remuneration Report (Audited)
The information provided under headings (a) ‐ (d) is provided in accordance with section 300A of the Corporations Act 2001. These
disclosures have been audited.
a) Principles used to determine the nature and amount of remuneration
The Company has a Remuneration and Nomination Committee. The Board has adopted a Remuneration and Nomination Policy
which provides advice on remuneration and incentive policies and practices and specific recommendations on remuneration
packages and other terms of employment for executive Directors, other senior executives and Non‐executive Directors. The
performance of the Company is taken into consideration when the remuneration policies of the Company are assessed by the
Committee. The Corporate Governance Statement provides further information on the role of this Committee.
Executive Remuneration
The remuneration policy ensures that contracts for services are reviewed on a regular basis and properly reflect the duties and
responsibilities of the individuals concerned. The executive remuneration structure is based on a number of factors including relevant
market conditions, knowledge and experience with the industry, organisational experience, performance of the Company and that
the remuneration is competitive in retaining and attracting motivated people. There are no guaranteed pay increases included in
the senior executives' contracts.
Non‐executive Directors
Fees and payments to Non‐executive Directors reflect the demands which are made on, and the responsibilities of, the Directors.
Non‐executive Directors’ fees and payments are reviewed annually by the Board.
Additional information
The earnings of the consolidated entity for the five years to 30 June 2015 are summarised below:
Sales revenue
EBITDA
EBIT
Profit / (loss) after income tax
2015
$‘000
2014
$‘000
2013
$‘000
2012
$‘000
2011
$‘000
53
(2,511)
(2,517)
(2,517)
Nil
(2,249)
(2,236)
(2,236)
Nil
(3,053)
(3,061)
(3,061)
Nil
(3,079)
(3,087)
(3,087)
Nil
(4,929)
(4,937)
(4,937)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
Share price at financial year end ($)
Total dividends per share (cents per share)
2015
$0.09
Nil
2014
$0.08
Nil
2013
$0.001
Nil
2012
$0.007
Nil
2011
$0.034
Nil
Basic earnings per share (cents per share)
(1.792)
(1.806)
(7.099)
(0.212)
(0.474)
Directors' Fees
The current base remuneration was last reviewed with effect from 26 March 2009.
Non‐executive Director’s fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for
approval by shareholders. The maximum currently stands at $200,000 per annum and was approved by shareholders at the Annual
General Meeting on 23 November 2010.
The following fees have applied for the year ended 30 June 2015:
Non‐executive Director’s base fee ‐ $35,000 per annum.
Work undertaken by the Non‐executive Directors, in addition to that provided in their role as Non‐executive Directors is
charged at $1,200 per day or pro‐rata for part thereof.
Audit Committee and the Remuneration and Nomination Committee – no additional fees payable.
Except for retirement benefits provided by the superannuation guarantee legislation, there are no retirement benefits for the Non‐
executive Directors.
b) Details of remuneration
Directors and the key management personnel (as defined in section 300A Corporations Act 2001) of the Company and the Group are
set out in the following tables. The key management personnel of the Company and the Group includes the Directors as per page 16
Crater Gold Mining Limited
19
and 17 and the following executive officers who have authority and responsibility for the planning, directing and controlling the
activities of the Group.
Directors’ Report
Short‐term
Base
Fees/salary
Post‐
employment
Share‐based payments
Total
Other 5
Superannuation
Options
Director / key management
person
2015
Non‐executive Directors
S W S Chan
T M Fermanis
R P Macnab
D T Y Sun
J D Collins‐Taylor 6
Subtotal
Executive Directors
R D Parker, Managing
Director 1
L K K Lee, Finance Director 2
G B Starr, Managing
Director 3
Other key management
personnel
G R Boyce
R Johnson
J A Lemon 4
J McCarthy
Total
2014
Non‐executive Directors
S W S Chan
T M Fermanis
L K K Lee 2
R P Macnab
R D Parker
D T Y Sun
J D Collins‐Taylor 6
Subtotal
Executive Directors
G B Starr, Managing
Director
Other key management
personnel
G R Boyce
R Johnson
J A Lemon 4
J McCarthy
Total
35,000
35,000
35,000
35,000
7,479
147,479
‐
144,000
‐
‐
‐
144,000
85,000
56,250
18,000
‐
‐
‐
‐
‐
‐
‐
‐
‐
% of
total
‐
‐
‐
‐
42.5%
35,000
179,000
35,000
35,000
12,999
296,999
‐
‐
‐
‐
5,520
5,520
‐
5,519
‐
8.9%
103,000
61,769
424,333
‐
40,312
‐
‐
464,645
183,243
249,996
72,724
7,885
1,226,910
35,000
35,000
2,301
35,000
35,000
35,000
35,000
212,301
‐
‐
‐
‐
162,000
‐
144,000
‐
102,016
‐
‐
‐
246,016
‐
‐
‐
‐
40,312
‐
‐
‐
‐
11,039
‐
‐
‐
‐
183,243
249,996
72,724
7,885
1,440,261
‐
‐
‐
‐
‐
‐
‐
‐
25,611
25,611
‐
40,978
25,611
25,611
25,611
169,033
42.3%
12.5%
‐
23.0%
42.3%
42.3%
42.3%
60,611
204,611
2,301
177,994
60,611
60,611
60,611
627,350
300,000
‐
27,750
40,978
11.1%
368,728
200,059
245,190
63,278
14,500
1,035,328
‐
‐
‐
‐
246,016
‐
‐
‐
‐
27,750
15,367
25,611
15,367
‐
266,356
7.1%
9.5%
19.5%
‐
215,426
270,801
78,645
14,500
1,575,450
1. Mr R D Parker was appointed a Director on 11 March 2013 and was appointed as Managing Director on 1 April 2015.
2. Mr Lee was appointed a Director on 6 June 2014 and was appointed as Finance Director on 1 April 2015.
3. Mr Starr resigned as Managing Director on 31 March 2015.
4. Mr Lemon acts in a part‐time capacity. Mr Lemon resigned as Company Secretary on 14 August 2015.
5. Other relates to services provided by Directors. Refer to Note 25 for details.
6. Mr J D Collins‐Taylor resigned as a Director on 9 March 2013 and was appointed as an Alternate Director to Mr Fermanis on 11 March 2013. He
resigned as an Alternate Director to Mr Fermanis on 16 September 2014.
No other Directors, officers or executives of the Company received any share‐based payments, other than those shown in the
remuneration table above.
Crater Gold Mining Limited
20
All remuneration is on fixed rates. Refer section (c) of this remuneration report. There were no performance based payments made
during the year.
A summary of Director and key management personnel remuneration follows.
Directors’ Report
Remuneration component
Short term
Post‐employment benefits
Share‐based payments
Total
2015
$
2014
$
1,388,910
1,281,344
40,312
11,039
27,750
266,356
1,440,261
1,575,450
c) Service agreements
On appointment to the Board, all Non‐executive Directors enter into a service agreement with the Company in the form of a letter
of appointment. The letter summarises the Board policies and terms, including compensation, relevant to the office of Director.
Remuneration and other terms of employment for the Executive Directors and other key management personnel are also formalised
in service agreements. Major provisions of the agreements relating to remuneration are set out below. There are no current service
agreements that contain incentive clauses and as such future remuneration is not necessarily dependent on the performance results
of the Company:
Key management personnel
Commencement date
1 April 2015
Term of
agreement
No fixed term
Base salary and
fees
$200,000 pa
Superannuation
‐
Period of
notice
4 weeks
R D Parker 1
Managing Director
G B Starr 2
Managing Director
L.K K Lee 1
Finance Director
G Boyce
Chief Financial Officer
R Johnson
General Manager – PNG
H L Roberts 3
Company Secretary
J A Lemon 3
Company Secretary
J McCarthy
Project Manager ‐ Croydon
26 March 2010
No fixed term
$300,000 pa 9.25% of base salary
12 months
1 April 2015
No fixed term
$120,000 pa
1 November 2011
No fixed term
$925 pd
1 January 2013
No fixed term
$250,000 pa
14 August 2015
No fixed term
$1,200 pd
13 February 2006
No fixed term
$165 ph
23 September 2011
No fixed term
$1,000 pd
‐
‐
‐
‐
‐
‐
4 weeks
4 weeks
4 weeks
4 weeks
4 weeks
4 weeks
1. Messrs Parker and Lee were non‐executive Directors for the period from the start of the financial year to 31 March 2015. They were appointed
to their current executive roles on 1 April 2015.
2. Mr G B Starr resigned as Managing Director on 31 March 2015.
3. Mr J L Lemon resigned as Company Secretary on 14 August 2015 and Mr H L Roberts was appointed as Company Secretary on the same day.
d) Equity based compensation
Options granted as part of remuneration for the year ended 30 June 2015
The Employee Share Option Plan (“Plan”) is designed to provide long term incentives for executives to deliver long term shareholder
returns. Participation in the plan is at the Board’s discretion and no individual has a contractual right to participate in the Plan or to
receive any guaranteed benefits.
Share‐based compensation for the year ended 30 June 2015
No shares were issued to Directors and other key management personnel as part of compensation during the year ended 30 June
2015 (2014: Nil).
Crater Gold Mining Limited
21
Directors’ Report
Options and rights over equity instruments
The number of options over ordinary shares in the Company held during the financial year by each Director and key management
personnel of the Group, including their personally related parties are set out below:
Name
2015
Directors
S W S Chan
T M Fermanis
L K K Lee
R P Macnab
R D Parker
D T Y Sun
G B Starr
J D Collins‐Taylor
Key management personnel
G R Boyce
R Johnson
J A Lemon
J V McCarthy
Balance at the
start of the
year
Granted during
the year as
compensation
Exercised
during the year
Other changes
during the year
Balance at the
end of the year
500,000
500,000
‐
800,000
500,000
500,000
800,000
500,000
300,000
500,000
300,000
‐
‐
‐
500,000
‐
‐
‐
‐
500,000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
(800,000)
(1,000,000)
‐
‐
‐
‐
500,000
500,000
500,000
800,000
500,000
500,000
‐
‐
300,000
500,000
300,000
‐
1. Messrs Starr and Collins‐Taylor resigned during the course of the year and therefore ceased to be KMP.
Options granted carry no dividend or voting rights.
All the options above have an exercise price of $0.25 and expire on 30 September 2017. They were granted at varying dates between
22 October 2013 and 23 December 2014 and vested immediately.
Grant date
Expiry date
22 October 2013
22 October 2013
23 December 2014
23 December 2014
30 September 2017
30 September 2017
30 September 2017
30 September 2017
Issue price of
shares ($)
$0.25
$0.25
$0.25
$0.25
Number of shares
under option
3,600,000
2,600,000
5,400,000
2,100,000
Type
Fair value($)
Unlisted
Unlisted
Unlisted
Unlisted
$0.05
$0.05
$0.01
$0.01
Crater Gold Mining Limited
22
Share holdings
The number of shares in the Company held during the financial year by each Director and key management personnel of the Group,
including their personally related parties are set out below:
Directors’ Report
Name
2015
Directors
S W S Chan
G B Starr 1
T M Fermanis
L K K Lee
R P Macnab
R D Parker
D T Y Sun
J D Collins‐Taylor 1
Key management personnel
G R Boyce
R Johnson
J A Lemon
J V McCarthy
2014
Directors
S W S Chan
G B Starr
T M Fermanis
L K K Lee
R P Macnab
R D Parker
D T Y Sun
J D Collins‐Taylor
Key management personnel
G R Boyce
R Johnson
J A Lemon
J V McCarthy
Balance at the
start of the
year
Granted during
the year as
compensation
Additions
Disposals /
Other changes 2
Balance at the
end of the year
83,004,984
301,000
587,000
‐
‐
85,365
‐
172,364
58,823
‐
45,700
‐
64,531,868
301,000
571,952
‐
‐
‐
‐
134,864
‐
‐
45,700
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
23,732,357
‐
15,311
‐
‐
126,389
‐
‐
50,000
781,250
‐
‐
18,473,116
‐
15,048
‐
‐
85,365
‐
37,500
58,823
‐
‐
‐
‐
(301,000)
‐
‐
‐
‐
‐
(172,364)
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
106,737,341
‐
602,311
‐
‐
211,754
‐
‐
108,823
781,250
45,700
‐
83,004,984
301,000
587,000
‐
‐
85,365
‐
172,364
58,823
‐
45,700
‐
1. Messrs Starr and Collins‐Taylor resigned during the course of the year and therefore ceased to be KMP.
2. When a shareholder ceases to be a Director or Key Management, their existing shareholding is adjusted in the column “Other changes during
the year”.
Other transactions with key management personnel and their related parties
Mr S W S Chan is a director and the controller of Freefire Technology Limited (“Freefire”), the major shareholder in the Company.
During the year the Company paid Freefire $203,706 in loan interest and fees (2014: $31,134), $249,859 in underwriting fees (2014:
$109,148) and $214,900 in interest on convertible notes (2014: nil). During the course of the year Freefire made a number of short
term loans to the Company at an annual interest rates of 8‐15% (see note 3d for further information on the loan). Freefire also
underwrote 50% of the Convertible Note issue in August 2014 and the 1 for 4 Rights Issue in May 2015 and earned a 5% underwriting
commission for this. The Board considers that the terms under which these payments were made are reasonable and no more
favourable than the alternative arrangements available or reasonably expected to be available.
Mr R D Parker’s close family members hold a total of 77 Convertible Notes of the Company on which they earned $165 in interest
(2014: Nil).
Mr T Fermanis owns 40 Convertible Notes of the Company on which he earned $86 in interest (2014: Nil).
Mr G R Boyce owns 200 Convertible Notes of the Company on which he earned $429 in interest (2014: Nil).
This concludes the Remuneration Report, which has been audited.
Crater Gold Mining Limited
23
Directors’ Report
Auditor’s Independence Declaration
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 25.
Corporate Governance
The Board is committed to achieving and demonstrating the highest standards of corporate governance. As such, Crater Gold Mining
Limited and its Controlled Entities (‘the Group’) have adopted a corporate governance framework and practices to ensure they meet
the interests of shareholders.
The Australian Securities Exchange Corporate Governance Council’s Corporate Governance Principles and Recommendations – 3rd
edition (‘the ASX Principles’) are applicable for financial years commencing on or after 1 July 2014, consequently for the Group’s 30
June 2015 year end. As a result, the Group has chosen to publish its Corporate Governance Statement on its website rather than in
this Annual Report.
The Corporate Governance Statement and governance policies and practices can be found in the corporate governance section of
the Company’s website at http://www.cratergold.com.au.
The Group’s Corporate Governance Statement incorporates the disclosures required by the ASX Principles under the headings of the
eight core principles. All of these practices, unless otherwise stated, were in place for the full reporting period.
Signed for and on behalf of the Board in accordance with a resolution of the Directors.
On behalf of the Directors
R D Parker
Managing Director
Sydney
30 September 2015
T M Fermanis
Deputy Chairman
The objective of the Company is ongoing cash flow to establish the
Company as a profitable gold producer. When we reach mining plant
capacity, we anticipate producing some 10,000 ounces of gold in the first
full year of production, at an all‐in cash cost of below AUD $400 per ounce
average over the mining lease term.
Crater Gold Mining Limited
24
Auditor’s Independence Declaration
Crater Gold Mining Limited
25
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the Financial Year ended 30 June 2015
Continuing Operations
Revenue
Profit on sale of other financial assets
Interest revenue and other income
Total income
Less:
Administration expense
Corporate compliance expense
Exploration and evaluation costs written off
Financing expense
Loss before income tax expenses from continuing operations
Income tax expense
Loss for the year after income tax expense
Other comprehensive income
Notes
June
2015
$
June
2014
$
5
5
5
6
6
13
7
53,251
‐
‐
438,251
3,756
39,164
57,007
477,415
(1,824,731)
(1,785,817)
(102,790)
(103,678)
‐
(793,100)
(646,735)
(31,134)
(2,517,249)
(2,236,315)
‐
‐
(2,517,249)
(2,236,315)
Exchange differences on translating foreign operations
22
2,117,703
(2,474,075)
Total comprehensive income for the year
(399,546)
(4,710,390)
Loss per share from continuing operations attributable to the ordinary equity holders of the Company:
Basic loss ‐ cents per share
Diluted loss ‐ cents per share
8
8
(1.792)
(1.792)
(1.806)
(1.806)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
Crater Gold Mining Limited
26
Consolidated Statement of Financial Position
As at 30 June 2015
Notes
June
2015
$
June
2014
$
10
11
12
13
14
15
16
17
18
19
20
21
22
22
501,025
216,307
717,332
333,986
172,200
506,186
66,445
45,437
30,781,160
30,212,032
6,159,354
1,061,048
‐
836,418
38,068,007
31,093,887
38,785,339
31,600,073
1,878,248
561,636
718,566
129,278
1,259,740
1,500,000
‐
51,101
3,699,624
2,398,945
2,977,026
2,977,026
‐
‐
6,676,650
2,398,945
32,108,689
29,201,128
53,724,173
50,768,612
340,507
‐
3,407,059
1,278,317
(25,363,050)
(22,845,801)
32,108,689
29,201,128
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non‐current assets
Other financial assets
Exploration and evaluation
Mining assets
Plant and equipment
Total non‐current assets
Total Assets
LIABILITIES
Current liabilities
Trade and other payables
Related party payables
Interest‐bearing liabilities
Employee benefits
Total current liabilities
Non‐current liabilities
Interest‐bearing liabilities
Total non‐current liabilities
Total liabilities
Net Assets
EQUITY
Contributed equity
Convertible note reserve
Reserves
Accumulated losses
Total Equity
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
Crater Gold Mining Limited
27
Consolidated Statement of Changes in Equity
For the Financial Year ended 30 June 2015
Contributed
equity
Convertible
note reserve
Reserves
Accumulated
losses
$
$
Total
$
1,278,317
(22,845,801)
29,201,128
Note
s
22
21
$
50,768,612
‐
3,172,295
$
‐
‐
‐
‐
340,507
21
(216,734)
‐
11,039
‐
‐
‐
2,955,561
340,507
11,039
‐
‐
‐
‐
‐
11,039
3,172,295
340,507
(216,734)
3,307,107
‐
‐
‐
‐
‐
‐
‐
(2,517,249)
(2,517,249)
‐
2,117,703
‐
2,117,703
2,117,703
(2,517,249)
(399,546)
Balance at 1 July 2014
Movement in share based payment reserve
Issue of share capital
Issue of convertible notes
Transaction costs
Transactions with owners
Profit (loss) for the period
Other comprehensive income
Exchange differences on translating foreign operations
22
Total comprehensive income for the period
Balance at 30 June 2015
53,724,173
340,507
3,407,059
(25,363,050)
32,108,689
Balance at 1 July 2013
Movement in share based payment reserve
Issue of share capital
Transaction costs
Transactions with owners
Profit (loss) for the period
Other comprehensive income
Exchange differences on translating foreign operations
22
Total comprehensive income for the period
Balance at 30 June 2014
50,768,612
22
21
21
48,565,624
‐
2,382,965
(179,977)
2,202,988
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
3,420,840
(20,609,486)
31,376,978
331,552
‐
‐
331,552
‐
‐
‐
‐
331,552
2,382,965
(179,977)
2,534,540
‐
(2,236,315)
(2,236,315)
(2,474,075)
‐
‐
(2,474,075)
(2,236,315)
(4,710,390)
1,278,317
(22,845,801)
29,201,128
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Crater Gold Mining Limited
28
Consolidated Statement of Cash Flows
For the Financial Year ended 30 June 2015
June
2015
$
June
2014
$
Notes
53,251
‐
(311,197)
(1,926,169)
3,756
(499,962)
39,164
(31,134)
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Net cash used in operating activities
31
(754,152)
(1,918,139)
Cash flows from investing activities
Purchases of property plant and equipment
Payments for exploration and evaluation
Proceeds from sale of other financial assets
Payments for security deposit
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of ordinary shares and options
Share issue costs
Proceeds from issue of convertible notes
Expenses on issue of convertible notes
Proceeds from borrowings
Repayment of borrowings
Net cash provided by financing activities
Net increase/(decrease) in cash held
Cash at the beginning of the period
Effects of foreign exchange movements on cash transactions and balances
Cash at the end of the period
(451,160)
(788,628)
(4,355,120)
(5,195,107)
‐
1,479,751
(21,008)
(11,583)
(4,827,288)
(4,515,567)
3,069,795
2,182,965
(216,734)
(179,978)
3,454,750
(283,989)
‐
‐
3,109,740
1,500,000
(3,350,000)
‐
5,783,562
3,502,987
202,122
(2,930,719)
333,986
3,422,826
(35,083)
(158,121)
501,025
333,986
10
10
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Crater Gold Mining Limited
29
Notes to the Financial Statements
1
Summary of Significant Accounting Policies
Crater Gold Mining Limited (the “Company”) and its legal subsidiaries together are referred to in this financial report as the Group or
the Consolidated Entity.
Details of the principal accounting policies adopted in the preparation of the financial report are set out below. These policies have
been consistently applied to all years presented, unless otherwise stated.
Crater Gold Mining Limited is a for profit public company, limited by shares and domiciled in Australia.
The financial statements were authorised for issue, in accordance with a resolution of the Directors, on 30 September 2015. The
Directors have the power to amend and reissue the financial statements.
a. Basis of preparation
This general purpose financial report has been prepared in accordance with Australian Accounting Standards (AASB), Australian
Accounting Interpretation, and other authoritative pronouncements of the Australian Accounting Standards Board and the
Corporations Act 2001. These Financial Statements also comply with International Reporting Standards as issued by the International
Accounting Standards (IASB).
New, revised or amending Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been early adopted
Any significant impact on the accounting policies of the consolidated entity from the adoption of these Accounting Standards and
Interpretations are disclosed below. The adoption of these Accounting Standards and Interpretations did not have any significant
impact on the financial performance or position of the consolidated entity.
The following Accounting Standards and Interpretations are most relevant to the consolidated entity:
AASB 2012‐3 Amendments to Australian Accounting Standards ‐ Offsetting Financial Assets and Financial Liabilities
The consolidated entity has applied AASB 2012‐3 from 1 July 2014. The amendments add application guidance to address
inconsistencies in the application of the offsetting criteria in AASB 132 'Financial Instruments: Presentation', by clarifying the
meaning of 'currently has a legally enforceable right of set‐off'; and clarifies that some gross settlement systems may be
considered to be equivalent to net settlement.
AASB 2013‐3 Amendments to AASB 136 ‐ Recoverable Amount Disclosures for Non‐Financial Assets The consolidated entity
has applied AASB 2013‐3 from 1 July 2014. The disclosure requirements of AASB 136 'Impairment of Assets' have been
enhanced to require additional information about the fair value measurement when the recoverable amount of impaired
assets is based on fair value less costs of disposals. Additionally, if measured using a present value technique, the discount
rate is required to be disclosed.
AASB 2014‐1 Amendments to Australian Accounting Standards (Parts A to C)
The consolidated entity has applied Parts A to C of AASB 2014‐1 from 1 July 2014. These amendments affect the
following standards: AASB 2 'Share‐based Payment': clarifies the definition of 'vesting condition' by separately defining a
'performance condition' and a 'service condition' and amends the definition of 'market condition'; AASB 3 'Business
Combinations': clarifies that contingent consideration in a business combination is subsequently measured at fair value with
changes in fair value recognised in profit or loss irrespective of whether the contingent consideration is within the scope of
AASB 9; AASB 8 'Operating Segments': amended to require disclosures of judgements made in applying the aggregation
criteria and clarifies that a reconciliation of the total reportable segment assets to the entity's assets is required only if
segment assets are reported regularly to the chief operating decision maker; AASB 13 'Fair Value Measurement': clarifies that
the portfolio exemption applies to the valuation of contracts within the scope of AASB 9 and AASB 139; AASB 116 'Property,
Plant and Equipment' and AASB 138 'Intangible Assets': clarifies that on revaluation, restatement of accumulated
depreciation will not necessarily be in the same proportion to the change in the gross carrying value of the asset; AASB 124
'Related Party Disclosures': extends the definition of 'related party' to include a management entity that provides KMP
services to the entity or its parent and requires disclosure of the fees paid to the management entity; AASB 140 'Investment
Property': clarifies that the acquisition of an investment property may constitute a business combination.The consolidated
entity has applied AASB 10 from 1 July 2013, which has a new definition of 'control'. Control exists when the reporting entity
is exposed, or has the rights, to variable returns from its involvement with another entity and has the ability to affect those
returns through its 'power' over that other entity. A reporting entity has power when it has rights that give it the current
ability to direct the activities that significantly affect the investee's returns. The consolidated entity not only has to consider
its holdings and rights but also the holdings and rights of other shareholders in order to determine whether it has the
necessary power for consolidation purposes.
Crater Gold Mining Limited
30
Notes to the Financial Statements
Historical cost convention
The financial report has been prepared under the historical cost convention, as modified by the revaluation of available‐for‐sale
financial assets, financial assets and liabilities at fair value through the statement of comprehensive income and certain classes of
plant and equipment.
Critical accounting estimates
The preparation of the financial report in conformity with Accounting Standards requires the use of certain critical accounting
estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The
areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial
statements are disclosed in note 2.
b. Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 30.
c. Principles of consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company or parent entity as at
30 June 2015 and the results of all subsidiaries for the year then ended.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity when
the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the consolidated entity. They are de‐consolidated from the date that control ceases.
A list of consolidated entities is contained in note 29 to the financial statements.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the consolidated
entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without
the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the
book value of the share of the non‐controlling interest acquired is recognised directly in equity attributable to the parent.
Non‐controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other
comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity. Losses incurred
by the consolidated entity are attributed to the non‐controlling interest in full, even if that results in a deficit balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non‐
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The consolidated
entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or
loss in profit or loss.
d. Segment reporting
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns
that are different to those of other business segments. Segment information is provided on the same basis as information used for
internal reporting purposes by the chief executive and the Board. In identifying its operating segments, management generally
follows the Group's project activities. Each of these activities is managed separately.
e.
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in
Australian dollars, which is The Company’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year
end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of
Consolidated Income, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.
Translation differences on non‐monetary items, such as equities held at fair value through profit or loss, are reported as part of the
fair value gain or loss. Translation differences on non‐monetary items, such as equities classified as available‐for‐sale financial assets,
are included in the fair value reserve in equity.
Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are translated into the presentation currency as follows:
Crater Gold Mining Limited
31
Notes to the Financial Statements
assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at the date of that
Statement of Financial Position;
income and expenses for each income statement are translated at average exchange rates (unless this is not a reasonable
approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses
are translated at the dates of the transactions); and
all resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and
other currency instruments designated as hedges of such investments, are taken to shareholders’ equity. When a foreign operation
is sold or borrowings repaid a proportionate share of such exchange differences are recognised in the Statement of Profit or Loss and
Other Consolidated Income as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of foreign entities are treated as assets and liabilities of the foreign
entities and translated at the closing rate.
f. Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns,
trade allowances and duties and taxes paid.
Sale of gold
Sale of gold is recognised at the point of sale, which is where the customer has taken delivery of the goods, the risks and rewards are
transferred to the customer and there is a valid sales contract. Amounts disclosed as revenue are net of sales returns and trade
discounts.
Interest revenue
Interest revenue is recognised using the effective interest rate method, which, for floating rate financial assets, is the rate inherent
in the instrument.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
g.
Income Tax
The income tax expense or revenue for the year comprises current income tax expense or income and deferred tax expense or
income.
Current income tax expense or revenue is the tax payable on the current period’s taxable income based on the applicable income tax
rate adjusted by changes in deferred tax assets and liabilities.
Current and deferred income tax expense (income) is charged or credited directly to equity instead of the income statements 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
Crater Gold Mining Limited 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.
The tax consolidated group has entered a tax funding arrangement whereby each company in the group contributes to the income
tax payable by the group in proportion to their contribution to the group’s taxable income. Differences between the amounts of net
Crater Gold Mining Limited
32
Notes to the Financial Statements
tax assets and liabilities derecognised and the net amounts recognised pursuant to the funding arrangement are recognised as either
a contribution by, or distribution to the head entity.
h.
Leases
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a straight line basis over
the term of the lease.
i. Acquisition of assets
The purchase method of accounting is used for all acquisitions of assets (including business combinations) regardless of whether
equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given up, shares issued or liabilities
undertaken at the date of acquisition. Incidental costs directly attributable to the acquisition are taken to Profit and Loss under
AASB 3.
Where equity instruments are issued in an acquisition, the value of the instruments is their market price as at acquisition date, unless
the notional price at which they could be placed in the market is a better indicator of fair value.
Transaction costs arising on the issue of equity instruments are recognised directly in equity.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their
fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the
fair value of the Group's share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the
fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement, but only after a
reassessment of the identification and measurement of the net assets acquired.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present
value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar
borrowing could be obtained from an independent financier under comparable terms and conditions.
j.
Impairment of assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are
subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable.
An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
flows (cash generating units).
k. Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, highly liquid
investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current
liabilities on the Statement of Financial Position.
l.
Investments and other financial assets
Management determines the classification of its investments at initial recognition and re‐evaluates this designation at each reporting
date.
Loans and receivables
Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market.
They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They
are included in current assets, except for those with maturities greater than 12 months after the Statement of Financial Position date
which are classified as non‐current assets. Loans and receivables are included in receivables in the Consolidated Statement of
Financial Position (note 13). They are subsequently measured at amortised cost using the effective interest rate method.
De‐recognition
Financial assets are derecognised 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 derecognised where the related obligations are either discharged, cancelled or expire. 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 income statements.
Subsequent measurement
Available for sale financial assets and financial assets at fair value through income statements are subsequently carried at fair value.
Gains and losses arising from changes in the fair value of the financial assets at fair value through income statements category are
included in the income statement in the period in which they arise. Dividend income from financial assets at fair value through
income statements is recognised in the income statement as part of revenue from continuing operations when the Group’s right to
receive payments is established.
Impairment
The Group assesses at each balance date whether there is objective evidence that a financial asset or group of financial assets is
impaired.
Crater Gold Mining Limited
33
Notes to the Financial Statements
Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement.
m. Comparatives
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in the presentation for the
current financial year.
n. Exploration and evaluation expenditure
Exploration and evaluation expenditure incurred is capitalised in respect of each identifiable area of interest. These costs are only
carried forward to the extent that they are expected to be recouped through the successful development of the area of interest or
when activities in the areas of interest have not yet reached a stage which permit reasonable assessment of the existence of
economically recoverable reserves.
The ultimate recoupment of capitalised costs is dependent on the successful development and commercial exploitation, or sale, of
the respective areas of interest. Accumulated costs in relation to an abandoned area are written off in full against profit/loss in the
year in which the decision to abandon the area is made.
Where costs are capitalised on exploration, evaluation and development, they are amortised over the life of the area of interest to
which they relate once production has commenced. Amortisation charges are determined on a production output basis, unless a
time basis is more appropriate under specific circumstances.
Exploration, evaluation and development assets are assessed for impairment if:
sufficient data exists to determine technical feasibility and commercial viability, and
facts and circumstances suggest that the carrying amount exceeds the recoverable amount. For the purposes of impairment
testing, exploration and evaluation assets are allocated to cash‐generating units to which the exploration activity relates.
A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in
relation to that area of interest.
o. Mining assets
Capitalised mining development costs include expenditures incurred to develop new ore bodies to define further mineralisation in
existing ore bodies, to expand the capacity of a mine and to maintain production. Mining development also includes costs transferred
from exploration and evaluation phase once production commences in the area of interest.
Amortisation of mining development is computed by the units of production basis over the estimated proved and probable reserves.
Proved and probable mineral reserves reflect estimated quantities of economically recoverable reserves which can be recovered in
the future from known mineral deposits. These reserves are amortised from the date on which production commences. The
amortisation is calculated from recoverable proven and probable reserves and a predetermined percentage of the recoverable
measured, indicated and inferred resource. This percentage is reviewed annually.
Restoration costs expected to be incurred are provided for as part of development phase that give rise to the need for restoration.
p. Plant and equipment
Each class of plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis.
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.
The cost of fixed assets constructed within the consolidated group includes the cost of materials, direct labour, borrowing costs and
an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured
reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are
incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight‐line basis over the asset’s useful life to the Group commencing
from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Asset
Depreciation rates
Plant and Equipment
4% – 50%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each Statement of Financial Position date.
An asset’s carrying amount is written down immediately to its recoverable amount where there are indicators of impairment.
Crater Gold Mining Limited
34
Notes to the Financial Statements
The Company uses the unit‐of‐production basis when depreciating mine specific assets which results in a depreciation/amortisation
charge proportional to the depletion of the anticipated remaining life of mine production.
Amortisation of mine development costs is provided using the unit‐of‐production method.
q. Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid.
The amounts are unsecured and are usually paid within 30 days of recognition.
r. Borrowings
Borrowings are initially recognised at fair value net of transaction costs and subsequently at amortised cost, using the effective
interest method.
Convertible notes
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement of
financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a market rate for an equivalent
non‐convertible bond and this amount is carried as a non‐current liability on the amortised cost basis until extinguished on conversion
or redemption. The increase in the liability due to the passage of time is recognised as a finance cost. The remainder of the proceeds
are allocated to the conversion option that is recognised and included in shareholders equity as a convertible note reserve, net of
transaction costs. The carrying amount of the conversion option is not remeasured in the subsequent years. The corresponding
interest on convertible notes is expensed to profit or loss.
s.
Employee benefits
Short‐term employee benefits
Liabilities for wages and salaries, including non‐monetary benefits, annual leave and long service leave expected to be settled within
12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are settled.
Other long‐term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are measured
as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date
using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures and periods of service. Expected future payments are discounted using market yields at the reporting date on corporate
bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
Share‐based payments
Equity‐settled and cash‐settled share‐based compensation benefits are provided to employees.
Equity‐settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering
of services. Cash‐settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by
reference to the share price.
The cost of equity‐settled transactions are measured at fair value on grant date. Fair value is independently determined using either
the Binomial or Black‐Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of
dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk
free interest rate for the term of the option, together with non‐vesting conditions that do not determine whether the consolidated
entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions
The cost of equity‐settled transactions are recognised as an expense with a corresponding increase in equity over the vesting period.
The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number
of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period
is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods.
The cost of cash‐settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial
or Black‐Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The
cumulative charge to profit or loss until settlement of the liability is calculated as follows:
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash‐settled transactions is the cash paid to settle the
liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions are
considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied.
If equity‐settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional
expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share‐based
compensation benefit as at the date of modification.
Crater Gold Mining Limited
35
Notes to the Financial Statements
If the non‐vesting condition is within the control of the consolidated entity or employee, the failure to satisfy the condition is treated
as a cancellation. If the condition is not within the control of the consolidated entity or employee and is not satisfied during the
vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity‐settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is
recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated
as if they were a modification.
t.
Contributed equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of GST, from the
proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not
included in the cost of the acquisition as part of the purchase consideration.
u. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial
year, adjusted for bonus elements in ordinary shares issued during the year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Potential ordinary shares are anti‐dilutive when their conversion to ordinary shares would increase earnings per share or decrease
loss per share from continuing operations. The calculation of diluted earnings per share does not assume conversion, exercise, or
other issue of potential ordinary shares that would have an anti‐dilutive effect on earnings per share.
v. Rounding of amounts
The Company is of a kind referred to in Class order 98/100, issued by the Australian Securities and Investments Commission, relating
to the ''rounding off'' of amounts in the financial report. Amounts in the financial report have not been rounded off in accordance
with that Class Order to the nearest thousand dollars, but to the nearest dollar.
w. Goods and services tax (GST) and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from
the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from,
or payable to, the taxation authority is included with other receivables or payables in the Statement of Financial Position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are
recoverable from or payable to the taxation authority are presented as an operating cash flow.
Commitments and contingencies are disclosed gross of the amount of GST recoverable from, or payable to, the tax authorities.
x. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period
of time to prepare for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially
ready for their intended use or sale.
All other borrowing costs are recognised in the income statement in the period in which they are incurred.
y. Rehabilitation costs
The Company records the present value of the estimated cost of legal and constructive obligations to restore operating locations in
the period in which the obligation is incurred. The nature of restoration activities includes dismantling and removing structures,
rehabilitating mines, dismantling operating facilities, closure of plant and waste sites and restoration, reclamation and revegetation
of afflicted areas.
When the liability is initially recorded, the present value of the estimated cost is capitalised by increasing the carrying amount of the
related mining assets.
z. New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory, have
not been early adopted by the consolidated entity for the annual reporting period ended 30 June 2015. The consolidated entity's
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the consolidated
entity, are set out below.
AASB 9 Financial Instruments and its consequential amendments
This standard and its consequential amendments are applicable to annual reporting periods beginning on or after 1 January
2017 and completes phases I and III of the IASB's project to replace IAS 39 (AASB 139) 'Financial Instruments: Recognition and
Measurement'. This standard introduces new classification and measurement models for financial assets, using a single
approach to determine whether a financial asset is measured at amortised cost or fair value. The accounting for financial
Crater Gold Mining Limited
36
Notes to the Financial Statements
liabilities continues to be classified and measured in accordance with AASB 139, with one exception, being that the portion
of a change of fair value relating to the entity's own credit risk is to be presented in other comprehensive income unless it
would create an accounting mismatch. Chapter 6 'Hedge Accounting' supersedes the general hedge accounting requirements
in AASB 139 and provides a new simpler approach to hedge accounting that is intended to more closely align with risk
management activities undertaken by entities when hedging financial and non‐financial risks. The consolidated entity will
adopt this standard and the amendments from 1 July 2017 but the impact of its adoption is yet to be assessed by the
consolidated entity.
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2017. The standard provides a single
standard for revenue recognition. The core principle of the standard is that an entity will recognise revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects
to be entitled in exchange for those goods or services. The standard will require: contracts (either written, verbal or implied)
to be identified, together with the separate performance obligations within the contract; determine the transaction price,
adjusted for the time value of money excluding credit risk; allocation of the transaction price to the separate performance
obligations on a basis of relative stand‐alone selling price of each distinct good or service, or estimation approach if no distinct
observable prices exist; and recognition of revenue when each performance obligation is satisfied. Credit risk will be
presented separately as an expense rather than adjusted to revenue. For goods, the performance obligation would be
satisfied when the customer obtains control of the goods. For services, the performance obligation is satisfied when the
service has been provided, typically for promises to transfer services to customers. For performance obligations satisfied over
time, an entity would select an appropriate measure of progress to determine how much revenue should be recognised as
the performance obligation is satisfied. Contracts with customers will be presented in an entity's statement of financial
position as a contract liability, a contract asset, or a receivable, depending on the relationship between the entity's
performance and the customer's payment. Sufficient quantitative and qualitative disclosure is required to enable users to
understand the contracts with customers; the significant judgments made in applying the guidance to those contracts; and
any assets recognised from the costs to obtain or fulfil a contract with a customer. The consolidated entity will adopt this
standard from 1 July 2017 but the impact of its adoption is yet to be assessed by the consolidated entity.
Crater Gold Mining Limited
37
Notes to the Financial Statements
2
Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations
of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom
equal the actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities are set out below.
Exploration and evaluation expenditure
Exploration and evaluation expenditure is reviewed regularly to ensure that the capitalised expenditure is only carried forward to the
extent that it is expected to be recouped through the successful development of the area of interest or when activities in the area of
interest have not yet reached a stage which permits a reasonable assessment of the existence of economically recoverable reserves.
This policy is outlined in note 1.
Share‐based payment transactions
The consolidated entity 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 using either the Binomial or Black‐Scholes model
taking into account the terms and conditions upon which the instruments were granted. The accounting estimates and assumptions
relating to equity‐settled share‐based payments would have no impact on the carrying amounts of assets and liabilities within the
next annual reporting period but may impact profit or loss and equity.
Estimation of useful lives of assets
The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges for its property,
plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or
some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously estimated
lives, or technically obsolete or non‐strategic assets that have been abandoned or sold will be written off or written down.
Employee benefits provision
As discussed in note 1, the liability for employee benefits expected to be settled more than 12 months from the reporting date are
recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at the
reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and
inflation have been taken into account.
Impairment of non‐financial assets other than goodwill and other indefinite life intangible assets
The consolidated entity assesses impairment of non‐financial assets other than goodwill and other indefinite life intangible assets at
each reporting date by evaluating conditions specific to the consolidated entity and to the particular asset that may lead to
impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of
disposal or value‐in‐use calculations, which incorporate a number of key estimates and assumptions.
It is reasonably possible that the underlying gold price assumption may change which may then impact the estimated life of mine
determinant and may then require a material adjustment to the carrying value of mining plant and equipment, mining infrastructure
and mining development assets. Furthermore, the expected future cash flows used to determine the value‐in‐use of these assets are
inherently uncertain and could materially change over time. They are significantly affected by a number of factors including reserves
and production estimates, together with economic factors such as metal spot prices, discount rates, estimates of costs to produce
reserves and future capital expenditure.
Crater Gold Mining Limited
38
Notes to the Financial Statements
3
Financial Risk Management
The Group’s major area of risk is managing liquidity and cash balances and embarking on fundraising activities in anticipation of
further projects. The activities expose the Group to a variety of financial risks: market risk (including interest rate risk and price risk),
credit risk and liquidity 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. The Group uses different methods to measure
different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, and other risks,
ageing analysis for credit risk.
Risk management is carried out under policies set by the Managing Director and approved by the Board of Directors.
The Board provides principles for overall risk management, as well as policies covering specific areas, such as, interest rate risk, credit
risk and investment of excess liquidity.
a. Market risk
Foreign exchange risk
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency
that is not the Group’s functional currency. The Group operates internationally and is exposed to foreign exchange risk arising from
currency exposures to the Papua New Guinea Kina. As the Group is still in the development, exploration and evaluation stages, it has
not needed to use forward contracts to manage foreign exchange risk. The Board will continue to monitor the Group’s foreign
currency exposures.
The Group’s exposure to interest‐rate risk is summarised in the following table. Fixed interest rate items mature within 12 months.
Price risk
The Group is exposed to both commodity price risk and revenue risk. The commodity prices impact the Group’s capacity to raise
additional funds and impact its sales of gold now that the Company is in production. Management actively monitors commodity
prices and does not believe that the current level in AUD terms warrant specific action.
b. Credit risk
The credit risk on financial assets of the Group which have been recognised in the consolidated Statement of Financial Position is
generally the carrying value amount, net of any provisions for doubtful debts. Management scrutinizes outstanding debtors on a
regular basis and no items are considered past due or impaired.
c.
Liquidity risk
Prudent liquidity management implies maintaining sufficient cash and marketable securities and the ability of the Group to raise
funds on capital markets. The Managing Director and the Board continue to monitor the Group’s financial position to ensure that it
has available funds to meet its ongoing commitments (refer to Note 4).
Crater Gold Mining Limited
39
Notes to the Financial Statements
Financial Risk Management (cont.)
3
d. Cash flow interest rate risk
Consolidated
2015
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Weighted average interest rate
Financial liabilities
Trade and other payables
Related party payables
Interest bearing liabilities ‐ current 1
Interest bearing liabilities – non‐current 2
Weighted average interest rate
Net financial assets/(liabilities)
2014
Financial assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Weighted average interest rate
Financial liabilities
Trade and other payables
Related party payables
Interest bearing liabilities 1
Weighted average interest rate
Net financial assets/(liabilities)
Notes
Floating
interest rate
Fixed interest
rate
Non‐interest
bearing
Total
10
11
12
16
17
18
20
10
11
12
16
18
467,085
‐
‐
467,085
1.68%
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
1,259,740
2,977,026
4,236,766
14.24%
33,940
216,307
66,445
316,692
1,878,248
561,636
‐
‐
2,439,884
501,025
216,307
66,445
783,777
1,878,248
561,636
1,259,740
2,977,026
6,676,650
467,085
(4,236,766)
(2,123,192)
(5,892,873)
287,254
‐
‐
287,254
3.0%
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
1,500,000
1,500,000
15.0%
46,732
172,200
45,437
264,369
718,566
129,278
‐
847,844
333,986
172,200
45,437
551,623
718,566
129,278
1,500,000
2,347,844
287,254
(1,500,000)
(583,475)
(1,796,221)
The Convertible Notes are repayable on 22 August 2017. All other financial liabilities are due and payable within 12 months.
The Company has assessed the potential interest rate risk on floating interest rate assets and does not consider the risk to be material
to the Company.
1 Freefire Technology Limited
The Company has secured short‐term, interest bearing loans totalling $1,259,740 (2014: $1,500,000) from its major shareholder,
Freefire Technology Limited (“Freefire”).
• The loan funds are to be used by the Company principally for the purpose of developing the High Grade Zone at the Company’s
Crater Mountain, PNG project and for general working capital.
•
Interest on the Principal Sums is payable by the Company to Freefire at the rate of 8%‐15% (2014: 15%) per annum.
• The loans are repayable by the Company to Freefire upon written demand by Freefire.
2 Convertible notes
On 22 August 2014 the consolidated entity issued 138,190 10% convertible notes, with a face value of $25 each, for total proceeds
of $3,454,750. Interest is paid on a semi‐annual basis from 31 December 2014 onwards in arrears at a rate of 10% per annum based
on the face value. The notes are convertible into ordinary shares of the parent entity, on a quarterly basis at the option of the holder,
or repayable on 22 August 2017. The conversion rate is 100 ordinary shares for each note held.
Total transactions costs were $283,989 at the date of issue and unamortised transaction costs of $203,274 have been offset against
the convertible notes payable liability.
The convertible notes are unsecured.
Crater Gold Mining Limited
40
Notes to the Financial Statements
3
e.
Financial Risk Management (cont.)
Fair value estimation
The fair value of assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The
fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current
market interest rate that is available to the Group for similar financial instruments.
The Group measures fair values using the following fair value hierarchy that considers and reflects the significance of the inputs used
in making the measurements:
Level 1
Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2
prices) or indirectly (derived from prices).
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as
Level 3
Inputs for the asset or liability that are not based on observable market data (significant unobservable inputs).
The determination of what constitutes ‘observable’ requires significant judgment by the Group. The Group considers observable
data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and
provided by independent sources that are actively involved in the relevant market.
The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair values due
to their short‐term nature.
f.
Sensitivity analysis
Foreign currency risk sensitivity analysis
The Group is exposed to fluctuations in the value of the Australian Dollar to the PNG Kina (PKG). At 30 June 2015, the effect on profit
and equity of the Consolidated Group as a result of changes in the value of the Australian Dollar to the PKG, with all other variables
remaining constant, is as follows:
Movement to
AUD
PKG by + 5%
Change in profit
$
6,478
Change in equity
$
142,074
PKG by ‐ 5%
(6,478)
(142,074)
4 Going Concern
These financial statements are prepared on a going concern basis. The Group has incurred a net loss after tax of $2,517,249 (2014:
$2,236,315) for the year ended 30 June 2015 with operating cash outflows of $754,152 (2014: outflows of $1,918,139). As at 30 June
2015, the Group had net current liabilities of $2,982,292 (2014: $1,892,759) including cash on hand of $501,025 (2014:$333,986).
Notwithstanding the above the Directors note the following in their consideration of Going Concern:
a) The Group’s key area of expenditure is the Crater Mountain Project in Papua New Guinea. The Group was granted Mining Lease
ML 510 in November 2014 for the High Grade Zone project (“HGZ” project) at Crater Mountain. Whilst production is currently still
low, the Group anticipates that there will be more significant production output in the near future generating positive cash flows.
b) On 24 September 2015 the Company announced that it had successfully coordinated a two stage capital raising of A$3.4 million.
This Capital Raising was made up of two tranches with the first tranche of A$1.3 million issued to a selection of international
institutional investors and Private Investors. The second tranche of A$2.1 million will be issued (subject to shareholder approval) to
Freefire Technology Limited on the same terms thereby maintaining Freefire’s 62% holding in the company.
c) In addition, the Group has successfully raised funds through share issues and debt funding on a number of occasions and the
Directors are confident that this could be achieved should the need arise. Management have received a letter of support from Freefire
stating that they intend to support the Group by way of further loans to cover any cash shortfall in the next 12 months should the
need for such funding arise to enable the Group to meet its liabilities as and when they fall due.
On this basis, the Directors are of the opinion that the financial statements should be prepared on a going concern basis and the
Group will be able to pay its debts as and when they fall due and payable.
Crater Gold Mining Limited
41
Note
5
Income from continuing operations
Revenue from gold sales
Profit on sale of other financial assets
Interest received
6
Expenses
Expenses, excluding finance costs, included in the
Statement of Comprehensive Income classified by nature
Audit fees
Accounting
Consulting fees
Director related expenses
‐ Directors’ fees
‐ reimbursable expenses
Total director related expenses
Depreciation and amortisation expense
Employee benefits expense
Employee share option plan costs
Exploration costs written off
General administration expenses
Insurance
‐ Directors & officers indemnity insurance
‐ other
Total insurance
Loss on disposals of fixed assets
Marketing and promotion expenses
Occupancy expenses
Share registry / meeting costs
Telephone
Travel
Notes to the Financial Statements
June
2015
$
June
2014
$
53,251
‐
‐
438,251
3,756
39,164
95,214
25,373
601,356
217,479
12,108
229,587
5,954
509,966
11,039
‐
86,363
19,220
27,102
46,322
‐
36,928
74,252
102,790
25,013
77,364
90,507
27,744
521,125
212,301
9,234
221,535
6,869
381,307
275,902
793,100
65,391
17,506
5,569
23,075
9,724
49,697
38,418
103,678
24,546
49,978
1,927,521
2,682,596
Crater Gold Mining Limited
42
Note
7
a.
Income Tax
Income tax
Current tax expense
Notes to the Financial Statements
June
2015
$
June
2014
$
‐
‐
b. Numerical reconciliation of income tax revenue to prima facie tax receivable
Loss before income tax
(2,517,249)
(2,236,315)
Tax at the Australian tax rate of 30% (2014 – 30%)
(755,175)
(670,894)
Tax effect of amounts which are not deductible (taxable) in calculating taxable income:
Profit on disposal of non‐portfolio interest in foreign companies not taxable
Non‐deductible share based payments
Other
Net adjustment to deferred tax assets and liabilities for tax losses and temporary
differences not recognised
Income tax expense
c.
Tax losses
Unused tax losses for which no deferred tax asset has been recognised
Opening balance
Tax (profit) / loss for the year
Tax losses previously overstated written back
Closing balance
Potential Tax Benefits @ 30%
d. Unrecognised temporary differences
Temporary differences for which deferred tax assets and liabilities have not been
recognised:
Exploration and evaluation
Accruals
Employee Entitlements
Capital Raising Costs
Provision for write off of development
Provision for impairment
Business related capital costs
Subtotal
‐
3,312
9,008
(131,312)
75,172
12,750
(742,855)
(714,284)
742,855
714,284
‐
‐
38,830,784
25,184,866
3,150,043
2,459,507
(129,555)
11,186,412
41,851,272
38,830,784
12,555,382
11,649,235
(4,208,267)
43,500
‐
917,684
660,030
3,539,959
17,579
970,485
(4,174,875)
54,000
61,827
1,269,092
624,615
3,350,017
17,579
1,202,255
Potential Tax effect at 30%
291,146
360,677
Crater Gold Mining Limited
43
Notes to the Financial Statements
June
2015
June
2014
Note
8
Earnings per Share
a. Basic loss per share
Profit/(loss) from continuing operations attributable to the ordinary equity holders of
the Company (cents per share)
(1.792)
(1.806)
b. Diluted loss per share
Profit/(loss) from continuing operations attributable to the ordinary equity holders of
the Company (cents per share)
(1.792)
(1.806)
The calculation of basic earnings per share at 30 June 2015 was based on the continuing operations loss attributable to ordinary
shareholders of $2,517,249 (2014 loss: $2,236,315) and a weighted average number of ordinary shares outstanding during the
financial year ended 30 June 2015 of 140,508,932 (2014: 123,844,707).
c. Weighted average number of shares used as a denominator
Basic loss per share
Diluted loss per share
2015
Shares
2014
Shares
140,508,932
123,844,707
140,508,932
123,844,707
At the year end, the consolidated entity had 6,700,000 options on issue (2014: 6,478,211), representing:
6,700,000 unlisted options with weighted average exercise price of $0.25 (2014: 6,478,211 at average $0.37)
Crater Gold Mining Limited
44
Notes to the Financial Statements
9
Segment results
Full‐year to 30 June 2015
Gold sales revenue
Other revenue
Other expenses
Segment profit (loss)
Segment assets
Segment liabilities
Full‐year to 30 June 2014
External segment revenue
Loss on disposal
Asset write downs
Other expenses
Segment profit (loss)
Segment assets
Segment liabilities
Croydon
$
Fergusson
Island
$
Crater
Mountain
$
Intersegment
eliminations /
unallocated
$
Consolidated
$
‐
‐
‐
‐
‐
‐
‐
‐
53,251
‐
‐
3,756
53,251
3,756
(182,806)
(2,391,450)
(2,574,256)
(129,555)
(2,387,694)
(2,517,249)
4,208,266
‐
281,316
‐
32,053,098
33,646,615
2,242,659
(26,969,965)
38,785,339
6,676,650
‐
‐
(793,100)
‐
(793,100)
4,174,875
‐
‐
‐
‐
‐
‐
‐
‐
‐
477,415
(9,724)
477,415
(9,724)
‐
(793,100)
(139,144)
(1,771,762)
(1,910,906)
(139,144)
(1,304,071)
(2,236,315)
213,780
‐
25,164,316
28,678,445
2,047,102
(26,279,500)
31,600,073
2,398,945
Reconciliation of Segment Profit to loss for the period from continuing operations:
Segment profit (loss)
Loss for the period from continuing operations
(2,517,249)
(2,517,249)
Segment information is presented using a “management approach”, i.e. segment information is provided on the same basis as
information used for internal reporting purposes by the chief executive and the Board. In identifying its operating segments,
management generally follows the Group's project activities. Each of these activities is managed separately.
The Chief Operating Decision Makers (“CODM”) review EBITDA (earnings before interest, tax, depreciation and amortisation). The
accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.
The information reported to the CODM is on at least a monthly basis.
Crater Gold Mining Limited
45
Notes to the Financial Statements
9 Segment results (cont.)
Description of segments
Croydon
This project consists of two sub‐projects in far North West Queensland, the Croydon Polymetallic Project and the Croydon Gold
Project.
Fergusson Island
This project consists of two gold exploration projects at Wapolu and Gameta on Fergusson Island, in Milne Bay province, PNG.
Crater Mountain
This is an advanced exploration project located in the PNG Highlands approximately 50kms southwest of Goroka.
Geographical information
Sales to
external
customers
2015
$
‐
53,251
53,251
Geographical
non‐current
assets
2015
$
2014
$
2014
$
‐
‐
‐
5,875,242
32,192,765
5,845,138
25,248,749
38,068,007
31,093,887
Australia
Papua New Guinea
The geographical non‐current assets above are exclusive of, where applicable, financial instruments, deferred tax assets, post‐
employment benefits assets and rights under insurance contracts.
Types of products and services
The principal products and services of this operating segment are the mining and exploration operations in Australia and Papua New
Guinea.
Major customers
Major customers who individually accounted for more than ten percent of total revenue contribute 100 percent of total revenue
(2014: n/a).
Note
10 Current Assets ‐ Cash and Equivalents
Cash at bank and on hand
The effective (weighted average) interest rate on short term bank deposit was 1.7%
(2014: 2.5%).
11 Current Assets ‐ Trade and Other Receivables
GST receivable
Other
12 Non‐Current Assets ‐ Other Financial Assets
Security deposits
June
2015
$
June
2014
$
501,025
333,986
108,154
108,153
216,307
89,184
83,016
172,200
66,445
66,445
45,437
45,437
Crater Gold Mining Limited
46
Notes to the Financial Statements
Note
13 Non‐Current Assets ‐ Exploration and Evaluation
At the beginning of the year
Cost
Provision for impairment
Net book value
Opening net book value
Expenditure capitalised
Exploration costs reclassified to Mining assets
Exploration costs written off
Effect of movement in exchange rates
Closing net book value
At the end of the year
Cost
Provision for impairment
Net book value
The ultimate recoupment of costs carried forward for exploration and evaluation assets
is dependent on the successful development and commercial exploitation or sale of the
respective areas.
14 Non‐Current Assets – Mining assets
Mining development – at cost
Accumulated amortisation
Provision for impairment
Effect of movements in exchange rates
Net book value
As a result of the granting of the mining lease, ML510 for Anomaly’s HGZ project at
Crater Mountain in the Eastern Highlands Province, the decision was taking to reclassify
the relevant exploration and evaluation expenditure as a mining asset in line with
accounting standards.
No amortisation has been booked on the assets as production only commenced in May
2015.
A reconciliation of the written down values at the beginning and end of the current and
previous financial year are set out below
Balance at 30 June 2014
Reclassification of Mining assets
Impairment of assets
Amortisation expense
Balance at 30 June 2014
June
2015
$
June
2014
$
31,201,205
(989,173)
28,653,373
(989,173)
30,212,032
27,664,200
30,212,032
4,642,518
(6,159,354)
‐
2,085,964
30,781,160
27,664,200
5,620,830
‐
(793,100)
(2,279,898)
30,212,032
31,770,333
(989,173)
31,201,205
(989,173)
30,781,160
30,212,032
6,159,354
‐
‐
‐
6,159,354
‐
6,159,354
‐
‐
6,159,354
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Crater Gold Mining Limited
47
Note
15 Non‐Current Assets – Plant and Equipment
Plant and equipment
Cost
Accumulated depreciation
Net book value
Notes to the Financial Statements
June
2015
$
June
2014
$
1,724,001
(662,953)
1,061,048
1,182,843
(346,425)
836,418
A reconciliation of the carrying amounts of each class of property, plant and equipment at the beginning and end of the current and
prior financial years are set out below.
Carrying amount as at 1 July 2013
Additions
Disposals
Depreciation expense
Depreciation capitalised
Effect of movements in exchange rates
Carrying amount as at 30 June 2014
Additions
Disposals
Depreciation expense
Depreciation capitalised
Effect of movements in exchange rates
Carrying amount as at 30 June 2015
Note
16 Current Liabilities – Trade and Other Payables
Trade payables
Accruals
Other payables
17 Related Party Payables
G R Boyce
S W S Chan
T M Fermanis
Freefire Technology Ltd
R Johnson
L K K Lee
J A Lemon
R P Macnab
R D Parker
D T Y Sun
Plant and
equipment
326,163
788,628
(9,724)
(6,869)
(225,723)
(36,057)
836,418
451,160
‐
(5,954)
(287,397)
66,821
1,061,048
June
2015
$
539,146
843,213
495,889
1,878,248
June
2014
$
178,911
271,852
267,803
718,566
101,745
21,120
30,625
88,225
25,652
87,499
51,875
28,740
30,625
86,025
30,625
‐
‐
‐
104,165
‐
3,993
‐
‐
‐
561,636
129,278
Crater Gold Mining Limited
48
Notes to the Financial Statements
Note
18 Current Liabilities – Interest bearing liabilities
Freefire Technology Limited loan
Refer to note 3(d) for detailed information on financial instruments.
19 Current Liabilities – Provisions
Employee entitlement
Balance as at 1 July
Entitlement provided
Entitlement taken
Employee entitlement
The Company expects the full entitlement to be used in the next 12 months
20 Non‐current Liabilities – Interest bearing liabilities
Convertible notes
Refer to note 3(d) for detailed information on financial instruments.
21 Contributed Equity
a.
Share capital
Equity Securities Issued
For the financial year ended 30 June 2015
As at 1 July 2014
Shares issued
As at 30 June 2015
For the financial year ended 30 June 2014
As at 1 July 2013
Shares issued
As at 30 June 2014
b. Ordinary Shares
June
2015
$
June
2014
$
1,259,740
1,259,740
1,500,000
1,500,000
51,101
29,423
(80,524)
‐
38,398
29,423
(16,720)
51,101
2,977,026
2,977,026
‐
‐
No. of ordinary
shares
Total
$
136,435,320
35,390,080
171,825,400
50,768,612
2,955,561
53,724,173
108,654,916
27,780,404
136,435,320
48,565,624
2,202,988
50,768,612
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the
number of shares and the amounts paid on those shares.
On a show of hands, every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote and upon a
poll, each share is entitled to one vote.
Capital risk management
The Group’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns
for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital
to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to
the current company's share price at the time of the investment. The consolidated entity is not actively pursuing additional
investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies.
Crater Gold Mining Limited
49
Notes to the Financial Statements
21 Contributed Equity (cont.)
The Group is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk management
decisions. There have been no events of default on the financing arrangements during the financial year.
The capital risk management policy remains unchanged from the 30 June 2014 Annual Report.
c.
Employee Share Option Plan
Information relating to the Employee Share Option Plan, including details of options issued, exercised, lapsed and outstanding during
the financial year is set out in note 26b.
d. Movements in share capital
Date
Details
For the financial year ended 30 June 2015
01‐Jul‐14
23‐Apr‐15
23‐Apr‐15
21‐May‐15
Balance 1 July ‐ Ordinary Shares
Manzilake Pty Limited
Paul Henley
Rights Issue
Less: Transaction costs arising on share issues
No. of shares
136,435,320
781,250
500,000
34,108,830
171,825,400
Value
$
50,768,612
62,500
40,000
3,069,795
(216,734)
53,724,173
In May 2015 the Company raised $3,069,795 at $0.09 (9 cents) per share in a 1 for 4 non‐renounceable Rights Issue. The Rights
Issue was underwritten by Freefire Technology Ltd.
For the financial year ended 30 June 2014
01‐Jul‐13
24‐Jul‐13
16‐Dec‐13
Balance 1 July ‐ Ordinary Shares
Global Resources Corporation
Rights Issue
Less: Transaction costs arising on share issues
108,654,916
493,340
27,287,064
136,435,320
48,565,624
200,000
2,182,965
(179,977)
50,768,612
Crater Gold Mining Limited
50
21 Contributed Equity (cont.)
e. Movement in options
Date
Details
For the financial year ended 30 June 2015
01‐Jul‐14
Opening Balance
04‐Jul‐14
Options expired
04‐Aug‐14 Options expired
05‐Sep‐14
Options expired
05‐Oct‐14
Options expired
16‐Sep‐14
Options lapsed
23‐Dec‐14
ESOP
23‐Dec‐14
Director options
08‐May‐15 Options expired
30‐Jun‐15
Options expired
30‐Jun‐15
Options expired
For the financial year ended 30 June 2014
01‐Jul‐13
Opening Balance
29‐Jul‐13
Options expired
30‐Aug‐13 Options expired
22‐Sep‐13
Options expired
29‐Sep‐13
Options expired
19‐Oct‐13
Options expired
31‐Oct‐13
Options expired
01‐Nov‐13 Options expired
22‐Nov‐13 Options expired
30‐Nov‐13 Options expired
20‐Dec‐13
Options expired
20‐Jan‐14
Options expired
23‐Feb‐14
Options expired
30‐Mar‐14 Options expired
03‐May‐14 Options expired
02‐Jun‐14
Options expired
22‐Oct‐13
Director options
22‐Oct‐13
ESOP
Notes to the Financial Statements
Class of options
Listed
Unlisted
Total
‐
6,478,211
6,478,211
(5,032)
(4,490)
(4,966)
(6,223)
(5,032)
(4,490)
(4,966)
(6,223)
(500,000)
(500,000)
500,000
500,000
500,000
500,000
(130,000)
(130,000)
(42,500)
(85,000)
(42,500)
(85,000)
6,700,000
6,700,000
387,937
387,937
‐
‐
(7,008)
(8,378)
(5,680)
(8,107)
(5,049)
(7,280)
(7,387)
(6,549)
(4,901)
(7,574)
(7,885)
(9,327)
(8,896)
(8,801)
(6,904)
(7,008)
(8,378)
(5,680)
(8,107)
(5,049)
(7,280)
(7,387)
(6,549)
(4,901)
(7,574)
(7,885)
(9,327)
(8,896)
(8,801)
(6,904)
3,600,000
3,600,000
2,600,000
2,600,000
‐
6,478,211
6,478,211
Each option entitles the holder to purchase one share. The names of all persons who currently hold share options, granted at any
time, are entered in the register kept by the Company, pursuant to Section 168 of the Corporations Act 2001, which may be inspected
free of charge. Persons entitled to exercise these options have no right, by virtue of the options, to participate in any share issue by
the parent entity or any other body corporate.
The model inputs for options granted during the year ended 30 June 2015 included:
Options were granted for no consideration;
Exercise prices of 25 cents;
Grant date 23 December2014;
Expiry date of 30 September 2017;
Immediately vesting
Share price at grant date of 12 cents;
Expected volatility of the company’s shares 41.35%;
Expected dividend yield of 0%; and
Risk free rates of 2.56%.
Crater Gold Mining Limited
51
Notes to the Financial Statements
June
2015
$
June
2014
$
1,784,207
30,000
1,592,852
1,773,168
30,000
(524,851)
3,407,059
1,278,317
1,773,168
11,039
1,441,616
331,552
1,784,207
1,773,168
30,000
30,000
30,000
30,000
(524,851)
2,117,703
1,949,224
(2,474,075)
1,592,852
(524,851)
(22,845,801)
(2,517,249)
(20,609,486)
(2,236,315)
(25,363,050)
(22,845,801)
Note
22 Reserves and Accumulated Losses
Reserves
Share based payment reserve
Share cancellation reserve
Foreign currency translation reserve
Movements
Share‐based Payments Reserve
Balance 1 July 2014
Fair value of Employee Share Option Plan share options
Balance 30 June 2015
Share Cancellation Reserve
Balance 1 July 2014
Balance 30 June 2015
Foreign currency translation reserve
Balance 1 July 2014
Currency translation differences
Balance 30 June 2015
Accumulated Losses
Movements in accumulated losses were as follows:
Balance 1 July 2014
Loss for the year
Balance 30 June 2015
Nature and purpose of reserves
Share‐based payments reserve
The share‐based payments reserve is used to recognise:
The fair value of options issued to employees and Directors; and
The fair value of options issued as consideration for goods or services rendered.
Share cancellation reserve
The cancellation of shares in 2010 was realised within the share cancellation reserve.
Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency translation reserve. The
reserve is recognised in the Consolidated Statement of Profit or Loss and Other Comprehensive Income when the net investment is
disposed.
Crater Gold Mining Limited
52
Notes to the Financial Statements
Note
23 Commitments
Operating leases
Committed at the reporting date but not recognised as liabilities, payable:
Within one year
Later than one year but not later than five years
24 Guarantees and Deposits
Non‐Current
Deposits lodged with the Queensland Department of Mines
Accommodation and rental bonds
Deposits lodged with PNG Department of Mining and Petroleum
25 Related Party transaction
a. Parent entity
Crater Gold Mining Limited is the parent entity.
b. Key management personnel
June
2015
$
June
2014
$
46,598
‐
46,598
27,500
7,686
31,259
66,445
44,892
46,688
91,580
27,500
5,165
12,772
45,437
Disclosures relating to key management personnel are set out below and the remuneration report in the Directors' Report. The
aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out
below:
Remuneration component
Short term
Post‐employment benefits
Share‐based payments
Total
2015
$
1,388,910
40,312
11,039
2014
$
1,281,344
27,750
266,356
1,440,261
1,575,450
c.
Transactions with Related Parties
Mr S W S Chan is a director and the controller of Freefire Technology Limited (“Freefire”), the major shareholder in the Company.
During the year the Company paid Freefire $203,706 in loan interest and fees (2014: $31,134), $249,859 in underwriting fees (2014:
$109,148) and $214,900 in interest on convertible notes (2014: nil). During the course of the year Freefire made a number of short
term loans to the Company at an annual interest rates of 8‐15% (see note 3d for further information on the loan). Freefire also
underwrote 50% of the Convertible Note issue in August 2014 and the 1 for 4 Rights Issue in May 2015 and earned a 5% underwriting
commission for this. The Board considers that the terms under which these payments were made are reasonable and no more
favourable than the alternative arrangements available or reasonably expected to be available.
Mr R D Parker’s close family members hold a total of 77 Convertible Notes of the Company on which they earned $165 in interest
(2014: Nil).
Mr T Fermanis owns 40 Convertible Notes of the Company on which he earned $86 in interest (2014: Nil).
Mr G R Boyce owns 200 Convertible Notes of the Company on which he earned $429 in interest (2014: Nil).
d. Receivable from and payables to Related Parties
Details can be found at note 17.
Crater Gold Mining Limited
53
Notes to the Financial Statements
26 Share Option Based Payments
a. Recognised share option based payment expenses
The expense recognised for share options granted for employee services received during the year is shown in the table below:
Expense arising from equity settled share‐based payment transactions
June
2015
$
June
2014
$
11,039
11,039
275,902
275,902
b. Employee Share Option Plan
The establishment of the Crater Gold Mining Employee Share Option Plan (“the Plan”) was approved by shareholders on 22 June
2007. The Plan is designed to provide long term incentives for executives, staff and contractors to deliver long term shareholder
returns. Participation in the Plan is at the Board’s discretion and no individual has a contractual right to participate in the Plan or to
receive any guaranteed benefits. Options granted under the Plan carry no dividend or voting rights.
Summary of options granted under the Employee Share Option Plan
The following table illustrates the number and weighted average exercise prices (“WAEP”) of, and movements in, share options issued
during the year:
Outstanding at the beginning of the year
Granted
Cancelled
Forfeited
Exercised
Expired
Outstanding at the end of the year
Exercisable at the end of the year
2015
2014
No.
WAEP $
No.
WAEP $
6,327,500
1,000,000
‐
(500,000)
‐
(127,500)
6,700,000
6,700,000
$0.33
$0.25
‐
$0.25
‐
$4.17
$0.25
$0.25
127,500
6,200,000
‐
‐
‐
‐
6,327,500
6,327,500
$4.13
$0.25
‐
‐
‐
‐
$0.33
$0.33
Employee Share Options outstanding at 30 June 2015 expire on 30 September 2017.
Option pricing model – Employee Share Option Plan
The fair value of the equity‐settled share options granted under the Employee Share Option Plan is estimated as at the date of grant
using a Black‐Scholes option pricing Model taking into account the terms and conditions upon which the options were granted. The
model takes into account the historic dividends and share price volatilities and each comparator company to produce a predicted
distribution of relative share performance.
Historical volatility of 41.35% was the basis for determining expected share price volatility and it is not expected that this volatility
will change significantly over the life of the options. The expected life of the options is taken to be the full period of time from grant
date to expiry date as there is no expectation of early exercise of the options. The options are options to subscribe for ordinary
shares in the capital of the Company. The options are issued for no consideration. A risk free rate of 2.56% was used in the model.
Shares issued on exercise of the option will rank pari passu with all existing shares of the Company from the date of issue.
Crater Gold Mining Limited
54
Notes to the Financial Statements
26 Share Option Based Payments (cont.)
c.
Share option based payments made to unrelated party
The Company did not issue any options over ordinary shares to extinguish its liabilities (2014: Nil).
The following table illustrates the number and weighted average exercise prices (“WAEP”) of, and movements in, share options on
issue to unrelated parties in settlement of liabilities:
Outstanding at the beginning of the year
Granted
Forfeited
Exercised
Expired
Outstanding at the end of the year
Exercisable at the end of the year
27 Equity settled liabilities
a.
Share based payments
Date
Creditor
2015
23‐Apr‐15
23‐Apr‐15
Manzilake Pty Limited
Paul Henley
2015
2014
No.
WAEP $
No.
WAEP $
150,711
‐
‐
‐
(150,711)
‐
‐
$2.12
‐
‐
‐
$2.12
‐
‐
260,437
‐
‐
‐
(109,726)
150,711
$2.70
‐
‐
‐
$3.51
$2.12
150,711
$2.12
No. of
shares
Value per
share
Valuation
Total
$
781,250
500,000
1,281,250
$0.08
$0.08
$0.08
62,500 Value of principal
40,000 Value of principal
102,500
The payments above were for settlement of services provided to the Company.
2014
24 July 2013
Global Resources Corporation
493,340
493,340
$0.41
$0.41
200,000 Value of principal
200,000
The payments to Global Resources Corporation was for a 94% share of EPM18616 in Croydon, Queensland
b. Option based payments
The Company did not issue any options over ordinary shares to extinguish its liabilities (2014: Nil).
Crater Gold Mining Limited
55
Notes to the Financial Statements
Note
28 Remuneration of Auditors
During the year, the following fees were paid or payable for services provided by BDO
East Coast Partnership, the auditor of the parent entity, its related practices and
unrelated firms
BDO East Coast Partnership
Audit and review of financial reports
Non‐audit services
BDO Papua New Guinea
(Auditors of Anomaly Limited)
Audit and review of financial reports
Non‐audit services
Smiths Chartered Accountants
(Auditors of Anomaly Limited)
Audit and review of financial reports
Non‐audit services
June
2015
$
June
2014
$
83,941
‐
83,941
10,810
‐
10,810
463
‐
463
79,000
‐
79,000
‐
‐
79,000
11,507
‐
11,507
29 Subsidiaries
a. Ultimate controlling entity
Crater Gold Mining Limited is the ultimate controlling entity for the Group.
b. Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly‐owned subsidiaries in
accordance with the accounting policy described in Note 1.
Name of entity
Principal place of
business / Country
of Incorporation
Class of shares
Percentage ownership
Anomaly Resources Limited
Australia
Ordinary
Anomaly Limited
Papua New Guinea
Ordinary
The proportion of ownership interest is equal to the proportion of voting power held.
2015
%
100
100
2014
%
100
100
Crater Gold Mining Limited
56
Notes to the Financial Statements
June
2015
$
June
2014
$
(5,358,731)
(5,358,731)
(2,097,171)
(2,097,171)
467,529
287,654
48,070,468
46,252,748
2,841,108
5,818,135
1,948,792
1,948,792
76,012,257
73,056,696
340,507
2,991,412
‐
2,980,372
(37,091,843)
(31,733,112)
42,252,333
44,303,956
Note
30 Parent Entity information
Statement of Comprehensive Income
Loss after income tax
Total Comprehensive Income
Statement of Financial Position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Contributed equity
Convertible note equity
Reserves
Accumulated losses
Total Equity
Guarantee
The parent company had no bank guarantees in respect of its subsidiaries as at 30 June 2015 (2014: Nil)
Contingent liabilities
The parent company had no contingent liabilities as at 30 June 2015 (2014: Nil).
Capital commitments ‐ Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2015 (2014: Nil).
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except for
the following:
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Crater Gold Mining Limited
57
Notes to the Financial Statements
Note
31 Reconciliation of loss for the period from continuing operations to net cash
inflow/(outflow) from operating activities
Loss for the period from continuing operations
Adjustments for non‐cash income and expense items:
Depreciation and amortisation
Written down value of fixed asset disposals
Non‐cash interest transactions
Profit on disposal of other financial assets
Exploration costs written off
Payables settled by equity payments
Change in operating assets and liabilities:
Decrease/(increase) in trade and other receivables
(Decrease)/increase in trade creditors and accruals
(Decrease)/increase in employee entitlements
Net cash (outflow) from operating activities
June
2015
$
June
2014
$
(2,517,249)
(2,236,315)
5,954
‐
146,772
‐
‐
113,540
(44,107)
1,592,039
(51,101)
6,869
9,724
‐
(438,251)
793,100
331,552
(121,248)
(276,273)
12,703
(754,152)
(1,918,139)
32 Post Balance Date Events
At a general meeting of the Company held on 3 July 2015 it was resolved to issue:
• A total of 7,800,000 options over ordinary shares in the Company the six current Director’s noted above exercisable at $0.25 and
expiring on 27 July 2019.
• 800,000 options over ordinary shares in the Company to Mr G B Starr, former Managing Director, exercisable at $0.25 and expiring
on 30 September 2017.
On 9 September 2015 a total of 5,800,000 options over ordinary shares in the Company were issued which are exercisable at $0.25
and expire on 27 July 2019.
Since 1 July 2015 Freefire Technology Limited has advanced to the Company a total of $1,061,844 in further short term loans.
On 24 September 2015 the Company announced that it had successfully coordinated a two stage capital raising of A$3.4 million. This
Capital Raising was made up of two tranches with the first tranche of A$1.3 million issued to a selection of international institutional
investors and family offices. The second tranche of A$2.1 million will be issued to Freefire Technology Limited on the same terms
thereby maintaining Freefire’s 62% holding in the company.
33 Contingent Liabilities
The Group does not have any contingent liabilities (2014: Nil).
Crater Gold Mining Limited
58
Directors’ Declaration
In the directors' opinion:
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at 30
June 2015 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and
payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
This declaration is made in accordance with a resolution of the Directors.
R D Parker
Managing Director
30 September 2015
Crater Gold Mining Limited
59
Independent Auditor’s Report
Crater Gold Mining Limited
60
Independent Auditor’s Report
Crater Gold Mining Limited
61
ASX Additional Information
The following information is required to be disclosed under ASX Listing Rule 4:10 and is not disclosed elsewhere in this Report.
This information is correct as at 30 September 2015.
Substantial Shareholders
The following substantial shareholders are recorded in the Company’s register of substantial shareholders.
Name
Freefire Technology Ltd
Voting Rights
Number of shares
106,737,341
% holding
62.12
Ordinary shares – on a show of hands, are one vote for every registered holder and on a poll, are one vote for each share held by
registered holders. Options holders have no voting rights.
Holders of Each Class of Equity Security
Name
Fully paid ordinary Shares
Unlisted Options (exercisable at $0.25 per option on or before 30 September 2017)
Unlisted Options (exercisable at $0.25 per option on or before 30 September 2017) (ESOP)
Unlisted Options (exercisable at $0.25 per option on or before 17 July 2109)
Unlisted Options (exercisable at $0.25 per option on or before 30 September 2017) (ESOP)
Code
CGN
CGNO37
CGNO38
CGNO39
CGNO40
Number of
holders
3,461
8
5
6
1
Convertible Notes
CGNG
253
Top 20 Holders of Ordinary Shares
Name
Freefire Technology Ltd
HSBC Custody Nominees (Australia) Limited
Mr Joe Holloway
Bloom Star Investment Limited
M Chung Pty Ltd
Mr Paul Henley
J P Morgan Nominees Australia Limited
Mr Paul Thomas Mcgreal
Mr Vineet Jindal
Iae Study In Australia Pty Ltd
Mr Michael Patrick Lawry
Richard Lewis Johnson
Mr James Sinton Spence
J G Dunn Superannuation Fund Pty Ltd
Martin Place Securities Nominees Pty Ltd
ABN Amro Clearing Sydney Nominees Pty Ltd
Mr Thomas Mark Fermanis
Mr Barry Rowland Butler & Mrs Julie Butler
G & W Aust Pty Ltd
Mr Michael Nam Soon Chung
Number of shares
% holding
106,737,341
62.12%
7,067,452
2,643,524
1,775,649
1,354,040
1,224,457
1,168,302
1,156,755
1,111,888
1,000,000
919,670
859,226
781,250
767,100
745,000
586,092
570,313
566,883
536,667
450,000
4.11%
1.54%
1.03%
0.79%
0.71%
0.68%
0.67%
0.65%
0.58%
0.54%
0.50%
0.45%
0.45%
0.43%
0.34%
0.33%
0.33%
0.31%
0.26%
132,021,609
76.83%
Crater Gold Mining Limited
62
ASX Additional Information
Number of shares
100,241
19,575
6,676
2,335
1,000
400
400
320
300
261
260
256
240
211
200
200
200
180
149
140
% holding
72.54%
14.17%
4.83%
1.69%
0.72%
0.29%
0.29%
0.23%
0.22%
0.19%
0.19%
0.19%
0.17%
0.15%
0.14%
0.14%
0.14%
0.13%
0.11%
0.10%
133,544
96.64%
Top 20 Holders of Convertible Notes
Name
Freefire Technology Ltd
Bloom Star Investment Limited
HSBC Custody Nominees (Australia) Limited
Mr Mark Andrew Tkocz & Ms Susan Elizabeth Evans
Mr Anthony John Andreatta & Mrs Helen Marion Andreatta
Mr Geoffrey Shilkin
N & P Superannuation Pty Limited
J G Dunn Superannuation Fund Pty Ltd
Mr Derek Lloyd Nettleton
Bagmer Pty Ltd
Mr Kenneth Macnab
J P Morgan Nominees Australia Limited
EW & PD Pty Ltd
Mr William Max Blacker & Mrs Simangele Maria Blacker
Mrs Joan Lesley Rybalka
Ms Ping Zhou
Mr Graham Ronald Boyce
Mr Peter Richard Roth
Mr Stephen Charles Lindsay
Mr Lance Anthony Kohl
Grand Total
Distribution of Equity Securities
Class of Security
Security Code
Fully paid ordinary
Shares
CGN
Unlisted Options
Unlisted Options
Unlisted Options
Unlisted Options
CGNO37
CGNO38
CGNO39
CGNO40
Convertible Notes
CGNG
249
1 to
1,000
1,001 to
5,000
5,001 to
10,000
10,001 to
100,000
100,001
and Over
Total
1,468
938
380
581
94
3,461
‐
‐
‐
‐
‐
‐
‐
‐
1
‐
‐
‐
‐
1
‐
‐
‐
‐
1
8
5
6
1
1
8
5
6
1
253
Number of holders holding less than a marketable parcel of shares
A marketable parcel is defined by the Market Rule Procedures of the ASX as a parcel of securities with a value of not less than $500.
The number of ordinary shareholders holding less than a marketable parcel of shares is 2,426.
On market buy‐back
There is no current on market buy‐back
Crater Gold Mining Limited
63
Corporate Directory
Directors:
S W S Chan (Non‐executive Chairman)
R D Parker (Managing Director)
T M Fermanis (Non‐executive Deputy Chairman)
L K K Lee (Finance Director)
R P Macnab (Non‐executive Director)
D T Y Sun (Non‐executive Director)
Company Secretary:
H L Roberts
ABN:
75 067 519 779
Registered Office:
Postal Address:
Share Registry:
Auditors:
Level 4,
15 – 17 Young Street,
Sydney NSW 2000
Australia
Telephone: +61 2 9241 4224
Email:
info@cratergold.com.au
Level 4,
15 – 17 Young Street,
Sydney NSW 2000
Australia
Link Market Services Limited
Level 15, 324 Queen Street
Brisbane QLD 4000
Australia
Telephone: 1300 554 474
Facsimile: +61 7 3228 4999
BDO East Coast Partnership
Level 11
1 Margaret Street
Sydney NSW 2000
Australia
Telephone: +61 2 9251 4100
ASX Listing:
Crater Gold Mining Limited shares are quoted on the Australian Securities Exchange under
the code “CGN”.
Website address:
www.cratergold.com.au
Crater Gold Mining Limited
64