ABN 49 119 057 457
for the Year Ended
30 June 2017
Table of Contents
Highlights for the Year to 30 June 2017
Corporate Directory
Review of Operations
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Information for Listed Public Companies
Tenement Schedule
3
4
5
11
16
17
18
19
20
21
32
33
36
37
* Cover Photo: Cuttings from drill hole through mineralised zone - Mt Thirsty Nickel-Cobalt-Manganese Oxide Project
ASX Code: CNJ
Page 2 of 37
Annual Report for Year Ending 30 June 2017
HIGHLIGHTS FOR THE YEAR TO 30 JUNE 2017
• RC drilling for metallurgical test work completed. Intersections (within current JORC
(2004) Resource outline) include:
MTRC036 - 24m at 0.16% Co, 0.80% Ni from 18m
MTRC037 - 17m at 0.16% Co, 0.77% Ni from 13m
MTRC038 - 14m at 0.18% Co, 0.96% Ni from 14m
MTRC039 - 20m at 0.32% Co, 0.42% Ni from 14m
MTRC040 - 6m at 0.29% Co, 0.40% Ni from 30m
MTRC041 - 9m at 0.12% Co, 0.71% Ni from 23m
• 1.5 tonnes RC drill samples sent to ALS Metallurgy in Perth
• Metallurgical testwork continuing
• Recent SO2 leach results consistent with previous studies
• Promising results from alternate reagents
• New cobalt-nickel oxide deposit delineated 3km north of Mt Thirsty by recent air core
drilling. Best Intersections include:
MTAC771 14m @ 0.12% Co & 0.8% Ni from 13m
MTAC772 18m @ 0.16% Co & 0.8% Ni from 15m
MTAC 773 10m @ 0.17% Co & 0.8% Ni from 16m
MTAC778 10m @ 0.13% Co & 1% Ni from 22m
• Scoping Study targeting completion in September quarter
E63/1267
New Co-Ni Oxide
Deposit
Figure 1: Mt Thirsty Project Location Plan
ASX Code: CNJ
Page 3 of 37
Annual Report for Year Ending 30 June 2017
CORPORATE DIRECTORY
DIRECTORS:
Gregory H Solomon LLB (Non-Executive)
Douglas H Solomon BJuris LLB (Hons) (Non-Executive)
Guy T Le Page B.A., B.Sc. (Hons).,M.B.A., F.FIN., MAusIMM (Non-Executive)
James B Richardson Dip, Fin Plan (Non-Executive)
COMPANY SECRETARY:
Aaron P Gates B.Com CA AGIA
REGISTERED OFFICE:
Level 15,
197 St Georges Terrace
Perth, Western Australia 6000
Tel +61 8 9282 5889
Fax +61 8 9282 5866
Email: mailroom@conico.com.au
Website: www.conico.com.au
SOLICITORS:
Solomon Brothers
Level 15,
197 St Georges Terrace
Perth, Western Australia 6000
AUDITORS:
Nexia Perth Audit Services Pty Ltd
Chartered Accountants
Level 3
88 William Street
Perth, Western Australia 6000
SHARE REGISTRY:
Advanced Share Registry Services
110 Stirling Highway
Nedlands, Western Australia 6009
STOCK EXCHANGE LISTING:
ASX Code: CNJ (ordinary shares)
Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian
Securities Exchange Limited.
ASX Code: CNJ
Page 4 of 37
Annual Report for Year Ending 30 June 2017
REVIEW OF OPERATIONS
MT THIRSTY PROJECT, WA (Conico Ltd 50%, JV with Barra Resources Ltd)
The Mt Thirsty Cobalt Project is located 20km north-northwest of Norseman, Western Australia. Conico Ltd (ASX: CNJ)
is the Joint Venture manager.
The Project contains the Mt Thirsty Cobalt-Nickel (Co-Ni) Oxide Deposit that has the potential to emerge as a significant
cobalt producer. Further information can be found at www.mtthirstycobalt.com. In addition to the Co-Ni Oxide Deposit,
the Project also hosts nickel sulphide (Ni-S) mineralisation.
Demand for cobalt looks encouraging as the world becomes more dependent on rechargeable power sources.
Innovations with portable electronics and electric vehicle design are adding to this surging demand. However, the battery
industry is also competing with demand for cobalt from producers of superalloys, aircraft turbines and chemical
industries.
Demand is likely to escalate exponentially with battery production, however supply is uncertain due to:
Over 60% of global supply coming from the politically unstable African countries such the Democratic Republic
of Congo, Central African Republic and Zambia.
Cobalt is largely a by-product of copper and nickel mining and there are an increasing number of mine closures
and project deferments due to low commodity prices.
With potential supply constraints and surging demand, many commentators see pricing pressure as a likely eventuality.
The undeveloped Mt Thirsty Cobalt Project has a significant JORC (2004) compliant resource with a potential to have a
long mine life. The Project is close to all necessary infrastructure (rail, road, power, water, and sea port) and, being in a
mining orientated state, has the potential to attract a variety of interested parties including end users of cobalt. The Joint
Venture partners are working collaboratively to exploit this joint opportunity and have launched a marketing initiative.
Figure 2: Global lithium-ion battery and materials demand forecast from EV sales, 2015-2030.
ASX Code: CNJ
Page 5 of 37
Annual Report for Year Ending 30 June 2017
REVIEW OF OPERATIONS
RC Drilling R63/4
A six-hole reverse circulation drilling program totalling 234m was completed in November 2016. The holes were drilled
within the area of the JORC (2004) Indicated Resource (Figure 3) to provide a range of samples for further metallurgical
testwork. All holes were drilled vertically and sampled in 1m intervals using a rotary splitter. Significant results are
summarised in Table 1 below. All of the available sample material (1.5 tonnes in total) from the intersections below was
sent to ALS Metallurgy in Perth for use in further metallurgical testwork. The significant cobalt intersections comprised
soft clay-rich material derived from strongly weathered ultramafic rocks.
Table 1: Metallurgical RC Drilling - Summary of Cobalt Intersections
Hole No.
Easting
Northing
AGD84 Zone 51
MTRC036
372162
6447455
MTRC037
372244
6447455
MTRC038
372349
6447457
MTRC039
371956
6447000
MTRC040
372115
6447001
MTRC041
372295
6446999
RL
m
380
378
371
385
396
383
Depth
From
To
Interval
Co*
m
54
30
35
40
40
35
m
18
13
14
14
30
23
m
42
30
28
34
36
32
m
24
17
14
20
6
9
%
0.16
0.16
0.18
0.32
0.29
0.12
Ni
%
0.80
0.77
0.96
0.42
0.40
0.71
Mn
%
1.58
1.04
1.60
2.26
1.90
0.89
*A cut off assay of 0.06% Co was used for the above intersections. Intersections are close to true width.
Figure 3: Location of recent RC drill holes and JORC (2004) Indicated Resource outline. The dots are all
previous drill holes (AGD84 Zone 51).
ASX Code: CNJ
Page 6 of 37
Annual Report for Year Ending 30 June 2017
Air Core Drilling E63/1267
Aircore (AC) drilling on E63/1267, located approximately 3km north of the Mt Thirsty Cobalt Deposit has delineated a
new zone of cobalt-nickel oxide mineralisation. The mineralisation lies at shallow depth beneath outcropping laterite in
strongly weathered ultramafic rocks and is of similar style to that of the Mt Thirsty Cobalt Deposit.
Thirty-one shallow AC holes were drilled in late April 2017 for an aggregate of 1,084m to test a GSWA mapped laterite
outcrop on the eastern side of E63/1267 where a single AC traverse drilled by the joint venture in May 2015 intersected
significant cobalt (Co) and nickel (Ni) assays in the three most eastern holes. The latest drilling was mostly on a 100m by
40m grid with one infill line to 50m by 40m in the central portion (Figure 4).
Cobalt assays greater than or equal to 0.06% Co over a true thickness of 2m or more were exhibited in 27 of the 31
holes drilled. Significant intersections are shown in Table 2. All but one of the AC holes were drilled vertically except for
MTAC797, which was inclined at -60o to the west due to steep topography at the intended location.
The newly defined zone of mineralisation is strongest in the northern portion of the area drilled and weakens to the south.
With the exception of the two northernmost lines, the mineralised zone has been closed off to the west, remains open to
the east across the tenement boundary, with potential to extend further to the north and south.
The recently discovered Co-Ni oxide mineralisation in E63/1267 has the potential to provide further upside to the Mt
Thirsty Project.
Figure 4: Drill Hole Location Plan. Mapped laterite (shaded brown) and topographic contours (brown lines). Red
dots are recent AC drilling, black dots are 2015 AC drilling. Approximate western boundary of Co-Ni oxide
mineralisation shown in blue and eastern tenement boundary in red. Grid AGD84 Zone 51. Cross Section A-B
shown in Figure 5.
ASX Code: CNJ
Page 7 of 37
Annual Report for Year Ending 30 June 2017
Figure 5: Cross Section A-B, 6451050N, looking north through holes MTAC770 to 773. Brown hatch is laterite,
orange is goethitic saprolite and green is nontronitic saprolite. Ni% assays on the left and Co% assays on the
right.
Table 2: E63/1267 Significant Cobalt and Nickel Intersections in AC Drilling (≥0.06% Co)
Hole No
East
North
RL Hole Depth From To
Downhole
Thickness Co % Ni %
MTAC767
MTAC768
AGD84 AGD84 m
342
372418 6451150
340
372379 6451148
MTAC769
372340 6451152 338.4
MTAC770
372418 6451048 346.1
MTAC771
MTAC772
MTAC773
MTAC774
MTAC775
MTAC776
MTAC777
MTAC778
MTAC779
MTAC780
MTAC782
MTAC783
MTAC784
MTAC785
MTAC787
MTAC788
MTAC789
MTAC790
MTAC793
MTAC794
MTAC795
MTAC796
372384 6451050 343.7
372341 6451052 341.5
372298 6451049 341.8
372263 6451045 342.2
372419 6450950 349.5
372377 6450951 347.5
372418 6450847 353.5
372382 6450843 352.5
372336 6450843 348.8
372305 6450841 346.2
372416 6450749 350.7
372380 6450748 350.9
372339 6450749 347.9
372301 6450757 344.2
340
372419 6450642
372378 6450648 341.9
372340 6450652 340.8
372303 6450653 338.7
350
372304 6450958
372422 6450893 349.4
372383 6450903 347.5
372341 6450900 347.5
MTAC797*
372353 6450947 348.1
m
34
26
30
42
30
39
46
21
47
45
40
39
48
39
42
34
36
33
23
27
16
24
54
51
42
45
45
m
14
0
15
1
17
5
13
13
15
16
8
22
19
15
36
22
27
22
29
19
17
15
4
18
14
15
31
24
5
1
21
24
m
16
2
25
3
26
7
24
27
33
26
10
30
33
17
38
32
38
30
34
31
27
28
6
25
16
18
41
29
7
18
26
39
m
2
2
10
2
9
2
11
14
18
10
2
8
14
2
2
10
11
8
5
12
10
13
2
7
2
3
10
5
2
17
5
15*
0.095
0.092
0.085
0.091
0.098
0.073
0.085
0.123
0.161
0.167
0.069
0.222
0.135
0.044
0.077
0.126
0.076
0.093
0.095
0.086
0.093
0.083
0.141
0.121
0.068
0.122
0.140
0.105
0.124
0.134
0.088
0.123
0.39
0.51
1.09
0.61
0.62
0.73
0.58
0.78
0.75
0.79
0.42
0.74
0.86
1.08
0.40
1.04
0.61
0.69
0.54
0.60
0.52
0.45
0.38
0.41
0.41
0.38
0.38
0.61
0.57
0.62
0.68
0.57
Note: All holes drilled vertically except for MTAC797 inclined at -60oW. As mineralisation is interpreted to be relatively flat
lying, downhole depth is interpreted to be equivalent to true thickness except for hole MTAC797 where true thickness of
the mineralisation is approximately 13m. All holes were sampled in one metre intervals.
ASX Code: CNJ
Page 8 of 37
Annual Report for Year Ending 30 June 2017
Metallurgical Testwork
The 1.5 tonnes of RC drill samples obtained from Mt Thirsty were sent to ALS Metallurgy in Perth in early January 2017
and final stages of the testwork are still in progress.
This current phase of metallurgical testwork will expand on and increase the level of confidence in previous testwork
undertaken which has shown that agitated leaching using sulphur dioxide (SO2) at atmospheric pressure and low
temperature (<50oC) recovers up to 80% of the cobalt and over 25% of the nickel within a few hours of leaching. The
results of the metallurgical testwork will be fed directly into a Scoping Study over the Mt Thirsty Cobalt Oxide Deposit.
Recent results from testwork on the preferred reagent for the atmospheric leach process, sulphur dioxide, have been
consistent with earlier studies which showed high recovery of cobalt.
Metallurgical test work has also been conducted using an alternate ferrous sulphate reagent, with early results very
promising. This continuing work will be considered prior to the finalisation of flowsheet design.
Mt Thirsty Scoping Study
A Scoping Study, due for completion in late August 2017, is being managed by Provide Advantage, with support from
consultant engineers CPC Engineering, metallurgical support from ALS Metallurgy Pty Ltd and open pit optimisation and
mine scheduling from CSA Global.
The unique characteristics of the Mt Thirsty Cobalt Deposit has encouraged the joint venture partners to progress the
Scoping Study on the basis of ore being treated via an atmospheric leaching process (at ambient pressure and relatively
low temperature) instead of the traditional higher capex/opex HPAL process. Recent results from testwork on the
preferred reagent for the atmospheric leach process, sulphur dioxide, have been consistent with earlier studies which
showed high recovery of cobalt.
Metallurgical test work has also been conducted using alternate reagents, with early results producing some extremely
promising results. This work is continuing and will be considered prior to the finalisation of flowsheet design and Scoping
Study.
At completion of the Scoping Study, the Joint venture will be able to better determine the funding requirements and
development options which may be available to bring the Mt Thirsty Cobalt Project to fruition.
New Tenement Applications
The two new licences (E63/1790 and P63/2045) applied for last financial year adjacent to the existing Joint Venture
tenements were granted in February 2017. The latter covers a short extension of the interpreted footwall contact north of
R63/4 which is considered prospective for Ni sulphides. Both licences have potential for lithium-bearing pegmatites that
have been mapped by the GSWA in the Mt Thirsty area.
Mt Thirsty Project - Mineral Resources Statement
In view of the current status of the project and lack of any new information no annual review of the company’s mineral
resources which are entirely located within R63/4 (previously E63/373) at Mt Thirsty has been undertaken.
Mt Thirsty Oxide Resources
Category
Indicated Resource
Inferred Resource
Total Resource
Tonnes
16,600,000
15,340,000
31,940,000
Co%
0.14
0.11
0.13
Ni%
0.60
0.51
0.55
Mn%
0.98
0.73
0.86
The figures shown in this table were estimated within a wireframed mineralised envelope which was based mostly on a
0.06% Co cut off. In some places where Co was less than 0.06% a Ni cut off of 0.7% was used.
Estimation Governance Statement
The resource information above was prepared and first disclosed under the JORC Code (2004). It has not been updated since or re-
estimated to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported,
refer ASX Announcement 8th March 2011: “Resource Upgrade”, available to view on www.conico.com.au).
Disclaimer
The interpretations and conclusions reached in this report are based on current geological theory and the best evidence available to the
authors at the time of writing. It is the nature of all scientific conclusions that they are founded on an assessment of probabilities and,
however high these probabilities might be, they make no claim for complete certainty. Any economic decisions that might be taken on
the basis of interpretations or conclusions contained in this report will therefore carry an element of risk.
It should not be assumed that the reported Exploration Results will result, with further exploration, in the definition of a Mineral
Resource.
ASX Code: CNJ
Page 9 of 37
Annual Report for Year Ending 30 June 2017
Competent Person’s Statement
The information in this report that relates to Exploration Targets, Exploration Results and Mineral Resources is based on and fairly
represents information compiled by Michael J Glasson and Robert N Smith, Competent Persons who are members of the Australian
Institute of Geoscientists.
Mr Glasson and Mr Smith are employees of Tasman Resources Ltd and in this capacity act as part time consultants to Conico Ltd. Mr
Glasson and Mr Smith hold shares in Conico Ltd.
Mr Glasson and Mr Smith have sufficient experience which is relevant to the style of mineralisation and type of the deposits under
consideration and to the activity being undertaking to qualify as Competent Persons as defined in the 2012 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Glasson and Mr Smith consent to the inclusion in
the report of the matters based on their information in the form and context in which it appears.
ASX Code: CNJ
Page 10 of 37
Annual Report for Year Ending 30 June 2017
DIRECTORS’ REPORT
The directors present their report together with the consolidated financial statements of the Group comprising Conico Ltd
(the Company) and its controlled entity and the Group’s interest in a joint venture for the financial year ended 30 June
2017.
Directors
The names of directors in office at any time during or since the end of the year are:
Gregory H Solomon
Douglas H Solomon
Guy T Le Page
James B Richardson
Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.
Company Secretary
The following person held the position of Company Secretary at the end of the financial year:
Mr Aaron P Gates has worked for Conico Ltd for the past 9 years. He is a Chartered Accountant and Chartered
Secretary, has completed a Bachelor of Commerce (Curtin University) with majors in accounting and business law and
completed a Diploma of Corporate Governance. Prior to joining Conico he worked in public practice in audit and
corporate finance roles.
Principal Activities
The principal activity of the Group during the financial year ended 30th June 2017 was mineral exploration for cobalt,
nickel and manganese.
There were no significant changes in the nature of the activities of the Group during the year.
Operating Results
The loss of the Group after providing for income tax amounted to $325,673 (2016: $54,113).
Dividends Paid or Recommended
No dividends were paid or declared for payment during the year.
Review of Mineral Exploration Operations
A review of the operations of the Group during the year ended 30 June 2017 is set out in the Review of Operations on
Page 5.
Financial position
The net assets of the Group have increased by $146,827 from 30 June 2016 to $15,023,025 in 2017. This increase has
largely resulted from the capital raising during the year.
Significant Changes in State of Affairs
In the opinion of the directors, other than disclosed elsewhere in this report, there were no significant changes in the
state of affairs of the Group that occurred during the year.
After Balance Date Events
No matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in
future financial years.
Future Developments, Prospects and Business Strategies
The Group proposes to continue with its exploration and evaluation program as detailed in the Review of Operations.
Environmental Issues
The Group is the subject of environmental regulation with respect to mining exploration and will comply fully with all
requirements with respect to rehabilitation of exploration sites.
ASX Code: CNJ
Page 11 of 37
Annual Report for Year Ending 30 June 2017
Information on Directors
Gregory H Solomon
Executive Chairman
Qualifications
Experience
Interest in Shares and Options
Directorships held in other listed
entities
Douglas H Solomon
Qualifications
Experience
Interest in Shares and Options
Directorships held in other listed
entities
Guy T Le Page
Qualifications
Experience
LLB
Appointed chairman March 2006. Board member since March 2006. A
solicitor with more than 30 years of Australian and international experience in
a wide range of areas including mining law, commercial negotiation (including
numerous mining and exploration joint ventures) and corporate law. He is a
partner in the Western Australian legal firm, Solomon Brothers and has
previously held directorships of various public companies since 1984
including two mining/exploration companies.
23,105,469 Ordinary Shares
Eden Innovations Ltd
Tasman Resources Ltd
Non-Executive
BJuris LLB (Hons)
Board member since 30 March 2006. A Barrister and Solicitor with more than
20 years’ experience in the areas of mining, corporate, commercial and
property law. He is a partner in the legal firm, Solomon Brothers.
21,586,875 Ordinary Shares
Eden Innovations Ltd
Tasman Resources Ltd
Non-Executive
B.A., B.Sc. (Hons).,M.B.A., F.FIN., MAusIMM
Board member since 30 March 2006. Currently a corporate adviser
specialising in resources. He is actively involved in a range of corporate
initiatives from mergers and acquisitions, initial public offerings to valuations,
consulting and corporate advisory roles. He previously spent 10 years as an
exploration and mining geologist in Australia, Canada and the United States.
His experience spans gold and base metal exploration and mining geology
and he has acted as a consultant to private and public companies.
Interest in Shares and Options
15,852,502 Ordinary Shares
Directorships held in other listed
entities
Eden Innovations Ltd
Tasman Resources Ltd
Mt Ridley Mines Ltd
Red Sky Energy Ltd
James B Richardson
Qualifications
Experience
Interest in Shares and Options
Directorships held in other listed
entities
Non-Executive
Dip, Fin Plan
Board member since 11 November 2008. Currently a corporate advisor where
he has been actively involved in a range of corporate activities, including the
development, documentation, negotiation and marketing of a number of
successful financial instruments for various companies encompassing various
sectors of the investment market. He has also been employed as a specialist
business development executive in some of the more successful national
financial services organisations. Additionally, he has extensive experience in
evaluating investment opportunities, structuring projects and negotiating
financial transactions to meet the expectations of the investment market.
28,500,000 Ordinary Shares
None
ASX Code: CNJ
Page 12 of 37
Annual Report for Year Ending 30 June 2017
Remuneration Report (Audited)
This report details the nature and amount of remuneration for each director of Conico Ltd, and for the executives
receiving the highest remuneration.
Remuneration Policy
The remuneration policy of Conico Ltd has been designed to align director and executive objectives with shareholder and
business objectives by providing a fixed remuneration component and offering specific long-term incentives based on
key performance areas affecting the company’s financial results. The board believes the remuneration policy to be
appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the
company, as well as create goal congruence between directors, executives and shareholders.
The board’s policy for determining the nature and amount of remuneration for board members and senior executives of
the company is as follows:
All executives receive a base salary (which is based on factors such as length of service and experience),
superannuation, fringe benefits and options. Executives are also entitled to participate in the employee share and option
arrangements. All directors and executives receive a superannuation guarantee contribution where required by the
government, which is currently 9.5%, and do not receive any other retirement benefits.
All remuneration paid to directors and executives is valued at the cost to the company and expensed. Options are valued
using the Black-Scholes methodology or an appropriate market based pricing valuation methodology. The board policy is
to remunerate non-executive directors at market rates for time, commitment and responsibilities. The Group does not
have a policy on directors hedging their shares.
The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by
shareholders at the Annual General Meeting. Fees for non-executive directors are not linked to the performance of the
company. However, to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in
the company and are able to participate in the employee option plan.
Details of Remuneration for Year Ended 30 June 2017
The remuneration for each director and each of the executive officers of the Group during the year was as follows:
Key Management Personnel Remuneration –
Key Management
Person
Short-term Benefits
Post-
employment
benefits
Other
long-term
benefits
Termination
Benefits
Share-based
payments
Total
Perfor-
mance
Related
Salary
and Fees
Cash
Non-
profit
share
cash
benefit
Super-
annuation
Other
Other
Equity Options
$
$
$
$
$
$
$
$
$
%
2017
Gregory H Solomon
31,250
Douglas H Solomon
10,000
Guy T Le Page
10,000
James B Richardson
10,000
Aaron P Gates
(i)
61,250
2016
Gregory H Solomon
46,875
Douglas H Solomon
15,000
Guy T Le Page
15,000
James B Richardson
15,000
Aaron P Gates
(i)
91,875
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,969
950
950
950
-
5,819
4,453
1,425
1,425
1,425
-
8,728
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
34,219
10,950
10,950
10,950
-
67,069
51,328
16,425
16,425
16,425
-
- 100,603
-
-
-
-
-
-
-
-
-
-
-
-
(i) - These management personnel are remunerated by Princebrook Pty Ltd under the Princebrook Management
Services Contract.
ASX Code: CNJ
Page 13 of 37
Annual Report for Year Ending 30 June 2017
Options issued as part of remuneration for the year ended 30 June 2017
No options were issued to directors and employees as part of their remuneration during the year and no shares were
issued upon the exercise of options granted as remuneration.
Directors Meetings
During the financial year, two meetings of directors were held. Attendances by each director were as follows:
Directors’ Meetings
Number eligible
to attend
Number
attended
Gregory H Solomon
Douglas H Solomon
Guy T Le Page
James B Richardson
2
2
2
2
Indemnifying Officers or Auditor
2
2
2
1
The company has arranged for an insurance policy to insure the directors against liabilities for costs and expenses
incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of director of
the company, other than conduct involving a wilful breach of duty in relation to the company. The total premium payable
is approximately $12,210.
Proceedings on Behalf of Group
No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to
which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those
proceedings. The Group was not a party to any such proceedings during the year.
Options
At the date of this report, the unissued ordinary shares of Conico Ltd under option are as follows:
Grant Date
Various
Date of Expiry
Exercise Price
Number under Option
30 November 2019
$0.03
43,375,000
43,375,000
During the year ended 30 June 2017, no ordinary shares of Conico Ltd were issued on the exercise of options granted
under the Conico Ltd Employee Share Option Plan. No shares have been issued since.
No person entitled to exercise the options had or has any right by virtue of the option to participate in any share issue of
any other body corporate.
Non-audit Services
The board of directors is satisfied that the provision of non-audit services during the year is compatible with the general
standard of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the
services disclosed below did not compromise the external auditor’s independence for the following reasons:
all non-audit services are reviewed and approved prior to commencement to ensure they do not adversely affect the
•
integrity and objectivity of the auditor; and
•
the nature of the services provided does not compromise the general principles relating to auditor independence in
accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical
Standards Board.
No fees for non-audit services were paid/payable to the external auditors during the year ended 30 June 2017.
ASX Code: CNJ
Page 14 of 37
Annual Report for Year Ending 30 June 2017
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 30 June 2017 has been received and can be found on page
16.
Signed in accordance with a resolution of the Board of Directors.
Gregory H Solomon
Chairman
Dated this 29th day of August 2017
ASX Code: CNJ
Page 15 of 37
Auditor’s independence declaration under section 307C of the Corporations Act 2001
To the directors of Conico Ltd
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year
ended 30 June 2017 there have been:
(i) no contraventions of the auditor’s independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
Nexia Perth Audit Services Pty Ltd
TJ SPOONER FCA, FCA(UK), ACIS, AGIA, AMIIA, CTA
Director
Perth
29 August 2017
Annual Report for Year Ending 30 June 2017
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME FOR YEAR ENDED 30 JUNE 2017
Other Income
Debt forgiveness
Accounting and audit
Depreciation and amortisation
Exploration and evaluations assets written off
Interest Expense
Key management remuneration
Legal and other consultants
Management fees
Other expenses
Loss before income tax
Income tax benefit
Loss for the year
Other Comprehensive Income
Items that may be reclassified to profit or loss:
Revaluations of financial assets
Income tax relating to comprehensive income
Total other comprehensive income
Total Comprehensive Loss attributable to
members of the parent entity, net of tax
Note
2
4(d)
3
Consolidated
2017
$
2016
$
12,528
-
(17,037)
(1,738)
(35,720)
-
(65,905)
(2,419)
(144,000)
(71,382)
(325,673)
-
2,519
355,342
(18,054)
(2,095)
-
(764)
(100,603)
(100,091)
(117,446)
(72,921)
(54,113)
-
(325,673)
(54,113)
-
-
-
-
-
-
(325,673)
(54,113)
Basic/Diluted loss per share (cents per share)
6
(0.11)
(0.03)
The accompanying notes form part of these financial statements.
ASX Code: CNJ
Page 17 of 37
Annual Report for Year Ending 30 June 2017
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Exploration and evaluation
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
The accompanying notes form part of these financial statements.
Note
Consolidated
2017
$
2016
$
7
8
9
10
13
14
15
16
466,368
24,700
491,068
397,789
66,212
464,001
9,587
11,325
14,921,918
14,768,889
14,931,505
14,780,214
15,422,573
15,244,215
124,548
124,548
275,000
275,000
399,548
93,017
93,017
275,000
275,000
368,017
15,023,025
14,876,198
18,907,403
18,434,903
477,450
477,450
(4,361,828)
(4,036,155)
15,023,025
14,876,198
ASX Code: CNJ
Page 18 of 37
Annual Report for Year Ending 30 June 2017
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 30 JUNE 2017
Consolidated Group
Ordinary
Share Capital
Option
Reserve
Retained
Earnings
Total
$
$
$
$
Balance at 30 June 2015
16,799,457
477,450
(3,982,042) 13,294,865
Net loss for the year
Shares issued
Other comprehensive Income
-
1,635,446
-
-
-
-
(54,113)
(54,113)
- 1,635,446
-
-
Balance at 30 June 2016
18,434,903
477,450
(4,036,155) 14,876,198
Net loss for the year
Shares issued
Other comprehensive Income
-
472,500
-
-
-
-
(325,673)
(325,673)
-
-
472,500
-
Balance at 30 June 2017
18,907,403
477,450
(4,361,828) 15,023,025
The accompanying notes form part of these financial statements.
ASX Code: CNJ
Page 19 of 37
Annual Report for Year Ending 30 June 2017
CONSOLIDATED STATEMENT OF CASHFLOWS FOR THE YEAR ENDED 30 JUNE 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Note
Consolidated
2017
$
2016
$
17,793
1,257
(256,969)
(484,605)
2,568
417
Net cash provided by (used in) operating activities
22
(236,608)
(482,931)
CASH FLOWS FROM INVESTING ACTIVITIES
Exploration and evaluation expenditure
Net cash provided by (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issues
Net cash provided by (used in) financing activities
Net increase / (decrease) in cash held
Cash at beginning of financial year
Cash at end of financial year
7
The accompanying notes form part of these financial statements.
(167,313)
(167,313)
(37,581)
(37,581)
472,500
472,500
68,579
397,789
466,368
901,949
901,949
381,437
16,352
397,789
ASX Code: CNJ
Page 20 of 37
Annual Report for Year Ending 30 June 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, including Australian Accounting Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board and the Corporations Act 2001. The financial report of Conico Limited and
controlled entities complies with all International Financial Reporting Standards (IFRS) in their entirety.
The financial report covers the consolidated group of Conico Ltd and controlled entities as at and for the year ended
30 June 2017. Conico Ltd is a listed public company, incorporated and domiciled in Australia. The Group is a for-
profit entity and primarily is involved in mineral exploration for cobalt, nickel and manganese.
The following is a summary of the material accounting policies adopted by the group in the preparation of the financial
report. The accounting policies have been consistently applied, unless otherwise stated.
Basis of Preparation
The accounting policies set out below have been consistently applied to all years presented.
Reporting Basis and Conventions
The financial report has been prepared on an accruals basis and is based on historical costs modified by the
revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value basis of
accounting has been applied. These consolidated financial statements are presented in Australian dollars, which is
the Group’s functional currency.
Going Concern
These financial statements have been prepared on a going concern basis, which contemplates continuity of normal
business activities the realisation of assets and extinguishment of liabilities in the ordinary course of business.
The Group has reported a net loss for the year of $325,673 (2016: $54,113) and a cash outflow from operating
activities of $236,608 (2016: $482,931).
The directors are confident that the Group, subject to being able to raise further capital, will be able to continue its
operations as a going concern. Without such capital, the net loss for the year and the cash outflow from operating
activities indicate the existence of a material uncertainty which may cast significant doubt about the Group’s ability to
continue as a going concern. The directors also carefully manage discretionary expenditure in line with the Group’s
cash flow.
The continuing applicability of the going concern basis of accounting is dependent upon the Group’s ability to source
additional finance. Unless additional finance is received the Group may need to realise assets and settle liabilities
other than in the normal course of business and at amounts which could differ from the amounts at which they are
stated in these financial statements.
Accounting Policies
a.
Principles of Consolidation
A controlled entity is any entity Conico Ltd 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. A
list of controlled entities is contained in Note 12 to the financial statements. All controlled entities have a June
financial year-end.
All inter-company balances and transactions between entities in the consolidated group, including any
unrealised profits or losses, have been eliminated on consolidation. Accounting policies of controlled entities
have been changed where necessary to ensure consistencies with those policies applied by the parent entity.
b.
Interests in a Joint Operation
The consolidated financial statements include the assets that the Group controls and the liabilities that it incurs
in the course of pursuing the joint operation and the expenses that the Group incurs and its share of the
income that it earns from the joint operation. Details of the Group’s interests are shown at Note 11.
c.
Income Tax
The charge for current income tax expense is based on the profit for the year adjusted for any non-assessable
or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by
the balance sheet date.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or
liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be
credited directly to equity, in which case the deferred tax is adjusted directly against equity.
ASX Code: CNJ
Page 21 of 37
Annual Report for Year Ending 30 June 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
c.
Income Tax continued
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
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 are recognised for unused tax losses, tax credits and deductible temporary differences, to
the extent that it is probable that future tax profits will be available against which they can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the assumption
that no adverse change will occur in income taxation legislation and the anticipation that the group will derive
sufficient future assessable income to enable the benefit to be realised.
The R&D tax offset is recognised upon receipt.
d.
Property, 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 depreciation rates used for each class of depreciable assets are:
Plant and equipment
15.00–50.00%
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are recognised in profit or loss.
e.
Exploration and Evaluation Expenditure
Exploration, evaluation and development expenditure incurred is accumulated in respect of each identifiable
area of interest. These costs are only carried forward where right of tenure is current and to the extent that
they are expected to be recouped through the successful development of the area or where activities in the
area have not yet reached a stage that permits reasonable assessment of the existence of economically
recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the
decision to abandon the area is made.
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.
Costs of site restoration are provided over the life of the facility from when exploration commences and are
included in the costs of that stage. Any changes in the estimates for the costs are accounted on a prospective
basis. In determining the costs of site restoration, there is uncertainty regarding the nature and extent of the
restoration due to community expectations and future legislation.
f.
Impairment of Non-financial Assets
At each reporting date, the Group reviews the carrying values of its non-financial / tangible and intangible
assets to determine whether there is any indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and
value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its
recoverable amount is expensed to the income statement. Where it is not possible to estimate the recoverable
amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to
which the asset belongs.
h.
Cash and cash equivalents
Cash comprises current deposits with banks.
ASX Code: CNJ
Page 22 of 37
Annual Report for Year Ending 30 June 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
i.
Financial Instruments
Recognition
Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the
related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured
as set out below.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are stated at amortised cost using the effective interest rate method.
Impairment
At each reporting date, the Group assesses at a specific asset level whether there is objective evidence that a
financial instrument has been impaired. Impairment losses are recognised in the income statement.
j.
Provisions
Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
k.
Revenue
Revenue from the sale of goods is recognised upon delivery of goods to customers. Interest revenue is
recognised on a proportional basis taking into account the interest rates applicable to the financial assets.
l.
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
m.
New accounting standards and interpretations
A number of new and revised standards became effective for the first time to annual periods beginning on or
after 1 July 2016. There were no significant standards or interpretations and the adoption of the new standards
and interpretations has not had a material impact on the Group.
n.
Segment reporting
Segment results that are reported to the Group’s board of directors (the chief operating decision maker)
include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
o.
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares
are recognised as a deduction from equity.
p.
New accounting standards and interpretations not yet adopted
A number of new standards and amendments to standards are effective for annual periods beginning after 1
July 2017, and have not been applied in preparing these consolidated financial statements. The Group does
not plan to adopt these standards early. The new standards include AASB 9 – Financial Instruments, AASB 15
– Revenue from contracts with customers and AASB 16 - Leases. Based on the current operations of the
Group, management are of the view that these standards and amendments will not have a significant impact
on the financials.
q.
Key estimates – Exploration and Evaluation
The Group’s policy for exploration and evaluation is discussed in Note 1(f). The application of this policy
requires management to make certain assumptions as to future events and circumstances. Any such estimates
and assumptions may change as new information becomes available. At the date of this report the Group has
sufficient reason to believe:
•
•
•
•
exploration in specific areas is ongoing and the entity has not decided to discontinue such activities; and
no specific sufficient data exists that indicates that the carrying amount of the exploration and evaluation
asset is unlikely to be recovered.
substantive expenditure on further exploration and evaluation in specific areas has been budgeted;
rights to explore in specific areas, once expired, will be renewed;
The consolidated financial statements were authorised for issue on 29 August 2017 by the board of directors.
ASX Code: CNJ
Page 23 of 37
Annual Report for Year Ending 30 June 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 2: OTHER INCOME
—
interest received
—
sale of goods / services
Total Other Income
NOTE 3: INCOME TAX BENEFIT
2017
$
2016
$
2,568
9,960
12,528
417
2,102
1,105
a.
The prima facie tax on loss from ordinary activities before income tax is reconciled to the income tax as follows:
Prima facie tax payable on loss from ordinary activities before income
tax at 27.5% (2016: 30%)
Tax effect of:
—
—
—
Current year temporary differences not recognised
Effect of tax rate change
Current year tax losses not recognised
Income tax expense / (benefit)
b.
Components of deferred tax
Unrecognised deferred tax asset - losses
Unrecognised deferred tax asset – provisions and accruals
Unrecognised deferred tax liabilities – exploration and evaluation
Unrecognised deferred tax liabilities – capital raising costs
Net Unrecognised deferred tax assets
(89,560)
(16,234)
(235,053)
(309,406)
(79,665)
-
404,278
325,640
-
-
2,091,497
2,122,058
83,254
95,203
(979,667)
(1,022,819)
(223,353)
(238,461)
971,731
955,981
Deferred tax assets have not been brought to account as it is not probable within the immediate future that tax profits will
be available against which deductible temporary differences and tax losses can be utilised. The benefit of the tax losses
will only be obtained if the Group complies with conditions imposed by the tax legislation in Australia.
NOTE 4: KEY MANAGEMENT PERSONNEL COMPENSATION
a.
Names and positions held of key management personnel in office at any time during the financial year:
Person
Position
Person
Position
Gregory H Solomon
Executive Chairman
James B Richardson
Non-Executive Director
Douglas H Solomon
Non-Executive Director
Guy T Le Page
Non-Executive Director
Aaron P Gates
Company Secretary/CFO
Key management personnel remuneration is included in the Remuneration Report of the Directors’ Report.
b.
Options and Rights Holdings
Number of Options Held by Key Management Personnel
Balance
1.7.2016
Granted as
Compen-
sation
Options
Exercised
Net Change
Other
Balance
30.6.2017
Total
Vested
30.6.2017
Total Exer-
cisable
30.6.2017
Total Unexer-
cisable
30.6.2017
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Page 24 of 37
Gregory H Solomon
Douglas H Solomon
Guy T Le Page
James B Richardson
Aaron P Gates
Total
ASX Code: CNJ
Annual Report for Year Ending 30 June 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 4: KEY MANAGEMENT PERSONNEL COMPENSATION CONTINUED
c.
Shareholdings
Number of Shares held by Key Management Personnel
Balance
30.6.2016
Received as
Compen-
sation
Options
Exercised
Net Change
Other*
Balance
30.6.2017
Gregory H Solomon
Douglas H Solomon
Guy T Le Page
James B Richardson
Aaron P Gates
Total
23,105,469
21,586,875
21,852,510
34,060,000
-
100,604,854
-
-
-
-
-
-
*Net Change Other refers to shares purchased or sold during the financial year.
d.
Remuneration
Refer to disclosures contained in the Remuneration Report section of the
Directors’ Report. The totals of remuneration paid to key management
personnel of the Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Termination benefits
Share based payments
Total
-
-
-
-
-
-
-
-
23,105,469
21,586,875
(6,000,008)
15,852,502
(5,560,000)
28,500,000
-
-
(11,560,008)
89,044.846
2017
$
2016
$
61,250
91,875
5,819
8,728
-
-
-
-
-
-
67,069
100,603
NOTE 5: AUDITOR’S REMUNERATION
Remuneration of the auditor for auditing or reviewing the financial report
17,975
17,775
NOTE 6: LOSS PER SHARE
a.
Reconciliation of loss to profit or loss
Profit/(loss)
Loss used to calculate basic EPS
b.
Weighted average number of ordinary shares outstanding during the
year used in calculating basic EPS
The share options on issue are not potentially dilutive shares.
NOTE 7: CASH AND CASH EQUIVALENTS
Cash at bank
Reconciliation of cash
Cash at the end of the financial year as shown in the consolidated statement of
cash flows is reconciled to items in the balance sheet as follows:
Cash and cash equivalents
ASX Code: CNJ
(325,673)
(54,113)
(325,673)
(54,113)
299,949,570 212,739,446
466,368
397,789
466,368
397,789
466,368
397,789
466,368
397,789
Page 25 of 37
Annual Report for Year Ending 30 June 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 8: TRADE AND OTHER RECEIVABLES
Other receivables
NOTE 9: PROPERTY, PLANT AND EQUIPMENT
Equipment:
At cost
Accumulated depreciation
Total Plant and Equipment
2017
$
2016
$
24,700
24,700
66,212
66,212
50,786
50,786
(41,199)
(39,461)
9,587
11,325
a.
Movements in Carrying Amounts
Movement in the carrying amount between the beginning and the end of the current financial year.
Opening balance
Depreciation expense
Closing balance
b.
Impairment losses
11,325
(1,738)
13,420
(2,095)
9,587
11,325
The total impairment loss recognised in the consolidated statement of profit or loss and other comprehensive income
during the current year amounted to $Nil (2016: Nil).
NOTE 10: EXPLORATION AND EVALUATION
Balance at the beginning of the financial year
Expenditure incurred during the year
Expenditure written-off during the year
Balance at the end on the financial year
14,768,889 14,727,743
188,749
41,146
(35,720)
-
14,921,918 14,768,889
Capitalised costs amounting to $167,313 (2016: $37,581) have been included in cash flows from investing activities in
the statement of cash flows for the consolidated entity.
NOTE 11: JOINT OPERATION
A controlled entity, Meteore Metals Pty Ltd, has a 50% interest in the Mt Thirsty Joint Venture, whose principal activity
is the development of the Mt Thirsty nickel, cobalt and manganese project. The consolidated financial statements
include the assets that the Group controls and the liabilities that it incurs in the course of pursuing the joint operation
and the expenses that the Group incurs and its share of the income that it earns from the joint operation.
Share of joint operation results and financial position:
Current Assets
Non-Current Assets
Total Assets
Current Liabilities
Total Liabilities
Revenue
Expenses
Profit / (Loss) before income tax
Income tax expense
Profit / (Loss) after income tax
45,519
9,506
2,470,626
2,317,597
2,516,145
2,327,103
55,183
80,183
-
8,681
33,681
-
(7,461)
(13,280)
(7,461)
(13,280)
-
-
(7,461)
(13,280)
ASX Code: CNJ
Page 26 of 37
Annual Report for Year Ending 30 June 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 12: CONTROLLED ENTITIES
Controlled Entities Consolidated
Meteore Metals Pty Ltd
* Percentage of voting power is in proportion to ownership
Country of
Incorporation
Australia
Percentage Owned (%)*
2017
100
2016
100
NOTE 13: TRADE AND OTHER PAYABLES
Trade payables
Sundry payables and accrued expenses
NOTE 14: PROVISIONS
NON-CURRENT
Other
2017
$
2016
$
92,163
32,385
124,548
47,874
45,143
93,017
275,000
275,000
275,000
275,000
This mainly relates to a provision of $250,000 that has been recognised in relation to the Group’s 50% share of the
liability to pay the original owners of the Mt Thirsty project $500,000 upon the commencement of mining on the
tenements. The directors believe this will not become due for at least a couple of years. This amount has not been
recorded at present value as a timeframe for discounting is not determinable.
NOTE 15: ISSUED CAPITAL
310,993,387 (2016: 295,243,387) ordinary shares
18,907,403
18,434,903
2017
$
2016
$
2016
2017
No.
No.
2017
$
2016
$
a.
Ordinary shares
At the beginning of reporting period
295,243,387
132,431,258
18,434,903
16,799,457
Shares issued during the year
15,750,000
162,812,129
472,500
1,635,446
At reporting date
310,993,387
295,243,387
18,907,403
18,434,903
Ordinary shares participate in dividends and in the proceeds of winding up in proportion to the number of shares held.
At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands. The Company has no authorised share capital or par value. All issued
shares are fully paid.
ASX Code: CNJ
Page 27 of 37
Annual Report for Year Ending 30 June 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 15: ISSUED CAPITAL CONTINUED
b.
Options
At the beginning of reporting period
Issued during the year
Options lapsed during the year
Options exercised during the year
At reporting date
c.
Capital Management
2017
2016
64,626,000
5,501,000
- 59,125,000
(5,501,000)
(15,750,000)
-
-
43,375,000 64,626,000
Management controls the working capital of the Company in order to maximise the return to shareholders and
ensure that the Company can fund its operations and continue as a going concern. Management effectively
manages the Company’s capital by assessing the Company’s financial risks and adjusting its capital structure in
response to changes in these risks and in the market. These responses include the management of expenditure
and debt levels, distributions to shareholders and capital raisings. There have been no changes in the strategy
adopted by management to control the capital of the Company since the prior year.
NOTE 16: RESERVES
a.
Option Reserve
The option reserve records items recognised as expenses on valuation of share options.
b.
Financial Asset Reserve
The financial asset reserve records revaluations of non-current assets. Under certain circumstances dividends
can be declared from this reserve.
NOTE 17: PARENT COMPANY INFORMATION
a.
Parent Entity
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Equity
Issued capital
Accumulated losses
Reserves
Option reserve
Total reserves
Financial performance
Profit / (Loss) for the year
Other comprehensive income
Total comprehensive loss
Contingent Liabilities and Commitments
2017
$
2016
$
430,761
446,897
14,251,822 14,103,560
14,682,583 14,550,457
74,740
84,337
-
-
74,740
84,337
18,907,403 18,434,903
(4,777,010)
(4,446,232)
477,450
477,450
477,450
477,450
(330,778)
(44,229)
-
-
(330,778)
(44,229)
The Directors are not aware of any contingent liabilities or capital commitments as at 30 June 2017.
Guarantees in respect of the debts of its subsidiaries
There are no parent entity guarantees in respect of the debts of its subsidiary at year end.
ASX Code: CNJ
Page 28 of 37
Annual Report for Year Ending 30 June 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 18: CAPITAL AND LEASING COMMITMENTS
a.
Capital Expenditure Commitments
Payable:
—
—
not later than 12 months
greater than12 months
2017
$
2016
$
-
-
-
-
-
-
b.
Exploration Expenditure Commitments
In order to maintain current rights of tenure to exploration tenements, the company is required to perform
minimum exploration work to meet the requirements specified by various State governments. It is anticipated
that expenditure commitments for the twelve months will be tenement rentals of $3,000 (2016: $5,000) and
exploration expenditure of $33,500 (2016: $94,000).
NOTE 19: SHARE-BASED PAYMENTS
No share-based payment arrangements existed at 30 June 2017.
NOTE 20: RELATED PARTY TRANSACTIONS
2017
$
2016
$
Transactions between related parties are on normal commercial terms and conditions no
more favourable than those available to other parties unless otherwise stated.
Transactions with related parties:
Key Management Personnel
Management fees and administration fees paid to Princebrook Pty Ltd, a company in
which Mr GH Solomon and Mr DH Solomon have an interest. At 30 June 2017 $12,000
(2016: $12,000) was included in Trade and Other Payables owing to Princebrook Pty Ltd.
Management fees and administration fees forgiven by Princebrook Pty Ltd, a company in
which Mr G Solomon and Mr D Solomon have an interest.
144,000
117,446
-
355,342
Legal and professional fees payable to Solomon Brothers, a firm of which Mr GH Solomon
and Mr DH Solomon are partners.
2,436
21,466
Corporate advisory fees paid to RM Corporate Finance Pty Ltd, a company in which Mr G
T Le Page and Mr J B Richardson have an interest.
Placement fees paid to RM Corporate Finance Pty Ltd, a company in which Mr G T Le
Page and Mr J B Richardson have an interest.
Placement fees paid to RM Capital Pty Ltd, a company in which Mr G T Le Page and Mr J
B Richardson have an interest.
Amount included in Trade and Other Payables as owing to Mr Gregory H Solomon for
unpaid directors fees and superannuation.
Amount included in Trade and Other Payables as owing to Mr Douglas H Solomon for
unpaid directors fees and superannuation.
Amount included in Trade and Other Payables as owing to Mr Guy T Le Page for unpaid
directors fees and superannuation.
Amount included in Trade and Other Payables as owing to Mr James B Richardson for
unpaid directors fees and superannuation.
Associated Companies
-
-
-
81,000
36,000
22,620
8,031
9,516
2,570
3,045
2,570
3,045
2,570
3,045
Reimbursement to Tasman Resources Ltd (which has a 14.05% interest in the Company)
for employee costs on an hourly basis, in relation to Tasman staff utilised by the Company
and rent of a motor vehicle.
27,586
3,668
ASX Code: CNJ
Page 29 of 37
Annual Report for Year Ending 30 June 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 21: CASH FLOW INFORMATION
a. Reconciliation of Cash Flow from Operations with Loss after Income Tax
Loss after income tax
Non-cash flows in profit
Depreciation
Debt forgiveness
Exploration and evaluation written off
Changes in assets and liabilities, net of non-cash payments
(Increase)/decrease in trade and term receivables*
Increase/(decrease) in trade payables and accruals
Cash flow used in operations
* - Net of Exploration and Evaluation cash flows.
NOTE 22: SEGMENT REPORTING
2017
$
2016
$
(325,673)
(54,113)
1,738
2,095
35,720
(355,342)
20,076
(55,976)
31,531
(19,595)
(236,608)
(482,931)
The Group operates predominately in one geographical segment and one business segment, being mineral exploration
and development in Western Australia. Operating segments are identified based on internal reports reviewed by the
chief operating decision maker/s.
NOTE 23: CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The Directors are not aware of any contingent assets or contingent liabilities as at 30 June 2017.
NOTE 24: EVENTS AFTER THE BALANCE SHEET DATE
No matters or circumstances have arisen since the end of the financial year which significantly affected or may
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in
future financial years.
NOTE 25: FINANCIAL INSTRUMENTS
a.
Financial Risk Exposures and Management
The main risks the company is exposed to through its financial instruments are interest rate risk, liquidity risk
and credit risk.
i.
Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Group has minimal exposure to interest rate risk, the
only asset / liability affected by changes in market interest rates is Cash and cash equivalents.
ii.
Liquidity Risk
The Company manages liquidity risk by monitoring forecast cash flows and ensuring that adequate
funding is maintained. The Company’s operations require it to raise capital on an on-going basis to fund
its planned exploration program and to commercialise its tenement assets. If the company does not raise
capital in the short term, it can continue as a going concern by reducing planned but not committed
exploration expenditure until funding is available and/or entering into joint venture arrangements where
exploration is funded by the joint venture partner. All financial liabilities and assets are expected to be
realised and settled within 6 months.
iii.
Credit risk
Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in a
financial loss to the company. The company has adopted a policy of only dealing with credit-worthy
counterparties and obtaining sufficient collateral or other security where appropriate, as a means of
mitigating the risk of financial loss from defaults.
ASX Code: CNJ
Page 30 of 37
Annual Report for Year Ending 30 June 2017
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2017
NOTE 25: FINANCIAL INSTRUMENTS CONTINUED
iii.
Credit risk continued
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance
date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those
assets, as disclosed in the balance sheet and notes to the financial statements.
The Company does not have any material credit risk exposure to any single receivable or group of
receivables under financial instruments entered into by the company.
b.
Financial Instruments
i.
Net Fair Values
The aggregate net fair values of the financial assets and financial liabilities, at the balance date, are
approximated by their carrying value.
ii.
Interest Rate Risk
The company’s exposure to interest rate risk and effective weighted average interest rates on classes of
financial assets and financial liabilities, is as follows:
Weighted Average
Effective Interest
Rate
2017
2016
Floating Interest Rate Non Interest Bearing
Total
2017
$
2016
$
2017
$
2016
$
2017
$
2016
$
Financial Assets:
Cash and cash equivalents
0.60%
0.95%
466,368
397,789
-
- 466,368 397,789
Trade and other receivables
-
-
-
-
24,700
66,212
24,700
66,212
Total Financial Assets
0.60%
0.95%
466,368
397,789
24,700
66,212 491,068 464,001
Financial Liabilities:
Trade and sundry payables
Total Financial Liabilities
NOTE 26: COMPANY DETAILS
-
-
-
-
-
-
-
-
124,548
93,017 124,548
93,017
124,548
93,017 124,548
93,017
The registered office of the company is:
The principal place of business is:
Conico Limited
Level 15,
Conico Limited
Level 15,
197 St Georges Terrace
Perth Western Australia 6000
197 St Georges Terrace
Perth Western Australia 6000
ASX Code: CNJ
Page 31 of 37
Annual Report for Year Ending 30 June 2017
DIRECTORS’ DECLARATION
In the opinion of the directors of Conico Ltd (the “Company”):
a.
the financial statements and notes set out on pages 17 to 31, and the Remuneration disclosures that are contained
in pages 13 to 14 of the Remuneration Report in the Directors’ Report, are in accordance with the Corporations Act
2001, including:
(i)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its performance, for
the financial year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001; and
(iii)
complying with International Financial Reporting Standards as disclosed in Note 1.
the remuneration disclosures that are contained in pages 13 to 14 of the Remuneration Report in the Directors’
Report comply with Australian Accounting Standard AASB 124 Related Party Disclosures 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.
b.
c.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
Non-Executive Chairman and Chief Financial Officer for the financial year ended 30 June 2017.
This declaration is made in accordance with a resolution of the Board of Directors.
Gregory H Solomon
Chairman
Dated this 29th day of August 2017
ASX Code: CNJ
Page 32 of 37
Independent Auditor’s Report to the Members of Conico Limited
Report on the financial report
Opinion
We have audited the financial report of Conico Limited (the Company and its subsidiaries (the Group)),
which comprises the consolidated statement of financial position as at 30 June 2017, the consolidated
statement of comprehensive income, consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Company is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2017 and of its financial
performance for the year then ended; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the ‘Auditor’s responsibilities for the audit of the financial
report’ section of our report. We are independent of the entity in accordance with the Corporations Act
2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES
110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
Without modifying our opinion, we draw attention to Note 1 to the Financial Report, which indicates
that the Group will require further funding in the next twelve months from the date of this report to
fund its planned exploration and evaluation projects and operating costs. These conditions, along with
other matters as set forth in Note 1, indicate the existence of a material uncertainty that may cast
significant doubt about the Group’s ability to continue as a going concern and therefore the Group may
be unable to realise its assets and discharge its liabilities in the normal course of business.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit
matter
Capitalisation
evaluation assets
of
Exploration
and
Refer to Note 10 (Exploration and
evaluation)
As at 30 June 2017 the carrying value of
Exploration and Evaluation assets was
$14,921,918 (2016: $14,768,889). The Group’s
accounting policy in respect of exploration and
evaluation assets is outlined in Note 1e.
This is a key audit matter due to the fact that
significant judgement is applied in determining
whether:
the capitalised Exploration and Evaluation
assets meet the recognition criteria in
terms of AASB 6 Exploration for and
Evaluation of Mineral Resources; and
facts and circumstances exist that suggest
that the carrying amount of the Exploration
and Evaluation assets may exceed their
recoverable amount in accordance with
AASB 6.
procedures
Our
evaluating
focussed
management’s assessment of the capitalised
Exploration and Evaluation assets’ carrying value.
These procedures included, amongst others:
on
confirming whether the rights to tenure of
the areas of interest remained current at
balance date;
obtaining evidence of the future intention for
the areas of interest, including reviewing
future budgeted expenditure and related
work programmes; and
obtaining an understanding of the status of
ongoing exploration programmes for the
areas of interest.
We also assessed the appropriateness of the
accounting treatment and disclosure in terms of
AASB 6.
Other information
The directors are responsible for the other information. The other information comprises the information
in Conico Limited’s annual report for the year ended 30 June 2017, but does not include the financial
report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of the
other information we are required to report that fact. We have nothing to report in this regard.
Directors’ responsibility for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the entity’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the entity or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibility for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at The
Australian Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/Home.aspx.
This description forms part of our auditor’s report.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 13 to 14 of the Directors’ Report for the
year ended 30 June 2017.
In our opinion, the Remuneration Report of Conico Limited for the year ended 30 June 2017, complies
with Section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Nexia Perth Audit Services Pty Ltd
TJ SPOONER FCA, FCA(UK), ACIS, AGIA, AMIIA, CTA
Director
Perth
29 August 2017
Annual Report for Year Ending 30 June 2017
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
1. Shareholding as at 15 August 2017
a. Distribution of Shareholders
Category (size of holding)
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Number of
Shareholders
29
67
161
511
256
1,024
b.
c.
The number of shareholdings held in less than marketable parcels at 15 August 2017 is 263.
The names and relevant interests of the substantial shareholders listed in the holding company’s register as at 31
August 2017 are:
Shareholder
Tasman Resources Ltd
J Richardson
Arkenstone Pty Ltd
March Bells Pty Ltd
G T Le Page
d. Voting Rights
Number of Ordinary shares
41,476,285
28,500,000
23,105,469
21,586,875
15,852,502
Each ordinary share is entitled to one vote when a poll is called, otherwise each member present at a meeting or
by proxy has one vote on a show of hands.
e
20 Largest Shareholders — Ordinary Shares
Name
Tasman Resources Ltd
1.
2 March Bells Pty Ltd
Arkenstone Pty Ltd
3
Tasman Resources Ltd
4.
Tadea Pty Ltd
5.
6.
Tadea Pty Ltd
7. Peto Pty Ltd <1953 Superfund A/c>
8. Redcode Pty Ltd
9. Guy Le Page & Dina Le Page
10. Matthew Torenius & Oliver Torenius
11. Flourish Super Pty Ltd
12. GT Le Page & Associates Pty Ltd
13. Apostman Superannuation Pty Ltd
14. Merriwa Street Pty Ltd
15. Guy Touzeau Le Page
16. Gary Tatasciore + Eric Tatasciore + Luke Tatasciore
17. Hyun Ho Ok & Byung Hye Ok
18. Pennock Pty Ltd
19. Arkenstone Pty Ltd
20. Anna De Lucia
Number
Shares Held
25,000,000
20,728,125
17,015,625
16,476,285
15,250,000
13,250,000
8,500,000
7,500,000
6,214,194
5,670,000
5,550,000
5,138,308
4,875,000
4,700,000
4,500,008
4,500,000
4,441,493
4,000,000
3,837,500
3,650,000
% of Issued
Capital
7.96%
6.60%
5.42%
5.25%
4.86%
4.22%
2.71%
2.39%
1.98%
1.81%
1.77%
1.64%
1.55%
1.50%
1.43%
1.43%
1.42%
1.27%
1.22%
1.16%
2. Unquoted Securities – Options as at 15 August 2017
Holder Name
Date of Expiry
Exercise Price
Various
30 November 2019
$0.03
180,816,538
57.59%
Number on
issue
Number of
holders
40,375,000
40,375,000
17
17
ASX Code: CNJ
Page 36 of 37
Annual Report for Year Ending 30 June 2017
TENEMENT SCHEDULE
Table 1 lists further details on the tenements.
Table 1: Conico Tenement Schedule
State
Licence
Type
WA
WA
WA
WA
EL
P
EL
R
Number
E63/1790
P/2045
E63/1267
R63/4
Interest
%
50
50
50
50
Locality
Mt Thirsty
Mt Thirsty
Mt Thirsty
Mt Thirsty
* - This application covers the same area as R63/4.
Location
Approximately 20 km NW of Norseman
Approximately 20 km NW of Norseman
Approximately 20 km NW of Norseman
Approximately 20 km NW of Norseman
ASX Code: CNJ
Page 37 of 37