1
Cullen Resources Limited
CORPORATE DIRECTORY
CONTENTS
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ABN: 46 006 045 790
Directors
Denis Clarke (Non-executive Chairman)
Chris Ringrose (Managing Director)
John Horsburgh (Non-executive)
Grahame Hamilton (Non-executive)
Wayne Kernaghan (Non-executive)
Chairman's Report
Company Profile
Highlights
Exploration Review
Directors' Report
Corporate Governance Statement
Statement of Financial Position
Statement of Changes in Equity
Statement of Comprehensive Income
Statement of Cash Flows
Notes to the Financial Statements
Directors' Declaration
Independent Audit Report
Shareholder Information
Secretary
Wayne Kernaghan
Registered and Principal Office
Unit 4
7 Hardy Street
South Perth WA 6151
Telephone +61 (8) 9474 5511
Facsimile +61 (8) 9474 5588
Solicitors
HWL Ebsworth
level 11 Westralia Plaza
167 St Georges Terrace
Perth WA 6000
Auditors
Ernst & Young
11 Mounts Bay Road
Perth WA 6000
Bankers
Westpac
Sydney NSW 2000
Securities Quoted
Australian Stock Exchange
Limited
Home Exchange - Sydney
ASX Code: CUL
Share Registry
Computershare Investor
Services
Level 3, 60 Carrington Street
Sydney NSW 2000
Telephone (02) 8234 5000
www.computershare.com
Email
cullen@cullenresources.com.au
Company Website
www.cullenresources.com.au
EXPLORATION FOR LITHIUM | PILGANGOORA NE (ELA45/4626)
Chairman’s Report
2
DEAR FELLOW SHAREHOLDER
It has been extremely pleasing to see the return of investor interest in the activities of junior explorers during the past
year. Nevertheless, Cullen's capital management and project prioritisation remained the watch word in general
throughout 2015/2016. Renewed investor interest in the “exploration space”, has been sparked by, firstly, the positive
view of future lithium demand, and secondly, by the high price of gold in Australian dollar terms. Cullen responded
quickly to this new interest and initiated the addition of a lithium exploration portfolio and re-focused attention on our
gold exploration assets. In particular our position for lithium exploration in Finland, acquired at modest cost, is a well-
placed and significant bridgehead in an important jurisdiction in Europe.
Cullen has in addition complied with its two main objectives: maintaining its interest in the Mt Stuart Iron Ore Joint
Venture (MSIOJV), and exploring for gold and nickel sulphide deposits in its wholly-owned Mt Eureka Project, both in
Western Australia.
The general intention has been that the MSIOJV would be developed as part of the larger West Pilbara Iron Ore
Project (WPIOP). However, in December 2015, due largely to the then current iron ore market conditions, the owners
of that major project decided to delay completion of their feasibility study that was scheduled for completion in mid-
2016. Up until then mine and market feasibility studies for the potential development of the WPIOP were being
conducted, and Aurizon Operations Limited was conducting a feasibility study relating to rail and port components of
the WPIOP. Consequently, the MSIOJV was unable to complete the definitive feasibility on its project that was also
scheduled for completion in mid-2016. The period of Aurizon's exclusivity to be the rail and port infrastructure
proponent expired at the end of April 2016. Desktop studies of various integrated rail and port infrastructure solutions
continue, and areas of potential project value optimisation and enhancement will continue to be investigated over the
balance of 2016. Key WPIOP approvals are also being progressed. A WPIOP budget for 2016-2017 financial year was
presented to Cullen in July 2016, and, at present, Cullen at its discretion may continue participation or take a royalty on
production.
At Mt Eureka Cullen owns ~40km of strike of an under-explored greenstone belt extending northwards from the nickel
sulphide discovery at Camelwood-Musket-Cannonball (Rox Resources Limited) which is also prospective for gold
deposits. The Company's most recent activities at Mt Eureka have upgraded several new gold targets and the region
remains a potential new nickel sulphide province, and we believe that our large project is highly prospective for nickel
sulphides. Much work has been undertaken to review the extensive geological, geochemical and geophysical
database at Mt Eureka, mostly derived from exploration by Cullen and partners over many years. We are ready to
undertake further drilling programmes for gold, and completed the first such programme in June this year.
In addition, Cullen maintains its effort on early stage exploration in greenfield terranes and has made some new
tenement applications in WA and Finland for lithium. These are important, prospective terranes for lithium deposits
and offer opportunities for discovery or partnership with other major players. Cullen also has a 20% free carried
interest to decision to mine in the Killaloe JV where Matsa Resources Limited is exploring along strike from the exciting
Polar Bear project of S2 Resources Ltd for gold and nickel.
In conclusion, I thank all shareholders for their continued support, and my fellow directors, staff, consultants and
contractors in Perth for their valuable contributions. In particular, I would like to express appreciation to Dr Chris
Ringrose for his resolute efforts to maintain and develop the company during the last few years that have been trying
times for junior explorers such as Cullen.
Dr. Denis Clarke, Chairman
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Company Profile
Company Profile
PERTH-BASED MINERALS EXPLORER WITH:
- iron ore project interests, West Pilbara
- multi-commodity project portfolio
- active programmes for lithium and gold
- motivated management
- experienced board
- project generation in Australia and Finland
W E S T E R N
A U S T R A L I A
Lithium: Exploration Licence Applications
Kununurra
Gold and Nickel
Iron Ore
Gold and Base Metals
BROOME
PORT HEDLAND
Dampier
Karratha
PILGANGOORA NE
Marble Bar
WODGINA WEST
WEST PILBARA
Tom Price
Paraburdoo
Newman
YINNETHARRA
MT EUREKA
CUE
Meekatharra
WILUNA
Kalbarri
Mount Magnet
Leinster
Sandstone
GERALDTON
Port of Geraldton
Leonora
Menzies
Coolgardie
PERTH
Northam
Merredin
KALGOORLIE
Kambalda
KILLALOE
GREENBUSHES
Bunbury
500 kilometres
Albany
Norseman
RAVENSTHORPE
ESPERANCE
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Highlights
Highlights
2015/2016
MT EUREKA,WA
GOLD & NICKEL
KILLALOE JV, WA
GOLD & NICKEL
NEW PROJECTS
LITHIUM
2
~450km project area in North Eastern Goldfields -
prospective for gold and nickel. Further drill testing of
geochemically anomalous shear zones for gold is
planned. Nickel sulphide targets from ground EM
survey at AK47 prospect to be tested.
Targeting nickel sulphide and gold deposits. Project
area located south side of Lake Cowan along strike
from “Taipan” nickel and Baloo and Monsoon gold
discoveries of S2 Resources Ltd.
Portfolio of tenement applications in key lithium
exploration terranes across WA. Also well-
positioned in Finland for exploration for lithium -
surrounding known resources owned by Finnish
company.
MT STUART JV, WA
Updated Ore Reserve estimate for the Catho Well
Channel Iron Deposit (CID) of 83Mt @ 55.1% Fe
announced in September 2015.
IRON ORE
NORTH TUCKABIANNA, WA
GOLD & BASE METALS
Project area ~30km east of Cue, covering the
northern part of the Tuckabianna - Webbs Patch
greenstone sequence. Exploration targets for gold
and VMS-style base metal mineralisation in this
underexplored area. Some EM anomalies drilled,
others remain untested.
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Exploration Review
ASHBURTON/PILBARA, WA | IRON
WEST PILBARA MT STUART JV
The Mt Stuart Iron Ore Joint Venture (ELs 08/1135, 1292, 1330, 1341 and MLs 08/481,482) is between Cullen
Exploration Pty Ltd - 30% and contributing, and API Management Pty Ltd (“API”) - 70%. The shareholders of API are
the parties to the unincorporated joint venture known as the Australian Premium Iron Joint Venture (APIJV). The
participants in the APIJV are: Aquila Steel Pty Ltd 50% (the ultimate owners of which are Baosteel Resources Australia
Pty Ltd (85%) and Aurizon Operations Limited (15%)); and AMCI (IO) Pty Ltd 50% (the ultimate owners of which are
AMCI Investments Pty Ltd (51%) and Posco WA Pty Ltd (49%)). Baosteel and Posco are subsidiaries of major steel
producers in China and Korea respectively. API is managing the proposed development of the West Pilbara Iron Ore
Project (WPIOP) – Stage 1 (40 Mtpa).
The MSIOJV owns the Catho Well channel iron deposit (CID) with an Ore Reserve estimate of 83 Mt @ 55.1% Fe
(JORC 2012 compliant). The general intention has been that the MSIOJV would be developed as part of the larger
WPIOP – Stage 1. Up until December 2015, APIM had been conducting mine and market feasibility studies for the
potential development of the WPIOP, with project partner Aurizon conducting a feasibility study relating to rail and port
components of the WPIOP. However, in late December 2015, the Manager was advised by the APIJV Participants that
due largely to the current iron ore market conditions, they decided to discontinue the previously targeted completion of
a definitive feasibility study on the WPIOP by mid-2016.
The WPIOP has maintained all approvals for development of the Anketell Port as stated in the FS15 Study.
Investigation of other port rail options continues, to identify solutions offering further project development advantages.
Areas of potential project value optimisation and enhancement will continue to be investigated over the balance of
2016. Key WPIOP approvals will also continue to be progressed.
Exploration Review
6
WYLOO AND PARABURDOO JVs | IRON
The Wyloo JV project lies just south east of the MSIOJV's Catho Well Channel Iron Deposit. Towards the end of the
2015 financial year, Cullen Exploration Pty Limited (”Cullen”) a wholly-owned subsidiary of Cullen Resources Limited
sold its 100% interest in the Wyloo JV to Fortescue for $50,000 cash plus a further $900,000 cash, if and when a
decision to mine is made, and a Royalty of 1.5% Gross Revenue on up to 15Mt - as detailed in Cullen’s 2015 Annual
Report.
Fortescue can earn up to an 80% interest in the iron ore rights on Cullen's E52/1667 (Paraburdoo JV), located ~25km
south east of Paraburdoo in the Pilbara Region of Western Australia. The tenement includes potential for bedded iron
deposits within the Brockman Iron Formation, along strike from the Paraburdoo and Channar Groups of iron deposits.
I n d i a n O c e a n
Port Hedland
API JV's proposed
railway and port
Dampier
ANKETELL
POINT
Pannawonica
Solomon
Mt MacLeod
MT STUART JV
CATHO WELL CID
Tom Price
Hardey
Paraburdoo
Channar
WYLOO JV
Cullen/Fortescue
PARABURDOO JV
Cullen/Fortescue
Marble Bar
Cloudbreak
Christmas Creek
Nyudunghu
N
50 kilometres
Newman
Mt Whaleback
Iron ore deposits
Existing railway
Proposed railway (APIJV)
Fortescue iron ore deposit
Existing Fortescue railway
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Exploration Review
MT EUREKA | GOLD
Cullen holds 100% of ~450km of approved tenure and applications in the Mt Eureka Greenstone Belt in the North
2
Eastern Goldfields of Western Australia which includes multiple targets for gold and nickel sulphides. In October 2015,
Cullen drilled an intersection of 5m at 12.43 g/t Au to the end of hole (45 - 50m) at the Galway prospect, part of the
large Galway-Southern mineralisation zone, where historical drill holes with maximum values greater than 0.5 g/t Au
occur across an area of approximately 1200 x 200-400m (from air core and RC drill traverses at 50-100m along strike).
In late June 2016, Cullen completed a programme of RC drilling (9 holes for 960m) at the Galway prospect to test
beneath and along strike from this air core anomaly and to better understand the controls to gold mineralisation. Assay
data (see following table) includes best of : 5m @ 7.84 g/t Au (from 95m) and 10m @ 4.74 g/t Au (from 50m) - 5m
composite samples. Several intervals of 5 to 15m down-hole length of low grade ( > 0.1 g/t Au to < 1.58 g/t Au in 5
composite samples) were also reported.
This gold mineralisation at Galway appears to be related to both supergene zones and sheared contacts of felsic
volcaniclastics with mafics or ultramafics. However there is no extension of good gold grade along north-south strike
from the 100m spaced drill traverses completed in June 2016. This suggests that gold mineralisation may be localised
in NE-SW oriented, high-angle shear corridors with superimposed moderate to low angle, east to north - east dipping
supergene zones. Local structural complexity/late faulting also occurs, which suggests that the optimal drill hole
orientation across the target area may remain to be resolved. The interpretation of a previous detailed ground
magnetics survey by Cullen, centred on the adjoining Southern gold prospect, support the suggested structural
controls at Galway. The latest interpretation of regional geophysical data also highlights the presence of a strike
persistent, NE-SW structural corridor including Galway and Southern prospects.
At the Taipan prospect, historical drilling has defined a strike extensive, strata parallel, gold anomalous shear zone.
This target has not been adequately explored down plunge or to the west across interpreted dolerites, which may be
differentiated. New interpretation of geophysical data (see following figure) also suggests that a major contact of
mafics with sediments lies just east of the limit of historical drilling at Taipan and may be an important focus of shearing
and possibly gold mineralisation. This target and trend will be a focus for further work. The Taipan soil anomaly and
drilling is limited to the north east by palaeochannel sediments and is only lightly explored further north.
Cullen also completed a review and re-interpretation of its geophysical databases for the Mt Eureka greenstone belt
(gravity, VTEM and aeromagnetics) leading to a renewed focus on the eastern granite-greenstone contact for gold
exploration.
MT EUREKA | NICKEL
The Mt Eureka project area includes a wide variety of targets for massive nickel sulphide deposits. Some targets have
been drill-tested by WMC/BHPB Limited in joint venture with Cullen in 2002-2006, generally by 1 or 2 diamond drill
holes. However, several targets have received very limited follow-up, with no ground EM and/or deeper drill testing.
These targets include unresolved down hole EM (DHEM) and/or ground EM anomalies, as well as geochemical and
lithological targets along strike of known mineralisation for further evaluation.
Exploration Review
8
Mt Eureka Project:
Significant Results / Details of RC Drilling, Galway prospect (>0.1g/t Au) in 5m composite samples (June 2016)
Hole ID
Easting
(m)
Northing
(m)
EOH
Depth (m)
Dip
(degrees)
Azimuth
(degrees)
From
(m)
To
(m)
Thickness
(m)
Au
(g/t)
MERC 134
353940
7055946
104
-60
267
MERC 135
353983
7055947
98*
-60
268
MERC 136
354021
7055946
MERC 137
MERC 138
MERC 139
353940
354000
354023
7056061
7056057
7056058
MERC 140
354119
7056067
MERC 141
MERC 142
353960
354000
7055856
7055856
140
86
44*
98
134
110
146
-60
-60
-60
-60
-60
-60
-60
262
268
268
262
264
265
270
40
60
95
50
70
85
70
85
50
75
100
60
75
98
75
95
10
15
5
10
5
0.27
0.97
7.84
4.74
1.37
13 (EOH)
0.54
5
10
NSR
NSR
NSR
30
20
35
25
5
5
NSR
NSR
NSR
35
40
5
NSR
NSR
NSR
0.18
0.16
NSR
0.20
0.13
NSR
1.58
NSR
Notes: Gold assays by Aqua Regia digest, 10g charge, to detection limit of 1ppb, or by fire assay, 50g charge for
samples reading >4 g/t Au from Aqua Regia; coordinates are GDA Z51, down hole lengths reported – true width
not known at this stage. NSR = No significant result. EOH = End of Hole.
* two holes abandoned before target depth due to loss of air
MT EUREKA PROJECT - GALWAY PROSPECT E-W SECTION 7055950mN
C
A
C
A
C
A
MIA010
C134
MIA011
R
E
M
C
A
354000mE
C135
R
E
M
C
A
C
A
C136
R
E
M
0mRL
1m/0.16
17m
?
-50mRL
1m/0.5
1m/5.48
1m/4.81
1m/1.38
30m
1m/14.29
1m/9.32
??
1m/1.12
15m/0.97
? ?
5m/7.84
-100mRL
104m
5m/2.61
5m/1.04
5m/0.27
41m
5m/12.43
50m
2m/1.36
1m/8.48
10m/4.74
QV
56m
5m/1.37
Ab
56m
86m
98m
?
4m/1.95
16m/0.4
15m/0.54
?
Mafics
140m
1m/3.06
5m/0.18
Ab
69m
10m/0.16
?
?
0
50
Metres
0mRL
-50mRL
?
65m
Ultramafics
Transported
Laterite
Mottled
Ultramafics
Mafics
Felsic
Mineralised zone
(white on section)
Sheared Contacts
MERC134 - MERC136
June 2016
-100mRL
C
A
Air core hole (2002-2003)
MIA010, MIA011
Cullen holes-Oct 2015
Ab
Abandoned
(water flow, broken ground)
1m/1.93
Intersection in g/tAu
QV
Quartz veining
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Exploration Review
MT EUREKA PROJECT - GOLD TARGET AREAS AND PROSPECTS
V
X
0
N
Kilometres
10
X
7070000mN
X
V
Granite
Granite
V
X
7060000mN
V
X
SOUTHERN
GALWAY
V
COBRA
Large area of de-mag
in structural complex area
7050000mN
GRAF’S FIND
Granite
X
X
V
V
7040000mN
Magnetic alteration
Extension of
Southern/Galway corridor
Untested lithological
/structural contact
X
TAIPAN
Regional bend
in greenstone belt
Intrusive along
mafic/sediment contact
X
V
Greenstone - ultramafics/mafics
Greenstone - significant felsics/
sediments
BIF/Chert
Faults
Thrust Fault
Target Areas for Au
Interpreted Intrusives
Au Prospects
Mt Eureka Project
tenement boundary
350000mE
360000mE
370000mE
Exploration Review
10
WESTERN AUSTRALIA | LITHIUM EXPLORATION
In May-June 2016, Cullen Resources Limited (“Cullen” or the “Company”) completed a preliminary field review of its
Pilbara tenement applications for lithium pegmatite mineralisation. Numerous pegmatites were observed and
sampled in both the Pilgangoora North East (ELA 45/4626) and Wodgina West (ELA 45/4682) prospect areas in the
Pilbara - fieldwork guided by mineral occurrences from published maps (MINEDEX database) and historical
information but pegmatites sampled by Cullen were generally more widespread than existing data indicated.
(ELA 45/4626) is centred ~ 30km north east of the Pilgangoora Lithium deposits* where the world's second largest
deposits of spodumene (lithium-bearing pyroxene) has recently been defined; and the second, (ELA 45/4682), lies in
part immediately west of the Wodgina Mine**, one of the world's largest hard rock tantalum resources. This tenement
application also lies on- strike to the north of the Stannum Prospect (of Metalcity - ASX: MCT).
(*Pilbara Minerals Ltd: ASX-PLS/Altura Mining Ltd: ASX-AJM **Global Advanced Metals)
The results of rock chip sample assaying confirm the north eastern sector of the ELA 45/4626, characterised by
magnetic anomalies, includes samples with lithium mineralisation with two samples (from the one site) reporting
1.21% Li O and 1.12% Li O in a “muscovite schist”. These two samples also have high Rb (to 0.52%), high Ta O (to
2
2
2
5
240ppm) and high Sn (to 264ppm). Another two samples from this north-eastern target area reported 0.2% and 0.18%
Li O in pegmatites. Each of these three samples is close to a discrete unit of monzonitic granite, as shown on the
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1:250,000 geological map.
Field review of targets areas for lithium pegmatite mineralisation within Cullen's ELA 70/4803 in May 2006, south west
of the Greenbushes Mine, found just two pegmatitic granite outcrops, and four reconnaissance pisolites samples
were collected from ELA 70/4802 – access is very limited in these areas due to areas of jarrah dieback control.
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Exploration Review
CULLEN’S STRATEGY IN FINLAND
In Finland, Cullen will follow a prospect generator/farm-out business model as practised by the company over the past
several years in Australia. This is an appropriate and prudent approach which utilises the excellent public geological
databases in Finland and the low tenure costs in the early stages of exploration. Cullen will focus on exploration for
lithium, gold, copper and cobalt. Cullen has had significant previous experience prospecting and exploring in Finland
and has good contacts with well-regarded geological consulting groups based in Scandinavia to facilitate efficient
operations.
Cullen's initial work will proceed from a review and compilation of available geological, geophysical, geochemical and
previous exploration data to field mapping and sampling, to be undertaken mainly by Finnish consulting geologists.
Reservation Notification applications once registered give Cullen the priority, within a four month to two year period
from lodgement (actual reservation time period to be determined by Finnish Mining authorities), to make applications
for Exploration Permits (required for any ground disturbing exploration programs).
The Geological Survey of Finland (GTK) has re-assayed its regional till geochemical samples from the Kaustinen,
Central Ostrobothnia area (collected in the 1970's) for lithium*. The resulting distribution of Lithium (Li) in till, in
Cullen's opinion suggests good prospectivity for new discoveries of lithium-bearing pegmatites surrounding the
known deposits owned by Keliber Oy and within Cullen's Reservation Notification area (“Rita”). Only the Rita
reservation has been registered as at 30 June 2016.
*(Timo Ahtola (ed.), Janne Kuusela, Asko Kapyaho and Olavi Kontoniemi, Geological Survey of Finland, Report of
Investigation, 220, 2015: “Overview of lithium pegmatite exploration in the Kaustinen area in 2003-2012”).
FINLAND PROJECT LOCATION MAP
S w e d e n
G u l f
o f
B o t h n i a
Oulu
200 kilometres
“RITA”
(Li in Pegmatites)
“KAATIALA”
(Be-Li-Sn-Nb-Ta
in Pegmatites)
Outukumpu
F I N L A N D
KYLYLAHTI
“OUTU”
(Outukumpu Style
Cu-Zn-Co)
HELSINKI
G u l f
o f
F i n l a n d
CULLEN - Reservation Notification
(Targetting)
Mine (Boliden)
Towns
Exploration Review
12
NORTH WEST YILGARN, WA
NORTH TUCKABIANNA | GOLD AND BASE METALS
The felsic Eelya Complex, ~30km east of Cue, hosts the high-grade Hollandaire copper discovery of Silver Lake
Resources Ltd (ASX: SLR – 10 November 2011) as well as several other EM conductor targets, explored by Silver
Lake Resources Ltd, including the Colonel and Mt Eelya prospects . Musgrave Minerals Ltd (ASX: MGV) has recently
had further success exploring base metal prospects in JV on this project area.
In April 2012, Cullen completed 7 holes, ~1000m, of scout RC drilling at its North Tuckabianna copper/gold project
which targeted three conductors (NT1-NT3) identified by a helicopter-borne EM survey (VTEM,100-200m line
spacing). The VTEM survey was flown across the Eelya Complex and the northern section of the Tuckabianna
greenstone belt in March 2012. This drilling intersected disseminated sulphide (mainly pyrite and pyrrhotite, 1-20%
visually identified over intervals of 1-20m downhole) in mafic and felsic rocks at or near the modelled conductor plates
from the VTEM survey in all holes drilled.
However, downhole surveys completed at each VTEM anomaly redefined the position of the conductor plates and
showed that the conductive targets had been narrowly missed by the first pass drilling and therefore had not been
adequately tested. These redefined conductor plates were tested in August 2012 with four RC holes (TNRC15-18)
and intersected zones of disseminated sulphide but with only geochemically anomalous assay results (maximum Cu -
0.20%). Several low-order VTEM anomalies remain to be investigated and tested, initially using Aircore and/or RAB
drilling.
EASTERN GOLDFIELDS, WA
KILLALOE JV | GOLD AND NICKEL
Matsa Resources Limited (Matsa) has earned a 70% interest in the Killaloe Project and Cullen exercised its option to
convert its 30% participating interest into a 20% Free Carried Interest (FCI) to a Decision to Mine.
Matsa, has
previously reported that the corridor of gold mineralisation which includes the gold discoveries of S2 Resources Ltd at
Baloo, Monsoon and Nanook, (ASX : S2R , 25 July 2016) within S2R's Polar Bear project, is interpreted to extend to
the SE into the Killaloe JV project area, and over a distance of ~20km. The Polar Bear gold corridor within the Killaloe
JV ground may be indicated by extensive soil gold anomalism and gold intersections in previous drilling (including 2m
@ 6 g/t in hole KRC023 at the Cashel prospect). IP anomalies have also been delineated within the Killaloe JV project
area, as announced recently by Matsa (ASX:MAT 27 June and 5 July 2016).
13
13
Exploration Review
CENTRAL LACHLAN FOLD BELT, NSW
MINTER | TUNGSTEN
A combined RC percussion-diamond drilling programme totalling 536.8 metres in three holes was undertaken on the
Minter project in June/July 2012 testing selected geological/geochemical targets at the Doyenwae and Orr Trig
prospects. Holes were designed to test beneath zones of anomalous tungsten and tin geochemistry outlined by earlier
soil sampling and shallow percussion/aircore/RAB drilling.
At the Doyenwae Prospect, RC percussion hole MRC005 averaged 0.045% tungsten over the full 111 metre length of
the hole with localised two-metre zones of quartz-scheelite veining assaying up to 0.35% tungsten.
Diamond drill hole CMDD001, drilled to 258.0 metres at the Doyenwae prospect, intersected significant quartz +
sulphide veining throughout much of the hole. Examination of the core with an ultraviolet lamp detected widespread
scheelite mineralisation occurring both within quartz veins and as disseminations/aggregates in silica-altered
sandstone units; particularly in the interval from 130 metres to the end of the hole. The true width of potential
mineralisation in both MRC005 and CMDD001 is uncertain as preliminary observations of vein orientations in the
CMDD001 drill core indicate that the holes may have been drilled at a low angle to some of the mineralised quartz
veins.
At the Orr Trig Prospect, diamond core hole CMDD002; drilled to 267.8 metres, intersected scattered zones of narrow
quartz veining and localised silicification over much of the hole with scheelite being observed as disseminations in
sandstone and within quartz veins in the interval between 100m and 250m. Although it would appear that hole
CMDD002 has been drilled in an appropriate direction with respect to the orientation of the quartz veins, the amount of
observable scheelite mineralisation is less than that noted in CMDD001. The results included: 1m @ 0.7% WO (from
131.45m) and 4.05m @ 0.58% WO from 185m in CMDD001. Further drilling is required to test the dominant vein
orientation as inferred from a mapping programme completed at a quarrying site near the Doyenwae prospect.
Exploration Review
14
SCHEDULE OF TENEMENTS (as at 30 June 2016)
REGION
TENEMENTS
TENEMENT
APPLICATIONS
CULLEN
INTEREST
COMMENTS
WESTERN AUSTRALIA
E08/1135, E08/1330,
E08/1341, E08/1292
ML08/481, ML08/482
30% - 100%
API has earned 70% of iron ore
rights; Cullen 100% other mineral
rights
Mt Stuart JV
Wyloo North
Paraburdoo JV
E52/1667
North Pilbara
Gunbarrel
Irwin Well
Irwin Bore
Cue
Ravensthorpe
Yinnetharra
Greenbushes
Killaloe JV
E52/1299
E53/1300 +/*
E53/1635
E53/1637
E53/1209
E20/714
E63/1018, E63/1199,
P63/1672
Forrestania JV
M77/544
NEW SOUTH WALES
Fortescue can earn up to 80% of
iron ore rights; Cullen 100% other
mineral rights
+2.5% NPI Royalty to Pegasus on
Cullen's interest (parts of E1299);
*1.5% NSR Royalty to Aurora
(other parts of E1299 and parts of
1300)
ELA47/3342
ELA45/4626,
ELA45/4682
ELA53/1892,
ELA53/1893
ELA74/575
ELA09/2179
ELA70/4802,
ELA70/4803
100%
100%
100%
100%
20%
Matsa Resources Limited 80%
20%
Hannans Reward Ltd 80%
Gold rights only
Minter
EL6572
100%
JOINT VENTURES - SUMMARY TABLE (as at 30 June 2016)
Joint Venture
(farm out)
Commodity
Focus
JV Partner
Paraburdoo
Iron Ore
Fortescue Metals
Group Ltd
JV Partner
Earning
(Earned)
Cullen’s
FCI to DTM
Actual or
(Available)
80%
(20%)
Mt. Stuart
Iron Ore
API JV
(70%)
(cid:703)
-
Forrestania
Gold
Hannans Reward Ltd
(80%)
Killaloe
Nickel, Gold Matsa Resources
Limited
(80%)
20%
20%
Cullen’s
NSR
(possible)
Comment
-
-
1.5% FOB Royalty capped to
20Mt. May earn 51% by defining
Inferred Resource, 80% by
defining Indicated Resource.
Cullen contributing at 30% in
Mt Stuart JV, 50 cents/tonne
royalty on all JV production
2.5%
Gold Rights on M77/544 only
2%
DTM = Decision to Mine FOB = Free on Board FCI = Free Carried Interest
NSR = Net Smelter Return
(cid:703)
= Iron ore rights only
15
Exploration Review
MINERAL RESOURCES AND ORE RESERVES (MROR) STATEMENT
MSIOJV RESOURCE
The Mineral Resource estimate for the MSIOJV, comprising the Catho Well Deposit, is contained in Table 1 below. The
supporting details for that estimate are contained in the Company's release to the ASX on 10 March 2015.
Table 1: MSIOJV - Stage 1 Mineral Resource Estimate (100% JV Basis)
Deposit
Classification
(JORC 2012)
Tonnage
Mt
Fe
%
SiO2
%
Al O2
%
3
Mn
%
LOI
%
MgO
%
P
%
S
%
Measured
3
55.3
6.45
3.56
0.06
9.98
0.19
0.042
0.022
Catho Well
Indicated
140
54.4
7.60
3.42
0.08
10.36
0.19
0.036
0.016
MSIOJV
Inferred
19
54.5
7.70
3.18
0.10
10.28
0.20
0.039
0.016
TOTAL
162
54.4
7.59
3.40
0.08
10.35
0.19
0.037
0.016
MSIOJV ORE RESERVES
The updated WPIOP – Stage 1 Ore Reserve estimate of 780 million tonnes, with a grade of 57.2% Fe, is provided in
Table 2. The Ore Reserve is reported as the estimated saleable product. The estimate has been prepared on the basis
that two CID blended fines ore products are produced: a primary higher grade product (Product 1 – WPF1 – 82% of
total), and a lower grade product (Product 2 – WPF2) that is produced and sold in the latter years of the mine life.
Target product specifications were set following market studies and discussions with customers, including the
stakeholders in the WPIOP. The MSIOJV owns the Catho Well channel iron deposit (CID) with an Ore Reserve
estimate of 83 Mt @ 55.1% Fe, one of the ten deposits comprising the WPIOP – Stage 1 Ore Reserve (Table 3).
By comparison, the 2010 Ore Reserve was 445 Mt with a grade of 57.1% Fe.
Table 2: WPIOP - Stage 1 Ore Reserve Estimate (100% Project Basis)
Ore Reserve
Product
Tonnes
Mt (Dry)
Fe
%
SiO2
%
Al O2
%
3
P
%
LOI
%
Product 1
(WPF1)
Product 2
(WPF2)
Total
(WPF1 + WPF2)
Proved
200
58.0
5.2
3.5
0.08
7.8
Probable
444
57.6
5.5
3.1
0.08
8.4
TOTAL ORE
643
57.7
5.4
3.2
0.08
8.2
Proved
20
54.3
7.9
4.6
0.08
9.0
Probable
117
54.6
8.2
3.7
0.08
9.2
TOTAL ORE
137
54.5
8.1
3.8
0.08
9.2
Proved
220
57.6
5.5
3.6
0.08
7.9
Probable
560
57.0
6.1
3.2
0.08
8.5
TOTAL ORE
780
57.2
5.9
3.3
0.08
8.4
Waste (dmt)
Mt (dry)
Strip Ration
1
Waste : Ore
601
0.75
1 Strip ratio is the ratio of mined waste to mined ore (which is slightly higher than product ore due to recovery losses)
Exploration Review
16
The Ore Reserve estimate was prepared in accordance with the Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (the JORC Code 2012) by AMC Consultants Pty Ltd (AMC), an
independent mining consultancy, as part of a Mining and Ore Reserve Study (AMC Mining Study) for APIM.
The Ore Reserve estimate covered ten CID deposits in the WPIOP – Stage 1 area, being the:
Buckland Hills and Red Hill Creek deposits - held by the APIJV;
Cochrane, Jewel, Kens Bore, Cardo Bore North, Cardo Bore East, Upper Cane, Trinity Bore, Red Hill Creek
(west portion) Catho Well (north portion) deposits – held by the RHIOJV; and
Catho Well (south portion) deposit – held by the MSIOJV.
The Ore Reserve has been estimated by incorporating all WPIOP – Stage 1 deposits in order to achieve the target
blended product grade specifications and to optimise overall project economics. The Ore Reserves that are
attributable to each of the APIJV, RHIOJV and MSIOJV and contribute to the total WPIOP – Stage 1 Ore Reserves are
detailed in Table 3 below.
Table 3: Ore Reserve Estimate as at 16th September 2015 - Total by Joint Venture
Joint
Venture
APIJV
MSIOJV
RHIOJV
WPIOP
Product
dmt
(Mt)
Product 1
Product 2
Total Ore
Product 1
Product 2
Total Ore
Product 1
Product 2
Total Ore
Total Ore
8
1
10
2
0
3
189
19
208
220
Fe
(%)
57.7
53.8
57.2
55.7
54.1
55.4
58.0
54.3
57.7
57.6
Proved
SiO2
(%)
Al2O3
(%)
5.3
9.0
5.8
6.3
7.1
6.4
5.2
7.8
5.5
5.5
3.0
4.4
3.2
3.4
4.5
3.5
3.5
4.6
3.6
3.6
P
(%)
0.11
0.09
0.11
0.04
0.04
0.04
0.08
0.08
0.08
0.08
LOI
(%)
7.6
7.5
7.5
9.9
10.1
9.9
7.8
9.1
7.9
7.9
dmt
(Mt)
119
32
151
59
21
80
266
63
329
560
Fe
(%)
58.8
55.5
58.1
55.4
54.1
55.1
57.6
54.3
57.0
57.0
Probable
SiO2
(%)
Al2O3
(%)
5.2
9.0
6.0
6.8
7.7
7.1
5.4
7.9
5.9
6.1
2.1
2.6
2.2
3.0
3.6
3.2
3.5
4.3
3.7
3.2
P
(%)
0.13
0.13
0.13
0.04
0.04
0.04
0.07
0.06
0.07
0.08
Total Proved and Probable
LOI
(%)
7.9
8.2
8.0
10.2
10.4
10.2
8.2
9.4
8.4
8.5
dmt
(Mt)
127
33
161
61
22
83
455
82
537
780
Fe
(%)
58.7
55.4
58.0
55.4
54.1
55.1
57.8
54.3
57.2
57.2
SiO2
(%)
Al2O3
(%)
5.2
9.0
6.0
6.8
7.7
7.0
5.3
7.9
5.7
5.9
2.1
2.7
2.2
3.0
3.7
3.2
3.5
4.4
3.6
3.3
P
(%)
0.13
0.13
0.13
0.04
0.04
0.04
0.08
0.07
0.07
0.08
LOI
(%)
7.9
8.2
8.0
10.2
10.4
10.2
8.0
9.3
8.2
8.4
The Ore Reserve is the part of the Mineral Resource which can be economically mined by open cut mining methods.
Dilution of the Mineral Resource model and an allowance for ore loss was included in the Ore Reserve estimate.
Probable Ore Reserves for Catho Well were based on Mineral Resources classified as Indicated, intersected by the
open pit mine designs. Proved Ore Reserves were based on Mineral Resources classified as Measured, intersected
by the open pit mine designs. Ore Reserves were estimated after consideration of all mining, metallurgical,
infrastructure, social, environmental, marketing, legal, governmental and economic modifying factors of the WPIOP.
The above modifying factors were summarized in Appendix A of the September 2015 Cullen ASX announcement in
the form required by the JORC Code 2012 (referred to within the JORC Code as “Table 1”) as a checklist or reference
when preparing Public Reports on Exploration Results, Mineral Resources and Ore Reserves.
The WPIOP - Stage 1 Ore Reserves are based on information compiled under the direction of Ms Kate Sommerville.
Ms Sommerville is a Member of the Australasian Institute of Mining and Metallurgy and is employed by AMC. Ms
Sommerville has sufficient experience relevant to the style of mineralization and type of deposit under consideration
to qualify as a Competent Person as defined in the JORC Code 2012.
This Ore Reserve estimate replaces the previous Ore Reserve estimate released in 2010. The difference in the
estimates is an increase of 276 Mt (dry) of saleable product for the WPIOP (including an increase of 17 Mt (dry) for the
MSIOJV) and results from revised mine planning and the inclusion of additional Mineral Resources.
17
Exploration Review
Competent Person Statement (mineral resource)
The information in this report that relates to the Catho Well Mineral Resource was prepared under the supervision of Mr Stuart
Tuckey and Mr Richard Gaze who are members of the Australasian Institute of Mining and Metallurgy. Mr Tuckey was previously a
full-time employee of the API Management Pty Ltd. Mr Gaze is a full-time employee of Golder Associates Pty Ltd. Mr Tuckey and Mr
Gaze have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the
activity which they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the 'Australasian Code of
Reporting of Exploration Results, Mineral Resources and Ore Reserves'.
Competent Persons Statement
The information in this report that relates to the WPIOP - Stage 1 Ore Reserve estimate is based on information compiled and
reviewed by Ms Kate Sommerville, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Ms
Sommerville is a full time employee of AMC Consultants Pty Ltd. Ms Sommerville has sufficient experience that is relevant to the
style of mineralization and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person
as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'.
Ms Sommerville consents to the report being issued in the form and context in which it appears.
Statement of No Conflict of Interest
In undertaking the assignments referred to in this report, AMC acted as an independent party, has no interest in the outcome of the
WPIOP - Stage 1, and has no business relationship with APIM or any of the joint venture companies other than undertaking those
individual technical consulting assignments as engaged, and being paid according to standard per diem rates with reimbursement
for out-of-pocket expenses. Therefore, AMC and the Competent Person believe that there is no conflict of interest in undertaking the
assignments which are the subject of this report.
Competent Person Statement
The information in this report that relates to Exploration Results is based on information compiled by Dr Chris Ringrose, Managing
Director, Cullen Resources Limited who is a Member of the Australasian Institute of Mining and Metallurgy. Dr. Ringrose is a full-time
employee of Cullen Resources Limited. He has sufficient experience which is relevant to the style of mineralisation and types of
deposits under consideration, and to the activity which has been undertaken, to qualify as a Competent Person as defined by the
2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr. Ringrose
consents to the report being issued in the form and context in which it appears. The information in this report may also include review
and interpretation of historical and previous exploration by Cullen. The Company confirms that it is not aware of any new information
or data which materially affects the information included in this report.
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
DIRECTORS' REPORT
Your Directors submit their report for the year ended 30 June 2016.
Directors
The names and details of the company’s directors in office during the financial year and until the date of this
report are as follows. Directors were in office for this entire period unless otherwise stated.
Dr Denis Clarke BSc, BA, PhD, FAIMM (Non‐Executive Chairman) (Appointed 1 April 1999)
•
Dr Denis Clarke has more than 40 years’ experience in exploration and mining operations. Over 15 years with
Plutonic Resources (“Plutonic”), he contributed significantly at the General Manager level to its success as it
developed from a small explorer in 1983 to one of Australia’s largest gold miners prior to its take‐over in 1998 in
a transaction which valued Plutonic at $1 billion. Dr Clarke at various times managed the exploration, finance,
administration and corporate divisions. He subsequently was a director and consultant to Troy Resources
Limited for eleven years as it developed from explorer to a successful international gold miner. During the past
three years Dr Clarke has been Chairman or Non‐Executive Director of the following listed companies:
LionGold Corp Ltd (from 1 October 2012 to present)
‐
‐ Hill End Gold Limited (from 25 February 2010 to 19 January 2016)
‐
Signature Metals Limited (from 14 September 2012 to present)
Dr Chris Ringrose BSc, PhD, MBA, MAIMM, MAICD (Managing Director) (Appointed 19 June 2003)
•
Dr Chris Ringrose has been an exploration geologist based mainly in Western Australia since he completed his
geology degrees in Scotland in 1982. His career has included experience with EZ, Chevron and Aztec, and prior to
joining Cullen, he was Exploration Manager with Troy Resources Limited for nine years. Dr Ringrose has also
completed an MBA at Deakin University and brings to the Company significant management, exploration and
project evaluation experience gained both in Australia and overseas. Dr Ringrose has had no other directorships
of listed companies in the last three years.
Grahame Hamilton BSc, MSc, MAIG (Non‐Executive Director) (Appointed 1 April 1999)
•
Mr Grahame Hamilton, a graduate of the University of NSW, has extensive experience over 40 years in
exploration, corporate and project management. He has wide ranging expertise in project evaluation. Between
1994 and 1996 he managed the Brocks Creek exploration, environmental impact statement, feasibility study,
mine development and construction for Solomon Pacific Resources NL. Before Solomon, Mr Hamilton worked
with Getty Oil Development Co. ‐ Minerals Division as Queensland Manager.
John Horsburgh BSc, MSc, FAIMM (Non‐Executive Director) (Appointed 1 April 1999)
•
Mr John Horsburgh, a graduate of the Royal School of Mines, has over 40 years industry experience including 11
years with Solomon Pacific Resources NL. Prior to this he gained extensive experience in Australia and overseas
with Getty Oil Development Co., Billiton and RTZ Group. Mr Horsburgh is Non‐Executive Chairman of AIM‐listed
public company Mariana Resources Limited.
•
Wayne John Kernaghan BBus, ACA, FAICD, ACIS (Non‐Executive Director and Company Secretary)
(Appointed 11 November 1997)
Mr Wayne Kernaghan is a member of the Institute of Chartered Accountants in Australia with a number of years
experience in various areas of the mining industry. He is also a Fellow of the Australian Institute of Company
Directors. During the past three years Mr Kernaghan has held, and is currently a director and holds, the following
listed company directorships:
‐
‐
Gulf Industrials Limited (from 30 June 2005 to present)
South American Ferro Metals Limited (from 26 June 2013 to 24 April 2015)
‐ 18 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Principal Activities
The principal activity for the Consolidated Entity comprising Cullen Resources Limited ("the Company") and its
controlled entities (together "the Consolidated Entity") during the course of the financial year was mineral
exploration. There was no significant change in the nature of the Consolidated Entity's activities during the year.
Results
The loss attributable to the Consolidated Entity for the financial year was $955,336 [2015: loss $1,414,969]. No
income tax was attributable to this result [2015: Nil].
Dividends
The directors do not recommend the payment of a dividend for this financial year. No dividend has been
declared or paid by the Company since the end of the previous financial year.
Significant Changes in the State of Affairs
In the opinion of the directors there were no significant changes in the state of affairs of the Consolidated Entity
that occurred during the financial year under review not otherwise disclosed in this report or the consolidated
financial statements.
Review of Operations
Cullen is a mineral exploration company seeking deposits of gold, nickel, copper, cobalt, lithium and iron ore
either in its own right, or managed by other partners in Joint Ventures.
During the year under review, the Company continued its mineral exploration activities including: project
generation, database reviews, field mapping, geochemical surveying, and drilling programmes. Company
exploration activities, including joint operations, were focused in Western Australia with additional activities in
New South Wales as follows:
Ashburton Province, WA (Mt Stuart JV and Paraburdoo JV iron ore projects)
North Eastern Goldfields, WA (Gunbarrel/Mt Eureka and Irwin Bore, gold and nickel projects)
Eastern Goldfields, WA (Killaloe JV, gold and nickel project)
Murchison,WA (North Tuckabianna , copper and gold project)
Forrestania, WA (Forrestania JV, gold project)
Central Lachlan Fold Belt, NSW (Minter tungsten project)
Drilling by Cullen during the year to 30 June 2016 focussed on programmes for gold deposits in the Mt Eureka
project area, and for iron ore in the Mt Stuart Iron Ore JV. Other exploration field work has included: field
reconnaissance, geological mapping and drilling in the Mt Eureka project, and evaluations of new project
opportunities and project generation. The Company continued to market projects as potential farm‐out
opportunities. The Company also initiated the development of a portfolio of exploration projects for lithium in
Western Australia and Finland.
A total of $986,422 (2015: $1,490,268) was spent on exploration by Cullen during the year, with Joint Venture
Partners contributing further exploration funds on Cullen tenements.
Cullen will continue to identify and evaluate both advanced and "grass roots" opportunities throughout Australia
and in selected overseas locations. Cullen’s portfolio is under continual evaluation to focus on projects likely to
result in discovery of an economic mineral deposit.
Corporate
At 30 June 2016 available cash totalled $531,471 (2015: $867,152).
After Balance Date Events
There has not arisen in the interval between the end of the financial year and the date of this report any item,
transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect the
‐ 19 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
operations of the Consolidated Entity, the results of those operations or the state of affairs of the Consolidated
Entity in the subsequent financial years.
Likely Developments and Future Results
Other than as referred to in this report, further information as to likely developments in the operations of the
Consolidated Entity and the expected results of those operations would, in the opinion of the directors, be
speculative and not in the best interests of the Consolidated Entity.
Environmental Regulation
The exploration activities of the Consolidated Entity in Australia are subject to environmental regulation under
the laws of the Commonwealth and the States in which those exploration activities are conducted. The
environmental laws and regulations generally address the potential impact of the Consolidated Entity's activities
in the areas of water and air quality, noise, surface disturbance and the impact upon flora and fauna. The
directors are not aware of any environmental matter which would have a materially adverse impact on the
overall business of the Consolidated Entity.
Options
As at the date of this report the Company has 26,000,000 (2015: 26,000,000) options which were outstanding.
During the year nil (2015: 20,000,000) options were issued and nil (2015: nil) options expired. Refer to Note 11
of the financial statements for further details of the options outstanding.
During the year no fully paid ordinary shares were issued by virtue of the exercise of options (2015: Nil). Since
the end of the financial year no shares have been issued by virtue of the exercise of options (2015: Nil).
Directors’ Interest
At the date of this report, the interest of the directors in the shares and options of the company were:
2016
D. Clarke
C. Ringrose
G. Hamilton
J. Horsburgh
W. Kernaghan
Direct
Fully Paid Shares
‐
11,835,342
228,571
8
3,428,574
Options
2,500,000
10,000,000
2,500,000
2,500,000
2,500,000
Indirect
Fully Paid Shares
17,428,513
‐
30,289,143
33,437,149
14,275,417
Options
‐
‐
‐
‐
‐
Directors' Meetings
During the year the Company held ten meetings of directors. The attendance of the directors at meetings of the
Board were:
D. Clarke
C. Ringrose
G. Hamilton
J. Horsburgh
W. Kernaghan
No. of meetings
attended
10
10
9
10
10
Maximum possible
eligible to attend
10
10
10
10
10
Indemnification and insurance of Directors and Officers
The Company has entered into deeds of indemnity with the Directors indemnifying them against certain
liabilities and costs to the extent permitted by law. The Company has paid premiums totalling $9,811 (2015:
$10,892) in respect of Directors and Officers Liability Insurance and Company reimbursement policies, which
covers all Directors and Officers of the Company. The policy conditions preclude the Company from any detailed
disclosures.
‐ 20 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Indemnification of Auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the
terms of its audit engagement agreement against claims by third parties arising from the audit (for an
unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year.
Employees
The Consolidated Entity employed two employees as at 30 June 2016 (2015: two).
Corporate Governance
In recognising the need for the highest standard of corporate behaviour and accountability, the directors of
Cullen Resources Limited support and have adhered to the principles of good corporate governance. The
Company’s corporate governance statement is on page 28.
Auditor Independence
The directors have received the auditor’s independence declaration for the year ended 30 June 2016 which is on
page 27 and forms part of this directors’ report. For the year Ernst & Young have provided non‐audit services to
the Consolidated Entity in the amount of $4,294 (2015: $10,872).
The directors are satisfied that non‐audit services are compatible with the independence requirements of the
Corporations Act 2001. The nature and scope of the non‐audit services provided has meant that auditor
independence was not compromised.
‐ 21 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
REMUNERATION REPORT (AUDITED)
This report details the nature and amount of remuneration for each director of Cullen Resources Limited.
This remuneration report outlines the director and executive remuneration arrangements of the Consolidated
Entity in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of
this report, key management personnel (KMP) of the Consolidated Entity are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the Consolidated Entity,
directly or indirectly, including any director (whether executive or otherwise) of the parent company. Only
directors of the Consolidated Entity meet the definition of key management personnel as the executive role is
performed by the executive director.
Details of key management personnel:
Directors
D. Clarke
C. Ringrose
G. Hamilton
J. Horsburgh
W. Kernaghan
Chairman (Non‐Executive)
Managing Director
Director (Non‐Executive)
Director (Non‐Executive)
Director (Non‐Executive)
Remuneration Policy
The remuneration policy of Cullen Resources Limited has been designed to align director objectives with
shareholder and business objectives by providing a fixed remuneration component and offering specific long‐
term incentives. The board of Cullen Resources Limited 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 and shareholders.
The Board’s policy for determining the nature and amount of remuneration for Board members is as follows.
The remuneration policy, setting the terms and conditions for the executive director was developed by the
Board. The executive receives a base salary on factors such as length of service and experience, superannuation,
options and incentives. The Board reviews executive packages annually by reference to executive performance
and comparable information from industry sectors and other listed companies in similar industries.
The Board policy is to remunerate non‐executive directors at market rates for comparable companies for time,
commitment and responsibilities. The Board determines payments to the non‐executive directors and reviews
their remuneration annually, based on market practice, duties and accountability. Independent external advice is
sought when required. 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 either long term or short term performance of the Consolidated Entity. However, to align directors’
interest with shareholder interests, the directors are encouraged to hold shares in the Company. There is a
specified aggregate directors fees of $250,000 for non‐executive directors which was approved by shareholders
at a general meeting of the Company. The $250,000 excludes other services outside of non‐executive directors'
fees.
Remuneration Incentives
Director and executive remuneration is currently not linked to either long term or short term performance
conditions. The Board feels that the expiry date and exercise price of options when issued to the directors and
executives are sufficient to align the goals of the directors and executives with those of the shareholders to
maximise shareholder wealth, and as such, has not set any performance conditions for the directors or the
executives of the Company. The Board will continue to monitor this policy to ensure that it is appropriate for the
Company in future years.
‐ 22 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Group performance and shareholder wealth
Below is a table summarising key performance and shareholder wealth statistics for the Consolidated Entity over
the last five years.
Financial Year
30 June 2012
30 June 2013
30 June 2014
30 June 2015
30 June 2016
Loss After Tax
$
2,649,846
2,078,566
1,880,593
1,414,969
955,336
EPS
Cents
(0.41)
(0.28)
(0.21)
(0.13)
(0.06)
Share Price
Cents
1.8
0.8
1.7
0.4
0.3
Employment Contract ‐ Managing Director
Pursuant to an agreement Dr Ringrose will provide managing director services to the Company. The term of this
arrangement is from 1 November 2006 and will continue thereafter unless terminated on not less than three
months' notice given at any time. Effective from 1 April 2011 Dr Ringrose’s salary is $265,000pa. The position of
the director will become redundant under this agreement in the limited circumstances where the employment
of the Managing Director is terminated as a result of a takeover or merger of the Company. The Company will
pay the Managing Director the equivalent of four weeks per year of service or part thereof of his base salary as a
redundancy payment.
As part of Dr Ringrose's employment package he was issued with 10,000,000 options on 1 December 2014 with
the following terms. The options will expire on the earlier of the date which is one month after the Director to
whom the options are issued ceases to be a Director of the Company (or such longer period as determined by
the Board of Directors) or at 5.00 pm on 30 November 2017 ("the Expiry Date") with an exercise price of $0.016.
This is contained in the notice of meeting which was approved by shareholders.
During the year the Board paid a discretionary bonus of Nil (2015: Nil) to Dr Ringrose.
Non Executive Directors
The non executive directors have been issued with 2,500,000 options each on 1 December 2014 with an exercise
price of $0.016 each. The options will expire on the earlier of the date which is one month after the Director to
whom the options are issued ceases to be a Director of the Company (or such longer period as determined by
the Board of Directors) or at 5.00 pm on 30 November 2017 ("the Expiry Date"). This is contained in the notice of
meeting which was approved by shareholders.
Directors’ and Executives’ Remuneration
Details of remuneration provided to directors for the year ended 30 June 2016 are as follows:
Directors
Short Term
Director
Fees
$
35,000
Salary/
Consulting
$
Bonus
$
‐
‐
265,000
30,000
30,000
‐
‐
D. Clarke
C. Ringrose
G. Hamilton
J. Horsburgh
W. Kernaghan
30,000
38,875**
Total
125,000
303,875
Post
Employ‐
ment
Super‐
annuation
$
3,325
Long
Term
Long
Service
Leave
$
‐
Share
Based
Payments
Options
$
‐
Non
Monetary
Benefits
$
‐
* 5,417
25,175
5,088
‐
‐
‐
2,850
2,850
2,850
‐
‐
‐
5,417
37,050
5,088
‐
‐
‐
‐
‐
Perfor‐
mance
Related
%
‐
‐
‐
‐
‐
‐
Total
$
38,325
300,680
32,850
32,850
71,725
476,430
‐
‐
‐
‐
‐
‐
* This relates to the provision of a motor vehicle.
**Consultancy payments were made to Mosman Corporate Services Pty Ltd totalling $38,875 which is a company
controlled by Mr W Kernaghan. There was $2,000 outstanding at 30 June 2016.
‐ 23 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Details of remuneration provided to directors for the year ended 30 June 2015 are as follows:
Directors
Short Term
Director
Fees
$
35,000
Salary/
Consulting
$
‐
‐
265,000
30,000
30,000
30,000
‐
‐
42,875**
D. Clarke
C. Ringrose
G. Hamilton
J. Horsburgh
W. Kernaghan
Total
125,000
307,875
Bonus
$
‐
‐
‐
‐
‐
‐
Post
Employ‐
ment
Super‐
annuation
$
Long
Term
Long
Service
Leave
$
3,325
‐
25,175
5,097
Non
Monetary
Benefits
$
‐
* 5,417
‐
‐
‐
2,850
2,850
2,850
‐
‐
‐
Share
Based
Payments
Options
$
15,250
61,000
15,250
15,250
15,250
Total
$
53,575
361,689
48,100
48,100
90,975
5,417
37,050
5,097
122,000
602,439
Perfor‐
mance
Related
%
‐
‐
‐
‐
‐
‐
* This relates to the provision of a motor vehicle.
**Consultancy payments were made to Mosman Corporate Services Pty Ltd totalling $42,875 which is a company
controlled by Mr W Kernaghan. There was $3,125 outstanding at 30 June 2015.
Shares issued on exercise of remunerated options
During the financial year nil (2015: Nil) remunerated options were exercised. During the financial year nil
(2015: nil) options expired. The directors exercised nil (2015: Nil) options during the year.
Options granted as part of remuneration for the year ended 30 June 2016
There were no options granted as a part of remuneration for the year ended 30 June 2016.
Directors
D. Clarke
C. Ringrose
G. Hamilton
J. Horsburgh
W. Kernaghan
Value of options
granted during the
year
$
‐
‐
‐
‐
‐
Value of options
exercised during the
year
$
‐
‐
‐
‐
‐
Value of options
expired during the year
$
‐
‐
‐
‐
‐
Total value of options
granted, exercised and
expired during the year
$
‐
‐
‐
‐
‐
Options granted as part of remuneration for the year ended 30 June 2015
There were 20,000,000 options granted as a part of remuneration for the year ended 30 June 2015.
Directors
D. Clarke
C. Ringrose
G. Hamilton
J. Horsburgh
W. Kernaghan
Value of options
granted during the
year
$
15,250
61,000
15,250
15,250
15,250
Value of options
exercised during the
year
$
‐
‐
‐
‐
‐
Value of options
expired during the year
$
‐
‐
‐
‐
‐
Total value of options
granted, exercised and
expired during the year
$
15,250
61,000
15,250
15,250
15,250
‐ 24 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Option holdings of directors
Balance at
beginning of
year 1 July 2015
Number
Options
issued
Number
Options
lapsed
Number
2,500,000
10,000,000
2,500,000
2,500,000
2,500,000
20,000,000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Balance at end
of year
30 June 2016
Number
2,500,000
10,000,000
2,500,000
2,500,000
2,500,000
Vested and
exercisable at
30 June 2016
Number
2,500,000
10,000,000
2,500,000
2,500,000
2,500,000
Total
Number
2,500,000
10,000,000
2,500,000
2,500,000
2,500,000
20,000,000
20,000,000
20,000,000
Directors
D Clarke
C Ringrose
G Hamilton
J Horsburgh
W Kernaghan
Total
The outstanding options are exercisable at $0.016 and have an expiry date of 30 November 2017.
These options had a weighted average exercise price of $0.016 and a weighted average remaining contractual
life of 1.42 years.
Balance at
beginning of
year
1 July 2014
Number
Options
issued
Number
Options
lapsed
Number
Balance at end
of year
30 June 2015
Number
Total
Number
Vested and
exercisable at
30 June 2015
Number
Directors
D Clarke
C Ringrose
G Hamilton
J Horsburgh
W Kernaghan
Total
2,500,000
10,000,000
2,500,000
2,500,000
2,500,000
20,000,000
The outstanding options were exercisable at $0.016 and have an expiry date of 30 November 2017.
These options had a weighted average exercise price of $0.016 and a weighted average remaining contractual
life of 2.42 years.
2,500,000
10,000,000
2,500,000
2,500,000
2,500,000
20,000,000
2,500,000
10,000,000
2,500,000
2,500,000
2,500,000
20,000,000
2,500,000
10,000,000
2,500,000
2,500,000
2,500,000
20,000,000
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Shareholdings of directors
Directors
D Clarke
C Ringrose
G Hamilton
J Horsburgh
W Kernaghan
Total
Directors
D Clarke
C Ringrose
G Hamilton
J Horsburgh
W Kernaghan
Total
Balance
1 July 2015
Number
11,619,008
7,890,227
23,684,374
25,337,147
11,802,656
80,333,412
Balance
1 July 2014
Number
7,864,000
3,450,000
18,391,004
19,952,126
6,873,376
56,530,506
Options
Exercised
Number
‐
‐
‐
‐
‐
‐
Options
Exercised
Number
‐
‐
‐
‐
‐
‐
Net Change
Purchase
Number
5,809,505
3,945,115
6,833,340
8,100,010
5,901,335
30,589,305
Net Change
Purchase
Number
3,755,008
4,440,227
5,293,370
5,385,021
4,929,280
23,802,906
Balance
30 June 2016
Number
17,428,513
11,835,342
30,517,714
33,437,157
17,703,991
110,922,717
Balance
30 June 2015
Number
11,619,008
7,890,227
23,684,374
25,337,147
11,802,656
80,333,412
The directors' shareholdings are held directly and indirectly.
‐ 25 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
End of Remuneration Report
Signed in accordance with a resolution of the directors
C. Ringrose
Director
Perth, WA
16 September 2016
‐ 26 ‐
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Auditor’s Independence Declaration to the Directors of Cullen Resources
Limited
As lead auditor for the audit of Cullen Resources Limited for the financial year ended 30 June 2016, I
declare to the best of my knowledge and belief, there have been:
a. no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b. no contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Cullen Resources Limited and the entities it controlled during the financial
year.
Ernst & Young
V L Hoang
Partner
16 September 2016
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
MH:VH:CULLEN:012
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
CORPORATE GOVERNANCE STATEMENT
In recognising the need for the highest standards of corporate behaviour and accountability, the directors of
Cullen Resources Limited have adhered to the principles of corporate governance and this statement outlines
the main corporate governance practices in place throughout the financial year. The ASX Corporate Governance
Council released revised Corporate Governance Principles and Recommendations on 27 March 2014. Having
regard to the size of the Company and the nature of its enterprise, it is considered that the Company complies
as far as possible with the spirit and intentions of the ASX Corporate Governance Council's Corporate
Governance Principles and Recommendations. Unless otherwise stated, the practices were in place for the
entire year.
Board of Directors
The Board of Directors of the Company is responsible for the corporate governance of the Company. The Board
guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are
elected and to whom they are accountable.
As the Board acts on behalf of shareholders, it seeks to identify the expectations of shareholders, as well as
other ethical expectations and obligations. In addition, the Board is responsible for identifying areas of
significant business risk and ensuing arrangements are in place to adequately manage those risks.
The primary responsibility of the Board includes:
formulation and approval of the strategic direction, objectives and goals of the Company;
monitoring the financial performance of the Company, including approval of the Company’s financial
statements;
ensuring that adequate internal control systems and procedures exists and that compliance with these
systems and procedures is maintained;
the identification of significant business risks and ensuring that such risks are adequately managed;
the review of performance and remuneration of executive directors; and
the establishment and maintenance of appropriate ethical standards.
The responsibility for the operation and administration of the Company is carried out by the directors, who
operate in an executive capacity, supported by senior professional staff. The Board ensures that this team is
suitably qualified and experienced to discharge their responsibilities, and assesses on an ongoing basis the
performance of the management team, to ensure that management’s objectives and activities are aligned with
the expectations and risks identified by the Board.
The Directors of the Company are as follows:
Dr Denis Clarke
Dr Chris Ringrose
Grahame Hamilton
John Horsburgh
Wayne Kernaghan
For information in respect to each director refer to the Directors' Report.
‐ 28 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Independent Directors
Under ASX guidelines, four of the current Board of five directors are considered to be independent directors.
Dr Ringrose is the executive director and under the ASX guidelines deemed not to be independent by virtue of
his position. The Board is satisfied that the structure of the Board is appropriate for the size of the Company and
the nature of its operations and is a cost effective structure for managing the Company.
Board Composition
When the need for a new director is identified, selection is based on the skills and experience of prospective
directors, having regard to the present and future needs of the Company. Any director so appointed must then
stand for election at the next Annual General Meeting of the Company.
Terms of Appointment as a Director
The constitution of the Company provides that a Director, other than the Managing Director, may not retain
office for more than three calendar years or beyond the third annual general meeting following his or her
election, whichever is longer, without submitting for re‐election. One third of the Directors must retire each
year and are eligible for re‐election. The Directors who retire by rotation at each annual general meeting are
those with the longest length of time in office since their appointment or last election.
Board Committees
In view of the size of the Company and the nature of its activities, the Board has considered that establishing
formally constituted committees for audit, board nominations and remuneration would contribute little to its
effective management. Accordingly audit matters, the nomination of new Directors and the setting, or review,
of remuneration levels of Directors and senior executives are reviewed by the Board as a whole and approved
by resolution of the Board (with abstentions from relevant Directors where there is a conflict of interest).
Where the Board considers that particular expertise or information is required, which is not available from
within their number, appropriate external advice may be taken and reviewed prior to a final decision being
made by the Board.
Remuneration
Remuneration and other terms of employment of executives, including executive directors, are reviewed
periodically by the Board having regard to performance, relevant comparative information and, where
necessary, independent expert advice. Remuneration packages are set at levels that are intended to attract and
retain executives capable of managing the Company’s operations.
The terms of engagement and remuneration of executive directors is reviewed periodically by the Board, with
recommendations being made by the non‐executive directors. Where the remuneration of a particular
executive director is to be considered, the director concerned does not participate in the discussion or decision
making.
Make Timely and Balanced Disclosure
The board has in place written policies and procedures to ensure the Company complies with its obligations
under the continuous disclosure rule 3.1 and other ASX Listing Rule disclosure requirements.
Independent Professional Advice
Directors have the right, in connection with their duties and responsibilities as directors, to seek independent
professional advice at the Company’s expense. Prior approval of the Chairman is required, which will not be
unreasonably withheld.
‐ 29 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Code of Conduct
In view of the size of the Company and the nature of its activities, the Board has considered that an informal
code of conduct is appropriate to guide executives, management and employees in carrying out their duties and
responsibilities.
Diversity Policy
The Company is in the process of establishing a diversity policy having regard to the size of the company and the
nature of its business.
As at 30 June 2016, 50 % (2015: 50%) of the workforce is female with no females at board or senior
management level. There are only two employees, one female and one male.
Communication to Market & Shareholders
The Board of Directors aims to ensure that the shareholders, on behalf of whom they act, are informed of all
information necessary to assess the performance of the directors and the Company. Information is
communicated to shareholders and the market through:
the Annual Report which is available to all shareholders;
other periodic reports which are lodged with ASX and available for shareholder scrutiny;
other announcements made in accordance with ASX Listing Rules;
special purpose information memoranda issued to shareholders as appropriate;
the Annual General Meeting and other meetings called to obtain approval for board action as appropriate;
and,
The Company's website.
Share Trading
Dealings are not permitted at any time whilst in the possession of price sensitive information not already
available to the market. In addition, the Corporations Act 2001 prohibits the purchase or sale of securities whilst
a person is in possession of inside information.
External Auditors
The external auditor is Ernst and Young. The external auditors are invited to attend the annual general meeting
and be available to answer shareholder questions about the conduct of the audit and the preparation and
content of the auditor's report.
Full details of the company’s corporate governance practices can be viewed at its website
www.cullenresources.com.au.
‐ 30 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Consolidated Statement of Financial Position
as at 30 June 2016
Current Assets
Cash and cash equivalents
Receivables
Total Current Assets
Non Current Assets
Other financial assets
Plant & equipment
Exploration & evaluation
Total Non Current Assets
Total Assets
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Share based payment reserve
Accumulated losses
Total Equity
Note
21(i)
5
6
7
8
9
10
11
12
13
Consolidated
2016
$
531,471
43,971
575,442
10,000
5,606
5,811,317
5,826,923
6,402,365
153,734
107,999
261,733
2015
$
867,152
93,804
960,956
10,000
‐
5,329,287
5,339,287
6,300,243
299,480
111,171
410,651
261,733
410,651
6,140,632
5,889,592
43,482,463
1,459,725
(38,801,556)
6,140,632
42,276,087
1,459,725
(37,846,220)
5,889,592
These financial statements should be read in conjunction with the accompanying notes.
‐ 31 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Consolidated Statement of Changes in Equity
for the year ended 30 June 2016
Note
Issued
Capital
$
Share Based
Payment
Reserve
$
Accumulated
Losses
$
Total
Equity
$
At 1 July 2014
40,521,766
1,301,725
(36,431,251)
5,392,240
Loss for the year
Other comprehensive income
Total comprehensive
income/(loss) for the year
Issue of share capital
Share issue costs
‐
‐
‐
1,793,201
(38,880)
‐
‐
‐
‐
‐
Share based payments
12
‐
158,000
(1,414,969)
(1,414,969)
‐
‐
(1,414,969)
(1,414,969)
‐
‐
‐
1,793,201
(38,880)
158,000
At 30 June 2015
42,276,087
1,459,725
(37,846,220)
5,889,592
Note
Issued
Capital
$
Share Based
Payment
Reserve
$
Accumulated
Losses
$
Total
Equity
$
At 1 July 2015
42,276,087
1,459,725
(37,846,220)
5,889,592
Loss for the year
Other comprehensive income
Total comprehensive
income/(loss) for the year
Issue of share capital
Share issue costs
‐
‐
‐
1,246,181
(39,805)
Share based payments
12
‐
‐
‐
‐
‐
‐
‐
(955,336)
(955,336)
‐
‐
(955,336)
(955,336)
‐
‐
‐
1,246,181
(39,805)
‐
At 30 June 2016
43,482,463
1,459,725
(38,801,556)
6,140,632
These financial statements should be read in conjunction with the accompanying notes.
‐ 32 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Consolidated Statement of Comprehensive Income
for the year ended 30 June 2016
Revenues
Rent
Salaries and consultants' fees
Compliance expenses
Impairment of exploration expenditure
Share based payments
Depreciation
Other expenses
Loss before income tax
Income tax
Net loss attributable to members of
Cullen Resources Limited after tax
Other Comprehensive Income:
Total comprehensive loss
for the period
Basic (loss) per share
(cents per share)
Diluted (loss) per share
(cents per share)
Note
3
8
12
4
22
22
Consolidated
2016
$
2015
$
122,906
130,816
(36,741)
(307,114)
(135,197)
(504,392)
‐
(1,844)
(92,954)
(37,359)
(409,590)
(156,633)
(644,867)
(158,000)
(963)
(138,373)
(955,336)
(1,414,969)
‐
‐
(955,336)
(1,414,969)
‐
‐
(955,336)
(1,414,969)
(0.06)
(0.13)
(0.06)
(0.13)
These financial statements should be read in conjunction with the accompanying notes.
‐ 33 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Consolidated Statement of Cash Flows
for the year ended 30 June 2016
Note
Consolidated
2016
$
2015
$
Cash flows from operating activities
Sale of tenements
Research and development grant
Cash payments in the course of operations
GST refunded
Interest received
75,000
42,942
(1,220,002)
44,519
4,964
‐
99,529
(1,327,651)
81,328
8,560
Net operating cash flows
21(ii)
(1,052,577)
(1,138,234)
Cash flows from investing activities
Payments for plant & equipment
Proceeds from sale plant & equipment
Payments for exploration & evaluation
Net investing cash flows
Cash flows from financing activities
Proceeds from issue of shares
Share issue costs
Net financing cash flows
Net decrease in cash
and cash equivalents
Cash and cash equivalents at the
beginning of the financial year
Cash and cash equivalents at the end
of the financial year
(7,450)
‐
(482,030)
‐
22,727
(845,401)
(489,480)
(822,674)
1,246,181
(39,805)
1,793,201
(38,880)
1,206,376
1,754,321
(335,681)
(206,587)
867,152
1,073,739
21(i)
531,471
867,152
These financial statements should be read in conjunction with the accompanying notes.
‐ 34 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Notes to the Financial Statements
1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
(a)
The financial statements are general purpose financial statements, which have been prepared in accordance with the requirements
of the Corporations Act 2001, and Australian Accounting Standards. The financial statements have also been prepared in
accordance with the historical cost convention using the accounting policies described below.
Statement of compliance
(b)
The financial statements comply with Australian Accounting Standards as issued by the Australian Accounting Standards Board and
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
Accounting policies and disclosures
(c)
The Consolidated Entity has adopted all new and amended Australian Accounting Standards and AASB interpretations which were
applicable as of 1 July 2015. Adoption of other new and amended Australian Accounting Standards and AASB interpretations did not
have any effect on the financial position or performance of the Consolidated Entity.
The Consolidated Entity has not elected to early adopt any new standards or amendments.
Going Concern
The accounts have been prepared on the going concern basis, which contemplates continuity of normal business activities and the
realisation of assets and liabilities in the normal course of business.
The Consolidated Entity had cash and cash equivalents of $531,471 at 30 June 2016. The directors acknowledge that continued
exploration and development of the consolidated group’s mineral exploration projects will necessitate further capital raisings.
The Consolidated Entity remains dependent on its ability to raise funding in volatile capital markets. However, the directors
continue to believe that the going concern basis of accounting by the Consolidated Entity is appropriate as the Company and
Consolidated Entity have successfully completed capital raisings during the year to 30 June 2016, notwithstanding the challenging
conditions in equity markets.
In consideration of the above matters, the directors have determined that it is reasonably foreseeable that the Consolidated Entity will
continue as going concern and that it is appropriate that the going concern method of accounting be adopted in the preparation of the
financial statements. In the event that the Consolidated Entity is unable to continue as a going concern (due to inability to raise future
funding requirements), it may be required to realise its assets at amounts different to those currently recognised, settle liabilities other
than in the ordinary course of business and make provisions for other costs which may arise as a result of cessation or curtailment of
normal business operations.
Accordingly, the financial statements do not include adjustments relating to the recoverability and classification of assets amount
or to the amounts and classification of liabilities that might be necessary if the Consolidated Entity does not continue a going
concern.
Principles of consolidation
(d)
The consolidated financial statements include the financial statements of Cullen Resources Limited and the results of all of its
controlled entities which are referred to collectively throughout these financial statements as the “Consolidated Entity”. The results
of controlled entities are prepared for the same reporting period as the parent, using consistent accounting policies. All inter‐entity
balances and transactions, and unrealised profits arising from intra‐economic entity transactions, have been eliminated in full.
Taxes
(e)
Income tax
Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences, except:
where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction
that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or
loss; or
35
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
in respect of taxable temporary differences associated with investments in subsidiaries, associates and interest in joint venture,
where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry‐forward of unused tax assets and unused
tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences,
and the carry‐forward of unused tax credits and unused tax losses can be utilised, except:
where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint
ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance
sheet date.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the Consolidated Statement of
Comprehensive Income.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST
is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the
Consolidated Statement of Financial Position. Cash flows are included in the Consolidated Statement of Cash Flows on a gross basis
and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the
taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
Provision for employee benefits
(f)
Provision has been made in the financial statements for benefits accruing to employees in relation to annual leave and long service
leave. Annual leave provisions expected to be settled within twelve months are measured at their nominal amounts. Long service
leave provisions are measured at the present value of the estimated future cash outflow to be made in respect of services provided
by employees up to the reporting date. In determining the present value of future cash outflows, the interest rates attaching to
Australian corporate bond securities which have terms to maturity approximating the terms of the related liabilities are used.
Investments in controlled entities
(g)
Investments in controlled entities are carried in the company’s financial statements at the lower of cost and recoverable amount.
Dividends and distributions are brought to account when they are proposed by the controlled entities.
Exploration and Evaluation Expenditure
Expenditure is deferred
(h)
(i)
Expenditure on exploration and evaluation is accounted for in accordance with the 'area of interest' method. Exploration and
evaluation expenditure is capitalised provided the rights to tenure of the area of interest is current(or in the process of being re‐
applied for) and either:
the exploration and evaluation activities are expected to be recouped through successful development and exploitation of the
area of interest or, alternatively, by its sale; or
exploration and evaluation activities in the area of interest have not at the reporting date reached a stage that permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant
operations in, or relating to, the area of interest are continuing.
36
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
When the technical feasibility and commercial viability of extracting a mineral resource have been demonstrated then any
capitalised exploration and evaluation expenditure is reclassified as capitalised mine development. Prior to reclassification,
capitalised exploration and evaluation expenditure is assessed for impairment.
Impairment
The carrying value of capitalised exploration and evaluation expenditure is assessed for impairment at the area of interest level
whenever facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount.
An impairment exists when the carrying amount of an area of interest exceeds its estimated recoverable amount. The area of
interest is then written down to its recoverable amount. Any impairment losses are recognised in the Consolidated Statement of
Comprehensive Income.
(i)
Both the functional and presentation currency of Cullen Resources Limited and its Australian subsidiaries is Australian dollars ($A).
Foreign currency
Foreign currency transactions are translated to Australian currency at the rate of exchange ruling at the date of the transactions.
Monetary items in foreign currencies at balance date are translated at the rates of exchange ruling on that date.
Exchange differences relating to amounts payable and receivable in foreign currencies are brought to account in the Consolidated
Statement of Comprehensive Income in the financial year in which the exchange rates change, as exchange gains or losses.
(j)
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Plant and equipment
Depreciation is calculated on a straight‐line basis over the estimated useful life of the assets as follows:
Plant and equipment – over 3 to 8 years.
The assets residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate at each financial year
end.
Revenue
(k)
Other revenue includes interest revenue on short term deposit received from other persons. It is brought to account using the
effective interest rate method. This is a method of calculating the amortised cost of a financial asset and allocating the interest
income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Refundable research and development tax offset is brought to account when the funds are received.
Joint Operations
(l)
The Consolidated Entity recognises in relation to its joint operations:
‐
Assets, including its share of any assets held jointly
‐
Liabilities, including its share of any liabilities incurred jointly
‐
Revenue from the sale of its share of the output arising from the joint operation
‐
Share of the revenue from the sale of the output by the joint operation
‐
Expenses, including its share of any expenses incurred jointly
Payables
(m)
Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration to be paid in the
future for goods and services received, whether or not billed to the Consolidated Entity.
Cash and cash equivalents
(n)
Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short‐term deposits with an original
maturity 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. For the purposes of the Consolidated Statement of Cash Flows, cash includes cash on hand and in banks,
and money market investments readily convertible to cash within two working days.
Leases
(o)
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an
assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the
arrangement conveys a right to use the asset.
Operating lease payments are recognised as an expense in the Consolidated Statement of Comprehensive Income on a straight‐line
basis over the lease term.
37
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Issued capital
(p)
Issued and paid up capital is recognised at the fair value of the consideration received by the Consolidated Entity. Any transaction
costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.
Earnings per share (EPS)
(q)
Basic EPS is calculated as net profit/(loss) attributable to members, adjusted to exclude costs of servicing equity, divided by the
weighted average number of ordinary shares, adjusted for any bonus element. Diluted EPS is calculated as net profit/ (loss)
attributable to members, adjusted for:
costs of servicing equity;
the after tax effect of interest associated with dilutive potential ordinary shares that have been recognised as expenses;
and
other non‐discretionary changes in revenues or expenses during the period that would result from the dilution of potential
ordinary shares;
divided by the weighted average number of ordinary shares, adjusted for any bonus element.
(r)
The accounting policies adopted are consistent with those of the previous year, except as noted at Note 1(c).
Change in accounting policies
Share based payments
(s)
At each subsequent reporting date until vesting, the cumulative charge to the Consolidated Statement of Comprehensive Income is
the product of:
(i)
(ii)
The grant date fair value of the option.
The current best estimate of the number of options that will vest, taking into account such factors as the likelihood of
employee turnover during the vesting period and the likelihood of non‐market performance conditions being met.
The expired portion of the vesting period.
(iii)
The charge to the Consolidated Statement of Comprehensive Income for the period is the cumulative amount as calculated above
less the amounts already charged in previous periods. There is a corresponding entry to equity.
The company may also issue options that do not have any vesting conditions.
Until an option has vested, any amounts recorded are contingent and will be adjusted if more or fewer options vest than were
originally anticipated to do so. Any option subject to a market condition is considered to vest irrespective of whether or not that
market condition is fulfilled, provided that all other conditions are satisfied.
If the terms of an equity‐settled option are modified, as a minimum an expense is recognised as if the terms had not been
modified. An additional expense is recognised for any modification that increases the total fair value of the share‐based payment
arrangement, or is otherwise beneficial to the employee, as measured at the date of modification.
If an equity‐settled option is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet
recognised for the option is recognised immediately. However, if a new option is substituted for the cancelled option and
designated as a replacement option on the date that it is granted, the cancelled and new option are treated as if they were a
modification of the original option, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of diluted earnings per
share.
Investment and other financial assets
(t)
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets
at fair value through profit or loss, loans and receivables, held‐to‐maturity investments, or available‐for‐sale investments, as
appropriate. When financial assets are recognised initially, they are measured at fair value, plus, in the case of assets not at fair value
through profit or loss, directly attributable transactions costs. The Consolidated Entity determines the classification of its financial
assets after initial recognition and, when allowed and appropriate, re‐evaluates this designation at each financial year‐end.
Impairment of non‐financial assets
(u)
Non‐financial assets are tested 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. 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 inflows that are largely
independent of the cash inflows from other assets or groups of assets (cash‐generating units). Non‐financial assets other than
goodwill that suffered impairment are tested for possible reversal of the impairment whenever events or changes in circumstances
indicate that the impairment may have reversed.
New accounting standards and interpretations
(v)
International Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have
not been adopted by the Group for the annual reporting period ended 30 June 2016. These are outlined in the table below.
38
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Application
date of
standard
Application
date for Group
1 January 2018
1 July 2018
Accounting
Standard
Title
Summary
AASB 9
Financial
Instruments
AASB 9 (December 2014) is a new standard which
replaces AASB 139. This new version supersedes AASB 9
issued in December 2009 (as amended) and AASB 9
(issued in December 2010) and includes a model for
classification and measurement, a single, forward‐
looking ‘expected loss’ impairment model and a
substantially‐reformed approach to hedge accounting.
AASB 9 is effective for annual periods beginning on or
after 1 January 2018. However, the Standard is available
for early adoption. The own credit changes can be early
adopted in isolation without otherwise changing the
accounting for financial instruments.
Classification and measurement
AASB 9 includes requirements for a simpler approach
for classification and measurement of financial assets
compared with the requirements of AASB 139. There
are also some changes made in relation to financial
liabilities.
The main changes are described below.
Financial assets
a.
b.
c.
Financial assets that are debt instruments will be
classified based on (1) the objective of the entity's
business model for managing the financial assets;
(2) the characteristics of the contractual cash flows.
Allows an irrevocable election on initial recognition
to present gains and losses on investments in equity
instruments that are not held for trading in other
comprehensive income. Dividends in respect of
these investments that are a return on investment
can be recognised in profit or loss and there is no
impairment or recycling on disposal of the
instrument.
Financial assets can be designated and measured at
fair value through profit or loss at initial recognition
if doing so eliminates or significantly reduces a
measurement or recognition inconsistency that
would arise from measuring assets or liabilities, or
recognising the gains and losses on them, on
different bases.
Financial liabilities
Changes introduced by AASB 9 in respect of financial
liabilities are limited to the measurement of liabilities
designated at fair value through profit or loss (FVPL)
using the fair value option.
Where the fair value option is used for financial liabilities,
the change in fair value is to be accounted for as follows:
►
The change attributable to changes in credit risk are
presented in other comprehensive income (OCI)
►
The remaining change is presented in profit or loss
AASB 9 also removes the volatility in profit or loss that
was caused by changes in the credit risk of liabilities
elected to be measured at fair value. This change in
accounting means that gains or losses attributable to
changes in the entity’s own credit risk would be
recognised in OCI. These amounts recognised in OCI are
not recycled to profit or loss if the liability is ever
repurchased at a discount.
‐ 39 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Application
date of
standard
Application
date for Group
1 January 2018
1 July 2018
Accounting
Standard
Title
Summary
AASB 9
(continued)
Financial
Instruments
Impairment
The final version of AASB 9 introduces a new expected‐
loss impairment model that will require more timely
recognition of expected credit losses. Specifically, the
new Standard requires entities to account for expected
credit losses from when financial instruments are first
recognised and to recognise full lifetime expected losses
on a more timely basis.
Hedge accounting
Amendments to AASB 9 (December 2009 & 2010
editions and AASB 2013‐9) issued in December 2013
included the new hedge accounting requirements,
including changes to hedge effectiveness testing,
treatment of hedging costs, risk components that can be
hedged and disclosures.
Consequential amendments were also made to other
standards as a result of AASB 9, introduced by AASB
2009‐11 and superseded by AASB 2010‐7, AASB 2010‐
10 and AASB 2014‐1 – Part E.
AASB 2014‐7 incorporates the consequential
amendments arising from the issuance of AASB 9 in Dec
2014.
AASB 2014‐8 limits the application of the existing
versions of AASB 9 (AASB 9 (December 2009) and AASB 9
(December 2010)) from 1 February 2015 and applies to
annual reporting periods beginning on after 1 January
2015.
AASB 14
Regulatory deferral
accounts
1 January 2016
1 July 2016
AASB 14 permits first‐time adopters to continue to
account for amounts related to rate regulation in
accordance with their previous GAAP when they adopt
Australian Accounting Standards. However, to enhance
comparability with entities that already apply Australian
Accounting Standards and do not recognise such
amounts, AASB 14 requires that the effect of rate
regulation must be presented separately from other
items. An entity that is not a first‐time adopter of
Australian Accounting Standards will not be able to apply
AASB 14.
AASB 2014‐1 Part D makes amendments to AASB 1 First‐
time Adoption of Australian Accounting Standards, which
arise from the issuance of AASB 14 Regulatory Deferral
Accounts in June 2014.
‐ 40 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Accounting
Standard
AASB 2014‐3
Title
Summary
Amendments to
Australian
Accounting
Standards –
Accounting for
Acquisitions of
Interests in Joint
Operations
[AASB 1 & AASB 11]
AASB 2014‐3 amends AASB 11 Joint Arrangements to
provide guidance on the accounting for acquisitions of
interests in joint operations in which the activity
constitutes a business. The amendments require:
(a)
the acquirer of an interest in a joint operation in
which the activity constitutes a business, as defined
in AASB 3 Business Combinations, to apply all of the
principles on business combinations accounting in
AASB 3 and other Australian Accounting Standards
except for those principles that conflict with the
guidance in AASB 11
Application
date of
standard
Application
date for Group
1 January 2016
1 July 2016
AASB 2014‐4
Clarification of
Acceptable
Methods of
Depreciation and
Amortisation
(Amendments to
AASB 116 and AASB
138)
(b)
the acquirer to disclose the information required
by AASB 3 and other Australian Accounting
Standards for business combinations
This Standard also makes an editorial correction to AASB
11.
AASB 116 Property Plant and Equipment and AASB 138
Intangible Assets both establish the principle for the
basis of depreciation and amortisation as being the
expected pattern of consumption of the future economic
benefits of an asset.
The IASB has clarified that the use of revenue‐based
methods to calculate the depreciation of an asset is not
appropriate because revenue generated by an activity
that includes the use of an asset generally reflects factors
other than the consumption of the economic benefits
embodied in the asset.
The amendment also clarified that revenue is generally
presumed to be an inappropriate basis for measuring the
consumption of the economic benefits embodied in an
intangible asset. This presumption, however, can be
rebutted in certain limited circumstances.
1 January 2016
1 July 2016
‐ 41 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Application
date of
standard
Application
date for Group
1 January 2018
1 July 2018
Accounting
Standard
AASB 15
Title
Summary
Revenue from
Contracts with
Customers
AASB 15 Revenue from Contracts with Customers
replaces the existing revenue recognition standards AASB
111 Construction Contracts, AASB 118 Revenue and
related Interpretations (Interpretation 13 Customer
Loyalty Programmes, Interpretation 15 Agreements for
the Construction of Real Estate, Interpretation 18
Transfers of Assets from Customers, Interpretation 131
Revenue—Barter Transactions Involving Advertising
Services and Interpretation 1042 Subscriber Acquisition
Costs in the Telecommunications Industry). AASB 15
incorporates the requirements of IFRS 15 Revenue from
Contracts with Customers issued by the International
Accounting Standards Board (IASB) and developed jointly
with the US Financial Accounting Standards Board (FASB).
AASB 15 specifies the accounting treatment for revenue
arising from contracts with customers (except for
contracts within the scope of other accounting standards
such as leases or financial instruments).The core
principle of AASB 15 is that an entity recognises revenue
to depict the transfer of promised goods or services to
customers in an amount that reflects the consideration
to which the entity expects to be entitled in exchange
for those goods or services. An entity recognises
revenue in accordance with that core principle by
applying the following steps:
(a) Step 1: Identify the contract(s) with a customer
(b)
Step 2: Identify the performance obligations in the
contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the
performance obligations in the contract
Step 5: Recognise revenue when (or as) the entity
satisfies a performance obligation
(c)
(d)
(e)
AASB 2015‐8 amended the AASB 15 effective date so it is
now effective for annual reporting periods commencing
on or after 1 January 2018. Early application is
permitted.
AASB 2014‐5 incorporates the consequential
amendments to a number Australian Accounting
Standards (including Interpretations) arising from the
issuance of AASB 15.
AASB 2014‐9
Amendments to
Australian
Accounting
Standards – Equity
Method in Separate
Financial
Statements
AASB 2014‐9 amends AASB 127 Separate Financial
Statements, and consequentially amends AASB 1 First‐
time Adoption of Australian Accounting Standards and
AASB 128 Investments in Associates and Joint Ventures,
to allow entities to use the equity method of accounting
for investments in subsidiaries, joint ventures and
associates in their separate financial statements.
1 January 2016
1 July 2016
AASB 2014‐9 also makes editorial corrections to AASB
127.
AASB 2014‐9 applies to annual reporting periods
beginning on or after 1 January 2016. Early adoption
permitted.
‐ 42 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Application
date of
standard
Application
date for Group
1 January 2018
1 July 2018
Accounting
Standard
AASB 2014‐10
Title
Summary
Amendments to
Australian
Accounting
Standards – Sale or
Contribution of
Assets between an
Investor and its
Associate or Joint
Venture
AASB 2014‐10 amends AASB 10 Consolidated Financial
Statements and AASB 128 to address an inconsistency
between the requirements in AASB 10 and those in AASB
128 (August 2011), in dealing with the sale or
contribution of assets between an investor and its
associate or joint venture. The amendments require:
(a) A full gain or loss to be recognised when a
transaction involves a business (whether it is
housed in a subsidiary or not)
(b) A partial gain or loss to be recognised when a
transaction involves assets that do not constitute a
business, even if these assets are housed in a
subsidiary.
AASB 2014‐10 also makes an editorial correction to AASB
10.
AASB 2015‐10 defers the mandatory effective date
(application date) of AASB 2014‐10 so that the
amendments are required to be applied for annual
reporting periods beginning on or after 1 January 2018
instead of 1 January 2016.
‐ 43 ‐
Accounting
Standard
AASB 2015‐1
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Title
Summary
Application
date of
standard
Application
date for Group
Amendments to
Australian
Accounting
Standards – Annual
Improvements to
Australian
Accounting
Standards 2012–
2014 Cycle
The subjects of the principal amendments to the
Standards are set out below:
1 January 2016
1 July 2016
AASB 5 Non‐current Assets Held for Sale and Discontinued
Operations:
• Changes in methods of disposal – where an entity
reclassifies an asset (or disposal group)
directly from being held for distribution to
being held for sale (or visa versa), an entity
shall not follow the guidance in paragraphs
27–29 to account for this change.
AASB 7 Financial Instruments: Disclosures:
• Servicing contracts ‐ clarifies how an entity
should apply the guidance in paragraph 42C of
AASB 7 to a servicing contract to decide
whether a servicing contract is ‘continuing
involvement’ for the purposes of applying the
disclosure requirements in paragraphs 42E–
42H of AASB 7.
• Applicability of the amendments to AASB 7 to
condensed interim financial statements ‐
clarify that the additional disclosure required
by the amendments to AASB 7 Disclosure–
Offsetting Financial Assets and Financial
Liabilities is not specifically required for all
interim periods. However, the additional
disclosure is required to be given in
condensed interim financial statements that
are prepared in accordance with AASB 134
Interim Financial Reporting when its inclusion
would be required by the requirements of
AASB 134.
AASB 119 Employee Benefits:
• Discount rate: regional market issue ‐ clarifies
that the high quality corporate bonds used to
estimate the discount rate for post‐
employment benefit obligations should be
denominated in the same currency as the
liability. Further it clarifies that the depth of
the market for high quality corporate bonds
should be assessed at the currency level.
AASB 134 Interim Financial Reporting:
Disclosure of information ‘elsewhere in the interim
financial report’ ‐ amends AASB 134 to clarify the
meaning of disclosure of information ‘elsewhere in the
interim financial report’ and to require the inclusion of a
cross‐reference from the interim financial statements to
the location of this information.
‐ 44 ‐
Accounting
Standard
AASB 2015‐2
AASB 2015‐5
AASB 2015‐7
AASB 2015‐9
Amendments to
Australian
Accounting
Standards –
Disclosure
Initiative:
Amendments to
AASB 101
Amendments to
Australian
Accounting
Standards –
Investment
Entities: Applying
the Consolidation
Exception
Amendments to
Australian
Accounting
Standards – Fair
Value Disclosures
of Not‐for‐Profit
Public Sector
Entities
[AASB 13]
Amendments to
Australian
Accounting
Standards – Scope
and Application
Paragraphs
[AASB 8, AASB 133
& AASB 1057]
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Title
Summary
Application
date of
standard
Application
date for Group
1 January 2016
1 July 2016
1 January 2016
1 July 2016
The Standard makes amendments to AASB 101
Presentation of Financial Statements arising from the
IASB’s Disclosure Initiative project. The amendments are
designed to further encourage companies to apply
professional judgment in determining what information
to disclose in the financial statements. For example, the
amendments make clear that materiality applies to the
whole of financial statements and that the inclusion of
immaterial information can inhibit the usefulness of
financial disclosures. The amendments also clarify that
companies should use professional judgment in
determining where and in what order information is
presented in the financial disclosures.
This makes amendments to AASB 10, AASB 12 Disclosure
of Interests in Other Entities and AASB 128 arising from
the IASB’s narrow scope amendments associated with
Investment Entities.
This Standard makes amendments to AASB 13 Fair Value
Measurement to exempt not‐for‐profit public sector
entities from certain requirements of the Standard.
1 July 2016
1 July 2016
This Standard inserts scope paragraphs into AASB 8 and
AASB 133 in place of application paragraph text in AASB
1057. This is to correct inadvertent removal of these
paragraphs during editorial changes made in August
2015. There is no change to the requirements or the
applicability of AASB 8 and AASB 133.
1 January 2016
1 July 2016
‐ 45 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Accounting
Standard
Title
Summary
Application
date of
standard
Application
date for Group
AASB 16
Leases
The key features of AASB 16 are as follows:
1 January 2019
1 July 2019
Lessee accounting
• Lessees are required to recognise assets and
liabilities for all leases with a term of more
than 12 months, unless the underlying asset is
of low value.
• A lessee measures right‐of‐use assets similarly to
other non‐financial assets and lease liabilities
similarly to other financial liabilities.
• Assets and liabilities arising from a lease are
initially measured on a present value basis.
The measurement includes non‐cancellable
lease payments (including inflation‐linked
payments), and also includes payments to be
made in optional periods if the lessee is
reasonably certain to exercise an option to
extend the lease, or not to exercise an option
to terminate the lease.
• AASB 16 contains disclosure requirements for
lessees.
Lessor accounting
• AASB 16 substantially carries forward the lessor
accounting requirements in AASB 117.
Accordingly, a lessor continues to classify its
leases as operating leases or finance leases,
and to account for those two types of leases
differently.
• AASB 16 also requires enhanced disclosures to be
provided by lessors that will improve
information disclosed about a lessor’s risk
exposure, particularly to residual value risk.
AASB 16 supersedes:
(a) AASB 117 Leases
(b) Interpretation 4 Determining whether an
Arrangement contains a Lease
(c) SIC‐15 Operating Leases—Incentives
(d) SIC‐27 Evaluating the Substance of Transactions
Involving the Legal Form of a
Lease
The new standard will be effective for annual periods
beginning on or after 1 January 2019. Early application is
permitted, provided the new revenue standard, AASB 15
Revenue from Contracts with Customers, has been
applied, or is applied at the same date as AASB 16.
This Standard amends AASB 107 Statement of Cash Flows
(August 2015) to require entities preparing financial
statements in accordance with Tier 1 reporting
requirements to provide disclosures that enable users of
financial statements to evaluate changes in liabilities
arising from financing activities, including both changes
arising from cash flows and non‐cash changes.
‐ 46 ‐
1 January 2017
1 July 2017
2016‐2
Amendments to
Australian
Accounting
Standards –
Disclosure
Initiative:
Amendments to
AASB 107
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Application
date of
standard
Application
date for Group
1 January 2018
1 July 2018
Accounting
Standard
IFRS 2
(Amendments
Title
Summary
Classification and
Measurement of
Share‐based
Payment
Transactions
(Amendments to
IFRS 2)
This standard amends to IFRS 2 Share‐based Payment,
clarifying how to account for certain types of share‐based
payment transactions. The amendments provide
requirements on the accounting for:
► The effects of vesting and non‐vesting
conditions on the measurement of cash‐
settled share‐based payments
► Share‐based payment transactions with a net
settlement feature for withholding tax
obligations
A modification to the terms and conditions of a share‐
based payment that changes the classification of the
transaction from cash‐settled to equity‐settled
Management is in the process of currently estimating the impact of these Standards.
2.
SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS
In applying the Consolidated Entity’s accounting policies management continually evaluates estimates and assumptions
based on experience and other factors, including expectations of future events that may have an impact on the Consolidated
Entity. All estimates and assumptions made are believed to be reasonable based on the most current set of circumstances
available to management. Actual results may differ from the estimates and assumptions. Significant estimates and
assumptions made by the management in the preparation of these financial statements are outlined below:
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future
events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of certain assets and liabilities within the next annual reporting period are:
Impairment of capitalised exploration and evaluation expenditure
(a)
The future recoverability of capitalised exploration expenditure is dependent on a number of factors, including whether the
Consolidated Entity decides to exploit the related lease itself or, if not, whether it successfully recovers the related
exploration and evaluation asset through sale. Factors that could impact the future recoverability include the level of
reserves and resources, future technological changes, which could impact the cost of mining, future legal changes (including
changes to environmental restoration obligations) and changes to commodity prices. To the extent that capitalised
exploration and evaluation expenditure is determined not to be recoverable in the future, profits and net assets will be
reduced in the period in which this determination is made. In addition, exploration and evaluation is capitalised if activities in
the area of interest have not yet reached a stage that permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves. To the extent it is determined in the future that this capitalised expenditure should be
written off, profits and net assets will be reduced in the period in which this determination is made.
Share‐based payment transactions
(b)
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 an external valuer using either a
binomial or Black‐Scholes model, with the assumptions detailed in Note 16. The accounting estimates and assumptions
relating to equity‐settled share‐based payments would have no impact on the carrying amount of assets and liabilities within
the next annual reporting period but may impact expenses and equity.
‐ 47 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
3. REVENUE AND EXPENSES
(Loss) after crediting the following revenues:
Other Revenues
Interest received
Research and development grant
Sale of plant and equipment
Sale of tenements
Loss after charging the following expenses:
Consolidated
2016
$
2015
$
4,964
42,942
‐
75,000
122,906
8,560
99,529
22,727
‐
130,816
Auditors remuneration in respect of the Audit of the financial statements
33,928
45,731
Operating lease payments
Superannuation
4.
INCOME TAX
The major components of income tax expenses
are:
Income Statement
Current Income Tax
Current income tax charge/(benefit)
Deferred Income Tax
Relating to origination and reversal of
temporary differences
Income tax expense/(benefit) reported in the
statement of comprehensive income
Operating loss before income tax
Prima facie income tax (benefit)
calculated at 28.5% (2015: 30%)
Non‐deductible expenses
Non‐assessable income
Income tax losses carried forward/(utilised)
36,741
37,359
38,384
49,482
‐
‐
‐
‐
‐
‐
(955,336)
(1,414,969)
(272,271)
(424,491)
8,850
57,240
(12,239)
(29,859)
275,660
397,110
Total income tax (expense)/benefit
‐
‐
Cullen Resources Limited and its 100% owned Australian subsidiaries have entered the tax consolidation regime
from 1 July 2002. The head entity of the tax consolidation group is Cullen Resources Limited.
The entity has adopted the stand alone taxpayer method for measuring current and deferred tax amounts. The
members of the income tax consolidated group have entered into a tax funding agreement.
‐ 48 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Consolidated
Deferred Tax Liabilities
Statement of Financial
Position
Statement of Comprehensive
Income
2016
$
2015
$
2016
$
2015
$
Exploration
(1,656,225)
(1,598,786)
137,375
253,620
Deferred Tax Assets
Provisions
Accruals
Deferred tax assets used to
offset deferred tax liabilities (i)
Net Deferred Tax Recognised
in the Statement of Financial Position
30,780
6,327
33,351
9,150
(904)
(2,365)
(3,198)
(1,350)
1,619,118
1,556,285
(140,644)
(258,168)
‐
‐
‐
‐
(i)
As at 30 June 2016 future income tax benefits were available to the Consolidated Entity in respect of
operating losses and prospecting and exploration expenditure incurred. The directors estimate the
potential income tax benefit at 30 June 2016 in respect of tax losses not brought to account is $9,784,922
(2015: $9,509,262) and there is no expiry date. The benefit of these losses has only been brought to
account to the extent needed to offset deferred tax liabilities. The remaining benefit will only be obtained
if:
(a)
(b)
the Consolidated Entity derives future assessable income of a nature and of sufficient amount to
enable the benefit to be realised.
the Consolidated Entity continues to comply with the conditions for deductibility imposed by the
law; and
(c) no changes in tax legislation adversely affect the Consolidated Entity in realising the benefit.
5. RECEIVABLES
Current
Other debtors
Other debtors includes GST receivable which is non‐interest bearing.
6. OTHER FINANCIAL ASSETS
Non current
Security deposits
The security deposits are non‐interest bearing and relate to mining tenements.
Consolidated
2016
$
2015
$
43,971
93,804
10,000
10,000
10,000
10,000
‐ 49 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
7. PLANT & EQUIPMENT
Plant & Equipment at cost
Opening balance
Additions
Disposals
Closing balance
Plant & Equipment – Accumulated depreciation
Opening balance
Depreciation
Disposals
Closing balance
Total written down amount
(a) Reconciliation
Plant & Equipment
Carrying amount at beginning
Additions
Disposals
Depreciation expense
8. EXPLORATION & EVALUATION
Costs carried forward in respect of
areas of interest in the exploration
and evaluation phase
Opening balance
Expenditure incurred during the year
Less
Impairment (a)
Closing balance net of impairment
Consolidated
2016
$
2015
$
108,362
7,450
‐
115,812
(108,362)
(1,844)
‐
(110,206)
164,153
‐
(55,791)
108,362
(163,190)
(963)
55,791
(108,362)
5,606
‐
‐
7,450
‐
(1,844)
5,606
963
‐
‐
(963)
‐
5,329,287
986,422
6,315,709
4,483,886
1,490,268
5,974,154
(504,392)
(644,867)
5,811,317
5,329,287
Mining tenements are carried forward in accordance with the accounting policy set out in Note 1.
The ultimate recoupment of the book value of deferred costs relating to areas of interest in the exploration and
evaluation phase is dependent upon the successful development and commercial exploitation or, alternatively, sale
of the respective areas of interest and the Consolidated Entity’s ability to continue to meet its financial obligations to
maintain the areas of interest.
(a) Impairment
The Directors have reviewed all exploration projects for indicators of impairment in light of approved budgets.
Where substantive expenditure is neither budgeted nor planned the area of interest has been written down to its
fair value less costs to dispose. In determining fair value less cost of disposal the Directors had regard to the best
evidence of what a willing participant would pay in an arms length transaction. Where no such evidence was
available, areas of interest were written down to nil pending the outcome of any future farm‐out arrangement. The
Company will continue to look to attract farm‐in partners and/or recommence exploration should circumstances
change.
‐ 50 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
9. TRADE AND OTHER PAYABLES
Current
Trade creditors ‐ unsecured
Trade creditors are non‐interest bearing and are normally settled on 30 day terms.
153,734
299,480
Consolidated
2016
$
2015
$
107,999
111,171
43,482,463
42,276,087
10. PROVISIONS
Current
Employee benefits
11. CONTRIBUTED EQUITY
Issued capital
1,901,560,131 ordinary shares
(2015: 1,378,469,841)
Movement in issued shares for the year:
Beginning of the financial year:
Issued at 0.2 cents each (i)
Issued at 0.2 cents each(ii)
Issued at 0.003 cents each (ii)
Issued at 1.2 cents each (i)
Issued at 0.6 cents each (ii)
Issued at 0.38 cents each(ii)
Issued at 0.38 cents each(iii)
Less share issue expenses
End of financial year:
2016
2015
Number of
Shares
1,378,469,841
283,090,290
40,000,000
200,000,000
‐
‐
‐
‐
‐
1,901,560,131
$
Number of
$
Shares
1,038,472,843
‐
‐
‐
44,891,671
60,500,000
75,000,000
159,605,327
‐
1,378,469,841
40,521,766
‐
‐
‐
538,701
363,000
285,000
606,500
(38,880)
42,276,087
42,276,087
566,181
80,000
600,000
‐
‐
‐
‐
(39,805)
43,482,463
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid
upon shares held.
Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
(i) Issued under a rights issue to shareholders
(ii) Issued under a placement
(ii) Issued under a Share Purchase Plan to shareholders.
Options
As at 30 June 2016 there are 26,000,000 (2015: 26,000,000) unissued shares in respect of which options were
outstanding and the details of these are as follows:
‐ 51 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Number
Grant Date
Vesting Date
6,000,000
20,000,000
26,000,000
9/06/14
1/12/14
Various
Nil
Exercise
Price
0.023
0.016
Expiry Date
31 May 2017
30 November 2017
The options have no rights until they are exercised and become ordinary shares.
During the year Nil (2015: nil) options lapsed.
During the year nil (2015:20,000,000) options were issued to Directors to align their interest with shareholders.
Since the end of the financial year no shares have been issued by virtue of the exercise of options.
12. SHARE BASED PAYMENT RESERVE
The share based payment reserve represents the cost of share‐based payments to directors, employees and
third parties.
Beginning of the year
Share based payments
End of the year
13. ACCUMULATED LOSSES
Accumulated losses at the beginning of the year
Net loss
Accumulated losses at the end of the year
Consolidated
2016
$
2015
$
1,459,725
‐
1,301,725
158,000
1,459,725
1,459,725
(37,846,220)
(955,336)
(38,801,556)
(36,431,251)
(1,414,969)
(37,846,220)
14. PARTICULARS IN RELATION TO CONTROLLED ENTITIES
The consolidated financial statements at 30 June 2016 include the following controlled entities. The financial
years of all controlled entities are the same as that of the parent entity.
Place of
Incorporation
Interest
%
Investment
$
Name
June
2016
June
2015
June
2016
Cullen Minerals Pty Limited
Cullen Exploration Pty Ltd
Montrose Resources Pty Limited#
Bearmark Investments Pty Ltd
Cullen Resources Namibia Pty Ltd
Cullen Finland OY
Cullen Exploration Inc#
ARCTEX OY*
ARCTEX AB*
Australia
Australia
Australia
Botswana
Namibia
Finland
Canada
Finland
Sweden
100
100
‐
100
100
100
‐
‐
‐
*During the year this company was de‐registered.
# During the prior year this company was de‐registered.
100
100
‐
100
100
‐
‐
100
100
‐
‐
‐
‐
15
‐
‐
‐
‐
June
2015
‐
‐
‐
‐
15
‐
‐
4,072
7,975
‐ 52 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
15. KEY MANAGEMENT PERSONNEL
Compensation for key management personnel
Short‐term employee benefits
Post‐employment benefits
Other long‐term benefits
Termination benefits
Share‐based payments
Total compensation
16. SHARE BASED PAYMENTS
(a)
Recognised share based payment expenses
Director options
Employee options
Consolidated
2016
$
2015
$
434,292
37,050
5,088
‐
‐
476,430
438,292
37,050
5,097
‐
122,000
602,439
2016
$
2015
$
‐
122,000
‐ 36,000
‐ 158,000
Employee Options
(b)
For details/movements around the director options, please refer to the Remuneration Report.
(i)
Options held at the beginning of the reporting period – 1 July 2015
Number
Grant Date
Vest Date
Expiry Date
Weighted
Average
Exercise Price
6,000,000
9/6/14
Various*
31/5/17
$0.023
(ii)(a) Options lapsed during the year ‐ 2016
Number
Grant Date
‐
‐
Vest
Date
‐
Expiry
Date
‐
Weighted Average
Exercise Price
‐
(ii)(b) Options lapsed during the previous year ‐ 2015
Number
Grant Date
Vest
Date
‐
‐
‐
Expiry
Date
‐
Weighted
Exercise Price
Average
‐
(iii)(a) Options issued during the year ‐ 2016
Number
Grant Date
Vest Date
Expiry Date
‐
‐
‐
‐
‐ 53 ‐
Weighted
Average
Exercise
Price
‐
Weighted
Average
Share Price
‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
(iii)(b) Options issued during the previous year ‐ 2015
Number
Grant Date
Vest Date
Expiry Date
‐
‐
‐
‐
(iv)
Options held at the end of the reporting period ‐30 June 2016
Number
Grant Date
Vest Date
Expiry Date
Weighted
Average
Exercise
Price
‐
Exercise
Price
6,000,000
9/6/14
Various*
31/5/17
$0.023
*All these options have vested.
Weighted
Average
Share Price
‐
Weighted Average
Fair Value
of Options
$0.0096
These options had a weighted average exercise price of $0.023 and a weighted average remaining contractual
life of 0.92 years.
The fair value of the equity settled share options granted are estimated as at the date of allocation using a
Binomial Model taking into account the terms and conditions upon which they were granted.
(c)
Weighted average remaining contractual life
Options ‐ Employee
Options ‐ Directors
(d)
Range of exercise prices
Options ‐ Employee
Options ‐ Directors
(e)
Weighted average fair value at date of issue
Options ‐ Employee
Options ‐ Directors
2016
Years
0.92
1.42
2016
cents
2.3
1.6
2016
cents
‐
‐
2015
Years
1.92
2.42
2015
cents
2.3
1.6
2015
cents
‐
0.61
Option pricing model
(f)
The fair value of the equity settled share options granted are estimated as at the date of allocation using a
Binomial Model taking into account the terms and conditions upon which they were granted.
The following table lists the inputs to the models used at the date of allocation for employee and directors’
options:
Expected volatility
Risk free interest rate
Exercise price
Share price at measurement date
2016
‐
‐
‐
‐
2015
155.19%
2.135%
0.016
0.008
‐ 54 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
17. JOINT OPERATIONS
The Consolidated Entity has interests in the following joint operations:
Principal Activity
Other Participant
(a) Mt Stuart
Exploration
Australian Premium Iron Management Pty Limited (API)
(b) Paraburdoo
Exploration
Fortescue Mining Group Limited (Fortescue)
(c) Forrestania
Exploration
Hannans Reward Limited (Hannans)
(d) Killaloe
Exploration
Matsa Resources Limited (Matsa)
a)
b)
c)
API has earned a 70% interest in the iron ore rights and Cullen is contributing at 30% for its interest.
Fortescue can earn up to 80% in the iron ore rights, Cullen has a 100% interest.
Hannans has an 80% interest; Cullen is 20% free carried.
d) Matsa has an 80% interest; Cullen is 20% free carried.
The joint operations are not separate legal entities. They are contractual arrangements between the participants for the
sharing of costs and any outputs and do not, in themselves, generate revenue and profit. The net contribution of any jointly
controlled assets to the operating profit before income tax is $Nil (2015: $Nil). The Consolidated Entity’s assets employed in
the jointly controlled assets, are included in the balance sheet of the Consolidated Entity as follows:
Consolidated
2016
$
2015
$
28,536
75,610
5,775,245
5,329,287
55,786
85,132
Current Assets
Receivables
Non‐Current Assets
Exploration and expenditure
Current Liabilities
Trade and other payables
18. COMMITMENTS
(a) Minimum exploration work
The Consolidated Entity has certain obligations to perform minimum exploration work and expend minimum amounts of
money on mineral exploration tenements. The Consolidated Entity has committed to expend a minimum of $1,462,100
(2015: $1,569,260) over the next year to keep its current tenements in good standing. Approximately 56% (2015: 61%) of
this expenditure will be met by our joint operations partners.
(b) Joint Operation commitment
The Consolidated Entity has certain obligations in respect to the Mt Stuart joint operation and maybe required to expend
further funds over the next year being its share of the joint operation’s expenditure. The Consolidated Entity’s share of the
joint operation’s total budgeted expenditure over the next year is $345,000.
‐ 55 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
(c) Lease expenditure commitments
Lease expenditure commitment
Operating leases (non‐cancellable) for premises
Minimum lease payments
‐
‐
not later than one year
later than one year and not later than five years
Aggregate lease expenditure contracted for at reporting
date but not provided for
Consolidated
2016
$
2015
$
‐
‐
‐
30,969
‐
30,969
A lease for the premises was entered into for the period 1 May 2014 to 30 April 2016 with an option for a further two
years. The lease was not renewed when it expired and is now on a month by month basis. There are no contingent rentals
or restrictions imposed by the lease arrangements.
19. RELATED PARTIES
Payments to director related companies
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated. Consultancy payments were made to Mosman Corporate Services Pty
Ltd totalling $38,875(2015:$42,875) which is a company controlled by Mr W Kernaghan. There was $2,000 (2015: $3,125)
outstanding at 30 June 2016.
20. OPERATING SEGMENTS
Identification of Reportable Segments
The Consolidated Entity has based its operating segment on the internal reports that are reviewed and used by the executive
management team in assessing performance and in determining the allocation of resources.
The Consolidated Entity currently does not have production and is only involved in exploration. As a consequence, activities
in the operating segment are identified by management based on the manner in which resources are allocated, the nature of
the resources provided and the identity of the manager and country of expenditure. Discrete financial information about
each of these areas is reported to the executive management team on a monthly basis.
Based on this criteria, the Consolidated Entity has only one operating segment, being exploration, and the segment
operations and results are the same as the Consolidated Entity’s results.
Non Current Assets by Geographical regions:
Australia
21. STATEMENT OF CASH FLOWS
Consolidated
2016
$
2015
$
5,826,923
5,826,923
5,339,287
5,339,287
(i) Reconciliation of cash
For the purposes of the Consolidated Statement of Cash Flows, cash includes cash at bank and short term deposits at call.
Cash at the end of the financial year as shown in the Consolidated Statement of Cash Flows is reconciled to the related items
in the Consolidated Statement of Financial Position as follows:
Cash on hand
(ii) Reconciliation of operating (loss)
after income tax to net cash used in operating activities
Operating (loss) after income tax
Add/(less) non cash items
‐ 56 ‐
Consolidated
2016
$
2015
$
531,471
867,152
(955,336)
(1,414,969)
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Profit on sale of plant & equipment
Depreciation
Security deposit written off
Share based payments
(Decrease) / Increase in provisions for employee benefits
(Decrease) / Increase in trade and other payables
Decrease / (Increase) in receivables
‐
1,844
‐
‐
(3,172)
(145,746)
49,833
(22,727)
963
2,400
158,000
(10,658)
153,541
(4,784)
Net operating cashflows
(1,052,577)
(1,138,234)
Share based payments
During the year the Consolidated Entity made share based payments of $Nil (2015:$158,000) to directors and an
employee of the Consolidated Entity.
22. EARNINGS/(LOSS)PER SHARE
Basic (loss) per share (cents per share)
Diluted (loss) per share (cents per share)
The following reflects the income and share data used
in the calculations of basic and diluted (loss) per share
Net (loss)
Weighted average number of ordinary shares used in
the calculation of basic and diluted earnings per share
Options on issue at year end are not dilutive and hence
not used in the calculation of diluted EPS
23. FINANCIAL INSTRUMENTS
Consolidated
2016
2015
(0.06)
(0.06)
(0.13)
(0.13)
(955,336)
(1,414,969)
1,577,754,627
1,111,569,227
26,000,000
26,000,000
The Group's financial instruments comprise receivables, payables, and cash and short‐term deposits.
The Group manages its exposure to key financial risks, including interest rate risk in accordance with the Group's financial risk
management policy. The objective of the policy is to support the delivery of the Group's financial targets whilst protecting
future financial security.
The Board reviews and agrees policies for managing each of these risks as summarised below.
Primary responsibility for identification and control of financial risks rests with the Board of Directors. Due to the size and
nature of the company's operations, and as the company does not use derivative instruments or debt, the directors do not
believe the establishment of a risk management committee is warranted.
Interest Rate Risk
(a)
The Group's exposure to market interest rates relates primarily to the Group's cash and cash equivalents.
The Group's exposure to interest rate risk for each class of financial assets and financial liabilities is set out below.
‐ 57 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
Financial Instruments
Financial Assets
Cash and cash equivalents
Total Financial Assets
Consolidated
Floating
interest rate
Floating
interest rate
2016
$
2015
$
531,471
867,152
531,471
867,152
Cash gives rise to interest rate risk because the interest rate is variable.
The following summarises the effect on loss and equity of financial instruments held at balance date as a result of a 1%
movement in interest rates, with all other variables remaining constant.
Interest rate +1%
Interest rate ‐1%
Consolidated
(Decrease)/Increase in loss/equity
2016
$
(5,314)
5,314
2015
$
(8,671)
8,671
The selection of 1% sensitivity check was based on recent interest rate adjustments. The same basis was adopted in 2015.
(b) Currency Risk
The Consolidated Entity has limited exposure to foreign currency risk as it pays for its overseas exploration activities from
Australia in various overseas currencies.
(c) Credit Risk
Credit risk arises from the financial assets of the Consolidated Entity, namely trade and other receivables. The Consolidated
Entity's exposure to credit risk arises from potential default of the counter party, with a maximum exposure equal to its
carrying amount. Exposure at balance date is addressed in each applicable note.
The Consolidated Entity does not hold any credit derivatives to offset its credit exposure.
Receivable balances are monitored on an ongoing basis with the result that the Consolidated Entity's exposure to bad debts is
not significant. Receivables are due from the Australian Taxation Office and other government bodies which have very low
default risk.
There are no significant concentrations of credit risk within the Consolidated Entity and cash and cash equivalents are spread
amongst two of the big four Australian Banks.
(d) Liquidity Risk
The liquidity position of the Consolidated Entity is managed to ensure sufficient liquid funds are available to meet the
Consolidated Entity's financial commitments in a timely and cost‐effective manner. The Consolidated Entity funds its activities
through capital raisings in order to limit its liquidity risk which is monitored on a monthly basis.
Contractual maturity of the trade payables is within 30 day terms.
The Consolidate Entity manages its liquidity risk by monitoring the total cash inflows and outflows expected on a monthly basis.
The Consolidated entity has established comprehensive risk reporting covering its business units that reflect expectations of
management of the expected statement of financial assets and liabilities.
(e) Capital Management
Management controls the capital of the Consolidated Entity in order to provide the shareholders with adequate returns and
ensure that the group can fund its operations and continue as a going concern.
There are no externally imposed capital requirements.
Management effectively manages the group's capital by assessing the Consolidated Entity's financial risks and adjusting its
capital structure in responses to include the management of debt levels, distributions to shareholders and share issues.
‐ 58 ‐
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
The Consolidated Entity uses cash flow forecasts to manage and adjust its capital management.
There have been no changes in the strategy adopted by management to control the capital of the Consolidated Entity since the
prior year.
Capital managed by the Consolidated Entity consists of shareholders equity.
Shareholders equity
24. AUDITOR'S REMUNERATION
Amounts received or due and receivable
by Ernst and Young
‐
‐
an audit or review of the financial report
of the entity and any other entity in the
Consolidated Entity
taxation services provided to the Consolidated Entity
25. PARENT ENTITY INFORMATION
Information relating to Cullen Resources Limited:
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Accumulated losses
Share based payment reserve
Total shareholders' equity
Loss of the parent entity
Total comprehensive income of the parent entity
Consolidated
2016
$
2015
$
6,140,632
5,889,592
Consolidated
2016
$
2015
$
33,928
4,294
38,222
45,731
10,872
56,603
2016
$
2015
$
516,458
5,683,560
59,386
59,386
43,482,463
38,801,556
1,459,725
6,140,632
967,398
967,398
794,431
5,956,773
55,119
55,119
42,276,087
37,834,148
1,459,725
5,901,654
1,414,969
1,414,969
The parent entity has no contingent liabilities, nor does it have any contractual commitments for the acquisition of property,
plant or equipment.
26. SUBSEQUENT EVENTS
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or
event of a material and unusual nature likely, in the opinion of the directors, to affect the operations of the Consolidated
Entity, the results of those operations or the state of affairs of the Consolidated Entity in the subsequent financial years.
27. CORPORATE INFORMATION
The financial report of Cullen Resources Limited for the year ended 30 June 2016 was authorised for issue in accordance with
a resolution of the directors on 16 September 2016.
Cullen Resources Limited is a for profit company limited by shares incorporated in Australia whose shares are publicly traded
on the Australian Stock Exchange.
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CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
DIRECTORS' DECLARATION
In accordance with a resolution of the directors of Cullen Resources Limited, I state that:
In the opinion of the directors:
(a)
the financial statements and notes of the Consolidated Entity are in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2016
and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001; and
the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in Note 1(b).
subject to the achievement of the matters in Note 1(c), there are reasonable grounds to believe
that the Company will be able to pay its debts as and when they become due and payable.
this declaration has been made after receiving the declaration required to be made to the
directors in accordance with section 295A of the Corporations Act 2001 for the financial year
ended 30 June 2016.
(b)
(c)
(d)
On behalf of the Board
C. Ringrose
Director
Perth, WA
16 September 2016
‐ 60 ‐
Ernst & Young
11 Mounts Bay Road
Perth WA 6000 Australia
GPO Box M939 Perth WA 6843
Tel: +61 8 9429 2222
Fax: +61 8 9429 2436
ey.com/au
Independent auditor's report to the members of Cullen Resources Limited
Report on the financial report
We have audited the accompanying financial report of Cullen Resources Limited which comprises the
consolidated statement of financial position as at 30 June 2016, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement
of cash flows for the year then ended, notes comprising a summary of significant accounting policies and
other explanatory information, and the directors' declaration of the consolidated entity comprising the
company and the entities it controlled at the year's end or from time to time during the financial year.
Directors' responsibility for the financial report
The directors of the company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal controls as the directors determine are necessary to enable the preparation of the financial
report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors
also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that
the financial statements comply with International Financial Reporting Standards.
Auditor's responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor's judgment, including the assessment
of the risks of material misstatement of the financial report, whether due to fraud or error. In making
those risk assessments, the auditor considers internal controls relevant to the entity's preparation and
fair presentation of the financial report in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal controls. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Independence
In conducting our audit we have complied with the independence requirements of the Corporations Act
2001. We have given to the directors of the company a written Auditor’s Independence Declaration, a
copy of which is included in the directors’ report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
MH:VH:CULLEN:011
Opinion
In our opinion:
a.
the financial report of Cullen Resources Limited is in accordance with the Corporations Act 2001,
including:
i
ii
giving a true and fair view of the consolidated entity's financial position as at 30 June 2016
and of its performance for the year ended on that date;
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
b.
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 1.
Report on the remuneration report
We have audited the Remuneration Report included in the directors' report for the year ended 30 June
2016. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is
to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Cullen Resources Limited for the year ended 30 June 2016
complies with section 300A of the Corporations Act 2001.
Emphasis of matter
Without qualifying our opinion, we draw attention to Note 1 in the financial report, which describes the
principal conditions that raise doubt about the consolidated entity’s ability to continue as a going concern.
These conditions indicate the existence of a material uncertainty that may cast significant doubt about the
consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be
unable to realise its assets and discharge its liabilities in the normal course of business.
Ernst & Young
V L Hoang
Partner
Perth
16 September 2016
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
MH:VH:CULLEN:011
CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
SHAREHOLDER INFORMATION
CAPITAL STRUCTURE
As at 14 September 2016, the company had the following securities on issue:
Issued Capital
Top 20 Shareholders
Total holding of twenty largest shareholders
% of total shares on issue
Distribution of shareholders
1 ‐ 1,000 shares
1,001 ‐ 5,000 shares
5,001 ‐ 10,000 shares
10,001 ‐ 100,000 shares
100,001 and over
Total
Fully paid
Ordinary shares
1,901,560,131
832,906,420
43.8%
165
171
326
1,438
1,038
3,138
Unmarketable Parcels as at 14 September 2016
Minimum $500.00
2,298
OPTIONS
As at 14 September 2016, 26,000,000 unissued shares in respect of options were outstanding.
These are as follows:
Number
6,000,000
20,000,000
Exercise Price
$0.023
$0.016
Expiry Date
31 May 2017
30 November 2017
SUBSTANTIAL SHAREHOLDERS
The company has two Substantial Shareholders as at 14 September 2016
Name
Perth Capital Pty Ltd, Wythenshawe
Pty Ltd & Associates
Baosteel Group Corporation & Aurizon
Holdings Limited
%
22.19
No. of shares
421,996,207
5.38
102,343,426
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CULLEN RESOURCES LIMITED ‐ ANNUAL REPORT 2016
TWENTY LARGEST SHAREHOLDERS
The names of the twenty holders of the fully paid shares at 14 September 2016 are listed below:
Name
Perth Capital Pty Ltd
Penoir Pty Ltd
Warramboo Holdings Pty Ltd
Perth Capital Pty Ltd
Bellarine Gold Pty Ltd
Glyde Street Nominees Pty Ltd
Chiatta Pty Ltd
Warramboo Holdings Pty Ltd
Mr Nan Ze Xu
Kitchsmith Pty Ltd
Innerleithen Pty Ltd
Brisbane Investments I Ltd
Brisbane Investments II Ltd
A N Superannuation Pty Ltd
Mr Andrew Granton Brown
Ms Carol Mccoll
W L Houghton Pty Ltd
Lindglade Enterprises Pty Ltd
WJK Investments Pty Ltd
Denkey Pty Ltd
Total
No. of Shares
225,000,000
72,000,000
58,433,080
50,000,000
45,446,950
41,661,655
40,000,000
32,409,595
30,395,377
29,999,998
29,662,499
25,411,350
25,411,349
22,447,370
20,000,000
20,000,000
20,000,000
17,428,513
13,777,629
13,421,055
% Held
Rank
11.83
3.79
3.07
2.63
2.39
2.19
2.10
1.70
1.60
1.58
1.56
1.34
1.34
1.18
1.05
1.05
1.05
0.92
0.72
0.71
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
832,906,420
43.80
VOTING RIGHTS
Every member present in person or by representative shall on a show of hands have one vote, and on a poll
every member present in person or by representative, proxy or attorney shall have one vote in respect of each
fully paid share held by him.
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