Annual Report
for the year ended 30 June 2018
De Grey Mining Limited
ABN: 65 094 206 292
De Grey Mining Limited
Contents
Corporate Information ............................................................................................................................. 2
Chairman’s Letter ..................................................................................................................................... 3
Review of Operations ............................................................................................................................... 5
Directors’ Report .................................................................................................................................... 19
Audit Independence Declaration ........................................................................................................... 32
Consolidated Statement of Comprehensive Income ............................................................................. 33
Consolidated Statement of Financial Position ....................................................................................... 34
Consolidated Statement of Changes in Equity ...................................................................................... 35
Consolidated Statement of Cash Flows ................................................................................................. 36
Notes to the Consolidated Financial Statements .................................................................................. 37
Director’s Declaration ............................................................................................................................ 65
Audit Report ........................................................................................................................................... 66
ASX Additional Information ................................................................................................................... 70
Annual Mineral Resources Statement ................................................................................................... 73
Schedule of Interests in Mining Tenements .......................................................................................... 77
1
De Grey Mining Limited
Corporate Information
ABN 65 094 206 292
Directors
Simon Lill (Executive Chairman)
Andrew Beckwith (Technical Director & Operations Manager)
Steven Morris (Non-Executive Director)
Brett Lambert (Non-Executive Director)
Company Secretaries
Craig Nelmes
Patrick Holywell
Registered Office and Principal Place of Business
Level 3, Suites 24-26,
22 Railway Road
SUBIACO WA 6008
Telephone: +61 (0)8 6117 9328
Facsimile: +61 (0)8 6117 9330
Postal Address
PO Box 2023,
SUBIACO WA 6904
Solicitors
Steinepreis Paganin
Level 4, The Read Buildings
16 Milligan Street
PERTH WA 6000
Share Registry
Security Transfer Registrars Pty Ltd
770 Canning Highway
APPLECROSS WA 6153
Telephone: (08) 9315 2333
Facsimile: (08) 9315 2233
Auditors
Butler Settineri (Audit) Pty Ltd
Unit 16, First Floor Spectrum Offices
100 Railway Road
SUBIACO WA 6008
Internet Address
www.degreymining.com.au
Email Address
admin@degreymining.com.au
Stock Exchange Listing
Australian Securities Exchange (ASX code DEG)
Frankfurt Stock Exchange (FRA code WKN 633879)
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De Grey Mining Limited
Chairman’s Letter
Dear Shareholders,
The 2018 financial year has been exciting.
The creation of new strategic partnerships has provided for an acceleration in exploration activity and the release of
numerous impressive exploration results. These results have allowed the Company to establish a corporate resource target
at year end of plus 3M ounces which we intend to move towards through the next 12 months.
We started the financial year with a share price of 4.4 cents and finished it at 18.5 cents – an increase of 420% through the
year.
The Operations Report covers the geological and operational activity in detail. I would instead like to highlight the strategic
partnerships established during the year.
We commenced the year by securing rights through a 4 year farm in opportunity to a large parcel of land to the south of
our existing tenement holdings, EL 47/2502, the Farno McMahon (“Farno”) ground. Farno was recently acquired by TSX-V
listed Novo Resources Inc and we look forward to working closely with Novo as our new JV partner. We are currently active
on the Farno ground where we have commenced drilling underexplored and prospective targets.
In late November 2017, we welcomed Kirkland Lake Gold Limited to our register through their $5M investment in the
Company at a price of $0.15 per share. Kirkland are a large Canadian gold producer, now listed in Australia, with a current
market capitalisation of A$5.9 Bn. Their initial investment was directed towards our conglomerate gold prospectivity.
However, they have also come to understand the significance and potential of our shear zone hosted lode gold. We expect
Kirkland to continue to be a supportive shareholder.
We then later welcomed DGO Gold Ltd to our register with a $5M investment in the company at a price of $0.20 per share
and at a premium to the then market price. DGO is headed by experienced and well-known geologist Ed Eshuys who has
noted DGO’s attraction to our project as a result of the underexplored nature and potential of the greater than 200kms of
prospective shear zones.
The Indee Gold tenements are an integral part of the Pilbara Gold Project. On the 30 January 2018 we signed a fully binding
Share Sale Agreement with Northwest Non-Ferrous Australian Mining Pty Ltd. This requires De Grey to settle the
outstanding balance on or before 24 January 2019, or through the payment of $700,000 we are able to extend settlement
to 24 July 2019, with that payment reducing the overall commitment. We have an excellent relationship with our Chinese
partners and cannot thank them enough for their ongoing support.
We also appreciate the partnership with Top Drill Pty Ltd, whom have now agreed to two drilling equity contracts during
the financial year. The first was completed in the first half of the year and resulted in an issue of 7.6 million shares. The
second is currently underway and provides for the issue of up to $1M in equity as part payment of ongoing drilling activities.
These arrangements have been positive for both parties and we expect to continue to work with Top Drill into the future
through ongoing drilling programs.
During the year we farewelled Davide Bosio from the Board. Davide played an important role in De Grey’s
recommencement of gold exploration in the Pilbara, negotiating the Indee Gold transaction and in supporting the early
stage project development initiatives. He agreed to step aside in favour of adding minerals exploration and operational
experience to the Board. We thank Davide for that and his efforts whilst a member of the board.
We consequently welcomed two new Board Members.
Andy Beckwith has been with De Grey since early 2017 and has been instrumental in showing the Board the potential of
the existing project, the region, and then helping put the whole package together. He thoroughly deserves his role as
Technical Director in charge of operations.
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De Grey Mining Limited
Brett Lambert is an experienced Mining Engineer and Company Director who has proven his value through both corporate
and industry experience.
All three, together with our fellow director Steve Morris are to be thanked.
I would also take the opportunity to thank all of our workforce, from Senior Exploration Managers such as Phil Tornatora
(structural) and Michael Jackson (conglomerates) to all geologists, field workers and office staff.
The year ahead will continue to be exciting.
We can look forward to:
•
Pre-feasibility Study results in the first quarter of calendar 2019 based on an open pit mining operation with a target
plus 7 year mine life at 1M tpa based on an increase in resources from ~ 1M ounces at the Scoping Study level to
1.4M ounces at the Pre-Feasibility Study level;
Ongoing and accelerating drilling activities as we endeavour to make our corporate target of +3M ounces a reality;
and
Initial results of bulk sampling work from our conglomerate gold areas.
•
•
It should be rewarding. We hope you stay with us for the journey ahead.
Yours sincerely,
Simon Lill
Executive Chairman
4
Review of Operations
De Grey Mining Limited
HIGHLIGHTS FOR THE YEAR
•
•
•
Pilbara Gold Project Open Pit Mining Scoping Study (“OPMSS”) completed in August 2017 and demonstrates positive
economics with potential for substantial upside
Exploration activity accelerated with greater than 35,000m of RC and Diamond drilling completed
Total Resources increased to 1.4Moz Au (ASX Release 3 October 2018: “2018 Total Gold Mineral Resource Increases
to 1.4M oz”) and objectives met:
o Increases achieved at all large gold systems - Withnell, Wingina, Mt Berghaus, Mallina and Toweranna;
o Increasing shallow and open pit mining resources with emphasis on shallow resources to 100m depth to allow
future reserve definition through the 2018 Open Pit Mining Pre-Feasibility Study (“OPMPFS”); and
o All systems remaining open along strike and at depth.
• Measured and Indicated Resources increased by ~ 400,000oz since the OPMSS
•
Positive exploration drilling results across the Project
• Discovery of Conglomerate Gold style mineralisation
• OPMPFS advancing
• Metallurgical test work ongoing as part of the OPMPFS
• Underground Scoping Study on Withnell and Wingina commenced with further drilling of Withnell underground
planned
•
Strategic tenement farm ins – Farno McMahon, Vanmaris and Blue Moon (Southern Areas)
Introduction - Pilbara Gold Project
During the 2017-2018 financial year De Grey accelerated its exploration activity at The Pilbara Gold Project (PGP). The PGP
is an outstanding development project with excellent potential for significant increases in resources prior to ultimately
moving towards production.
The project now hosts a 1.4Moz resource after numerous infill and extensional drilling campaigns across the project
through the 2017-2018 year. As all existing prospects remain open along strike and at depth the Company recently reset
its stated corporate strategy of targeting over 3Moz in resources.
5
Figure 1: Project location
De Grey Mining Limited
The PGP is well located within 1 hours drive from the major coastal port and mining town of Port Hedland, approximately
a two hour flight direct from Perth in Western Australia (Figure 1). The project covers a large contiguous landholding
(>1,500km2) with De Grey holding:
•
•
•
100% ownership of the eastern half of the project;
the right to acquire 100% of the western portion (Indee Gold Pty Ltd) of the project; and
additional joint venture and option agreements to the south providing De Grey with the right to earn between 70-
80% of separate tenements in the southern portion of the project area. The main tenement area is the Farno
McMahon ground, EL 47/2502 where our Joint Venture partner is Novo Resources of Canada.
The currently defined 1.4Moz gold resources, and the additional 3.47Mt of base metal resources, are located on granted
exploration and mining leases owned either 100% by De Grey or within the Indee Gold tenements where De Grey holds
the right to acquire 100%.
Apart from the potential to further increase resources along the shear zones there also exists potential in the newly
discovered conglomerate gold where De Grey has recently commenced sampling work. (Figure 2).
The hosting gold structures are large, regional scale, sub-vertical shear zones, similar to structures seen in other Archaean
regions like the Eastern Goldfields Yilgarn Craton. De Grey’s shear zone hosted gold deposits resemble many of the gold
deposits mined throughout the Kalgoorlie to Wiluna region with similar structural settings and alteration assemblages.
The regional scale shear zones extend over 200km in strike length in total within the project area. Detailed RC and diamond
drilling is estimated to have tested less than 10% of these prospective shear zones. In general, the detailed drilling has only
reached shallow depths of around 100m except for:
•
•
the two main Withnell and Wingina gold deposits, where limited drilling extends mineralisation to approximately
400m and 300m vertical depth respectively; and
Toweranna where very limited historical drilling has shown mineralisation to 350m.
The under-explored nature of the mineralised structures coupled with 5 partially tested large gold systems and over 40
untested gold anomalies provides confidence further discoveries will be made within the project area.
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De Grey Mining Limited
In late 2017, De Grey discovered conglomerate gold style gold nuggets at the Loudens Patch target and has subsequently
found similar style gold nuggets and conglomerate outcrops along approximately 3km of a 12km long target. The
conglomerate gold exploration activities are in their infancy. Limited diamond drilling has recently been completed to
better define the host geological sequence. Due to the nuggetty nature of the mineralisation, excavator trenching is
underway (and in progress at the date of this report) to create exposures for detailed bulk sampling at Loudens Patch.
Figure 2: Over 200km of prospective and under-explored shear zones
Pilbara Gold Project – 2017 Open Pit Mining Scoping Study
(ASX “Positive Scoping Study completed at Pilbara Gold Project” 4 August 2017)
The 2017 Open Pit Mining Scoping Study (“OPMSS”) suggests the open pit mining strategy of establishing a new purpose
built 1Mtpa CIL and sulphide flotation processing plant will form a strong and viable financial basis for building a larger
scale production profile as exploration increases resources across the project.
The results of the OPMSS enabled the Directors to confidently commit to the agreement to acquire 100% of the Indee Gold
Project which forms part of the overall Pilbara Gold Project. De Grey has subsequently paid the initial $1.5M deposit under
the agreement to acquire the project, with final settlement of $10.4M cash and $3M in De Grey shares due by 24 January
2019. Settlement can be extended to 24 July 2019 by De Grey paying a further cash deposit of $700,000 prior to 24 January
2019, with this amount reducing the settlement by the same amount.
The scope of this study was that it was to be based only on open pit mining within the existing 1Moz resource base, with
treatment via a new, purpose built 1Mtpa oxide CIL plant with a sulphide flotation and regrind circuit proposed to be added
in year 3. Recoveries used for the sulphide flotation circuit were 80% for fresh rock and between 90-96% for oxide based
on metallurgical test results at that time.
In August 2017, the Company released the results of OPMSS that had commenced in the previous financial year. The OPMSS
was managed by independent mining consultants Mintrex, with inputs from Cube Consulting and the Company.
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De Grey Mining Limited
The key study outputs for the base case include:
▪ Total resource mined
▪ Resource categories
▪ Gold production
▪ C1 cash cost (LOM)
▪ AISC cost (LOM)
▪ Project Capex
4.8Mt at 2.1g/t Au for approximately 325,000oz Au;
38% Measured, 43% Indicated, 19% Inferred;
65% oxide & 35% fresh (sulphide);
~290,000 oz. Au recovered over 5 years;
Ranges from 65,000 oz. in Year 1 to 51,000oz in Year 4;
< A$1,000/oz. (calculated by De Grey);
< A$1,200/oz. (calculated by De Grey); and
$78M for new oxide CIL plant and associated infrastructure + $18M for
sulphide circuit upgrade in year 3, funded from cashflow.
Pit optimisations during the OPMSS showed only 4.8Mt from the Company’s 18.84 Mt inventory (at that time) reporting to
the mill. This resulted in the project life being just under 5 years.
The OPMSS shows significantly improved economics could be achieved through increasing the operations overall mine life,
increased grade of mill feed, increased recoveries in sulphide material, improved mine scheduling and improvement
through increased scale delivering reduced unit costs.
These have all been considered in the ensuing period and De Grey is confident that the Pre-Feasibility Study currently
underway should demonstrate improved results from the OPMSS.
Total Gold JORC 2012 Resources
On 23 October 2018, De Grey reported the 2018 Total Resources (JORC 2012) for the Pilbara Gold Project (refer to the
Annual Statement of Mineral Resources – JORC 2012 on page 73) (Table 1).
Table 1
Total Gold Mineral Resources by Mining Centre, October 2018
The updated Mineral Resource represented a 15% increase on the previous 2017 Mineral Resource and was completed
after a substantial RC and diamond drilling campaign throughout 2017/2018. The Mineral Resource includes drilling
completed prior to the end of July 2018 and is summarised below:
Total Mineral Resource (↑15%) 27.25Mt @ 1.6g/t Au (1,393,800oz)
M & I (53%) (↑25%)
Oxide (38%) (↑15%)
Fresh (62%) (↑15%)
14.32Mt @ 1.6g/t Au (739,200oz)
11.02Mt @ 1.5g/t Au (529,900oz)
16.23Mt @ 1.7g/t Au (863,900oz)
8
MtAu g/tAu OzMtAu g/tAu OzMtAu g/tAu OzMtAu g/tAu OzOxide 0.921.852,3002.701.4120,4001.251.456,7004.861.5229,400Fresh0.481.522,5004.641.7250,0006.191.9372,50011.301.8644,900Total 1.391.774,8007.331.6370,4007.431.8429,20016.161.7874,300Oxide 2.681.8152,1001.831.586,9001.641.261,4006.161.5300,400Fresh0.401.620,5000.681.634,5003.851.3163,9004.931.4219,000Total 3.081.7172,7002.511.5121,5005.491.3225,30011.091.5519,400Oxide3.601.8204,4004.531.4207,4002.891.3118,10011.021.5529,900Fresh0.881.543,0005.321.7284,50010.041.7536,40016.231.7863,900Total4.471.7247,4009.851.6491,80012.931.6654,50027.251.61,393,800TypeMeasuredIndicatedInferredTotal Withnell Mining CentreWingina Mining CentreTOTAL Pilbara Gold Project
The 2018 Mineral Resource represents a significant increase of ~0.4Moz in Measured and Indicated Resource categories
since the 2017 OPMSS. A large portion of the new Mineral Resources are within the top 100m depth from surface and
should increase recoverable resources. Highlights of the Resource upgrade are summarised as follows:
De Grey Mining Limited
•
•
25% increase in combined “Measured and Indicated Mineral Resource” to 739,200oz.
391,000oz added in shallow Mineral Resource, generally less than 100m depth, since the 2017 OPMSS was completed
in August 2017.
44% increase in “Indicated Mineral Resource” to 491,800oz.
15% increase in Total Mineral Resource ounces.
14% increase in Total Mineral Resource tonnes.
Increased geological confidence in proposed open pit optimisation shells.
•
•
•
•
• All deposits remain open along strike and at depth.
The shallow nature of the Mineral Resources is an underlying theme of all drilling across the project. All deposits discovered
to date show gold mineralisation from surface and constrained by drilling, i.e. remain open along strike and at depth beyond
the current limits of drilling. In all circumstances, except for Withnell and Wingina, the deposits have rarely been targeted
beyond 100m depth. Deeper drilling will form an integral component of future drilling campaigns as will further drilling
along strike.
De Grey remains confident of continued resource growth from both the known deposits and the numerous untested
regional targets.
Individual deposit increases since the 2017 OPMSS include:
Toweranna
Mt Berghaus
Mallina
Camel
Amanda
Roe
•
•
•
•
•
•
•
•
254% increase in overall Mineral Resource to 143,900oz
173% increase in oxide Mineral Resource to 34,100oz
288% increase in fresh Mineral Resource to 109,800oz
Increase in Indicated Mineral Resource from nil to 54,400oz
29% increase in overall Mineral Resource to 181,000oz
333% increase in Indicated Mineral Resource to 53,300oz
9% increase in overall Mineral Resource to 160,700oz
67% increase in Indicated Mineral Resource to 50,600oz
• 24% increase in Measured & Indicated Mineral Resource to 50,300oz
• 44% increase in overall Mineral Resource to 50,800oz
•
Increase in Indicated Mineral Resource from nil to 24,800oz
• 31% increase in overall Mineral Resource to 38,300oz
• 19% increase in Measured and Indicated Mineral Resource to 17,800oz
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De Grey Mining Limited
Exploration Activity for the Year
Considerable effort has been focussed on resource drilling at the five major known gold systems (Withnell, Wingina, Mt
Berghaus, Toweranna and Mallina) after further encouraging results were achieved at each of these prospects.
The De Grey geological team remain confident that further increase in gold resources can be achieved along both the
Mallina and Tabba Tabba shear zones. Resources should be expanded along strike and below the major mineralised gold
systems already defined. The recently discovered conglomerate gold style of mineralisation within the project area
provides an exciting “X factor” to the project as exploration advances.
A large pipeline of over 40 targets are currently being assessed by independent geological consultants. This assessment
includes the recent acquisition of new regional aeromagnetic data and high quality resolution and georeferenced aerial
photography, together with the integration of the company’s extensive and existing project wide geochemical, geophysical
and drilling databases. RAB drilling has commenced at some of these targets.
A new structural and geological basement interpretation is currently underway and is expected to provide an improved
understanding of the strong pipeline of targets and prioritisation for further testing.
In many instances, access to these new exploration target areas requires aboriginal heritage clearances and statutory
Program of Works (PoW) approvals from the Mines Department. The majority of PoW approvals have been received, and
a series of large aboriginal heritage surveys have been recently completed, paving the way for numerous drilling and bulk
sampling programs to be advanced over the coming 12 months in line with our overall corporate strategy.
The 2017/2018 exploration drilling results have been positive with significant results and consequent resource increases at
Mallina, Mt Berghaus and Toweranna during the period.
At Mt Berghaus, mineralisation has been infilled and extended along approximately 1.2km of the overall prospective 5km
anomaly. Drilling has focussed on improving and extending the resources with numerous broad moderate grade
intersections with many higher grade zones also defined. Current work underway incudes a detailed 6km long Sub-Audio-
Magnetic (SAM) survey which aims to map the controlling shear zones and associated porphyry dykes along the trend
under the thin sand cover. Figure 3 highlights drilling completed during the period and the Main and North Lodes.
Encouragingly, all lodes remain open along strike and down dip.
Figure 3: Mt Berghaus – Main Lode and North Lodes and drilling locations (local grid)
10
A selection of the recent RC drilling results below, show examples of the broad moderate grades and the narrower higher
grade zones being intersected at Mt Berghaus.
De Grey Mining Limited
Main Lode (>20g*m)
North Lode (>20g*m)
13m @ 3.49g/t Au from 16m in BGRC281
incl 4m @ 10.35g/t Au from 21m
21m @ 2.22g/t Au from 26m in BGRC282
incl 3m @ 8.45g/t Au from 44m
11m @ 4.92g/t Au from 22m in BGRC291
incl 2m @ 24.07g/t Au from 27m
9m @ 2.62g/t Au from 55m in BGRC291
24m @ 2.05g/t Au from 21m in BGRC231
incl 4m @ 6.24g/t Au from 40m
23m @ 2.2g/t Au from 2m in BGRC241
incl 6m @ 5.22g/t Au from 12m
8m @ 5.92g/t Au from 49m in BGRC255
incl 2m @ 21.81g/t Au from 49m
17m @ 3.25g/t Au from 28m in BGRC259
incl 4m @ 7.92g/t Au from 33m
2m @ 12.83g/t Au from 61m in BGRC275
26m @ 3.45g/t Au from 3m in BGRC294
incl 3m @ 24.37g/t Au from 3m
Figure 4: Mt Berghaus – 5km long target
At Toweranna, gold mineralisation is hosted by stacked quartz veins within a 250m diameter granite plug. The recent
drilling has focussed on infill along the western margin and extensions predominantly along the southern margin.
Additional reconnaissance drilling has also been completed where the gold has been infilled along the Western and
Southern margins. These two areas form the bulk of the new resource update. Additional limited drilling has been
completed along the northern and eastern margins, with positive results.
11
Overall the Toweranna drilling to date has highlighted gold quartz veins throughout the entire granite body and therefore
the Company is confident additional resource increases are likely at Toweranna with additional drilling. The gold
mineralisation is also noted to extend to at least 200-250m depth based on historical holes and remains open. Selected
recent drill results are provided below to demonstrate the high grade nature of the mineralisation. Further drilling is
planned to fully test the northern and eastern portions of the shallow portions of the deposit and deeper drilling is currently
being tested to determine underground potential.
De Grey Mining Limited
Toweranna – Selected drilling results
23m @ 4.37g/t from 42m
10m @ 6.82g/t from 6m
19m @ 4.74g/t from 43m
5m @ 6.72g/t from 34m
12m @ 4.69g/t from 1m
10m @ 7.13g/t from 37m
18m @ 5.60g/t from 49m
4m @ 35.0g/t from 8m
4m @ 25.3g/t from 28m
12m @ 7.0g/t from 0m including 4m @ 16.2g/t
8m @ 5.7g/t from 88m including 4m @ 9.0g/t
12m @ 4.9g/t from 104m
12m @ 4.1g/t from 40m including 4m @ 8.47g/t
5m @ 8.38g/t from 64m including 2m @ 19.43g/t Au),
3m @ 18.43g/t from 111m
4m @ 19.14g/t from 51m
9m @ 5.19g/t from 41m including 2m @ 19.94g/t
11m @ 7.07g/t from 105m
8m @ 21.7g/t from 48m including 4m @ 40.2g/t
5m @ 12.87g/t from 28m including 3m @ 20.62g/t
4m @ 20.2g/t from 8m
4m @ 14.7g/t from 32m
Figure 5: Toweranna sheeted veins hosted in a 250m diameter circular granite
12
Figure 6: Toweranna plan showing shallow resource upside in red area
De Grey Mining Limited
Drilling at Mallina has also been successful with significant mineralisation defined with the infill holes and new extensions
defined. The most significant new hole result is in MLRC214 which intersected 46m @ 3.26g/t Au and ended in
mineralisation, immediately below the 2017 OPMSS pit shell (Figure 7). This hole has been extended with a diamond tail
with results pending.
This large intercept occurs within a broader anomalous corridor of mineralisation along the Central Zone. This corridor
remains open at depth and could be open for up to 600m to the east where no shallow drilling has occurred to date. A
detailed SAM survey similar to the one being undertaken at Mt Berghaus is being considered subject to positive results
from the Mt Berghaus survey. The survey would aim to delineate and map the associated shear zones and porphyry dykes
for direct drill testing.
Mallina is another large gold system with a minimum strike length of 3km. This is likely to grow as further exploration is
undertaken. Mineralisation remains open and the new broad +3g/t zone in MLRC214 provides incentive to drill deeper as
these grades and thicknesses would support deeper open pits. The following results are examples of broader zones of
encouraging mineralisation:
56m @ 3.04g/t from 14m including 30m @ 5.29g/t
16m @ 3.00g/t from 32m including 6m @ 4.66g/t
13m @ 3.80g/t from 51m including 6m @ 7.35g/t
19m @ 2.44g/t from 35m
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Figure 7: Mallina cross section 609315E
De Grey Mining Limited
Withnell Underground Target
The 2017 Open Pit Mining Scoping Study defined potential to extend the existing previously mined 45m deep open pit to a new
depth of approximately 120m. Drilling by previous owners partially tested the zone beneath the proposed new open pit limits
returning numerous encouraging high grade intersections along an 800m strike length with widths and grades typical of many
modern Australian underground gold mines.
Four subvertical lodes have been previously defined at Withnell (Figure 8) that extend beneath the open pit limits, with Lodes 1 &
2 semi-continuously defined over 800m of strike.
A recent drilling program comprised 15 diamond core holes drilled from surface targeting Lodes 1 and 2 within a 400m x 100m
“panel” of known mineralisation directly below the eastern portion of the proposed pit. The drilling was designed to infill and
confirm continuity, grade distribution and geological definition of each lode and to assess the veracity of previous wider spaced
drill intersections. The holes will also be used for added metallurgical characterisation and recovery testwork.
The results to date have successfully confirmed:
1.
2.
3.
4.
5.
and
6.
Lode definition, geology and continuity along strike and dip;
High grade nature of mineralisation;
Stacked nature of lodes and potential for additional splays off the main lodes;
The strike rate of intersecting both lodes 1 & 2 is very high, both along strike and down dip;
Previous drill intersections, both low and high grade, which provides confidence in the deeper wide spaced drill results;
Potential for higher grade shoots within the broad mineralised system.
14
A summary of the intersections by lode >20gm (downhole gram*metres) is provided below with both the low-grade and high-
grade intercepts noted. The high-grade intercepts are also shown in the representative section (Figure 8).
De Grey Mining Limited
New drill intersections >20g*m
HoleID
Lode
Full intercept
NDD109 WD01
NDD115 WD02
NDD117 WD02
NDD117 WD01
NDD118
NDD119 WD01
4.85m @ 8.46g/t Au from 158.15m in NDD109
(incl 0.35m @ 70.4g/t Au from 159.2m)
3.8m @ 6.85g/t Au from 151.7m in NDD115
7.97m @ 7.48g/t Au from 137.03m in NDD117
(incl 2.5m @ 14.52g/t Au from 138.5m)
5.6m @ 5.24g/t Au from 166.3m in NDD117
(incl 0.95m @ 21.3g/t Au from 170.2m)
1.4m @ 20.05g/t Au from 228.7m in NDD118
4.8m @ 6.63g/t Au from 165m in NDD119
(incl 1m @ 22.78g/t Au from 165.5m)
Metal
(g*m)
41.0
24.6
26.0
59.6
36.3
29.3
20.2
28.1
31.8
22.8
At the date of this report, results from the remaining Withnell underground diamond drilling program are pending. As announced
subsequent to the reporting date, follow-up diamond drilling to test the depth extensions is currently being planned. This follow
up drilling plans to test the 800m x 400m Withnell Underground Exploration Target (ASX 1 October 2018 “High grade lodes confirm
Withnell Underground target”). The next program will be to undertake extensional drilling to define the limits and higher grade
plunging shoots of this large gold system.
Figure 8: Withnell Representative cross-section 624330E
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De Grey Mining Limited
Open Pit Mining Pre-Feasibility Study
The Open Pit Mining Pre-Feasibility Study (“OPMPFS”) commenced during the financial year and remains in progress at the
date of this report. It aims to assess the economic viability of an open pit mining only strategy based on the new 1.4Moz
resource. This study is expected to provide material improvements on the 2017 OPMSS based on overall significantly
increased resources, improved metallurgical recoveries and better mine scheduling of higher grade material earlier in the
mine life. This study will be based on a nominal 1Mtpa throughput with a conventional oxide CIL plant and flotation circuit
for the fresh sulphide rich ores.
The work completed to date has centred on completion of the recent extensive infill and extensional drilling programs to
allow the now updated resources to be finalised. Detailed metallurgical testwork includes the drilling of specific diamond
holes at various deposits for suitable oxide and fresh material and the completion of specific comminution and recovery
testwork to enable a detailed flowsheet to be designed. The majority of this testwork has been completed by GR
Engineering and ALS. The metallurgical aspect of the testwork is nearing completion and flowsheet design will commence
shortly. Additional environmental, hydrological and geotechnical studies are advancing well.
De Grey is targeting a 2018 OPMPFS that demonstrates a robust financial base case on a viable standalone open pit mining
operation. There is also underground potential seen at both the Withnell and Wingina deposits which would could improve
the financial returns on investment through increased throughput, higher grade and increased mine life.
To assess this financial benefit and potential, a scoping study was commenced on the Withnell underground. This study
commenced with a program of diamond drilling of a 400m x 100m panel of higher grade resources immediately beneath
the proposed 2017 OPMSS open pit limits. This drilling has now been completed with initial logging confirming the
geological continuity of the interpreted underground lodes. Assay results have been encouraging in defining the two lodes
below the Withnell open pit area.
If the Company continues to achieve positive underground drilling results then this is likely to drive an expanded Withnell
underground drilling program which in turn is expected to positively impact an expanded PFS to include underground
mining from Withnell. The company intends to undertake further drilling to define and scope out the overall mineralised
system to approximately 600m vertical depth, including infill drilling of the higher grade shoots.
At this point in time, any new regional greenfields discovery or higher grade brownfields under-ground extensions are
considered of great importance in the scale of any future mining development.
Base Metal Resources
(ASX: “Pilbara Gold Project increases gold resources by >20% to over 1.2Moz, 28 September 2017)
The Base Metals resources comprise the VMS style multi-metallic deposits of Discovery and Orchard Tank. Assessment of
the mineralisation during 2017/18 shows the deposits remain open and the entire 60km strike length of the host Tabba
Tabba greenstone belt remains prospective and essentially only partially tested with surface geochemistry and limited
drilling.
The Base Metal Mineral Resource has not changed since the 2017 Mineral Resource statement and comprise:
Total
3.47Mt @ 3.2% Zn, 1.3% Pb, 0.1% Cu, 0.8g/t Au, 110g/t Ag
(111,000t Zn, 46,100t Pb, 4,100t Cu, 91,900oz Au and 12.3Moz Ag)
Indicated
0.41Mt @ 3.7% Zn, 1.7% Pb, 0.2% Cu, 1.68g/t Au, 140g/t Ag
(15,200t Zn, 7,100t Pb, 700t Cu, 20,600oz Au and 1.9Moz Ag)
Inferred
3.06Mt @ 3.1% Zn, 1.3% Pb, 0.1% Cu, 0.7g/t Au, 106g/t Ag
(95,800t Zn, 39,000t Pb, 3,400t Cu, 71,300oz Au and 10.4Moz Ag)
The Company has undertaken an extensive review of the Base Metals potential. De Grey will update the market on the
outcome of that review once results are assessed.
16
Lithium
During the year the Company reported on its discovery hole at the King Col pegmatite trend, with results as follows:
De Grey Mining Limited
KRC012
KRC011
KRC011
17m @ 2.55% Li2O from 13m
8m @ 1.0% Li2O from 27m
1m @ 8.63% Cs2O from 25m
Detailed petrology work following this discovery then confirmed the presence of spodumene quartz mineralisation
associated with the higher grade (4.84% Li2O) portions of KRC012 intercept. Petalite and Lepidolite, both lithium bearing
minerals, were also confirmed. Pollucite, a very rare caesium mineral was also noted in the drilling.
The Company also extended the potential target strike length and defined a second large anomaly:
• Main King Col lithium in soil anomaly extended from 2.0km to 4.8km long; and
• New 3.0km long anomaly defined to south east.
The Company has recently drilled two diamond holes, twinning the two main intersections, to provide more accurate
lithology on the target. These results are pending.
2018/2019 Exploration Strategy
The 2017/2018 exploration programs have delivered numerous significant drilling results as well as the material increase
in defined resources. This year’s achievements have provided De Grey with a greater degree of confidence as to the
potential for further expand resources at each of the large gold mineralised systems at Withnell, Wingina, Mt Berghaus,
Mallina and Toweranna.
One such opportunity is in expansion of the Withnell underground lodes. The extremely positive assay results from a
diamond drill program, released subsequent to the end of the financial year, has demonstrate continuity of two higher
grade lodes beneath the proposed open pit. Wide-spaced earlier drilling shows this high grade mineralisation extends to
at least 350vm and remain open or totally untested over large areas of the 1.3km long open pit.
An Exploration Target of 2.6Mt – 3.5Mt @ 4.0g/t to 6.5g/t for 330,000oz – 720,000oz suggests strong potential to expand
this high grade and deeper mineralisation at depths more than 600m below surface (refer to the ASX Announcement on 1
October 2018 for further details on the Exploration Target).
Exploration Target Cautionary Statement - The potential quantity and grade of the exploration target is conceptual in
nature. There has been insufficient exploration to determine a mineral resource and there is no certainty that further
exploration work will result in the determination of mineral resources will be realised. Refer to Exploration Target section
for supporting details.
Overall, the 5km long Withnell trend currently hosts over 0.5Moz and has seen very limited drilling below 100m depth,
other than portions of the main Withnell deposit, currently the target of our underground planning. This is a very similar
situation at all of the other larger gold deposits, where drilling at depth is very limited and the full extents of mineralisation
remain open.
De Grey’s geological team believe the greatest opportunity for near term increased resources is available through:
•
•
•
•
testing the Withnell trend and following the higher grade plunging shoots at depth;
further and deeper drilling at Toweranna where high grade quartz veins occur to at least 200m depth;
ongoing extensional drilling at Mallina and Mt Berghaus where broad zones of mineralisation are highlighted
associated with quartz veins in shear zones, as well as commencement of consideration of the underground
potential of both resources at depth; and
associated porphyries and dykes at Wingina where high grade gold mineralisation remains open at depth.
17
De Grey Mining Limited
Accordingly, the FY2019 exploration strategy will be to:
(i)
(ii)
Improve the resource confidence at the higher grade brownfields underground lodes at the Withnell deposit in
order to include the resources into an “expanded open pit and underground feasibility study”.
Expand resource extensions at the larger gold systems both along strike and at depth with larger step out
resource definition drilling.
(iii) Discover new greenfields mineralisation from within the large existing pipeline of regional targets, including the
new conglomerate gold targets.
As noted within the report, De Grey has reset its corporate target to +3Moz of resources. It anticipates taking significant
steps towards that figure during the course of the forthcoming year.
Competent Person
The information in this report that relates to exploration results is based on, and fairly represents information and
supporting documentation prepared by Mr. Phil Tornatora, a Competent Person who is a member of The Australasian
Institute of Mining and Metallurgy. Mr. Tornatora is a consultant to De Grey Mining Limited. Mr. Tornatora has sufficient
experience that is relevant to the style of mineralisation 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 Resource and Ore Reserves”. Mr. Tornatora consents to the inclusion in this report of the
matters based on his information in the form and context in which it appears.
The Information in this report that relates to Mineral Resources is based on information compiled by Mr Paul Payne, a
Competent Person who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Payne is a full-time employee
of Payne Geological Services. Mr Payne has sufficient experience that is relevant to the style of mineralisation 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”. Mr Payne
consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to Withnell Underground Exploration Target is based on, and fairly represents
information and supporting documentation compiled by Mr. Andrew Beckwith, a Competent Person who is a member of
The Australasian Institute of Mining and Metallurgy. Mr. Beckwith is a consultant to De Grey Mining Limited. Mr. Beckwith
has sufficient experience that is relevant to the style of mineralisation 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 Resource and Ore Reserves”. Mr. Beckwith consents to the inclusion in this report
of the matters based on his information in the form and context in which it appears.
Forward Looking Statements
Statements regarding De Grey’s plans with respect to the mineral properties, resource reviews, programmes, economic
studies and future development are forward-looking statements. There can be no assurance that De Grey’s plans for
development of its mineral properties will proceed any time in the future. There can also be no assurance that De Grey will
be able to confirm the presence of additional mineral resources/reserves, that any mineralisation will prove to be economic
or that a mine will successfully be developed on any of De Grey’s mineral properties.
18
Directors’ Report
Your directors present their report on the consolidated entity comprising De Grey Mining Limited (“De Grey” or “the
Company”) and its controlled entities (“the consolidated entity” or “Group”) for the financial year ended 30 June 2018.
De Grey Mining Limited
All amounts are expressed in Australian dollars unless otherwise stated.
De Grey is a company limited by shares that is incorporated and domiciled in Australia.
Directors
The following persons were Directors of the Company during the whole of the financial year and up to the date of this report,
except as otherwise indicated:
Simon Lill
Andrew Beckwith (appointed 26 October 2017)
Steven Morris
Brett Lambert (appointed 26 October 2017)
Davide Bosio (resigned 26 October 2017)
Information on Directors
Simon Lill, BSc MBA
Executive Chairman
Mr. Lill joined De Grey Mining Limited in October 2013 and has a BSc and MBA, both from The University of Western Australia.
He has extensive experience over three decades with ASX listed companies, spanning small cap companies to larger concerns,
involving restructuring, corporate, compliance, marketing, company secretarial and management activities.
During the past three years Mr Lill has also served as a Director of the following listed companies:
Company
Mejority Capital Limited
Purifloh Limited
XPD Soccer Gear Group Limited
Date appointed
18 May 2011
2 September 2013
29 March 2018
Date ceased
-
-
-
Interest in shares and options:
5,100,000 ordinary fully paid shares
1,883,333 options over ordinary shares in De Grey Mining Limited
1,500,000 performance rights
Andrew Beckwith, BSc Geology, Aus IMM
Technical Director & Operations Manager
Mr Beckwith is a successful explorer whose past experience includes senior technical roles with AngloGold Ashanti, Acacia
Resources, Helix Resources, Normandy NFM, North Flinders Mines, BP Minerals Australia and at Westgold Resources, where
he led the team initially as exploration manager and then as Managing Director. Additionally, Mr Beckwith recently held the
position of director of Bulletin Resources Limited until June 2014.
During his time with Westgold, he was intimately involved in the Explorer 108 Pb-Zn-Ag and the Au-Cu Rover 1 (1.2Moz)
discoveries, both in the Northern Territory. Westgold was awarded the “2008 Explorer of the Year” for the Rover 1 discovery
and also went on to acquire the Central Murchison Gold Project, in Western Australia, with growth from an initial 1.9Moz
resource on acquisition to the current 5.0Moz with mining development currently underway by Metals X, which acquired
Westgold in 2012. Westgold has since demerged from Metals X and is currently producing over 265,000 ounces per year and
growing.
19
De Grey Mining Limited
Mr. Beckwith commenced his time with De Grey as a Technical Consultant back in February 2016 and was appointed to the
board in October 2017.
During the past three years Mr Beckwith has also served as a Director of the following listed companies:
Company
Carnavale Resources Limited
Date appointed
29 July 2014
Date ceased
-
Interest in shares and options:
4,025,000 ordinary fully paid shares
3,066,668 options over ordinary shares in De Grey Mining Limited
2,000,000 performance rights
Steven Morris, Dip Fin Mkts
Non-executive Director
Mr. Morris was appointed to the board in September 2013 and assumed the role of Chairman soon after. He has some 25
years of experience at the most senior executive level in a range of industries including the last 20 years in Financial Markets.
During that time, he has held positions such as Head of Private Clients Australia for Patersons Securities Ltd and Managing
Director of Intersuisse Ltd. He is the Founder and remains a significant shareholder of Peloton Shareholder Services offering
management of shareholder based capital raising and investor relations advice to numerous ASX listed companies. He
currently holds an executive position within the Little Group, which holds assets across a range of industries including
Property Management, Software Solutions, Aviation and Ferries. He is a Non-Executive Director of Purifloh Limited and also
serves as a Director of the Melbourne Football Club.
During the past three years Mr Morris has also served as a Director of the following listed companies:
Company
Purifloh Limited
Date appointed
2 September 2013
Date ceased
-
Interest in shares and options:
1,310,000 ordinary fully paid shares
1,350,000 options over ordinary shares in De Grey Mining Limited
750,000 performance rights
Brett Lambert, B.AppSc (Mining Engineering), MAICD
Non-executive Director
Mr Lambert is a mining engineer and experienced company director. He has over 30 years involvement in the Australian and
international resources industry encompassing mining operations, project development, business development and
corporate administration.
After graduating from the Western Australian School of Mines, Mr Lambert commenced his professional career with Western
Mining Corporation (“WMC”) at Kalgoorlie in 1983. He progressed to a senior management position with WMC before leaving
to take responsibility for the development of Herald Resources’ Three Mile Hill gold mine at Coolgardie. Mr Lambert has
since held senior roles with a number of junior and mid-tier resource companies, including more than 10 years at Chief
Executive Officer/Managing Director level.
Mr Lambert has served as a director of companies listed on the Australian Securities Exchange, London’s Alternative
Investment Market (“AIM”) market, the Toronto Stock Exchange and the Stock Exchange of Thailand.
20
During the past three years Mr Lambert has also served as a Director of the following listed companies:
De Grey Mining Limited
Date ceased
-
-
9 May 2016
Company
Mincor Resources NL
Australian Potash Limited
ABM Resources NL (now Prodigy Gold) 8 March 2016
Date appointed
1 January 2017
9 May 2017
Interest in shares and options:
Nil ordinary fully paid shares
Nil options over ordinary shares in De Grey Mining Limited
500,000 performance rights
Davide Bosio
Mr Bosio resigned from the board on 26 October 2017.
Company Secretaries
The following persons acted as Company Secretary of the Company during the whole of the financial year and up to the date
of this report:
Craig Nelmes, BBus
Mr. Nelmes joined De Grey Mining Limited in October 2013 and is an Accountant with over 20 years’ experience in the
mining sector in Australia and overseas, as well as seven years with International Accounting firm Deloitte and most recently
ten years with Corporate Consultants Pty Ltd, a Company providing accounting, secretarial and administrative services to
ASX and TSX listed entities.
Patrick Holywell, FGIA GradDipCA GAICD BCom
Patrick Holywell is a Chartered Accountant with over fifteen years of experience in corporate governance, finance and
accounting including employment with Deloitte and Patersons Securities Ltd. Mr Holywell has been employed by and acted
as company secretary, CFO and/or director of a number of companies in the resources sector.
21
De Grey Mining Limited
Principal Activities
The principal activity of the consolidated entity during the course of the year was exploration and development activities at
the Pilbara Gold Project, 80 kms south west of Port Hedland in the Pilbara region of Western Australia. De Grey currently
controls a considerable tenement package comprising over 1,500km2. The tenement package is highly prospective for gold
and also comprises significant base metals resources (Zn-Ag-Pb) as well as the recently identified lithium prospects.
Financial Review
The consolidated loss after tax for the year ended 30 June 2018 was $2,476,951 (2017: $3,218,897).
Earnings per share
The basic loss per share for the year ended 30 June 2018 was 0.85 cents per share (2017: 1.91 cents per share).
Dividends
No dividends were paid or declared during the financial year. No recommendation for payment of dividends has been made.
Significant changes in state of affairs
There have a number of significant changes in the state of affairs of the Company and its controlled entities during the
financial year; and are as follows:
•
•
Executed a fully binding Share Sale Agreement to 100% acquire the Indee tenements and within forms part of the greater
Pilbara Gold Project, with final settlement extended to 24 January 2019 (and the option to extend that date out to 24
July 2019);
~$10 M equity funding injections through a combination of private placements and the exercise of option class during
the financial year, with a further $5M placement completed in July 2018 (Refer to Matters Subsequent to the end of the
Financial Year).
• Additional funding has allowed for the acceleration of the exploration activities (including extensive diamond and RC
drilling programs across the Pilbara project resource areas and exploration targets), as well as commencing pre-
feasibility studies; and
Identified the potential for conglomerate hosted gold mineralization within the Pilbara Gold Project Tenement package.
•
Matters subsequent to the end of the financial year
On 11 July 2018, the Company completed a $5 Million placement to ASX listed DGO Gold Limited (“DGO”) via the issue of 25
Million ordinary fully paid shares at a price of $0.20 each. For each share two classes of free attaching unlisted options were
also issued on a 1:2 basis, being 12.5M unlisted options with an exercise price of $0.25 and expiry date of 31 October 2020
and 12.5M unlisted options with an exercise price of $0.30 and expiry date of 30 May 2021.
Likely developments and expected results
De Grey seeks to maximise shareholder value through its ongoing exploration and development work at The Pilbara Gold
Project. The Project consists of a combination of 100% owned tenements, tenements with farm in rights in favour of De Grey
and tenements where De Grey has entered into a fully binding share sale agreement to acquire 100% of the Indee tenements).
The combination of the above, represents a tenement package of over 1,500Km2 in the Pilbara region of Western Australia,
and +200 km of prospective shear zones hosting mineralisation and which includes gold, base metals and lithium.
De Grey has focused on infill and extensional drilling at its existing identified resources as a pre-cursor to completion of an
Open Pit Mining Pre- Feasibility Study (PFS”). That PFS work remains in progress at the date of this report, with completion
anticipated during the first quarter of 2019. The Company through the PFS is targeting an open pit 7+ year mine life at 1Mtpa
to consider the economics of such a Project.
22
De Grey Mining Limited
The Company also recognises the potential of its land package for further substantial gold discoveries with over 40 identified
gold anomalies already identified, as well as significant underground potential at a number of the existing resources. It is also
anticipated that regional exploration work through a combination of air core and RC drilling will represent part of the overall
plan to increase the resource base will continue through 2019 and beyond.
Aside from the shear zone hosted resources the Company also controls three zones of conglomerate gold mineralisation and
intends to undertake bulk sample testing. The style of mineralisation does not lend itself to traditional sampling methods
due to nuggety gold mineralisation. The potential of these zones is seen as significant, and exploration work will continue in
tandem with the shear zone hosted mineralisation remaining the strong focus.
De Grey is also continuing to explore its base metals and lithium prospects and is considering mechanisms to continue to add
shareholder value through various corporate strategies.
Remuneration Report (Audited)
The remuneration report is set out under the following main headings:
A. Key Management Personnel
B. Remuneration policy
C. Service agreements
D. Details of Remuneration
E. Securities Based Compensation
F. Other Transactions and Balances with Key Management Personnel
The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations
Act 2001.
A. Key management personnel
Names and positions held of the Company’s key management personnel (“Key Management Personnel”) in office at any time
during the financial year and up to the date of this annual report are:
Key Management Personnel
Mr Simon Lill
Mr Andrew Beckwith
Mr Steven Morris
Mr Brett Lambert
Mr Davide Bosio
Mr Craig Nelmes
Mr Patrick Holywell
Position
Executive Chairman
Technical Director & Operations Manager (appointed 26 October 2017)
Non-Executive Director
Non-Executive Director (appointed 26 October 2017)
Non-Executive Director (resigned 26 October 2017)
Company Secretary
Company Secretary (appointed 2 July 2018)
Except as noted, the named persons held their current position for the whole of the financial year and/or at the date of this
report.
23
De Grey Mining Limited
B. Remuneration policy
The remuneration policy of De Grey Mining Limited has been designed by the board. Its objective is to align key management
personnel objectives with shareholder and business objectives by providing a fixed remuneration component and offering
specific long-term incentives based on key performance areas affecting the Group’s financial results. The board of De Grey
Mining 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 Group.
From time to time when reviewing the remuneration, the Company may also source external advice to assist with salary
setting and determination of other benefits, including short term and long-term incentive plans.
The remuneration policy has been tailored to increase the direct positive relationship between shareholders’ investment
objectives and director and key management personnel performance. Currently, this is facilitated through the issue of
options to the majority of key management personnel to encourage the alignment of personal and shareholder interests.
The company believes this policy will be effective in increasing shareholder wealth.
Fixed remuneration
Fixed remuneration consists of total Directors’ fees, salaries, consulting fees and employer contributions to superannuation
funds, excluding performance pay (cash, shares and options). Fixed remuneration levels are reviewed annually by the board.
Executive remuneration
The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and
appropriate for the results delivered. The framework has three components:
•
Total fixed remuneration - a base salary (which is based on factors such as length of service, performance and
experience) and employer contributions to superannuation.
•
•
Short-term performance incentives; and
Long-term incentives through participation in the Performance Rights (“PRP”) and/or Employee Option (“EOP”) Plans of
De Grey Mining Limited and as approved by the Board.
Non-executive Directors’ remuneration
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.
Fees for non-executive directors are not linked to the performance of the Group. However, to align Directors’ interests with
shareholder interests, these directors may receive short term performance incentives and longer-term performance
incentives via the EOP.
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 and is currently $250,000.
The annual remuneration for each non-executive director remained at $36,000 per annum for the 2017-2018 financial year.
These fees have been determined by the Board of the Company, taking into consideration factors such as the market rates
of industry peer companies and the current level of activity. Where there is a significant change in the size and scale of
Company activities these annual fees will be reviewed. Where approved and at the request of the board, any of the Non-
Executive Directors may from time to time be required to fulfil certain executive functions.
24
De Grey Mining Limited
Use of remuneration consultants
The Board may (from time to time) engage the services of external consultants to advise on the remuneration policy and to
benchmark director and key management personnel remuneration against comparable entities so as to ensure that
remuneration packages are consistent with the market and are appropriate for the organisation. The Group did not employ
the services of any remuneration consultants during the financial year ended 30 June 2018.
Performance Rights (PRP) and Employee Option Plans (EOP) of De Grey Mining Limited
The PRP and EOP were last approved by Shareholders at the 2017 and 2015 Annual General Meetings respectively.
Directors and full and part time employees of De Grey Mining Limited are eligible to participate in each Plan. Any issue of
Rights or Options to Directors under either Plan will be subject to Shareholder approval pursuant to the provisions of the
ASX Listing Rules and the Corporations Act 2001. The Directors consider that collectively the PRP and EOP represent an
appropriate method to:
• Reward Directors, Key management personnel and employees for their past performance;
•
•
•
•
•
Provide long term incentives for participation in the Company’s future growth;
To motivate and retain Directors, KMP and senior employees;
Establish a sense of ownership in the Company for the Directors and employees;
Enhance the relationship between the Company and its employees for the long-term mutual benefit of all parties; and
Enable the Company to attract high calibre individuals who can bring specific expertise to the Company.
Voting on the Remuneration Report - 2017 Annual General Meeting
The Company received approximately 99.4% of “yes” votes on its remuneration report for the current financial year (2017:
96.9%).
C. Executive service agreements
Remuneration and other terms of employment for the executive directors and other KMP are formalised in employment or
service agreements. The major provisions of the agreements relating to remuneration for the year ended 30 June 2018 are
set out in the table below:
Name
Simon Lill
Andrew Beckwith
Andrew Beckwith
Craig Nelmes
Agreement
Service
Employment
Service
Service
Base Salary p.a.
$156,000¹
$250,000²
$180,000³
$169,512⁴
Term of the
Agreement
Not specified
Not specified
Not specified
Not specified
Redundancy
6 months
6 months
N/A
6 months
¹ Mr. Lill’s service agreement was effective from 1 November 2017 and supersedes his prior service agreement dated 1 October 2013.
²Mr. Beckwith’s employment agreement was effective from 1 November 2017.
³ Mr. Beckwith’s provided consulting services via his consultancy entity Penand Pty Ltd, before mutual termination on 31 October 2017.
⁴ Mr. Nelmes’s service agreement was effective from 1 May 2018, previously he provided Secretarial and financial services via his former employer –
Corporate Consultants Pty Ltd.
25
De Grey Mining Limited
D. Details of Remuneration
Details of the remuneration of the directors, the key management personnel of the Group (as defined in AASB 124 Related
Party Disclosures) and specified executives of De Grey Mining Limited and the Group are set out in the following tables. The
key management personnel of the Group are the Directors of De Grey Mining Limited and the Company Secretaries.
Short-term
Post-
employment
Share based payments
Total
Consulting
& Fees
Superannuation
Options
Performance
rights
% of
remuneration
Share-based
$
$
$
$
$
%
Salary
& Fees
$
Directors
Simon Lill
2018
2017
Andrew
Beckwith3
2018
Steven Morris
2018
2017
Brett Lambert3
2018
Davide Bosio2
2018
2017
Sub-
Directors
total
-
-
147,000
102,000
-
-
-
10,200
62,401
-
209,401
112,200
152,216
60,000
14,461
26,200
86,698
339,575
-
-
36,000
34,000
21,917
3,000
19,005
35,580
-
-
-
2,082
1,995
3,610
-
6,800
32,512
-
68,512
40,800
-
21,675
48,674
-
6,800
-
-
21,000
45,990
30%
9%
33%
47%
17%
45%
0%
15%
2018
2017
193,138
35,580
246,000
136,000
18,538
3,610
26,200
23,800
203,286
-
687,162
198,990
Key
Other
management
personnel
Craig Nelmes¹
2018¹
2017¹
Patrick
Holywell4
2018
key
Total
management
personnel
compensation
28,059
-
-
-
-
-
-
-
13,100
6,800
37,441
-
78,600
6,800
64%
100%
-
-
-
-
2018
2017
193,138
35,580
274,059
136,000
18,538
3,610
39,300
30,600
240,727
-
765,762
205,790
¹Mr Nelmes service agreement entered into from 1 May 2018, previous via former employer Corporate Consultants Pty Ltd’s service agreement for
Secretarial, financial, administrative services
²Mr Bosio resigned 26 October 2017.
3Mr. Beckwith and Mr. Lambert were appointed directors 26 October 2017.
4Mr Holywell was appointed 2 July 2018
26
Share-holdings of Key Management Personnel
Opening Balance
Received on
Purchases (disposals)
Other changes
Closing Balance
1 July 2017
exercise of options
during the year
during the year
30 June 2018
De Grey Mining Limited
No.
No.
No.
Directors
Simon Lill
Andrew
Beckwith²
Steven
Morris
Brett
Lambert²
Davide
Bosio
Other
executives
Craig
Nelmes
Patrick
Holywell³
Total
No.
3,750,000
3,225,000
910,000
-
-
No.
750,000
-
-
-
-
600,000
800,000
400,000
-
-
862,111
525,000
425,000
-
-
-
8,747,111
1,275,000
2,225,000
-
-
-
-
-
-
-
-
5,100,000
4,025,000
1,310,000
-
-1
1,812,111
-
12,247,111
1Mr Bosio resigned 26 October 2017.
2Mr Beckwith and Mr Lambert were appointed directors 26 October 2017.
3Mr Holywell was appointed 2 July 2018.
Option-holdings of Key Management Personnel
Opening Balance
1 July 2017
Options acquired as
compensation
Purchases
(disposals)
during the year
Options
exercised/Other
changes during the
year
Closing Balance
30 June 2018
No.
No.
No.
No.
No.
Directors
Simon Lill
Andrew
Beckwith²
Steven
Morris
Brett
Lambert²
Davide
Bosio
Other
executives
Craig
Nelmes
Patrick
Holywell³
Total
2,333,333
2,666,668
1,000,000
-
1,000,000
2,509,811
-
9,509,812
-
-
-
-
-
-
-
-
300,000
400,000
350,000
-
-
(750,000)
-
-
-
-
1,883,333
3,066,668
1,350,000
-
1,000,0001
300,000
(525,000)
2,284,811
-
-
-
1,350,000
(1,275,000)
9,584,812
1Mr Bosio resigned 26 October 2017.
2Mr Beckwith and Mr Lambert were appointed directors 26 October 2017.
3Mr Holywell was appointed 2 July 2018.
27
De Grey Mining Limited
Performance rights of Key Management Personnel
Opening
Balance
1 July 2017
No.
Rights acquired
as
compensation
Purchases
(disposals)
Other changes
Closing Balance
during the year
during the year
30 June 2018
No.
No.
No.
No.
-
-
-
-
-
-
-
-
1,500,000
2,000,000
750,000
500,000
-
900,000
-
5,650,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,500,000
2,000,000
750,000
500,000
-
900,000
-
5,650,000
Directors
Simon Lill
Andrew Beckwith2
Steven Morris
Brett Lambert2
Davide Bosio1
Other executives
Craig Nelmes
Patrick Holywell3
Total
1Mr Bosio resigned 26 October 2017.
2Mr Beckwith and Mr Lambert were appointed directors 26 October 2017.
3Mr Holywell was appointed 2 July 2018.
E. Securities based compensation - options
The Company granted 1,500,000 (2017: 4,500,000) options over unissued ordinary shares during the financial year to
Directors and other executives as part of their remuneration, as detailed in the table below:
Grant
Date
Expiry
Date
Exercise
Price
(cents)
Value per
option at
grant date
(cents)
Granted
Number
Exercised
Number
Vesting Date
Number
Vested at
end of
year
2018
Andrew
Beckwith
24 Sep 2017
31 Oct 2020
10.0
Craig Nelmes
24 Sep 2017
31 Oct 2020
10.0
2017
Simon Lill
6 Dec 2016
30 Nov 2018
Steven Morris
6 Dec 2016
30 Nov 2018
Davide Bosio
Craig Nelmes
6 Dec 2016
30 Nov 2018
6 Dec 2016
30 Nov 2018
10.0
10.0
10.0
10.0
2.62
2.62
0.68
0.68
0.68
0.68
1,000,000
500,000
1,500,000
1,000,000
1,000,000
1,000,000
-
-
-
-
-
-
24 Sep 2017
1,000,000
24 Sep 2017
500,000
6 Dec 2016
1,500,000
6 Dec 2016
1,000,000
6 Dec 2016
1,000,000
6 Dec 2016
1,000,000
There are no performance related conditions attached to any of these issued options.
28
De Grey Mining Limited
F. Securities based compensation – performance rights
The number of performance rights granted and their respective vesting status – to directors and key management personnel
as part of compensation during the year ended 30 June 2018 are set out below:
Simon Lill
Andrew Beckwith
Steve Morris
Brett Lambert
Craig Nelmes
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Tranche 5
No.
200,000
400,000
150,000
100,000
100,000
No.
200,000
400,000
150,000
100,000
100,000
No.
No.
500,000
500,000
400,000
400,000
150,000
150,000
100,000
100,000
300,000
300,000
No.
100,000
400,000
150,000
100,000
100,000
Total
No.
1,500,000
2,000,000
750,000
500,000
900,000
The values of rights over ordinary shares granted, exercised and lapsed for directors as part of compensation during the year
ended 30 June 2018 are set out below:
Simon Lill
Andrew Beckwith
Steve Morris
Brett Lambert
Craig Nelmes
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Tranche 5
$
9,194
18,389
6,895
4,597
4,597
$
9,194
18,389
6,895
4,597
4,597
$
28,091
22,471
8,429
5,619
16,855
$
11,325
9,060
3,398
2,265
6,795
$
4,597
18,389
6,895
4,597
4,597
Total
$
62,401
86,698
32,512
21,675
37,441
240,727
G. Other transactions and balances with Key Management Personnel
There were no other transactions and balances with key management personnel.
----------- End of Audited Remuneration Report -----------
29
Directors’ Meeting
The number of meetings of the Company’s Board of Directors held in the 12 months to 30 June 2018 and the number of
meetings attended by each Director were:
De Grey Mining Limited
Simon Lill
Andrew Beckwith
Steven Morris
Brett Lambert
Davide Bosio
Share Options
Directors Meetings
Eligible
Attended
12
6
12
6
6
12
6
11
6
5
At the date of this report there are 132,918,975 unissued ordinary shares in respect of which options are outstanding.
Listed options
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Number
53,103,031
6,100,000
1,134,611
2,250,000
12,000,000
33,333,333
12,500,000
12,500,000
Exercise Price
10 cents
10 cents
4 cents
10 cents
10 cents
20 cents
25 cents
30 cents
Expiry Date
30 November 2018
30 November 2018
10 June 2019
31 October 2020
31 October 2020
30 November 2019
30 November 2019
30 May 2021
During the financial year 79,308,333 options were issued and 31,043,903 were exercised. Since the end of the financial year
25,000,000 options were issued and 2,374,169 were exercised.
Environmental Regulation
The Group is subject to environmental regulation in respect to its exploration activities. The Group aims to ensure the
appropriate standard of environmental care is achieved, and in doing so, that it is aware of and is in compliance with all
environmental legislation. The directors of the Group are not aware of any breach of environmental legislation for the year
under review.
Risk Management
The board is responsible for ensuring that risks, and also opportunities, are identified on a timely basis and that activities are
aligned with the risks and opportunities identified by the board. Given the size and scale of its current operations, the board
and key management personnel as a group periodically assess risks and develop strategies to mitigate the impact of any
perceived risks. The board endeavours to identify potential risks when carrying out strategy planning and budgeting tasks
and assessment and monitoring through its board meetings.
Insurance of Directors and Officers
During the financial year, De Grey Mining Limited paid a premium to insure the directors and secretary of the Company. The
total amount of insurance contract premiums paid is confidential under the terms of the insurance policy.
The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought
against the officers in their capacity as officers of the Company, and any other payments arising from liabilities incurred by
the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a
wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage
for themselves or someone else or to cause detriment to the company. It is not possible to apportion the premium between
amounts relating to the insurance against legal costs and those relating to other liabilities.
30
De Grey Mining Limited
Non-Audit Services
The following non-audit services were provided by the Group’s auditor, Butler Settineri (Audit) Pty Ltd, or associated entities
(refer note 20). The directors are satisfied that the provision of non-audit services is compatible with the general standard
of independence for auditors imposed by the Corporations Act 2001. The directors are satisfied that the provision of non-
audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
• All non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and
objectivity of the auditor; and
• None of the services undermine the general standard of independence for auditors.
Butler Settineri received or are due to receive the following amounts for the provision of non-audit services:
Tax compliance services
Proceedings on behalf of the company
2018
$
2,200
2017
$
3,750
As at the date of this report there are no leave applications or proceedings booked on behalf of De Grey Mining Limited
under section 237 of the Corporations Act 2001.
Auditor’s Independence Declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on
page 32.
Signed in accordance with a resolution of the directors
Simon Lill
Executive Chairman
Perth, 28 September 2018
31
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of De Grey Mining Limited for the year ended 30
June 2018, I declare that, 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.
The declaration is in respect of De Grey Mining Limited and the entities it controlled
during the year.
BUTLER SETTINERI (AUDIT) PTY LTD
LUCY P GARDNER
Director
Perth
Date: 28 September 2018
Consolidated Statement of Comprehensive Income
De Grey Mining Limited
FOR THE YEAR ENDED 30 JUNE 2018
REVENUE
EXPENDITURE
Depreciation expense
Director & employee expenses
Share based payments – directors and employees
Exploration expenditure
Corporate and compliance expenses
Consulting expenses
Corporate advisory
Share based payments – corporate advisory
Investor relations & promotional expenses
Administration expenses
Occupancy expenses
Other expenses
Notes
4
5/28
5
2018
$
184,311
(40,663)
(480,303)
(347,947)
-
(346,560)
(204,463)
(203,375)
(314,880)
(557,269)
(128,302)
(37,500)
-
Consolidated
2017
$
30,798
(11,276)
(182,147)
(49,980)
(2,323,620)
(205,835)
(99,682)
(30,000)
-
(68,854)
(249,778)
(28,500)
(23)
LOSS BEFORE INCOME TAX
(2,476,951)
(3,218,897)
INCOME TAX BENEFIT / (EXPENSE)
6
-
-
LOSS FOR THE YEAR
(2,476,951)
(3,218,897)
OTHER COMPREHENSIVE INCOME
Items that may be reclassified to profit or loss
Other comprehensive income for the year, net of tax
-
-
TOTAL COMPREHENSIVE LOSS FOR THE YEAR ATTRIBUTABLE TO EQUITY
HOLDERS OF DE GREY MINING LIMITED
(2,476,951)
(3,218,897)
Basic and diluted loss per share for loss attributable to the ordinary equity
holders of the company (cents per share)
27
(0.85)
(1.91)
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the Notes to the
Consolidated Financial Statements.
33
Consolidated Statement of Financial Position
AT 30 JUNE 2018
Notes
Consolidated
De Grey Mining Limited
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Available-for-sale financial assets
Deferred exploration & evaluation expenditure
Plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Employee benefit obligations
Contract liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Contract liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
2018
$
1,147,538
245,075
19,894
42,962
1,455,469
200,000
21,982,686
691,087
22,873,773
2017
$
1,007,029
126,738
11,695
16,040
1,161,502
-
980,397
58,361
1,038,758
24,329,242
2,200,260
1,322,874
9,868
700,000
2,032,742
12,700,000
12,700,000
1,024,126
-
-
1,024,126
-
-
14,732,742
1,024,126
9,596,500
1,176,134
59,464,845
711,106
(50,579,451)
9,596,500
49,108,104
170,530
(48,102,500)
1,176,134
7
8
9
10
11
12
13
14
15
16
16
17
18
18
The above Consolidated Statement of Financial Position should be read in conjunction with the Notes to the Consolidated
Financial Statements.
34
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2018
Consolidated
Notes
Contributed
Equity
$
Reserves
$
Accumulated
Losses
$
Total
$
De Grey Mining Limited
BALANCE AT 30 JUNE 2016
Loss for the year
OTHER COMPREHENSIVE INCOME
18(b)
TOTAL COMPREHENSIVE LOSS
TRANSACTIONS WITH OWNERS IN THEIR
CAPACITY AS OWNERS
Shares issued during the year
Share issue costs
Share based payments - options
Transfer of reserve on expiry of options
17(b)
17(b)
18(a)
18(a)
BALANCE AT 30 JUNE 2017
Loss for the year
OTHER COMPREHENSIVE INCOME
18(b)
TOTAL COMPREHENSIVE LOSS
TRANSACTIONS WITH OWNERS IN THEIR
CAPACITY AS OWNERS
Shares issued during the year
Share application monies (non-refundable)
Share issue costs
Share based payments - options
18(a)
Share based payments – performance rights 18(a)
Transfer of reserve on expiry of options
18(a)
17(b)
17(b)
17(b)
45,837,739
120,550
(44,883,603)
1,074,686
-
-
-
-
-
-
(3,218,897)
(3,218,897)
-
(3,218,897)
-
(3,218,897)
3,514,063
(243,698)
-
-
-
-
49,980
-
-
-
-
-
3,514,063
(243,698)
49,980
-
49,108,104
170,530
(48,102,500)
1,176,134
-
-
-
10,110,003
250,000
(158,887)
-
-
155,625
-
-
-
-
-
407,205
288,996
(155,625)
(2,476,951)
(2,476,951)
-
(2,476,951)
-
(2,476,951)
-
-
-
-
-
10,110,003
250,000
(158,887)
407,205
288,996
-
BALANCE AT 30 JUNE 2018
59,464,845
711,106
(50,579,451)
9,596,500
The above Consolidated Statement of Changes in Equity should be read in conjunction with the Notes to the Consolidated
Financial Statements.
35
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 JUNE 2018
Notes
Consolidated
De Grey Mining Limited
CASH FLOWS FROM OPERATING ACTIVITIES
Royalties received
EIS Grant received
Payments to suppliers and employees
Interest received
Payments for exploration and evaluation expenditure
NET CASH OUTFLOW FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Option payments to acquire tenements
Option payments to acquire – Indee Gold Pty Ltd
Payments for available for sale financial assets
Payments for plant and equipment
NET CASH INFLOW / (OUTFLOW) FROM INVESTING ACTIVITIES
26
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issues of ordinary shares
Proceeds from application for issue of ordinary shares (non-refundable)
Payments of share issue transaction costs
NET CASH INFLOW FROM FINANCING ACTIVITIES
NET INCREASE / (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
2018
$
11,316
53,680
(2,019,783)
22,596
(5,153,578)
(7,085,770)
(195,000)
(1,500,000)
(200,000)
(593,224)
(2,488,224)
9,623,390
250,000
(158,887)
9,714,503
140,509
1,007,029
1,147,538
2017
$
19,562
-
(918,750)
7,268
(2,125,359)
(3,017,279)
(290,000)
(100,000)
-
(43,618)
(433,618)
3,494,063
-
(243,698)
3,250,365
(200,532)
1,207,561
1,007,029
The above Consolidated Statement of Cash Flows should be read in conjunction with the Notes to the Consolidated Financial
Statements.
36
De Grey Mining Limited
Notes to the Consolidated Financial Statements
FOR THE YEAR ENDED 30 June 2018
1. Summary of significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the
consolidated entity consisting of De Grey Mining Limited and its subsidiaries. The financial statements are presented in the
Australian currency. De Grey Mining Limited is a company limited by shares, domiciled and incorporated in Australia. The
financial statements were authorised for issue by the directors on 28 September 2018. The directors have the power to
amend and reissue the financial statements.
A. Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001. De Grey Mining Limited
is a for-profit entity for the purpose of preparing the financial statements.
(i) New standards and interpretations adopted in the 2018 financial year
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. The adoption of these Accounting
Standards and Interpretations did not have any significant impact on the financial performance or position of the Group
during the financial year. Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory
have not been early adopted.
(ii) New standards and interpretations not yet adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the Group for the annual reporting period ended 30 June 2018. The consolidated entity’s
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the
consolidated entity, are set out below.
AASB 9 Financial Instruments and associated Amending Standards (applicable for annual reporting period commencing 1
January 2018)
AASB 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities and introduces
new rules for hedge accounting. In December 2014, the AASB made further changes to classification and measurement rules
and also introduced a new impairment model. These latest amendments now complete the new financial instruments
standard.
Following the changes approved by the AASB in December 2014, the Company no longer expects any impact from the new
classification, measurement and derecognition rules on the Company’s financial assets and financial liabilities. While the
Company has yet to undertake a detailed assessment of the financial instruments classified as available-for-sale financial
assets, it would appear that they would satisfy the conditions for classification as available for sale and hence there will be
no change to the accounting for these assets.
Impact – unlikely as the Company does not have any hedging arrangements in place. The new impairment model is an
expected credit loss model which may result in the earlier recognition of credit losses. The Company has not yet assessed
how its own impairment provisions would be affected by the new rules.
AASB 15 Revenue from Contracts with Customers (applicable for annual reporting period commencing 1 January 2018)
The AASB has issued a new standard for the recognition of revenue. This will replace AASB 118 which covers contracts for
good and services and AASB 111 which covers construction contracts. The new standard is based on the principle that revenue
is recognised when control of a good or service transfers to a customer – so the notion of control replaces the existing notion
of risks and rewards. The standard permits a modified retrospective approach for the adoption. Under this approach entities
37
De Grey Mining Limited
will recognise transitional adjustments in retained earnings on the date of initial recognition without restating the
comparative period. They will only need to apply the new rules to contracts that are not completed as of the date of initial
application.
Impact - unlikely as the Company does not have any revenue from contracts with customers at this stage.
AASB 16: Leases applies to annual reporting periods beginning on or after 1 January 2019
This Standard supersedes AASB 117 Leases, Interpretation 4 Determining whether an Arrangement contains a Lease, IC-15
Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of lease. Early
application of the Standard 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. The key features of AASB 16 are as follows:
•
Leases 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 the lease are initially measured on a present value basis. The measurement includes
non-cancellable lease payments (including inflation-linked payments), and also include payments to be made in optional
periods if the lessee is reasonably certain to exercise an option to extend to lease, or not to exercise an option to
terminate the lease.
• AASB 16 contains disclosure requirements for leases.
Impact - The standard will affect primarily the accounting for the group’s operating leases. As at the reporting date, the
group has non-cancellable operating lease office rental commitments of $244,475, see note 22. The group has assessed that
these lease commitments will likely become finance leases under the new standard, and hence an asset and corresponding
financial liability of $219,740 will be recognised upon adopting the new standard.
(iii) Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of
available-for-sale financial assets, which have been measured at fair value.
B. Principles of consolidation
(i)
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of De Grey Mining Limited
(“company” or “parent entity”) as at 30 June 2018 and the results of all subsidiaries for the year then ended. De Grey Mining
Limited and its subsidiaries together are referred to in this financial report as the Group or the consolidated entity.
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent, De Grey Mining Ltd
and all of the subsidiaries (including any structured entities). Subsidiaries are entities the parent controls. The parent controls
an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from
the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the Group.
Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of
comprehensive income, statement of changes in equity and statement of financial position respectively.
Investments in subsidiaries are accounted for at cost in the separate financial statements of De Grey Mining Limited.
38
De Grey Mining Limited
(ii)
Joint ventures
Jointly controlled assets - the proportionate interests in the assets, liabilities and expenses of joint venture activities have
been incorporated in the financial statements under the appropriate headings. Details of the joint ventures are set out in
note 25.
(iii)
Changes in ownership interests
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity
owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the
controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the
amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate
reserve within equity attributable to owners of De Grey Mining Limited.
When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured
to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount
for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial
asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted
for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised
in other comprehensive income are reclassified to profit or loss.
If the ownership interest in a jointly controlled entity or associate is reduced but joint control or significant influence is
retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified
to profit or loss where appropriate.
C. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the
operating segments, has been identified as the full Board of Directors.
D. Foreign currency translation
(i)
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are
presented in Australian dollars, which is De Grey Mining Limited's functional and presentation currency.
(ii)
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in
profit or loss.
(iii)
Group companies
The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy)
that have a functional currency different from the presentation currency are translated into the presentation currency as
follows:
•
assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of
that statement of financial position;
income and expenses for each statement of comprehensive income are translated at average exchange rates (unless
that is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which
case income and expenses are translated at the dates of the transactions); and
all resulting exchange differences are recognised in other comprehensive income.
•
•
39
De Grey Mining Limited
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings and other financial instruments designated as hedges of such investments, are recognised in other
comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid,
the associated exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
E. Revenue recognition
Revenue is recognised to the extent that is it probable that the economic benefits will flow to the Group and the revenue can
be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:
Interest Revenue
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial assets.
Royalty Revenue
Royalties revenue is recognised on the basis of actual shipment tonnes and the agreed contractual price per tonne.
F. Income tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company’s subsidiaries and associates operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the
tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income
tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is
determined using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are
expected to apply when the related deferred income tax asset is realised, or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases
of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities
and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset
where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset
and settle the liability simultaneously.
De Grey Mining Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation
legislation. As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of these
entities are set off in the consolidated financial statements.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or
directly in equity, respectively.
40
De Grey Mining Limited
G. Leases
Leases of property, plant and equipment where the Group, as lessee, has substantially all the risks and rewards of ownership
are classified as finance leases. Finance leases are capitalised at the lease’s inception at the fair value of the leased property
or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges,
are included in other short-term and long-term payables. Each lease payment is allocated between the liability and finance
cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest
on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases
is depreciated over the shorter of the asset’s useful life and the lease term.
Leases where a significant portion of the risks and rewards of ownership are not transferred to the Group as lessee are
classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are
charged to profit or loss on a straight-line basis over the period of the lease.
H. Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets
are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes
of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows
which 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 reviewed for possible reversal of the impairment at each
reporting date.
I. Cash and cash equivalents
For statement of cash flows presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call
with financial institutions, other short-term highly liquid investments with original maturities of three months or less that
are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value, and bank
overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.
J. Trade and other receivables
Receivables are recognised and carried at original invoice amount less a provision for any uncollectible debts. An estimate
for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written-off as incurred.
K. Investments and other financial assets
Classification
The Group classifies its investments in the following categories: financial assets at fair value through profit or loss, loans
and receivables, held-to-maturity investments and available-for-sale financial assets. The classification depends on the
purpose for which the investments were acquired. Management determines the classification of its investments at initial
recognition and, in the case of assets classified as held-to-maturity, re-evaluates this designation at each reporting date.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this
category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading
unless they are designated as hedges. Assets in this category are classified as current assets.
41
De Grey Mining Limited
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for those with maturities greater than 12 months after the
reporting date which are classified as non-current assets. Loans and receivables are included in trade and other receivables
in the statement of financial position.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets quoted in an active market with fixed or determinable
payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity. If
the Group were to sell other than an insignificant amount of held-to-maturity financial assets, the whole category would
be tainted and reclassified as available-for-sale. Held-to-maturity financial assets are included in non-current assets, except
for those with maturities less than 12 months from the reporting date, which are classified as current assets.
Available-for-sale financial assets
Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either
designated in this category or not classified in any of the other categories. They are included in non-current assets unless
management intends to dispose of the investment within 12 months of the reporting date. Investments are designated
available-for-sale if they do not have fixed maturities and fixed or determinable payments and management intends to hold
them for the medium to long term.
Financial assets – reclassification
The Group may choose to reclassify a non-derivative trading financial asset out of the held-for-trading category if the
financial asset is no longer held for the purpose of selling it in the near term. Financial assets other than loans and
receivables are permitted to be reclassified out of the held-for-trading category only in rare circumstances arising from a
single event that is unusual and highly unlikely to recur in the near term. In addition, the Group may choose to reclassify
financial assets that would meet the definition of loans and receivables out of the held-for-trading or available-for-sale
categories if the Group has the intention and ability to hold these financial assets for the foreseeable future or until maturity
at the date of reclassification.
Reclassifications are made at fair value as of the reclassification date. Fair value becomes the new cost or amortised cost
as applicable, and no reversals of fair value gains or losses recorded before reclassification date are subsequently made.
Effective interest rates for financial assets reclassified to loans and receivables and held-to-maturity categories are
determined at the reclassification date. Further increases in estimates of cash flows adjust effective interest rates
prospectively.
Recognition and derecognition
Regular purchases and sales of financial assets are recognised on trade-date – the date on which the Group commits to
purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not
carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised
at fair value and transaction costs are expensed to the statement of comprehensive income. Financial assets are
derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the
Group has transferred substantially all the risks and rewards of ownership.
When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised in equity are
included in the statement of comprehensive income as gains and losses from investment securities.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a financial asset not at fair
value through profit or loss, transactions costs that are directly attributable to the acquisition of the financial asset.
Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
42
De Grey Mining Limited
Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method.
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair
value. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’
category are presented in the statement of comprehensive income within other income or other expenses in the period in
which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the statement of
comprehensive income as part of revenue from continuing operations when the Group’s right to receive payments is
established.
Changes in the fair value of monetary securities denominated in a foreign currency and classified as available-for-sale are
analysed between translation differences resulting from changes in amortised cost of the security and other changes in the
carrying amount of the security.
The translation differences related to changes in the amortised cost are recognised in profit or loss, and other changes in
carrying amount are recognised in equity. Changes in the fair value of other monetary and non-monetary securities
classified as available-for-sale are recognised in equity.
Details on how the fair value of financial investments is determined are disclosed in note 1(t).
Impairment
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group
of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred
only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition
of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial
asset or group of financial assets that can be reliably estimated. In the case of equity investments classified as available-
for-sale, a significant or prolonged decline in the fair value of the security below its cost is considered an indicator that the
assets are impaired.
Assets carried at amortised cost
For loans and receivables, the amount of the loss is measured as the difference between the asset’s carrying amount and
the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at
the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss
is recognised in profit or loss. If a loan or held-to-maturity investment has a variable interest rate, the discount rate for
measuring any impairment loss is the current effective interest rate determined under the contract. As a practical
expedient, the Group may measure impairment on the basis of an instrument’s fair value using an observable market price.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal
of the previously recognised impairment loss is recognised in profit or loss.
Assets classified as available-for-sale
If there is objective evidence of impairment for available-for-sale financial assets, the cumulative loss – measured as the
difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset
previously recognised in profit or loss – is removed from equity and recognised in profit or loss.
Impairment losses on equity instruments that were recognised in profit or loss are not reversed through profit or loss in a
subsequent period.
If the fair value of a debt instrument classified as available-for-sale increases in a subsequent period and the increase can
be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss
is reversed through profit or loss.
43
De Grey Mining Limited
L. Plant and equipment
All plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when
replaced. All other repairs and maintenance are charged to the statement of comprehensive income during the reporting
period in which they are incurred.
Depreciation of plant and equipment is calculated using the reducing balance method to allocate their cost or revalued
amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain
leased plant and equipment, the shorter lease term. The rates vary between 20% and 40% per annum.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount (note 1(h)).
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the
statement of comprehensive income. When revalued assets are sold, it is Group policy to transfer the amounts included in
other reserves in respect of those assets to retained earnings.
M. Exploration and evaluation costs
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an exploration and
evaluation asset in the year in which the expenditure is incurred where;
(a) The Group has secured (or has the legal right to) tenure, and/or the legal rights to explore an area of interest;
(b) Exploration and evaluation activities in the area of interest have not at the end of the reporting period reached a stage
which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active
and significant operations in, or in relation to, the area of interest are continuing; and
(c) The exploration and evaluation expenditures are expected to be recouped through successful development and
exploitation of the area of interest, or alternatively, by its sale.
Where the conditions outlined in (a), (b) and/or (c) are not met in relation to specific area(s) of interest, then those
exploration and evaluation costs are expensed as incurred.
N. Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which
are unpaid. The amounts are unsecured and are paid on normal commercial terms.
O. Employee benefits
Wages and salaries, annual leave and long service leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities are
settled. The liability for annual leave and long service leave is recognised in the provision for employee benefits. All other
short-term employee benefit obligations are presented as payables.
44
De Grey Mining Limited
P. Share-based payments
The Group provides benefits to employees (including directors) of the Group in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares (‘equity-settled
transactions’), refer to note 28.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which
they are granted.
The fair value is determined by an internal valuation using a Black-Scholes option pricing model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in
which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled
to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the
extent to which the vesting period has expired and (ii) the number of options that, in the opinion of the directors of the
Group, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment
is made for the likelihood of market performance conditions being met as the effect of these conditions is included in the
determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a
market condition.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not
yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award
and designated as a replacement award on the date that it is granted, the cancelled and new award are treated as if they
were a modification of the original award.
Options over ordinary shares have also been issued as consideration for the acquisition of interests in tenements and other
services. These options have been treated in the same manner as employee options described above, with the expense
being included as part of exploration expenditure.
Q. Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
R. Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to owners of the company, excluding any costs of
servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
the after-income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential
ordinary shares.
45
De Grey Mining Limited
S. Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
T. Significant accounting judgements estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates
in relation to assets, liabilities, contingent liabilities, revenue and expenses.
Management bases its judgements, estimates and assumptions on historical experience and on other various factors,
including expectations of future events, management believes to be reasonable under the circumstances.
Exploration expenditure
Exploration and evaluation costs are assessed on the basis of the revised accounting policy with respect to whether or not
it is appropriate to carry as a Deferred exploration asset – refer to (m) above.
Financial assets – measurement and impairment assessment
The Company is required to classify those all assets and liabilities, measured at fair value, using a three-level hierarchy,
based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date;
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
or indirectly; and
Level 3: Unobservable inputs for the asset or liability. Considerable judgement is required to determine what is significant
to fair value and therefore which category the asset or liability is placed in can be subjective. The fair value of assets and
liabilities classified as level 3 (if any) is determined by the use of valuation models. These include discounted cash flow
analysis or the use of observable inputs that require significant adjustments based on unobservable inputs.
The group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group
of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred
only if there is objective evidence of impairment as a result of consideration of all available information with respect to the
asset. In the case of non-listed equity investments classified as available-for-sale, the Company takes into consideration its
underlying assets and liabilities, its most recent funding and any other pertinent information to support its carrying value
and/or indicators of asset impairment.
46
De Grey Mining Limited
U. Going concern
The financial report has been prepared on a going concern basis which assumes the commercial realisation of the future
potential of the Group’s assets and discharge of its liabilities in the normal course of business. The group recorded a loss of
$2,476,951 (2017: $3,218,897) for the year ended 30 June 2018, has a cash and cash equivalents balance of $1,147,538
(2017: $1,007,029).
The Company has annual minimum exploration commitments on its Pilbara Project tenements of $1,563,620 (2017:
$1,307,260), including those agreements to acquire or an option to acquire.
In addition, the Company has a remaining liability of $13.4 Million owing to the current owners of Indee Gold Pty Ltd, which
is due on or before 24 January 2019, or by paying a further $700,000 by that date, the settlement date can be extended to
24 July 2019.
Although the above matters are indicative of a material uncertainty, the Directors believe that it is appropriate to prepare
the financial statements on the going concern basis for the following reasons:
The Directors believe that it is appropriate to prepare the financial statements on the going concern basis for the following
reasons:
(i) The Group, during the year and up to the date of this report, has demonstrated its capacity to raise new equity capital
as required via the completion of three private placements (~$13 Million before costs), including two to strategic
investor and ASX/TSX listed Kirkland Lake Gold Limited and ASX listed DGO Limited (settling in July 2018);
(ii) An additional ~$1.6 Million was raised via the exercise of various class of options during the year also;
(iii) There are currently a number of option classes, that if exercised, has the potential to provide further proceeds within
the coming 12 months, that can be allocated to ongoing exploration and feasibility activities, and includes 53 Million
listed options, exercisable at 10 cents each, and exercisable on or before 30 November 2018;
(iv) A further cash payment of $10.4 Million is to be paid on or before 24 January 2019 (settlement date) to the current
owners of Indee Gold Pty Ltd, however, De Grey also has the right to extend Settlement by a further 6 months to 24 July
2019 by payment of an Extension Deposit of $700,000, before the abovementioned settlement date, with the remaining
$9.7 Million then payable on or before 24 July 2019;
(v) There is a recognition that it will be necessary to secure additional funding to complete the Indee Gold acquisition as
well as ongoing exploration and pre-feasibility studies, ongoing corporate and administrative costs; and
(vi) It considers that it has the capacity to raise additional funds so as to continue exploration and feasibility expenditures
on its Pilbara Gold Project, further progress its base metals and lithium prospects as well as meeting its corporate and
working capital needs.
The Directors have reviewed the Group’s and Company’s overall position and outlook in respect of the matters identified
above and are of the opinion that the use of the going concern basis is appropriate in the circumstances.
2. Financial Risk Management
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price
risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial
markets and seeks to minimise potential adverse effects on the financial performance of the Group.
Risk management is carried out by the full Board of Directors as the Group believes that it is crucial for all Board members
to be involved in this process. The Board, with the assistance of senior management as required, has responsibility for
identifying, assessing, treating and monitoring risks and reporting to the Board on risk management.
A. Market risk
Foreign exchange risk
The Group has minimal operations internationally and there are currently limited exposures to foreign exchange risk arising
from currency exposures.
47
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a
currency that is not the entity’s functional currency and net investments in foreign operations. The Group has not
formalised a foreign currency risk management policy, however it monitors its foreign currency expenditure in light of
exchange rate movements.
All parent entity and Australian subsidiary entity balances are in Australian dollars and all Group balances are in Australian
dollars, so the Group has only minimal exposure to foreign currency risk at the reporting date.
De Grey Mining Limited
Price risk
Given the current level of operations, the Group is not exposed to price risk.
Interest rate risk
The Group is exposed to movements in market interest rates on cash and cash equivalents. The Group policy is to monitor
the interest rate yield curve out to six months to ensure a balance is maintained between the liquidity of cash assets and
the interest rate return. The entire balance of cash and cash equivalents for the Group $1,147,538 (2017: $1,007,029) is
subject to interest rate risk. The proportional mix of floating interest rates and fixed rates to a maximum of six months
fluctuate during the year depending on current working capital requirements. The weighted average interest rate received
on cash and cash equivalents by the Group was 0.70% (2017: 1.29%).
Sensitivity analysis
At 30 June 2018, if interest rates had changed by -/+ 100 basis points from the weighted average rate for the year with all
other variables held constant, post-tax loss for the Group would have been $32,481 lower/higher (2017: $5,620
lower/higher) as a result of lower/higher interest income from cash and cash equivalents.
B. Credit risk
The maximum exposure to credit risk at balance date is the carrying amount (net of provision for impairment) of those
assets as disclosed in the statement of financial position and notes to the financial statements. The only significant
concentration of credit risk for the Group is the cash and cash equivalents held with financial institutions. All material
deposits are held with the major Australian banks for which the Board evaluate credit risk to be minimal.
As the Group does not presently have any trade debtors, lending, significant stock levels or any other credit risk, a formal
credit risk management policy is not maintained.
C. Liquidity risk
The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and ensuring sufficient cash
and marketable securities are available to meet the current and future commitments of the Group. Due to the nature of
the Group’s activities, being mineral exploration, the Group does not have ready access to credit facilities, with the primary
source of funding being equity raisings. The Board of Directors constantly monitor the state of equity markets in conjunction
with the Group’s current and future funding requirements, with a view to initiating appropriate capital raisings as required.
The financial liabilities of the Group are confined to trade and other payables as disclosed in the Statement of financial
position. All trade and other payables are non-interest bearing and due within 12 months of the reporting date.
D. Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for
disclosure purposes. All financial assets and financial liabilities of the Group at the balance date are recorded at amounts
approximating their carrying amount. The fair value of financial instruments traded in active markets is based on quoted
market prices at the reporting date. The quoted market price used for financial assets held by the Group is the current bid
price.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values
due to their short-term nature.
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De Grey Mining Limited
3. Segment Information
Management has determined the operating segments based on the reports reviewed by the Board of Directors that are used
to make strategic decisions. For management purposes, the Group has identified one reportable operating segment being
exploration activities undertaken in one geographical segment being Australasia. These segments include the activities
associated with the determination and assessment of the existence of commercial economic reserves, from the Group’s
mineral assets in the sole geographic location.
Segment performance is evaluated based on the operating profit and loss and cash flows and is measured in accordance with
the Group’s accounting policies.
Segment revenue
Reconciliation of segment revenue to total revenue
before tax:
Interest revenue
Other revenue
Australasia
Consolidated Total
2018
$
155,684
2017
$
23,030
2018
$
155,684
22,596
6,031
2017
$
23,030
7,268
500
Segment results
155,684
(2,300,589)
155,684
(2,300,589)
Reconciliation of segment result to net loss before tax:
Corporate advisory
Share based payments
Other corporate and administration
Net loss before tax
(203,375)
(662,826)
(1,794,557)
(2,476,951)
(30,000)
(49,980)
(846,096)
(3,218,897)
Segment operating assets
24,329,242
1,154,526
24,329,242
1,154,526
Reconciliation of segment operating assets to total
assets:
Other corporate and administration assets
Total assets
1,684,194
24,329,243
1,045,734
2,200,260
Segment operating liabilties
14,473,198
972,127
14,473,198
972,127
Reconciliation of segment operating liabilities to total
liabilities:
Other corporate and administration liabilities
Total liabilities
259,545
51,999
14,732,743
1,024,126
49
4. Revenue
From continuing operations
Royalties- sands
EIS Grant
Diesel fuel tax rebates
Interest
Other
5. Expenses
De Grey Mining Limited
Consolidated
2018
$
11,605
53,680
90,399
22,596
6,031
184,311
2017
$
23,030
-
-
7,268
500
30,798
Loss before income tax includes the following specific expenses:
Contributions to superannuation funds
Share based payments – options (Directors & under approved plan)
Share based payments – performance rights (Directors & under approved plan)
Share based payments – corporate advisory services
65,879
58,950
288,997
314,880
15,729
49,980
-
-
6. Income tax
(a) Income tax expense
Current tax
Deferred tax
(b) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations before income tax expense
Prima facie tax benefit at the Australian tax rate of 27.5% (2017: 27.5%)
Tax effect of amounts which are not deductible (taxable) in calculating taxable
income:
Capital raising fees
Other allowable expenditure
Sundry items
Overseas projects income and expenses
Tax effect of current year tax losses for which no deferred tax asset has been
recognised
Income tax expense
(c) Unrecognised deferred tax assets
Unrecognised deferred tax assets
Provisions
Capital raising fees
Carry forward tax losses
Gross deferred tax assets
50
-
-
-
-
-
-
(2,476,951)
(3,218,897)
(681,161)
(885,197)
(38,988)
(1,678,129)
(18,634)
-
(2,416,912)
(40,267)
(269,609)
29,959
-
(1,165,114)
2,416,912
-
1,165,114
-
103,956
18,341,985
18,445,941
99,250
11,827,572
11,926,822
De Grey Mining Limited
(d) Tax consolidation
Effective 1 July 2004, for the purposes of income taxation, De Grey Mining Limited and its 100% owned Australian subsidiaries
formed a tax consolidated group. Members of the group have entered into a tax sharing arrangement in order to allocate
income tax between the entities should the head entity default on its tax payment obligations. At the balance date, the
possibility of default is remote. The head entity of the tax consolidated group is De Grey Mining Limited.
The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate De
Grey Mining Limited for any current tax payable assumed and are compensated by De Grey Mining Limited for any current
tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to De Grey
Mining Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts
recognised in the wholly-owned entities’ financial statements.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head
entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment
of interim funding amounts to assist with its obligations to pay tax instalments. The funding amounts are recognised as
current intercompany receivables or payables.
(e) Franking credits
The company has no franking credits available for use in future years.
7. Current assets – Cash and cash equivalents
Cash at bank and in hand (i)
Short-term deposits (ii)
Cash and cash equivalents as shown in the statement of financial position and
the statement of cash flows
(i) Cash at bank earns interest at floating rates based on daily bank deposit rates.
Consolidated
2018
$
116,128
1,031,410
2017
$
30,926
976,103
1,147,538
1,007,029
(ii) Short-term deposits are made for varying periods of between one day and three months depending on the immediate
cash requirements of the Group and earn interest at the respective short-term deposit rates.
8. Current assets – Trade and other receivables
Receivable – sands royalty
GST receivable (net)
Fuel tax credits receivable
Sundry debtors
Sundry debtors are non-interest bearing and have repayment terms between 30 and 90 days.
9. Current assets - Inventories
Diesel fuel in stock
10. Current assets – Other assets
Prepayment rents
Prepayment – other corporate
Advances & deposits
51
3,759
184,310
56,279
727
245,075
3,469
91,157
31,127
985
126,738
19,894
19,894
11,695
11,695
10,000
31,030
1,932
42,962
-
16,040
-
16,040
11. Available-for-sale financial assets
Equity securities – Farno-McMahon Pty Ltd – unlisted (i)
Equity securities – Muskateer Resources Pty Ltd - unlisted (ii)
De Grey Mining Limited
Consolidated
2018
$
200,000
-
200,000
2017
$
-
-
-
(i) A 4% interest held in an unlisted minerals exploration entity, whose major assets are mineral tenements in the Pilbara
region of Western Australia. On 18 September 2018, the Company announced that Novo Resources Corp. of Canada
(“Novo”) had reached a conditional agreement to acquire 100% of Farno McMahon Pty Ltd (“Farno”). The Company
agreed to accept the Novo offer, which is a combination of cash and scrip and on the day prior to the announcement
had a value of approximately $314,000.
(ii) A 4% interest held in an unlisted mineral exploration entity, whose major asset is an Australian based Zinc project. The
Company has performed an assessment of the investment and considers it appropriate that it remain fully impaired as
at balance date.
12. Non-current assets – Deferred exploration & evaluation expenditure
Beginning of financial period
Exploration expenditure - all areas of interest (i)
Tenement option payments (non Indee Gold Pty Ltd)
Indee Gold Pty Ltd – acquisition consideration paid
Indee Gold Pty Ltd – acquisition consideration payable
Expensed to P&L
980,397
5,907,789
194,500
1,500,000
13,400,000
-
21,982,686
-
2,914,017
290,000
100,000
-
(2,323,620)
980,397
(i) The Group has capitalised all costs associated with The Pilbara Project.
The recoverability of the carrying amount of the exploration and evaluation assets is dependent on successful
development and commercial exploitation, or alternatively, sale of the respective areas of interest.
13. Non-current assets – Plant and equipment
Plant and equipment
Cost
Accumulated depreciation
Net book amount
Plant and equipment
Opening net book amount
Additions
Depreciation charge
Closing net book amount
1,129,560
(438,473)
691,087
58,361
673,389
(40,663)
691,087
456,171
(397,810)
58,361
26,019
43,618
(11,276)
58,361
52
14. Current liabilities – Trade and other payables
Trade payables
Trade payables to be settled via an equity issue
Other payables and accruals (i)
De Grey Mining Limited
Consolidated
2018
$
2017
$
1,167,211
92,750
62,913
1,322,874
610,214
332,113
81,799
1,024,126
(i) Trade, other payables and accruals are non-interest bearing and are normally settled on terms of 30-45 days.
15. Current liabilities – Employee benefit obligations
Employee benefits (i)
9,868
-
(i) The current provision for employee benefits includes all unconditional entitlements where employees have completed
the required period of service. The entire amount is presented as current, since the consolidated entity does not have an
unconditional right to defer settlement and has an expectation that employees will take the full amount of accrued leave
or require payment within the next 12 months.
16. Current & non-current liabilities – Contract liabilities
Contract liabilities (i)
Consists of:
Current
Non-current
13,400,000
700,000
12,700,000
13,400,000
-
-
-
-
(i) The Company announced on 12 February 2018 that it had completed the execution of a Share Sale Agreement (“SSA”) to
purchase 100% of the issued shares in the capital of Indee Gold Pty Ltd (“Indee Gold”) from Northwest Nonferrous
Australia Mining Pty Ltd (“NNAM”). The terms of the SSA provide for settlement of the acquisition to be completed no
later than 24 July 2019. A part payment of $700,000 must be paid by 24 January 2019, unless De Grey elects to settle
prior to that date. The total consideration remaining to settle the acquisition is:
(a) Payment of $10.4M in cash; and
(b) Issue of $3.0M of equity in De Grey at a price that is 90% of a 20 day VWAP immediately prior to settlement.
53
17. Contributed equity
(a) Share capital
Ordinary shares fully paid
Total contributed equity
(b) Movements in ordinary share capital
Beginning of the financial year
Issued during the current & prior years:
Placement share issue (non-cash)
Placement share issue
Total shares on issue – pre-capital consolidation
Shares on issue – post consolidation
Share purchase plan (SPP) issue
Placement share issue
Share issued in lieu of supplier invoices (non-cash)
Shares issued on exercise of options
Placement share issue
Shares issued on exercise of options
Shares issued on exercise of options
Shares issued on exercise of options
Shares issued - part consideration tenement acquisition
Placement share issue
Shares issued - part consideration tenement acquisition
Share application monies (non-refundable July 2018 placement)
Transaction costs
Share based payments reserve transfer on option exercise
End of the financial year
(c) Prior Year Share Consolidation
De Grey Mining Limited
2018
2017
Issue
Price
Number of shares
$
Number of shares
$
334,468,800
59,464,845
201,296,240
49,108,104
334,468,800
59,464,845
201,296,240
49,108,104
201,296,240
49,108,104
2,878,652,645
45,837,739
$0.002
$0.0029
$0.058
$0.065
$0.04373
$0.04
$0.05
$0.058
$0.08
$0.10
$0.15
$0.15
$0.22
-
-
-
-
-
-
7,595,324
20,850,000
60,450,000
5,000,000
2,125,000
3,068,903
150,000
33,333,333
600,000
-
-
-
334,468,800
-
-
-
332,113
834,000
3,022,500
290,000
170,000
306,890
22,500
5,000,000
132,000
250,000
(158,887)
155,625
59,464,845
-
-
-
10,000,000
434,663,155
3,323,315,800
166,166,240
7,130,000
28,000,000
-
20,000
1,260,523
-
-
413,540
1,820,000
-
-
-
-
201,296,240
-
(243,698)
-
49,108,104
De Grey Mining completed its one for twenty (20) share consolidation in December 2016 following approval by shareholders
at its 2016 Annual General Meeting, held on 30 November 2016. The share consolidation involved the conversion of every
twenty fully paid ordinary shares on issue into one fully paid ordinary share. Where the share consolidation resulted in a
shareholder having a fractional entitlement to a share, the entitlement was rounded up to the next whole number of shares.
Upon the completion of the share consolidation in December 2016, the number of De Grey Mining shares on issue reduced
from 3,323,315,800 shares to 166,166,240 shares as at that date.
(d) Movements in options on issue
Number of options
2018
2017
62,030,714
Beginning of the financial year
Net issued / (exercised or cancelled) during the year:
− Exercisable at 0.2 cents, on or before 10 June 2019¹
− Exercisable at 4 cents, on or before 10 June 2019¹
− Exercisable at 0.2 cents, on or before 10 June 2019¹
− Exercisable at 8 cents, on or before 25 Nov 2017¹
− Exercisable at 10 cents, on or before 30 Nov 2018
− Exercisable at 10 cents, on or before 30 Nov 2018
− Exercisable at 5.8 cents, on or before 6 Sep 2017
− Exercisable at 10 cents, on or before 31 Oct 2020
− Exercisable at 10 cents, on or before 31 Oct 2020
− Exercisable at 20 cents, on or before 30 Nov 2019
End of the financial year
¹ The options were re-stated after the 20:1 Capital Consolidation completed in December 2016 (Note 17(c))
Listed
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
Unlisted
-
(20,850,000)
-
(2,125,000)
29,906,097
(1,250,000)
(5,000,000)
2,250,000
12,000,000
33,333,333
110,295,144
521,192,212
(478,692,212)
23,934,611
(42,500,000)
2,125,000
23,621,103
7,350,000
5,000,000
-
-
-
62,030,714
54
De Grey Mining Limited
(e) Movement in performance rights on issue
On 21 December 2017, 6,700,000 unlisted Performance Rights were issued to directors and employees of the Group. The
issue consists of five (5) tranches each with specific performance hurdles.
Tranche 1
Tranche 2
Tranche 3
Tranche 4
Tranche 5
Total
Opening balance – 1 July 2017
-
-
-
-
-
-
Performance rights issued for the year
1,300,000
1,300,000
1,450,000
1,450,000
1,200,000
6,700,000
Closing balance – 30 June 2018
1,300,000
1,300,000
1,450,000
1,450,000
1,200,000
6,700,000
The Performance Rights shall vest upon satisfaction of the following milestones:
1. Tranche One – the Company declaring greater than 1,500,000 ounce gold resource (JORC 2012) at an overall grade of at
least 1.7 g/t and a minimum category of JORC inferred at the Pilbara Gold Project, on or before 30 November 2019;
2. Tranche Two – the Company declaring greater than 2,000,000 ounce gold resource (JORC 2012) at an overall grade of at
least 1.7 g/t and a minimum category of JORC inferred at the Pilbara Gold Project, or before 30 November 2019;
3. Tranche Three – settlement of the Company’s 100% acquisition of Indee Gold Pty Ltd;
4. Tranche Four – The Company securing Project Financing for the Pilbara Gold Project at a minimum throughput of 1M
tpa; and
5. Tranche Five – The Company confirming higher grade resources of at least 200,000 ounces and at an overall grade of
greater than 5 g/t or before 30 November 2019.
(f) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the company in proportion
to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a
meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Ordinary shares
have no par value and the Company does not have a limited amount of authorised capital. Neither the Company, nor any of
its subsidiaries, holds any shares in the Company at 30 June 2018 (2017: Nil).
(g) Capital risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they
may continue to provide returns for shareholders and benefits for other stakeholders.
Due to the nature of the Group’s activities, being mineral exploration, the Group does not have ready access to credit
facilities, with the primary source of funding being equity raisings. Therefore, the focus of the Group’s capital risk
management is the current working capital position against the requirements of the Group to meet exploration
programmes and corporate overheads. The Group’s strategy is to ensure appropriate liquidity is maintained to meet
anticipated operating requirements, with a view to initiating appropriate capital raisings as required. The working capital
position of the Group at 30 June 2018 and 30 June 2017 are as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables (excluding payables to be settled by an equity issue¹)
Working capital position
Consolidated
2018
$
1,147,538
245,075
(1,230,124)
162,489
2017
$
1,007,029
126,738
(692,013)
441,754
¹ There were payables totalling $92,750 (2017: $332,113) (Refer Note 14) settled by an equity issue of ordinary fully paid shares on 11 July
2017 (subsequent to the financial reporting date).
55
18. Reserves and accumulated losses
(a) Reserves
Share-based payments reserve (i)
Movements:
Share-based payments reserve
Balance at beginning of year
Share based payments (options) expense (Directors & EOP plan)
Share based payments (options) expense (Corporate advisory)
Share based payments (performance rights) expense (Directors & PR plan)
Transfer to Issued Capital on exercise/expiry of options
Balance at end of year
(b)Accumulated losses
Balance at beginning of year
Net loss for the year
Balance at end of year
(c) Nature and purpose of reserves
(i) Share-based payments reserve
De Grey Mining Limited
Consolidated
2018
$
711,106
711,106
170,530
58,950
348,255
288,996
(155,625)
711,106
2017
$
170,530
170,530
120,550
49,980
-
-
-
170,530
(48,102,500)
(2,476,951)
(50,579,451)
(44,883,603)
(3,218,897)
(48,102,500)
The share-based payments reserve is used to recognise the value of equity benefits provided to either employees or directors as
remuneration or to suppliers as payment for products and services.
19. Dividends
No dividends were paid during the financial year.
No recommendation for payment of dividends has been made.
20.
Remuneration of auditors
During the year the following fees were paid or payable for services
provided by the auditor of the parent entity, its related practices and non-
related audit firms:
(a) Audit services
Butler Settineri (Audit) Pty Ltd - audit and review of financial reports
Total remuneration for audit services
(b) Non-audit services
Butler Settineri – tax compliance services
Total remuneration for other services
56
-
-
42,737
42,737
2,200
2,200
20,500
20,500
3,750
3,750
De Grey Mining Limited
21. Contingent liabilities
There are no contingent liabilities or contingent assets of the Group at reporting date.
22. Commitments
(a) Exploration commitments
The Group has certain commitments to meet minimum expenditure
requirements on the mineral exploration assets it has an interest in.
Outstanding Pilbara Project exploration commitments are as follows:
Turner River tenements (100% owned) (i)
Indee Gold Pty Ltd (“Indee Gold”) tenements under share sale agreements to
acquire 100% (ii)
Haoma Mining NL/Elazac Mining Pty Ltd (“Haoma”) tenement under option
agreement (iii)
Tenements under other option agreements (iv)
Annual commitment for the Pilbara Project assets
Consolidated
2018
$
2017
$
756,240
590,100
70,000
147,280
1,563,620
577,160
590,100
-
140,000
1,307,260
(i) The Turner River Project tenements are owned 100% and have minimum aggregate expenditure requirements of
$756,240 p.a. (2017: $577,160)
(ii) The Indee Gold tenements are covered under a full share sale agreement, dated 9 February 2018, as detailed in Note
25.
(iii) The Haoma tenements are covered under an option agreement, and which De Grey formally exercised that option on
12 July 2018, as detailed in Note 25.
(iv) The other tenements under option agreements are with respect to the Farno McMahon, Vanmaris and Blue Moon
Projects, as detailed in Note 25.
(b) Capital commitments
The Group did not have any capital commitments as at the current or prior balance date.
(c) Operating lease (non-cancellable)
Within one year
Later than one year and less than five years
Aggregate lease expenditure contracted for at reporting date but
not recognised as liabilities
48,895
195,580
244,475
-
-
-
57
De Grey Mining Limited
23. Related party transactions
(a) Parent entity
The ultimate parent entity within the Group is De Grey Mining Limited.
(b) Subsidiaries
Interests in subsidiaries are set out in note 24.
(c) Transactions with related parties
Transactions between related parties are on commercial terms and conditions, no more favourable than those available to
other parties unless otherwise stated.
(d) Loans to related parties
De Grey Mining Limited has provided unsecured, interest free loans to each of its wholly owned Australian subsidiaries and
all of which have been fully impaired.
24.
Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 1(b):
Name
Country of Incorporation Class of Shares
Beyondie Gold Pty Ltd
Domain Mining Pty Ltd
Winterwhite Resources Pty Ltd
Last Crusade Pty Ltd
Australia
Australia
Australia
Australia
Ordinary
Ordinary
Ordinary
Ordinary
¹The proportion of ownership interest is equal to the proportion of voting power held.
25.
Interests in joint ventures / other acquisitions
Equity Holding¹
2018
2017
%
100
100
100
100
%
100
100
100
100
(a) Attgold Pty Ltd Retained Pegmatite Rights across E45-2364 (a tenement within the Pilbara Project)
In February 2007, De Grey acquired 100% of tenement E45-2364 on exercise of an option. Under the agreement, Attgold
retained the pegmatite related rights on this tenement only. The pegmatite rights give Attgold rights to explore on the
tenement for pegmatite minerals, which in turn are defined as “tin, tantalum, niobium, lithium, cesium and non-gold bearing
or base metal bearing aggregate.” This is subject to various clauses of priority, access and normal statutory requirements.
De Grey holds all other mineral rights in this tenement, most specifically gold and base metals and the joint venture has a
carrying value of nil.
(b) Mount Dove Iron Rights
On 22 September 2015, the company entered into a Deed of Termination with the Atlas Iron Group, where they relinquished
their iron ore rights on any of the Turner River Project tenements, the Company shall pay Atlas Iron Limited a one-off payment
of $50,000 if it mines iron ore on its tenements.
58
De Grey Mining Limited
(c) Turner River Shingles, River Sand and Limestone Blocks Farm-Out
In October 2012 De Grey, through its wholly owned subsidiary Last Crusade Pty Ltd (“LC”), entered into an agreement with
Mobile Concreting Solutions Pty Ltd (“MCS”) under which LC facilitated the excision of graticule B703 from LC’s Exploration
Licence 45/3390. Under the agreement, MCS applied for a mining licence over the excised graticule to mine for shingles,
river sand and limestone blocks. LC retains the right to explore for all other minerals on the affected ground and MCS pays a
royalty of $0.50 per tonne to LC for all material removed. The sands mining operations commenced in the December 2013
quarter and have continued throughout the current financial year.
(d) Haoma Option – Southern Portion of Tenement E45/2983
In October 2016, De Grey secured an option to acquire 100% of the southern portions of tenement E45/2983, from Haoma
Mining NL (Haoma”), by payment of $10,000 on exercise of such option. Haoma has retained all rights to pegmatite related
mineralisation and alluvial sand and scree deposits on E45/2983; and Haoma obtained the rights to alluvials and screes on
part of the De Grey tenement E45/2533 and the full tenement E45/4751.
(e) Indee Gold Option
On 24 January 2017, De Grey initially entered into an exclusive and binding Heads of Agreement (“HoA”) with current owner
Northwest Nonferrous Australia Mining Pty Ltd (“NNAM”) and its wholly-owned subsidiary, Indee Gold Pty Ltd (“Indee Gold”).
Indee Gold owns the gold assets to the immediate west of De Grey’s Turner River Project near Port Hedland, Western
Australia.
On 9 February 2018, De Grey executed a detailed Share Sale Agreement (“SSA”) on 9 February 2018 to acquire all the shares
in Indee Gold from NNAM.
Under the executed SSA, the total acquisition price is A$15 Million (as per the initial HoA). As at the reporting date, De Grey
has completed its financial obligations under the agreement via the payment of an initial Exclusivity Fee of $100,000 (paid in
January 2017) and a deposit of $1.5 Million (paid in February 2018).
The remaining consideration payable so as to effect settlement are as follows:
•
•
$10.4 Million to be paid on Settlement scheduled for 24 January 2019;
$3 Million of Consideration Shares (new De Grey fully paid ordinary shares) to be issued on Settlement to NMAM and
• De Grey has the right to extend Settlement by 6 months to 24 July 2019 by payment of an Extension Deposit of $700,000,
before 24 January 2019, which would reduce the cash payable at Settlement to $9.7 Million.
As at the date of this report, the Company has scheduled a Shareholders Meeting to obtain approval to proceed with both
the Indee Gold acquisition, as well as approval to issue shares to NMAM as noted above. The meeting to set down for 5
October 2018.
Up to the date of the SSA settlement of SSA, De Grey is required to meet the statutory expenditure commitments on each
of the Indee tenements
(f) Farno McMahon Project Option
On 28 July 2017, secured an option to joint venture (earn-in) agreement for tenement E47/2502, representing the Farno
McMahon Project. An option fee of $40,000 was paid to Vendor granting De Grey and exclusive right and period to assess
the project and on 2 October 2017, the Company elected to enter into a Joint Venture Earn -in. The vendor retains all alluvial
rights.
The Joint Venture Earn-in consists of two stages:
Stage 1 - DEG to spend a minimum of $1.0M over a period of 3 years to earn 30%, as follows:
•
•
•
Year 1 (to 13 December 2017) expenditure requirement of $100,000 have been met;
Year 2 (to 13 March 2019) expenditure requirement of $300,000 is in progress at the date of this report; and
Year 3 (to 13 December 2019) expenditure requirement of $600,000
Stage 2 - DEG may spend a further $1.0M expenditure over an additional 1-year period (Year 4) to earn an additional 45%
equity in the tenement for a total equity of 75%.
59
De Grey Mining Limited
(g) Vanmaris Project Option
On 25 September 2017, secured an Option letter agreement with the owner of tenements E47/3399, E47/3428-3430,
P47/1732-1733 whereby De Grey may acquire an 80% interest in each of these listed tenements, within a 4 year option
period.
The terms of the letter agreement included a cash and script option payment to the vendors of $30,000 cash and 150,000
ordinary fully paid De Grey shares.
De Grey are to maintain the tenements in good standing during the option period and within the 4 year option period can
elect to acquire an 80% interest on payment of $500,000 cash. The vendor retains the alluvial and prospecting rights to a
depth of 3 metres.
(h) Blue Moon Project Option
On 11 October 2017, secured an Option letter agreement with the owner of tenement P47/1773 whereby De Grey may
acquire a 70% interest in the listed tenements, within a 2 year option period.
The key terms of the letter agreement included a cash and script option payment to the vendors of $125,000 cash and
600,000 ordinary fully paid De Grey shares.
It is then to fund exploration at De Grey’s discretion during the 2 year Option Period and after which it can elect to acquire
70% of the mineral rights of the tenement below 6m depth on payment of $500,000 cash. The Vendor retains all the mineral
rights to a depth of 6 metres.
26.
Statement of cash flows
Reconciliation of net loss after income tax to net cash outflow from operating
activities
Net loss for the year
Non-Cash Items
Depreciation of non-current assets
Share based payments (options and performance rights)
Non-cash expenses
Payments to acquire or option mineral tenements
Equity settlement of expenses
Exploration & evaluation expenditure capitalised
Change in operating assets and liabilities
(Increase)/decrease in trade, other receivables and assets
(Increase)/decrease in inventories
(Decrease)/increase in trade and other payables
Consolidated
2018
$
2017
$
(2,476,951)
(3,218,897)
40,663
696,201
154,500
332,113
(5,814,539)
(145,510)
(8,200)
135,953
11,276
49,980
390,000
20,000
(980,397)
(37,793)
(11,694)
760,246
Net cash outflow from operating activities
(7,085,770)
(3,017,279)
60
De Grey Mining Limited
27. Loss per share
(a) Reconciliation of earnings used in calculating loss per share
Loss attributable to the owners of the company used in calculating basic and diluted
loss per share
(b) Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating
basic and diluted loss per share
2018
$
2017
$
(2,476,951)
(3,218,897)
Number of shares
Number of shares
291,136,047
168,820,401
(c) Information on the classification of options
As the Group has made a loss for the year ended 30 June 2018, all options on issue are considered antidilutive and have not been included
in the calculation of diluted earnings per share. These options could potentially dilute basic earnings per share in the future.
28.
Share-based payments
From time to time options are granted to;
(i) eligible employees under the Performance Rights Plan (“PRP”) and/or the Employee Option Plan (“EOP”) of De Grey
Mining Limited to align their interests with that of the shareholders of the company.
(ii) Directors under rules comparable with the PRP and/or EOP, but subject to shareholder approval pursuant to the
provisions of the ASX Listing Rules and the Corporations Act 2001.
(a) Options
Employee Option Plan of De Grey Mining Limited (“EOP”) ¹
Shareholders approved the EOP at the Annual General Meeting held on 25 November 2015. The EOP is designed to attract
and retain eligible employees, provide an incentive to deliver growth and value for the benefit of all Shareholders and facilitate
capital management by enabling the Company to preserve cash reserves for expenditure on principal activities. Participation
in the Plan is at the discretion of the Board and no eligible employee has a contractual right to receive an option under the
Plan.
The exercise price and expiry date for all options granted will be determined by the board prior to granting of the options, and
in the case of Director options subject to shareholder approval. The options granted may also be subject to conditions on
exercise and usually have a contractual life of two to three years.
Options granted carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share in
the capital of the company with full dividend and voting rights.
There were Nil director options granted (2017: 3,500,000) and 2,250,000 EOP options¹ granted (2017: 3,850,000) in the
financial year ended 30 June 2018 and are all currently outstanding are detailed in the following table:
Grant date
Expiry date
Exercise price
Cents
Balance at start
of the year
Granted during
the year
Number
Number
Expired or
other change
during the year
Number
Balance at end of
the year
Number
Vested and
exercisable at
end of the year
Number
Consolidated – 2018
25 Nov 2014
30 Nov 2016
30 Nov 2016
24 Sep 2017
25 Nov 2017
30 Nov 2018
30 Nov 2018
31 Oct 2020
2,125,000
3,500,000
3,850,000¹
-
9,475,000
-
-
-
2,250,000
2,250,000
(2,125,000)
(1,000,000)
(250,000)
-
(3,375,000)
-
2,500,000
3,600,000
2,250,000
8,350,000
-
2,500,000
3,600,000
2,250,000
8,350,000
61
De Grey Mining Limited
Grant date
Expiry date
Exercise price
Consolidated – 2017
25 Nov 2014
25 Nov 2014
30 Nov 2016
30 Nov 2016
25 Nov 2017
25 Nov 2017
30 Nov 2018
30 Nov 2018
Cents
0.4
8.0
10.0
10.0
Balance at start
of the year
Granted during
the year
Number
Number
Expired or
other change
during the year
Number
Balance at end of
the year
Number
Vested and
exercisable at
end of the year
Number
42,500,000
-
-
-
42,500,000
-
-
3,500,000
3,850,000¹
7,350,000
(42,500,000)
2,125,000
-
-¹
(40,375,000)
-
2,125,000
3,500,000
3,850,000¹
9,475,000
-
2,125,000
3,500,000
3,850,000
9,475,000
Expenses arising from options - share-based payment transactions
The weighted average fair value of the options granted during the year was $0.0262 (2017: $0.0068). The price was calculated
by using the Black-Scholes European Option Pricing Model applying the following inputs:
Weighted average exercise price (cents)
Weighted average life of the option (years)
Weighted average underlying share price (cents)
Expected share price volatility
Weighted average risk-free interest rate
2018
10.0
3.1
$0.066
75%
1.5%
2017
10.0
2.0
$0.04
75%
1.5%
Historical volatility has been used as the basis for determining expected share price volatility as it assumed that this is
indicative of future trends, which may not eventuate.
No assumptions have been made relating to dividends or expected early exercise of the options and there are no other inputs
to the model.
The life of the options is based on historical exercise patterns, which may not eventuate in the future.
Total expenses arising from equity settled share-based payment transactions recognised during the period were as follows:
Options issued to directors and EOP to eligible employees
(b) Performance rights
$
58,950
$
49,980
Employee Performance Rights Plan of De Grey Mining Limited (“PRP”)
Shareholders approved the PRP at the Annual General Meeting held on 30 November 2017. The PRP, like the EOP Plan is
designed to attract and retain eligible employees, provide an incentive to deliver growth and value for the benefit of all
Shareholders and facilitate capital management by enabling the Company to preserve cash reserves for expenditure on
principal activities. Participation in the Plan is at the discretion of the Board and no eligible employee has a contractual right
to receive performance rights under the Plan.
The performance rights granted will be determined by the board prior to granting of the rights, and in the case of Director
performance rights, these are subject to shareholder approval. The rights granted may be subject to performance milestones
before the holder has the right to exercise (Refer Note 17) and can have a contractual life of up to 5 years.
Rights granted carry no dividend or voting rights. When exercisable, each right is convertible into one ordinary share in the
capital of the company with full dividend and voting rights.
There were 6,700,000 performance rights granted (2017: Nil) in the financial year ended 30 June 2018 and are all currently
outstanding are detailed in the following table:
62
De Grey Mining Limited
Expenses arising from performance rights - share-based payment transactions
On 21 December 2017, 6,700,000 unlisted Performance Rights were issued to directors and employees of the Group, with
vesting conditions as described in Note 17 (e)
Number Issued (No.)
Grant Date
Exercise Price ($)
Expiry/Amortisation Date
Underlying Share Price on Grant ($)
Total Fair Value ($) – Life of Right
Tranche 1
Tranche 2
Tranche 3¹
Tranche 4¹
Tranche 5
1,300,000
1,300,000
1,450,000
1,450,000
1,200,000
21-Dec-2017
21-Dec-2017
21-Dec-2017 21-Dec-2017 21-Dec-2017
N/A
N/A
N/A
N/A
N/A
30-Nov-2019
30-Nov-2019
24-Jul-2019 30-Nov-2021 30-Nov-2019
$0.17
$0.17
$0.17
$0.17
$0.17
$221,000
$221,000
$246,500
$246,500
$204,000
Total Fair Value ($) – Expensed 30 June 2018
$59,763
$59,763
$81,460
$32,844
$55,166
¹Under the performance rights plan, rights expire the earlier of any date specified on issue or 5 years. In the case of tranches 3 and 4 and for the purposes
of amortisation, the fair value share-based payments have been calculated on the basis of all information available at date of this report, and board considers
both dates as appropriate.
$288,996
29.
Events occurring after the reporting date
There has been no matters or circumstances occurring subsequent to the end of the financial year that has significantly
affected, or may significantly affect the operations of the Group, the result of those operations, or the state of affairs of the
Group in future financial years, other than;
On 12 July 2018, the Company completed a $5 Million placement to ASX listed DGO Gold Limited (“DGO”) via the issue of
25 Million ordinary fully paid shares at a price of $0.20 each. For each share two classes of free attaching unlisted options
were also issued on a 1:2 basis, being 12.5M unlisted options with an exercise price of $0.25 and expiry date of 31 October
2020 and 12.5M unlisted options with an exercise price of $0.30 and expiry date of 30 May 2021. On 12 July 2018, the
Company also allotted 300,000 and 1,950,000 shares on exercise of 10 cent listed options and 4c unlisted options
respectively. Finally, the Company issued 1,009,300 shares as part settlement of supplier invoices.
On 18 September 2018, the Company announced that Novo Resources Corp. of Canada (“Novo”) had reached a conditional
agreement to acquire 100% of Farno McMahon Pty Ltd (“Farno”), the owner of four key tenements, including tenement
E47/2502. The Company had previously entered into a Joint Venture Heads of Agreement with Farno on E47/2502 whereby
it can earn 75% of this tenement through expenditure of $4 million over 4 years. The Company also held a 4% shareholding
in Farno and has agreed to accept the Novo offer, which is a combination of cash and scrip.
On 18 September 2018, the Company allotted 124,169 shares on exercise of 10 cent listed options as well as 607,548 shares
as part settlement of supplier invoices.
63
30. Parent entity information
De Grey Mining Limited
Parent Entity
2018
$
2017
$
The following information relates to the parent entity, De Grey Mining Limited, at 30 June 2018. The information presented here has been
prepared using accounting policies consistent with those presented in Note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Contributed equity
Reserves
Accumulated losses
Total equity
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
1,455,470
22,873,773
24,329,243
2,032,743
12,700,000
14,732,743
59,464,845
711,106
(50,579,451
9,596,500
(2,476,951)
-
(2,476,951)
1,161,502
1,038,758
2,200,260
1,024,126
-
1,024,126
49,108,104
170,530
(48,102,500)
1,176,134
(3,218,897)
-
(3,218,897)
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2018 and 30 June 2017.
Capital commitments
The parent entity had no capital commitments as at 30 June 2018 and 30 June 2017.
Accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1.
64
De Grey Mining Limited
Director’s Declaration
In the directors’ opinion:
(a)
the financial statements and notes set out on pages 33 to 64 are in accordance with the Corporations Act 2001,
including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements; and
giving a true and fair view of the company’s and the consolidated entity’s financial position as at 30 June 2018
and of their performance for the financial year ended on that date;
the audited remuneration report set out on pages 23 to 29 of the directors’ report complies with section 300A of
the Corporations Act 2001;
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become
due and payable; and
a statement that the attached financial statements are in compliance with Australian Accounting Standards has been
included in the notes to the financial statements.
(b)
(c)
(d)
The directors have been given the declarations by the chief executive officer and chief financial officer required by section
295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Simon Lill
Executive Chairman
Perth, 28 September 2018
65
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF DE GREY MINING LIMITED
Report on the Financial Report
Opinion
We have audited the financial report of De Grey Mining Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June
2018 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, and notes to the financial
statements, including a summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
i) giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its
financial performance for the year then ended; and
ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We have conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those Standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report.
We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our ethical requirements
in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material Uncertainty Related to Going Concern
Without qualifying our opinion above, we wish to draw your attention to Note 1(U) of the financial
statements “Going Concern”. The matters as set forth in Note 1(U) “Going Concern” indicates 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.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period.
These matters were addressed in the context of our audit of the financial report as a while, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
exploration
Deferred
expenditure
(refer notes 1(m) and 12)
and
evaluation
How our audit addressed the key audit matter
The Group operates as an exploration entity
and as such
its primary activities entail
expenditure focussed on the exploration for and
evaluation of economically viable mineral
deposits. These activities are currently limited
to the Pilbara region in Western Australia.
Our audit procedures included the following:
• ensuring the Group’s continued right to explore
in the relevant areas of interest including
assessing documentation such as exploration
and mining licences;
All exploration and evaluation expenditure
incurred during the year has been capitalised
and recognised as an asset in the Statement of
Financial Position.
• enquiring of management and the directors as
to the Group’s intentions and strategies for
future exploration activity and
reviewing
budgets and cash flow forecasts;
The Group has also capitalised contract
liabilities of $13,400,000 associated with the
Share Sale Agreement between the Group and
the Vendors of Indee Gold Pty Ltd.
• assessing the results of recent exploration
activity to determine whether there are any
indicators suggesting a potential impairment of
the carrying value of the asset;
The closing value of deferred exploration and
evaluation expenditure is $21,982,686 as at 30
June 2018.
• assessing the Group’s ability to finance the
planned exploration and evaluation activity; and
The carrying value of exploration and
evaluation assets is subjective based on the
Group’s intention, and ability, to continue to
explore the asset. The carrying value may also
be affected by
results of ongoing
exploration activity indicating that the mineral
reserves and
resources may not be
commercially viable for extraction. This creates
a risk that the asset value included within the
financial statements may not be recoverable.
the
Contract liabilities
(refer notes 12 and 16)
The Group has completed the execution of a
Share Sale Agreement to purchase 100% of
the issued shares of Indee Gold Pty Ltd.
The Agreement includes specific payments to
be made on or before 24 July 2019.
The contract liabilities under the Agreement
have been recognised as liabilities totalling
$13,400,000 at 30 June 2018.
• assessing the adequacy of the disclosures
made by the Group in the financial report.
Our audit procedures included the following:
• assessing management’s assumptions
in
determining that a constructive obligation arises
as a result of the Agreement;
• assessing management’s strategy and ability to
the
the payments required under
finance
Agreement; and
• assessing the adequacy of the disclosures
made by the Group in the financial report.
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2018, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Directors’ Responsibilities 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 the Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that gives a true and fair view and is free from material misstatement, whether due
to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue and auditor’s report that
includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken
on the basis of the financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
• Obtain and understanding of internal control relevant to the audit 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 Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significant in the audit of the financial report of the current period and are therefore key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh public interest benefits of such communication.
Report on the Remuneration Report
Opinion
We have audited the Remuneration Report included on pages 23 to 29 of the directors’ report for the
year ended 30 June 2018.
In our opinion, the Remuneration Report of De Grey Mining Limited, for the year ended 30 June 2018,
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001.
Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
BUTLER SETTINERI (AUDIT) PTY LTD
LUCY P GARDNER
Director
Perth
Date: 28 September 2018
ASX Additional Information
De Grey Mining Limited
Additional information required by Australian Stock Exchange Ltd, and not shown elsewhere in this report, is as follows. The
information is current as at 12 October 2018.
(a) Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Ordinary shares
Listed option class
Number of holders Number of shares Number of holders Number of options
1
1,001
5,001
10,001
100,001
- 1,000
- 5,000
- 10,000
- 100,000
and over
The number of shareholders holding
less than a marketable parcel of shares
are:
(b) Twenty largest shareholders
165
457
453
1,430
419
2,924
28,731
1,552,549
3,797,175
54,846,854
303,234,508
363,459,817
404
614,426
The names of the twenty largest holders of quoted ordinary shares are as follows:
1
6
54
133
102
296
136
23,401
318,550
5,719,888
47,041,056
53,103,031
Kirkland Lake Gold Limited
DGO Gold Limited
Citicorp Nominees Pty Ltd
HSBC Custody Nominees Australia Ltd
JP Morgan Nominees Australia Pty Ltd
BNP Paribas Nominees Pty Ltd
National Nominees Ltd
1
2
3
4
5
6
7
8 Merrill Lynch Australia Nominees Pty Ltd
Lynch, Michael
9
10 Wolpers, R & LA
11
12 BNP Paribas Nominees Pty Ltd
13 Parker, Robert
14 Penand Pty Ltd
15 HSBC Custody Nominees Australia Ltd
16 Andama Holdings Pty Ltd
17 BM Capital Management Pty Ltd
18 Vienna Holdings Pty Ltd
19 Nelson Enterprises Pty Ltd
20 Vienna Holdings Pty Ltd
Lill, Simon Richard
70
Listed ordinary shares
Number of shares
Percentage of
ordinary shares
33,333,333
25,000,000
19,629,829
18,684,750
18,104,328
13,661,334
9,500,000
9,152,703
5,750,000
5,350,000
5,100,000
4,089,262
3,250,000
3,165,000
2,644,598
2,541,372
2,075,000
2,000,000
2,000,000
1,900,000
186,931,509
9.17%
6.88%
5.40%
5.14%
4.98%
3.76%
2.61%
2.52%
1.58%
1.47%
1.40%
1.13%
0.89%
0.87%
0.73%
0.70%
0.57%
0.55%
0.55%
0.52%
51.42%
(c) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of the Corporations
Act 2001 are:
De Grey Mining Limited
DGO Gold Limited
(d) Twenty largest option holders
The names of the twenty largest holders of quoted options are as follows:
Coulson, Phillip John
Vienna Holdings Pty Ltd
Johnston, David Anthony
Troca Enterprises Pty Ltd
Fedoruk, Mark
Cotterill, Adam
BNP Paribas Nominees Pty Ltd
Calliton Pty Ltd
Lynch, Michael
1
2
3
4
5
6
7 Matchett Shane A & Melita A
12 Sammut, Sam & Lynette R
13 Wagner, Wade Peter
14 HSBC Custody Nominees Australia Ltd
15 Bryon, Daryl C & Elizabeth S
16 Woodward, Graham & Sheryl
17 Divin, Paul Venda
18 Brennan Super WA Pty Ltd
19 Cotterill, Adam & Victoria
20 Reese, Philip
Number of Shares
25,000,000
Listed options
Number of options
Percentage of
options
3,000,000
2,780,000
2,144,594
1,882,590
1,800,000
1,750,000
1,697,275
1,000,000
1,000,000
980,457
980,000
945,000
900,000
878,738
867,140
819,786
706,000
700,000
641,700
630,000
26,103,280
5.65%
5.24%
4.04%
3.55%
3.39%
3.30%
3.20%
1.88%
1.88%
1.85%
1.85%
1.78%
1.69%
1.65%
1.63%
1.54%
1.33%
1.32%
1.21%
1.19%
49.17%
71
(e) Unquoted (unlisted) Securities
De Grey Mining Limited
Holders of 20% or more of the class
Class
Number
of
Securities
Number
of
Holders
Holder Name
Unlisted $0.04 options, expiry 10 June 2019
1,134,611
Unlisted $0.10 options, expiry 30 November 2018
6,100,000
Unlisted $0.10 options, expiry 31 October 2020
2,250,000
Unlisted $0.10 options, expiry 31 October 2020
12,000,000
Unlisted $0.20 options, expiry 30 November 2019
Unlisted $0.25 options, expiry 30 November 2019
Unlisted $0.30 options, expiry 30 November 2019
Performance rights
33,333,333
12,500,000
12,500,000
6,700,000
2
6
3
1
1
1
1
6
Craig Nelmes
GXB Pty Ltd
Simon Lill
Andy Beckwith
Andy Beckwith
Phil Tornatora
Craig Nelmes
Corporate
Consultants Pty Ltd
Kirkland Lake Gold Limited
DGO Gold Limited
DGO Gold Limited
Andy Beckwith
Simon Lill
Resource
Number of
Securities
634,611
500,000
1,500,000
1,500,000
1,000,000
750,000
500,000
12,000,000
33,333,333
12,500,000
12,500,000
2,000,000
1,500,000
(f) Voting rights
All ordinary shares (whether fully paid or not) carry one vote per share without restriction.
The Quoted and unquoted (unlisted) options have no voting rights.
(g) Corporate Governance
The Board of De Grey Mining Limited is committed to Corporate Governance. The Board is responsible to its Shareholders
for the performance of the Company and seeks to communicate with Shareholders. In accordance with ASX Listing Rule
4.10.3, the Company has elected to disclose its Corporate Governance policies and its compliance with them on its website,
rather than in the Annual Report.
Accordingly, information about the Company's Corporate Governance practices is set out on the Company's website at
https://degreymining.com.au/corporate-governance.
(h) Application of Funds
During the financial year, De Grey Mining Limited confirms that it has used its cash and assets (in a form readily
convertible to cash) in a manner which is consistent with the Company’s business objectives.
72
Annual Mineral Resources Statement
Withnell Mining Centre Mineral Resources - Gold
De Grey Mining Limited
Deposit
Type
Withnell
Mallina
Toweranna
Camel
Calvert
Roe
Dromedary
Leach Pad
Hester
Withnell
Mining
Centre
Oxide
Fresh
Total
Oxide
Fresh
Total
Oxide
Fresh
Total
Oxide
Fresh
Total
Oxide
Fresh
Total
Oxide
Fresh
Total
Oxide
Fresh
Total
Oxide
Fresh
Total
Oxide
Fresh
Total
Oxide
Fresh
Total
Deposit
Type
Wingina
Mt
Berghaus
Amanda
Wingina
Mining
Centre
Oxide
Fresh
Total
Oxide
Fresh
Total
Oxide
Fresh
Total
Oxide
Fresh
Total
Indicated
Au g/t
Au Oz
Mt
Measured
Au
g/t
1.3
1.4
1.3
Mt
0.57
0.45
1.02
0.18
0.01
0.19
2.8
2.1
2.8
0.06
0.01
0.08
0.10
2.7
2.5
2.7
2.2
0.10
2.2
Au Oz Mt
600
23,300 0.22
20,900 2.57
44,100 2.79
0.45
0.81
1.26
0.27
0.46
0.72
16,400 0.32
0.14
17,000 0.46
0.43
0.56
0.99
0.13
0.07
0.20
0.03
0.03
0.06
0.86
5,500
1,000
6,500
7,200
7,200
1.6
1.8
1.7
1.3
1.2
1.2
2.2
2.5
2.3
2.6
1.4
2.2
1.3
1.3
1.3
1.5
2.3
1.8
1.6
1.6
1.6
0.7
11,400
145,200
156,600
19,100
31,400
50,600
18,400
36,000
54,400
26,800
6,500
33,300
17,900
23,800
41,700
6,000
5,300
11,300
1,400
1,700
3,200
19,300
0.86
0.7
19,300
0.92
0.48
1.39
1.8
1.5
1.7
52,300 2.70
22,500 4.64
74,800 7.33
1.4
1.7
1.6
120,400
250,000
370,400
5,400
Au Oz
Inferred
Au
g/t
1.1
2.2 171,200
2.1 176,600
21,300
1.2
1.4
88,800
1.3 110,100
15,700
2.1
73,800
2.2
89,500
2.2
1,500
1.1
8,600
1.8
10,100
1.7
1,400
0.8
9,300
1.2
10,700
1.2
5,700
1.6
14,800
2.2
20,500
2.0
2,200
1.6
4,700
1.8
6,900
1.7
3,500
1.6
1,300
1.2
4,800
1.5
1.4
56,700
1.9 372,500
1.8 429,200
Mt
0.94
5.43
6.37
1.00
2.82
3.83
0.50
1.51
2.01
0.54
0.29
0.84
0.48
0.79
1.27
0.30
0.30
0.60
0.17
0.12
0.29
0.86
0.00
0.86
0.07
0.03
0.10
4.86
11.30
16.16
0.15
2.41
2.56
0.55
2.01
2.57
0.23
1.06
1.29
0.04
0.14
0.19
0.05
0.23
0.28
0.11
0.21
0.33
0.04
0.08
0.12
0.07
0.03
0.10
1.25
6.19
7.43
Wingina Mining Centre Mineral Resources - Gold
Measured
Au
g/t
1.8
1.6
1.7
Mt
2.68
0.40
3.0
8
Au Oz
Mt
152,100
20,500
0.65
0.34
172,700
0.99
0.68
0.27
0.95
0.50
0.07
0.57
1.8
152,100
1.83
Indicated
Au
g/t
1.3
1.5
Au Oz
Mt
Au Oz
Mt
27,000
16,300
0.34
1.08
14,400
57,400
3.67
1.82
Inferred
Au
g/t
1.3
1.7
1.4
1.8
1.7
1.7
1.3
1.7
1.3
1.5
43,300
1.42
38,900
14,400
53,300
21,000
3,800
24,800
0.99
2.40
3.39
0.32
0.37
0.69
86,900
1.64
1.6
1.1
1.2
1.2
1.1
1.2
1.2
1.2
71,700
5.49
35,800
91,800
127,600
11,200
14,800
26,000
1.67
2.77
4.34
0.82
0.44
1.26
61,400
6.16
1.6
1.4
1.2
1.3
1.2
1.3
1.3
1.5
2.6
8
0.4
0
3.0
8
1.6
20,500
0.68
1.6
34,500
3.85
1.3
163,900
4.93
1.4
219,000
1.7
172,700
2.51
1.5
121,500
5.49
1.3
225,300
11.09
1.5
519,400
73
Total
Au
g/t
1.3
1.9
1.8
1.3
1.3
1.3
2.1
2.3
2.2
2.6
1.7
2.2
1.3
1.3
1.3
1.8
2.2
2.0
1.9
1.7
1.9
0.7
0.0
0.7
1.6
1.2
1.5
1.5
1.8
1.7
Total
Au
g/t
1.6
1.6
Au Oz
40,000
337,300
377,300
40,500
120,200
160,700
34,100
109,800
143,900
44,700
15,700
60,400
19,300
33,100
52,400
17,200
21,100
38,300
10,800
6,400
17,200
19,300
0
19,300
3,500
1,300
4,800
229,400
644,900
874,300
Au Oz
193,500
94,200
287,700
74,700
106,300
181,000
32,200
18,500
50,800
300,400
De Grey Mining Limited
De Grey Mining Limited Total Mineral Resources - Gold
Measured
Au
g/t
1.8
1.5
1.7
1.8
1.6
1.7
1.8
1.5
Au Oz
Mt
52,300
22,500
74,800
152,100
20,500
172,700
204,400
43,000
2.70
4.64
7.33
1.83
0.68
2.51
4.53
5.32
Indicated
Au
g/t
1.4
Au Oz
120,400
250,000
370,400
86,900
34,500
121,500
207,400
Mt
1.25
6.19
7.43
1.64
3.85
5.49
2.89
284,500
10.04
1.7
1.6
1.5
1.6
1.5
1.4
1.7
Inferred
Au
g/t
1.4
1.9
1.8
1.2
1.3
1.3
1.3
1.7
Au Oz
Mt
56,700
4.86
372,500
11.30
429,200
16.16
61,400
163,900
6.16
4.93
225,300
11.09
118,100
11.02
536,400
16.23
Total
Au
g/t
1.5
1.8
1.7
1.5
1.4
1.5
1.5
1.7
Au Oz
229,400
644,900
874,300
300,400
219,000
519,400
529,900
863,900
Mining
Centre
Type
Mt
Oxide
0.92
Withnell
Fresh
0.48
Total
1.39
Oxide
2.68
Wingina
Fresh
0.40
Total
3.08
Oxide
3.60
Fresh
0.88
Total
Pilbara
Gold
Project
Total
491,800
All gold deposits are reported at a 0.5g/t Au cut-off grade except Withnell below -100mRL and Wingina below -55mRL where
a 1.0g/t Au cut-off was applied.
1,393,800
247,400
654,500
27.25
12.93
4.47
9.85
1.7
1.6
1.6
1.6
Deposit
Class
Discovery
Massive Sulphide
Discovery Deposit
Halo
Mineralisation
Discovery Deposit
Total
Orchard Tank
Deposit Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Indicated
Inferred
Total
Turner River Project Base Metal Mineral Resources
Tonnes
Mt
0.27
0.35
0.61
0.15
0.63
0.78
0.41
0.98
1.39
Cu
Pb
Zn
%
%
%
5.2 2.4 0.2
5.2 2.1 0.2
5.2 2.2 0.2
0.9 0.5 0.1
1.1 0.5 0.1
1.0 0.5 0.1
3.7 1.7 0.2
2.6 1.0 0.1
2.9 1.2 0.1
Ag
Au
ppm ppm
192
1.9
196
1.3
194
1.5
47
0.9
60
0.6
57
0.6
140
1.6
108
0.8
118
1.0
Metal Tonnes
Zn
13,900
18,200
32,100
1,300
6,900
8,200
15,200
25,100
40,300
Pb
Cu
Au
Oz
16,300
600
6,400
7,100
14,100
600
13,500 1,200 30,400
4,300
100
700
11,700
400
2,900
16,000
400
3,600
20,600
700
7,100
10,000
25,800
900
17,100 1,700 46,400
Ag
kOz
1,600
2,200
3,800
200
1,200
1,400
1,900
3,400
5,300
2.08
2.08
3.4 1.4 0.1
3.4 1.4 0.1
0.7
0.7
105
105
70,800
70,800
28,900 2,400 45,500
28,900 2,400 45,500
7,000
7,000
Turner River Total Base Metal Mineral Resources
Class
Tonnes
Mt
0.41
3.06
3.47
Discovery and Orchard Tank deposits are reported at a 0.5% Zn cut-off grade
Cu
Pb
Zn
%
%
%
3.7 1.7 0.2
3.1 1.3 0.1
3.2 1.3 0.1
Ag
Au
ppm ppm
140
1.6
106
0.7
110
0.8
Indicated
Inferred
Total
De Grey Total
Zn
15,200
95,800
111,000
Metal Tonnes
Pb
Cu
Au
Oz
7,100
20,600
700
39,000 3,400 71,300
46,100 4,100 91,900
Ag
kOz
1,900
10,400
12,300
74
Review of Material Changes
Material changes have been made to the Company’s Gold Mineral Resource Inventory. Between June 2017 and September
2018, the total inventory for the Pilbara Gold Project increased from 18.8Mt at 1.7g/t for 1,002koz to 27.2Mt at 1.6g/t for
1,394koz as shown below.
De Grey Mining Limited - Comparison of June 2017 and September 2018 Gold Mineral Resources
De Grey Mining Limited
Report
Year
2018
2017
Mt
4.47
4.39
Change
2%
Pilbara
Gold
Project
Total
Au
g/t
1.7
1.7
0%
Measured
Indicated
Au Oz Mt
247,400 9.85
241,700 5.44
Au
g/t
1.6
1.7
Au Oz
Inferred
Au
g/t
491,800 12.93 1.6 654,500 27.25
1.6 465,500 18.84
295,100
Au Oz
9.01
Mt
Mt
Total
Au
g/t
1.6
1.7
Au Oz
1,393,800
1,002,300
2%
81%
-6%
67%
44%
0%
41%
45%
-6%
39%
At the Withnell Mining Centre, increases are due to the delineation of new Mineral Resources at the Mallina, Toweranna and
Leach Pad deposits as well as increases to the Camel and Roe deposits to incorporate successful exploration drilling results.
The total Withnell Mining Centre Mineral Resource inventory at September 2018 comprised 16.2Mt at 1.7g/t Au for 874koz,
an increase of 62% in ounces compared to the June 2017 estimate.
At the Wingina Mining Centre, material increases to the Mt Berghaus and Amanda Mineral Resource estimates resulted from
the incorporation of successful exploration drilling results. The Mineral Resource at September 2018 for the Wingina Mining
Centre comprised 11.1Mt at 1.5g/t Au for 519koz, an increase of 12% in ounces compared to the estimate reported at June
2017.
Wingina Mining Centre - Comparison of June 2017 and September 2018 Gold Mineral Resources
Indicated
Inferred
Total
Au Oz
Mt
Au g/t
Au Oz
Deposit
Withnell
Mallina
Tower-
anna
Camel
Calvert
Roe
Drom-
edary
Leach
Pad
Hester
Withnell
Mining
Centre
Report
Year
2018
2017
Change
2018
2017
Change
2018
2017
Change
2018
2017
Mt
1.02
1.02
0%
0.19
0.14
Change
36%
2018
2017
Change
2018
2017
Change
2018
2017
Change
2018
2017
Change
2018
2017
Change
2018
2017
Change
Au Oz Mt
Measured
Au
g/t
1.3
1.3
0%
44,100
44,100
0%
Au g/t
Au Oz
Mt
1.7
1.7
0%
1.2
>
2.3
>
2.2
2.9
156,600
156,600
0%
50,600
>
54,400
>
33,300
26,700
2.56
2.56
0%
2.57
>
1.29
>
0.19
0.31
2.79
2.79
0%
1.26
>
0.72
>
0.46
0.29
17,000
14,000
2.8
3.1
-
10%
21%
59%
-24%
25%
-39%
0.08
0.04
100%
0.1
0.1
0%
2.7
2.8
-4%
2.2
2.2
0%
6,500
3,700
76%
7,200
7,200
0%
0.28
0.28
0%
0.33
0.22
50%
0.12
0.12
0%
0.99
0.99
0%
0.2
0.12
67%
0.06
0.06
0%
0.86
1.3
1.3
0%
1.8
3
-40%
1.6
1.6
0%
0.7
41,700
41,700
0%
11,300
11,300
0%
3,200
3,200
0%
19,300
>
>
>
Au
g/t
2.1
2.1
0%
1.3
>
2.2
>
1.7
1.7
0%
1.2
1.2
0%
2
2
0%
1.7
1.7
0%
176,600
176,700
0%
110,100
>
89,500
>
10,100
16,700
-40%
10,700
10,700
0%
20,500
14,200
44%
6,900
6,900
0%
1.39
1.31
6%
1.7
1.6
6%
74,800
69,000
8%
7.33
4.24
73%
1.6
1.8
-11%
370,400
239,500
55%
75
0.1
0.1
0%
7.43
3.6
106%
1.5
1.5
0%
1.8
2
-10%
4,800
4,800
0%
429,200
229,900
87%
6.37
6.37
0%
3.83
>
2.01
>
0.84
0.74
14%
1.27
1.27
0%
0.6
0.38
58%
0.29
0.29
0%
0.86
>
0.1
0.1
0%
16.16
9.15
77%
1.8
1.8
0%
1.3
>
2.2
>
2.2
2.4
-8%
1.3
1.3
0%
2
2.4
-17%
1.9
1.9
0%
0.7
>
1.5
1.5
0%
1.7
1.8
-6%
377,300
377,300
0%
160,700
>
143,900
>
60,400
57,400
5%
52,400
52,400
0%
38,300
29,300
31%
17,200
17,200
0%
19,300
>
4,800
4,800
0%
874,300
538,400
62%
De Grey Mining Limited
Wingina Mining Centre - Comparison of June 2017 and September 2018 Gold Mineral Resources
Measured
Indicated
Inferred
Total
Au Oz
Mt
Au g/t
Au Oz
Mt
Au g/t
Au Oz
Deposit
Wingina
Mt
Berghaus
Amanda
Wingina
Mining
Centre
Report
Year
2018
2017
Change
2018
2017
Change
2018
2017
Change
2018
2017
Mt
3.08
3.08
0%
Au
g/t
1.7
1.7
0%
Au Oz
Mt
172,700
172,700
0%
0.99
0.99
0%
0.95
0.21
352%
0.57
Au
g/t
1.4
1.4
0%
1.7
1.8
-6%
1.3
43,300
43,300
0%
53,300
12,300
333%
24,800
3.08
3.08
1.7
1.7
0%
172,700
2.51
172,700
1.2
0%
109%
1.5
1.4
7%
121,500
55,600
119%
Change
0%
1.42
1.42
0%
3.39
3.3
3%
0.69
0.69
0%
5.49
5.41
1%
1.6
1.6
0%
1.2
1.2
0%
1.2
1.6
-25%
1.3
1.4
-7%
71,700
71,700
0%
127,600
128,500
-1%
26,000
35,400
-27%
5.49
5.49
0%
4.34
3.52
22%
1.26
0.69
88%
225,300 11.09
235,600
-4%
9.69
15%
1.6
1.6
0%
1.3
1.2
8%
1.3
1.6
-19%
1.5
1.5
0%
287,700
287,700
0%
181,000
140,800
29%
50,800
35,400
44%
519,400
463,900
12%
There were no changes to the Mineral Resource estimates for the Turner River base metal deposits during the 2018 financial
year.
Governance and Internal Control
The Company’s procedures for the sample techniques and sample preparation are regularly reviewed and audited by
independent experts.
Assays are performed by independent internationally accredited laboratories with a QAQC program showing acceptable
levels of accuracy and precision.
The exploration assay results database is maintained and appropriate backed-up internally.
All De Grey Mineral Resource estimates have been undertaken independently by Payne Geological Services Pty Ltd.
COMPETENT PERSON STATEMENT
The information in this Annual Mineral Resources Statement is based on, and fairly represents information and supporting
documentation prepared by Mr Paul Payne, a Competent Person who is a Fellow of the Australasian Institute of Mining and
Metallurgy. Mr Payne is a full-time employee of Payne Geological Services. Mr Payne has sufficient experience that is relevant
to the style of mineralisation 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”. Mr Payne consents to the inclusion in the report of the matters based on his information in the
form and context in which it appears.
Mr Payne has approved this Mineral Resources Statement as a whole and consents to its inclusion in the Annual Report in the
form and context in which it appears.
In relation to Mineral Resources, the Company confirms that all material assumptions and technical parameters that underpin
the relevant market announcement continue to apply and have not materially changed
76
Schedule of Interests in Mining Tenements
De Grey Mining Limited
Project/Location
Country
Tenement
Percentage
held/earning
Beyondie
Turner River
Turner River
Turner River
Turner River
Turner River
Turner River
Turner River
Turner River
Turner River
Turner River
Turner River
Turner River
Turner River
Turner River
Turner River
Turner River
Turner River
Blue Moon
Farno-McMahon
Indee
Indee
Indee
Indee
Indee
Indee
Indee
Indee
Indee
Indee
Vanmaris
Vanmaris
Vanmaris
Vanmaris
Vanmaris
Vanmaris
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
E52/2215
E47/891
E45/2533
E45/2364
E45/2995
E45/3390
E45/3391
E45/3392
E47/3552
E47/3553
E47/3554
E47/3750
P45/3028
P45/3029
E45/2983
P47/1827
P47/1866
P47/1827
P47/1773
E47/2502
E47/2720
E47/3504
M47/473
M47/474
M47/475
M47/476
M47/477
M47/480
L47/164
L47/165
E47/3399
E47/3428
E47/3429
E47/3430
P47/1732
P47/1733
20%¹
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
0%²
0%³
0%⁴
0%⁴
0%⁴
0%⁴
0%⁴
0%⁴
0%⁴
0%⁴
0%⁴
0%⁴
0%⁵
0%⁵
0%⁵
0%⁵
0%⁵
0%⁵
1De Grey retains 100% rights to all non-iron ore related minerals under a Split Commodity Agreement.
² De Grey Option has an option to acquire a 70% interest from tenement holder Mr. Craig Gibson (Note 25(h)).
³De Grey has an option to acquire 100% of tenement E45/2983, from Haoma Mining NL and Elazac Mining Pty Ltd, the later party being
the tenement holder (Note 25 (d)).
⁴In February 2018, De Grey executed a fully binding share agreement to acquire 100% of Indee Gold Pty Ltd – the tenement owner (Note
25(e)).
⁵ De Grey Option has an option to acquire an 80% interest from tenement holder Mr. Mathew Vanmaris (Note 25(g)).
77
De Grey Mining Limited
Registered Office
Level 3, Suites 24-26, 22 Railway Road,
Subiaco WA 6008
Postal Address
PO Box 2023,
Subiaco WA 6904
Telephone: +61 8 6117 9328
Fax: +61 8 6117 9330
E-mail: admin@degreymining.com.au
Website: www.degreymining.com.au
78