Europa Metals Ltd
(Formally known as Ferrum Crescent Ltd)
A.C.N. 097 532 137
Annual Report
For the year ended
30 June 2018
Europa Metals Ltd
A.C.N. 097 532 137
Contents
Chairman’s Letter
Corporate information
Directors’ report
Company and project overview
Corporate governance statement
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of cash flows
Consolidated statement of changes in equity
Notes to the consolidated financial statements
Directors’ declaration
Independent auditor’s report
Auditor’s independence declaration
Additional ASX information
Additional JSE information
Page No.
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Europa Metals Ltd
A.C.N. 097 532 137
Chairman’s Letter
Dear Shareholders,
The 2018 financial year has been a rewarding one for the Company and its management, employees and
shareholders. Management’s decision to divest of the Company’s operations in South Africa in order to focus
attention and efforts on the wholly owned Toral lead-zinc-silver project in northern Spain, has been the
catalyst for the Company moving in a more positive direction. I joined as Non-executive Chairman of Europa
Metals Ltd (“Europa or the “Company”) in January 2018 as part of a revitalisation of the Board, and under the
executive drive of Laurence Read (Executive Director) and Myles Campion (Technical Director) I am most
excited about the next 12 months and beyond.
Our Toral project, situated in Castila y León, northern Spain, has continued to demonstrate the hallmarks of
a high grade deposit with further scale potential. On 6 February 2018, the Company announced Maiden
independent Inferred Mineral Resource estimate completed in accordance with JORC (2012) in respect of
the project. The JORC resource estimate, comprising 16Mt at 6.9% Zn Equivalent (including Pb credits) and
25 g/t Ag, more recently updated to 19Mt at 6.9% Zn Equivalent (including Pb credits) and 24 g/t Ag, forms
the basis for the Company’s ongoing scoping study, which is being overseen by the talented team at Addison
Mining Services Limited. Importantly, our progress at Toral has enabled the Company to access funding from
the capital markets for its current and planned exploration activities.
I look forward to providing both longstanding and new shareholders with further updates on the Company’s
progress at Toral as the 2019 financial year unfolds.
Yours faithfully,
Colin Bird
Non-Executive Chairman
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Europa Metals Ltd
A.C.N. 097 532 137
Corporate information
Directors:
Evan Kirby
Laurence Read
Myles Campion
Colin Bird
Daniel Smith
Justin Tooth
Grant Button
Appointed
Appointed
Appointed
Resigned
Resigned
17 October 2017
11 January 2018
16 January 2018
26 September 2017
31 January 2018
Company Secretary:
Daniel Smith (Appointed 16 January 2018)
Grant Button (Resigned 16 January 2018)
Auditor:
BDO Audit (WA) Pty Ltd
38 Station Street
Subiaco, WA 6008
Australia
Telephone: (+61 8) 6382 4600
Facsimile: (+61 8) 6382 4601
Banker:
National Australia Bank
Perth Central Business Banking Centre
UB13.03, 100 St Georges Terrace
Perth WA 6000 AUSTRALIA
Telephone: 13 22 65
Lawyer:
HFW
Level 15
Brookfield Place - Tower 2
123 St Georges Terrace
Perth WA 6000 AUSTRALIA
Telephone: (+61 8) 9422 4700
Facsimile: (+61 8) 9422 4777
Share Registry:
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
Perth WA 6000 AUSTRALIA
Telephone: (+61 8) 9323 2000
Facsimile: (+61 8) 9323 2033
Registered and Principal Office:
c/- Minerva Corporate Pty Limited
Level 8, 99 St Georges Terrace
Perth WA
6000 AUSTRALIA
Telephone: (+61 8) 9486 4036
Facsimile: (+61 8) 9486 4799
Website: www.europametals.com
Email: info@europametals.com
Stock Exchange Listings:
Europa Metals Ltd’s ordinary shares are listed on the Australian Securities Exchange (ASX:EUZ), and the
JSE Limited (JSE:EUZ), and quoted on the AIM market of the London Stock Exchange plc (AIM:EUZ).
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Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
The Directors of Europa Metals Ltd (“Europa” or “the Company”) (the “Directors”) present their report for the
financial year ended 30 June 2018.
Directors
The names and details of the Directors in office during the financial year and at the date of this report are set out
below:
Each Director was in office for the entire reporting period unless otherwise stated.
Dr Evan Kirby (Age 67), BSc (Hons) Metallurgy, PhD Metallurgy, Non-Executive Director
Experience and
expertise
Dr Kirby is a metallurgist with over 31 years of international experience in the mining
sector. He has held senior management positions with Impala Platinum, Rand
Mines and Rustenburg Platinum Mines and worked as a director and technical
consultant for a number of mining companies.
Other current
directorships
Former directorships
over the past 3 years
Special
responsibilities
Director of Bezant Resources plc (AIM: BZT)
Director of Nyota Minerals Limited (ASX & AIM: NYO)
Non-Executive Director
Chairman of the Remuneration Committee
Member of the Audit Committee
Chairman of the Nominations Committee
Member of the Risk Management Committee
Interests in shares
and options
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
12,929,158
22,500,000
Mr Laurence Read (Age 41), BA (Hons), Non-Executive Director, appointed 30 January 2017;
Executive Director appointed 26 September 2017
Experience and
expertise
Mr Read is a UK resident, and has sixteen years experience working with public and
private companies in particular within the natural resources sector.
Other current
directorships
Former directorships
over the past 3 years
Special
responsibilities
Interests in shares
and options
Chief Executive Officer of Bezant Resources plc (AIM: BZT)
None
Executive Director
Member of the Audit Committee
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
23,913,043
112,500,000
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Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
Myles Campion (Age 49), BSc Geology (Hons), MSc Mineral Exploration, Non-Executive Director
(Appointed 17 October 2017)
Experience and
expertise
Mr Campion served as a Fund Manager of Oceanic Asset Management Pty Ltd,
Australian Natural Resources OEIC and Global Connections Funds plc - Junior
Resources Fund. Mr Campion has 24 years' experience in the natural resources
sector, including as a Resource analyst, Fund Manager, equities research and
project and debt financing. He has over 10 years experience as a field geologist that
includes success at the Emily Ann Nickel Sulphide Mine. He was based in London
for five years working at Barclays Capital in their natural resources team and as a
Senior Resource Analyst at WH Ireland. He also served as Fund Manager of CF
Global Resources Fund.
He held the role of Project Geologist at LionOre responsible for the exploration,
discovery and BFS completion of the Emily Ann Nickel Sulphide Mine. Mr Campion's
financial experience ranges from Australian and UK equities research through to
project and debt financing in London, covering the entire spectrum of mining
companies with an extensive knowledge of the global resources market covering the
three main bourses, the Toronto Stock Exchange, AIM and the ASX. He holds a
Graduate Diploma of Business (Finance) and is an Associate of the Royal School of
Mines. Mr Campion earned an M.Sc. in Minerals Exploration from the Royal School
of Mines in London and B.Sc. Honours in Geology from University of Wales College
Cardiff.
Director of Katoro Gold Plc (AIM: KAT)
Director of Taruga Minerals Limited (ASX: TAR)
Technical director
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
18,514,492
112,500,000
Other current
directorships
Former directorships
over the past 3 years
Special
responsibilities
Interests in shares
and options
Colin Bird (Age 74), Higher National Diploma in Mining Engineering (Trent Polytechnical College,
United Kingdom), Non-Executive Chairman (Appointed 11 January 2018)
Experience and
expertise
Mr Bird is a Fellow of the Institute of Materials, Minerals and Mining and a UK
Chartered Engineer. He also holds a UK and South African Mine Managers
Certificate for coal mines. The formative part of his career was spent in the UK coal
mining industry and thereafter he moved to the Zambian copper belt and then to
South Africa to work in a management position with Anglo Coal and BP Coal. On
his return to the UK he was Technical and Operations Director of Costain Mining
Ltd, which involved responsibility for Costain’s interests in the UK, Latin-America
and Spain. Mr Bird has senior technical and operational experience in a number of
commodities including coal, nickel, gold, copper and industrial minerals.
After his extensive operational and technical career, he became involved in
corporate finance and has been the prime mover in a number of public listings,
mainly on the UK’s AIM market
Other current
directorships
Former directorships
over the past 3 years
Special
responsibilities
Interests in shares
and options
Director of Bezant Resources plc (AIM: BZT)
Director of Jubilee Metals Group Plc (AIM: JLP)
Director of African Pioneer Plc (ISDX: APPP)
Chairman of Galileo Resources Plc (AIM: GLR)
Executive Chairman of Xtract Resources Plc (AIM: XST)
Director of BMR Group Plc (LSE: BMR)
Director of Orogen Gold Plc (AIM: ORE)
Non-executive Chairman (appointed 11 January 2018)
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
50,000,000*
105,000,000
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Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
* - Mr Bird also has an indirect interest in a further 130,499,858 ordinary shares via his directorship of African Pioneer Plc and
directorship/shareholding in Davey Crest Nominees Limited.
Daniel Smith (Age 34), BA (International Relations), GIA (Cert), Non-Executive Director, Company
Secretary (Appointed 16 January 2018)
Experience and
expertise
Mr Smith is a member of the Australian Institute of Company Directors and the
Governance Institute of Australia and has over 10 years’ primary and secondary
capital markets expertise. As a director of Minerva Corporate, he has advised on,
and been involved in, a significant number of IPOs, RTOs and capital raisings on
both the ASX and NSX. His key focus is on corporate governance and compliance,
commercial due diligence and transaction structuring, as well as ongoing investor
and stakeholder engagement. Mr Smith is currently a director and company
secretary of ASX-listed Lachlan Star Limited and Hipo Resources Limited, and is
Company Secretary for Taruga Minerals Limited, Love Group Global Ltd, and Vonex
Limited. He holds a BA in International Relations from Curtin University, Western
Australia.
Director of Lachlan Star Limited (ASX: LSA)
Director of Hipo Resources Limited (ASX: HIP)
Director of Taruga Minerals Limited (ASX:TAR)
Director of CoAssets Limited (ASX:CA8)
Non-Executive Director and Company Secretary
Member of Remuneration Committee
Chairman of Audit Committee
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
-
10,000,000
Other current
directorships
Former directorships
over the past 3 years
Special
responsibilities
Interests in shares
and options
Mr Justin Tooth (Age 53), BSc, Executive Chairman and Managing Director, resigned 26 September
2017
Experience and
expertise
Mr Tooth is a financial sector professional with over 21 years’ experience in equity
sales and corporate broking and has a comprehensive knowledge of the natural
resources sector. Between 1994 and 2009, Mr Tooth held senior roles at SBC
Warburg, Lehman Brothers, Paribas and Deutsche Bank, amongst others, primarily
in equity sales and management roles. From 2009 to 2014, he was employed by
the specialist mining brokerage Ocean Equities Limited (now Pareto Securities
Limited) in the role of sales and business development manager.
Other current
directorships
Former directorships
over the past 3 years
Special
responsibilities
Interests in shares
and options
None
None
None
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
326,650
-
Mr Grant Button (Age 56), B Bus, CPA, Company Secretary; Non-Executive Chairman, resigned 31
January 2018
Experience and
expertise
Mr Button is a qualified accountant and has 25 years’ financial and other commercial
management and transactional experience, including 23 years’ experience at a
senior management level in the resources industry. He has acted as an executive
director, managing director, finance director, CFO and company secretary of a range
of publicly listed companies.
Other current
directorships
Executive director of Magnum Mining & Exploration Limited (ASX: MGU). Appointed
6 February 2006.
Former directorships
over the past 3 years
None
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Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
Special
responsibilities
Interests in shares
and options
Corporate
None
Ordinary Shares in Europa Metals Ltd
Options held in Europa Metals Ltd
5,356,300
10,000,000
Board Changes
On 26 September 2017, the Company announced that Mr Justin Tooth, Executive Chairman had resigned from
the Board of Directors of the Company with immediate effect, in order to pursue his other business interests.
Additionally, Mr Laurence Read, previously a Non-executive Director, became an Executive Director.
On 17 October 2017, the Company announced the appointment of Mr Myles Campion as an Executive Director.
Mr Campion has a comprehensive background in all technical and financial facets of the resources sector,
specialising internationally in resource evaluation and project assessment. This follows a 10-year career as an
exploration and mine site geologist in Australia covering base metals and gold. He holds a BSc (Hons) in Geology
from University of Wales College, Cardiff and an MSc (MinEx) from the Royal School of Mines in London, and also
holds a Graduate Diploma of Business (Finance).
On 11 January 2018, the Company announced the appointment of Mr Colin Bird as a Non-Executive Director and
Chairman of the Company. Mr Bird is a chartered mining engineer with extensive multi-commodity mine
management experience in Africa, Europe, Latin America and the Middle East. Mr Bird’s operational and corporate
experience, includes the development of the Jubilee Metals Group production portfolio, concentrating on Platinum
Group Metals in South Africa, in addition to the successful sale of Kiwara plc.
On 16 January 2018, the Company announced the resignation of Mr Grant Button as Company Secretary and the
appointment of Mr Daniel Smith as a Non-Executive Director and Company Secretary. Mr Smith is a member of
the Australian Institute of Company Directors and the Governance Institute of Australia and has over 10 years’
primary and secondary capital markets expertise. On 31 January 2018, the Company announced the resignation
of Mr Grant Button as a Non-Executive Director.
Name Change
On 4 June 2018, the Company announced that the Australian Securities and Investments Commission had
approved the change of the Company’s name to Europa Metals Ltd. Coinciding with the change of company name,
the ticker code for the Company was changed to EUZ on the ASX, AIM and JSE.
Capital Raisings
On 8 September 2017, the Company announced that it had conditionally raised in aggregate, £193,304
(approximately A$321,590) before expenses through a placement via Peterhouse Corporate Finance Limited, as
agent to the Company, of 214,782,526 new ordinary shares of no par value each in the capital of the Company at
a price of 0.09 pence per new ordinary share. The placement was completed on 14 September 2017.
On 2 November 2017, the Company announced that it had conditionally raised £185,250 before expenses through
a placement via Beaufort Securities Limited of 370,499,858 new ordinary shares of no par value each in the capital
of the Company at a price of 0.05 pence per new ordinary share together with the issue of 185,249,929 options
exercisable at a price of 0.075 pence per new ordinary share for a period of thirty months from their date of issue.
The placing was completed on 8 November 2017.
On 9 February 2018 the Company announced the expiry of 2,000,000 unlisted options exercisable at GBP0.0075
and 3,000,000 unlisted options exercisable at GBP0.02 on or before 2 February 2018, which had lapsed
unexercised.
On 22 May 2018, and further to its previous announcement of 21 March 2018, the Company announced that
following shareholder approval it had issued 1,739,130,435 new ordinary shares of no par value each in the capital
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Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report
of the Company at a price of 0.0575 pence per share, raising approximately £1m (before expenses). The proceeds
of the fundraising provided necessary financing and general working capital to enable the Company to progress
the resource delineation and commissioning of an initial scoping study in respect its wholly owned Toral lead-zinc-
silver project.
Shareholder Meetings
At a General Meeting of the Company held on 18 October 2017, shareholders ratified the Company’s previous
capital raising of £225,521 completed on 23 June 2017.
At the Annual General Meeting of the Company held on 30 November 2017, shareholders approved, inter alia, the
re-election of Messrs Button, Read and Campion.
At a General Meeting of the Company held on 21 May 2018, shareholders approved, amongst other things, the
issue of shares relating to a capital raising as well as the ratification of a previous fundraising, the issue of placing
options to brokers and advisers of the Company, incentive options to Directors of the Company, the conversion of
outstanding Director’s fees into shares, and the change of the Company’s name from Ferrum Crescent Limited to
Europa Metals Ltd.
Sponsor and Broker
On 8 September 2017, the Company announced the appointment of Peterhouse Corporate Finance Limited as an
AIM broker to the Company.
On 21 March 2018, the Company announced the appointment of Turner Pope Investments (TPI) Limited as the
Company’s joint broker on AIM.
On 2 May 2018, the Company announced that in accordance with paragraph 2.6 of the JSE Limited Listings
Requirements, Sasfin Capital Proprietary Limited had been appointed as the Company’s JSE sponsor with effect
from 1 May 2018.
Dividends
No dividend has been paid or declared since the start of the financial year and the Directors do not recommend
the payment of a dividend in respect of the financial year (2017: Nil).
Principal activities
The principal activity of the entities within the consolidated entity during the financial year was the exploration
for minerals.
Review of operations and activities
Information on the operations and activities of the Group is set out in the Company and Project overview section
on pages 26 to 29 of this Annual Report.
On 3 July 2017, the Company announced that it had disposed of Batavia Ltd, its wholly-owned Mauritian
subsidiary which held all of the Group’s South African assets, including the Moonlight Iron Ore Project in Limpopo
Province, northern South Africa. The disposal effectively ended the Group’s exposure to all of the costs and
commitments associated with maintaining the Moonlight Project in good standing and enabled the Company to
focus its resources on its portfolio of European lead-zinc-silver exploration assets.
Lead-Zinc-Silver Exploration Projects, Spain
On 28 July 2017, the Company announced the initial results from its drilling programme at the Toral Project,
Spain. The near surface drilling campaign at the project, designed to determine the presence of near surface
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A.C.N. 097 532 137
Directors’ Report
mineralisation, returned core containing visible lead-zinc from every one of the 6 drill holes completed. The
Company announced the results of the drill programme assays on 7 September 2017, which confirmed the
presence of lead-zinc intersections in all six holes with significant high grade lead-zinc intersections in all of the
six holes. Highlights included:
All of the 1,046.9m drilled occurred within 200 metres of the surface.
Intersection of lead-zinc anomalies in all six drill holes.
Key intersections encountered (all widths given along the core):
o Hole TOR17009 1 metre grading at 1.22%Pb, 9.77%Zn (10.99% combined Pb/Zn);
o Hole TOR17012 3 metres grading at 0.64%Pb, 6.46%Zn (7.10% combined Pb/Zn);
o Hole TOR17012 1 metre grading at 0.67%Pb, 16.10%Zn (16.77% combined Pb/Zn);
o Hole TOR17013 1 metre grading at 6.51%Pb, 6.50%Zn (13.01% combined Pb/Zn); and
o Hole TOR17013 3 metres grading at 6.03%Pb, 5.49%Zn (11.52% combined Pb/Zn).
On 22 November 2017, the Company announced that, following a formal application to the Director General of
Mines of the Province of Leόn, the exploration licence in respect of the Group’s Toral lead-zinc project had been
renewed for a further 3 year term to November 2020.
On 11 December 2017, the Company provided an update on its work programme to define a maiden JORC
(2012) compliant resource estimate for Toral. As part of this programme, Addison Mining Services Limited
(“AMS”) had successfully undertaken a site visit, including data location checks, data collection and analytical
review procedures, including check sampling for the purpose of verification and validation of the project’s
database for use in JORC 2012 compliant modelling and estimation. The maiden JORC (2012) compliant
resource estimate was expected to be received in early 2018.
On 6 February 2018, the Company announced a Maiden independent Inferred Mineral Resource estimate
completed in accordance with JORC (2012) in respect of the Toral Project, Spain. A new block model combined
with an initial digital geological model had increased the level of understanding of the mineralogical and
geological controls at Toral, and the Company expressed confidence in being able to enhance and potentially
expand the resource going forwards, subject to undertaking additional drilling and exploration activities.
Maiden JORC (2012) Independent Resource Estimate, Toral Project
The Inferred resource for the Toral Pb-Zn-Ag mineralisation located on the Toral property had been estimated
at various cut-offs (see Table below). The Company had reviewed the new model with AMS, and concluded that
a 4% cut-off was appropriate utilising estimated mining parameters typical for similar types of projects and
mineralogy, and a historical three-year trailing average for metal prices.
Zn Price Used: US$2,400/t
Pb Price Used: US$2,000/t
Ag Price Used:
US$c/lb1.09
US$c/lb0.91
US$17/oz
The maiden resource successfully identified potentially economic mineralisation ranging from surface to
approximately 1,100m below surface. The block model currently extends for a strike length of 3,300m and is still
open to the east long strike and also at depth where it has not yet been closed off.
Cut-Off
Zn Eq
(PbAg)%
6.0
5.0
4.0
3.0
Tonnes
(Millions)
Density
Zn_Eq
(Pb)%
Zn Eq
(PbAg)%
9
12
16
20
2.65
2.57
2.52
2.50
8.8
7.8
6.9
6.2
9.5
8.4
7.5
6.7
Zn
%
5.0
4.6
4.0
3.7
Pb
%
4.3
3.7
3.3
2.9
Ag
g/t
31
28
25
23
Zn
Tonnes
(000’s)
470
580
670
750
Pb
Tonnes
(000’s)
400
470
540
600
Ag Troy
Oz
(Millions)
9
11
13
15
Table: Summary of Inferred mineral resources for the Toral property reported at a 4.0% Zn equivalent cut-off
grade and estimated grade and tonnages at the various cut off grades.
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A.C.N. 097 532 137
Directors’ Report
An image of the AMS’ resource block model for the Toral Project as a 3D view looking north is set out below:.
On 19 June 2018, the Company announced that it had engaged the services of UK based AMS with immediate
effect, to commence an initial Scoping Study (the “Study”) on the Company’s 100% owned Toral lead, zinc and
silver project. The principal objective of the Study is to determine first economics on the Toral Project, reported
on by a fully accredited and independent mining consultancy group. The findings of the Study will be disclosed
to the market following completion, which is currently anticipated during Q4 2018.
AMS’ Principal Geologist, James Hogg, and Associate Principal Mining Engineer, Julian Bennett, will lead the
Study project team dedicated to the Toral Project. The dedicated Study team is working alongside the
Company’s existing in-country management, under the direction of Myles Campion, Technical Director, and
Jesus Montero, principal Mining Engineer from Mining Sense.
Moonlight Project, South Africa
On 3 July 2017, the Company announced that it had entered into a legally binding agreement for the sale of
Batavia Ltd, its wholly-owned Mauritian subsidiary which is the investment holding company for all the Group’s
South African assets, including the Moonlight iron ore project in Limpopo Province, northern South Africa (the
“Moonlight Project”), to NPSPL Africa Holdings Limited and its BEE partner, Ngwenya Capital (Pty) Limited
(together, the “Purchasers”). For nominal consideration of one thousand Australian dollars, the Purchasers have
acquired Batavia and thereby assumed responsibility for all of the Company’s iron ore assets, its South African
subsidiaries and all of the associated corporate, audit, fiscal and environmental responsibilities and costs. The
disposal was part of the Company’s strategic decision to focus on its lead-zinc projects in Spain.
Financial Position
In carrying out its operations during the reporting period, the Group has incurred a loss after income tax for the
period from 1 July 2017 to 30 June 2018 of $1,883,446 (2017: loss of $11,286,803). The Group had net assets
of $2,484,371 (2017: $1,570,393) as set out in the Statement of Financial Position.
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A.C.N. 097 532 137
Directors’ Report
Significant changes in the Group’s state of affairs
There have been no significant changes in the state of affairs of the consolidated entity to the date of this report
that have not otherwise been disclosed elsewhere in the Annual Report.
Significant events after the reporting date
There are subsequent events to report, as follows:
On 16 July 2018, the Company announced that it had contracted a combination drill rig for mobilisation to its
Toral lead-zinc-silver project located in the Province of Leόn, northern Spain, during August 2018. The
Combination rig and associated operating crew was to be supplied by Sondeos y Perforaciones Industriales de
Bierzo SA (“SPI”) and overseen by the Company’s on-site exploration team. The combination rig is one of only
a few of its type in Spain and had been deployed on a series of recent, successful drilling programmes. Such
rigs are used extensively on Australian drilling programmes.
On 30 July 2018, the Company announced the expiry of 205,949,134 unlisted options exercisable at £0.003 per
share on or before 29 July 2018.
On 10 August 2018, and further to its previous announcement of 27 July 2018, the Company announced that it
had raised approximately £563,516 (approximately A$0.98m) (before expenses), through the issue of
727,118,650 new ordinary shares of no par value each in the capital of the Company at an issue price of 0.0775
pence per share. The new ordinary shares were issued under the Company’s existing placement capacity under
ASX Listing Rule 7.1. The net proceeds from the fundraising are to be utilised towards funding a planned phase
2 work programme at the Company’s Toral lead-zinc-silver project, as well as providing additional general
working capital for the Group.
On 28 August 2018, the Company announced that the abovementioned combination drill rig had been
successfully mobilised at the Toral lead-zinc-silver project. Further to the mobilisation and arrival on site of the
combination rig, drilling will initially ascertain the potential continuation of the mineralised structure outside of the
current defined JORC (2012) resource area. With a significant inferred resource estimate already established
for the main Toral project area, the extension drilling to the East will seek to identify the presence of further
mineralisation/hosting structures. Subsequent to completion of the extension drilling, the Company will
concentrate on drilling within the upper zone of the identified JORC (2012) resource area, before moving on to
a Phase II programme, targeting key areas within the high grade zone of the inferred resource in order to increase
resource confidence levels. In addition, the Company announced that further to an intensive 6 week process, its
new geological team had successfully relogged all priority intersections from the historical drill core from the
Toral project stored at the National Litoteca, located in Andalucia, Spain.
On 13 September 2018, the Company announced that the Board had decided to initiate the Change of Land
Use processes needed for the potential full future development of a mine at its Toral project and had engaged a
specialist consultancy, MAGMA Soluciones Ambientales SL, to progress the requisite applications across the
three distinct municipalities overlapping the projects licence area. The process is currently estimated to take
approximately 18 months.
On 20 September 2018, the Company announced an updated JORC (2012) mineral resource estimate for its
Toral project. The abovementioned re-logging of historic drill core held at the National Litoteca from the Toral
project had resulted in significantly higher bulk density measurements than those used for the Maiden resource
estimate completed by AMS between November 2017 and January 2018, as announced by the Company on 6
February 2018.
Accordingly, the updated mineral resource estimate for the Toral lead-zinc-silver deposit comprised:
19Mt @ 6.9% Zn Equivalent (including Pb credits) and 24g/t Ag
720,000 tonnes of Zinc, 570,000 tonnes of Lead and 14 million ounces of Silver
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Directors’ Report
Likely developments and expected results
The Group will continue to carry out its business plans, by:
Conducting its ongoing phase 1 extension drilling programme and thereafter proceed on to its planned
phase 2 activities at its wholly owned Toral lead-zinc-silver Project in Spain;
Finalising an intial scoping study for the Toral Project, which will provide the Company with the level of
confidence and understanding of the technical and commercial characteristics of the project to justify and
drive further exploration and development;
Seeking and evaluating further strategic acquisition opportunities within the exploration and mining
industry to potentially enter into additional advanced projects that will add value to the Group; and
Continuing to meet its statutory commitments relating to its exploration tenements and carrying out
exploration activities in accordance with its stated strategy, whilst carefully conserving the Group’s cash
reserves in order to be able to take advantage of potential value adding opportunities.
There can be no guarantee either that further exploration of the Group’s projects will result in exploration success
or that any potential additional strategic acquisitions considered by the Directors to be likely to add value to the
Group will become available to the Group.
Environmental regulation and performance
The Group’s activities are subject to Spanish legislation relating to the protection of the environment. The Group
is subject to significant environmental legal regulations in respect to its exploration and evaluation activities. The
Group is in compliance with the NGER Act 2007.
There have been no known breaches of these regulations and principles.
Competent Person’s Statement
The Toral maiden and updated resource estimates were prepared by Mr J.N. Hogg, MSc. MAIG Principal
Geologist for AMS, who is an independent Competent Person within the meaning of the JORC (2012) code and
qualified person under the AIM guidance note for Mining and Oil & Gas companies. The maiden and updated
resource estimates were aided by Mr R. J. Siddle, MSc, MAIG Senior Resource Geologist for AMS under the
guidance of the competent person. Mr Hogg has reviewed and verified the technical information that forms the
basis of, and has been used in the preparation of, the mineral resource estimates, including all analytical data,
diamond drill hole logs, QA/QC data, density measurements, and sampling, diamond drilling and analytical
techniques. Mr Hogg consents to the inclusion in this report of the matters based on the information, in the form
and context in which it appears. Mr Hogg has also received and approved the technical information in his capacity
as a qualified person under the AIM Rules for Companies.
Indemnification and Insurance of Directors and officers
The Group has entered into deeds of access and indemnity with the officers of the Group, indemnifying them
against liability incurred, including costs and expenses in defending any legal proceedings. The indemnity
applies to a liability for costs and expenses incurred by the Director or officer acting in their capacity as a director
or officer.
Except in the case of a liability for legal costs and expenses, it does not extend to a liability that is:
(a) owed to the Group or a related body corporate of the Group;
(b) for a pecuniary penalty order under section 1317G or a compensation order under section 1317H or section
1317HA of the Corporations Act 2001; or
(c) owed to someone other than the Group or a related body corporate of the Company where the liability did
not arise out of conduct in good faith.
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Directors’ Report
Similarly, the indemnity does not extend to liability for legal costs and expenses:
(d) in defending proceedings in which the officer is found to have a liability described in paragraph (a), (b) or
(c) above;
(e) in proceedings successfully brought by the Australian Securities and Investments Commission or a
liquidator; or
(f)
in connection with proceedings for relief under the Corporations Act 2001 in which the court denies the relief.
During or since the financial year end, the Company has paid premiums in respect of a contract insuring all the
Directors and officers. The terms of the contract prohibit the disclosure of the details of the insurance contract
and premiums paid.
Indemnification of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, BDO Audit (WA) Pty Ltd, as
part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an
unspecified amount). No payment has been made to indemnify BDO Audit (WA) Pty Ltd during or since the
financial year end.
Non-audit services
The Group may decide to employ the auditor on assignments additional to its statutory audit duties where the
auditor’s expertise and experience with the Group are important.
Details of the amounts paid or payable to the Group’s auditors, BDO International for audit and non-audit services
provided during the financial year are set out below.
Remuneration of the auditor, BDO International for Group
and subsidiary statutory reporting:
-
other assurance related services
2018
$
2017
$
1,750
1,750
4,717
4,717
Directors’ meetings
Meetings of directors held and their attendance during the financial year were as follows:
Director
Evan Kirby
Laurence Read
Myles Campion
Colin Bird1
Daniel Smith2
Justin Tooth3
Grant Button4
1 Appointed 11 January 2018
2 Appointed 16 January 2018
3 Resigned 26 September 2017
4 Resigned 16 January 2018
Board Meetings
Remuneration Committee
Eligible
Attended
Eligible
Attended
8
8
8
2
2
-
6
8
8
8
2
2
-
6
1
-
-
1
1
-
-
1
-
-
1
1
-
-
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Directors’ Report
Remuneration Report (audited)
This Remuneration Report outlines the Director and executive remuneration arrangements of the Company and
the consolidated entity in accordance with the requirements of the Corporations Act 2001 and its Regulations.
For the purpose of this report, Key Management Personnel (KMP) of the consolidated entity are defined as those
persons having authority and responsibility for planning, directing and controlling the major activities of the
Company and the Group, directly or indirectly, and includes Directors of the Company.
The information provided in this remuneration report has been audited as required by section 308(3C) of the
Corporations Act 2001.
The Remuneration Report is presented under the following sections:
1. Individual KMP disclosures
2. Remuneration at a glance
3. Board of Directors (the “Board”) oversight of remuneration
4. Non-executive director remuneration arrangements
5. Executive remuneration arrangements
6. Directors and KMP contractual arrangements
7. Equity instruments disclosures
8. Loans to KMP and their related parties
9. Transactions with KMP and their related parties
1.
Individual key management personnel disclosures
(i) Directors:
Name
Justin Tooth
Grant Button
Evan Kirby
Laurence Read
Myles Campion
Colin Bird
Daniel Smith
(ii) Executives:
Role
Executive Chairman and
Managing Director
Non-Executive Director
Company Secretary
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Executive Director
Executive Technical Director
Non-Executive Chairman
Non-Executive Director
Company Secretary
Appointed
31 March 2016
Resigned
26 September 2017
15 October 2010
31 March 2016
26 September 2017
31 March 2016
30 January 2017
26 September 2017
17 October 2017
11 January 2018
16 January 2018
16 January 2018
31 January 2018
-
-
-
-
-
Name
Laurence Read
Role
Executive Director
Appointed
26 September 2017
Resigned/ Terminated
-
Myles Campion
Technical Director
17 October 2017
-
Justin Booth
Managing Director
31 March 2016
26 September 2017
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Directors’ Report
Remuneration Report (audited) continued
2.
Remuneration at a glance
The performance of the Group depends upon the quality of its directors and executives. To prosper, the Group
must attract, motivate and retain highly skilled directors and executives.
To this end, the Company embodies the following principles in its remuneration framework:
Provide competitive rewards to attract high calibre executives;
Link executive rewards to shareholder value; and
Provide significant portions of executive remuneration “at risk” through participation in incentive plans
Shares and options issued under incentive plans provide an incentive to stay with the Group. At this stage,
shares and options issued do not have performance criteria attached. This policy is considered to be appropriate
for the Group, having regard to the current state of its development.
The Company has established a directors’ and executives’ salary sacrifice plan, pursuant to which individuals
may elect for a nominated fixed period to sacrifice all or an agreed percentage of their salary or fees to be applied
in the subscription for on-market purchase of shares in the Company. As such shares may not be purchased or
subscribed for during periods that are close periods or when individuals are in possession of inside information,
the entitlement to subscribe for shares is determined by calculating the number of shares using the market price
for the month concerned. The plan was established to allow for the subsequent settlement of salary or fees from
1 April 2012. Directors and executives have previously elected to participate in the plan with effect from that
date. During the period to 30 June 2018 no Directors or executives participated (2017: Nil) in the salary sacrifice
plan. Shares listed under the plan are not subject to performance conditions. Shareholder approval for the plan
and for the issue of shares under the plan was obtained on 8 August 2012.
The Company also recognised that, at this stage in its development, it is most economical to have only a few
employees and to draw, as appropriate, upon a pool of consultants selected by the Directors on the basis of their
known management, geoscientific, engineering and other professional and technical expertise and experience.
The Company will nevertheless seek to apply the principles described above to its Directors and executives,
whether they are employees of or consultants to the Company.
3.
Board oversight of remuneration
Remuneration Committee Responsibilities
A Remuneration Committee was established on 14 January 2010 and reconstituted on 15 October 2010 and again
on 9 March 2015.
The Committee assesses the appropriateness of the nature and amount of remuneration of Directors and senior
executives on a periodic basis by reference to relevant employment market conditions, with the overall objective
of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team.
Remuneration Structure
In accordance with best practice corporate governance, the structure of non-executive and executive director
remuneration is separate and distinct.
4.
Non-Executive Director remuneration arrangements
Objective
The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract
and retain directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.
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Directors’ Report
Structure
The Company’s constitution and the ASX Listing Rules specify that the aggregate remuneration of Non-
Executive Directors must be determined from time to time by shareholders of the Company in a general meeting.
An amount not exceeding the amount determined is then divided between the Non-Executive Directors as
agreed. The current aggregate limit of remuneration for non-executive directors is $250,000 as approved at the
2010 Annual General Meeting of Shareholders.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is
apportioned amongst Non-Executive Directors is reviewed annually. The Board may consider advice from
external consultants, as well as the fees paid to Non-Executive Directors of comparable companies, when
undertaking the annual review process. No remuneration or external consultants were used during the financial
year.
Each Non-Executive Director receives a fee for being a Director of the Company. No additional fee is paid for
participating in Board Committees.
Non-Executive Directors may participate in the Company’s share and option plans as described in this report.
Mr Evan Kirby is on a contract dated 31 March 2016, which provides for a fixed fee of $2,500 per month. Mr
Colin Bird is on a contract dated 11 January 2018, which provides for a fixed fee of £3,000 per month. Mr Daniel
Smith (through Minerva Corporate Pty Ltd) is on a contract dated 15 January 2018 which provides for a fixed
fee of $2,000 per month.
5.
Executive remuneration arrangements
Objective
The Group aims to reward executives with a level and mix of remuneration commensurate with their position
and responsibilities within the Group and so as to:
reward executives for Group, business team and individual performance;
align the interests of executives with those of shareholders; and
ensure total remuneration is competitive by market standards.
Structure
At this time, the cash component of remuneration paid to executive Directors, the Company Secretary and
other senior managers is not dependent upon the satisfaction of performance conditions.
It is current policy that some executives be engaged by way of consultancy agreements with the Company,
under which they receive a contract rate based upon the number of hours of service supplied to the
Company. There is provision for yearly review and adjustment based on consumer price indices. Such
remuneration is hence not dependent upon the achievement of specific performance conditions. This
policy is considered to be appropriate for the Company, having regard to the current state of its
development.
The Executive Directors may also participate in the Company’s share and option plans as described in
this report, including the salary sacrifice share plan. Refer to page 21 and 22 for details of options
previously granted.
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Directors’ Report
Performance table
The following table details the net profit / (loss) of the Company from continuing operations after income tax,
together with the basic earnings / (loss) per share since the incorporation of the parent:
Net profit / (loss) from continuing operations after
income tax
Basic earnings / (loss) per share in cents
Share Price in Cents
2018
$
2017
$
2016
$
2015
$
(1,883,446)
(0.06)
0.20
(11,286,803)
(0.91)
0.10
(1,573,533)
(0.22)
0.40
(2,345,860)
(0.50)
0.10
5.
Executive contractual arrangements
Laurence Read – Executive Director
£75,000 per annum
Salary
Ongoing
Term
6 months notice period by either party
Termination
Myles Campion – Technical Director
£100,000 per annum
Salary
Ongoing
Term
6 months notice period by either party
Termination
Mr Justin Tooth was appointed as Non-Executive Chairman pursuant to a contract dated 16 December 2015.
Under this contract, he was entitled to fees of $50,000 per annum and the reimbursement of expenses. On 31
March 2016 upon his appointment as Executive Chairman and Managing Director his contract was amended to
a salary of GBP 75,000 per annum. On 1 October 2016 his contract was further amended to a salary of GBP
100,000 (approx. $163,688 at an exchange rate of 1.636878). This contract was cancelled on 26 September
2017 upon his resignation.
18 | P a g e
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A.C.N. 097 532 137
Directors’ Report (continued)
Remuneration report (audited) continued
Remuneration of key management personnel of the Company and the Consolidated Entity
Table 1: Remuneration for the years ended 30 June 2017 and 30 June 2018
Short-term
benefits
Post-
employment
Salary
& fees
Cash
bonus
Superannuation
Long - term benefits
Cash
Incentives
Long
Service
Leave
Share-based
payments
Total
Performance
related
Options
Options
Shares
$
$
$
$
$
$
$
$
%
Non-executive directors
Evan Kirby
Colin Bird
Klaus Borowski
Daniel Smith
Grant Button
Executive directors
Tom Revy
Justin Tooth
Laurence Read
Myles Campion
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
15,000
30,000
15,276
-
-
17,500
11,000
-
31,964
54,795
-
-
119,522
202,463
73,249
-
52,782
-
Subtotal
2018
318,793
Subtotal
2017
304,758
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Refer to Page 15 for all appointment and resignation dates
-
-
-
-
-
-
-
-
3,037
5,205
-
-
-
-
-
-
-
-
3,037
5,205
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21,931
15,648
52,579
-
77,977
-
-
-
9,747
-
9,747
-
-
10,118
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30,000
93,253
-
-
17,500
20,747
-
44,748
60,000
-
10,118
119,522
202,463
109,655
28,966
211,870
-
-
-
109,655
22,427
184,864
-
-
-
338,712
67,041
727,583
10,118
-
320,081
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
%
42%
-
84%
-
-
-
47%
-
22%
-
-
100%
-
-
52%
-
59%
-
-
-
19 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report (continued)
Remuneration report (audited) continued
Remuneration of key management personnel of the Company and the Consolidated Entity (continued)
Table 1: Remuneration for the years ended 30 June 2017 and 30 June 2018 (continued)
Short-term benefits
Post-employment
Long - term
benefits
Share-based
payments
Termination
payments
Total
Performance
related
Salary &
fees
Cash
bonus
Superannuation
Long Service
Leave
Options
Shares
$
$
$
$
$
$
$
$
%
Other key management personnel
Scott Huntly
2018
-
2017
112,204
Dave Richards
Beverley Gardner
Ed Aylmer
Subtotal
2018
2017
2018
2017
2018
2017
2018
-
-
-
102,078
-
18,479
-
Subtotal
2017
232,761
Total KMP
2018
318,793
Total KMP
2017
537,519
-
-
-
-
-
-
-
-
-
-
-
-
Refer to Page 15 for all appointment and resignation dates
-
-
-
-
-
-
-
-
-
-
3,037
5,205
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
469
-
470
-
-
-
939
-
-
-
-
-
-
-
-
-
-
-
-
51,511
163,715
-
-
-
-
469
-
46,752
149,300
-
-
-
-
18,479
-
98,263
331,963
338,712
67,041
-
727,583
11,057
-
98,263
652,044
-
-
-
-
-
-
-
-
-
-
-
-
Options
%
-
-
-
100%
-
0.31%
-
-
-
-
-
-
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A.C.N. 097 532 137
Directors’ Report (continued)
Remuneration report (audited) continued
6. Equity Instruments disclosures
Table 2: Share options impacting remuneration in current or future reporting years
30 June 2018
Options awarded
up to 30 June
2018
No.
Award date
Fair value per
option at award
date ($)
Total value
($)
Exercise price
(p)
Expiry date
First exercise
date
Last
exercise
date
No.
%
Terms and Conditions for each Grant during the year
Options vested during the year
Executive directors
Laurence Read
Myles Campion
112,500,000
112,500,000
22 May 2018
22 May 2018
0.0975 cents
0.0975 cents
$109,655
$109,655
0.0575 pence
0.0575 pence
22/05/2023
22/05/2023
22 May 2018
22 May 2018
22/05/2023
22/05/2023
112,500,000
112,500,000
Non-Executive Directors
Evan Kirby
Colin Bird
Daniel Smith
Totals
22,500,000
80,000,000
10,000,000
337,500,000
22 May 2018
22 May 2018
22 May 2018
0.0975 cents
0.0975 cents
0.0975 cents
$21,931
$77,977
$9,747
$328,965
0.0575 pence
0.0575 pence
0.0575 pence
22/05/2023
22/05/2023
22/05/2023
22 May 2018
22 May 2018
22 May 2018
22/05/2023
22/05/2023
22/05/2023
22,500,000
80,000,000
10,000,000
100%
100%
100%
100%
100%
Incentive options granted to key management personnel will generally only be of benefit if the executives perform to the level whereby the value of the consolidated entity increases sufficiently to warrant the
exercising of the incentive options granted. Other than service based vesting conditions, there are no additional performance criteria on the incentive options granted to executives.
21 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report (continued)
Remuneration report (audited) continued
7.
Equity Instruments disclosures (continued)
Table 3: Share holdings
2018
Balance
1-July-17
Rights
Exercised
Shares
On
Exercise
of Options
Net Change
Other (i)
Balance
30-Jun-18
Directors
Evan Kirby
Laurence Read
Myles Campion (1)
Colin Bird (2)
Daniel Smith (3)
Justin Tooth(4)
Grant Button (5)
10,900
-
-
-
-
326,650
5,356,300
5,693,850
(i)
Net change other includes:
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,918,258
23,913,043
18,514,492
180,499,858
-
(326,650)
(5,356,300)
12,929,158
23,913,043
18,514,492
180,499,858
-
-
-
230,162,701
235,856,551
issued in settlement of fees
subscribed in share issue
subscription for options
sales / transfers
acquisitions and disposals on market
appointment / resignation as director
exchange of options for shares
salary sacrifice share scheme shares issued
(1) Appointed 17 October 2017
(2) Appointed 11 January 2018
(3) Appointed 16 January 2018
(4) Resigned 26 September 2017
(5) Resigned 31 January 2018
Table 4: Option holdings
2018
Options
Balance
Granted
Received as
Options
Net Change
Balance
Vested &
Exercisable
Vested & Not
Exercisable
1-July-2017
Remuneration
Expired
Other (i)
30-Jun-18
30-Jun-18
30-Jun-18
Directors
Evan Kirby
Laurence Read
Myles Campion
Colin Bird
Daniel Smith
Justin Tooth
Grant Button
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
22,500,000
112,500,000
112,500,000
80,000,000
10,000,000
-
-
-
-
-
-
-
-
-
-
-
-
22,500,000
22,500,000
112,500,000
112,500,000
112,500,000
112,500,000
25,000,000
105,000,000
105,000,000
-
-
-
10,000,000
10,000,000
-
-
-
-
-
-
-
-
-
-
-
$337,500,000
25,000,000
362,500,000
362,500,000
(i) 25,000,000 options issued relating to a November 2017 placement.
Refer to Page 15 for all appointment and resignation dates
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Directors’ Report (continued)
Remuneration report (audited) continued
(ii)
Equity Instruments disclosures (continued)
Table 5: Number of employee shares (under non-recourse loan schemes) held by directors and executives:
Directors
Grant Button
Balance
Received as
Options
Net Change
Balance
Loan Value
1-July-17
Remuneration
Exercised
Other (i)
30-Jun-18
$
500,000
500,000
-
-
-
-
(500,000)
(500,000)
-
-
99,000
99,000
(i)
Resignation 31 January 2018
Refer to Page 15 for all appointment and resignation dates
Executive Share Incentive Plan (ESIP)
Under the plan, eligible employees are offered shares in the Company at prices determined by the Board. The Board
has the ultimate discretion to impose special conditions on the shares issued under the ESIP and can grant a loan to a
participant for the purposes of subscribing for plan shares. Shares issued under loan facilities are held on trust for the
benefit of the participant and will only be transferred into the participant’s name once the loan has been fully repaid.
ESIP participants receive all the rights associated with the ordinary shares.
Loans granted to participants are limited recourse and interest free unless otherwise determined by the Board. The loans
are to be repaid via the application of any dividends received from the shares and/or the sale of the plan shares. Where
the loan is repaid by the sale of shares, any remaining surplus on sale is remitted to the participant while any shortfall is
borne by the Group.
During the 2017 and 2018 reporting period no new shares were issued under the ESIP.
If, at any time during the exercise period an employee ceases to be an employee, all options held by that employee vest
immediately and will lapse one month after their employment end date. As such, there is not considered to be any
service conditions attaching to the grant of shares under the ESIP, and the full expense is recognised at the grant date.
Fair value of award granted
Shares granted under the ESIP are accounted for as “in-substance” options due to the limited recourse nature of the
loan between the employees and the Company to finance the purchase of ordinary shares. The fair value at grant date
for the various tranches of rights issued under the ESIP is determined using a binomial model.
(iii)
Loans to Key Management Personnel and their Related Parties
There were no loans to Directors or other key management personnel at any time during the year ended 30 June 2018
(2017: Nil).
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Directors’ Report (continued)
Remuneration report (audited) continued
(iv)
Transactions with Key Management Personnel and their Related Parties
The following transactions were undertaken between the Company, executive officers and director-related entities during 2018
and 2017
Consulting fees were paid to Mowbrai Ltd, a company of which Laurence
Read is a director(1)
Consulting fees were paid or accrued to Tavistock Communications Ltd, a
company of which Merlin Marr-Johnson is an employee(1)
Consulting fees were paid or accrued to Marrad Ltd, a company of which
Merlin Marr-Johnson is a director(1)
2018
$
-
-
-
-
2017
$
76,621
31,250
44,112
151,983
None of the above fees were outstanding at 30 June 2018 thus no doubtful allowance has been made.
(1)
KMP at the time of receiving the above consulting fees
(v)
Voting of Shareholders at last year’s annual general meeting (AGM)
Europa Metals Ltd received 99.95% votes in favour of its remuneration report for its 2017 financial year. The Company
did not receive any specific feedback at the AGM through the year on its remuneration practices.
End of audited Remuneration Report
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Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Report (continued)
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 73 and forms part of this report.
This report is made in accordance with a resolution of the Directors.
Daniel Smith
Non-Executive Director
Perth
28 September 2018
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Europa Metals Limited
A.C.N. 097 532 137
Company and Project Overview
Introduction to the Group
Europa Metals Ltd (“Europa”, “EUZ” or the “Company”) is an Australian company listed on the Australian
Securities Exchange (ASX: EUZ) and on the JSE Limited (JSE: EUZ) and quoted on the AIM market of the
London Stock Exchange plc (AIM: EUZ). During the year, the Company undertook operational restructuring
which led to the divestment of its South African iron ore operations, such that the Company is now solely
focused on its Spanish lead-zinc-silver operations.2
The Moonlight Project
On 3 July 2017, the Company announced that it had entered into a legally binding agreement for the sale
of Batavia Ltd, its wholly-owned Mauritian subsidiary which was the investment holding company for all of the
Group's South African assets, including the Moonlight iron ore project in Limpopo Province, northern South
Africa, to NPSPL Africa Holdings Limited and its BEE partner, Ngwenya Capital (Pty) Limited. Accordingly,
the Company no longer holds any interest in this project.
The Toral Project
On 28 July 2017, the Company announced the initial results from its drilling programme at the Toral Project,
Spain. The near surface drilling campaign at the project, designed to determine the presence of near surface
mineralisation, returned core containing visible lead-zinc from every one of the 6 drill holes completed. The
Company announced the results of the drill programme assays on 7 September 2017, which confirmed the
presence of lead-zinc intersections in all six holes with significant high grade lead-zinc intersections in all of
the six holes. Highlights included:
All of the 1,046.9m drilled occurred within 200 metres of the surface.
Intersection of lead-zinc anomalies in all six drill holes.
Key intersections encountered (all widths given along the core):
o Hole TOR17009 1 metre grading at 1.22%Pb, 9.77%Zn (10.99% combined Pb/Zn);
o Hole TOR17012 3 metres grading at 0.64%Pb, 6.46%Zn (7.10% combined Pb/Zn);
o Hole TOR17012 1 metre grading at 0.67%Pb, 16.10%Zn (16.77% combined Pb/Zn);
o Hole TOR17013 1 metre grading at 6.51%Pb, 6.50%Zn (13.01% combined Pb/Zn); and
o Hole TOR17013 3 metres grading at 6.03%Pb, 5.49%Zn (11.52% combined Pb/Zn).
On 22 November 2017, the Company announced that, following a formal application to the Director General
of Mines of the Province of Leόn, the exploration licence in respect of the Group’s Toral lead-zinc project had
been renewed for a further 3 year term to November 2020.
On 11 December 2017, the Company provided an update on its work programme to define a maiden JORC
(2012) compliant resource estimate for Toral. As part of this programme, Addison Mining Services Limited
(“AMS”) had successfully undertaken a site visit, including data location checks, data collection and analytical
review procedures, including check sampling for the purpose of verification and validation of the project’s
database for use in JORC 2012 compliant modelling and estimation. The maiden JORC (2012) compliant
resource estimate was expected to be received in early 2018.
Maiden JORC (2012) Inferred Resource Estimate
On 6 February 2018, the Company announced a Maiden independent Inferred Mineral Resource estimate
completed in accordance with JORC (2012) in respect of the Toral Project, Spain. A new block model
combined with an initial digital geological model had increased the level of understanding of the mineralogical
and geological controls at Toral, and the Company expressed confidence of being able to enhance and
potentially expand the resource going forwards, subject to undertaking additional drilling and exploration
activities.
26 | P a g e
Europa Metals Limited
A.C.N. 097 532 137
Company and Project Overview
The Inferred resource for the Toral Pb-Zn-Ag mineralisation located on the Toral property had been estimated
at various cut-offs (see Table below). The Company reviewed the new model with AMS, and concluded that
a 4% cut-off was appropriate utilising estimated mining parameters typical for similar types of projects and
mineralogy, and an historical three-year trailing average for metal prices.
Zn Price Used: US$2,400/t
Pb Price Used: US$2,000/t
Ag Price Used:
US$c/lb1.09
US$c/lb0.91
US$17/oz
The maiden resource successfully identified potentially economic mineralisation ranging from surface to
approximately 1,100m below surface. The block model currently extends for a strike length of 3,300m and is
still open to the east long strike and also at depth where it has not yet been closed off.
Cut Off
Zn Eq
(PbAg)%
6.0
5.0
4.0
3.0
Tonnes
(Millions)
Density
Zn_Eq
(Pb)%
Zn Eq
(PbAg)%
9
12
16
20
2.65
2.57
2.52
2.50
8.8
7.8
6.9
6.2
9.5
8.4
7.5
6.7
Zn
%
5.0
4.6
4.0
3.7
Pb
%
4.3
3.7
3.3
2.9
Ag
g/t
31
28
25
23
Zn
Tonnes
(000’s)
470
580
670
750
Pb
Tonnes
(000’s)
400
470
540
600
Ag Troy
Oz
(Millions)
9
11
13
15
Table: Summary of Inferred mineral resources for the Toral property reported at a 4.0% Zn equivalent cut-
off grade and estimated grade and tonnages at the various cut-off grades.
On 2 March 2018, the Company announced that Peterhouse Corporate Finance Limited was now sole broker
to the Company, pursuant to the AIM Rules for Companies, following an announcement made on 2 March
2018 regarding Beaufort Securities Limited (“BSL”) and Beaufort Asset Clearing Services Limited (“BACSL”)
being placed into administration such that the Financial Conduct Authority (the “FCA”) had imposed
requirements on BSL and BACSL to cease all regulatory activity.
On 23 April 2018, the Company announced that it had engaged the services of Mining Sense Consulting
(“Mining Sense”), a Spanish consultancy company to the mining industry, to complement the existing
operational team focused on the Toral project.
On 19 June 2018, the Company announced that it had engaged the services of UK based AMS with
immediate effect, to commence an initial Scoping Study (the “Study”) on the Company’s 100% owned Toral
lead, zinc and silver project. The principal objective of the Study is to determine first economics on the Toral
Project, reported on by a fully accredited and independent mining consultancy group. The findings of the
Study will be disclosed to the market following completion, which is currently anticipated during Q4 2018.
AMS’ Principal Geologist, James Hogg, and Associate Principal Mining Engineer, Julian Bennett, will lead
the Study project team dedicated to the Toral Project. The dedicated Study team is working alongside the
Company’s existing in-country management, under the direction of Myles Campion, Technical Director, and
Jesus Montero, principal Mining Engineer from Mining Sense.
The specific workstream headings for the work being undertaken for the Study are as follows:
- Resource optimisation of maiden JORC (2012) Inferred resource;
- Preliminary mine layout;
- Mineral inventory estimation;
- Preliminary Economic Assessment, DCF and sensitivity analysis;
- CAPEX and OPEX parameters; and
- Review of environmental, hydrogeological and geotechnical parameters
Corporate
On 8 September 2017, the Company announced that it had conditionally raised in aggregate, £193,304
(approximately A$321,590) before expenses through a placement via Peterhouse Corporate Finance Limited
27 | P a g e
Europa Metals Limited
A.C.N. 097 532 137
Company and Project Overview
(‘Peterhouse’), as agent to the Company, of 214,782,526 new ordinary shares of no par value each in the
capital of the Company at a price of 0.09 pence per new ordinary share. On the same date, Peterhouse were
also appointed as an AIM Broker to the Company. The placement was completed on 14 September 2017.
On 15 September 2017, the Company announced that a formal notice of a general meeting to be held on 18
October 2017 had been issued seeking (i) shareholder approval for the issue of new ordinary shares to raise
up to A$2.7 million by way of private placement to undertake extensive exploration and evaluation activities
at the Company’s Toral and Lago projects in Spain and provide general working capital; and (ii) to ratify the
shares issued on 23 June 2017 in connection with the Company’s fundraising of 9 June 2017.
On 26 September 2017, the Company announced that Mr Justin Tooth, Executive Chairman had resigned
from the Board of Directors of the Company with immediate effect, in order to pursue his other business
interests. Additionally, Mr Laurence Read, previously a Non-executive Director, became an Executive
Director.
Further to a comprehensive operational review undertaken subsequent to the abovementioned September
2017 Board changes, the Company announced in October 2017 that the Board believed that it was possible
to pursue a strategy to build value from its Toral lead-zinc-silver asset for a cost lower than originally planned,
and therefore, the full A$2.7 million which the Board originally envisaged would be required to be raised in a
placing, may not be required. As a result, the Board decided to withdraw Resolution 1, seeking shareholder
approval to raise up to A$2.7 million by way of private placement, from the general meeting convened to be
held on 18 October 2017.
On 17 October 2017, the Company announced the appointment of Mr Myles Campion as an Executive
Director. Mr Campion has a comprehensive background in all technical and financial facets of the resources
sector, specialising internationally in resource evaluation and project assessment. This follows a 10-year
career as an exploration and mine site geologist in Australia covering base metals and gold. He holds a BSc
(Hons) in Geology from University of Wales College, Cardiff and an MSc (MinEx) from the Royal School of
Mines in London, and also holds a Graduate Diploma of Business (Finance). Mr Campion’s financial
experience ranges from Australian and UK equities research through to project and debt financing in London,
covering the entire spectrum of mining companies with an extensive knowledge of the global resources
market covering the three main bourses, the Toronto Stock Exchange, AIM and the ASX. This knowledge
was applied effectively as a Fund Manager at Oceanic Asset Management, where he successfully managed
the Australian Natural Resources Fund, an Open Ended Investment Company (OEIC) traded in London.
At a General Meeting held on 18 October 2017, shareholders approved the remaining Resolution 2 relating
to the ratification of a previous capital raising.
On 2 November 2017, the Company announced that it had conditionally raised £185,250 before expenses
through a placement via Beaufort Securities Limited of 370,499,858 new ordinary shares of no par value each
in the capital of the Company at a price of 0.05 pence per new ordinary share together with the issue of
185,249,929 options (the “Placing Options”) exercisable at a price of 0.075 pence per new ordinary share for
a period of thirty months from their date of issue. In addition to the aforementioned issue of 185,249,929
Placing Options, the Company agreed to issue a further 50,000,000 options to Beaufort Securities Limited,
exercisable at a price of 0.075 pence per new ordinary share, for a period of thirty months from their date of
issue (the “Broker Options”). The issue of both the Placing Options and the Broker Options was subject to
obtaining shareholder approval at a General Meeting of the Company. The placement was completed on 8
November 2017.
On 12 January 2018, the Company announced the appointment of Mr Colin Bird as a Non-Executive Director
and Chairman of the Company. Mr Bird is a chartered mining engineer with extensive multi-commodity mine
management experience in Africa, Europe, Latin America and the Middle East. Mr Bird’s operational and
corporate experience, includes the development of the Jubilee Metals Group production portfolio,
concentrating on Platinum Group Metals in South Africa, in addition to the successful sale of Kiwara plc.
Kiwara plc was sold to First Quantum Minerals (TSX: FM) for US$260 million in November 2009, whilst its
project was undertaking infill drilling at the Kalumbila copper-nickel deposit in north-western Zambia.
28 | P a g e
Europa Metals Limited
A.C.N. 097 532 137
Company and Project Overview
On 16 January 2018, the Company announced the resignation of Mr Grant Button as Company Secretary
and the appointment of Mr Daniel Smith as a Non-Executive Director and Company Secretary. Mr Smith is a
member of the Australian Institute of Company Directors and the Governance Institute of Australia and has
over 10 years’ primary and secondary capital markets expertise. As a director of Minerva Corporate, he has
advised on, and been involved in, over a dozen IPOs, RTOs and capital raisings on both the ASX and NSX.
His key focus is on corporate governance and compliance, commercial due diligence and transaction
structuring, as well as ongoing investor and stakeholder engagement. Mr Smith is also currently Company
Secretary for Taruga Minerals Limited and Love Group Global Limited, both listed on the ASX. He holds a
BA in International Relations from Curtin University, Western Australia.
The Company advised the change of its Australian principal and registered office address, as well as its
mailing and contact details on 23 January 2018.
On 1 February 2018, the Company announced the resignation of Mr Grant Button as a Non-Executive
Director.On 9 February 2018, the Company announced the expiry of 2,000,000 unlisted options exercisable
at GBP0.0075 and 3,000,000 unlisted options exercisable at GBP0.02 on or before 2 February 2018, which
had lapsed unexercised.
On 6 March 2018, the Company announced that Peterhouse Corporate Finance Limited was now sole broker
to the Company, pursuant to the AIM Rules for Companies, following an announcement made on 2 March
2018 regarding Beaufort Securities Limited (“BSL”) and Beaufort Asset Clearing Services Limited (“BACSL”)
being placed into administration and that the Financial Conduct Authority (the “FCA”) had imposed
requirements on BSL and BACSL to cease all regulatory activity.
On 20 March 2018, the Company announced that it had conditionally raised, in aggregate, approximately
£1 million (before expenses), through a proposed subscription and placing of, in aggregate, 1,739,130,435
new ordinary shares of no par value each in the capital of the Company (“Ordinary Shares”) at a price of
0.0575 pence per share (the “Issue Price”) (the “Fundraising”). The Fundraising comprised a placing of
1,608,695,652 new Ordinary Shares via Turner Pope Investments (TPI) Ltd (‘Turner Pope’), as agent of the
Company, and a subscription for a further 130,434,783 new Ordinary Shares, both at the Issue Price,
with certain new and existing investors. On the same date, Turner Pope was appointed as the Company’s
joint AIM broker. The Fundraising was subject to the requisite shareholder approval which was duly obtained
at a general meeting held on 21 May 2018. The Fundraising was completed on 27 May 2018.
On 2 May 2018, the Company announced that in accordance with paragraph 2.6 of the JSE Limited Listings
Requirements, Sasfin Capital Proprietary Limited had been appointed as the Company’s JSE sponsor with
effect from 1 May 2018.
On 14 May 2018, the Company announced the expiry of 197,411,127 unlisted options exercisable at
£0.00165 per share.
On 21 May 2018, the Company announced, inter alia, that a special resolution had been passed at the
Company’s general meeting to change the name of the Company from Ferrum Cescent Limited to Europa
Metals Ltd. The Australian Securities and Investments Commission (“ASIC”) subsequently recorded the
change of name effective from 31 May 2018. The new share code for the Company on ASX, AIM and JSE
is EUZ.
Outlook
The Company is currently reviewing all data and pursuing its phase I and planned phase 2 exploration work
programmes on Toral in order to unlock value from the significant existing information held on the project.
29 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Corporate Governance Statement
Introduction
This corporate governance statement is dated 28 September 2018 and has been approved by the Board.
The Board recognises the importance of maintaining appropriately high standards of corporate governance
and has made it a priority to adopt systems of control and accountability as the basis for the administration
of corporate governance and put in place governance structures that would be expected in light of the Group’s
size, stage of development and resources. Some of these policies and procedures are summarised in this
statement. In accordance with recent changes to the AIM Rules for Companies (the “AIM Rules”), the Board
has reviewed which recognised corporate governance code to apply to the Company on a comply or explain
basis, as required by AIM Rule 26. Accordingly, the Board has decided to adhere to the ASX Corporate
Governance Council's Corporate Governance Principles and Recommendations, third edition (the
“Principles & Recommendations” or the “Code”), and has followed each recommendation to the extent
considered appropriate for the Company’s corporate governance practices. Where the Company’s corporate
governance practices follow a recommendation, the Board has made appropriate statements reporting on
the adoption of the recommendation. Where, after due consideration, the Company's corporate governance
practices depart from a recommendation, the Board has made full disclosure and reasoning for the adoption
of its own practice, in compliance with the ASX “if not, why not” regime and the comply or explain basis
required by AIM Rule 26.
DISCLOSURE OF CORPORATE GOVERNANCE PRACTICES
Summary statement
Recommendation 1.1
Recommendation 1.2
Recommendation 1.3
Recommendation 1.4
Recommendation 1.5
Recommendation 1.6
Recommendation 1.7
Recommendation 2.1
Recommendation 2.2
Recommendation 2.3
Recommendation 2.4
Recommendation 2.5
Recommendation 2.6
Recommendation 3.1
Recommendation 4.1
ASX P &
R1
If not, why
not2
ASX P & R1
If not,
why not2
Recommendation 4.2
Recommendation 4.3
Recommendation 5.1
Recommendation 6.1
Recommendation 6.2
Recommendation 6.3
Recommendation 6.4
Recommendation 7.1
Recommendation 7.2
Recommendation 7.3
Recommendation 7.4
Recommendation 8.1
Recommendation 8.2
Recommendation 8.3
1
2
Indicates where the Company has followed the Principles & Recommendations.
Indicates where the Company has provided “if not, why not”/comply or explain disclosure.
Website disclosures
In accordance with AIM Rule 26, the Company is required to maintain on its website details of the Code, how
the Company complies with the Code and an explanation of any deviations from such Code. This information
is required to be reviewed annually and going forward it is intended that it will be reviewed at the same time
as the Company’s Annual Report is prepared.
Further information about the Company’s charters, policies and procedures may be found at the Company's
website at www.europametals.com, under the section titled Corporate Governance.
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Europa Metals Ltd
A.C.N. 097 532 137
Disclosure – Principles & Recommendations
The Company reports below on how it has followed (or otherwise departed from) each of the Principles &
Recommendations during the year ending 30 June 2018 (the “reporting period”).
Principle 1 – Lay solid foundations for management and oversight
Recommendation 1.1:
Companies should disclose the respective roles and responsibilities of the board and management and those
matters expressly reserved to the board and those delegated to management.
Disclosure:
The Company has established the functions reserved to the Board and has set out these functions in its
Board Charter. The Board is collectively responsible for promoting the success of the Company through its
key functions of overseeing the management of the Company, providing overall corporate governance of the
Company, monitoring the financial performance of the Company, engaging appropriate management
commensurate with the Company’s structure and objectives, involvement in the development of corporate
strategy and performance objectives and reviewing, ratifying and monitoring systems of risk management
and internal control, codes of conduct and legal compliance.
The Company has established the functions delegated to management and has set out these functions in its
Board Charter. Senior executives are responsible for supporting the executive officers and assisting the
executive officers in implementing the running of the general operations and financial business of the
Company, in accordance with the delegated authority of the Board.
Senior executives are responsible for reporting all matters which fall within the Company's materiality
thresholds at first instance to the executive officers or, if the matter concerns the executive officers, then
directly to the Chairman or the lead independent director, as appropriate.
Recommendation 1.2:
Companies should undertake appropriate checks before appointing a person, or putting a person forward for
election to shareholders, as a director.
Disclosure:
The Company does undertake appropriate checks in accordance with this recommendation.
Recommendation 1.3:
Companies should have written agreements with each director and senior executive setting out the terms of
their appointment.
Disclosure:
The Company does have written agreements with each director and senior executive in accordance with
this recommendation.
Recommendation 1.4:
The company secretary should be accountable directly to the board, through the chairman, on all matters to
do with the proper functioning of the board.
Disclosure:
The company secretary is accountable directly to the board, through the chairman, on all matters to do with
the proper functioning of the board.
31 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Recommendation 1.5:
The Company should:
(a)
have a diversity policy which includes requirements for the board or a relevant committee of the board
to set measurable objectives for achieving gender diversity and to assess annually both the
objectives and the Company’s progress in achieving them;
(b)
disclose that policy or a summary of it; and
(c)
disclose as at the end of each reporting period the measurable objectives for achieving gender
diversity set by the board or a relevant committee of the board in accordance with the Company’s
diversity policy and its progress towards achieving them, and the respective proportions of men and
women on the board, in senior executive positions and across the whole organisation (including how
the Company has defined “senior executive” for these purposes).
Disclosure:
The Company has established a Diversity Policy a copy of which is published on the Company’s website.
The Company has not yet established measurable objectives for achieving gender diversity. The Company
operates with a very small team of professionals, whose services are provided on the basis of their experience
and professional qualifications. Establishing such measurable objectives will be addressed by the Board
when the Company’s operations require the expansion of its personnel numbers
The respective proportions of men and women on the board and in senior executive positions (that term
meaning a position having senior management responsibilities as set out in the Company’s delegated
authorities manual) are set out in the following table:
Gender
Total
Female
Male
% Female
0
5
0%
Senior
Management
0
2
0%
Board
0
5
0%
Recommendation 1.6:
The Company should:
(a)
(b)
have and disclose a process for periodically evaluating the performance of the board, its committees
and individual directors; and
disclose, in relation to each reporting period, whether a performance evaluation was undertaken in
the reporting period in accordance with that process.
Disclosure:
The Company periodically evaluates the performance of the board, its committees and individual directors.
A performance evaluation was undertaken during the reporting period.
Recommendation 1.7:
The Company should:
(a)
(b)
have and disclose a process for periodically evaluating the performance of senior executives; and
disclose, in relation to each reporting period, whether a performance evaluation was undertaken in
the reporting period in accordance with that process.
Disclosure:
The Company periodically evaluates the performance of senior executives. A performance evaluation was
not undertaken during the reporting period.
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Europa Metals Ltd
A.C.N. 097 532 137
Principle 2 – Structure the Board to add value
Recommendation 2.1:
The Board should establish a Nomination Committee.
Disclosure:
The Company has established a separate Nomination Committee. The Committee comprises Dr Evan Kirby
(chairman of the committee), Mr Myles Campion and Mr Colin Bird.
Recommendation 2.2:
The Company should have and disclose a board skills matrix setting out the mix of skills and diversity that
the board currently has or is looking to achieve in its membership.
Disclosure:
The Company has a skills matrix setting out the skills and diversity of the board. Its members have a mixture
of experience and corporate, technical, financial and management skills that are considered appropriate for
the Company’s present situation.
Recommendation 2.3:
The Company should disclose:
(a)
(b)
the names of the directors considered by the board to be independent directors;
if directors have a prescribed interest, position, association or relationship with the Company, why
they are regarded as independent directors; and
(c)
the length of service of each director.
Disclosure:
The independent directors of the Company are Mr Daniel Smith, Dr Evan Kirby and Mr Colin Bird. The length
of service of each director is as follows: Mr Smith – 8 Months; Dr Kirby – 2 years; Mr Bird – 8 months.
Recommendation 2.4:
A majority of the board of the Company should be independent directors.
Disclosure:
There are five directors, three of whom are independent.
Recommendation 2.5:
The chairman of the board of the Company should be an independent director and, in particular, should not
be the same person as the CEO of the Company.
Disclosure:
Mr Colin Bird was appointed as the independent Chairman on 11 January 2018.
33 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Recommendation 2.6:
The Company should have a programme for inducting new directors and provide appropriate professional
development opportunities for directors to develop and maintain the skills and knowledge needed to perform
their role as directors effectively.
Disclosure:
The Company will induct new directors at an appropriate time when suitable individuals are identified and
available and as the Company’s business requires adjusted skills sets on the board. Directors will be provided
appropriate professional development opportunities to develop and maintain the skills and knowledge needed
to perform their role as directors effectively as and when required.
Principle 3 – Act ethically and responsibly
Recommendation 3.1:
The Company should:
(a)
(b)
have a code of conduct for its directors, senior executives and employees; and
disclose that code or a summary of it.
Disclosure:
The Company has established a Code of Conduct applying to directors, senior executives and employees as
to the practices necessary to maintain confidence in the Company’s integrity, practices necessary to take into
account their legal obligations and the expectations of their stakeholders and responsibility and accountability
of individuals for reporting and investigating reports of unethical practices. The Code of Conduct is available
for scrutiny on the Company’s website.
Principle 4 – Safeguard integrity in financial reporting
Recommendation 4.1:
The board should:
(a)
(b)
have an audit committee that has at least three members, all of whom are non-executive directors
and a majority of whom are independent, and be chaired by an independent director who is not
chairman of the board; and
disclose the committee’s charter, its members and the relevant qualifications and experience of the
committee members and the number of times it met during the reporting period.
Disclosure:
The Company has established an Audit Committee with a formal charter. The committee comprises three
directors, being Mr Daniel Smith (chairman of the committee), Mr Colin Bird and Mr Laurence Read. It meets
the stipulations set out in recommendation 4.1, and the relevant qualifications and experience of its members
are set out in the Directors’ Report. All of the Audit Committee members consider themselves to be financially
literate and have industry knowledge.
Recommendation 4.2:
The board should, before it approves the Company’s financial statements for a financial period, receive from
its CEO and CFO a declaration that, in their opinion, the financial records of the Company have been properly
maintained and that the financial statements comply with the appropriate accounting standards and give a
true and fair view of the financial position and performance of the Company and that the opinion has been
formed on the basis of a sound system of risk management and internal control which is operating effectively.
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Europa Metals Ltd
A.C.N. 097 532 137
Disclosure:
The board meets the stipulations set out in recommendation 4.2.
Recommendation 4.3:
The Company should ensure that its external auditor attends its AGM and is available to answer questions
from security holders relevant to the audit.
Disclosure:
The Company meets the stipulations set out in recommendation 4.3.
Principle 5 – Make timely and balanced disclosure
Recommendation 5.1:
The Company should have a written policy designed to ensure compliance with ASX Listing Rule disclosure
requirements and to ensure accountability at a senior executive level for that compliance and disclose those
policies or a summary of those policies.
Disclosure:
The Company has established a written policy designed to ensure compliance with ASX Listing Rule
disclosure requirements and accountability at a senior executive level for that compliance. The policy is
available for scrutiny on the Company’s website.
Principle 6 – Respect the rights of security holders
Recommendation 6.1:
The Company should provide information about itself and its governance to investors via its website.
Disclosure:
The Company complies with recommendation 6.1.
Recommendation 6.2:
The Company should design and implement an investor relations programme to facilitate effective two-way
communication with investors.
Disclosure:
The Company has designed a communications policy for promoting effective communication with
shareholders.
Recommendation 6.3:
The Company should disclose the policies and processes it has in place to facilitate and encourage
participation at meetings of security holders.
Disclosure:
The Company gives adequate notice to security holders of meetings of security holders and encourages
attendance at such meetings.
Recommendation 6.4:
The Company should give security holders the option to receive communications from, and send
communications to, the entity and its security registry electronically.
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Europa Metals Ltd
A.C.N. 097 532 137
Disclosure:
The Company meets the requirements of recommendation 6.4.
Principle 7 – Recognise and manage risk
Recommendation 7.1:
The board should:
(a)
(b)
have a risk management committee that has at least three members, a majority of whom should be
independent, and be chaired by an independent director; and
disclose the committee’s charter, its members and the relevant qualifications and experience of the
committee members and the number of times it met during the reporting period.
Disclosure:
The Company does not currently have a risk management committee. The Board has required management
to design, implement and maintain risk management and internal control systems to manage the Company’s
material business risks. The Board also requires management to report to it confirming that those risks are
being managed effectively. Further, the Board has received a report from management as to the effectiveness
of the Company’s management of its material business risks.
Recommendation 7.2:
The board or a committee of the board should:
(a)
review the Company’s risk management framework at least annually to satisfy itself that it continues
to be sound; and
(b)
disclose, in relation to each reporting period, whether such a review has taken place.
Disclosure:
The Board has required management to design, implement and maintain risk management and internal
control systems to manage the Company’s material business risks. The Board also requires management to
report to it confirming that those risks are being managed effectively. Further, the Board has received a report
from management as to the effectiveness of the Company’s management of its material business risks.
During the reporting period the Company had an informal risk management system in place, including the
policies and systems referred to in the disclosure in relation to recommendation 7.2. Although the system
was not fully documented, management acting through the Executive Directors was able to form the view
that management of its material business risks during the reporting period was effective.
Recommendation 7.3:
The Company should disclose:
(a)
(b)
if it has an internal audit function, how the function is structured and what role it performs; or
if it does not have an internal audit function, that fact and the processes it employs for evaluating and
continually improving the effectiveness of its risk management and internal control processes.
Disclosure:
The Company does not have an internal audit function. The Board has required management to design,
implement and maintain risk management and internal control systems to manage the Company’s material
business risks. The Board also requires management to report to it confirming that those risks are being
managed effectively. Further, the Board has received a report from management as to the effectiveness of
the Company’s management of its material business risks.
36 | P a g e
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A.C.N. 097 532 137
Recommendation 7.4:
The Company should disclose whether it has any material exposure to economic, environmental and social
sustainability risks and, if it does, how it manages or intends to manage those risks.
Disclosure:
The Company does not have any material exposure to economic, environmental or social sustainability risks,
other than the risks that are common to all minerals explorers in relation to commodity prices and the
availability of venture capital.
Principle 8 – Remunerate fairly and responsibly
Recommendation 8.1:
The board should:
(a)
(b)
have a remuneration committee that has at least three members, a majority of whom should be
independent, and be chaired by an independent director; and
disclose the committee’s charter, its members and the relevant qualifications and experience of the
committee members and the number of times it met during the reporting period.
Disclosure:
The Company throughout the financial year had a separate remuneration committee that meets the
requirements of recommendation 8.1. The committee comprised Dr Evan Kirby (chairman of the committee),
Mr Colin Bird and Mr Daniel Smith. The relevant qualifications and experience of its members are set out in
the Directors’ Report. The committee met once during the reporting period.
Recommendation 8.2:
The Company should separately disclose its policies and practices regarding the remuneration of non-
executive directors and the remuneration of executive directors and other senior executives.
Disclosure:
Non-executive directors are remunerated at market rates for time, commitment and responsibilities.
Remuneration for non-executive directors is not linked to individual performance. Given the Company's stage
of development and the financial restrictions placed on it, the Company may consider it appropriate to issue
unquoted options to non-executive directors, subject to obtaining the relevant approvals. This policy is
subject to annual review. All of the directors' option holdings are fully disclosed.
Pay and rewards for executive directors and senior executives consist of a base pay and benefits (such as
superannuation) as well as long term incentives through participation in employee share and option plans.
Executives are offered a competitive level of base pay at market rates and which is reviewed annually to
ensure market competitiveness.
Recommendation 8.3:
If the Company has an equity-based remuneration scheme, it should:
(a)
have a policy on whether participants are permitted to enter into transactions (whether through the
use of derivatives or otherwise) which limit the economic risk of participating in the scheme; and
(b)
disclose that policy or a summary of it.
Disclosure:
Though the Company has a Share Plan and an Option Plan in place in order to provide incentives and
directors and employees have from time to time participated in such plans, any participation in such plans is
not regarded as equity-based remuneration, and in any event the Plan rules themselves would prevent the
entry into transactions that limit the economic risk of such participation.
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A.C.N. 097 532 137
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2018
Note
3(a)
3(b)
3(c)
17
6
5
Revenue from continuing operations
Revenue
Other income
Administration expenses
Occupancy expenses
Exploration expenditure
Foreign exchange gain/(loss)
Share based payments
Loss from sale of subsidiaries
Loss before taxation
Income tax benefit / (expense)
Loss after income tax for the year from continuing
operations
Net loss for the year
Other comprehensive income
Items that may be reclassified subsequently to profit
or loss
Net exchange gain/ (loss) on translation of foreign
operation
Other comprehensive income/ (loss) for the year,
net of tax
Total comprehensive loss for the year
Net loss for the year attributable to:
Equity holders of the Parent
Total comprehensive loss for the period attributable
to:
Equity holders of the Parent
2018
$
2017
$
9
71,310
17,956
175,851
(1,296,518)
(1,595,427)
(27,655)
(413,393)
121,513
(338,713)
(60,139)
(514,439)
(37,064)
(11,057)
-
(9,262,484)
(1,883,446)
(11,286,803)
-
-
(1,883,446)
(11,286,803)
(1,883,446)
(11,286,803)
230,474
(930,007)
230,474
(930,007)
(1,652,972)
(12,216,810)
(1,652,972)
(11,286,803)
(1,652,972)
(11,286,803)
(1,652,972)
(1,652,972)
(12,216,810)
(12,216,810)
Loss per share
Cents per share
Cents per share
Basic loss for the year attributable to ordinary equity
holders of the Parent
Diluted loss for the year attributable to ordinary equity
holders of the Parent
8
8
(0.06)
(0.06)
(0.91)
(0.91)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes
38 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Consolidated Statement of Financial Position
As at 30 June 2018
Note
9
10
Assets
Current assets
Cash and short term deposits
Trade and other receivables
Other current financial assets
Total current assets
Non-current assets
Plant and equipment
Capitalised exploration expenditure
11
Total non-current assets
2018
$
2017
$
1,272,327
77,510
-
1,349,837
20,192
1,344,013
1,364,205
503,891
96,147
14,344
614,382
21,865
1,180,488
1,202,353
Total assets
2,714,042
1,816,735
Liabilities and equity
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Accumulated losses
Reserves
Total equity
12
13
16
15
229,671
-
229,671
242,804
3,538
246,342
229,671
246,342
2,484,371
1,570,393
38,079,499
(38,367,110)
2,771,982
2,484,371
35,931,732
(36,483,664)
2,122,325
1,570,393
This Consolidated Statement of Financial Position is to be read in conjunction with the accompanying notes.
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Europa Metals Ltd
A.C.N. 097 532 137
Consolidated Statement of Cash Flows
For the year ended 30 June 2018
Note
2018
$
2017
$
Cash flows used in operating activities
Interest received
Exploration and evaluation expenditure
Receipts from customers
Payments to suppliers and employees
Net cash flows used in operating activities
20
Cash flows used in investing activities
Payments for plant and equipment
Sale of plant and equipment
Payment for acquisition of GoldQuest asset
Cash acquired on acquisition of GoldQuest asset
Proceeds from sale of subsidiaries
6
9
(404,017)
-
(1,031,775)
(1,435,783)
8,653
(463,585)
9,303
(1,695,759)
(2,141,388)
(22,008)
-
-
-
-
(17,679)
2,588
(519,821)
8,923
1,000
Net cash flows used in investing activities
(22,008)
(524,989)
Cash flows from financing activities
Proceeds from issue of shares
Transaction costs on issue of shares
Net cash flows from financing activities
2,294,676
(135,819)
2,158,857
2,821,053
(330,305)
2,490,748
Net increase / (decrease) in cash and cash equivalents
held
Net foreign exchange difference
Cash and cash equivalents at 1 July
701,066
67,370
503,891
Cash and cash equivalents at 30 June
9
1,272,327
(175,629)
(63,744)
743,264
503,891
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
40 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Consolidated Statement of Changes in Equity
For the year ended 30 June 2018
Attributable to the equity holders of the Parent
At 1 July 2016
Loss for the period
Other Comprehensive Income (net of tax)
Total comprehensive loss (net of tax)
Transactions with owners in their capacity as
owners:
Shares issued during the year net of transaction costs
Net growth on investment portfolio
Options issued under Employee Option Plan
At 1 July 2017
Loss for the period
Other Comprehensive Income (net of tax)
Total comprehensive loss (net of tax)
Transactions with owners in their capacity as
owners:
Shares issued during the year net of transaction costs
Options issued to Brokers
Options issued under Employee Option Plan
Issued capital
$
33,049,490
-
-
2,882,242
-
-
-
Accumulated
losses
$
(25,196,861)
(11,286,803)
-
(11,286,803)
-
-
-
-
Employee
share incentive
reserve
$
491,577
-
Option reserve
$
1,548,840
-
Foreign
exchange
reserve
$
951,685
-
(930,007)
(930,007)
-
-
-
-
21,678
21,678
-
230,474
230,474
-
-
-
-
-
-
-
-
-
-
-
-
-
49,173
11,057
1,609,070
1,609,070
-
-
-
-
80,470
338,713
35,931,732
(36,483,664)
35,931,732
-
(36,483,664)
(1,883,446)
491,577
491,577
-
-
-
-
(1,883,446)
2,147,767
-
-
-
-
-
-
-
-
-
At 30 June 2018
38,079,499
(38,367,110)
491,577
2,028,253
252,152
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Equity
reserve
$
(10,126,072)
-
-
-
-
Total equity
$
718,659
(11,286,803)
(930,007)
(12,216,810)
2,882,242
10,126,072
10,126,072
-
-
-
-
-
-
-
-
-
-
-
49,173
11,057
1,570,393
1,570,393
(1,883,446)
230,474
(1,652,972)
2,147,767
80,470
338,713
2,484,371
41 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 1: Corporate information
The consolidated financial statements of Europa Metals Ltd and its subsidiaries (collectively, the “Group”) for the
year ended 30 June 2018 were authorised for issue in accordance with a resolution of the directors on 28
September 2018.
Europa Metals Ltd, the parent, is a for profit company limited by shares incorporated in Australia whose shares
are publicly traded on the Australian Stock Exchange (ASX), the London Stock Exchange (AIM) and the JSE
Limited (JSE).
Domicile:
Australia
Registered Office:
C/o Minerva Corporate Pty. Ltd, Level 8, 99 St Georges Terrace, Perth, WA, 6000.
Note 2: Summary of significant accounting policies
(a)
Basis of preparation
The Financial Report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, Australian Accounting Standards and Interpretations and complies with
other requirements of Australian law.
The accounting policies detailed below have been consistently applied to all of the years presented unless
otherwise stated. The financial statements are for the consolidated entity consisting of Europa Metals Ltd and its
subsidiaries.
The Financial Report has also been prepared on a historical cost basis, except for the forward subscription
agreement and the available-for-sale (AFS) investments which have been measured at fair value.
All amounts are presented in Australian dollars, unless otherwise stated.
(b)
Statement of compliance
The Financial Report complies with Australian Accounting Standards, as issued by the Australian Accounting
Standards Board, and complies with International Financial Reporting Standards (IFRS), as issued by the
International Accounting Standards Board.
(c)
Going concern
The Annual Report has been prepared on a going concern basis and this basis is predicated on a number of
initiatives being undertaken by the Group with respect to ongoing cost reductions and funding as set out below.
The Group incurred an operating loss after income tax of $1,883,446 for the year ended 30 June 2018 (2017:
$11,286,803). In addition, the Group had net current assets of $1,120,166 (2017: $368,040), and shareholders’
equity of $2,484,371 (2017: $1,570,393) as at 30 June 2018.
The Group’s forecast cash flow requirements for the 15 months ending 30 September 2019 reflect cash outflows
from operating and investing activities, which take into account a combination of committed and uncommitted but
currently planned expenditure. The ability of the Group to continue as a going concern is dependent on raising
additional funds to meet the Group’s ongoing working capital requirements when required.
These conditions indicate a material uncertainty which may cast significant doubt as to whether the Group will be
able to meet its debts as and when they fall due and thus continue as a going concern.
This Annual report has been compiled on a going concern basis. In arriving at this position the Directors are
satisfied that the Group will have access to sufficient cash as and when required to enable it to fund administrative
and other committed expenditure. The Directors are satisfied that they will be able to raise additional funds either
through implementation of strategic joint ventures or via a form of debt and/or equity raising. In addition, the
Directors have embarked on a strategy to reduce costs.
42 | P a g e
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A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 2: Summary of significant accounting policies (continued)
Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge
its liabilities other than in the ordinary course of business and at amounts that differ from those stated in the
financial statements.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded
asset amounts, nor to the amounts or classification of liabilities that might be necessary should the Group not be
able to continue as a going concern.
(d)
Adoption of new and revised standards
Europa Metals Limited and its subsidiaries (‘the Group’) has adopted all new and amended Australian Standards
and Interpretations mandatory for reporting periods beginning on or after 1 July 2017, including:
AASB 9 - Financial Instruments
AASB 15 - Revenue from Contracts with Customers
AASB 16 - Leases
The adoption of these standards and interpretations did not have any material effect on the financial position or
performance of the Group.
(e)
Accounting standards issued but not yet effective
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
effective and have not been adopted by the Group for the year ended 30 June 2018. Relevant Standards and
Interpretations are outlined in the table below. Management have assessed the impact of each standard and
considered there to be no material impact to the group.
Reference
Title
Summary
AASB 9
Financial Instruments
AASB 15
Revenue
Customers
from Contracts with
AASB 9 (December 2014) is a new standard which replaces AASB 139. This new
version supersedes AASB 9 issued in December 2009 (as amended) and AASB 9
(issued in December 2010) and includes a model for classification and
measurement, a single, forward-looking ‘expected loss’ impairment model and a
substantially-reformed approach to hedge accounting.
AASB 9 is effective for annual periods beginning on or after 1 January 2018.
However, the Standard is available for early adoption. The own credit changes can
be early adopted in isolation without otherwise changing the accounting for
financial instruments.
Classification and measurement
AASB 9 includes requirements for a simpler approach for classification and
measurement of financial assets compared with the requirements of AASB 139.
There are also some changes made in relation to financial liabilities.
In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers,
which replaces IAS 11 Construction Contracts, IAS 18 Revenue and related
Interpretations (IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements
for the Construction of Real Estate, IFRIC 18 Transfers of Assets from Customers
and SIC-31 Revenue—Barter Transactions Involving Advertising Services).
The core principle of IFRS 15 is that an entity recognises revenue to depict the
transfer of promised goods or services to customers in an amount that reflects the
consideration to which the entity expects to be entitled in exchange for those goods
or services. An entity recognises revenue in accordance with that core principle by
applying the following steps:
(a) Step 1: Identify the contract(s) with a customer
(b) Step 2: Identify the performance obligations in the contract
(c) Step 3: Determine the transaction price
(d) Step 4: Allocate the transaction price to the performance obligations in the
contract
(e) Step 5: Recognise revenue when (or as) the entity satisfies a performance
obligation
Application
date of
standard*
Application
date for
Group
1 January
2018
1 July 2018
1 January
2018
1 July 2018
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A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Reference
Title
Summary
Application
date of
standard*
Application
date for
Group
The Group has commenced a detailed review of its contracts to determine the
impact, if any, of AASB 15 to revenue recognition of the Group. At the date of this
report, that assessment is ongoing and it has not been possible to quantify the
effect of AASB 15.
The International Accounting Standards Board (IASB) in its July 2015 meeting
decided to confirm its proposal to defer the effective date of IFRS 15 (the
international equivalent of AASB 15) from 1 January 2017 to 1 January 2018.
AASB16
Leases
This Standard sets out the principles for the recognition, measurement,,
presentation and disclosure of leases, The objective is to ensure that lessees and
lessors provide relevant information in a manner that faithfully represents those
transaction, This information gives a basis for users of financial statements to
assess the effect that leases have on the financial position, financial performance
and cash flows of the entity.
1 January
2019
1 July 2019
(f)
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group and its subsidiaries as at 30
June 2018. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its power over the investee. Specifically, the
Group controls an investee if and only if the Group has:
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the
investee);
Exposure, or rights, to variable returns from its involvement with the investee; and
The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee, including:
The contractual arrangement with the other vote holders of the investee;
Rights arising from other contractual arrangements; and
The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of profit
or loss and other comprehensive income from the date the Group gains control until the date the Group ceases to
control the subsidiary.
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Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 2: Summary of significant accounting policies (continued)
(f)
Basis of consolidation (continued)
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the
parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having
a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity,
income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on
consolidation.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity
transaction. If the Group loses control over a subsidiary, it:
De-recognises the assets (including goodwill) and liabilities of the subsidiary;
De-recognises the carrying amount of any non-controlling interests;
De-recognises the cumulative translation differences recorded in equity;
Recognises the fair value of the consideration received;
Recognises the fair value of any investment retained;
Recognises any surplus or deficit in profit or loss; and
Reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained
earnings, as appropriate, as would be required if the Group had directly disposed of the related assets or
liabilities.
Exchange differences arising on translation of foreign operations are transferred directly to the group's foreign
currency translation reserve in the statement of financial position. These differences are recognised in the profit
or loss in the period in which the operation is disposed.
(g)
Critical accounting estimates and judgements
The application of accounting policies requires the use of judgements, estimates and assumptions about carrying
values of assets and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be relevant. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions are recognised in the
period in which the estimate is revised if it affects only that period or in the period of the revision and future periods
if the revision affects both current and future periods.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by an external valuer using
a binomial model, using the assumptions detailed in Note 17.
Business combination vs assets acquisition
The Company has determined that the acquisition of GoldQuest Iberica, S.L. in 2016 has taken the form of an
asset acquisition and not a business combination. In making this decision, the Company determined that the nature
of the exploration and evaluation activities by GoldQuest did not constitute an integrated set of activities and assets
that are capable of being conducted and managed for the purpose of providing a return in the form of dividends,
lower costs or other economic benefits directly to investors or other owners, members or participants.
When an asset acquisition does not constitute a business combination, the assets and liabilities are assigned a
carrying amount based on their relative fair values in an asset purchase transaction and no deferred tax will arise
in relation to the acquired assets and assumed liabilities as the initial recognition exemption for deferred tax under
AASB 112 applies. No goodwill will arise on the acquisition and transaction costs of the acquisition will be included
in the capitalised cost of the asset.
45 | P a g e
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A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 2: Summary of significant accounting policies (continued)
(h)
Foreign currency translation
Both the functional and presentation currency of the Company and its Australian controlled entity is Australian
dollars (A$). Each entity in the Group determines its own functional currency and items included in the financial
statements of each entity are measured using that functional currency.
The functional currency of the foreign operations is Euro (EUR), and United States dollars (USD).
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the reporting date.
All exchange differences in the parent Company’s financial statements are taken to profit or loss unless they relate
to the translation of subsidiary related loans and borrowings which are considered part of the net investment value
taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or loss.
As at the reporting date the assets and liabilities of foreign subsidiaries are translated into the presentation currency
of the Company at the rate of exchange ruling at the reporting date and their statements of profit or loss and other
comprehensive income are translated at the weighted average exchange rate for the year.
The exchange differences arising on the translation are taken directly to a separate component of equity.
On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign
operation is recognised in profit or loss.
(i)
Exploration and evaluation expenditure
Exploration and evaluation costs
Exploration and evaluation costs are written off in the year they are incurred apart from acquisition costs which are
carried forward where right of tenure of the area of interest is current. The future recoverability of exploration and
evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the
related lease itself, or, if not, whether it successfully recovers the related exploration and evaluation assets through
sale.
Factors that could impact the future recoverability include the level of reserves and resources, future technological
changes, which could impact the cost of mining, future legal changes (including changes to environmental
restoration obligations) and changes to commodity prices.
To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the
future, profits and net assets will be reduced in the period in which this determination is made.
(j)
Income tax
Current tax assets and liabilities for the current period and prior periods are measured at amounts expected to be
recovered from or paid to the taxation authorities based on the current period’s taxable income. The tax rates and
tax laws used for computations are enacted or substantively enacted by the reporting date.
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.
Current tax assets and liabilities for the current period and prior periods are measured at amounts expected to be
recovered from or paid to the taxation authorities based on the current period’s taxable income. The tax rates and
tax laws used for computations are enacted or substantively enacted by the reporting date.
Deferred income tax is provided on all temporary differences at the reporting date between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes.
46 | P a g e
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Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 2: Summary of significant accounting policies (continued)
(j)
Income tax (continued)
Deferred income tax liabilities are recognised for all taxable temporary differences except:
where the deferred income tax liability arises from the initial recognition of goodwill of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
where the taxable temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled
and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised
except:
where the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss; and
where the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income
tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date
Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of
profit or loss and other comprehensive income.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity
and the same taxation authority.
(k)
Goods & Services Tax/Value Added Tax
Revenues, expenses and assets are recognised net of the applicable amount of GST/VAT except:
where the GST/VAT incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST/VAT is recognised as part of the cost of acquisition of the asset or as part of
the expense item as applicable; and
receivables and payables are stated with the amount of GST/VAT included.
The net amount of GST/VAT recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position.
47 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 2: Summary of significant accounting policies (continued)
(k)
Goods & Services Tax/Value Added Tax (continued)
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST/VAT component of cash
flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority,
are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST/VAT recoverable from, or payable to, the
taxation authority.
(l)
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank and on hand and short-
term deposits with an original maturity of three months or less.
For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents
as defined above, net of outstanding bank overdrafts.
(m) Trade and other receivables
Receivables, which generally have 30-90 day credit terms, are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest rate method, less an allowance for any uncollectable
amounts.
Collectability of receivables is reviewed on an ongoing basis. Debts that are known to be uncollectable are written
off when identified. An allowance for doubtful debts is raised when there is objective evidence that the Company
will not be able to collect the debt.
(n) Revenue recognition
Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent
that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
The following specific recognition criteria must also be met before revenue is recognised:
Interest Income
Interest income is recognised as the interest accrues (using the effective interest method, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net
carrying amount of the financial asset.
(o) 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.
The Company’s own shares, which are re-acquired for later use in the employee share based payment
arrangements, are deducted from equity.
(p)
Trade and other payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services
provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes
obliged to make future payments in respect of the purchase of these goods and services.
(q)
Loss per share
Basic loss per share is calculated as net profit attributable to members of the Company adjusted to exclude any
costs of servicing equity (other than dividends) divided by the weighted average number of ordinary shares,
adjusted for any bonus element.
48 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 2: Summary of significant accounting policies (continued)
(q)
Loss per share (continued)
Diluted earnings per share is calculated as net profit attributable to members of the Company adjusted for:
costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been
recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares divided by the weighted average number of ordinary shares and dilutive
potential ordinary shares, adjusted for any bonus element.
(r)
Financial instruments – Initial recognition and subsequent measurement
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as
either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or
available-for-sale financial assets. When financial assets are recognised initially, they are measured at fair value,
plus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. The
Company determines the classification of its financial assets on initial recognition.
(t)
Share-based payment transactions
The Company provides benefits to its employees and consultants (including key management personnel (“KMP”)
in the form of share-based payments, whereby employees render services in exchange for shares or rights over
shares (equity-settled transactions).
Equity settled transactions
The cost of equity-settled transactions with employees is measured by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using a binomial model, further
details of which are given in Note 17.
In valuing equity-settled transactions, no account is taken of any vesting conditions, other than conditions linked
to the price of the shares of the Company if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity on the date
the equity right is granted. The statement of profit or loss and other comprehensive income charge or credit for a
period represents the movement in cumulative expense recognised as at the beginning and end of that period.
If the terms of an equity-settled transactions are modified, as a minimum an expense is recognised as if the terms
had not been modified. An additional expense is recognised for any modification that increases the total fair value
of the share based arrangement, or is otherwise beneficial to the employee, as measured at the date of
modification.
If 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, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
diluted earnings per share (see note 8).
(u)
Comparatives figures
When required by Accounting Standards, comparative figures have been restated to conform to changes in
presentation for the current financial year.
49 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 3: Revenue and expenses
Revenue and expenses from continuing operations
(a) Revenue
Turnover
Interest received
(b) Other Income
Income from third party advance payment
Refunds received
(c) Profit or loss
Other expenses include the following:
Depreciation
Gain on disposal of plant and equipment
Consulting services
Employment related
- Directors fees
- Wages
- Superannuation
Corporate
Travel
Other
2018
$
2017
$
-
9
9
-
71,310
71,310
9,303
8,653
17,956
175,851
-
175,851
2018
$
2017
$
7,952
-
5,588
(2,647)
426,227
553,604
341,322
55,498
8,309
240,476
34,314
182,421
304,758
253,794
11,170
263,535
16,459
189,166
1,296,519
1,595,427
On 30 June 2017, the Company completed the sale of Batavia Ltd, its wholly-owned Mauritian subsidiary which is
the investment holding company for all the Group’s South African assets including the Moonlight iron ore project
in Limpopo Province, northern South Africa (the “Moonlight Project”).
The disposal effectively ends the Group’s exposure to all of the costs and commitments associated with
maintaining the Moonlight Project.
50 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 4: Segment information
Identification of Reportable Segments
For management purposes, the Group has one main operating segment, mining exploration for lead-zinc-silver in
Spain. All of the Group’s activities are interrelated, and discrete financial information was reported to the Board
(Chief Operating Decision Makers) as one segment. Accordingly, all significant operating decisions are based upon
analysis of the Group as a whole. The financial results from this segment is equivalent to the financial statements
of the Group as a whole.
Geographic
Information
Note
Australia
Spain
Consolidation
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
Revenue from external
customers
3
9,303
-
9,303
Total profit or loss
after tax
Current assets
Non - current assets
Total assets
Current liabilities
Total liabilities
(1,538,556)
(10,990,999)
(344,889)
(295,804)
(1,883,446)
(11,286,803)
1,302,834
535,823
1,182,759
2,485,593
3,327
539,150
(221,868)
(149,247)
(221,868)
(149,247)
47,003
181,446
228,449
(7,803)
(7,803)
78,559
1,349,837
1,199,026
1,364,205
1,277,585
2,714,042
614,382
1,202,353
1,816,735
(97,095)
(229,671)
(97,095)
(229,671)
(246,342)
(246,342)
Net assets
2,263,725
389,903
220,646
1,180,490
2,484,371
1,570,393
Note 5: Income tax expense
Reconciliation of income tax expense to the pre-tax net loss
Loss before income tax
2018
$
2017
$
(1,883,446)
(11,286,803)
Income tax calculated at 27.5% (2017:30%) on loss before income tax
(517,948)
(3,103,871)
Add tax effect of: non-deductible expenses
Difference in tax rate of subsidiaries operating in other jurisdictions
Unused tax losses and temporary differences not brought to account
Income tax (profit) / expense
332,014
(8,622)
194,556
-
3,120,782
(376,033)
359,122
-
51 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 5: Income tax expense (continued)
Analysis of deferred tax balances
Deferred tax liabilities
Assessable temporary differences
Prepayments
Deferred tax liabilities offset by deferred tax assets
Net deferred tax liabilities
Deferred tax assets
Share issue expenses
Payables and provisions
Other
Unused tax losses
Total unrecognised deferred tax assets
Deferred tax assets
Deferred tax assets offset by deferred tax liabilities
Net deferred tax assets
2018
$
2017
$
(4,578)
4,578
-
(13,578)
13,578
-
109,140
12,531
-
4,439,954
4,561,625
(4,557,047)
4,578
(4,578)
-
136,425
30,126
21,584
4,205,179
4,393,314
(4,379,736)
13,578
(13,578)
-
Unused tax losses set out above have not been recognised due to the uncertainty of future taxable profit streams.
Note 6: Loss on sale of subsidiaries
On 30 June 2017, the Company completed the sale of Batavia Ltd, its wholly-owned Mauritian subsidiary which is
the investment holding company for all the Group’s South African assets including the Moonlight iron ore project
in Limpopo Province, northern South Africa (the “Moonlight Project”) for a nominal consideration of one thousand
Australian dollars.
The disposal effectively ends the Group’s exposure to all of the costs and commitments associated with
maintaining the Moonlight Project.
The loss from sale of subsidiaries in the 2017 financial year has been determined as follows:
Net proceeds from sale
Less: Carrying amount of net assets sold:
Cash and cash equivalents
Other receivables and prepayments
Investments
Plant & Equipment
Trade and other payable
Equity reserve (BEE transaction)
Foreign exchange reserve
Statement of Cash Flows reconciliation:
Net proceeds as per above
Cash received
$
1,000
(150)
(44,078)
(42,486)
(11,359)
30,092
(10,126,072)
930,569
(9,262,484)
1,000
1,000
52 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 7: Auditors’ remuneration
Remuneration of the auditor of the Company for:
-auditing or reviewing the financial statements
BDO Audit (WA) Pty Ltd
BDO South Africa Incorporated
Lancaster Mauritius
-other assurance related services
BDO Corporate Finance (WA) Pty Ltd
Others
Note 8: Earnings per share
Basic loss per share (cents per share)
Diluted loss per share (cents per share)
2018
$
2017
$
40,313
-
-
40,313
1,750
-
42,063
29,745
22,118
4,041
55,904
3,310
1,407
60,621
2018
$
2017
$
(0.06)
(0.06)
(0.91)
(0.91)
Loss used in calculating basic loss per share
(1,883,446)
(11,286,803)
Adjustments to basic loss used to calculate dilutive loss per share
-
-
Loss used in calculating dilutive loss per share
(1,883,446)
(11,286,803)
Weighted average number of ordinary shares used in the
calculation of basic loss per share
Number
3,075,844,119
1,238,720,046
Weighted average number of ordinary shares used in the
calculation of diluted loss per share
3,075,844,119
1,238,720,046
855,365,729 share options outstanding at 30 June 2018 (30 June 2017: 28,722,649) have not been included in
the calculation of dilutive loss per share as these are anti-dilutive.
Note 9: Cash and cash equivalents
Cash at the end of the financial year as shown in the statement of
cash flows is reconciled to items in the statement of financial
position as follows:
Cash at bank
See note 21 for the risk exposure analysis for cash and cash equivalents.
2018
$
2017
$
1,272,327
503,891
53 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 10: Trade and other receivables
Current
Sundry debtors
GST / VAT
Prepayments
2018
$
2017
$
23,825
37,037
16,648
77,510
30,018
16,606
49,523
96,147
Non-trade debtors are non-interest bearing and are generally on 30-90 days credit terms. The carrying amounts
of these receivables represent fair value and are not considered to be impaired.
Note 11: Capitalised exploration expenditure
At 1 July
Capitalised exploration expenditure
Foreign exchange movement
At 30 June
2018
$
1,180,488
-
163,525
1,344,013
2017
$
-
1,180,488
-
1,180,488
On 15 February 2016, the Company entered into an exclusive option and sale agreement for a staged option fee
of up to GBP22,500, with TH Crestgate GmbH (“Crestgate”), a private Swiss-based company potentially to acquire
100 per cent of its indirectly wholly-owned subsidiary, GoldQuest Iberica, S.L. (“GoldQuest”), a private company
incorporated in Spain, which owns 100 per cent of two lead-zinc exploration projects in the provinces of León and
Galicia, in historic Spanish mining areas (“the Iberian Projects”), to enable the Company to conduct due diligence
on GoldQuest and the Iberian Projects.
Subsequent to the Company entering into an exclusive option to acquire 100 percent of GoldQuest, two nil-cost
extensions were granted to the Company on 22 July 2016 and 31 August 2016.
On 22 September 2016 the option was exercised. Accordingly, the Company had acquired 100 per cent of the
share capital of GoldQuest. The consideration comprised GBP326,500 in cash and the issue of 100 million new
ordinary shares in the capital of the Company.
The purchase of GoldQuest was split into two transactions the details of which are set out below:
I.
Original option payments
On 16 February 2016, the first cash portion of GBP1,000 was paid to Crestgate.
On 17 February 2016, 4,515,041 ordinary shares were issued to Crestgate at a price of GBP 0.00144 per share.
On 1 April and 20 April 2016, the second and third cash payments of GBP7,500 each respectively were paid to
Crestgate.
On 25 May 2016 an amount of GBP92,500 was placed into a trust account with Crestgate’s lawyers until the option
to purchase was concluded, which would form part of the final purchase price.
On 31 May 2016, 5,000,000 ordinary shares were issued to Crestgate at a price of GBP0.0013 per share.
II.
Final purchase consideration
On 15 September GBP234,000 was paid to Crestgate as the final cash portion of the purchase of GoldQuest.
On 30 September 2016, the Company issued 100,000,000 new ordinary shares of no par value each in the capital
of the Company to GoldQuest Mining (Spain) Corp. These shares were issued in settlement of the share element
of the consideration for the acquisition of 100 per cent of the issued share capital of GoldQuest Iberica, S.L. The
shares are fully paid and rank pari passu in all respects with the Company’s existing ordinary shares.
The above transaction also incurred legal and administrative fees of AUD131,788. The total purchase
consideration was AUD1,180,488 made up as follows:
54 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 11: Capitalised exploration expenditure (continued)
Purchase consideration
100,000,000 ordinary shares issued to GoldQuest Mining (Spain) Corp.
9,515,041 ordinary shares issued to TH Crestgate GmbH
Cash consideration
Acquisition costs
Net assets acquired
Cash and Equivalents
Property, Plant and Equipment
Deferred exploration and evaluation expenditure
Trade and other receivables
Trade and other payables
Exploration and evaluation expenditure *
30 September
2016
391,495
25,841
631,364
131,788
1,180,488
8,923
7,437
1,744,515
64,064
(6,386)
(638,065)
1,180,488
* Fair Value attribution being the difference between consideration paid less fair value of identifiable net assets
acquired
The Company has determined that the acquisition has taken the form of an asset acquisition and not a business
combination. In making this decision, the Company determined that the nature of the exploration and evaluation
activities by GoldQuest did not constitute an integrated set of activities and assets that are capable of being
conducted and managed for the purpose of providing a return in the form of dividends, lower costs or other
economic benefits directly to investors or other owners, members or participants.
When an asset acquisition does not constitute a business combination, the assets and liabilities are assigned a
carrying amount based on their relative fair values in an asset purchase transaction and no deferred tax will arise
in relation to the acquired assets and assumed liabilities as the initial recognition exemption for deferred tax under
AASB 112 applies. No goodwill will arise on the acquisition and transaction costs of the acquisition will be included
in the capitalised cost of the asset.
Note 12: Trade and other payables
Current
Trade payables and other payables
2018
$
2017
$
229,671
229,671
242,804
242,804
Trade and other payables are non-interest bearing and are normally settled on 30-day terms.
Note 13: Contributed Equity
(a)
Share Capital
Ordinary Shares
2018
No. of shares
2017
No. of shares
2018
$
2017
$
Ordinary shares fully paid
Employee share
incentive plan shares
4,849,757,667
2,469,999,055
38,344,801
36,197,034
(2,300,000)
4,847,457,667
(2,300,000)
2,467,699,055
(265,302)
38,079,499
(265,302)
35,931,732
55 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 13: Contributed Equity (continued)
Capital management
When managing capital (which is defined as the Company’s total equity), management’s objective is to ensure the
entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other
stakeholders. Management also aims to maintain a capital structure that ensures the lowest cost of capital available
to the entity. As the equity market is constantly changing management may issue new shares to provide for future
exploration and development activity. The Company is not subject to any externally imposed capital requirements.
During the year ended 30 June 2018, nil (2017: nil) shares were issued back to the market from the Employee
Incentive Share Plan.
(b)
Movements in ordinary share capital
Date
Details
Number of
shares
$
30 June 2016
Closing Balance
1,282,791,883
33,314,792
29 July 2016
29 July 2016
Options Exercised
Additional Shares Issued
26 August 2016
Options Exercised
29 September 2016
Options Exercised
30 September 2016
Shares issued to GoldQuest
7 October 2016
Options Exercised
25 November 2016
Options Exercised
12 December 2016
Placing shares – Beaufort Securities
19 December 2016
Options Exercised
23 June 2017
Placing shares – Beaufort Securities
Costs associated with share issues
66,874,816
187,226,485
44,797,543
5,381,907
100,000,000
181,560,288
769,231
275,218,025
3,205,088
322,173,789
193,025
655,034
128,184
15,057
400,000
491,242
2,126
939,770
9,029
379,080
(330,305)
30 June 2017
Closing Balance
2,469,999,055
36,197,034
14 September 2017
Placing shares – Peterhouse Corporate
214,782,526
321,590
8 November 2017
Placing shares – Beaufort Securities
370,499,858
317,187
22 May 2018
Shares issued in lieu of directors fees
55,345,793
69,381
22 May 2018
Placing shares
1,739,130,435
1,655,898
Costs associated with share issues
(216,289)
Employee share plan shares on issue
30 June 2018
4,849,757,667
38,344,801
(2,300,000)
(265,302)
4,847,457,667
38,079,499
If, at any time during the exercise period, an employee ceases to be an employee, all share options held by that
employee will lapse one month after their employment end date. Therefore, employee shares above are only
recognised in issued capital when issued to the employees concerned.
56 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 13: Contributed Equity (continued)
(c)
Movements in employee share plan shares issued with limited recourse employee loans
Date
Details
Number of
shares
$
30 June 2017
30 June 2018
Opening balance
Cancelled during 2017
Issued during 2017
Closing balance
Opening balance
Cancelled during 2018
Issued during 2018
Closing balance
2,300,000
-
-
2,300,000
2,300,000
-
-
2,300,000
(265,302)
-
-
(265,302)
(265,302)
-
-
(265,302)
No employee share plan shares were issued in 2018 (2017: Nil).
This account is used to record the value of shares issued under the Executive Share Incentive Plan (ESIP). The
ESIP is accounted for as an “in-substance” option plan due to the limited recourse nature of the loan between
employees and the Company to finance the purchase of ordinary shares. The total fair value of the “in substance”
options issued under the plan is recognised as a share-based payment expense over the vesting period, with a
corresponding increase in equity.
Note 14: Options
2018
2017
No. of Options No. of Options
Options
At year end the following options were on issue:
- 2 February 2018 options exercisable at GBP0.0075 per share
- 2 February 2018 options exercisable at GBP0.02 per share
- 1 March 2018 options exercisable at GBP0.0075 per share
- 1 March 2018 options exercisable at GBP0.02 per share
- 12 May 2018 options exercisable at GBP0.00165 per share
-
-
-
-
-
2,000,000
3,000,000
2,000,000
3,000,000
197,411,127
- 29 July 2018 options exercisable at GBP0.003 per share
205,949,134
205,949,134
- 22 May 2020 options exercisable at GBP0.00075 per share
66,666,666
- 22 November 2020 options exercisable at GBP0.00075 per share
185,249,929
- 22 November 2020 options exercisable at GBP0.00075 per share
- 22 May 2021 options exercisable at GBP0.00075 per share
- 22 May 2023 options exercisable at GBP0.000575 per share
50,000,000
10,000,000
337,500,000
-
-
-
-
-
855,365,729
413,360,261
57 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 14: Options (continued)
Movements in 2 February 2018 options
Beginning of the financial year
Options issued during the year
Options cancelled during the year
End of the financial year
Movements in 1 March 2018 options
Beginning of the financial year
Options issued during the year
Options cancelled during the year
End of the financial year
Movement in 12 May 2018 options
Beginning of the financial year
Options issued during the year
Options exercised during the year
Options cancelled during the year
End of the financial year
Movement in 29 July 2018 options
Beginning of the financial year
Options issued during the year
Options cancelled during the year
End of the financial year
Movement in 22 May 2020 options
Beginning of the financial year
Options issued during the year
Options cancelled during the year
End of the financial year
Movement in 22 November 2020 options
Beginning of the financial year
Options issued during the year
Options cancelled during the year
End of the financial year
2018
2017
No. of Options No. of Options
5,000,000
5,000,000
-
(5,000,000)
-
-
-
5,000,000
5,000,000
5,000,000
-
(5,000,000)
-
-
-
5,000,000
197,411,127
500,000,000
-
-
-
(302,588,873)
(197,411,127)
-
-
197,411,127
205,949,134
-
-
-
205,949,134
-
205,949,134
205,949,134
-
66,666,666
-
66,666,666
-
235,249,929
-
235,249,929
-
-
-
-
-
-
-
-
58 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 14: Options (continued)
Movement in 22 May 2021 options
Beginning of the financial year
Options issued during the year
Options cancelled during the year
End of the financial year
Movement in 22 May 2023 options
Beginning of the financial year
Options issued during the year
Options cancelled during the year
End of the financial year
2018
2017
No. of Options No. of Options
10,000,000
-
-
10,000,000
337,500,000
-
-
337,500,000
-
-
-
-
-
-
-
-
The table in note 17 summarises the model inputs (post consolidation) for options granted during the year ended 30
June 2018.
Note 15: Reserves
Employee
share
incentive
reserve
$
Options
reserve
$
Foreign
exchange
reserve
$
Equity
reserve
$
Total
$
At 30 June 2016
491,577
1,548,840
951,685
(10,126,072)
(7,133,970)
Options issued to Brokers(1)
Options issued under Employee
Option plan
Sale of subsidiaries
Currency translation differences
At 30 June 2017
Options issued to Brokers(1)
Options issued under Employee
Option plan
Currency translation differences
-
-
-
-
49,173
11,057
-
-
-
-
-
(930,007)
491,577
1,609,070
21,678
-
-
80,470
338,713
-
-
-
230,474
252,152
-
-
49,173
11,057
10,126,072
10,126,072
-
-
-
-
-
-
(930,007)
2,122,325
80,470
338,713
230,474
2,771,982
At 30 June 2018
491,577
2,028,253
(1) The value of the service could not be reliably determined and therefore, the options is valued using the Black Scholes Model.
Nature and purpose of reserves
Employee share incentive reserve
This reserve is used to record the value of equity benefits provided to employees, consultants and directors as
part of their remuneration under the Executive Share Incentive Plan.
Options reserve
This reserve is used to record the value of options issued, other than share-based payments to directors,
employees and consultants as part of their remuneration.
59 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 15: Reserves (continued)
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the
financial statements of foreign subsidiaries.
Equity reserve
The Equity reserve is used to record the acquisition of the non-controlling interest by the Group and to record
differences between the carrying value of non-controlling interests and the consideration paid / received, where
there has been a transaction involving non-controlling interests that do not result in a loss of control.
The reserve is attributable to the equity of the parent.
Note 16: Accumulated losses
Accumulated losses at the beginning of the financial year
Net loss for the year
Accumulated losses at the end of the financial year
Note 17: Share based payments
Expenses arising from share-based payment transactions
2018
$
(36,483,664)
2017
$
(25,196,861)
(1,883,446)
(11,286,803)
(38,367,110)
(36,483,664)
Total expenses arising from share-based payment transactions recognised during the year were as follows:
2017
$
2018
$
Options issued under Employee Option Plan (Included in Expenses)
Options issued to Brokers (included in Equity)
338,713
80,470
419,183
11,057
-
11,057
Fair value of options granted
The fair value at the grant date of options issued is determined using a binomial option pricing model that takes
into account the exercise price, the term of the option, the impact of dilution, the non-tradable nature of the option,
the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and
the risk-free interest rate for the term of the option.
1. The tables below summarise the model inputs (post consolidation) for options granted prior to the year ended
30 June 2018:
Options granted for no consideration
Exercise price (GBP)
Issue date
Expiry date
337,500,000
0.0575
22 May 2018
22 May 2023
66,666,666
0.0750
22 May 2018
22 May 2020
of
the
price
volatility
Underlying security spot price at grant
date (GBP)
Expected
Company’s shares
Expected dividend yield
Expected life
Risk-free interest rate
Binomial model valuation per option
(AUD cents per share)
Total fair value
0.0675
110%
0%
2
1.26%
0.000975
0.0675
110%
0%
2
1.26%
0.000661
50,000,000
0.0750
22 May 2018
22 November
2020
0.0675
110%
0%
2
1.26%
0.000728
$338,713
Expenses
$44,064
Equity
$36,406
Equity
60 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 17: Share based payments (continued)
Movements
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in,
share options during the year:
Outstanding at 1 July
Issued during the year
Cancelled during the year
Outstanding at 30 June
Exercisable at 30 June
Note 18: Commitments and contingencies
2018
2017
Number
413,360,261
582,749,929
(207,411,127)
788,699,063
788,699,063
Number
513,000,000
205,949,134
(305,588,873)
413,360,261
413,360,261
(i) At this stage the Company has no minimum obligations with respect to tenement expenditure requirements.
(ii) Operating lease commitment to rental payments on office premise in Spain is as follows:
Within 1 year
2 to 3 years
Total
Note 19: Related party transactions
Compensation of Key Management Personnel
Short-term employee benefits
Post-employment benefits
Share based payments
Termination benefits
2018
$
25,545
-
25,545
2017
$
16,105
5,368
21,473
2018
$
2017
$
318,793
3,037
405,753
-
537,519
5,205
11,057
98,263
727,583
652,044
Transactions between related parties are on normal commercial terms and conditions and no more favourable
than those available to other parties unless otherwise stated.
Subsidiaries
The consolidated financial statements include the financial statements of Europa Metals Limited and the
subsidiaries listed in the following table.
Name
Country of Incorporation
2018
2017
Ferrum Metals Pty Ltd
GoldQuest Iberica S.L.
Australia
Spain
100
100
100
100
% Beneficial Equity
Interest
61 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 19: Related party transactions (continued)
Europa Metals Limited is the ultimate Australian parent entity and the ultimate parent of the Group. Transactions
between Europa Metals Limited and its controlled entities during the year consisted of loan advances by Europa
Metals Limited. All intergroup transactions and balances are eliminated on consolidation.
Trade payable
Magnum Mining and Exploration Ltd (i)
Minerva Corporate Pty Ltd (ii)
Income
from
Related
Parties
$
-
-
-
2018
2017
2018
2017
Expenditure
to Related
Parties
Amounts
Owed by
Related
Parties at
year end
Amounts
Owed to
Related
Parties at
year end
$
-
-
$
8,312
22,817
9,000
$
58,590
118,458
38,500
-
(i)
Mr G Button, a former non-executive director and company secretary for the Company, was also a director
of Magnum Mining and Exploration Ltd. During the year, Magnum Mining and Exploration Ltd received the
above fees for office rental, office running costs and staffing expenses. These fees are based on normal
commercial terms and conditions. Mr G Button resigned on 1 February 2018.
(ii) Mr D Smith, a non-executive director and company secretary for the Company, is also a director of Minerva
Corporate Pty Ltd. During the year, Minerva Corporate Pty Ltd received the above fees for company
secretarial and accounting services. These fees are based on normal commercial terms and conditions. Mr
D Smith was appointed on 16 January 2018.
The following transactions were undertaken between the Company, executive officers and director-related entities
during 2018 and 2017.
Consulting fees were paid to Mowbrai Ltd, a company of which Laurence
Read is a director
Consulting fees were paid or accrued to Tavistock Communications Ltd,
a company of which Merlin Marr-Johnson is an employee
Consulting fees were paid or accrued to Marrad Ltd, a company of which
Merlin Marr-Johnson is a director
2018
$
-
-
-
-
2017
$
76,621
31,250
44,112
151,983
62 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 20: Cash flow information
Reconciliation of cash flow from operations with loss from ordinary
activities after income tax
Loss from ordinary activities after income tax
(1,883,446)
(11,286,803)
2018
$
2017
$
Depreciation
Exploration expenditure
Profit on sale of plant and equipment
Loss on sale of subsidiaries
Impairment of loans
Share based payment compensation
Net foreign exchange differences
Movement of Bad debts
Proceeds from third party funding
Changes in assets and liabilities
(Increase) / decrease in receivables
(Increase) / decrease in other operating assets
Increase / (decrease) in payables and provisions
7,952
-
-
-
-
338,713
(67,370)
-
-
43,719
-
124,649
5,588
63,314
(2,647)
9,262,484
(772,564)
11,057
827,281
10,606
(175,851)
7,889
(34,360)
(57,382)
Cash flows used in operations
(1,435,783)
(2,141,388)
Note 21: Financial risk management objectives and policies
The Group’s principal financial instruments comprise cash, short term deposits, held-for-trading and derivative
instruments.
The main purpose of the financial instruments is to finance the Group’s operations. The Company also has other
financial instruments such as receivables and payables which arise directly from its operations.
The main risks arising from the Group’s financial instruments are interest rate risk, liquidity risk, foreign currency
risk and credit risk. The board reviews and agrees policies for managing each of these risks and they are
summarised below:
(a)
Interest Rate Risk
The Group’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a
result of changes in market interest rates, and the effective weighted average interest rate for each class of financial
assets and financial liabilities, is set out in the following table. Also included is the effect on profit and equity after
tax if interest rates at that date had been 10% higher or lower with all other variables held constant as a sensitivity
analysis.
The Group has not entered into any hedging activities to manage interest rate risk. In regard to its interest rate
risk, the Group continuously analyses its exposure. Within this analysis, consideration is given to potential renewals
of existing positions, alternative investments and the mix of fixed and variable interest rates.
63 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 21: Financial risk management objectives and policies (continued)
(a)
Interest Rate Risk (continued)
Weighted
Average Effective
Floating
Interest
Fixed
Interest
Non
Interest
Interest Rate
%
Rate
$
Rate
$
Bearing
$
Total
$
0.05%
0.00%
0.05%
0.00%
0.00%
0.00%
2018
Financial Assets
Cash
Receivables
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
2017
Financial Assets
Cash
Other deposits
Receivables
Investments
Total Financial Assets
Financial Liabilities
Trade and other payables
Total Financial Liabilities
(b)
Liquidity Risk
728
-
728
-
-
503,891
-
-
-
503,891
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,271,599
77,510
1,349,109
1,272,327
77,510
1,349,109
229,669
229,669
229,669
229,669
-
14,344
46,624
-
60,968
246,342
246,342
503,891
14,344
46,624
-
564,859
246,342
246,342
The Group manages liquidity risk by maintaining sufficient cash reserves and marketable securities required to
meet the current exploration and administration commitments, through the continuous monitoring of actual cash
flows.
Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate
liquidity risk management framework for the management of the Group’s short, medium and long term funding and
liquidity management requirements.
64 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 21: Financial risk management objectives and policies (continued)
Less than
1 month
1 – 3
months
3 months
– 1 year
1 – 5
years
5+ years
%
$
$
$
$
Total
contractual
cash flow
$
Total
$
2018
Financial assets:
Cash
Trust deposits
Receivables
Financial liabilities:
Non-interest bearing
Net cash inflow /
(outflow)
2017
Financial assets:
Cash
Trust deposits
Receivables
Financial liabilities:
Non-interest bearing
Net cash inflow /
(outflow)
(c)
Credit Risk
1,272,327
-
-
1,272,327
-
-
60,863
60,863
-
-
-
-
(229,669)
(229,669)
1,272,327
(152,159)
503,891
-
-
503,891
-
-
46,624
46,624
-
-
(246,342)
(246,342)
503,891
(199,718)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,344
-
14,344
-
-
14,344
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,272,327
-
60,863
1,333,190
-
(229,669)
(229,669)
1,272,327
-
60,863
1,333,190
-
(229,669)
(229,669)
1,103,521
1,103,521
503,891
14,344
46,624
564,859
503,891
14,344
46,624
564,859
(246,342)
(246,342)
(246,342)
(246,342)
318,517
318,517
Credit risk arises in the event that counterparty will not meet its obligations under a financial instrument leading to
financial losses. The Company is exposed to credit risk from its operating activities and, financing activities
including deposits with banks and investments with insurance companies. The credit risk control procedures
adopted by the Company is to assess the credit quality of the institution with whom funds are deposited or invested,
taking into account its financial position and past experiences.
The maximum exposure to credit risk on financial assets of the Company which have been recognised on the
statement of financial position is generally limited to the carrying amount.
Cash is maintained with National Australia Bank, Banco Popular of Spain and the Standard Bank of South Africa.
(d)
Foreign Exchange Risk
The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate
fluctuations arise. The carrying amount of the Group’s foreign currency denominated monetary assets and
monetary liabilities at the reporting date is as follows,
Liabilities
2018
$
2017
$
Assets
2018
$
2017
$
Great British Pounds (GBP)
South African Rand (ZAR)
Euro (EUR)
(110,886)
(2,539)
(15,774)
(11,667)
(3,302)
(32,126)
1,240,078
3,036
9,297
447,253
20,203
76,910
65 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 21: Financial risk management objectives and policies (continued)
Foreign currency sensitivity analysis
The Group is exposed to Great British Pound (GBP), and Euro (EUR) currency fluctuations.
The following table details the Group’s sensitivity to a 10% increase and decrease in the Australian Dollar (AUD)
against the relevant currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to
key management personnel and represents management’s assessment of the possible change in foreign
exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items
and adjusts their translation at the period end for a 10% change in foreign currency rates.
The sensitivity analysis includes cash balances held in GBP and EUR which give rise to a foreign currency gain or
loss on revaluation. A positive number indicates an increase in profit and other equity where the AUD strengthens
against the EUR. In relation to cash balances held in GBP a positive number indicates an increase in profit and
other equity where the Australian Dollar strengthens against the respective currency. For a weakening Australian
Dollar against the respective currency there would be an equal and opposite impact on the profit and other equity
and the balances below would be negative.
(d)
Foreign Exchange Risk
2018
2017
Profit / (loss)
$
Equity increase
/ (decrease)
$
Profit / (loss)
$
Equity increase /
(decrease)
$
AUD strengthens
10%
AUD weakens
10%
- ZAR
- GBP
- EUR
- ZAR
- GBP
- EUR
558
135,096
2,507
(558)
(135,096)
(2,507)
(558)
(135,096)
(2,507)
558
135,096
2,507
1,690
43,559
4,478
(1,690)
(43,559)
(4,478)
(1,690)
(43,559)
(4,478)
1,690
43,559
4,478
(e)
Fair value
The fair values of cash, trade and other receivables and trade and other payables approximate their carrying
values, as a result of their short maturity or because they carry floating rates.
Note 22: Parent Entity Information
Current assets
Total assets
Current liabilities
Total liabilities
Issued capital
Accumulated Losses
Reserves
Total shareholders’ equity
Loss of the parent entity
2018
$
2017
$
1,302,088
808,949
2,706,239
1,719,638
221,868
221,868
149,245
149,245
42,789,056
40,244,654
(42,867,023)
(34,420,811)
2,562,338
(4,253,450)
2,484,371
1,570,393
(1,538,302)
(2,142,178)
There have been no guarantees entered into by the parent entity in relation to any debts of its subsidiaries.
The parent entity has no contingent liabilities as at 30 June 2018 (2017: Nil).
66 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Notes to the consolidated financial statements
For the year ended 30 June 2018
Note 23: Significant events after the reporting date
On 16 July 2018 the Company announced that it had contracted a combination drill rig for mobilisation to its
Toral lead-zinc-silver project located in the Province of Leόn, northern Spain, during August 2018. The
Combination rig and associated operating crew is being supplied by Sondeos y Perforaciones Industriales
de Bierzo SA (“SPI”) and will be overseen by the Company’s on-site exploration team. The combination rig
is one of only a few of its type in Spain and has been deployed on a series of recent, successful drilling
programmes. Such rigs are used extensively on Australian drilling programmes.
On 30 July 2018, the Company announced the expiry of 205,949,134 unlisted options exercisable at £0.003
per share on or before 29 July 2018.
On 10 August 2018, and further to its previous announcement of 27 July 2018, the Company announced that
it had raised approximately £563,516 (approximately A$0.98m) before expenses, through the issue of
727,118,650 new ordinary shares of no par value each in the capital of the Company at an issue price of
0.0775 pence per share. The new ordinary shares were issued under the Company’s existing placement
capacity under ASX Listing Rule 7.1. The net proceeds from the fundraising are to be utilised towards funding
a planned phase 2 work programme at the Company’s Toral lead-zinc-silver project, as well as providing
additional general working capital for the Group.
On 28 August 2018, the Company announced that the abovementioned combination drill rig had been
successfully mobilised at the Toral lead-zinc-silver project. Further to the mobilisation and arrival on site of
the combination rig, drilling will initially ascertain the potential continuation of the mineralised structure outside
of the current defined JORC (2012) resource area. With a significant inferred resource estimate already
established for the main Toral project area, the extension drilling to the East will seek to identify the presence
of further mineralisation/hosting structures. Subsequent to completion of the extension drilling, the Company
will concentrate on drilling within the upper zone of the identified JORC (2012) resource area, before moving
on to a Phase 2 programme, targeting key areas within the high grade zone of the inferred resource in order
to increase resource confidence levels. In addition, the Company announced that further to an intensive 6
week process, its new geological team had successfully re-logged all priority intersections from the historical
drill core from the Toral project stored at the National Litoteca, located in Andalucia, Spain.
On 13 September 2018, the Company announced that the Board had decided to initiate the Change of Land
Use processes needed for the potential full future development of a mine at its Toral project and had engaged
a specialist consultancy, MAGMA Soluciones Ambientales SL, to progress the requisite applications across
the three distinct municipalities overlapping the project’s licence area. The process is currently estimated to
take approximately 18 months.
On 20 September 2018, the Company announced an updated JORC (2012) mineral resource estimate for
its Toral project. The abovementioned re-logging of historic drill core held at the National Litoteca from the
Toral project had resulted in significantly higher bulk density measurements than those used for the Maiden
resource estimate completed by AMS between November 2017 and January 2018, as announced by the
Company on 6 February 2018.
Accordingly, the updated mineral resource estimate for the Toral lead-zinc-silver deposit comprised:
19Mt @ 6.9% Zn Equivalent (including Pb credits) and 24g/t Ag
720,000 tonnes of Zinc, 570,000 tonnes of Lead and 14 million ounces of Silver
67 | P a g e
Europa Metals Ltd
A.C.N. 097 532 137
Directors’ Declaration
In the opinion of the directors of Europa Metals Limited
:
(a)
the financial statements and notes set out on pages 38 to 67 are in accordance with the Corporations
Act 2001, including:
(i)
(ii)
giving a true and fair view of the financial position of the Group as at 30 June 2018 and of its
performance, as represented by the results of its operations and its cash flows, for the year
ended on that date; and
complying with Accounting Standards in Australia and the Corporations Regulations 2001,
professional requirements and other mandatory requirements;
(b)
(c)
the financial statements and notes also comply with International Financial Reporting Standards as
disclosed in Note 2 (b); and
subject to the matters discussed in Note 2(g), there are reasonable grounds to believe that the Group
will be able to pay its debts as and when they become due and payable.
This declaration has been made after receiving the declarations required to be made to the directors in accordance
with section 295A of the Corporations Act 2001 for the year ending 30 June 2018.
This declaration is made in accordance with a resolution of the directors.
D Smith
Non-Executive Director
Perth
28 September 2018
68 | P a g e
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
INDEPENDENT AUDITOR’S AUDIT REPORT
To the members of Europa Metals Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Europa Metals Limited (the Company) and its subsidiaries (the
Group), which comprises the consolidated statement of financial position as at 30 June 2018, the
consolidated statement of profit or loss and other 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 report, 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 ended on that date; and
(ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been
given to the directors of the Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2(c) in the financial report which describes the events and/or conditions
which give rise to the existence of a material uncertainty that may cast significant doubt about the
group’s ability to continue as a going concern and therefore the group may be unable to realise its
assets and discharge its liabilities in the normal course of business. Our opinion is not modified in
respect of this matter.
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material uncertainty
related to going concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
Recoverability of Capitalised Exploration Expenditure
Key audit matter
How the matter was addressed in our audit
As disclosed in Note 11 to the financial report, the
Our procedures included, but were not limited to:
carrying value of capitalised exploration and evaluation
expenditure represents a significant asset of the Group.
In accordance with relevant accounting standards, the
recoverability of exploration and evaluation expenditure
required significant judgement by management in
determining whether there are any facts or
circumstances that exist to suggest the carrying amount
of this asset may exceed its recoverable amount. As a
result, this is considered a key audit matter.
(cid:127)
(cid:127)
(cid:127)
(cid:127)
Obtaining a schedule of the areas of interest
held by the Group and assessing whether the
rights to tenure of those areas of interest
remained current at balance date;
Considering the status of the ongoing
exploration programmes in the respective
areas of interest by holding discussions with
management, and reviewing the Group’s
exploration budgets, ASX announcements and
directors’ minutes;
Considering whether any such areas of interest
had reached a stage where a reasonable
assessment of economically recoverable
reserves existed;
Assessing the adequacy of the related
disclosure in Note 11 to 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 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.
Responsibilities of the directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the group 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 Group or to cease
operations, or has 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 an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 15 to 24 of the directors’ report for the
year ended 30 June 2018.
In our opinion, the Remuneration Report of Europa Metals 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.
BDO Audit (WA) Pty Ltd
Phillip Murdoch
Director
Perth, 28 September 2018
Tel: +61 8 6382 4600
Fax: +61 8 6382 4601
www.bdo.com.au
38 Station Street
Subiaco, WA 6008
PO Box 700 West Perth WA 6872
Australia
DECLARATION OF INDEPENDENCE BY PHILLIP MURDOCH TO THE DIRECTORS OF EUROPA METALS
LIMITED
As lead auditor of Europa Metals Limited for the year ended 30 June 2018, I declare that, to the best of
my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Europa Metals Limited and the entities it controlled during the period.
Phillip Murdoch
Director
BDO Audit (WA) Pty Ltd
Perth, 28 September 2018
BDO Audit (WA) Pty Ltd ABN 79 112 284 787 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275,
an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and
form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation other than for
the acts or omissions of financial services licensees
ASX Requirements
Distribution schedules of shareholders and statements of voting rights are set out in Table 1, whilst the
Company’s top twenty shareholders are shown in Table 2. Substantial shareholder notices that have
been received by the Company are set out in Table 3 and the tenement schedule as at 30 June 2018 is
set out in Table 4.
Table 1
Shareholder spread
Ordinary shares, with right to attend meetings and vote personally or by proxy, through show
of hands and, if required, by ballot (one vote for each share held)
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 - and over
38
48
70
178
416
Total holders of ordinary shares
Total number of ordinary shares
750
5,576,576,317
Options, with no right to attend meetings or vote personally or by proxy
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 - and over
-
-
-
-
13
13
649,416,595
Total holders of options
Total number of options
Table 2
Top twenty shareholders
Shareholder
HARGREAVES LANSDOWN (NOMINEES) LIMITED <15942>
INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED
HARGREAVES LANSDOWN (NOMINEES) LIMITED
INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED
BARCLAYS DIRECT INVESTING NOMINEES LIMITED
HSDL NOMINEES LIMITED
SOUTH AFRICA CONTROL A/C\C
HSBC GLOBAL CUSTODY NOMINEE (UK) LIMITED <941346>
VIDACOS NOMINEES LIMITED
HARGREAVES LANSDOWN (NOMINEES) LIMITED
INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED
JIM NOMINEES LIMITED
HSDL NOMINEES LIMITED
MR AWAIS MUHAMMAD
LAWSHARE NOMINEES LIMITED
SHARE NOMINEES LTD
ROCK (NOMINEES) LIMITED
BEAUFORT NOMINEES LIMITED
WEALTH NOMINEES LIMITED
HSBC CLIENT HOLDINGS NOMINEE (UK) LIMITED <731504>
Number of shares
592,749,482
Percentage
10.63%
377,947,081
365,653,897
292,219,514
287,255,139
278,161,793
265,378,425
222,950,771
214,058,447
203,943,019
193,714,089
168,105,243
167,451,851
130,434,783
93,884,448
91,618,266
76,890,061
61,832,508
59,694,284
56,239,313
6.78%
6.56%
5.24%
5.15%
4.99%
4.76%
4.00%
3.84%
3.66%
3.47%
3.01%
3.00%
2.34%
1.68%
1.64%
1.38%
1.11%
1.07%
1.01%
Top 20 holders of Ordinary Fully Paid Shares (Total)
4,200,182,414
75.32%
74 | P a g e
ASX Requirements (continued)
Table 3
Substantial shareholders
Shareholder
HARGREAVES LANSDOWN (NOMINEES) LIMITED <15942>
INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED
HARGREAVES LANSDOWN (NOMINEES) LIMITED
INTERACTIVE INVESTOR SERVICES NOMINEES LIMITED
BARCLAYS DIRECT INVESTING NOMINEES LIMITED
Number of shares
592,749,482
377,947,081
365,653,897
292,219,514
287,255,139
Percentage
10.63%
6.78%
6.56%
5.24%
5.15%
Voting Rights
The voting rights attached to each class of equity securities are set out below:
(a) Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
Table 4
Tenement schedule as at 30 June 2018:
Project
Right Number
Right Status
Holder
Toral
15.199
Investigation
Permit
GoldQuest
Iberica, S.L.
Lago
Lago II 6.056
Lago III 6.058
Exploration
Permit in
progress
Investigation
Permit in
progress
GoldQuest
Iberica, S.L.
Percentage
Interest
100%
100%
75 | P a g e
JSE Limited Requirements
Headline earnings reconciliation
2018
$
2017
$
Loss attributable to ordinary equity holders of the parent
entity
(1,883,446)
(11,286,803)
Add back IAS 16 loss on the disposal of plant and equipment
Less profit on sale of available for sale investments
Total tax effects of adjustments
-
-
(2,647)
-
-
Headline loss
(1,883,446)
(11,289,450)
Basic loss per share
Weighted average shares in issue
Basic loss per share (cents)
Headline loss
Weighted average shares in issue
Headline loss per share (cents)
(1,883,446)
3,075,844,119
(0.06)
(11,286,803)
1,238,720,046
(0.91)
(1,883,446)
3,075,844,119
(0.06)
(11,289,450)
1,238,720,046
(0.91)
76 | P a g e