Annual Report 2015
CORPORATE DIRECTORY
Directors and Company Secretary
Mr Rick Anthon (Non-executive Chairman)
Mr Calvin Treacy (Non-executive Director)
Mr Corey Nolan (Non-executive Director)
Mr Richard Seville (Non-executive Director)
Mr Duncan Cornish (Company Secretary)
Head Office and Registered Office
Elementos Limited
Level 5, 10 Market Street
Brisbane QLD 4000
Tel: +61 7 3221 7770
Fax: +61 7 3221 7773
www.elementos.com.au
Auditors
BDO Audit Pty Ltd
Level 10, 12 Creek Street
Brisbane QLD 4000
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Share Registry
Boardroom Pty Limited
Level 12, 225 George Street
Sydney NSW 2000
Tel: 1300 737 760
Fax: 1300 653 459
www.boardroomlimited.com.au
Stock Exchange Listing
Australian Securities Exchange Ltd
ASX Code: ELT
Australian Buisness Number
49 138 468 756
2
CONTENTS
CORPORATE DIRECTORY
CHAIRMAN’S LETTER
CORPORATE STRATEGY
MARKET UPDATE
REVIEW OF PROJECTS
Cleveland
Stage 1 – Tailings Reprocessing
Stage 2 – Open Pit Mining
Stage 3 - Underground Mining
Approvals and Applications
Mineral Resources and Ore Reserves
Millenium, Australia
Selwyn Range, Australia
GOVERNANCE ARRANGEMENTS AND INTERNAL CONTROLS
CAUTIONARY STATEMENTS
CONSOLIDATED FINANCIAL REPORT
ASX INFORMATION
2
5
6
7
8
8
9
11
12
14
15
16
16
17
17
19
66
3
CLEVELAND TIN AND COPPER MINE 1986
NORTHWEST TASMANIA, AUSTRALIA
4
CHAIRMAN’S LETTER
Dear Shareholders,
I am pleased to report that the Company’s focus on developing the
Cleveland Project over the past year has delivered significant value to
shareholders during the year.
With the completion of a Pre-feasibility Study and Ore Reserve statement for
the reprocessing of high-grade tailings (stage 1), and the reporting of positive
project economics from studies into Open Pit and Underground mining
(stages 2 and 3), the Company has been able to demonstrate the value in its
staged development strategy for the Cleveland Project.
The Cleveland Project is an exciting development prospect with the potential
to become an operating asset with a mine life of over 15 years.. The
Company is very confident that with further investment the resource and
reserve base can be expanded, which will underpin a long-life, globally
significant tin-copper-tungsten mine.
The market continues to be challenging for ASX listed mining companies, with
the 2014/15 financial year being amongst the most difficult in memory. During
the year, the board enacted cost reduction measures and a restructure.. It is
a credit to the management team that Elementos has been able to continue
the development of Cleveland through this period.
The board remains committed to its strategic plans and is confident that
near-term production is achievable. We believe that Elementos is well
positioned to build on the significant work that has been completed in the
past 12 months.
None of the progress made would be possible without the ongoing support of
our shareholders, for which we are genuinely appreciative.
Sincerely,
Rick Anthon
Non-Executive Chairman
5
CORPORATE STRATEGY
Elementos Limited (“Elementos” or the “Company”) is an Australian based,
Australian Stock Exchange listed project development company, focussed on
achieving near-term tin, copper and tungsten production from the Cleveland
Project in northwest Tasmania.
The Company’s strategy is centred on a three stage, low capital development
plan, with first production scheduled in 2017. The staged development strategy
minimises up-front capital, funds future stages from established cash flows, and
maximises the benefits of capital expenditure, while reducing the likelihood for
future equity raisings. Additionally, the strategy reduces the risk of investment for
our shareholders and optimises the Company’s appeal to strategic investors.
Cleveland development strategy
Stage Project
Commodities
Status (August 2015)
Production
commencesa
1
2
3
Cleveland Tailings
Cleveland Open Pit
Sn-Cu
Sn-Cu
Pre-feasibility completed
FY2017
Scoping study completed
FY2018
Cleveland Underground
Sn-Cu-WO3
Scoping study completed
FY2021
Sn = tin, Cu = copper, WO3 = tungsten.
a Subject to completion of technical studies and obtaining necessary approvals.
The Company has made significant progress in the development of the
Cleveland Mine during 2015.
Key project milestones achieved this year include:
Definition of Open Pit Mineral Resources with >98% in the Indicated category;
The completion of a Pre-feasibility Study for the reprocessing of the tailings
Mineral Resource, including a statement of Ore Reserves;
Completion of independent Scoping Studies for open pit and underground
mining;
Confirmation of the economic viability of the staged development of the
Cleveland Project;
Lodgement of the Development Permit and Environmental Management Plan
(DPEMP) with the Tasmanian Government;
Lodgement of a Mining Lease Application with the Tasmanian Government;
and
Commencement of a Community Engagement Program.
The Company is now well placed to accelerate the development of the
Cleveland Project with first production targeted n 2017.
6
MARKET UPDATE
Recent research by the International Tin Research Institute (“ITRI”) and Roskill
Information Services (“Roskill”) state the demand for tin remains strong due to its
use as a major constituent of solder for electronics. Future markets are also
looking strong, with recent research into the use of tin in lithium based battery
technology looking likely to be the next catalysis for tin demand.
On the supply side, while Indonesia began to curb illegal mining, Myanmar
boosted its tin exports, creating a temporary oversupply in the market. This
production is now diminishing and supports higher price forecasts going forward.
Tin supply verses demand forecasted by Roskill, April 2015
7
REVIEW OF PROJECTS
C l e v e l a n d
Cleveland and its surrounding tenure is located in northwest Tasmania and is
100% owned by the Company. The project area covers the northern margins and
metamorphic aureole of the Meredith Granite, which is associated with
numerous world-class metal deposits, including renowned tin deposits such as
Renison and Mt Bischoff.
The Clevland Project, in addition to its surface mining potential, is a brownfields
redevelopment of two deposits accessible from the same underground
infrastructure: a large Renison style tin-copper deposit and a world-class long life
tungsten porphyry deposit.
Cleveland has:
2,020 diamond drill holes providing 1,725 mineralised intersections;
Well-defined Mineral Resources with over 120,000m of assayed drill core data;
and
Mineralisation open at depth and in all directions.
Northwest Tasmania has well developed infrastructure and a strong mining
culture. The site is linked to Burnie Port, an established metals concentrate export
port by sealed roads.
Accessible power runs through Cleveland, and there is abundant water
available for use. The Burnie region has a large, available, and experienced
workforce, with a strong contracting, service and supply history that can provide
all the necessary requirements to deliver the project in a cost effective and timely
manner.
The Tasmanian Government, Environmental Protection Authority, and the
Department of Mineral Resources have all indicated support for the Company’s
project.
8
Regional location showing available infrastructure
Stage 1 – Tailings Reprocessing
The Cleveland tin and copper underground mine, operated by Aberfoyle Limited
between 1968 and 1986 was one of the largest underground tin operations in the
world, producing approximately 23,000 tonnes of tin and 10,000 tonnes of copper
during 18 years of operation. The mine closed in 1986 due to a rapid decline in tin
prices caused by the collapse of the International Tin Council and the change in
the Company’s strategic focus following the discovery of the Hellyer Deposit.
Historical mining at Cleveland produced a tailings legacy that the Company
tin and copper
proposes
mineralisation. The tailings are stored above ground on-site in two tailings dams.
reprocessing of
rehabilitate
through
the
to
The tailings contain a substantial quantity of recoverable tin and copper due in
part to operational inefficiencies and technical limitations of tin processing while
the mine was in operation. The Company has proven that advances in
technology, since Cleveland’s closure, will allow the tailings to be economically
reprocessed using standard mineral processing techniques including fine particle
gravity separation and flotation.
MiningOne Consultants independently estimated the Mineral Resources for the
Cleveland Tailings Project. The current
is
approximately 3.8Mt @ 0.30% tin and 0.13% copper1 (0% cut-off grade).
Indicated Mineral Resource
1 Announced per the JORC Code 2012 to the ASX on 17 June 2014 “Cleveland Tailings Resource Upgrade”.
9
The Company has recently completed a Pre-Feasibility Study2 (“PFS”) for the
reprocessing of this Mineral Resource and has estimated an Ore Reserve of 3.7Mt
@ 0.29%3 (0% cut-off grade).
The PFS demonstrated that the reprocessing of tailings is both technically and
financially viable, with a risk and opportunity profile that is competitive with or
better than other global tin assets at a similar stage of development. Key findings
included:
Production is scheduled to commence in 2017;
The fully allocated cost (C3)4 is estimated at US$13,137 per recovered tonne of
tin, placing the project in the bottom half of the ITRI C3 cost curve;
At current prices, the project is profitable and cash flow positive, indicating a
robust project that trades through the cycles;
The project area has excellent infrastructure when compared with other tin
projects, with power, water, and communications on site and roads
transecting the site, providing excellent access to ports and a skilled labour
market;
The project is in a low-risk jurisdiction relative to other tin provinces throughout
the world, with a stable and well-understood regulatory environment and
encouraging state government;
Local community and other stakeholders are supportive;
Environmental and mining applications have been lodged and Elementos has
every reason to believe at this point in time that approval is likely given the
significant government and stakeholder support to rehabilitate historical
legacies as proposed in the mine plan;
The proposed tailings reprocessing leverages the potential development of
open-pit and underground hard-rock Mineral Resources, creating potential for
significant production expansion; and
The study report has been independently reviewed by leading consultancy
AMC Consultants Pty Ltd (“AMC”) confirming the study meets the JORC Code
definitions of a pre-feasibility study and is of a standard normally accepted by
the mining industry for studies of this type.
2 Announced per the JORC Code 2012 to the ASX on 3 August 2015 “Cleveland Tailings PFS”.
3 Announced per the JORC Code 2012 to the ASX on 3 August 2015 “Cleveland Tailings Ore Reserve”.
4 Net Direct Cash Cost (C1) represents the cash cost incurred at each processing stage, from mining through to
recoverable metal delivered to market, less net by-product credits (if any). Production Cost (C2) is the sum of net direct
cash costs (C1) and depreciation, depletion and amortisation. Fully Allocated Cost (C3) is the sum of the production cost
(C2), indirect costs and net interest charges i.e. Total Cost.
10
Stage 2 – Open Pit Mining
The Company recently received an Open Pit Scoping Study, independently
prepared by AMC. The study was based on the previously announced Mineral
Resource of 0.8 million tonnes (Mt) at 0.81% Sn and 0.27% Cu5.
The AMC study identified five viable open pits, containing a mining inventory6 of
0.6 Mt at 0.50% Sn and 0.14% Cu. The open pit will supplement the feed from the
proposed tailings reprocessing operation, providing additional high-grade feed
into the upgraded process plant.
The highlights of the study included:
The Project is financially robust and technically low-risk;
Over 98% of the ore tonnes included in the mining inventory are in the
Indicated Mineral Resource category;
Five pits, with an average stripping ratio of 5.1, will be mined at a combined
rate of 200,000 tonnes per year over 3 years;
The incremental capital cost is estimated at A$6.6 million, comprising A$5.6
million for plant upgrades and A$1.0 million for site works and pre-production
waste stripping;
The capital requirements are fully funded by cash flow from stage 1 and, as
such, stage 2 will not require external financing;
The projected additional cash flow from the open-pit project is A$21 million
(before tax);
The project is cash flow positive at current tin and copper prices (2015
average price of US$16,657 per tonne tin and US$5,780 per tonne copper);
and
The net direct cash cost (C1) of US$8,303 per recovered tonne of tin places
the project in the bottom half of the industry cost curve.
Production from the stage 2 high-grade open-pit mine is scheduled to start in
2018, supplementing production from the stage 1 tin-copper tailings reprocessing
operation.
5 Announced per the JORC Code 2012 to the ASX on 3 March 2015 “Cleveland Open Pit - High-Grade Mineral Resource
Defined”
6 A mining inventory is not an Ore Reserve. Refer to Cautionary Statements attached to this announcement.
11
Cleveland open pit optimisation shells
Stage 3 - Underground Mining
AMC also completed an Underground Scoping Study, which examined the
technical and economic viability of mining and processing the previously
developed tin-copper deposit and a separate but large tungsten porphyry
deposit. As such, the viability of the underground operation was assessed as an
extension to the proposed tailings and open-pit operations with shared services,
plant and infrastructure.
The study provided a high-level mine design, mining inventory, production
schedule, process plant
for the potential
underground operation. Based on the previously announced Mineral Resource7,
the study identified a mining inventory8 of 1.9 Mt of tin-copper ore grading 0.61%
Sn and 0.22% Cu, and 1.7 Mt of tungsten ore grading 0.31% WO3.
flowsheet, and cost estimate
The findings demonstrate that underground operations will extend the Cleveland
mine life by eight years, doubling the life of the project, and adding a projected
additional A$90 million to the project’s pre-tax cash flows. Production from the
stage 3 underground mine is scheduled to commence in FY2021.
7 Announced per the JORC Code 2012 to the ASX on 3 March 2015 “Cleveland Open Pit - High-Grade Mineral Resource
Defined”
8 A mining inventory is not an Ore Reserve. Refer to Cautionary Statements attached to this announcement.
12
Cleveland Underground Mineral Resource (classified by net smelter return)
Highlights from the study were:
The projected pre-tax cash flow for the underground project is A$90 million,
boosting the integrated Cleveland Project pre-tax cash flow to A$166 million;
Refurbishment of the existing 3.5 kilometre decline and 9.7 kilometres of the
existing 25 kilometres of underground development minimises the required
development capital;
Underground infrastructure, orebody geometries and ground conditions are
amenable to low-cost mechanised bulk mining with large machinery;
Underground ore production peaks at 650,000 tonnes per annum, with
potential capacity up to 900,000 tonnes per annum;
The capital requirements are fully funded by cash flow from stages 1 and 2; as
such, stage 3 will not require additional equity; and
The integrated tailings-pit-underground operation is projected to generate a
revenue of A$638 million over the 15-year mine life, with exploration potential
yet to be tested.
13
Approvals and Applications
Environmental and mining applications have been lodged and Elementos has
every reason to believe at this point in time that approval is likely given the
significant government and stakeholder support to rehabilitate historical legacies
as proposed in the mine plan.
Cleveland Mining Lease application area
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Mineral Resources and Ore Reserves
Stage 1
Tailings Mineral Resource (at 0% Sn cut-off) 9
Category
Indicated
Tonnage
3.8 Mt
Table subject to rounding errors; Sn = tin, Cu = copper
Tailings Ore Reserve (at 0% Sn cut-off) 10
Sn Grade
0.30%
Cu Grade
0.13%
Category
Tonnage
Sn Grade
Cu Grade
Contained Sn
Contained
Cu
Probable
3.7 Mt
0.29%
0.13%
11 Kt
5 Kt
Table subject to rounding errors; Sn = tin, Cu = copper
Stage 2
Open Pit Tin-Copper Mineral Resource (at 0.35% Sn cut-off) 11
Category
Indicated
Inferred
Tonnage
0.8 Mt
0.01 Mt
Table subject to rounding errors; Sn = tin, Cu = copper
Stage 3
Sn Grade
Cu Grade
0.81%
0.99%
0.27
0.34
Underground Tin-Copper Mineral Resource (at 0.35% Sn cut-off) 12
Category
Indicated
Inferred
Tonnage
4.2 Mt
2.4 Mt
Table subject to rounding errors; Sn = tin, Cu = copper
Sn Grade
Cu Grade
0.67%
0.56%
0.28%
0.19%
Underground Tungsten Mineral Resource (at 0.20% WO3 cut-off) 13
Category
Inferred
Tonnage
4 Mt
Table subject to rounding errors; WO3 = tungsten oxide
WO3 Grade
0.30%
9 Announced per the JORC Code 2012 to the ASX on 17 June 2014 “Cleveland Tailings Resource Upgrade”
10 Announced per the JORC Code 2012 to the ASX on 3 August 2015 “Cleveland Tailings Ore Reserve”
11 Announced per the JORC Code 2012 to the ASX on 3 March 2015 “Cleveland Open Pit - High-Grade Mineral Resource
Defined”
12 Announced per the JORC Code 2012 to the ASX on 3 March 2015 “Cleveland Open Pit - High-Grade Mineral Resource
Defined”
13 This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply
with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.
15
M i l l e n i u m , A u s t r a l i a
The Millenium Project is situated near Cloncurry in the world-class Mt Isa Inlier, a
significant gold and base metal producing region, and host to major copper-
gold and lead-silver-zinc deposits. The district has established mining, processing
and transportation infrastructure in close proximity to the regional centres of Mt
Isa and Cloncurry.
Millenium is a large tenement holding over the Corella Fault zone, 40 kilometres
northwest of Cloncurry, and includes 134 hectares of Mining Leases. Chinalco
Yunnan Copper Resources Ltd manages the project under joint venture.
Activities undertaken by the joint venture partner, included:
The Pilgrim Fault geochemical survey, which identified a strong copper-gold
anomalous zone; and
Desktop geological and geophysical assessment.
Due to the focus on higher priority projects, the joint venture partner will take
some further time to assess the geological features within the project area in
more detail before establishing the targets for additional exploration.
S e l w y n R a n g e , A u s t r a l i a
Selwyn Range is situated 35 kilometres north of Osborne, 10 kilometres east of the
prolific Selwyn
rhenium
the Merlin molybdenum
development project), and 40 kilometres west of the Cannington mine.
includes
(which
trend
Selwyn Range consists of 109 km2 of largely contiguous, fully granted, Exploration
Permits for Minerals (“EPMs”): 19371, 19375 and 19426.
The EPMs are located over an area of inflection in a prospective north-south
structural trend, a feature often related to major deposits and mineralised
systems in the district.
Activities undertaken by the joint venture partner, Jason Resources Pty Ltd
(previously Below Ground Technology Pty Ltd) included:
Desktop geological reviews;
Geophysical data consolidation; and
Landholder and access activities.
After conducting desktop geological reviews and due to the focus on higher
priority projects, the JV Partner will take some further time to assess the geological
features within the project area in more detail before establishing the targets for
additional exploration.
16
GOVERNANCE ARRANGEMENTS
AND INTERNAL CONTROLS
A summary of the governance and controls applicable to the Company’s
Mineral Resource and Reserves processes is as follows:
Review and validation of drilling and sampling methodology and data
spacing, geological logging, data collection and storage, sampling and
analytical quality control;
Geological interpretation — review of known and interpreted structure,
lithology and weathering controls;
Estimation methodology — relevant to mineralisation style and proposed
mining methodology;
Comparison of estimation results with previous mineral resource models, and
with results using alternate modelling methodologies;
Visual validation of block model against raw composite data; and
Peer review by senior company personnel and independent consultants.
CAUTIONARY STATEMENTS
Forward-looking statements
This document may contain certain
forward-looking statements. Such
statements are only predictions, based on certain assumptions and involve
known and unknown risks, uncertainties and other factors, many of which are
beyond the company’s control. Actual events or results may differ materially
from the events or results expected or implied in any forward-looking
statement.
The inclusion of such statements should not be regarded as a representation,
warranty or prediction with respect to the accuracy of the underlying
assumptions or that any forward-looking statements will be or are likely to be
fulfilled.
Elementos undertakes no obligation to update any forward-looking statement
to reflect events or circumstances after the date of this document (subject to
securities exchange disclosure requirements).
The information in this document does not take into account the objectives,
financial situation or particular needs of any person or organisation. Nothing
contained in this document constitutes investment, legal, tax or other advice.
17
Mineral Resources and Ore Reserves
Elementos confirms that Mineral Resource and Ore Reserve estimates used in
this document were estimated, reported and reviewed in accordance with
the guidelines of the Australian Code for the Reporting of Exploration Results,
Mineral Resources and Ore Reserves (The JORC Code) 2012 edition.
Elementos confirms that it is not aware of any new information or data that
materially affects the Mineral Resource or Ore Reserve information included in
the “Cleveland Tailings Resource Upgrade” announced to the ASX on 17 June
2014, or the “Cleveland Open Pit - High-Grade Mineral Resource Defined”
announced on 3 March 2015 and the “Cleveland Tailings Ore Reserve”
released on the 3 August 2015.
The Company also confirms that all material assumptions and technical
parameters underpinning the estimates in the Cleveland Mineral Resources
and Reserves continue to apply and have not materially changed. Elementos
also confirms the form and context in which the Competent Person’s findings
are presented have not been materially modified from the date of
announcement.
Scoping Study Results
The scoping studies referred to in this announcement are based on low-level
technical and economic assessments, which are insufficient to support the
estimation of Ore Reserves, or to provide assurance of an economic
development case at this stage, or to provide certainty that the conclusions of
the scoping studies will be realised.
Elementos advises that the scoping study results are partly drawn from Inferred
Resources. There is a low level of geological confidence associated with these
estimates and there is no certainty that further exploration work will result in the
conversion of the estimate to an Indicated Mineral Resources or that the
production target itself will be realised. The term “mining inventory” is used to
describe the Indicated and Inferred Mineral Resource within the mine design.
Whereas an Ore Reserve, as defined by the JORC code (2012 Edition), must be
based on a study at pre-feasibility study level or better and must not include
Inferred Mineral Resources or Exploration Targets. As such, no Ore Reserve can
be stated on the basis of the scoping studies.
18
ELEMENTOS LIMITED
ABN 49 138 468 756
CONSOLIDATED FINANCIAL REPORT
FOR THE YEAR ENDED
30 JUNE 2015
19
ELEMENTOS LIMITED
ABN 49 138 468 756
DIRECTORS’ REPORT
The directors submit their report on the consolidated entity (“Group”) consisting of
Elementos Limited and the entities it controlled at the end of, and during, the
financial year ended 30 June 2015.
Directors
The directors of the Company at any time during or since the end of the financial
year are listed below. During the year, there were eight meetings of the full board
of directors. The meetings attended by each director were:
Directors
R Anthon (appointed 1/1/15)
C Treacy
C Nolan
R Seville
Board
Audit and Risk
Committee*
Meetings Attend Meetings Attend Meetings Attend
Remuneration
Committee*
5
8
8
7
5
8
8
7
1
-
1
-
1
-
1
-
1
-
1
-
1
-
1
-
*The Directors consider that the Company is not of a size and that its affairs are of such
complexity as to justify the formation of special or separate committees.
The directors have been in office since the start of the financial year to the date of
this report unless otherwise indicated.
Company Secretary
Duncan Cornish, held the position of Company Secretary at the end of the
financial year. Mr Cornish is a Chartered Accountant with significant experience as
public company CFO and Secretary, focused on junior resource companies, as
well as financial, administration and governance.
Mr Cornish is an accomplished and highly efficient corporate administrator and manager.
Duncan has more than 20 years’ experience in the accountancy profession both
in England and Australia, mainly with the accountancy firms Ernst & Young and
PricewaterhouseCoopers.
He has extensive experience in all aspects of company financial reporting,
corporate regulatory and governance areas, business acquisition and disposal
due diligence, capital raising and company listings and company secretarial
responsibilities, and serves as corporate secretary and chief financial officer of
several Australian and Canadian public companies.
Mr. Cornish holds a Bachelor of Business (Accounting) and is a member of the
Australian Institute of Chartered Accountants.
Principal Activities
The principal activity of the Group during the year was project development in
Australia. The Group is developing the Cleveland tin-copper-tungsten Project
through a staged, low-capital development strategy, which minimises upfront
capital, with cash flow funding future stages. This ensures maximum benefit from
capital expenditure, delivering optimal value to shareholders.
20
ELEMENTOS LIMITED
ABN 49 138 468 756
DIRECTORS’ REPORT
Cleveland Development Strategy
Stage
Project
Commodities
Production commences a
1
2
3
Cleveland Tailings
Cleveland Open Pit
Sn-Cu
Sn-Cu
Cleveland Underground
Sn-Cu-W
FY2017
FY2018
FY2021
a Subject to completion of technical studies and obtaining necessary approvals.
Sn = tin, Cu = copper, W = tungsten.
The Group also continued development of joint arrangements for its others assets
in Australia and withdrew from its activities in South America.
Review of Operations
Exploration and development activities at the Group’s projects during the year are
detailed below.
At the Cleveland Project in North-western Tasmania, the Group carried out the
following activities:
Resource Definition
o Open pit Mineral Resources defined (at 0.35% tin cut-off)
Indicated resources of 0.8 Mt at 0.81% tin and 0.27% copper
Inferred resources of 0.01 Mt at0.99% tin and 0.34% copper
Main tin and copper lenses extend over 700 meters strike
length
o Underground Mineral Resources restated
Indicated resources of 4.1 Mt at 0.67% tin and 0.28% copper
Inferred resources of 2.4 Mt at 0.56% tin and 0.19% copper
Stakeholder engagement
o Commenced a Community Engagement Program
Friday the 6th of February 2015
Friday the 1st of May 2015
o Commenced landholder identification process
Approvals and Permitting
o Continued field-testing and monitoring of environmental aspects
across the project area, including water quality testing
o Submitted a Development Plan and Environmental Management
Plan to the Tasmanian EPA for assessment and approval
o Submitted a Mining Lease Application to Mineral Resources Tasmania
for assessment and approvals
o
Installed survey control points and completed the mark out of the
Mining Lease boundary
o
Installed gate and signage on site
21
ELEMENTOS LIMITED
ABN 49 138 468 756
DIRECTORS’ REPORT
o Consolidated Exploration Lease (EL) 9/2006 into EL 7/2005
Technical Studies
o Completed preliminary metallurgical testing
o Commenced power and minor infrastructure studies
o Commenced preliminary process plant design
o Commenced pre-feasibility study for stage 1 tailings reprocessing
o Commenced scoping studies for stage 2 open pit mining and stage 3
underground mining
Exploration
o Undertook further exploration of lead, zinc and silver mineralisation
At Santo Domingo in Argentina, activities focused on withdrawing from all
commitments to focus on the development of Cleveland.
At the Millenium Project in the Mt Isa district, activities undertaken by the joint
venture partners Chinalco Yunnan Copper Resources Ltd (CYU) included:
o During the year, CYU identified, as part of the Pilgrim Fault geochemical
survey, a strong copper/gold anomalous zone at the northern end of the
original Millennium drilling locations; and
o Due to the focus on higher priority projects, CYU will take some further time
to assess the geological features at Millennium in more detail before
establishing the targets for additional exploration.
At the Selwyn Range project in the Mt Isa district, activities included:
o During the last financial year, Elementos entered into a joint venture with
Below Ground Technology Pty Ltd (“BGT”) to explore for copper, cobalt and
gold and ultimately earn a majority interest in the Selwyn Range project;
and
o After conducting desktop geological reviews and due to the focus on
higher priority projects, BGT will take some further time to assess the
geological features at Selwyn Range in more detail before establishing the
targets for additional exploration.
Significant Changes in State of Affairs
The Group’s operating loss for the financial year, after applicable income tax was
$2,692,540 (2014: $1,491,656). Exploration and evaluation expenditure during the
year totalled $1,352,157 (2014: $1,319,395).
At 30 June 2015, the Group’s net assets totalled $5,502,726 (2014: $6,755,762) which
included cash assets of $761,828 (2014: $682,689).
During the year, the Company raised $1.54 million (128,662,404 shares) from private
placements and a rights issue.
22
ELEMENTOS LIMITED
ABN 49 138 468 756
DIRECTORS’ REPORT
Information on Directors
The board has a strong combination of technical, managerial and capital markets
experience. Expertise and experience includes operating and mineral exploration
in Australia. The names and qualifications of the current directors are summarised
as follows:
Rick Anthon (appointed 1 January 2015)
Chairman
Mr Anthon BA (ANU), LLB (ANU), MAICD is a practicing lawyer with over 30 years’
experience in both corporate and commercial law. Mr Anthon also has extensive
experience in the resource sector, as a director of a number of resource
companies and as legal adviser, including project acquisition and development,
capital raising and corporate governance.
Mr Anthon’s leadership and experience in the resource sector, in conjunction with
his close working relationship with the current board, will be valuable as we focus
on the development of the Cleveland Mine and building value for all stakeholders.
Directorships held in other ASX listed companies in the last three years: Bass Metals
Ltd, Laneway Resources Ltd, Stratum Metals Ltd, Lamboo Resources Ltd and Baru
Resources Ltd.
Calvin Treacy (ceased as Managing Director 9 June 2015)
Non-executive Director
Mr Treacy (BEng, MBA, MAICD) has over twenty years senior management
experience in mining, mining technology and manufacturing. He has a strong
track record of founding and growing companies, and brings a wealth of
experience in the areas of strategic planning and capital raising.
Mr Treacy is a qualified Mechanical Engineer and holds a Masters of Business
Administration, with extensive experience across a range of industries and
positions.
Mr Treacy has worked in a range of roles including Non-executive Director, Chief
Executive Officer, Chief Operating Officer and Production Manager, providing a
blend of experience from hands-on management through to executive oversight
and strategic management.
Directorships held in other ASX listed companies in the last three years: Nil
Corey Nolan
Non-executive Director
Mr Nolan (BCom, MMEE, Graduate of AICD) has twenty years of diverse
experience in the resources sector. This has included experience in mining
operations, global resource evaluation, and the financing and development of
new opportunities in Australia, South Africa, Asia and South America.
23
ELEMENTOS LIMITED
ABN 49 138 468 756
DIRECTORS’ REPORT
Mr Nolan is a qualified mineral economist. He has held specialist roles as an
equities analyst in the mining and natural resources sector of stock broking firms
Morgan Stanley and Wilson HTM. During this period, he undertook detailed
coverage of the Australian and global resources sector including the commodities
market.
Mr Nolan has been a Director at PWC in the corporate finance and valuations
practice, specialising in resources industry valuations for Australian and global
resources firms.
Directorships held in other ASX listed companies in the last three years: Leyshon
Resources Limited.
Richard Seville
Non-executive Director
Mr Seville (BSc, MEngSc, MAusIMM, ARSM) is a mining geologist and geotechnical
engineer with thirty years’ experience in exploration, mine development and
operations. He also has significant corporate experience, in the roles of Chief
Execuitve Officer and Operations Director in ASX/AIM listed mining companies.
Directorships held in other ASX listed companies in the last three years: Leyshon
Resources Limited and Orocobre Limited.
The relevant interest of each director held directly or indirectly in shares and
options issued by the Company at the date of this report is as follows:
Directors
R Anthon
C Treacy
C Nolan
R Seville
Shares
Unlisted Options
4,664,678
26,850,004
3,853,400
26,290,597
-
6,200,000
3,300,000
-
24
ELEMENTOS LIMITED
ABN 49 138 468 756
DIRECTORS’ REPORT
Remuneration Report (Audited)
This report details the nature and amount of remuneration for each director and
other key management personnel.
The Group’s remuneration policy seeks to align director and executive objectives
with those of shareholders and business, while at the same time, recognising the
early development stage of the Group and the criticality of funds being utilised to
achieve development objectives. The board believes the current policy has been
appropriate and effective in achieving a balance of these objectives.
The remuneration structure for executives is based on a number of factors,
including length of service, particular experience of the individual concerned, and
overall performance of the Group.
The Group’s policy for determining the nature and amount of remuneration of
board members and key executives is set out below.
The executives receive payments provided for under an employment agreement,
which may include cash, superannuation, short-term incentives, and equity based
performance remuneration.
Board policy is to remunerate non-executive directors at market rates for
comparable companies for time, commitment and responsibilities. Individuals may
elect to salary sacrifice part of their fees as increased payments towards
superannuation. The maximum aggregate amount of fees that can be paid to
non-executive directors is subject to approval by shareholders at the Annual
General Meeting and is not linked to the performance of the Group. However, to
align directors’ interests with shareholder interests, directors are encouraged to
hold equity interests in the Group. The maximum aggregate amount of fees that
can be paid to non-executive directors approved by shareholders is currently
$250,000. One-third, by number, of non-executive directors retires by rotation at
the Company’s Annual General Meeting. Retiring directors are eligible for re-
election by shareholders at the Annual General Meeting of the Company.
The Group’s remuneration policy provides for long-term incentives to be offered
through a director and employee share option plan. Options are granted under
these plans to align directors’, executives’, employees’ and shareholders’ interests.
The Group does not remunerate any key management personnel with securities
that are not performance based. No options were granted during the current
financial year.
The board of directors is responsible for determining and reviewing the Group’s
remuneration policy, remuneration levels and performance of both executive and
non-executive directors. Independent external advice will be sought when
required. No independent external advice was sought during the current year.
The board is presently reassessing the remuneration policy to ensure it incorporates
appropriate elements given the Group’s status and planned activities. Through this
review process, the directors aim to provide clearer and more manageable
performance criteria for remuneration incentives including the issue of employee
and executive options, while also securing greater loyalty from key employees and
executives, reducing administration costs and the regulatory burden on the Group.
25
ELEMENTOS LIMITED
ABN 49 138 468 756
DIRECTORS’ REPORT
Performance-Based Remuneration
remuneration
includes both short-term and
Performance-based
long-term
incentives and is designed to reward key management personnel for reaching or
exceeding specific objectives or as recognition for strong individual performance.
Short-term incentives are available to eligible staff of the Group and are
comprised of cash bonuses, determined on a discretionary basis by the chief
executive officer and the board. No short-term incentives were made available
during the year.
Long-term incentives are comprised of share options, which are granted from time-
to-time to encourage sustained strong performance in the realisation of strategic
outcomes and growth in shareholder value.
The exercise price of the options is determined after taking into account the
underlying share price performance in the period leading up to the date of grant
and if applicable, performance conditions attached to the share options. Subject
to specific vesting conditions, each option is convertible into one ordinary share.
No options were granted during the current financial year.
The names of key management personnel of Elementos Ltd who have held office
during the financial year are:
Rick Anthon
Calvin Treacy
Tim McManus
Chairman – (appointed 1 January 2015)
Director - Managing Director (ceased 9 June 2015) and
Director - Non-executive (commenced 9 June 2015)
Chief Operating Officer (commenced 29 September
2014, ceased 9 June 2015)
Chief Executive Officer (commenced 9 June 2015)
Corey Nolan
Director - Non-executive
Richard Seville
Director - Non-executive
Remuneration Details of Key Management Personnel
The remuneration of the key management personnel of Elementos Limited was as
follows:
Key Management
Personnel
R Anthon
C Treacy
C Nolan
R Seville
T McManus
Year Ended 30 June 2015
Short Term Benefits
Salary
and Fees
Bonuses
($)
25,000
217,422
20,696
20,696
134,036
417,850
($)
-
-
-
-
-
-
Equity
Settled
Shares
($)
-
-
18,510
18,510
-
Equity
Settled
Options
($)
-
-
-
-
-
Post
Employment
Super-
annuation
($)
-
15,449
3,725
3,725
12,733
Total
($)
25,000
232,871
42,931
42,931
146,769
37,020
-
35,632
490,502
26
ELEMENTOS LIMITED
ABN 49 138 468 756
DIRECTORS’ REPORT
Year Ended 30 June 2014
Key Management
Personnel
C Treacy
C Nolan
R Seville (appointed
14 October 2013)
C Dunks (resigned 16
November 2013)
M Adams (resigned 16
November 2013)
R Trevillion (resigned 22
July 2013)
Short Term Benefits
Salary
and Fees
Bonuses
($)
102,644
67,173
28,602
-
-
-
198,419
($)
-
-
-
-
-
-
-
Equity
Settled
Shares
($)
50,000
-
-
50,000
50,000
50,000
Equity
Settled
Options
($)
42,780
-
-
Post
Employment
Super-
annuation
($)
9,494
6,213
2,646
-
-
-
-
-
-
Total
($)
204,918
73,386
31,248
50,000
50,000
50,000
200,000
42,780
18,353
459,552
The remuneration of key management personnel of Elementos Limited prior to the
merger was as follows:
Year Ended 30 June 2014
Key Management
Personnel
C Nolan
A Anthony McLellan
J Calaway
M McCauley
Short Term Benefits
Salary
and Fees
Bonuses
($)
50,000
72,456
11,534
3,990
137,980
($)
-
-
-
-
-
Equity
Settled
Shares
($)
-
-
-
-
-
Equity
Settled
Options
($)
-
-
-
-
-
Post
Employment
Super-
annuation
($)
4,625
6,630
-
369
11,624
Total
($)
54,625
79,086
11,534
4,359
149,604
Refer to Note 1 of the financial statements for further information regarding the
merger with Rockwell Minerals Limited.
27
ELEMENTOS LIMITED
ABN 49 138 468 756
DIRECTORS’ REPORT
Following are employment details of persons who were key management
personnel of the Group during the financial year:
Key Management
Personnel
Position Held
Contract Details
R Anthon
Chairman
C Treacy
Non-executive
Director
C Nolan
Non-executive
Director
R Seville
Non-executive
Director
T McManus
Chief Executive
Officer (appointed
Chief Operating
Officer 29/9/14,
appointed Chief
Executive Officer
9/6/15)
No fixed term,
termination as
provided by
Corporations Act
No fixed term,
termination as
provided by
Corporations Act
No fixed term,
termination as
provided by
Corporations Act
No fixed term,
termination as
provided by
Corporations Act
No fixed term, 3
months notice to
terminate
Proportion of
Remuneration
Equity
Based
Salary and
Wages
-
-
100%
100%
43%
57%
43%
57%
-
100%
Options Granted as Remuneration
There were no remuneration options granted during the current year.
Company Performance, Shareholder Wealth, and Director and Executive
Remuneration
During the financial year, the Company has generated losses as its principal
activity was mineral exploration.
The following table shows the share price of the Company since 2011.
Share Price at year end ($)
0.01
0.02
0.015
0.079
0.225
30 June 2015 30 June 2014 30 June 2013 30 June 2012 30 June 2011
As the Company is still in the exploration and development stage, the link between
remuneration, company performance and shareholder wealth is tenuous. Share
prices are subject to the influence of metal prices and market sentiment towards
the sector, and as such, increases and decreases might occur independent of
executive performance and remuneration.
28
ELEMENTOS LIMITED
ABN 49 138 468 756
DIRECTORS’ REPORT
Options Held by Key Management Personnel
Details of options held directly, indirectly or beneficially by key management
personnel are as follows:
Key
Management
Personnel
Balance
at 1 July
2014
Granted as
Compen-
sation
Exercised
Other
Changes
Balance
at 30 June
2015
Total
Vested
30 June
2015
Total
Vested and
Exercisable
30 June
2015
R Anthon
C Treacy
C Nolan
R Seville
-
6,200,000
3,300,000
-
9,500,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,200,000
6,200,000
3,300,000
3,300,000
-
6,200,000
3,300,000
-
-
-
9,500,000
9,500,000
9,500,000
Shares Held by Key Management Personnel
Details of shares held directly, indirectly or beneficially by key management
personnel are as follows:
Key
Management
Personnel
Balance
at 1 July
2014
Granted as
Compen-
sation
Received
on Exercise
of Options
Other
Changes
Balance
at 30 June
2015
R Anthon
C Treacy
C Nolan
R Seville
T McManus
-
22,750,004
1,047,372
16,981,177
-
-
-
2,753,185
2,753,185
-
40,778,553
5,506,369
-
-
-
-
-
-
4,664,678
4,664,678
4,100,000
26,850,004
52,843
3,853,400
6,556,236
300,000
26,290,598
300,000
15,673,757
61,958,680
This is the end of the Remuneration Report.
29
ELEMENTOS LIMITED
ABN 49 138 468 756
DIRECTORS’ REPORT
Dividends
No dividend has been proposed or paid since the start of the financial year.
Options
At the date of this report, the unissued ordinary shares of the Company under
options are as follows:
Unlisted Options
Grant Date
Expiry Date
Exercise
Price
No. Under Option
23 October 2009
23 October 2015
$0.226(i)
30 November 2010
29 November 2015
$0.226 (i)
28 March 2011
18 January 2017
$0.326(i)
4 December 2012
3 December 2016
$0.06 (i)
8 February 2013
20 January 2017
$0.06 (i)
20 March 2014
20 March 2018
$0.03 (i)
4,500,000
500,000
1,000,000
200,000
2,350,000
9,300,000
(i) The Trust Deeds relating to the grant of these options provides for a reduction in the
option exercise price where the Company undertakes a pro-rata issue of securities.
The reduction in exercise price is calculated in accordance with the formula
provided in the ASX Listing Rules.
There have been no unissued shares or interests under option of any controlled
entity within the economic entity during or since reporting date. Option holders do
not have any rights to participate in any share issue or other interests in the
Company or any other entity.
Subsequent Events
There are no matters or circumstances that have arisen since the end of the year
which significantly affected or may significantly affect the operations of the
Group, the results of those operations, or the state of affairs of the Group in future
financial years.
Environmental Issues
The Group is subject to significant environmental regulations under the laws of the
Commonwealth of Australia and states of Australia in which the Group operates.
The Group is also subject to environmental regulation in relation to its exploration
activities in Chile and Argentina.
The directors monitor the Group’s compliance with environmental obligations. The
directors are not aware of any compliance breach arising during the year and up
to the date of this report.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and
accountability, the directors of Elementos Limited support and, where practicable
or appropriate, have adhered to the ASX Principles of Corporate Governance. The
Company’s corporate governance statement is contained on its website.
30
ELEMENTOS LIMITED
ABN 49 138 468 756
DIRECTORS’ REPORT
Indemnifying Directors and Auditors
The Company has entered into a Deed with each of the directors whereby the
Company has agreed to provide certain indemnities to each director to the
extent permitted by the Corporations Act and to use its best endeavours to obtain
and maintain directors’ and officers’ indemnity insurance, subject to such
insurance being available at reasonable commercial terms.
The economic entity has paid premiums to insure each of the directors of the
Company against liabilities for costs and expenses incurred by them in defending
any legal proceedings arising out of their conduct while acting in the capacity of
director of the Company, other than conduct involving a wilful breach of duty in
relation to the Company. The contracts include a prohibition on disclosure of the
premium paid and nature of the liabilities covered under the policy.
The Company has not given an indemnity or entered into an agreement to
indemnify, or paid or agreed to pay insurance premiums in respect of any person
who is or has been an auditor of the Company or a related entity during the year
and up to the date of this report.
Proceedings on Behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the
Company or intervene in any proceedings to which the Company is a party for the
purpose of taking responsibility on behalf of the Company for all or any part of
those proceedings. The Company was not a party to any such proceedings during
the year.
Non-Audit Services
The auditors did not provide any non-audit services during the year.
Auditor’s Independence Declaration
lead auditor’s
The
Corporations Act 2001 is attached to this financial report.
independence declaration under section 307C of the
Signed in accordance with a resolution of the board of directors.
R Anthon
Chairman of Directors
Dated this 29th day of September 2015
Brisbane, Queensland
31 ELEMENTOS LIMITED
ABN 49 138 468 756
AUDITOR’S INDEPENDENCE DECLARATION
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
DECLARATION OF INDEPENDENCE BY AJ WHYTE TO DIRECTORS OF ELEMENTOS
LIMITED
As lead auditor of Elementos Limited for the year ended 30 June 2015, 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 Elementos Limited and the entities it controlled during the period.
A J Whyte
Director
BDO Audit Pty Ltd
Brisbane, 29 September 2015
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.
32
ELEMENTOS LIMITED
ABN 49 138 468 756
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEAR ENDED 30 JUNE 2015
Note
30 June 2015
30 June 2014
Revenue
Corporate and administrative expenses
Writeoff of exploration assets
Listing expenses
Loss before income tax expense
Income tax expense
2
3
8
19
4
Loss for the year attributable to members
of the parent entity
Other comprehensive income
Items that will be reclassified to profit or loss:
Exchange differences on translation of
foreign operations
Other comprehensive income for the year
net of tax
$
$
96,706
12,641
(944,903)
(1,844,343)
-
(1,026,188)
(277,473)
(200,636)
(2,692,540)
(1,491,656)
-
-
(2,692,540)
(1,491,656)
(73,705)
(594,929)
(73,705)
(594,929)
Total comprehensive income attributable
to members of the parent entity
(2,766,245)
(2,086,585)
Basic and diluted earnings per share
(cents per share)
15
(0.36)
(0.33)
The accompanying notes form part of these financial statements.
33
ELEMENTOS LIMITED
ABN 49 138 468 756
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other current assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Exploration and evaluation assets
Property, plant and equipment
Other non-current assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Accumulated losses
TOTAL EQUITY
Note 30 June 2015
30 June 2014
$
$
5
6
7
8
9
10
11
12
13
761,828
19,380
10,917
792,125
682,689
25,527
14,406
722,622
4,859,170
4,186
13,950
6,456,348
36,060
26,047
4,877,306
6,518,455
5,669,431
7,241,077
166,705
166,705
166,705
485,315
485,315
485,315
5,502,726
6,755,762
12,437,377
(604,464)
(6,330,187)
10,924,168
(530,759)
(3,637,647)
5,502,726
6,755,762
The accompanying notes form part of these financial statements.
34
ELEMENTOS LIMITED
ABN 49 138 468 756
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
Note
Contributed
Equity
Accumulated
Losses
Share-Based
Payments
Reserve
$
$
$
Foreign
Currency
Translation
Reserve
$
Total
$
Balance at 30 June 2013
4,998,940
(2,145,991)
Loss for the period
Other comprehensive income for the period
Total comprehensive income
Rockwell shares issued prior to merger
Shares issued due to capital raising
Equity settled compensation
Shares issued other
Transaction costs
Share based payments
Deemed value of notional merger shares issued
Balance at 30 June 2014
Loss for the period
Other comprehensive income for the period
Total comprehensive income
Shares issued due to capital raising
Equity settled compensation
Transaction costs
13
12
12
12
12
12
19
19
13
12
12
12
-
-
-
(1,491,656)
-
(1,491,656)
444,500
2,605,800
40,665
52,308
(59,794)
-
2,841,749
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
64,170
-
-
2,852,949
-
(594,929)
(594,929)
(1,491,656)
(594,929)
(2,086,585)
-
-
-
-
-
-
-
444,500
2,605,800
40,665
52,308
(59,794)
64,170
2,841,749
10,924,168
(3,637,647)
64,170
(594,929)
6,755,762
-
-
-
(2,692,540)
-
(2,692,540)
1,543,948
37,021
(67,760)
-
-
-
-
-
-
-
-
-
-
(73,705)
(2,692,540)
(73,705)
(73,705)
(2,766,245)
-
-
-
1,543,948
37,021
(67,760)
Balance at 30 June 2015
12,437,377
(6,330,187)
64,170
(668,634)
5,502,726
The accompanying notes form part of these financial statements.
35
ELEMENTOS LIMITED
ABN 49 138 468 756
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received
Other receipts
Payments to suppliers and employees
Note 30 June 2015
30 June 2014
$
$
51,125
45,581
(818,863)
11,141
1,500
(1,088,016)
Net cash provided by/(used in) operating activities
14
(722,157)
(1,075,375)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation assets
Research and develpment refunds
Cash acquired on acquistion of subsidiary
Purchase of property, plant and equipment
(1,352,157)
682,268
-
(5,844)
(1,319,395)
-
149,056
(208)
Net cash provided by/(used in) investing activities
(675,733)
(1,170,547)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Costs associated with share issues
1,543,948
(67,760)
2,845,300
(57,394)
Net cash provided by/(used in) financing activities
1,476,188
2,787,906
Net increase/(decrease) in cash held
Cash at Beginning of Year
Effect of exchange rates on cash holdings in foreign
currencies
78,298
541,984
682,689
143,733
841
(3,028)
Cash at End of Year
5
761,828
682,689
The accompanying notes form part of these financial statements.
36
ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements are general purpose financial statements that have been
prepared in accordance with the Corporations Act 2001 , Australian Accounting
Standards, and other authoritative pronouncements of the Australian Accounting
the purpose of
Standards Board. Elementos Limited is a for-profit entity for
preparing the financial statements. The financial statements are presented in
Australian dollars.
Compliance with Australian Accounting Standards ensures that the financial
statements and notes also comply with International Financial Reporting
Standards.
The financial statements are for the consolidated entity consisting of Elementos
Limited and its Controlled Entities. Elementos Limited is a public company,
incorporated and domiciled in Australia. The financial statements have been
prepared on an accruals basis and are based on historical cost modified by the
measurement at fair value of selected non-current assets, financial assets and
liabilities. The financial report was authorised for issue on 29 September 2015 by
the directors of the Company.
Separate financial statements for Elementos Limited as an individual entity are no
longer presented following a change to the Corporations Act 2001. However,
financial
information required for Elementos Limited as an individual entity is
included in Note 25.
Material accounting policies adopted in the preparation of
these financial
statements are presented below. They have been consistently applied unless
otherwise stated.
Going Concern
The financial statements have been prepared on a going concern basis, which
contemplates the continuity of normal business activities and the realisation of
assets and discharge of liabilities in the ordinary course of business. The Group has
not generated significant revenues from operations. During the year, the Group
has raised $1.54 million from the issue of 128,662,404 shares. The Group’s ability to
continue to adopt the going concern assumption will depend upon a number of
matters including subsequent successful raising in the future of necessary funding
and the successful exploration and subsequent exploitation of
the Group’s
tenements.
In the absence of these matters being successful, there exists a
material uncertainty that may cast significant doubt on the Group’s ability to
continue as a going concern with the result that the Group may have to realise its
assets and extinguish its liabilities other than in the ordinary course of business, and
at amounts different from those stated in the financial statements. No adjustments
for such circumstances have been made in the financial statements.
37 ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Acquisition of Rockwell Minerals Ltd and its Controlled Entities
shareholders
During the previous year, Rockwell Minerals Limited's original
obtained a majority share interest
the merger
in Elementos Limited after
transaction. This transaction did not meet the definition of a business combination
in Australian Accounting Standard AASB3 Business Combinations . The transaction
has therefore been accounted for in the consolidated financial statements in
accordance with Australian Accounting Standard AASB2 Share-based Payment
and has been accounted for as a continuation of the financial statements of
Rockwell Minerals Limited together with a deemed issue of shares, equivalent to
the shares held by the former shareholders of Elementos Limited. The deemed issue
in effect, a share-based payment transaction whereby Rockwell
of shares is,
Minerals Limited is deemed to have received the net assets of Elementos Limited,
together with the listing status of Elementos Limited. The overall accounting effect
is very similar to that of a reverse acquisition in AASB3.
Since the consolidated financial statements represent a continuation of the
financial statements of Rockwell Minerals Limited, the principles and guidance on
the preparation and presentation of the consolidated financial statements in a
reverse acquisition set out in AASB 3 have been applied:
- fair value adjustments arising at acquisition were made to Elementos Limited
assets and liabilities, not those of Rockwell Minerals Limited;
- the cost of the acquisition and the amount recognised as issued capital to
affect the transaction is based on the notional amount of shares that Rockwell
Minerals Limited would have needed to issue Elementos Limited shareholders, for
them to hold the same shareholding percentage in Rockwell Minerals Limited as
they have in the Group post the actual transaction;
- accumulated losses and other equity balances in the consolidated financial
statements at acquisition date are those of Rockwell Minerals Limited;
- a share-based payment transaction arises whereby Rockwell Minerals Limited is
deemed to have issued shares in exchange for the net assets of Elementos Limited
(together with the listing status of Elementos Limited). The listing status does not
qualify for recognition as an intangible asset and has therefore been expensed in
profit or loss as a listing expense;
- the equity structure in the consolidated financial statements (the number and
type of equity instruments issued) at the date of the acquisition reflects the equity
structure of Elementos Limited, including the equity instruments issued to effect the
acquisition; and
- the results for the year ended 30 June 2014 comprise the consolidated results for
the year of Rockwell Minerals Limited together with the results of Elementos Limited
from the acquisition date, being 14 October 2013.
38 ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Principles of Consolidation
Subsidiaries
The consolidated financial statements incorporate the assets and liabilities of all
subsidiaries of Elementos Limited ("Company" or "parent entity") as at 30 June 2015,
and the results of all subsidiaries for the year then ended. Elementos Limited and its
subsidiaries together are referred to in these financial statements as the Group or
the economic entity.
The names of the subsidiaries are contained in Note 23. All subsidiaries have a 30
June financial year end and are accounted for by the parent entity at cost.
Subsidiaries are all entities over which the Group has control. The Group has
control over an entity when the Group is exposed to, or has a right to, variable
returns from its involvement with the entity, and has the ability to use its power to
affect those returns.
Subsidiaries are fully consolidated from the date on which control is transferred to
the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions
between Group companies are eliminated. Unrealised losses are also eliminated
unless
the asset
transferred. Accounting policies of controlled entities have been changed where
necessary to ensure consistency with the policies adopted by the Group.
the transaction provides evidence of
the impairment of
Changes in ownership interests
When the Group ceases to have control, joint control or significant influence, any
retained interest in the entity is remeasured to its fair value, with the change in the
carrying amount recognised in the profit or loss.
The fair value is the initial carrying amount for the purposes of subsequently
accounting for the retained interest as an associate, joint venture or financial
asset. In addition, any amounts previously recognised in other comprehensive
income in respect of that entity are accounted for as if the Group had directly
disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to the profit or loss.
Segment Reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The chief operating
decision maker, who is
responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Managing
Director/Chief Executive Officer.
39 ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Income Tax
The income tax expense/(income) for the year comprises current income tax
expense/(income) and deferred tax expense/(income).
Current income tax expense charged to the profit or loss is the tax payable on
taxable income calculated using applicable income tax rates enacted, or
substantially enacted, as at reporting date. Current tax liabilities/(assets) are
therefore measured at the amounts expected to be paid to/(recovered from) the
relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and
deferred tax liability balances during the period as well unused tax losses.
Current and deferred income tax expense/(income) is charged or credited
directly to equity instead of the profit or loss when the tax relates to items that are
credited or charged directly to equity.
Deferred tax assets and liabilities are calculated at the tax rates that are expected
to apply to the period when the asset is realised or the liability is settled, based on
tax rates enacted or substantively enacted at reporting date. Their measurement
also reflects the manner in which management expects to recover or settle the
carrying amount of the related asset or liability.
Deferred tax assets and liabilities are ascertained based on temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in
the financial statements. Deferred tax assets also result where amounts have been
fully expensed but future tax deductions are available. No deferred income tax
will be recognised from the initial recognition of an asset or liability, excluding a
business combination, where there is no effect on accounting or taxable profit or
loss.
Deferred tax assets relating to temporary differences and unused tax losses are
recognised only to the extent that it is probable that future taxable profit will be
available against which the benefits of the deferred tax asset can be utilised.
The amount of benefits brought to account or which may be realised in the future
is based on the assumption that no adverse change will occur in income taxation
legislation and the anticipation that the economic entity will derive sufficient
future assessable income to enable the benefit to be realised and comply with the
conditions of deductibility imposed by the law.
40 ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Exploration and Evaluation Assets
Exploration and evaluation expenditure incurred is accumulated in respect of
each identifiable area of interest. Such expenditures comprise net direct costs
and an appropriate portion of related overhead expenditure but do not include
overheads or administration expenditure not having a specific nexus with a
particular area of interest. These costs are only carried forward to the extent that
they are expected to be recouped through the successful development of the
area or where activities in the area have not yet reached a stage which permits
reasonable assessment of the existence of economically recoverable reserves
and active or significant operations in relation to the area are continuing.
A regular review has been undertaken on each area of interest to determine the
appropriateness of continuing to carry forward costs in relation to that area of
interest.
A provision is raised against exploration and evaluation assets where the directors
are of the opinion that the carried forward net cost may not be recoverable or the
right of tenure in the area lapses. The increase in the provision is charged against
the results for the year. Accumulated costs in relation to an abandoned area are
written off in full against profit in the year in which the decision to abandon the
area is made.
When production commences, the accumulated costs for the relevant area of
interest are amortised over the life of the area according to the rate of depletion
of the economically recoverable reserves.
Restoration Costs
Costs of site restoration are provided over the life of the facility from when
exploration commences and are included in the costs of
that stage. Site
restoration costs include the dismantling and removal of mining plant, equipment
the site in
and building structures, waste removal, and rehabilitation of
accordance with clauses of the exploration and mining permits. Such costs have
been determined using estimates of future costs, current legal requirements and
technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted for on a prospective
basis. In determining the costs of site restoration, there is uncertainty regarding the
nature and extent of the restoration due to community expectations and future
legislation. Accordingly, the costs have been determined on the basis that the
restoration will be completed within one year of abandoning the site.
The economic entity currently has no obligation for any restoration costs in relation
to discontinued operations, nor is it currently liable for any future restoration costs
in relation to current areas of interest. Consequently, no provision for restoration
has been deemed necessary.
41 ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Impairment of Assets
At each reporting date, the economic entity reviews the carrying values of its
tangible and intangible assets to determine whether there is any indication that
those assets have been impaired. If such an indication exists, the recoverable
amount of the asset, being the higher of the asset’s fair value less costs to sell and
value in use, is compared to the asset's carrying value. Any excess of the asset's
carrying value over its recoverable amount is expensed to the profit or loss.
Financial Instruments
Recognition and Initial Measurement
liabilities, are
Financial
recognised when the entity becomes a party to the contractual provisions of the
instrument. Trade date accounting is adopted for financial assets.
instruments, incorporating financial assets and financial
instruments are initially measured at fair value plus transactions costs
Financial
where the instrument is not classified as at fair value through profit or
loss.
Transaction costs related to instruments classified as at fair value through profit or
loss are expensed to profit or loss immediately.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash
flows expires or the asset is transferred to another party whereby the entity no
in the risks and benefits
longer has any significant continuing involvement
associated with the asset.
Financial
liabilities are derecognised where the related obligations are either
discharged, cancelled or expire. The difference between the carrying value of the
financial liability extinguished or transferred to another party and the fair value of
consideration paid, including the transfer of non-cash assets or liabilities assumed,
is recognised in profit or loss.
Classification and Subsequent Measurement
Financial
using the effective interest rate method, or cost.
instruments are subsequently measured at fair value, amortised cost
Fair value is the price that would be received to sell an asset or paid to transfer a
Amortised cost is calculated as:
(a) the amount at which the financial asset or financial
initial recognition;
liability is measured at
(b) less principal repayments;
(c) plus or minus the cumulative amortisation of the difference, if any, between
the amount initially recognised and the maturity amount calculated using the
effective interest method; and
(d) less any reduction for impairment.
42
ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Financial Instruments (cont)
The effective interest method is used to allocate interest income or
interest
expense over the relevant period and is equivalent to the rate that exactly
discounts estimated future cash payments or receipts (including fees, transaction
costs and other premiums or discounts) through the expected life (or when this
cannot be reliably predicted, the contractual term) of the financial instrument to
the net carrying amount of the financial asset or financial
liability. Revisions to
expected future net cash flows will necessitate an adjustment to the carrying
value with a consequential recognition of an income or expense in profit or loss.
The economic entity does not designate any interests in subsidiaries, associates or
joint venture entities as being subject to the requirements of accounting standards
specifically applicable to financial instruments.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market and are
subsequently measured at amortised cost.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either
designated as such or that are not classified in any of the other categories. They
comprise investments in the equity of other entities where there is neither a fixed
maturity nor fixed or determinable payments.
liabilities
(excluding financial guarantees) are
Financial Liabilities
financial
Non-derivative
subsequently measured at amortised cost.
Impairment
At each reporting date, the economic entity assesses whether there is objective
evidence that a financial instrument has been impaired. In the case of available-
for-sale financial instruments, a significant or prolonged decline in the value of the
instrument
is considered to determine whether an impairment has arisen.
Impairment losses are recognised in the profit or loss.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks
and other short-term highly liquid investments with original maturities of less than 3
months.
Issued Capital
Ordinary shares are classified as equity. Transaction costs (net of tax where the
deduction can be utilised) arising on the issue of ordinary shares are recognised in
equity as a reduction of the share proceeds received.
43 ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Share Based Payments
The economic entity makes equity-settled share based payments to directors,
employees and other parties for services provided or the acquisition of exploration
assets. Where applicable, the fair value of the equity is measured at grant date
and recognised as an expense over the vesting period, with a corresponding
increase to an equity account. The fair value of shares is ascertained as the
market bid price. The fair value of options is ascertained using a binomial lattice
pricing model which incorporates all market vesting conditions. Where applicable,
the number of shares and options expected to vest is reviewed and adjusted at
each reporting date such that the amount recognised for services received as
consideration for the equity instruments granted shall be based on the number of
equity instruments that eventually vest.
Where the fair value of services rendered by other parties can be reliably
determined, this is used to measure the equity-settled payment.
Revenue
Interest revenue is recognised on a proportional basis taking into account the
interest rates applicable to the financial assets.
Employee Benefits
Short-term employee benefit obligations
leave
Liabilities for wages and salaries, including non-monetary benefits, annual
and accumulating sick leave expected to be settled wholly within 12 months after
the end of
the reporting period are recognised in liabilities in respect of
employees' services rendered up to the end of the reporting period and are
measured at amounts expected to be paid when the liabilities are settled.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST (or
overseas VAT), except where the amount of GST incurred is not recoverable. In
these circumstances the GST (or overseas VAT) is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense. Receivables and
payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis except for
the GST component of investing and financing activities which are disclosed as
operating cash flows.
Foreign Currency Transactions and Balances
Functional and presentation currency:
The functional and presentation currency of Elementos Ltd and its Australian
subsidiaries is Australian dollars ($A).
44 ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Foreign Currency Transactions and Balances (cont)
Transactions and balances:
Foreign currency transactions are translated into functional currency using the
exchange rates prevailing at the date of the transaction. Foreign currency
monetary items are translated at the year-end exchange rate. Non-monetary
items measured at historical cost continue to be carried at the exchange rate at
the date of the transaction. Non-monetary items measured at fair value are
reported at the exchange rate at the date when fair values were measured.
Exchange differences arising on the translation of monetary items are recognised
in the profit or loss, except where deferred in equity as a qualifying cash flow or
net investment hedge.
Group Companies:
The financial results and position of foreign operations whose functional currency is
different from the economic entity’s presentation currency are translated as
follows:
- assets and liabilities are translated at period-end exchange rates prevailing at
that reporting date;
- income and expenses are translated at average exchange rates for the period;
- retained earnings are translated at the exchange rates prevailing at the date of
the transaction.
Exchange differences arising on translation of foreign operations are recognised in
other comprehensive income.
Earnings Per Share (EPS)
Basic earnings per share is calculated by dividing the loss attributable to equity
holders of the Company, excluding any costs of servicing equity other than
ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial period adjusted for any bonus elements in ordinary shares
issued during the period.
Diluted earnings per share adjusts the figures used in the determination of basic
earnings per share to take into account the after income tax effect of interest and
other financing costs associated with dilutive potential ordinary shares and the
weighted average number of shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary shares.
Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgments incorporated into the financial
statements based on historical knowledge and best available current information.
Estimates assume a reasonable expectation of future events and are based on
current trends and economic data, obtained both externally and within the
economic entity.
45 ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Key Judgements
Exploration and Evaluation Assets
The economic entity performs regular
to
determine the appropriateness of continuing to carry forward costs in relation to
that area of interest. These reviews are based on detailed surveys and analysis of
drilling results performed to reporting date.
reviews on each area of
interest
Exploration and evaluation assets at 30 June 2015 were $4,859,170 (2014:
$6,456,348).
Acquisition of Elementos Ltd
During the previous year, Rockwell Minerals Ltd's original shareholders acquired a
majority share interest in Elementos Ltd as part of the merger transaction. For the
purpose of accounting for this transaction, Elementos Ltd was considered a
business as defined in AASB3 Business Combinations. Contributing to this
judgement is the fact that at the date of the merger, proven and probable
reserves had not yet been established for
the Elementos tenements, and
significant additional expenditure was required to establish the viability of these
tenements.
New and Amended Standards and Interpretations
None of the new standards and amendments to standards that are mandatory for
the first time for the financial year beginning 1 July 2014 affected any of the
amounts recognised in the current period or any period prior and are not likely to
affect future periods.
A number of new standards and amendments to the standards are effective for
financial reporting periods beginning and after 1 July 2015 and have not been
applied in preparing these financial statements. None of these are expected to
have a significant effect on the financial statements when they are first applied.
46 ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT)
Critical Accounting Estimates and Judgements (cont)
Fair Values
Fair values may be used for financial asset and liability measurement as well as for
sundry disclosures.
Fair value is the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement
date. It is based on the presumption that the transaction takes place either in the
principal market for the asset or liability or, in the absence of a principal market, in
the most advantageous market. The principal or most advantageous market must
be accessible to, or by, the Group.
Fair value is measured using the assumptions that market participants would use
when pricing the asset or liability assuming that market participants act in their
best economic interest.
The fair value measurement of a non-financial asset takes into account the market
participant's ability to generate economic benefits by using the asset at its highest
and best use or by selling it to another market participant that would use the asset
at its highest and best use.
In measuring fair value, the Group uses valuation techniques that maximise the
use of observable inputs and minimise the use of unobservable inputs.
47 ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
30 June 2015
$
30 June 2014
$
51,125
45,581
-
96,706
11,141
-
1,500
12,641
37,790
(98)
676,099
50,401
-
7,386
(11,239)
722,647
8,079
139
388,008
28,711
64,170
10,704
(51,605)
439,988
NOTE 2: REVENUE
Revenue from operating activities:
Interest received from other persons
Consulting fees
Other
NOTE 3: EXPENSES
Included in expenses are the following items:
Depreciation
Foreign currency translation loss/(profit)
Employee benefits expense comprises:
Salaries and wages
Contributions to defined contribution plans
Equity settled options
Annual leave expensed
Less capitalised as exploration assets
NOTE 4: INCOME TAX EXPENSE
The prima facie tax on the operating loss
reconciled to income tax expense as follows:
is
Prima facie tax/(benefit) on loss from ordinary
activities before income tax at 30% (2014: 30%)
(807,762)
(447,496)
Adjust for tax effect of:
Non-deductible amounts
Tax loss not recognised
Temporary differences recognised
Income tax expense/(benefit)
81,841
488,425
237,496
-
32,832
414,664
-
48
ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
30 June 2015
$
30 June 2014
$
NOTE 4: INCOME TAX (CONT)
Deferred tax assets and liabilities not recognised, the net benefit of which will only be
realised if the conditions for deductibility set out in Note 1 occur:
Temporary differences
Tax losses
-
63,021
3,650,673
3,162,248
The Group has carried forward tax losses of $12,960,563 in Australia, which must
satisfy the Continuity of Ownership Test, or failing that, the Same Business Test, in order
to be utilised in the future.
NOTE 5: CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short term deposits
NOTE 6: TRADE AND OTHER RECEIVABLES
Current:
Other receivables
307,426
454,402
761,828
639,462
43,227
682,689
19,380
25,527
There are no balances within other receivables that contain assets that are impaired
or are past due.
It is expected these balances will be received when due. There are
no balances with terms that have been renegotiated, but which would otherwise be
past due or impaired.
These amounts are non-interest bearing and generally on 30 day terms. No collateral
is held over receivables.
49
ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 7: OTHER CURRENT ASSETS
Current:
Other deposits
Prepayments
30 June 2015
$
30 June 2014
$
790
10,127
10,917
790
13,616
14,406
NOTE 8: EXPLORATION AND EVALUATION ASSETS
Exploration and evaluation expenditure carried
forward in respect of areas of interest are:
Exploration and evaluation phase - at cost
4,859,170
6,456,348
Movement in exploration and evaluation assets:
Opening balance - at cost
Acquisition of tenements
Capitalised exploration expenditure
Exploration and evaluation assets acquired on
the merger
Foreign currency translation movement
Exploration and evaluation assets written off
Total exploration and evaluation assets
Less research and development refunds
received
Carrying amount at the end of the year
6,456,348
-
1,003,138
2,879,676
808,011
891,063
-
2,750,000
(73,705)
(1,844,343)
5,541,438
(682,268)
(594,929)
(277,473)
6,456,348
-
4,859,170
6,456,348
Recoverability of the carrying amount of exploration assets is dependent on the
successful development and commercial exploitation of projects, or alternatively,
through the sale of the areas of interest.
Elementos Limited completed a merger transaction during the previous year with
Rockwell Minerals Limited. As part of this merger, exploration assets with a fair value
of $2,750,000 were acquired.
In regards to the Cleveland project,
evaluation activity, and ongoing activity is planned.
there has been recent exploration and
The Santo Domingo project has been written off in full.
50
ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 9: PLANT AND EQUIPMENT
Plant and Equipment
At cost
Accumulated depreciation
Total plant and equipment
30 June 2015
$
30 June 2014
$
38,542
(34,356)
4,186
117,875
(81,815)
36,060
Reconciliation of the carrying amounts for property, plant and equipment is set out
below:
Balance at the beginning of year
Additions on merger
Additions during the year
Disposals during the year
Depreciation expense
Foreign currency translation movement
Carrying amount at the end of year
NOTE 10: OTHER NON-CURRENT ASSETS
Mining Lease Deposits
Tax credits
NOTE 11: TRADE AND OTHER PAYABLES
Current:
36,060
-
5,844
-
(37,790)
72
4,186
-
44,524
208
-
(8,079)
(593)
36,060
13,950
-
13,950
7,950
18,097
26,047
Trade payables and accrued expenses
Short term employee benefits
Total payables (unsecured)
165,404
1,301
166,705
476,813
8,502
485,315
The average credit period on purchases of goods and services is 30 days. No
interest is paid on trade payables.
51
ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 12: CONTRIBUTED EQUITY
Fully paid ordinary shares
Balance as at 1 July
Rockwell shares issued prior to merger
26 July 2013
2 August 2013
Reversal of existing shares on merger
Existing Elementos shares on issue
Issue of shares on acquisition of Rockwell Minerals Limited (refer note 19)
Other share issues:
22 November 2013
22 November 2013
20 March 2014
20 March 2014
11 June 2014
11 June 2014
11 June 2014
11 June 2014
11 June 2014
25 July 2014
11 August 2014
11 August 2014
2 October 2014
23 December 2014
23 December 2014
5 March 2015
Balance as at 30 June
Total transaction costs associated with share issues
Net issued capital
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
(o)
(p)
(q)
(r)
2015
2014
No. of Shares
633,310,870
$
10,924,168
No. of Shares
70,390,006
$
4,998,940
4,000,000
4,890,000
(79,280,006)
188,638,746
277,480,026
632,507
68,950,000
15,000,000
887,923
48,066,667
29,166,667
120,000
3,395,135
973,199
200,000
244,500
-
-
2,841,749
12,081
1,379,000
300,000
14,278
576,800
350,000
2,400
49,908
14,306
633,310,870
10,983,962
(59,794)
10,924,168
83,186,790
40,315,384
2,000,230
1,403,366
2,402,372
3,160,000
1,700,632
767,479,644
998,240
483,785
24,003
14,174
14,174
37,920
8,673
12,505,137
(67,760)
12,437,377
52
ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 12: CONTRIBUTED EQUITY (CONT)
Ordinary shareholders are entitled to participate in dividends and the proceeds on the winding up of
the company in proportion to the number of and amount paid on the shares held. Every ordinary
shareholder present at a meeting in person or by proxy is entitled to one vote on a show of hands or
by poll. Ordinary shares have no par value.
(a) Issued at 5 cents each, pursuant to directors and executive staff salary sacrifice plan.
(b) Issued at 5 cents each, pursuant to a private placement.
(c) Issued at 1.91 cents each, pursuant to directors and executive staff salary sacrifice plan.
(d) Issued at 2 cents each, pursuant to a private placement.
(e) Issued at 2 cents each, pursuant to a private placement.
(f) Issued at 1.608 cents each, pursuant to directors and executive staff salary sacrifice plan.
(g) Issued at 1.2 cents each, pursuant to a private placement.
(h) Issued at 1.2 cents each, issued as payment to acquire an interest in a tenement.
(i) Issued at 2.0 cents each, as settlement of placement fees.
(j) Issued at 1.47 cents each, as payment of a tenement option payment.
(k) Issued at 1.47 cents each, pursuant to directors and executive staff salary sacrifice plan.
(l) Issued at 1.2 cents each, pursuant to a rights issue.
(m) Issued at 1.2 cents each, shortfall placement of the rights issue.
(n) Issued at 1.2 cents each, pursuant to a private placement.
(o) Issued at 1.01 cents each, pursuant to directors and exectuive staff salary sacrifice plan.
(p) Issued at 0.059 cents each, pursuant to directors and exectuive staff salary sacrifice plan.
(q) Issued at 1.2 cents each, pursuant to shareholder approval at AGM held on 26 November 2014.
(r) Issued at 0.051 cents each, pursuant to directors and exectuive staff salary sacrifice plan.
53 ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 12: CONTRIBUTED EQUITY (CONT)
Options
Unlisted Share Options
Balance at the beginning of the reporting period
Options acquired as part of the merger
Options issued during the period:
Issued to directors
Issued to staff
Lapsed
Exercisable at end of year
(a)
(b)
(c)
30 June 2014
30 June 2015
No. of Options No. of Options
17,850,000
18,400,000
-
-
-
(550,000)
18,400,000
-
9,100,000
6,200,000
3,100,000
-
17,850,000
18,400,000
(a) Issued to directors pursuant to shareholder approval
(b) Issued to staff pursuant to the Employee Share Option Plan
(c) Staff options lapsed
Capital Management
Exploration companies such as Elementos Limited are funded almost exclusively by share
capital. The Group has no debt. The Group's capital comprises equity, as disclosed in the
statement of financial position.
Management controls the capital of the Group to ensure it can fund its operations and
continue as a going concern. Capital management policy is to fund its exploration activities
by way of equity. No dividend will be paid while the Group is in exploration stage. There are
no externally imposed capital requirements.
There have been no changes to the capital management policies during the year.
54
ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 13: RESERVES
Foreign Currency Translation Reserve
The foreign currency translation reserve records exchange differences arising on
translation of foreign controlled subsidiaries. Amounts are reclassified to profit or loss
when the investment is disposed of.
Share-Based Payments Reserve
The share-based payment reserve is used to recognise the fair value of options
issued to employees. This reserve can be reclassified as retained earnings if options
NOTE 14: CASH FLOW INFORMATION
30 June 2015
30 June 2014
Reconciliation of Cash Flow from Operations with
Loss after Income Tax:
Profit/(loss) after income tax
Non-cash flows in loss from ordinary activities:
Depreciation
Share based payment expense
Exploration expenditure written off
Equity settled compensation
Changes in operating assets and liabilities:
(Increase)/Decrease in receivables
(Increase)/Decrease in prepayments
and other assets
(Decrease)/Increase in payables
Cash flows from operations
NOTE 15: EARNINGS PER SHARE
Net loss used in the calculation of basic and
diluted EPS
Weighted average number of ordinary shares
outstanding during the period used in the
calculation of basic EPS
$
$
(2,692,540)
(1,491,656)
37,790
-
1,844,343
37,021
8,079
64,170
277,473
245,269
5,020
143,292
4,103
42,106
4,444
(326,446)
(722,157)
(1,075,375)
(2,692,540)
(1,491,656)
752,713,682
452,331,868
Options are considered potential ordinary shares. Options issued are not presently
dilutive and were not included in the determination of diluted earnings per share for
the period.
55
ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 16: COMMITMENTS
(a) Exploration Commitments
The Group must meet minimum expenditure commitments in relation to option
agreements over exploration tenements and to maintain those tenements in good
standing.
The Group has certain obligations to expend minimum amounts on exploration in
tenement areas. These obligations may be varied from time to time and are
expected to be fulfilled in the normal course of operations of the Group.
Not later than 1 year
Later than 1 year but not later than 5 years
Total commitment
30 June 2015
$
30 June 2014
$
1,739,675
1,102,401
2,842,077
1,443,579
1,921,057
3,364,636
To keep tenements in good standing work programs should meet minimum
expenditure requirements. The Group has the option to negotiate new terms or
relinquish the tenements, and also meet expenditure requirements by joint venture
or farm-in arrangements (where not currently existing). The current joint venture
partners are responsible for approximately $1.6 million of the above expenditure
commitments.
(b) Operating Lease Commitments
The operating leases consist of premises
and equipment leases.
Not later than 1 year
Later than 1 year but not later than 5 years
Total commitment
NOTE 17: CONTINGENT LIABILITIES
-
-
-
15,732
-
15,732
There were no contingent liabilities at the end of the reporting period.
NOTE 18: RELATED PARTY TRANSACTIONS
Parent Entity
Elementos Limited is the legal parent and ultimate parent entity of the Group,
owning 100% of all subsidiaries at 30 June 2015.
Subsidiary
Interest in subsidiaries are disclosed in Note 23.
Key Management Personnel
Short-term employee benefits
Post-employment benefits
Share-based payments
417,850
35,632
37,020
490,502
198,419
18,353
242,780
459,552
56
ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 19: SHARE-BASED PAYMENTS
Merger
On 14 October 2013, Elementos Limited completed a merger transaction with
Rockwell Minerals Limited to acquire 100% of the issued capital through an off-
market takeover offer.
Under the takeover offer, each Rockwell shareholder was offered 3.5 Elementos
shares for each Rockwell share, resulting in Rockwell shareholders becoming the
controlling shareholders of Elementos.
Consequently, this transaction was accounted for as discussed in Note 1.
The value of the transaction is as follows:
30 June 2015
$
30 June 2014
$
Assets and liabilities acquired
Cash and cash equivalents
Trade and other receivables
Other current assets
Property, plant and equipment
Exploration and evaluation assets
Trade and other payables
Fair value of notional
Minerals Limited issued to effect the transaction
that Rockwell
shares
Listing expense
-
-
-
-
-
-
-
-
-
149,056
37,907
3,591
44,524
2,750,000
(343,965)
2,641,113
2,841,749
200,636
The fair value of the shares was assessed on the basis of the fair value of the net
assets acquired and Elementos Limited's listing status.
Director and Employee Share-based Payments
Share based payment expense recognised during the year:
Options issued to employees under employee
share option plan
Options issued to directors under director share
option plan
NOTE 20: AUDITORS' REMUNERATION
Remuneration of the auditor of the parent entity:
BDO Audit Pty Ltd and its related entities
- auditing or reviewing the financial reports
- independent experts report and associated
-
-
-
36,092
-
36,092
21,390
42,780
64,170
22,136
7,500
29,636
57
ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 21: FINANCIAL RISK MANAGEMENT
(a) Financial Risk Management Policies
The Elementos Group's financial instruments comprises cash balances, receivables and
payables. The main purpose of these financial
instruments is to provide finance for
Group operations.
Treasury Risk Management
Key executives of the Company meet on a regular basis to analyse exposure and to
evaluate treasury management strategies in the context of the most recent economic
conditions and forecasts.
The board of directors has overall responsibility for the establishment and oversight of
the Group's risk management framework. Management is responsible for developing
and monitoring the risk management policies and reports to the board.
Financial Risks
The main risks the Group is exposed to through its financial instruments are interest rate
risk, foreign currency risk, credit risk and liquidity risk. These risks are managed through
monitoring of forecast cash flows, interest rates, economic conditions and ensuring
adequate funds are available.
Interest Rate Risk
The Group's exposure to interest rate risk, which is the risk that a financial instrument's
cash flows or fair value will fluctuate as a result of changes in market interest rates,
arises in relation to theGroup's bank balances.
This risk is managed through the use of variable rate bank accounts.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able meet its financial obligations as
they fall due. This risk is managed by ensuring, to the extent possible, that there is
sufficient liquidity to meet liabilities when due, without incurring unacceptable losses or
risking damage to the Group's reputation.
The economic entity's activities are funded from equity sources.
Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other
security, at balance date to recognised financial assets, is their carrying amount, net of
any provisions for impairment of those assets, as disclosed in the statement of financial
position and notes to the financial statements.
Credit risk arises from exposures to deposits with financial
receivables.
institutions and sundry
Credit risk is managed and reviewed regularly by key executives. The key executives
monitor credit risk by actively assessing the rating quality and liquidity of counter
- only banks and financial institutions with an ‘A’ rating are utilised; and
- all other entities are rated for credit worthiness taking into account their size,
market position and financial standing.
58 ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 21: FINANCIAL RISK MANAGEMENT (CONT)
At 30 June 2015, there was no concentration of credit risk, other than bank balances
and on geographical basis with most financial assets in Australia (2014: nil).
Foreign Currency Risk
The Group is exposed to fluctuations in foreign currencies arising from the purchase of
goods and services in currencies other than the relevant entity's functional currency.
Financial assets and liabilities exist for the Group's Argentine operations, and thus there
is exposure to the Argentine Peso. As this risk is minor, it is not hedged. At reporting
date, the net foreign currency risk (stated in $AUD) was $836 (2014: $3,014).
Financial assets and liabilities exist for the Group's Chilean operations, and thus there is
exposure to the Chilean Peso. As this risk is minor, it is not hedged. At reporting date,
the net foreign currency risk (stated in $AUD) was $nil (2014: $358).
(b) Financial Instrument Composition and Contractual Maturity Analysis
Financial assets:
Within 6 months
- cash & cash equivalents (i)
- receivables (ii)
Financial liabilities:
Within 6 months
- payables (ii)
30 June 2015
$
30 June 2014
$
761,828
19,380
781,208
682,689
25,527
708,216
(166,705)
(485,315)
(i) Floating interest rates, with weighted average effective interest rate 1.79%, with an average maturity of
10 days.
(ii) Non-interest bearing. The contractual cash flows do not differ to the carrying amount.
(c) Net Fair Values
Fair values of financial assets and financial liabilities are materially in line with carrying
values.
(d) Sensitivity Analysis
The Company has performed sensitivity analysis relating to its exposure to interest rate
risk. At year end, the effect on profit and equity as a result of a 1% change in the
interest rate, with all other variables remaining constant would be +/- $7,610 (2014:
The Group has performed sensitivity analysis relating to its exposure to foreign
exchange risk. At year end, the effect on profit and equity as a result of a 10% change
in the Argentine Peso, with all other variables remaining constant would be +/-$10,731
(2014: $9,602). The effect on profit and equity as a result of a 10% change in the
Chilean Peso, with all other variables remaining constant would be +/-$nil (2014: $462).
59
ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 22: SEGMENT REPORTING
Description of Segments
Operating segments have been determined on the basis of reports reviewed by the chief
operating decision maker. The Managing Director/Chief Executive Officer are considered to
be the chief operating decision maker of the Group. The Managing Director/Chief Executive
Officer assess and review activities based on each area of interest. Each area of interest is
aggregated on a geographic basis to form a reportable segment. The Group's exploration
activities in each area of interest are primarily centered around tin, copper and gold. The
Group's reportable segments are Australia, Chile and Argentina.
Information provided to the Managing Director/Chief Executive Officer
Segment information provided to the Managing Director/Chief Executive Officer for the year
ended 30 June 2015 is as follows:
Australia
$
Chile
Argentina
$
Total
$
2015
Depreciation
Write back/(off) of exploration assets
EBITDA
Segment Assets and Liabilities
Segment assets
Segment liabilities
Additions
expenditure
to capitalised exploration
(37,169)
-
(28,179)
4,881,188
(42,943)
923,500
-
-
-
-
-
-
-
-
(621)
(1,844,343)
(37,790)
(1,844,343)
(1,802,128)
(1,830,307)
4,884
4,886,072
(8,033)
(50,976)
-
923,500
Argentina
$
Total
$
(1,423)
(277,473)
(8,079)
(277,473)
2014
Depreciation
Write back/(off) of exploration assets
Australia
$
Chile
(6,656)
-
EBITDA
(733,416)
(11,978)
(436,342)
(1,181,736)
Segment Assets and Liabilities
Segment assets
Segment liabilities
Additions to capitalised exploration
expenditure
4,643,100
13,187
1,792,868
6,449,155
(412,254)
(6,638)
(21,127)
(440,019)
1,585,205
-
2,863,869
4,449,074
60
ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 22: SEGMENT REPORTING (CONT)
Segment profit or loss before tax
Interest
Corporate and other expenses
Profit or loss before tax
received from other
30 June 2015 30 June 2014
$
(1,830,307)
29,073
(891,306)
(2,692,540)
$
(1,181,736)
1,551
(311,471)
(1,491,656)
Segment assets excludes corporate assets. Segment assets reconciles to total
assets as follows:
Segment assets
Cash
Plant and equipment
Other corporate assets
Total assets
4,886,072
757,048
-
26,311
5,669,431
6,449,155
660,999
35,121
95,802
7,241,077
Segment liabilities excludes corporate liabilities. Segment liabilities reconciles
to total liabilities as follows:
Segment liabilities
Trade and other payables
Total liabilities
(50,976)
(115,729)
(166,705)
(440,019)
(45,296)
(485,315)
NOTE 23: SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and
results of the following wholly-owned subisdiaires in accordance with the
accounting policy described in Note 1:
Country of
incorporation
Rockwell Minerals Limited
Australia
Rockwell Minerals (Tasmania) Pty L Australia
Australia
Element Minerals Australia Pty Ltd
Argentina
Elementos Minerales S.A.
Chile
Elementos Chile Limitda
Ownership interest
2015
100%
100%
100%
100%
100%
2014
100%
100%
100%
100%
100%
61
ELEMENTOS LIMITED
ABN 49 138 468 756
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 24: SUBSEQUENT EVENTS
There were no subsequent events after year end.
NOTE 25: PARENT ENTITY INFORMATION
The following information relates to the parent entity, Elementos Limited at 30
June 2015. This information has been prepared using consistent accounting
policies as presented in Note 1.
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Contributed equity
Reserves
Accumulated losses
Total equity
Loss for the period
Other comprehensive income for the period
Total comprehensive income for the period
30 June 2015
$
777,286
7,833,324
8,610,610
130,338
-
130,338
28,332,909
1,073,392
(20,926,029)
8,480,272
(10,710,560)
-
(10,710,560)
30 June 2014
$
684,820
17,098,985
17,783,805
106,183
-
106,183
26,819,699
1,073,392
(10,215,469)
17,677,622
(3,349,071)
-
(3,349,071)
The Company has no contingent
guarantees in relation to the debts of its subsidiaries (2014: nil).
liabilities, nor has it entered into any
The Company has not entered into any contractual commitments for the
acquisition of property, plant and equipment (2014: nil).
The Company and its Australian 100% owned controlled entities have formed
a tax consolidated group.
Members of
the Group entered into a tax sharing arrangement. The
agreement provides for the allocation of income tax liabilities between the
entities in proportion to their contribution to the Group's taxable income. The
head entity of the tax consolidated Group is Elementos Ltd.
NOTE 26: COMPANY DETAILS
The registered office and principal place of business is:
Level 5, 10 Market Street
Brisbane, Queensland, 4000 Australia
62
ELEMENTOS LIMITED
ABN 49 138 468 756
DIRECTORS’ DECLARATION
The directors of the Company declare that:
1. The attached financial statements and notes are in accordance with the
Corporations Act 2001, including:
(a) complying with Accounting Standards which, as stated in accounting
policy note 1 to the financial statements, constitutes explicit and
unreserved compliance with International Financial Reporting Standards
(IFRS); and
(b) giving a true and fair view of the Company’s and the consolidated
entity’s financial position as at 30 June 2015 and of their performance for
the financial year ended on that date.
2. The chief executive officer and chief financial officer have each declared
that:
(a)
(b)
(c)
the financial records of the Company for the financial year have been
properly maintained in accordance with section 286 of the Corporations
Act 2001;
the financial statements and notes for the financial year comply with the
Accounting Standards; and
the financial statements and notes for the financial year give a true and
fair view.
3. In the directors' opinion there are reasonable grounds to believe that the
Company will be able to pay its debts as and when they become due and
payable.
This declaration is made in accordance with a resolution of the board of directors.
R Anthon
Chairman
Dated this 29th September 2015
Brisbane, Queensland
63
Tel: +61 7 3237 5999
Fax: +61 7 3221 9227
www.bdo.com.au
Level 10, 12 Creek St
Brisbane QLD 4000
GPO Box 457 Brisbane QLD 4001
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of Elementos Limited
Report on the Financial Report
We have audited the accompanying financial report of Elementos Limited, which comprises the
consolidated statement of financial position as at 30 June 2015, 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, notes comprising a summary of
significant accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company and the entities it controlled at the year’s end or from
time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal 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 Note 1, the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements comply with International Financial
Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the company’s
preparation of the financial report that gives a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of Elementos Limited, would be in the same terms if given to the
directors as at the time of this auditor’s report.
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.
64
Opinion
In our opinion:
(a) the financial report of Elementos Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2015 and
of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in
Note 1.
Emphasis of matter
Without modifying our opinion, we draw attention to Note 1 in the financial report, which indicates
that the ability of the consolidated entity to continue as a going concern is dependent upon the future
successful raising of necessary funding through equity, successful exploration and subsequent
exploitation of the consolidated entity’s tenements, and/or sale of non-core assets. These conditions,
along with other matters as set out in Note 1, indicate the existence of a material uncertainty that
may cast significant doubt about the consolidated entity’s ability to continue as a going concern and
therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the
normal course of business.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2015. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Opinion
In our opinion, the Remuneration Report of Elementos Limited for the year ended 30 June 2015
complies with section 300A of the Corporations Act 2001.
BDO Audit Pty Ltd
A J Whyte
Director
Brisbane, 29 September 2015
BDO Audit Pty Ltd ABN 33 134 022 870 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 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.
65
ELEMENTOS LIMITED
ABN 49 138 468 756
ASX INFORMATION
Following is additional information required by the Australian Securities Exchange
Limited and not disclosed elsewhere in this report.
1.
Equity:
The following information is provided as at 6 October 2015.
Shareholding
Distribution of Shareholders Number:
Category Number
Ordinary Shares
(Size of Holding)
(Number)
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
57
85
94
312
320
868
Shares Held
(Number)
10,552
261,215
772,216
13,273,253
753,162,406
767,479,642
The number of shareholdings held in less than marketable parcels is 49.
Twenty Largest Holders - Ordinary Shares:
#
Shareholder
Number of
Shares Held
% of Total
Issued Capital
1 MR ANDREW CARLYLE GREIG
164,000,001
21.369
2
3
BOURSE SECURITIES PTY LTD
JAMES CALAWAY
4 MR PHILLIP GERRARD BERRY
5 CALVIN PATRICK TREACY
6 MR MICHAEL DAVID ADAMS & MRS CAROL ADAMS
7 MR RICHARD PHILLIP SEVILLE
8 CHRISTOPHER JOHN STAPLES & ANNA CLAIRE STAPLES
9
1514341 ONTARIO INC
10
J P MORGAN NOMINEES AUSTRALIA LIMITED
68,366,667
60,020,768
28,202,753
26,850,004
26,390,004
26,290,598
18,333,337
17,200,000
15,841,804
11 MR WILLIAM RICHARDS GOODALL
15,750,004
12 MR CHRISTOPHER JAMES DUNKS
15,750,004
13 MR JOHN DOUGLAS JEFFERY & MRS ELSPETH LOUISE JEFFERY
15,000,000
14 MR NEIL FRANCES STUART
13,252,858
15
LEET INVESTMENTS PTY LIMITED
11,992,539
8.908
7.821
3.675
3.498
3.439
3.426
2.389
2.241
2.064
2.052
2.052
1.954
1.727
1.563
66
ELEMENTOS LIMITED
ABN 49 138 468 756
ASX INFORMATION
#
Shareholder
Number of
Shares Held
% of Total
Issued Capital
16 MR DENIS GRENVILLE HINTON & MRS ROSLYN SUSANNA
HINTON
17 MR TIMOTHY NEWTON
18 HOMEMINSTER PTY LTD
19 KRAM NOMINEES PTY LTD
20 MR RICHARD ANTHON
6,388,999
5,600,000
5,031,303
4,872,365
4,664,678
0.832
0.730
0.656
0.635
0.608
The substantial shareholders listed in the Company’s register as at 6 October 2015
are:
Shareholder
MR ANDREW CARLYLE GREIG
BOURSE SECURITIES PTY LTD
JAMES CALAWAY
Number of Shares
Held
164,000,001
68,366,667
60,020,768
Unlisted Equity Securities
The following unlisted securities were on issue as at 6 October 2015.
Security
Number
No. of Holders
Options exercisable at 22.6 cents on or before 23 October
2015
Options exercisable at 22.6 cents on or before 30 November
2015
Options exercisable at 32.6 cents on or before 18 January
2017
Options exercisable at 6 cents on or before 3 December
2016
4,500,000
500,000
1,000,000
200,000
Options exercisable at 6 cents on or before 20 January 2017
2,350,000
Options exercisable at 3 cents on or before 20 March 2018
9,300,000
Options exercisable at $0.012 each on or before 31 July 2018
1,000,000
Options exercisable at $0.0125 each on or before 31 July
2019
10,000,000
Options exercisable at $0.015 each on or before 31 July 2019
10,000,000
Voting Rights
2
1
1
1
4
2
1
1
1
Each ordinary share is entitled to one vote when a poll is called. Otherwise each
member present at a meeting has one vote on a show of hands.
There are no voting rights attaching to either the listed or unlisted Options, but voting
rights as detailed above will attach to the ordinary shares issued when the Options
are exercised.
67
ELEMENTOS LIMITED
ABN 49 138 468 756
ASX INFORMATION
2.
Registers of securities are held at the following address:
Boardroom Pty Ltd
Level 12
225 George Street
Sydney NSW 2000
Australia
3.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the Company on all
Member Exchanges of the Australian Stock Exchange Limited, other than those
classified as restricted securities and detailed below.
4.
Restricted Securities
The Company has no restricted securities.
5.
Use of Cash and Convertible assets
During the year, the Company has used cash and assets readily convertible to cash
in a manner consistent with its business activities. The Company is involved in an
advanced stage tin-copper and tungsten project in Tasmania, as well as mineral
exploration in Australia.
6.
Schedule of Tenements
Tenement Name
Cleveland
Millenium
Tenement
Number
EL7/2005
EL15/2011
ML 2512
ML 2761
ML 2762
ML 7506
ML 7507
EPM 18402
EPM 18773
EPM 18793
EPM 18982
EPM 19014
EPM 19036
Selwyn South
EPM 19371
EPM 19375
EPM 19426
Area
(Hectares)
Elementos Interest
5993
3358
4
20
16
50
45
5146
3859
2251
4184
6111
3216
3860
6433
643
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Location of
Tenements
Tasmania
Tasmania
Queensland
Queensland
Queensland
Queensland
Queensland
Queensland
Queensland
Queensland
Queensland
Queensland
Queensland
Queensland
Queensland
Queensland
68