EMPIRE RESOURCES LIMITED
OPERATIONS REVIEW
EMPIRE RESOURCES LIMITED
ABN 32 092 471 513
Annual Report
30 June 2016
EMPIRE RESOURCES LIMITED
Corporate Directory
Directors
Company Secretary
Registered Office
Auditor
Share Registry
:
:
:
:
:
Thomas Revy
David Sargeant
Adrian Jessup
Simon Storm
Registered Office and Principal Place of Business
53 Canning Highway
Victoria Park
WA 6100
Telephone: (08) 9361 3100
Facsimile: (08) 9361 3184
Email info@resourcesempire.com.au
Website www.resourcesempire.com.au
HLB Mann Judd
Level 4
130 Stirling Street
Perth
WA 6000
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross
WA 6153
Telephone: (08) 9315 2333
Facsimile: (08) 9315 2233
Australian Securities Exchange
Home Branch: Perth
Code: ERL
ABN
:
32 092 471 513
1
EMPIRE RESOURCES LIMITED
REVIEW OF OPERATIONS
HIGHLIGHTS
2015 - 2016
Penny’s Find
High grade open pit reserve of 146,000 tonnes @ 4.62g/t Au for 21,700
ounces
Bankable Feasibility Study completed
Technically sound and financially viable project generating $7.6 million
free cash flow in less than a year based on A$1,500/oz
Every A$100/oz rise in the gold price over $1,500/oz generates extra $2
million cash flow
All mining approvals granted by the WA Dept. of Mines and Petroleum
MoU signed with Lakewood Mill for toll treatment of Penny’s Find ore
First round of grade control drilling completed
Mining tenders let
Feasibility study commenced on potential underground extension
Yuinmery
Updated resource estimation completed for the Just Desserts deposit -
1.27 million tonnes @ 1.9% Cu, 0.7g/t Au.
EMPIRE RESOURCES LIMITED
REVIEW OF OPERATIONS
REVIEW OF OPERATIONS
Empire Resources Limited is a gold and copper focused explorer and mine developer with a track
record of discoveries.
The two major projects in the Company’s portfolio are the Penny’s Find gold project, which is shortly
to go into production and the Yuinmery copper - gold project where two volcanogenic massive
sulphide deposits have been discovered to date.
Figure 1 : Location of Empire Resources’ projects
Penny’s Find : Gold Project (60% interest)
Penny’s Find is a near surface, high grade gold deposit situated in the Eastern Goldfields of
Western Australia, within close proximity to the gold mining centres of Kalgoorlie and Kanowna
Belle.
Empire holds a 60% interest in and acts as Manager for the project with unlisted Brimstone
Resources Ltd holding the remaining 40% interest.
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EMPIRE RESOURCES LIMITED
REVIEW OF OPERATIONS
Given the current high gold price of plus-AUD$1,500 per ounce, Empire Resources and Brimstone
Resources, as joint venture partners, agreed to bring the Penny’s Find gold deposit into production
as soon as possible. To this end, during the past year, a mine project manager was appointed and
work commenced on obtaining mining approvals from the WA Department of Mines and Petroleum.
The Company is pleased to report that all approvals have been received allowing commencement
of mining at Penny’s Find.
Figure 2 : Location of Penny’s Find Project
High grade gold mineralisation at Penny Find’s extends from surface to at least 250m depth and
remains open at depth. The gold mineralisation is hosted by quartz veins at the sheared contact
between sediments and basalt as shown in Figure 3.
Both oxide and fresh mineralisation are free milling with 98% and 99% recoveries achieved in
testwork respectively. There is also a high gravity recoverable gold component, 53% for oxide and
85% for fresh.
The deposit is situated on granted Mining Lease 27/156.
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EMPIRE RESOURCES LIMITED
REVIEW OF OPERATIONS
Resources
A new updated reportable resource estimation was completed for Penny’s Find in August 2015.
The new total indicated and inferred resource now stands at 470,000 tonnes @ 4.42g/t Au for
66,800 ounces. Table 1 lists the resource categories.
Table 1 : Penny’s Find Resources
Reserves and Bankable Feasibility Study
In June 2016, the joint venture partners completed a Bankable Feasibility Study (BFS) for the
Penny’s Find gold deposit.
The BFS, based on an open pit probable ore reserve of 146,000 tonnes @ 4.62g/t Au (Table 2)
shows Penny’s Find to be a technically sound and financially viable project generating $7.6 million
undiscounted free cash flow in less than a year based on AUD$1,500/oz.
Every AUD$100/oz rise in the gold price over $1,500/oz generates an extra $2 million cash flow.
Table 2 : Ore Reserve Summary
PENNY'S FIND OPEN PIT ORE RESERVE - 2016
DESCRIPTION
TONNES
GRADE
GOLD TO
PROVED
PROBABLE
TOTAL
g/t Au
MILL (ozs)
-
146,000
146,000
-
4.62
4.62
-
21,700
21,700
The Penny’s Find ore reserve is contained within a planned single open pit mined to a depth of 80m
with ore trucked off site for treatment through a toll milling facility using conventional gravity
recovery and a CIL circuit.
5
ClassTonnesAu g/tTonnesAu g/tTonnesAu g/tMeasured - - - - - -Indicated218,0004.6484,0004.90302,0004.71Inferred82,0001.7986,0005.89168,0003.89TOTAL300,0003.86170,0005.40470,0004.42Reportable In Situ Mineral Resource by location and cut-offOpen Cut (0.5g/t)Underground (1.5g/t)Combined
EMPIRE RESOURCES LIMITED
REVIEW OF OPERATIONS
Figure 3 : Penny’s Find – Geological Cross Section
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EMPIRE RESOURCES LIMITED
REVIEW OF OPERATIONS
All approvals to commence mining have been issued by the WA Department of Mines and
Petroleum with mining expected to commence in the December 2016 quarter. Tenders for the
mining contract are currently being reviewed. Figure 4 shows the layout of the planned open pit
mine.
Figure 4 : Site layout at Penny’s Find superimposed on an aerial photograph
Prior to commencement of mining, the gravel Pinjin - Kurnalpi road will need to be diverted 1.8
kilometres around the south end of the planned open pit. Permission to do this has been received
from the Kalgoorlie - Boulder Shire and is expected to take six weeks to complete starting in the
September quarter 2016.
Open cut mining is based on extraction by conventional truck and excavator techniques with 15%
ore dilution and 5% ore loss. The open pit will comprise a mixture of free dig and drill and blast,
reflecting the deeply weathered footwall sediments and fresh competent hanging wall basalts.
Gold processing and extraction is based on all metallurgical studies completed to date with the BFS
employing a conservative overall gold recovery of 93%.
A Memorandum of Understanding (MoU) has been signed between Empire and Golden Mile Milling
Pty Ltd for the toll treatment of ore from Penny’s Find. Golden Mile Milling operates the Lakewood
Mill located on the southern outskirts of Kalgoorlie-Boulder, being 63km by road from Penny’s Find
(Figure 2).
The MoU outlines industry standard terms and conditions for the batch treatment of Penny’s Find
ore at the Lakewood Mill. While the MoU is non-binding, it is intended to form the basis of a formal
binding agreement to be completed prior to any processing campaign.
All additional administration, road diversion, construction and overhead costs, including royalties,
have been included in the BFS.
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EMPIRE RESOURCES LIMITED
REVIEW OF OPERATIONS
A summary of the Bankable Feasibility Study is presented below in Table 3.
Table 3 : Bankable Feasibility Study Details
Parameter
Free Cashflow (A$ million)
Revenue (A$ million)
Total Costs (A$ million)
Payback (months)
Capex (A$ million)
Base Case
A$1,500/oz
7.6
29.6
22.0
8
1.5
A$1,700/oz
11.6
33.6
22.0
7
1.5
Total Cost of Production/oz
$1,086
Mining Reserve
Mining Cost/Ore tonne
Assumed Recovery
Recovered Gold
Open Pit Mine Life
Grade Control Drilling
146,000 tonnes @ 4.62g/t Au
$139.70
93%
20,252 ounces
11 months
At the end of June 2016, the first round of grade control RC drilling commenced at Penny’s Find.
This is the first of three grade control programmes scheduled in the planned 80 metre deep open
pit.
Assays from this drilling, received post year end, have provided strong confidence in the geological
model being used for Penny’s Find. Intersections include:
6m @ 3.52g/t Au from 11m depth in PGC010
7m @ 11.39g/t Au from 27m depth in PGC032
5m @ 13.58g/t Au from 32m depth in PGC036
3m @ 13.44g/t Au from 35m depth in PGC039
5m @ 6.33g/t Au from 23m depth in PGC040
11m @ 5.36g/t Au from 28m depth in PGC047
2m @ 9.61g/t Au from 22m depth in PGC052
12m @ 4.94g/t Au from 4m depth in PGC056
19m @ 5.85g/t Au from 3m depth in PGC060
3m @ 10.93g/t Au from 9m depth in PGC071
6m @ 4.81g/t Au from 21m depth in PGC075
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EMPIRE RESOURCES LIMITED
REVIEW OF OPERATIONS
Figure 5 : Penny’s Find Portion of the Grade Control Drilling Sites
Underground Feasibility
An underground feasibility has commenced to determine the viability of accessing an indicated and
inferred resource of 170,000 tonnes @ 5.40g/t Au lying immediately beneath the open pit. Initial
underground mine design has been undertaken to ensure any underground operation is able to
mesh smoothly with the open pit mining operation.
Figure 7 is a long section under the planned open pit showing a preliminary underground mine
design based on the resource block model in Figure 6.
Figure 6 : Penny’s Find Resource Model showing blocks above 0.5g/t Au
and planned Open Pit
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EMPIRE RESOURCES LIMITED
REVIEW OF OPERATIONS
Empire believes there is substantial upside at Penny’s Find once the ongoing feasibility study into
development of the underground resource has been completed. This along with exploration
potential at depth bodes well for the long term future of Penny’s Find.
Figure 7 : Penny’s Find Preliminary Underground Mine Design
Figure 8 : Yuinmery Project Location Plan
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EMPIRE RESOURCES LIMITED
REVIEW OF OPERATIONS
Yuinmery : Copper - Gold Project (100% interest)
The Yuinmery copper - gold project is located near the town of Sandstone, 475 km northeast of
Perth in Western Australia.
The project sits in the base metal rich Youanmi greenstone belt with the principal target being
volcanogenic massive sulphide (VMS) deposits. Elsewhere in the world, VMS deposits typically
occur in clusters with individual prospects often mined to great depths. Similar VMS deposits are
found at the Golden Grove mine to the west and Jaguar mine to the east.
The potential of Yuinmery arises from the calibre of drill intersections, with a string of high grade
copper-gold results at two of the projects most advanced prospects – Just Desserts and A Zone.
Interest in Yuinmery increased after excellent drilling results discovered high grade copper-gold
zones at the Just Desserts prospect. Assay results included 23m @ 2.7% Cu, 1.3g/t Au; 14m @
2.6% Cu, 1.9g/t Au; 13m @ 2.6% Cu, 1.7g/t Au; 6m @ 3.8% Cu, 12.9g/t Au and 10m @ 4.2%
Cu, and 6.0g/t Au.
During the past year the Company commissioned an update to the resource estimation for Just
Desserts incorporating additional drill hole data and ensuring compliance with the 2012 JORC
Code.
Based on a 1.0% Cu cut-off to a depth of 170m below surface, the new reportable indicated and
inferred resource for Just Desserts is 1.27 million tonnes @ 1.9% Cu, 0.7g/t Au (Table 4). This
compares with the maiden 2008 resource estimation of 1.07 Mt @ 1.8% Cu, 0.8g/t Au.
A mining lease application has been submitted to the WA Department of Mines and Petroleum to
cover the Just Desserts deposit and surrounding prospective ground.
Table 4 : Just Desserts Reportable Mineral Resources – 2016
Reportable Mineral Resource to depth of 170m
Cut-off
0.5% Cu
Weath
Partial
Fresh
All
1% Cu
Partial
Fresh
All
Class
Indicated
Inferred
sub-total
Indicated
Inferred
sub-total
Indicated
Inferred
Total
Indicated
Inferred
sub-total
Indicated
Inferred
sub-total
Indicated
Inferred
Total
Tonnes
Cu %
1.05
1.43
1.20
1.33
1.30
1.31
1.31
1.31
1.31
1.37
2.14
1.68
1.65
2.31
1.89
1.63
2.30
1.88
97,000
65,000
163,000
1,174,000
1,183,000
2,357,000
1,271,000
1,249,000
2,520,000
47,000
31,000
78,000
752,000
435,000
1,187,000
799,000
467,000
1,266,000
11
Au ppm Ag ppm
0.98
2.21
1.47
1.31
2.25
1.78
1.28
2.25
1.76
0.30
0.18
0.25
0.67
0.34
0.51
0.64
0.33
0.49
0.37
0.22
0.31
0.84
0.49
0.71
0.82
0.47
0.69
1.09
2.20
1.53
1.54
2.81
2.01
1.51
2.76
1.97
EMPIRE RESOURCES LIMITED
REVIEW OF OPERATIONS
Figure 9 - Yuinmery Project Summary Geological Plan
In 2011, the Company discovered a second VMS deposit at the A Zone prospect, which lies just 1.3
kilometres north of Just Desserts on the same mineralized horizon.
Drilling to date has reinforced the view that A Zone hosts a major copper-gold deposit. Intersections
include:
5m @ 4.4% Cu, 0.4g/t Au within 19m @ 1.8% Cu, 0.3g/t Au
4m @ 4.7% Cu, 0.5g/t Au within 7m @ 3.2% Cu, 0.3g/t Au
3m @ 8.2% Zn within 8m @ 4.0% Zn
7m @ 2.2% Cu, 0.6g/t Au within 12m @ 1.8% Cu, 0.5g/t Au
3m @ 4.0% Cu, 3.3g/t Au within 6m @ 3.0% Cu, 1.7g/t Au
5m @ 2.8% Cu, 1.2g/t Au within 10m @ 1.8% Cu, 0.9g/t Au
The copper–gold and zinc mineralisation at A Zone occurs in two horizons which plunge to the
north. Mineralisation remains open at depth and ongoing drilling will allow the calculation of a
maiden resource for A Zone.
In addition, a re-interpretation of geology and magnetics at Yuinmery has led to the conclusion the
Just Desserts and A Zone deposits occur on the same mineralized horizon, which has been offset
by faulting.
Reprocessing of previous ground electromagnetic surveys has identified two new targets on this
horizon located between the Just Desserts and A Zone deposits (Figures 10 and 11).
These new targets, which represent an extension to the Just Desserts mineralization, have been
moved by faulting 350m to the east of Just Desserts. The anomaly closest to Just Desserts is the
stronger and larger of the two and will be the priority drill target for the next round of RC drilling
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EMPIRE RESOURCES LIMITED
REVIEW OF OPERATIONS
Figure 10
Figure 11
Prospect Drill Targets on Electromagnetics
Prospect Drill Targets on Magnetics
Empire holds the expansion of total Yuinmery resources as a priority and is excited to have
additional targets in between known mineral deposits. The area to be targeted has had no drilling
previously and the discovery of further copper-gold deposits would have a significant impact on the
size and economics of the Yuinmery project.
Laverton (WA): Gold Project (100% interest)
The Laverton prospect, located 24 km northeast of the town of Laverton, WA consists of a single
granted exploration licence covering an area of 36 km2.
The area is considered prospective for gold mineralization and preliminary fieldwork is planned for
the coming year.
Half Way Dam (WA): Gold - Base Metals Project (100% interest)
A single exploration licence covering 130 km2 has been applied for 100 km northwest of Kalgoorlie,
WA.
The Half Way Dam prospect covers a synclinal sequence of ultramafic and mafic volcanics and
intrusives along with minor felsic volcanics and sediments.
Historical exploration has identified a number of gold and base metal soil and rock chip anomalies
which to date, have never been tested by drilling.
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EMPIRE RESOURCES LIMITED
REVIEW OF OPERATIONS
COMPETENT PERSON STATEMENTS
The information in this report that relates to Exploration Results has been compiled by Mr David Ross
B.Sc(Hons), M.Sc, who is an employee of the Company. He is a member of the Australasian Institute of
Mining and Metallurgy and the Australian Institute of Geoscientists. He has sufficient experience which is
relevant to the styles of mineralization and types of deposit under consideration and to the activity to which he
is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves”. David Ross consents to the inclusion
in this report of the matters based on his information in the form and context in which it appears.
The scientific and technical information in this report that relates to Ore Reserve estimates for the Penny’s Find
Deposit is based on information compiled by Mr Roselt Croeser, an independent consultant to Empire
Resources Limited. Mr Croeser is a Member of the Australasian Institute of Mining and Metallurgy. Mr
Croeser has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012
Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’.
Mr Croeser consents to the inclusion in this report of the matters related to the Ore Reserve estimate in the
form and context in which it appears.
The information is this report concerning the Mineral Resources for the Penny’s Find and Just Desserts
deposits have been estimated by Mr Peter Ball B.Sc who is a director of DataGeo Geological Consultants and
is a member of the Australasian Institute of Mining and Metallurgy (AusIMM). Mr Ball has sufficient experience
which is relevant to the styles of mineralization and types of deposit under consideration and qualifies as a
Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves”. Mr Ball consents to the inclusion in this report of the matters
based on his information in the form and context in which it appears.
14
Empire Resources Limited
Directors' Report
Directors’ Report
Your directors submit their report on Empire Resources Limited (the “Company”) and its controlled entity (the “Group”)
for the financial year ended 30 June 2016.
Directors
The company’s directors in office during the financial year and until the date of this report are as follows. Directors
were in office for the entire period unless otherwise stated.
Thomas Revy - Non-Executive Chairman– BAppSc. Grad Dip Bus.
Mr Revy is a mining professional with in excess of 30 years experience in the mining industry to date including
operations, process design and commissioning, technical and general management, business development, project
and company evaluation and corporate management. Countries where extensive work has been undertaken include
Australia, PNG, Southern and Central Africa, Central and South America and China.
Mr Revy has been a director of the following listed companies during the past three years.
Company
Position
Appointed
Resigned
Coppermoly Ltd
Ferrum Crescent Ltd
Non-executive Chairman
Director
20/05/2013
19/02/2014
11/03/2014
31/03/2016
David Sargeant - Managing Director - BSc. MAusIMM
Mr Sargeant – who holds a Bachelor of Science degree in economic geology from the University of Sydney – has
more than 40 years experience as a geologist, consultant and company director. As such, he has been involved in
numerous mineral exploration, ore deposit evaluation and mining development projects and is a member of AusIMM
and the Geological Society of Australia.
During his career, Mr Sargeant has held a range of senior positions, including that of senior geologist with Newmont
Pty Ltd and senior supervisory geologist with Esso Australia Ltd at the time of the Harbour Lights Gold Mine discovery
and development. Further, Mr Sargeant was the first chief geologist at Telfer Gold Mine during exploration,
development and production at that project. In addition, he was exploration manager for the Adelaide Petroleum NL
group of companies, manager of resources development for Sabminco NL and a technical director of Western Reefs
Limited during the period in which that company became a successful producer at the Dalgaranga Gold Project.
Mr Sargeant has been a director of the following listed companies during the past three years.
Company
Position
Appointed
FYI Resources Ltd
Non-executive Director
30/11/2009
Adrian Jessup – Non-Executive Director - BSc. MAusIMM
Mr Jessup also holds a Bachelor of Science degree (with honours) in economic geology from the University of Sydney
and has more than 40 years continuous experience as a geologist, company director and consultant involved in
mineral exploration, ore deposit evaluation and mining. He is a member of AusIMM, the Geological Society of
Australia and the Australian Institute of Geoscientists.
For the last 18 years, Mr Jessup has operated a geological consulting company. During that time, he was a founding
director of Sylvania Resources Limited and remained on the board for two years. Prior to that, Mr Jessup was
managing director of Giralia Resources NL for eight years, from the company's inception in 1987. Previously, he had
worked for AMAX Exploration Inc., as a senior geologist and as regional manager in charge of that company's mineral
exploration in Western Australia.
Mr Jessup has been a director of the following listed companies during the past three years.
Company
Position
Appointed
FYI Resources Ltd
Non-executive Director
30/11/2009
15
Empire Resources Limited
Directors' Report
Management
Simon Storm - Company Secretary – BCom. BCompt(Hons). CA, FGIA
Mr Storm is a Chartered Accountant with over 30 years of Australian and international experience in the accounting
profession and commerce. He commenced his career with Deloitte Haskins & Sells in Africa then London before
joining Price Waterhouse in Perth.
He holds various part-time senior finance and/or company secretarial roles with listed and unlisted entities in the
banking, resources, construction, telecommunications, property development and agribusiness industries. In the last
15 years he has provided consulting services covering accounting, financial and company secretarial matters to
various companies in these sectors.
David Ross – Exploration Manager – BSc(Hons). MSc. MAusIMM
Mr Ross holds a Bachelor of Science degree (with honours) in geology from Aberdeen University, Scotland and a
Master of Science degree in economic geology from McMaster University in Canada. He is a member of the AusIMM,
the Geological Society of Australia and the Australian Institute of Geoscientists.
With over 30 years experience as an exploration geologist in Western Australia his career has seen him involved with
numerous mineral exploration, ore deposit evaluation and mine development projects for both gold and base metals.
He has held senior geologist positions with Brunswick NL and Giralia Resources and was geological superintendent
for Australian Resources at the Gidgee Gold Mine. Most recently he held the position of chief geologist with De Grey
Mining Ltd where he was instrumental in the discovery of the Orchard Well VMS deposits.
Principal Activities
During the period the principal activities of the Company consisted of mineral exploration and evaluation of properties
in Australia. There has been no significant change in these activities during the financial period.
Dividends
No dividends have been paid during the period and no dividends have been recommended by the directors.
Result for the Financial Period
Loss from ordinary activities after provision for income tax was $1,624,620 (2015: $741,714).
Review of results and operations
The operations and results of the Company for the financial year are reviewed below. During the year, the Company
and Brimstone Resources Ltd entered into an unincorporated exploration joint venture to explore for, establish
reserves of and evaluate reserves of gold, nickel and other minerals on the Penny’s Find tenements. They conducted
a feasibility study into mining those reserves.
This review includes information on the financial position of the Company, and its business strategies and prospects
for future financial years.
Revenue
Revenue comprised interest received which was down 63% on prior year as a consequence of lower cash balances.
Other income was $215,631 (2015: $Nil) which comprised $210,131 from the profit on sale of shares in Barola
Resources Ltd.
Expenses
During the year, the Company commenced Feasibility work on the Penny’s Find Joint Venture with its 60% interest
being $669,351 (2015: $Nil). The Company conducted limited exploration activities at its various exploration projects
with expenditure on exploration decreasing 22% to $150,326 (2015: $193,345) as a consequence of availability of
cash. The Management fee expense was $439,510 (2015: $9,091) and Directors’ fees expense was $42,910 (2015:
written back $31,500). In June 2015, it was agreed that outstanding invoices payable to Directors of $282,080 for
Directors’ Fees would be waived. Employee benefits expense was $92,455 (2015: written back $192,026) In June
2015, the Exploration Manager waived his entitlement to $254,005 of salary and superannuation. During the year the
Directors and Exploration Manager resolved to settle all outstanding Directors’ fees and other employee entitlements
of $323,508 through the issue of 22,102,000 share options each exercisable into one ordinary share in the Company
at 2.5 cents each. The options have a 3 year term. The options to Directors received shareholder approval at a
general meeting held on 3 May 2016. This arrangement superseded previous arrangements Directors and the
Exploration Manager had with the Company in relation to the waiving of entitlements, up to 31 December 2015,
including the contingencies as disclosed in the 2015 annual report.
16
Empire Resources Limited
Directors' Report
Cash and cash equivalents at 30 June 2016 increased by 123% to $265,828 (2015: $119,069).
Operating cash flows
Cash flow used in operating activities increased by 78% to $364,404 (2015: $204,378). The cash outflows in the prior
year were reduced by the receipt of a R&D tax offset in July 2014 compared with $Nil in the current year.
Investing cash flows
Cash outflows for investing activities decreased by 25% to $289,442 (2015: $385,178) due to the sale of the
investment in Barola Resources Ltd which realised $400,000 (2015: $Nil). In the prior year there was the investment
in Barola Resources Ltd of $325,000. The investment proceeds were offset by the feasibility study expenditure on the
Penny’s Find Joint Venture of $545,145 (2015: $Nil).
Financing cash flows
Cash flow from financing activities increased by 16% to $800,605 (2015: $690,473) due to an increase in share
placements during the year.
Statement of financial position
Current assets
Current assets increased by 96% to $375,052 (2015: $191,052) mainly due to cash and cash equivalents increasing
123% to $265,828 (2015: $119,069).
Non-current assets
Non-current assets decreased by 84% to $29,714 (2015: $191,095). The equity accounted investment in Barola
Resources Ltd was derecognised(2015: $189,869) following the sale of the investment.
Current liabilities
Current liabilities increased by 132% to $767,287 (2015: $330,229), being an increase in trade and other payables as
a consequence of the feasibility and pre-mining work on the Penny’s Find Joint Venture.
Debt position
The Company has $52,932 (2015: $51,696) in unsecured loans from Directors which are expected to be repaid from
the proceeds of a future share placement of ordinary shares In December 2015, the Company entered a fee funding
agreement for $192,019 for various financial services invoices. As at 30 June 2016 the amount outstanding was
$80,008 (2015: $50,593).
Review of Operations
CORPORATE - ongoing management of the Company's cash position remained critical throughout the year. Cash
resources were boosted following share placements in November 2015 to June 2016 of 65 million shares raising
$825,000 before costs.
Significant Changes in State of Affairs
In the opinion of the Directors there were no other significant changes in the state of affairs of the Company.
Remuneration Report (Audited)
This report details the amount and nature of remuneration of each director of the Company and other key
management personnel.
Remuneration Policy
The principles used to determine the nature and amount of remuneration are applied through a remuneration policy
which ensures the remuneration package properly reflects the person’s duties and responsibilities and that the
remuneration is competitive in attracting, retaining and motivating people of the highest quality.
The remuneration policy, setting the terms and conditions for the executive directors has been developed internally by
the board and taking into account market conditions and comparable salary levels for companies of a similar size and
operating in similar sectors.
The remuneration policy is to provide a fixed remuneration component. The board believes that this remuneration
policy is appropriate given the stage of development of the Company and the activities which it undertakes and is
appropriate in aligning Directors’ objectives with shareholder and businesses objectives.
The remuneration framework has regard to shareholders’ interests in the following ways:
•
•
Focuses on sustained growth as well as focusing the directors on key non-financial drivers of value, and
Attracts and retains high calibre directors.
17
Empire Resources Limited
Directors' Report
The remuneration framework has regard to directors’ interests in the following ways:
•
•
•
•
Rewards capability and experience,
Reflects competitive reward for contributions to shareholder growth,
Provides a clear structure for earning rewards, and
Provides recognition for contribution.
Non-executive directors
The board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. The Board determines payments to the non-executive director and reviews their
remuneration annually, based on market practice, duties and accountability. Independent external advice is sought
when required. The maximum aggregate amount of fees that can be paid to directors is subject to approval by
shareholders at a General Meeting. Fees for non-executive directors are not linked to the performance of the Group.
However, to align directors’ interests with shareholder interests, the directors are encouraged to hold shares in the
Company and may receive options.
The Directors have resolved that non-executive directors’ fees will be $42,000 per annum for the Chairman, inclusive
of statutory superannuation contributions. Shareholders have approved aggregate remuneration for all non-executive
directors at an amount of $100,000 per annum. Where applicable, superannuation contributions of 9.5% (2015: 9.5%)
are paid on these fees as required by law.
Share-based compensation
To ensure that the Company has appropriate mechanisms to continue to attract and retain the services of Directors
and Employees of a high calibre, the Company established the Empire Resources Limited Share Plan (“SP”) and the
Empire Resources Option Plan. Neither Plan has been used in the last two financial years.
The Directors consider the plans are an appropriate method to:
a) reward Directors and Employees for their past performance;
b) provide long-term incentives to participate in the Company’s future growth;
c) motivate Directors and Employees and generate loyalty in Employees; and
d) assist to retain the services of valuable Employees.
There were no options issued as share-based compensation to key management personnel during the current
financial year or previous financial year.
No shares were issued during the year upon the exercise of options.
Executive Directors
Executive Directors provide their services via a consultancy arrangement. Directors do not receive any retirement
benefits. Options are not issued as part of remuneration for long term incentives.
All remuneration paid to directors and executives is valued at cost to the Company and expensed.
The Directors resolved to settle all outstanding Directors’ fees for the period 1 July 2015 - 31 December 2015 of
$238,800 through the issue of 16,315,000 share options each exercisable into one ordinary share in the Company
at 2.5 cents each. The options have a 3 year term. The issue of the options to Directors was approved by
shareholders on 3 May 2016.
These adjustments are reflected in the following table.
Compensation of Key Management Personnel for the year ended 30 June 2016.
The following table discloses the remuneration of the Key Management Personnel (‘KMP’) of the Company. KMP are
defined as those persons having authority and responsibility for planning, directing and controlling the major activities
of the Group, directly or indirectly, including any Director (whether Executive or otherwise) of the Company.
18
Empire Resources Limited
Directors' Report
The information in this table is audited.
Note 1 – Settlement of these consulting fees totalling $238,800 for July – December 2015 was through the issue of 1,435,000
unlisted options to Mr Revy and 7,440,000 unlisted options to each of Messrs Sargeant and Jessup, approved by shareholders on 3
May 2016. The fair value of the options at the date at which they were granted was $249,148. The difference of $10,348 was
recognised as a share based payment.
Employment contracts
– Mr D Sargeant
By agreement dated 24 October 2009, the Company and Kirkdale Holdings Pty Ltd (ACN 009 096 388) ('Kirkdale')
agreed the terms and conditions under which Kirkdale would provide the services of Mr Sargeant as Managing
Director of the Company.
The agreement has:
(a)
(b)
(c)
a term of three years;
requires the payment to Kirkdale of a fee of $15,000 (GST excl) per month (increasing by 10% each year)
and reimbursement of expenses;
provisions requiring the payment of a termination benefit of 50% of the amount due on termination of the
agreement.
In November 2013, the Chairman agreed to continue with this employment contract until further notice.
– Mr A Jessup
By agreement dated 24 October 2009, the Company and Murilla Exploration Pty Ltd (ACN 068 277 190) ('Murilla')
agreed the terms and conditions under which Murilla would provide the services of Mr Jessup as an executive officer
of the Company.
The agreement has:
(a)
(b)
(c)
a term of three years;
requires the payment to Murilla of a fee of $15,000 (GST excl) per month (increasing by 10% each year) and
reimbursement of expenses;
provisions requiring the payment of a termination benefit of 50% of the amount due on termination of the
agreement.
Effective 1 July 2016, Mr Jessup assumed a non-executive Director role with a Director fee of $40,000 per annum.
19
Directors' FeesConsulting FeesShort-term BenefitsPost-employment benefitsShare-based paymentsValue of shares & optionsTotalTotal$$$$$$DirectorsNon-ExecutiveMr T Revy1 201642,000- 42,000- 91042,9102015- - - - - - ExecutiveMr D Sargeant12016- 217,800217,800- 4,719222,5192015- 9,0919,091- - 9,091Mr A Jessup12016- 217,800217,800- 4,719222,5192015- - - - - - Total Directors201642,000435,600477,600- 10,348487,9482015- 9,0919,091- - 9,091
Empire Resources Limited
Directors' Report
The Company received short term loans from Mr Sargeant and Mr Jessup for $30,000 and $20,000 respectively in
the year ended 30 June 2015. These amounts are unsecured and are expected to be repaid from the proceeds of a
future share placement of ordinary shares. A coupon interest rate equivalent to the Australian Government Bond 2
year yield will be calculated at each month end and will be payable on settlement of the loans.
Directors may be paid additional fees for special duties or services outside the scope of the ordinary duties of a
Director. Directors will also be reimbursed for all reasonable expenses incurred in the course of their duties.
Equity Holdings
Equity instrument disclosures relating to directors and other key management personnel
Shareholdings
The number of ordinary shares in the Company held during the year by each director and other key management
personnel, including their personally related entities or associates, are set out below.
All equity transactions with key management personnel, which relate to the Company’s listed ordinary shares or
options, have been entered into on an arm’s length basis.
Option holdings
The number of options over ordinary shares in the Company held during the reporting period by each director and
key management personnel, including their personally related entities, are set out below.
End of Remuneration Report.
Other transactions with directors, their associates and director related entities are as follows:
20
DirectorsBalance at the start of the periodIssued under share planOn exercise of optionsShares acquiredBalance at the end of the periodMr T Revy 710,000 - - - 710,000 Mr D Sargeant6,400,000 - - - 6,400,000 Mr A Jessup2,567,555 - - - 2,567,555 9,677,555 - - - 9,677,555 2016 Shareholdings of Key Management Personnel2016 Option holdings of Key Management PersonnelDirectorsBalance at the start of the periodIssuedExpiredBalance at the end of the periodVested and exercisable at 30 June 2016Mr T Revy- 1,435,000 - 1,435,000 1,435,000 Mr D Sargeant- 7,440,000 - 7,440,000 7,440,000 Mr A Jessup- 7,440,000 - 7,440,000 7,440,000 - 16,315,000 - 16,315,000 16,315,000 20162015$$Amounts payable to Key Management PersonnelKirkdale Holdings Pty Ltd - Mr D Sargeant119,790 - Murilla Exploration Pty Ltd - Mr A Jessup119,790 - Mr T Revy21,000 - 260,580 - Consolidated
Empire Resources Limited
Directors' Report
Loans to Directors
The amounts received from Directors as unsecured loans were repaid In July 2016. A coupon interest rate
equivalent to the Australian Government Bond 2 year yield was calculated at each month end and was payable on
maturity.
Share Options
At the date of this report unissued ordinary shares of the Company under option are:
Directors’ Interests
The relevant interest of each director in the shares and options over shares issued by the Company at the date of this
report is as follows:
Company Performance
Comments on performance are set out in the review of operations.
Significant Changes in the State of Affairs
There were no other significant changes in the state of affairs of the Company other than those noted in the review of
operations.
21
20162015$$Amounts payable to Directors as unsecured loansDW Sargeant Pty Ltd - Mr D Sargeant31,967 31,111 Mr A Jessup20,965 20,585 52,932 51,696 Interest expense on unsecured loansDW Sargeant Pty Ltd - Mr D Sargeant856 1,111 Mr A Jessup380 585 1,236 1,696 ConsolidatedGrant DateDate of ExpiryExercise Price $Number under Option3-May-163-May-190.025 7,440,000 3-May-163-May-190.025 7,440,000 3-May-163-May-190.025 1,435,000 3-May-163-May-190.025 5,787,000 22-Jun-1622-Jun-190.040 1,000,000 18-Jul-1618-Jul-190.040 9,000,000 32,102,000 DirectorDirectIndirectDirectIndirectMr T Revy350,000360,0001,435,000- Mr D Sargeant- 6,400,000- 7,440,000Mr A Jessup922,2221,645,333- 7,440,000Number of Ordinary SharesNumber of Options
Empire Resources Limited
Directors' Report
Likely Developments and Expected Results
Disclosure of likely developments in the operations of the Company and the expected results of those operations in
future financial years, and any further information, has not been included in this report because, in the reasonable
opinion of the Directors to do so would be likely to prejudice the business activities of the Company.
Environmental Regulation
The Company’s operations were subject to environmental regulations under both Commonwealth and State
legislation in relation to its exploration activities.
The directors are not aware of any breaches during the period covered by this report.
Meetings of Directors
The following table sets out the number of meetings of the Company’s directors held during the period ended 30 June
2016 and the number of meetings attended by each director.
As at the date of this report the Company has not formed any committees as the directors consider that at present the
size of the Company does not warrant such. Audit, corporate governance, director nomination and remuneration
matters are all handled by the full board.
Proceedings on Behalf of the Company
No person has applied to the Court under Section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to 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 part of the proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under Section
237 of the Corporations Act 2001.
Indemnification and Insurance of Directors and Officers
Indemnification
The Company has agreed to indemnify current directors and officers and past directors and officers against all
liabilities to another person (other than the Company or a related body corporate), including legal expenses that may
arise from their position as directors and officers of the Company and its controlled entity, except where the liability
arises out of conduct involving a lack of good faith. The agreement stipulates that the Company will meet the full
amount of any such liabilities, including costs and expenses.
Insurance
The directors have not included details of the amount of the premium paid in respect of the directors’ and officers’
liability insurance contracts, as such disclosure is prohibited under the terms of the contract.
Events subsequent to reporting date
On 18 July 2016, the Company raised $1,260,000 through a placement of 63 million shares at a price of $0.02.
9 million unlisted options at an exercise price of 4 cents exercisable, within 3 years of being issued, were issued on
the same date.
Other than this, no matter or circumstance has arisen, since the end of the financial year, which significantly affected,
or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the
Group in subsequent financial years.
Non-audit Services
The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the
auditor’s expertise and experience with the Company and/or the Group are important.
Details of the amounts paid or payable to the auditor (HLB Mann Judd) for audit and non-audit services provided
during the year are set out below.
22
DirectorABMr Thomas Revy55Mr David Sargeant55Mr Adrian Jessup45A - meetings attendedDirectors’ MeetingsB - meetings held whilst a director
Empire Resources Limited
Directors' Report
During the period, the following fees were paid or payable for services
provided by the auditors of the parent entity HLB Mann Judd, its related
practices:
Consolidated
Year ended
30 June 2016
$
Year ended
30 June 2015
$
Assurance Services
HLB Mann Judd (Current Auditor)
1. Audit services
Audit and review of financial reports and other audit work under the
Corporations Act 2001
Total remuneration
25,000
25,000
26,700
26,700
2. Joint Venture Audit services
Audit of the Penny’s Find Joint Venture
Auditors Independence Declaration
4,200
-
Section 307C of the Corporations Act 2001 requires the company’s auditors, HLB Mann Judd, to provide the directors
with a written Independence Declaration in relation to their audit of the financial report for the year ended 30 June
2016. This written Auditor’s Independence Declaration is attached to the Independent Auditor’s Report to the
members and forms part of this Directors’ Report.
Signed in accordance with a resolution of Directors.
_________________
David Sargeant
Director
Perth, Western Australia
9 September 2016
23
EMPIRE RESOURCES LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
The above Statement of Comprehensive Income
should be read in conjunction with the accompanying notes.
24
Note20162015$$Interest income21,5154,040Sale of plant and equipment25,500- Net gain on disposal of investment2210,131- Interest expense(27,607)(9,757)Depreciation expense3(2,890)(1,921)Exploration expense3(150,326)(193,345)Feasibility expense3(669,351)- Employee benefits (expense) / written back(92,455)192,026 Management fee expense(439,510)(9,091)Directors' fees (expense) / written back(42,910)31,500 Accounting expense(64,685)(59,710)Share-based payment(107,183)(106,890)ASX expense(15,038)(14,381)Corporate relations expense(78,995)(57,998)Insurance expense(16,349)(17,547)Other expenses (134,467)(80,908)Share of loss of equity accounted investees8- (417,732)Loss before income tax(1,624,620)(741,714)Income tax benefit4- - Net loss for the period(1,624,620)(741,714)Total comprehensive loss for the period(1,624,620)(741,714)Basic and diluted loss per share (cents per share)5(0.59)(0.33)Consolidated
EMPIRE RESOURCES LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
The above Statement of Financial Position
should be read in conjunction with the accompanying notes.
25
RestatedNote20162015(Note 22)ASSETS$$CURRENT ASSETSCash and cash equivalents6265,828 119,069 Trade and other receivables789,224 51,983 Other financial assets20,000 20,000 Total Current Assets375,052 191,052 NON-CURRENT ASSETSInvestments accounted for using the equity method8- 189,869 Plant and equipment929,714 1,226 Total Non-Current Assets29,714 191,095 TOTAL ASSETS404,766 382,147 LIABILITIESCURRENT LIABILITIESTrade and other payables10634,347 227,580 Borrowings11132,940 102,649 Total Current Liabilities767,287 330,229 TOTAL LIABILITIES767,287 330,229 NET (LIABILITIES) / ASSETS(362,521)51,918 EQUITYIssued capital1218,572,844 17,822,941 Reserves131,579,195 1,118,917 Accumulated losses(20,514,560)(18,889,940)TOTAL (DEFICIENCY) / EQUITY(362,521)51,918 Consolidated
EMPIRE RESOURCES LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes
26
Issued Capital Accumulated LossesOption ReservesTotalNote$$$$Restated (Note 22)Balance at 1 July 201417,170,103 (18,148,226)1,012,027 33,904 Shares issued during the year699,000 - - 699,000 Options issued during the year- - 106,890 106,890 Equity issue expenses restated22(46,162)- - (46,162)Loss for the year- (741,714)- (741,714)Balance at 30 June 201517,822,941 (18,889,940)1,118,917 51,918 Balance at 1 July 201517,822,941 (18,889,940)1,118,917 51,918 Shares issued during the period825,000 - - 825,000 Share based payment- - 107,183 107,183 Options issued to Directors- - 249,148 249,148 Options issued to Exploration Manager- - 88,378 88,378 Options issued for share issue costs- - 15,569 15,569 Equity issue expenses(75,097)- - (75,097)Loss for the period- (1,624,620)- (1,624,620)Balance at 30 June 201618,572,844 (20,514,560)1,579,195 (362,521)Consolidated
EMPIRE RESOURCES LIMITED
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
The above Statement of Cash Flows should be read in conjunction
with the accompanying notes.
27
Note20162015$$Cashflows from Operating ActivitiesPayments to suppliers and employees(339,548)(298,248)Interest received1,515 4,040 Other - R&D tax offset- 97,891 Interest paid(26,371)(8,061)Net cash used in operating activities6(i)(364,404)(204,378)Cash Flows from Investing ActivitiesPurchase of plant and equipment(25,716)- Sale of motor vehicle5,500 - Proceeds from sale of investment400,000 - Exploration and evaluation expenditure(124,081)(60,178)Feasibility expenditure(545,145)- Payment for investment in associate- (325,000)Net cash used in investing activities(289,442)(385,178)Cash Flows from Financing ActivitiesProceeds from issue of equity securities825,000 699,000 Equity securities issue costs(24,395)(8,527)Proceeds from borrowings270,000 - Repayments of borrowings(270,000)- Net cash provided by financing activities800,605 690,473 Net increase in cash held146,759 100,917 Cash at the beginning of the period119,069 18,152 Cash at the end of the period6265,828 119,069 Consolidated
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
1.
Statement of Significant Accounting Policies
The financial report covers the consolidated entity of Empire Resources Limited and its controlled entity
(“Group”) and Empire as an individual parent entity (“Empire”). Empire is a listed public company limited by
shares, incorporated and domiciled in Australia.
The following is a summary of the material accounting policies adopted by the Group in the preparation of the
financial report. The accounting policies have been consistently applied by the controlled entity and are
consistent with those in the 30 June 2015 financial report.
(a)
Basis of Preparation
This general purpose financial report has been prepared in accordance with Australian Accounting Standards,
Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting
Standards Board (AASB) and the Corporations Act 2001. It has been prepared on the historical cost basis.
The financial report is presented in Australian dollars.
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the consolidated
financial report, comprising the financial statements and notes thereto, complies with the International Financial
Reporting Standards (IFRS).
For the purpose of preparing the consolidated financial statements, the Company is a for-profit entity.
The financial report was authorised for issue by the Board on 9 September 2016.
(b)
Going Concern
As disclosed in the Statement of Comprehensive Income, the Group recorded operating losses of $1,624,620
(2015: $741,714) and as disclosed in the Statement of Cash Flows, the Group recorded cash outflows from
operating activities of $364,404 (2015: $204,378), investing activities of $289,442 (2015: $385,178) and a cash
inflow from financing activities of $800,605 (2015: $690,473). Cash flows from financing activities arose from
capital raisings that are disclosed in Note 12(a). After consideration of these financial conditions, the Directors
have assessed the following matters in relation to the adoption of the going concern basis of accounting by the
Group:
The Group has successfully completed capital raisings during the year as disclosed in Note 12(a) and has
the ability to continue doing so on a timely basis, pursuant to the Corporations Act 2001, as is budgeted to
occur in the twelve month period from the date of this financial report;
The Group has a working capital deficit of $392,235 (2015: $139,177) at balance date and expenditure
commitments for the next 12 months of $113,547 (2015: $47,769), as disclosed in Note 15 (ii), and
retains the ability to sell its shares in FYI Resources Ltd, in the event that the capital raisings are delayed;
and
The Company and Group have the ability, if required, to undertake mergers, acquisitions or restructuring
activity or to wholly or in part, dispose of interests in mineral exploration assets.
A further equity raising of $1.26 million was completed in July 2016. The Directors anticipate a further equity
raising will be required in the 2017 financial year. Should further equity raisings not be completed, there is a
material uncertainty that may cast significant doubt as to whether the Group will be able to continue as a going
concern and, therefore, whether it will be able to realise its assets and extinguish its liabilities in the normal
course of business.
(c)
Basis of Consolidation
A controlled entity is any entity over which Empire Resources Limited has the power to control the financial and
operating policies of the entity so as to obtain benefits from its activities.
Details of the controlled entity are contained in Note 8(b) to the financial statements. The controlled entity has a
30 June financial year end.
All inter-company balances and transactions between entities in the consolidated Group, including any
unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have
been changed where necessary to ensure consistencies with those policies applied by the parent entity.
Where a controlled entity enters or leaves the consolidated Group during the year, their operating results are
included/excluded from the date control was obtained or until the date control ceased.
28
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
1.
Statement of Significant Accounting Policies (continued)
Business Combinations
Business combinations occur where control over another business is obtained and results in the consolidation
of its assets and liabilities. All business combinations, including those involving entities under common control,
are accounted for by applying the purchase method. The purchase method requires an acquirer of the business
to be identified and for the cost of the acquisition and fair values of identifiable assets, liabilities and contingent
liabilities to be determined as at acquisition date, being the date that control is obtained. Cost is determined as
the aggregate of fair values of assets given, equity issued and liabilities assumed in exchange for control
together with costs directly attributable to the business combination. Any deferred consideration payable is
discounted to present value using the entity’s incremental borrowing rate.
(d)
Investment in associates and joint ventures
An associate is an entity over which the group has significant influence. Significant influence is the power to
participate in the financial and operating policy decisions of the investee but is not control or joint control over
those policies.
A joint venture is an arrangement where the parties have joint control of the arrangement and have rights to the
net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require unanimous consent of the
parties sharing control.
The results and assets and liabilities of associates and joint ventures are incorporated in these consolidated
financial statements using the equity method of accounting, except when the investment, or a portion thereof, is
classified as held for sale, in which case it is accounted for in accordance with AASB 5. Under the equity
method, an investment in an associate or a joint venture is initially recognised in the consolidated statement of
financial position and adjusted thereafter to recognise the Group’s share of the profit or loss in other
comprehensive income of the associate or joint venture. When the Group’s share of losses of an associate or a
joint venture exceeds the Group’s interest in that associate or joint venture (which includes any long-term
interests that, in substance, form part of the Group’s net investment in associate or joint venture, the Group
discontinues to recognise its share of further losses. Additional losses are recognised only to the extent that the
Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint
venture.
An investment in an associate or joint venture is accounted for using the equity method from the date on which
the investee becomes an associate or a joint venture. On acquisition of the investment in an associate or joint
venture, any excess of the cost of the investment over the Group’s share of the net fair value of the identifiable
assets and liabilities is recognised as goodwill, which is included within the carrying amount of the investment.
Any excess of the Group’s share of net fair value of the identifiable assets and liabilities over the cost of the
investment, after reassessment, is recognised immediately in profit or loss in the period in which the investment
is acquired.
The requirements of ASSB 139 are applied to determine whether it is necessary to recognise any impairment
loss with respect to the Group’s investment in associate or joint venture. When necessary, the entire carrying
amount of the investment (including goodwill) is tested for impairment in accordance with AASB 136
‘Impairment of Assets’ as a single asset by comparing its recoverable amount (higher of value in use less costs
to sell) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the
investment. Any reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that
the recoverable amount of the investment subsequently increases.
The Group discontinues the use of the equity method from the date when the investment ceases to be an
associate or a joint venture, or when the investment is classified as held for sale. When the a group retains an
interest in the former associate or joint venture and the retained interest is a financial asset, the Group
measures the retained interest at fair value at that date and the fair value is regarded as its fair value on initial
recognition in accordance with AASB 139. The difference between the carrying amount of the associate or joint
venture at the date the equity method was discontinued, and the fair value of any retained interest and any
proceeds from disposing of a part interest in the associate or joint venture is included in the determination of
the gains or loss on disposal of the associate or joint venture. In addition, the Group accounts for all amounts
previously recognised in other comprehensive income in relation to that associate or joint venture on the same
basis as would be required if that associate or joint venture had directly disposed of the related assets or
liabilities. Therefore, if a gain or loss recognised in other comprehensive income by that associate or joint
venture would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group
reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the equity
method is discontinued.
29
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
1.
Statement of Significant Accounting Policies (continued)
The Group continues to use the equity method when an investment in an associate becomes an investment in
a joint venture or an investment in a joint venture becomes an investment in an associate. There is no re-
measurement to fair value upon such changes in ownership interests.
When the Group reduces its ownership interest in an associate or a joint venture but the Group continues to
use the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had
previously been recognised in other comprehensive income relating to that reduction in ownership interest if
that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.
When a group entity transacts with an associate or a joint venture of the Group, profits and losses resulting
from the transactions with the associate or joint venture are recognised in the Group’s consolidated financial
statements only to the extent of interests in the associate or joint venture that are not related to the Group.
(e)
Plant and Equipment
Plant and equipment is measured on the cost basis less depreciation and impairment losses.
The carrying amount of plant & equipment is reviewed annually by directors to ensure it is not in excess of the
recoverable amount from those assets. Recoverable amount is assessed on the basis of the expected net cash
flows which will be received from the asset’s employment and subsequent disposal. The expected net cash
flows have been discounted to their present values in determining recoverable amounts.
Depreciation is calculated on the straight line basis and is brought to account over the estimated useful lives of
all plant and equipment from the time the asset is held ready for use. The depreciation rates used are:
Office furniture
Office computer equipment
Motor vehicles
15-33%
33%
20%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.
An asset’s carrying amount is written down immediately to its recoverable amount if the assets carrying amount
is greater than its estimated recoverable amount. Gains and losses on disposal are determined by comparing
proceeds with the carrying amount. These gains and losses are included in the statement of
comprehensive income. When revalued assets are sold, amounts included in the revaluation reserve relating
to the assets are then transferred to accumulated losses.
(f)
Income Tax
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income
based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and
liabilities attributable to temporary difference and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the reporting period in the countries where the company’s subsidiaries and associates operate and
generate taxable income. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation. It establishes provisions where
appropriate on the basis of amounts expected to be paid to the tax authorities.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination and that, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and
it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which
30
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
1.
Statement of Significant Accounting Policies (continued)
the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be
utilised, except:
when the deferred income tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse in the foreseeable future and taxable profit will be
available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same
taxable entity and the same taxation authority.
(g)
Cash & Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid
investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown
within short-term borrowings in current liabilities on the Statement of Financial Position.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts.
(h)
Acquisition of Assets
The purchase method of accounting is used for all acquisitions of assets regardless of whether shares or other
assets are acquired. Cost is determined as the fair value of the assets given up at the date of the acquisition
plus costs incidental to the acquisition. Transaction costs arising on the issue of equity instruments are
recognised directly in equity.
(i)
Impairment of assets
At each reporting date, the Group 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 Statement of Comprehensive Income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
(j)
Financial Instruments
Recognition
Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the
related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured
as set out below.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are stated at amortised cost using the effective interest rate method.
31
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
1.
Statement of Significant Accounting Policies (continued)
Available-for-sale financial assets
Available for sale financial assets include any financial assets not classified as loans and receivables, held to
maturity investments or fair value through profit or loss. Available-for-sale financial assets are reflected at fair
value. Unrealised gains and losses arising from changes in fair value are taken directly to equity.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal
payments and amortisation.
Fair value
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are
applied to determine the fair value for all unlisted securities, including recent arm’s length transactions,
reference to similar instruments and option pricing models.
Impairment
At each reporting date, the Company assesses whether there is objective evidence that a financial instrument
has been impaired. In the case of available-for sale financial instruments, a prolonged decline in the value of
the instrument is considered to determine whether an impairment has arisen. Impairment losses are recognised
in the statement of comprehensive income.
(k)
Exploration and Evaluation and Development Expenditure
Exploration, evaluation and acquisition costs are expensed in the year they are incurred. Development costs
are capitalised. Where commercial production in an area of interest has commenced, the associated costs in
respect of the area of interest in the development phase, together with any forecast future capital expenditure
necessary to develop proved and probable reserves are amortised over the estimated life of the mine on a units
of production basis.
(l)
Employee Entitlements
Salaries, wages and annual leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave
expected to be settled within twelve months of the reporting date are recognised in other creditors in respect to
employees’ services up to the reporting date and are measured at the amounts expected to be paid when the
liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and
measured at the rates paid or payable.
Equity settled transactions
The Group provides benefits to employees (including senior executives) of the Group in the form of share-
based payments, whereby employees render services in exchange for shares or rights over shares (equity-
settled transactions).
There are currently two plans in place to provide these benefits:
the Employee Share Option Plan (ESOP), which provides benefits to directors and senior executives; and
the Employee Share Loan Plan (ESLP), which provides benefits to all employees, excluding senior
executives and directors.
The cost of these equity-settled transactions with employees is measured by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined by an external valuer
using a Black Scholes model, further details of which are given in Note 19. In valuing equity-settled
transactions, no account is taken of any performance conditions, other than conditions linked to the price of the
shares of Empire Resources Limited (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance and/or service conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each balance date until vesting date
reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number of
equity instruments that will ultimately vest. No adjustment is made for the likelihood of market performance
conditions being met as the effect of these conditions is included in the determination of fair value at grant date.
The profit or loss charge or credit for a period represents the movement in cumulative expense recognised as
at the beginning and end of that period.
32
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
1.
Statement of Significant Accounting Policies (continued)
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms
had not been modified. In addition, an expense is recognised for any modification that increases the total fair
value of the share-based payment arrangement, or is otherwise beneficial to the employee, as measured at the
date of modification.
If an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and any
expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for
the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and
new award are treated as if they were a modification of the original award, as described in the previous
paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of
loss per share (see Note 5).
The Group expenses equity-settled share-based payments such as share and option issues after ascribing a
fair value to the shares and/or options issued. The fair value of option and share plan issues of option and
share plan shares are recognised as an expense together with a corresponding increase in the share based
payments reserve or the share option reserve in equity over the vesting period. The proceeds received net of
any directly attributable transaction costs are credited to share capital when options are exercised.
The value of shares issued to employees financed by way of a non recourse loan under the employee Share
Plan is recognised with a corresponding increase in equity when the company receives funds from either the
employees repaying the loan or upon the loan termination, pursuant to the rules of the share plan. All shares
issued under the plan with non recourse loans are considered, for accounting purposes, to be options.
(m)
Trade and other receivables
All trade receivables are recognised at the amounts receivable as they are due for settlement no more than 30
days from the date of recognition.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible
are written off. An allowance for doubtful debts is raised where some doubt as to collection exists.
(n)
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial period which are unpaid and arise when the Group becomes obliged to make future payments in
respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within
30 days of recognition.
(o)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
(p)
Leases
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee
substantially all the risks and benefits incidental to ownership of leased non-current assets, and operating
leases under which the lessor effectively retains substantially all such risks and benefits
Operating lease payments are charged as expenses in the periods in which they are incurred, as this
represents the pattern of benefits derived from the leased assets.
(q)
Revenue Recognition
Amounts disclosed as revenue are net of duties and taxes paid. Revenue is recognised as follows:
33
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
Statement of Significant Accounting Policies (continued)
Interest
1.
(i)
Interest earned is recognised as and when it is receivable, including interest which is accrued and is readily
convertible to cash within two working days. Accrued interest is recorded as part of other debtors.
(ii)
Sundry income
Sundry income is recognised as and when it is receivable. Income receivable, but not received at balance date,
is recorded as part of other debtors.
(r)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST 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.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority
are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(s)
Critical accounting estimates and judgements
The directors evaluate estimates and judgments incorporated into the financial report 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 Group.
Key Estimates — Impairment
The Group assesses impairment at each reporting date by evaluating conditions specific to the group that may
lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is
determined. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of
key estimates.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined using the Black and
Scholes model, using the assumptions detailed in Note 19.
The Group measures the cost of cash-settled share-based payments at fair value at the grant date using the
Black and Scholes formula taking into account the terms and conditions upon which the instruments were
granted, as discussed in Note 19.
This fair value is expensed over the period until vesting with recognition of a corresponding liability. The liability
is re-measured to fair value at each balance date up to and including the settlement date with changes in fair
value recognised in profit or loss.
(t)
Adoption of new and revised standards
Changes in accounting policies on initial application of Accounting Standards
In the year ended 30 June 2016, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Group’s operations and effective for the current
annual reporting period.
It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised
Standards and Interpretations on the Group’s business and, therefore, no change is necessary to Group
accounting policies.
34
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
1.
Statement of Significant Accounting Policies (continued)
The Directors have also reviewed all new Standards and Interpretations that have been issued but are not yet
effective for the year ended 30 June 2016. As a result of this review the Directors have determined that there is
no impact, material or otherwise, of the new and revised Standards and Interpretations on the Group’s business
and, therefore, no change necessary to Group accounting policies.
(u)
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 Board of Directors of Empire
Resources Ltd.
The Group operates only in one business and geographical segment being predominantly in the area of
mineral exploration in Western Australia. The Group considers its business operations in mineral exploration
to be its primary reporting function.
(v)
Loss per share
Basic loss per share is calculated as net profit or loss attributable to members of the parent, adjusted to
exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the
weighted average number of ordinary shares, adjusted for any bonus element.
Diluted loss per share is calculated as net loss attributable to members of the parent, adjusted for:
costs of servicing equity (other than dividends) and preference share dividends;
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and
dilutive potential ordinary shares, adjusted for any bonus element.
(w)
Parent Entity Financial Information
The financial information for the parent entity, Empire Resources Limited disclosed in Note 23 has been
prepared on the same basis as the Group.
2.
Revenue
35
20162015$$RevenueInterest received1,515 4,040 Other incomeNet gain on disposal of plant and equipment5,500 - Net gain on disposal of investments210,131 - Consolidated
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
3.
Loss from ordinary activities
4.
Income tax
(a)
Income tax recognised in loss
No income tax is payable by the parent or consolidated group as they both recorded losses for income tax
purposes for the year.
The company has applied a tax rate of 30% in preparation of the tax disclosure, however the Company may be
eligible for the small business company tax rate of 28.5% which will be determined when the company
completes its tax return in due course.
36
20162015$$Loss before income taxThe loss from ordinary activities before income tax has been determined after:(a) ExpensesDepreciation2,890 1,921 Exploration costs expensed150,326 193,345 JV Feasibiltiy costs expensed669,351 - Consolidated(b)Numericalreconciliationbetweenincometax expense and the loss before income tax20162015$$Loss before tax(1,624,620)(741,714)Income tax benefit at 30% (2015:30%)487,386 222,514 Tax effect of:- deductible capital raising expenditure16,881 21,671 - non deductible expenditure(1,126)(125,388)- deductible temporary differences(34,799)25,692 - share based payment(32,155)(32,067)- gain on sale of investment63,039 - Deferred tax asset not recognised(499,226)(112,422)Income tax benefit attributable to loss from ordinary activities before tax- - Consolidated
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
4.
Income tax (continued)
A deferred tax asset attributable to income tax losses has not been recognised at balance date as the
probability criteria disclosed in Note 1(f) is not satisfied and such benefit will only be available if the conditions
of deductibility also disclosed in Note 1(f) are satisfied.
5.
Loss per share
6.
Cash and cash equivalents
37
(c) Unrecognised deferred tax balancesTaxlossesattributabletomembersofthegroup-revenue14,904,421 13,249,327 Potential tax benefit at 30%4,471,326 3,974,798 Deferred tax asset not bookedAmounts recognised in statement of comprehensive income-employee provisions27,341 3,538 -other6,210 4,373 Amounts recognised in equity- share issue costs49,130 41,084 Net unrecognised deferred tax asset at 30%4,554,007 4,023,793 20162015CentsCentsBasic and diluted loss per share (cents per share)(0.59)(0.33)Loss used in the calculation of basic EPS(1,624,620)(741,714)Weighted average number of shares outstanding during the year used in calculations of basic loss per share274,749,420 223,469,969 Diluted loss per share has not been disclosed as it is not materially different from basic loss per shareConsolidated20162015$$Cash at bank and in hand265,828 119,069 265,828 119,069 Consolidated
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
6.
Cash and cash equivalents (continued)
(i) Reconciliation of cash flow from operations with loss after income tax
7.
Trade and other Receivables
Provision for impairment of receivables
Current trade receivables are non-interest bearing and generally on 30 day terms. A provision for impairment
is recognised when there is objective evidence that an individual trade receivable is impaired. No receivables
are impaired at balance date.
38
20162015$$Loss after income tax(1,624,620)(741,714)Depreciation 2,890 1,921 Share based payments expense107,183 106,890 Gain on disposal of investment(210,131)- Gain on disposal of plant and equipment(5,500)- Exploration expenditure not capitalised150,326 193,345 Feasibility expenditure not capitalised669,351 - Share of loss of equity accounted investees- 417,732 (910,501)(21,826)Changes in assets and liabilities, net of the effects of purchase of subsidiaries:(Increase)/decrease in trade and other receivables8,719 84,526 (Decrease)/increase in trade and other payables451,930 (59,084)(Decrease)/increase in borrowings1,236 - (Decrease)/increase in employee benefits84,212 (207,994)Net cash outflow from operating activities (364,404)(204,378)Consolidated20162015$$CurrentTrade receivables44,770 43,866 Other receivables44,454 8,117 89,224 51,983 Consolidated
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
8.
Investments
(a) Investments accounted for using the Equity Method
The Group has reviewed the carrying value of its investment in FYI Resources Ltd and considers that it is not
stated in excess of its recoverable amount in the accounts.
39
20162015$$Reconciliation of movements in investments accounted for using the equity method:Balance at 1 July189,869 282,600 Acquisitions- 325,001 Share of loss- (417,732)Proceeds on sale(400,000)- Profit recognised on sale210,131 - Balance at end of period- 189,869 Consolidated2016201520162015Name of entityPrincipal activityCountry of incorporation%%$$Associated entityFYI Resources LtdMineral explorationAustralia14%17%300,000 384,000 Barola Resources LtdMineral explorationAustralia0%26%- 189,869 Ownership interestMarket Value20162015$$Summarised financial information of associates:Financial positionTotal assets984,968 1,548,472 Total liabilities(540,458)(632,849)Net assets444,510 915,623 Group’s share of associates’ net assets60,197 189,869 Financial performanceTotal revenue8,944 250,000 Total loss for the year(749,397)(2,332,881)Group’s share of associates' loss- (417,732)Group’sshareofassociate’scompehensiveincome- - Capitalcommitmentsandcontingentliabilitiesofassociate:Shareofcapitalcommitmentsincurredjointlywithother investors- - Shareofcontingentliabilitiesincurredjointlywithother investors- - Consolidated
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
8.
Investments (continued)
(b) Investments in subsidiary
9.
Plant & equipment
10. Trade and other payables
(i) Trade payables are non-interest bearing and are normally settled on 30 day terms.
40
Country of incorporationPercentage OwnedPercentage Owned20162015Controlled entity%%Parent Entity:Empire Resources LimitedAustraliaSubsidiary of Empire Resources Limited:Torrens Resources Pty LtdAustralia100 100 20162015$$Plant and Equipment Cost73,203 41,825 Accumulated depreciation(43,489)(40,599)29,714 1,226 Motor Vehicles Cost53,863 90,217 Accumulated depreciation(53,863)(90,217)- - Total Plant and Equipment29,714 1,226 Consolidated20162015$$Plant and EquipmentBalance at the beginning of year1,226 3,147 Additions31,378 - Depreciation expense(2,890)(1,921)Carrying amount at the end of the year29,714 1,226 ConsolidatedMovements in the carrying amounts of each class of property, plant & equipment at the beginning and end of the current financial period is as set out below:20162015$$Trade payables and accruals543,209 196,841 Employee benefits and GST91,138 30,739 634,347 227,580 Consolidated
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
11. Borrowings
(i) Refer to note 17 for terms and conditions.
12.
Issued capital
(a) Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company
in proportion to the number of and amounts paid on the shares.
On a show of hands every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to
one vote, and upon a poll each share is entitled to one vote.
41
20162015$$Director loans52,932 51,696 Other80,008 50,953 132,940 102,649 Consolidated20162015$$324,201,475 (2015: 259,201,475) fully paid ordinary shares18,572,84417,822,941Consolidated20162015No.No.(i) Ordinary shares - numberAt 1 July259,201,475 182,645,921 Shareplacement-16,666,666on23October2014at $0.009- 16,666,666 Shareplacement-16,666,666on3November2014 at $0.009- 16,666,666 Shareplacement-11,111,111on20November2014 at $0.009- 11,111,111 Shareplacement-11,000,000on9December2014 at $0.009- 11,000,000 Shareplacement-11,111,111on31December2014 at $0.009- 11,111,111 Shareplacement-10,000,000on26June2015at$0.01- 10,000,000 Shareplacement-10,000,000on19November2015 at $0.0110,000,000 - Shareplacement-10,000,000on29February2016 at $0.0110,000,000 - Shareplacement-5,000,000on31March2016at$0.015,000,000 - Shareplacement-30,000,000on5May2016at$0.012530,000,000 - Shareplacement-10,000,000on22June2016at$0.0210,000,000 - Balance at 30 June324,201,475 259,201,475 Consolidated
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
12. Issued capital (continued)
(b) Options
As at 30 June 2016 (30 June 2015: 30,000,000) the Company had the following options on issue over
ordinary shares:
42
20162015$$(ii) Ordinary shares – valueAt 1 July 17,822,941 17,170,103 Shareplacement-16,666,666on23October2014at $0.009- 150,000 Shareplacement-16,666,666on3November2014 at $0.009- 150,000 Shareplacement-11,111,111on20November2014 at $0.009- 100,000 Shareplacement-11,000,000on9December2014 at $0.009- 99,000 Shareplacement-11,111,111on31December2014 at $0.009- 100,000 Shareplacement-10,000,000on26June2015at$0.01- 100,000 Shareplacement-10,000,000on19November2015 at $0.01100,000 - Shareplacement-10,000,000on29February2016 at $0.01100,000 - Shareplacement-5,000,000on31March2016at$0.0150,000 - Shareplacement-30,000,000on5May2016at$0.0125375,000 - Shareplacement-10,000,000on22June2016at$0.02200,000 - Less share issue costs(75,097)(46,162)Balance at 30 June18,572,844 17,822,941 ConsolidatedGrant DateDate of ExpiryExercise Price $Number under Option27-Jun-1331-Aug-160.04 10,000,000 28-Jun-1331-Aug-160.05 10,000,000 29-Jun-1331-Aug-160.06 10,000,000 3-May-163-May-190.025 7,440,000 3-May-163-May-190.025 7,440,000 3-May-163-May-190.025 1,435,000 3-May-163-May-190.025 5,787,000 22-Jun-1622-Jun-190.040 1,000,000 53,102,000
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
13. Reserves
The options reserve is used to recognise the fair value of option issued to Directors, employees and
consultants but not exercised.
Details of certain components of the option reserve arising as a consequence of equity based payments are
included in Note 19.
14. Financial risk management
The Group’s financial situation is not complex. It’s activities may expose it to a variety of financial risks in the
future: market risk (including currency risk and fair value interest rate risk), credit risk, liquidity risk and cash
flow interest rate risk. At that stage the Group’s overall risk management program will focus on the
unpredictability of the financial markets and seek to minimise potential adverse effects on the financial
performance of the Group.
Risk management is carried out under an approved framework covering a risk management policy and internal
compliance and control by management. The Board identifies, evaluates and approves measures to address
financial risks.
The Group hold the following financial instruments:
43
20162015$$Reserves1,579,195 1,118,917 Reserves comprise the following:Options reserveBalance as at start of financial year1,118,917 1,012,027 Share-based payment107,183 106,890 Options issued to Directors249,148 - Options issued to Exploration Manager88,378 - Options issued - share issue costs15,569 - Balance at 30 June1,579,195 1,118,917 Consolidated20162015$$Financial assetsCash and cash equivalents265,828 119,069 Trade and other receivables89,224 51,983 Term deposit20,000 20,000 375,052 191,052 Financial liabilitiesTrade and other payables634,347 227,580 Borrowings132,940 102,649 767,287 330,229 Consolidated
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
14. Financial risk management (continued)
(a) Market risk
Cash flow and fair value interest rate risk
The Group’s main interest rate risk arises from cash deposits to be applied to exploration and development of
areas of interest. Deposits at variable rates expose the Group to cash flow interest rate risk. Deposits at fixed
rates expose the Group to fair value interest rate risk. During 2016 and 2015, the Group’s deposits at variable
rates were denominated in Australian Dollars.
As at the reporting date, the Group had the following variable rate deposits and there were no interest rate
swap contracts outstanding:
The Group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into
the renewal of existing positions.
Sensitivity – Consolidated and Parent entity
During 2016, if interest rates had been 1% higher or lower than the prevailing rates realised, with all other
variables held constant, there would be an immaterial change in post-tax loss for the year. Equity would not
have been impacted.
(b) Credit risk
The Group has no significant concentrations of credit risk. Cash transactions are limited to high credit quality
financial institutions.
Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and
financial institutions, as well as credit exposures on outstanding receivables and committed transactions. In
relation to other credit risk areas management assesses the credit quality of the customer, taking into account
its financial position, past experience and other factors.
The maximum exposure to credit risk at the reporting date is the carrying amount of the financial assets as
summarised at the beginning of this note.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an
adequate amount of committed credit facilities and the ability to close-out market positions. The Group
manages liquidity risk by continuously monitoring forecast and actual cash flows and matching the maturity
profiles of financial assets and liabilities. The Group will aim at maintaining flexibility in funding by accessing
appropriate committed credit lines available from different counterparties where appropriate and possible.
Surplus funds when available are generally only invested in high credit quality financial institutions in highly
liquid markets.
Financing arrangements
The Consolidated and Parent entity have short term loans from Directors. Details are included in Note 17.
44
Weighted average interest rateBalanceWeighted average interest rateBalance%$%$Deposit20,000 20,000 Other cash available265,828 119,069 Net exposure to cash flow interest rate risk1.5%285,828 2.2%139,069 20162015
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
14. Financial risk management (continued)
Maturities of financial assets and liabilities
The note above analyses the Consolidated and parent entity's financial liabilities. The liabilities comprise trade
and other payables that are non interest bearing and will mature within 12 months and Director loans that are
interest bearing and will be repaid from the proceeds of a future share placement of ordinary shares. The
amounts disclosed are the contractual undiscounted cash flows. There are no derivatives.
45
30 June 2016Weighted Average Effective Interest RateFloating Interest RateFixed Interest Rate Maturing Within Year1 to 5 YearsOver 5 YearsNon-interest bearingTotal$$$$$$Financial Assets:Cash and cash equivalents1.5%265,828 - - - - 265,828 Trade and other receivables- - - - 89,224 89,224 Other financial assets- 20,000 - - - 20,000 Total Financial Assets265,828 20,000 - - 89,224 375,052 Financial Liabilities:Trade and other payables- - - - 634,347 634,347 Short-term borrowings132,940 - - - - 132,940 Total financial liabilities132,940 - - - 634,347 767,287 30 June 2015Weighted Average Effective Interest RateFloating Interest RateFixed Interest Rate Maturing Within Year1 to 5 YearsOver 5 YearsNon-interest bearingTotal$$$$$$Financial Assets:Cash and cash equivalents2.2%119,069 - - - - 119,069 Trade and other receivables- - - - 51,983 51,983 Other financial assets- 20,000 - - - 20,000 Total Financial Assets119,069 20,000 - - 51,983 191,052 Financial Liabilities:Trade and other payables- - - - 227,580 227,580 Short-term borrowings102,649 - - - - 102,649 Total financial liabilities102,649 - - - 227,580 330,229
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
14. Financial risk management (continued)
Maturity analysis of financial assets and liability based on management’s expectation
(d) Fair value estimation
The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or
for disclosure purposes.
The fair value of financial instruments that are not traded in an active market (for example, investments in
unlisted subsidiaries) is determined using valuation techniques or cost (impaired if appropriate). The Group
uses a variety of methods and makes assumptions that are based on market conditions existing at each
balance date.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate
their fair values due to their short-term nature.
15. Capital and Leasing Commitments
46
Year ended 30 June 2016<6 months6-12 months1-5 years>5 yearsTotalConsolidatedFinancial assetsCash & cash equivalents265,828 - - - 265,828 Trade & other receivables89,224 - - - 89,224 Other financial assets- 20,000 - - 20,000 355,052 20,000 - - 375,052 Financial liabilitiesTrade & other payables(634,347)- - - (634,347)Short-term borrowings(132,940)- - - (132,940)(767,287)- - - (767,287)Net maturity(412,235)20,000 - - (392,235)20162015$$(i) Operating Lease Commitments Non-cancellableoperatingleasescontractedforbut not capitalised in the financial statements Payable - minimum lease payments - not later than 12 months60,671 60,012 - between 12 months and 5 years65,726 5,001 - greater than 5 years- - 126,397 65,013 Thecompanyenteredintoanoperatingleaseon1August2007forofficespaceitoccupiesinVictoriaPark.Thefifthtermoftheleaseis2yearsandexpires on 31 July 2018. Consolidated
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
15. Capital and Leasing Commitments (continued)
These commitments are based on the Group holding the tenements for the next 5 years.
16. Directors and other key management personnel
(i) Details of Key Management Personnel
Chairman – non-executive
Mr T Revy (from 8 January 2010)
Managing Director
Mr D Sargeant (from 13 April 2000)
Executive director
Mr A Jessup (from 15 August 2003 to 1 July 2016, then non-executive)
(ii) Compensation of Key Management Personnel
Settlement of these consulting fees totalling $238,800 for July – December 2015 was through the issue of
1,435,000 unlisted options to Mr Revy and 7,440,000 unlisted options to each of Messrs Sargeant and Jessup,
approved by shareholders on 3 May 2016. The fair value of the options at the date at which they were granted
was $249,148. The difference of $10,348 was recognised as a share based payment.
The amounts outstanding to Key Management Personnel at the reporting date are included in Note 17.
17. Related Parties
Directors and executives
Disclosures relating to the remuneration and shareholdings of directors and executives are set out in the
Directors’ Report.
47
20162015$$(ii) Expenditure commitments contracted for:Exploration TenementsInordertomaintaincurrentrightsoftenuretoexplorationtenements,theCompanyisrequiredtooutlayrentalsandtomeettheminimumexpenditurerequirements.Theseobligationsarenotprovidedforinthefinancialstatementsandarepayable:- not later than 12 months113,547 47,769 - between 12 months and 5 years454,188 191,076 - greater than 5 years- - 567,735 238,845 Consolidated20162015$$Short-term employee benefits477,600 9,091 Share-based payments10,348 - 487,948 9,091 Consolidated
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
17. Related Parties (continued)
Other transactions with directors, their associates and director related entities are as follows:
The amounts received from Directors as unsecured loans are expected to be repaid from the proceeds of a
future share placement of ordinary shares. A coupon interest rate equivalent to the Australian Government
Bond 2 year yield will be calculated at each month end and will be payable on maturity.
48
20162015$$Amounts payable to Key Management PersonnelKirkdale Holdings Pty Ltd - Mr D Sargeant119,790 - Murilla Exploration Pty Ltd - Mr A Jessup119,790 - Mr T Revy21,000 - 260,580 - 20162015$$Amounts payable to Directors as unsecured loansDW Sargeant Pty Ltd - Mr D Sargeant31,967 31,111 Mr A Jessup20,965 20,585 52,932 51,696 ConsolidatedConsolidatedRelated partyRevenue from Related PartiesReimbursement of Expenditure Related PartiesAmounts owed by Related Parties as at 30 JuneAmounts Owed to Related parties as at 30 June$$$$ConsolidatedAssociate:FYI Resources Ltd2016- 6,904 1,976 - 2015- 22,665 1,744 - Barola Resources Ltd2016- 166,412 - - 2015- 36,888 40,577 - Brimstone Resources Ltd2016- 155,679 - - 2015- - - - AssociateThe Group has a 14% interest in FYI Resources Limited (2015: 17%).The Group has a 0% interest in Barola Resources Limited (2015: 26%).The Group has a 60% interest (2015: 0%) in the Penny's Find Joint Venture. Brimstone Resources has a 40% (2015: 0%) interest in the Penny's Find Joint Venture.The following table provides the total amount of transactions that were entered into with related parties for the relevant financial year:
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
18. Remuneration of auditors
The auditor of Empire Resources Ltd is HLB Mann Judd.
19. Share Based Payments
(a) Option plan
The Company has established an option share plan, which is also available to directors, employees and some
consultants, known as the 2010 Empire Resources Option Plan and was approved by shareholders on 25
June 2010. The Empire Resources Option Plan is not currently active insofar as there have been no option
issues in the last two years and shareholder renewal, which is required every three years, has not been
sought.
The following table illustrates the number and weighted average exercise prices of and movements in share
options issued during the year:
The fair value of the equity-settled share options is estimated as at the date of grant using the Black and
Scholes model taking into account the terms and conditions upon which the options were granted.
49
20162015$$AmountsreceivedordueandreceivablebyHLBMann Judd for:Audit or review of the financial reports of the Company25,000 26,700 Audit of the Penny's Find Joint Venture4,200 - ConsolidatedNumberWeighted average exercise priceNumberWeighted average exercise price2016201620152015Outstanding at the beginning of the year30,000,000 $0.0533,000,000 $0.05Granted during the year23,102,000 $0.04- - Expired during the year- - (3,000,000)$0.09Outstanding at the end of the year53,102,000 $0.0430,000,000 $0.05
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
19. Share Based Payments (continued)
The following table lists the inputs to the model used for the years ended 30 June 2016 and 30 June 2015:
Note 1 – Issued to settle outstanding liabilities
(b) Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period were as follows:
20. Segment Information
Operating segments are reported in a manner that is consistent with the internal reporting provided to the
chief operating decision maker. The chief operating decision maker has been identified as the Board of
Empire Resources Ltd.
Consistent with prior year, the Group operates only in one business and geographical segment being
predominantly in the area of mining and exploration in Australia. The Group considers its business
operations in mineral exploration to be its primary reporting function.
21. Events after the Balance Date
On 18 July 2016, the Company raised $1,260,000 through a placement of 63 million shares at a price of
$0.02. 9 million unlisted options at an exercise price of 4 cents exercisable, within 3 years of being issued,
were issued on the same date.
Other than this, there has not been any matter or circumstance not otherwise dealt with in the financial
report that has significantly affected or may significantly affect the Company in future financial periods.
50
20162015$$Share based payments107,183 106,890 ConsolidatedGrant DateExpiry dateExercise priceVesting PeriodFair value at grant date of optionsExpected VolatilityOption lifeDividend yieldRisk-free interest rateGrant date share priceConsultant options27-Jun-1331-Aug-16$0.0431-Aug-16$0.01150%3.2 years0%3.00%$0.02Consultant options27-Jun-1331-Aug-16$0.0531-Aug-16$0.01150%3.2 years0%3.00%$0.02Consultant options27-Jun-1331-Aug-16$0.0631-Aug-16$0.01150%3.2 years0%3.00%$0.02Director options 103-May-1603-May-19$0.0303-May-16$0.02240%3 years0%2.00%$0.02Manager options 103-May-1603-May-19$0.0303-May-16$0.02240%3 years0%2.00%$0.02Consultant options22-Jun-1622-Jun-19$0.0422-Jun-16$0.02140%3 years0%1.57%$0.02
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
22. Restatement and comparative figures
During the year ended 30 June 2015, equity issue expenses were understated by $29,950, which has a
material effect on net assets of the Group.
Restatement of each of the financial statement line items for the prior year, are as follows:
51
Restated30/06/2015Adustment30/06/2015$$$CONDENSEDSTATEMENTOFFINANCIALPOSITION (extract)Trade and other payables197,630 29,950 227,580 NET ASSETS81,868 (29,950)51,918 Issued capital (net of equity issue expenses)17,852,891 (29,950)17,822,941 TOTAL EQUITY81,868 (29,950)51,918 Consolidated
Empire Resources Limited
Notes to the Financial Statements 30 June 2016
23. Parent Entity Financial Information
The individual financial statements for the parent entity show the following aggregate amounts:
52
20162015ASSETS$$CURRENT ASSETSCash and cash equivalents265,828 119,069 Trade and other receivables89,224 51,983 Other financial assets20,000 20,000 Total Current Assets375,052 191,052 NON-CURRENT ASSETSInvestments accounted for using the equity method- 189,869 Plant and equipment29,714 1,226 Total Non-Current Assets29,714 191,095 TOTAL ASSETS404,766 382,147 LIABILITIESCURRENT LIABILITIESTrade and other payables634,347 227,580 Borrowings132,940 102,649 Total Current Liabilities767,287 330,229 TOTAL LIABILITIES767,287 330,229 NET ASSETS(362,521)51,918 EQUITYIssued capital18,572,844 17,822,941 Reserves1,579,195 1,118,917 Accumulated losses(20,514,560)(18,889,940)TOTAL EQUITY(362,521)51,918 Loss before income tax expense(1,624,620)(741,714)Income tax benefit- - Other comprehensive loss for the year, net of tax- - Total comprehensive loss for the year(1,624,620)(741,714)Parent Entity
DIRECTORS’ DECLARATION
1. In the directors’ opinion:
(a)
the financial statements and notes set out on pages 24 to 52 are in accordance with the Corporations
Act 2001 including:
(i)
(ii)
complying with Australian Accounting Standards (including
the Australian Accounting
Interpretations), the Corporations Regulations 2001, professional reporting requirements and
other mandatory requirements; and
giving a true and fair view of the Group’s financial position as at 30 June 2016 and of its
performance for the financial year ended on that date.
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when
they become due and payable.
(c)
the financial statements and notes thereto are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
2. The directors have been given the declarations by the Chief Executive Officer and the Chief Financial
Officer required by section 295A of the Corporations Act 2001 for the financial year ended 30 June 2016.
This declaration is made in accordance with a resolution of the directors.
___________________
David Sargeant
Director
Perth, Western Australia
9 September 2016
53
INDEPENDENT AUDITOR’S REPORT
To the members of Empire Resources Limited
Report on the Financial Report
We have audited the accompanying financial report of Empire Resources Limited (“the company”), which
comprises the consolidated statement of financial position as at 30 June 2016, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated statement of
cash flows for the year then ended, notes comprising a summary of significant accounting policies and other
explanatory information, and the directors’ declaration of the Group 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(a) the directors also state, in accordance with Accounting Standard AASB 101: Presentation of
Financial Statements, the consolidated 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 Group’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 and its controlled
entities’ 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.
Our audit did not involve an analysis of the prudence of business decisions made by directors or management.
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.
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533.
Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a worldwide organisation of accounting firms and business advisers.
Auditor’s opinion
In our opinion:
(a)
the financial report of Empire Resources Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2016 and 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(a).
Emphasis of Matter
Without qualifying our opinion, we draw attention to Note 1 (b) in the financial report which indicates that the
directors anticipate that a further equity raising will be required and will be completed in the year to meet the
ongoing working capital requirements of the Group. Should this equity raising not be completed, there is a
material uncertainty that may cast significant doubt as to whether the Group will be able to continue as a going
concern and, therefore, whether it will be able to realise its assets and extinguish 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 2016.
The directors of the company are responsible for the preparation and presentation of the Remuneration Report
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on
the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
Auditor’s opinion
In our opinion, the Remuneration Report of Empire Resources Limited for the year ended 30 June 2016
complies with section 300A of the Corporations Act 2001.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
9 September 2016
D I Buckley
Partner
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Empire Resources Limited for the
year ended 30 June 2016, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
9 September 2016
D I Buckley
Partner
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4, 130 Stirling Street Perth WA 6000. PO Box 8124 Perth BC 6849 Telephone +61 (08) 9227 7500. Fax +61 (08) 9227 7533.
Email: hlb@hlbwa.com.au. Website: http://www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a worldwide organisation of accounting firms and business advisers.
ASX ADDITIONAL INFORMATION
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report is
as follows. The information is current as at 2 September 2016.
(a) Distribution of shares
The numbers of shareholders, by size of holding are:
The number of shareholdings held in less than marketable parcels is 453.
(b) Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:
(c) Substantial Shareholder
57
NumberCategory (size of holding)of Holders1 - 1,000281,001 - 5,000685,001 - 10,00011710,001 - 100,000635100,001 - and over3781,226SHAREHOLDERSNumber of shares held% Holding1 BLAMNCO TRADING PTY LTD 30,000,0007.75%2 FITALL GROUP LTD 20,000,0005.17%3 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 18,888,8884.88%4 ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD14,400,7523.72%5 TJUN TJUN PTY LTD 11,512,6782.97%6 SANGORA HOLDINGS PTY LTD 10,000,0002.58%7 MR ADRIAN CHRISTOPHER GRIFFIN 8,710,5952.25%8 XIAMEN SERVICES PTY LTD 7,900,0002.04%9 ARMCO BARRIERS PTY LTD 6,250,0001.61%10 MANDARA CAPITAL PTY LTD 6,000,0001.55%11 TRONES INVESTMENTS PTY LTD 5,915,0001.53%12 AGENS PTY LTD 5,734,1391.48%13 MARTINI 5 PTY LTD 5,300,0101.37%14 RBJ NOMINEES PTY LTD 5,000,0001.29%15 MR GREGORY MARK THRIFT & MRS JANE ELIZABETH THRIFT 5,000,0001.29%16 PURITAN STYLE PTY LTD 4,500,0001.16%17 WA SOURCING PTY LTD 4,444,4461.15%18 PRB MCDONALD PTY LTD 4,166,6661.08%19 KIRKDALE HOLDINGS PTY LTD 3,300,0000.85%20 SLADE TECHNOLOGIES PTY LTD 3,279,1740.85%180,302,34846.57%ShareholderNumber of sharesFITALL GROUP LTD 20,000,000BLAMNCO TRADING PTY LTD 30,000,000
ASX ADDITIONAL INFORMATION
(d) Stock Exchange Listing
Listing has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian
Stock Exchange Limited.
Quoted shares on ASX and total issued share capital
324,201,475
(e) Voting rights
All shares carry one vote per unit without restriction.
(f) Unlisted options
32,102,000 options are held by 8 option holders . Options do not carry a right to vote.
Holders of more than 20% of unlisted options are :-
Unlisted Option Holder Number
Kirkdale Holdinqs Pty Ltd 7,440,000
Murilla Exploration Pty Ltd 7,440,000
58
ASX ADDITIONAL INFORMATION
INTERESTS IN MINING AND EXPLORATION TENEMENTS
AT 31 AUGUST 2016
PROJECT
TENEMENT
INTEREST
REMARKS
PENNY'S FIND
YUINMERY
E27/410
E27/420
E27/553
M27/156
P27/2007
P27/2008
P27/2262
G27/1
L27/90
L27/91
L27/92
M57/265
M57/636
P57/1214
P57/1215
P57/1216
P57/1217
E57/1037
LAVERTON
E38/3075
HALF WAY DAM
E29/968
APPLICATION
APPLICATION
COVERED BY M57/636
COVERED BY M57/636
COVERED BY M57/636
COVERED BY M57/636
APPLICATION
APPLICATION
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
60%
100%
100%
100%
100%
100%
100%
100%
100%
100%
59