18
October
2013
The
Manager
Companies
ASX
Limited
20
Bridge
Street
SYDNEY
NSW
2000
Dear
Madam
(75
pages
by
email)
ANNUAL
REPORT
AND
NOTICE
OF
AGM
In
accordance
with
Listing
Rule
4.7
and
3.17,
I
attach
the
Company’s
Annual
Report
for
the
year
ended
30
June
2013
and
the
Company’s
Notice
of
Annual
General
Meeting
to
be
held
at
11.00
am
on
20
November
2013.
In
accordance
with
Listing
Rule
15.4
two
hard
copies
of
the
Company’s
Annual
Report
will
be
delivered
to
the
Company’s
Home
Exchange.
Yours
sincerely
Marcelo
Mora
Company
Secretary
Pjn7433
Equus
Mining
Limited
ABN
44
065
212
679
Level
2,
66
Hunter
Street
Sydney
NSW
2000
Australia
T
+61
2
9300
3366
F
+61
2
9221
6333
E
info@equusmining.com
W
www.equusmining.com
2013
Annual Report
EQUUS MINING LIMITED
(formerly Caspian Oil & Gas Limited) and its controlled entities
ABN. 44 065 212 679
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www.equusmining.com
Contents
Chairman’s Letter
Review of Operations
Statement of Corporate Governance
Directors’ Report
Lead Auditor’s
Independence Declaration
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
Consolidated Statement of
Financial Position
1
2
9
15
24
25
26
Consolidated Statement of
Changes in Equity
Consolidated Statement of
Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Stock
Exchange Information
27
28
29
59
60
62
Corporate Directory
Directors
Stock Exchange Listings
Norman Seckold Non-Executive Chairman
Edward Leschke Managing Director
Robert Perring Non-Executive Director
Non-Executive Director
Jürg Walker
Australian Securities Exchange (Code – EQE)
Berlin and Frankfurt Securities Exchanges
(Third Market Segment)
Company Secretary
Marcelo Mora
Principal Place of Business
and Registered Office
Level 2
66 Hunter Street
Sydney NSW 2000
Australia
Telephone:
Facsimile:
Email address:
Web site:
(61 2) 9300 3366
(61 2) 9221 6333
info@equusmining.com
www.equusmining.com
Share Registry
Advanced Share Registry Limited
150 Stirling Highway
Nedlands, Western Australia 6009
(61 8) 9389 8033
Telephone:
(61 8) 9389 7871
Facsimile:
Auditors
KPMG
Level 16, Riparian Plaza
71 Eagle Street
Brisbane QLD 4000
www.equusmining.com
Dear Fellow Shareholders,
This has been a landmark year for your company. Over
the course of the year, your Company has transferred
its main focus from being an oil and gas explorer in
Kyrgyzstan to a copper explorer in Chile. The Republic of
Chile ranks as one of the leading destinations globally
for mineral explorers and miners due to the country’s
sound licensing system and high mineral prospectivity,
in particular for copper.
Equus Mining’s foray into Chile has been via the
Naltagua copper project which, given its paucity of
modern exploration, demonstrates what Chile has to
offer in terms of attractive exploration opportunities.
During the year Equus Mining completed a significant
amount of surface exploration work at Naltagua
including channel sampling and an Induced Polarisation
survey, in preparation for an inaugural drilling
programme. Whilst government approvals for drilling
were belated, drilling did commence at the Naltagua
copper project in the fourth quarter and some
encouraging results were forthcoming from the initial
drill holes.
Chairman’s Letter
The equity markets for the junior resource sector
remained mostly subdued for the 2013 fiscal year. This
in turn has severely hampered the ability of junior
resource companies to raise funds. Fortunately, Equus
Mining possessed a number of non-core assets which
were progressively sold for cash. These proceeds have
funded operations throughout the year as well as
ensuring the Company has sufficient cash levels to fund
activities in the medium term at Naltagua as well as the
assessment of new opportunities. The malaise in the
equity markets means potential new opportunities are
likely to present themselves and Equus Mining is in a
solid position to take advantage of such openings.
Yours sincerely,
Norman A. Seckold
Chairman
The Republic of Chile ranks as one of the leading
destinations globally for mineral explorers and miners due
to the country’s sound licensing system and high mineral
prospectivity, in particular for copper.
1
2013 Annual Report Review of Operations
MANAGING DIRECTOR’S REVIEW OF
OPERATIONS
Overview
Equus Mining’s exploration focus during the 2013
financial year was on the newly acquired Yerba and
Araya projects, located within the Naltagua copper
district in Chile. The Naltagua copper district is located
80km southwest of the Chilean capital of Santiago and
75km by road southeast of the port city of San Antonio
(See Figure 1).
The copper deposits at Naltagua are interpreted to
be ‘manto-type’ or stratabound in character and are
preferentially hosted by permeable marine volcanic
rocks and interflow sediments of the Lower Cretaceous
(118 to 97 million years old) Prado Formation. The
copper is interpreted to have been scavenged from
intra-formational volcanic and sedimentary rocks by
relatively low-temperature metamorphic hydrothermal
fluids generated during diagenesis (burial) and
expelled into permeable coarse grained lithologies and
structures. These provide favourable trap-sites where
metals are deposited and concentrated.
The historic Naltagua copper district has seen minimal
exploration despite over 100 years of intermittent,
small-scale mining. Noranda drilled one hole in 2008,
which intersected 32 metres at 0.5% Cu in andesite
volcanic breccia, although no follow-up drilling was
undertaken at the time.
Prior to the commencement of drilling in April 2013,
Equus Mining conducted systematic channel sampling
of more than 1,000 metres of underground workings
(adits), project-scale geological mapping, 26 line-
kilometres of Induced Polarisation (‘IP’) geophysics and
indicative metallurgical testwork on a 30kg sample of
copper mineralised andesite breccia collected from the
Yerba mullock dump.
This preliminary work outlined three initial project areas
- Yerba, Araya and Cerro (See Figure 2).
Figure 1. Naltagua Copper District Location
2
EQUUS MINING LIMITED
Review of Operations
Figure 2. Project Locations
3
2013 Annual Report Review of Operations
Yerba Prospect
Geological mapping, surface rock-chip sampling and
the channel sampling of 541 metres of underground
workings led to the delineation of a north-northwest
trending zone of copper mineralization, partly
associated with hydrothermal breccias, in an east-
dipping sequence of andesite and interflow calcareous
black shale. The underground sampling returned a best
result of 48 metres (apparent width) at 1.35% Cu and
the surface sampling returned a best result of 33 metres
(true width) at 0.88% Cu. Additional surface channel
sampling of outcropping copper mineralisation returned
10 metres (apparent width) at 1.73% Cu and 20 metres
(apparent width) at 0.52% Cu in altered andesite,
which extended the area of discontinuous outcropping
copper mineralization to over 700 metres in a zone
approximately 75 meters wide (See Figure 3).
Table 1 – Drill Hole Locations
The Company’s inaugural diamond drilling commenced
on 1 April 2013 and 4 holes (YB-001-D to YB-004-D) for
1,003 metres were completed during the June quarter
of 2013 (See Figure 4). All four holes intersected
variable widths and grades of oxide and sulphide
copper mineralization with a best result of 39 metres
(true width) at 0.63% Cu and 4.6g/t Ag from 13 metres,
immediately below historic mine rock-fill (mullock),
in hole YB-001-D. Other significant results include
55 metres (true width) at 0.34% Cu from 22 metres,
including 17 metres (true width) at 0.68% Cu from
23 metres in hole YB-002-D. Drill hole locations and a
summary of drill hole assay results are summarised in
Tables 1 and 2 respectively.
Hole No.
YB-001-D
(Hole 1)
YB-002-D
(Hole 2)
YB-003-D
(Hole 3)
YB-004-D
(Hole 4)
North
WGS-84 UTM
East
WGS-84 UTM
Zone
UTM
6260781
313270
6260775
313330
6260775
313330
6260775
313332
19S
19S
19S
19S
Dip
-60
-75
-50
-50
Azimuth
Grid - UTM
Depth
metres
270
270
270
090
325
361
121
196
(Abandoned)
Table 2 – Drill Hole Assay Summary
Project
Yerba
Yerba
Yerba
Yerba
From
(metres)
To
(metres)
Interval
(metres)
Estimated
True Width
(metres)
Copper
(%)
13
22
23
34
19
51.7
37
84
152
52
77
40
40
23.4
64
68
107
171
39
55
17
6
4.4
12.3
31
23
19
39
55
17
6
3.3
9.2
15.5
11.5
9.5
0.63
0.34
0.68
1.21
0.74
0.44
0.26
0.16
0.32
EQUUS MINING LIMITED
Hole No.
YB-001-D
YB-002-D
including
including
YB-003-D
YB-003-D
YB-004-D
YB-004-D
YB-004-D
4
Review of Operations
Figure 3. Yerba Project Area
5
2013 Annual Report Review of Operations
Hole YB-004-D was planned to test the peak of an IP
chargeability anomaly down-dip of near-surface oxide
and sulphide copper mineralization. However, the hole
intersected variably weathered andesite much deeper
than anticipated down to the final hole depth of 196
metres before the hole was lost (abandoned) in a 10
metres wide, strongly weathered, post-mineralization
shear.
Since the program’s commencement in April,
considerable progress has been made towards better
understanding the controls on copper mineralization
and as a consequence, the current drilling program has
been substantially modified and a greater range of
targets are now being considered.
A 30 kilogram metallurgical sample was collected from
the Yerba mine dump and despatched to ALS Ammtec in
Sydney for preliminary qualitative test work. A simple
flotation test produced a high grade (41% Cu, 463g/t Ag),
premium-quality sulphide concentrate containing no
penalty elements.
Araya Prospect
The Araya Project is the Company’s second copper
project within the extensive Naltagua copper district.
Copper workings and outcropping copper mineralization
have been mapped and sampled over a strike-length
of 1,300 metres and the zone remains open to the
north and south. Drill targets have been defined, but
no drilling has been undertaken within the current
reporting year.
Cerro Prospect
Ubiquitous malachite (green secondary copper mineral)
after bornite (primary copper sulphide) is variably
exposed in an east-dipping sheet of altered andesite
volcanic breccia on the main Naltagua ridge. A total
of 12 samples of outcropping mineralization collected
along a ridge-top traverse over a distance of 210 metres
returned results ranging from 0.16% Cu to 3.53% Cu.
The true width of the mineralized unit is interpreted
to be 70 metres, dipping at 30 degrees to the east. Drill
targets have been defined, but no drilling has been
undertaken with the financial year ended 30 June 2013.
.
Figure 4. Drill Section 6260825 - Yerba Project
6
EQUUS MINING LIMITED Corporate
A considerable number of corporate events occurred
during the 2013 financial year as the Company was
transformed from an oil and gas explorer in the
Kyrgyzstan to a copper explorer in Chile. These events
are listed below:
September Quarter 2012
•
•
•
•
•
The Company acquired the Naltagua copper
project in Chile by purchasing unlisted Australian
public company, Equus Resources Limited (‘Equus
Resources’). Shareholders approved the acquisition
at a General Meeting held on Friday, 31 August
2012. Equus Resources’ shareholders were issued
with new Equus Mining Limited (formerly Caspian
Oil & Gas Limited) shares comprising 45% of the
expanded share capital base.
Equus Resources has the option to acquire 100% of
a contiguous group of 14 mining licences covering
an area of 18.05 square kilometres and 75% of
the known extent of the large (4 kilometres by 2
kilometres) Naltagua copper field. Under the terms
of the option agreement, Equus Mining Limited
(‘Equus’ or ‘The Company’) has the right (but not
the obligation) to acquire the mining licences on an
outright basis by making a payment of US$100,000
in September 2013, with a final payment of US$4.3
million in September 2014 to the licence holder (the
terms were subsequently extended – please see
below).
If Equus decides to exercise the option under this
agreement and once mining production commences
the Company will be obligated to pay the mining
licence owner on this agreement, as variable price,
a Royalty equivalent to 1% (one per cent) of the Net
Smelting Return (“NSR”), for a maximum term of 100
years, with a maximum limit of US$5,000,000.
Following shareholders approval at the General
meeting held on 31 August 2012, the Company
consolidated its share capital on a 1 for 10 basis, the
number of shares on issue at that date was reduced
from 1,331,500,513 to 133,149,810 after allowing for
rounding down of fractions.
The Company issued 4,570,914 new fully paid
ordinary shares for a total consideration of $251,400
before issue costs for $0.055 per share.
Review of Operations
•
Edward (Ted) Leschke appointed as Managing
Director
• Norman Seckold appointed as Non-executive
Chairman
•
•
Resignation of Directors Graeme Parsons and
Avraham Ben-Natan
Completed the sale of two subsidiary companies,
which held oil licences in Kyrgyzstan for
US$800,000.
December Quarter 2012
•
•
The Company changed its name from Caspian Oil
and Gas Limited to Equus Mining Limited (ASX
code: EQE) on 28 November 2012 and relocated its
Registered Office and principal place of business to
Level 2, 66 Hunter Street, Sydney, NSW 2000.
A share sale facility was initiated for all holders
of unmarketable parcels (less than $500 or 8,475
shares) of Equus shares. In total 1,864 shareholders,
holding in aggregate 4,353,229 shares, took part in
the sale plan.
• Mr Damien Koerber was appointed Head of
Exploration - South America in November 2012.
Mr Koerber is an experienced and highly regarded
geologist with more than 22 years’ exploration
experience, principally in Latin America. He has
held senior positions with North Limited (Chile),
Rio Algom (Chile), Newcrest (Chile and Peru), MIM
(Argentina and Brazil) and Patagonia Gold SA
(Argentina).
• Mr Marcelo Mora was appointed Company
Secretary in October 2012. Mr Mora holds a
Bachelor of Business and Graduate Diploma of
Applied Corporate Governance with Chartered
Secretaries Australia. He has more than 25 years’
experience in both Australia and Chile providing
financial reporting and company secretarial services
to a range of publicly-listed resources companies.
7
2013 Annual Report Review of Operations
March Quarter 2013
Competent Persons Statement
•
•
Equus Mining agreed to sell a ninety percent
interest in its subsidiary, Leo Shield Exploration
Ghana Ltd (‘Leo Ghana’), for consideration
of US$600,000 to an entity incorporated in
the Republic of Ghana, subject to obtaining
government approval. The Company will retain a
10% interest in Leo Ghana. A deposit of A$100,000
was received, with the balance due once all
government approval conditions are met. Leo
Shield Ghana’s assets include the Osenase and
Asamankese prospecting licences in the Kibi gold
belt, the Pramkese prospecting licence in the Birim
diamond field, a 7% interest in the Kwatechi gold
joint venture in the Ashanti gold belt and a 0.5%
royalty interest in potential future gold production
from the Grumesa prospecting licence.
The Naltagua Purchase Option Agreement period
was extended by 1 year (to September 2015) for no
change in total payment (US$5 million) and no other
additional consideration. The new option payment
schedule is September 2013 – US$100,000, September
2014 – US$500,000, and September 2015 – US$3.8
million. US$600,000 has previously been paid.
•
Robert Perring appointed as a Non-executive
Director
June Quarter 2013
The information in this report that relates to
Exploration Results is based on information compiled
by Mr Robert Perring, who is a Member of the Australian
Institute of Geoscientists. Mr Perring is a non-executive
director of Equus Mining Limited, and has sufficient
experience relevant to the style of mineralisation
and type of deposit under consideration and to the
activities reported on to qualify as a Competent Person
as defined in the 2004 Edition of the ‘Australasian Code
for Reporting of Exploration Results, Mineral Resources
and Ore Reserves’. Mr Perring consents to the inclusion
of the information in this report of the matters based
on information in the format and context in which it
appears.
Surface and Adit Sampling and Assaying: Sampling has
been conducted by qualified geologists using a sample
interval of 2 metres and 5 metres. Assay results have
been composited (weighted arithmetic mean) to give
an average grade estimate for the interval sampled.
The samples were assayed for copper (and 33 other
elements) by aqua regia digest ICP-ES/ICP-MS at Acme
Analytical Laboratories, Santiago, Chile.
Yours sincerely
The Company issued 10,000,000 new fully paid
ordinary shares for a total consideration of
$500,000 from professional and sophisticated
investors for $0.05 per share.
Colin Carson resigned as Non-Executive Director.
Equus sold its Tengrela Royalty Interest in Perseus
Mining’s Sissingué Gold Project in Côte d’Ivoire to
Franco-Nevada Corporation for A$2 million. The
funds were ear marked for the diamond drilling
program at Naltagua in Chile, to accelerate the
identification of a second project in Chile and for
working capital.
Ted Leschke
Managing Director
Dated this 30th day of September 2013
•
•
•
8
EQUUS MINING LIMITED Statement of
Corporate Governance
This statement outlines the main Corporate Governance
practices that were in place throughout or implemented
during the financial year, which comply with the
Australian Stock Exchange (‘ASX’) Corporate Governance
Council recommendations, unless otherwise stated.
The Board also ensures that the Group complies with
all of its contractual, statutory and any other legal
or regulatory obligations. The Board has the final
responsibility for the successful operations of the
Group.
Corporate Governance Statement
The Board is committed to maintaining the highest
standards of Corporate Governance. Corporate
Governance is about having a set of core values and
behaviours that underpin the Group’s activities and
ensure transparency, fair dealing and protection of the
interests of stakeholders.
The Board of Directors supports the Principles
of Good Corporate Governance and Best Practice
Recommendations developed by the ASX Corporate
Governance Council (‘Council’). Whilst the
Group’s practices are largely consistent with the
Council’s guidelines, the Board considers that the
implementation of some recommendations are not
appropriate having regard to the nature and scale of
the Group’s activities and size of the Board. The Board
uses its best endeavours to ensure exceptions to the
Council’s guidelines do not have a negative impact on
the Group and the best interests of shareholders as a
whole. When the Group is not able to implement one
of the Council’s recommendations the Group applies
the ‘if not, why not’ explanation approach by applying
practices in accordance with the spirit of the relevant
principle.
The following discussion outlines the ASX Corporate
Governance Council’s eight principles and associated
recommendations and the extent to which the Group
complies with those recommendations.
Details of all of the Council’s recommendations can be
found on the ASX website at http://www.asx.com.au
Principle 1 – Lay solid foundations for
management and oversight
Board of Directors
The Board is responsible for, and has the authority to
determine, all matters relating to the policies, practices,
management and operations of the Group. The Board
is also responsible for the overall corporate governance
and management oversight of the Group and recognises
the need for the highest standards of behaviour and
accountability in acting in the best interests of the
Group as a whole.
Where the Board considers that particular expertise
or information is required, which is not available from
within their members, appropriate external advice may
be taken and reviewed prior to a final decision being
made by the Board.
Without intending to limit the general role of the Board,
the principal functions and responsibilities of the Board
include the following:
•
•
•
•
•
•
•
formulation and approval of the strategic direction,
objectives and goals of the Group;
the prudential control of the Group’s finances
and operations and monitoring the financial
performance of the Group;
the resourcing, review and monitoring of executive
management;
ensuring that adequate internal control systems
and procedures exist and that compliance with
these systems and procedures is maintained;
the identification of significant business risks and
ensuring that such risks are adequately managed;
the timeliness, accuracy and effectiveness of
communications and reporting to shareholders and
the market; and
the establishment and maintenance of appropriate
ethical standards.
The Group has followed Recommendation 1.1 by
establishing the functions reserved to the Board and
those delegated to senior executives as disclosed above.
The Group has followed Recommendation 1.2 by
evaluating the performance of senior executives. The
Board reviews the performance of the Group’s senior
executives on a face to face basis with the performance
evaluation of the Managing Director being conducted
by the Chairman of the Board.
The Group has taken the appropriate measures to
provide each Director and senior executive with a copy
of the Group’s policies which spells out the rights,
duties and responsibilities that they should follow.
9
2013 Annual Report Statement of
Corporate Governance
The Group has followed Recommendation 1.3 by
conducting the evaluations of senior executives in
accordance with the process described above.
Principle 2 – Structure the Board to add value
Board of Directors - Composition, Structure and Process
The Board has been formed so that it has effective
composition, size and commitment to adequately
discharge its responsibilities and duties given the
Group’s current size, scale and nature of its activities.
Independent Directors
At the date of this report, the Company classified all of
the present directors as Non-Independent Directors, the
Group does not follow Recommendation 2.1. However,
it is the Board’s opinion that all Directors bring to the
Board their independent judgement, irrespective of
whether they are independent or not. The names of the
directors of the Company in office at the date of this
report, specifying which are independent, are set out in
the Directors’ Report on page 15 of this report.
Regular assessment of independence
An independent Director, in the view of the Group, is a
non-executive Director who:
•
is not a substantial shareholder of the Company or
an officer of, or otherwise associated directly with,
a substantial shareholder of the Company;
• within the last three years has not been
employed in an executive capacity by the Group,
or been a Director after ceasing to hold any such
employment;
• within the last three years has not been a principal
of a material professional advisor or a material
consultant to the Group, or an employee materially
associated with a service provider;
is not a material supplier or customer of the Group,
or an officer of or otherwise associated directly or
indirectly with a material supplier or customer;
has no material contractual relationship with the
Group other than as a Director of the Group;
•
•
1 0
•
•
has not served on the Board for a period which
could, or could reasonably be perceived to,
materially interfere with the Director’s ability to act
in the best interests of the Group; and
is free from any interest and any business or other
relationship which could, or could reasonably
be perceived to, materially interfere with the
Director’s ability to act in the best interests of the
Group.
The composition of the Board is reviewed periodically
with regards to the optimum number and skills of
Directors required for the Board to properly perform its
responsibilities and functions.
Chairperson and Managing Director
Norman A. Seckold, a non-independent Director,
holds the office of Chair. The Group does not follow
Recommendation 2.2 because the small size of the
Group does not warrant the appointment of more
Directors. However, the Board considers that Norman
A. Seckold best serves the office of Chair due to his
extensive experience in the industry.
The Chairman leads the Board and has responsibility for
ensuring the Board receives accurate, timely and clear
information to enable the Directors to perform their
duties as a Board.
The Managing Director is responsible and accountable
to the Board for the Group’s management. Edwards J.
Leschke has been appointed as the Managing Director
of the Group and performs the role of Chief Executive
Officer. Therefore, the Group follows Recommendation
2.3.
Board nominations
Having regard to the current membership of the Board
and the size, organisational complexity and scope of
operation of the Group, a Nomination Committee has
not been established and therefore Recommendation
2.4 has not been followed.
EQUUS MINING LIMITED Statement of
Corporate Governance
Performance review and evaluation
Professional advice
The Group has followed Recommendations 2.5 and
2.6 by disclosing the process for evaluating the
performance of the Board, and disclosure requirements
under Principle 2 below.
It is the policy of the Board to ensure that the Directors
and executives of the Group are equipped with the
knowledge and information they need to discharge
their responsibilities effectively, and that individual
and collective performance is regularly and fairly
reviewed. Although the Group is not of a size to warrant
the development of formal processes for evaluating
the performance of its Board, individual Directors
and executives, there is on-going monitoring by the
Chairman and the Board. The Chairman also speaks to
Directors individually regarding their role as a Director.
Board members, with the approval of the Chairman, may
seek from time to time external professional advice.
Term of appointment as a Director
The Constitution of the Company provides that a
Director, other than the Managing Director, may not
retain office for more than three calendar years or
beyond the third Annual General Meeting following his
or her election, whichever is longer, without submitting
himself or herself for re-election. One third of the
Directors (excluding the Managing Director) must retire
each year and are eligible for re-election. The Directors
who retire by rotation at each Annual General Meeting
are those with the longest length of time in office since
their appointment or last election.
Induction and education
Remuneration
The Group has the policy to provide each new Director
or officer with a copy of the following documents:
•
•
•
•
Code of Conduct;
Continuous Disclosure Policy;
Share Trading Policy; and
Shareholders Communication Policy.
Access to information
The remuneration of the Directors is determined by
the Board as a whole, with the Director to whom a
particular decision relates being absent from the
meeting during the time that the remuneration level is
discussed and decided upon.
For details on the amount of remuneration and any
amount of equity based executive remuneration
payment for each Director, refer to the Key Management
Personnel note to the financial statements and the
Remuneration Report in the Directors’ Report.
Each Director has access to Board papers and all
relevant documentation.
Internal controls
Skills, knowledge and experience
Directors are appointed based on the specific corporate
and governance skills and experience required by
the Group. The Board consists of a relevant blend
of personal experience in accounting and finance,
law, financial and investment markets, financial
management and public Group administration, and,
director-level business or corporate experience required
by the Group.
The Board acknowledges that it is responsible for the
overall internal control framework, but recognises
that no cost effective internal control system will
preclude all errors and irregularities. The system of
internal control adopted by the Group seeks to provide
an appropriate division of responsibility and careful
selection and training of personnel relative to the level
of activities and size of the Group.
1 1
2013 Annual Report Statement of
Corporate Governance
Principle 3 – Promote ethical and responsible
decision making
Code of Conduct and Ethical Standards
All Directors, executives and employees act with the
utmost integrity and objectivity in carrying out their
duties and responsibilities, endeavouring at all times
to enhance the reputation and performance of the
Group. Every employee has direct access to a Director
to whom they may refer any ethical issues that may
arise from their employment. The Group has followed
Recommendation 3.1 and has adopted a formal Code of
Conduct.
Access to Group information and confidentiality
All Directors have the right of access to all relevant
Group books and to the Group’s executive management.
In accordance with legal requirements and agreed
ethical standards, Directors and executives of the Group
have agreed to keep confidential information received
in the course of exercising their duties and will not
disclose non-public information except where disclosure
is authorised or legally mandated.
Share dealings and disclosures
The Group has adopted a policy relating to the trading
of Company securities. The Board restricts Directors,
executives and employees from acting on material
information until it has been released to the market.
Executives, employees and Directors should consult
with the Chairman prior to dealing in securities in the
Company or other companies with which the Company
has a relationship.
Share trading by Directors, executives or employees
is not permitted at any time whilst in the possession
of price sensitive information not already available to
the market. In addition, the Corporations Act prohibits
the purchase or sale of securities whilst a person is in
possession of inside information.
The trading windows for restricted persons is one week
before and 24 hours after the release of the Company’s
quarterly reports, half year results, the full year
results or additional periods which are imposed by the
Company when senior management becomes aware
of a matter that is considered to be price sensitive.
Restricted persons are prohibited from trading in the
Company’s securities outside these trading windows
unless in special circumstances and with the approval of
the Board.
1 2
Conflicts of interest
To ensure that Directors are at all times acting in the
best interests of the Group, Directors must:
•
•
disclose to the Board actual or potential conflicts of
interest that may or might reasonably be thought
to exist between the interests of the Director and
the interests of any other parties in carrying out
the activities of the Group; and
if requested by the Board, within seven days or
such further period as may be permitted, take such
necessary and reasonable steps to remove any
conflict of interest.
If a Director cannot, or is unwilling to remove a conflict
of interest then the Director must, as required by the
Corporations Act, absent himself from the room when
Board discussion and/or voting occurs on matters about
which the conflict relates.
Related party transactions
Related party transactions include any financial
transaction between a Director and the Group as
defined in the Corporations Act or the ASX Listing Rules.
Unless there is an exemption under the Corporations
Act from the requirement to obtain shareholder
approval for the related party transaction, the Board
cannot approve the transaction. The Group also
discloses related party transactions in its financial
statements as required under relevant Accounting
Standards.
Board diversity
Given the small size of the Group, the Group has
not set a policy concerning diversity and therefore
Recommendations 3.2, 3.3, 3.4 and 3.5 have not been
followed. However, the Company’s Board does take
into account the gender, age, ethnicity and cultural
background of potential Board members.
Principle 4 – Safeguard integrity in financial
reporting
Audit Committee
Having regard to the current membership of the Board
and the size, organisational complexity and scope of
operations of the Group, an Audit Committee has not
been established and therefore Recommendations 4.1,
4.2, 4.3 and 4.4 have not been followed.
EQUUS MINING LIMITED The objective of an Audit Committee is to make
recommendations to the Board regarding various
matters including the adequacy of the external audit,
risk management and compliance procedures, to
evaluate from time to time the effectiveness of the
financial statements prepared for the Board and to
ensure that independent judgement is always exercised.
These functions of an Audit Committee are performed
by the full Board.
Principle 5 – Make timely and balanced
disclosure
The Group has followed Recommendations 5.1 and 5.2
and has adopted a formal Continuous Disclosure Policy.
Continuous Disclosure to the ASX
The Board has designated the Managing Director
and CFO as being responsible for overseeing and co-
ordinating disclosure of information to the ASX as
well as communicating with the ASX. Accordingly the
Company will notify the ASX promptly of information:
•
•
concerning the Company, that a reasonable person
would expect to have a material effect on the price
or value of the Company’s securities; and
that would, or would be likely to, influence persons
who commonly invest in securities in deciding
whether to acquire or dispose of the Company’s
securities.
Announcements are made in a timely manner, are
factual and do not omit material information in order to
avoid the emergence of a false market in the Company’s
securities
Principle 6 – Respect the rights of
shareholders
The Company has followed Recommendations 6.1 and
6.2 and has designed a communications policy for
promoting effective communication with shareholders
and encouraging their participation at general meetings
as disclosed below.
Communication to the market and shareholders
The Board recognises its duty to ensure that its
shareholders are informed of all major developments
affecting the Company’s state of affairs. The Board
considers that information will be communicated to
shareholders and the market through:
Statement of
Corporate Governance
•
•
•
•
•
the Annual Report which is distributed to
shareholders (usually with the Notice of Annual
General Meeting);
the Annual General Meeting and other general
meetings called to obtain shareholder approvals as
appropriate;
the half-yearly financial statements;
quarterly activities and cash flow reports; and
other announcements released to the ASX
as required under the continuous disclosure
requirements of the ASX Listing Rules and other
information that may be mailed to shareholders or
made available through the Company’s website.
The Company actively promotes communication with
shareholders through a variety of measures, including
the use of the Company’s website and email. The
Company’s reports and ASX announcements are made
available on the Company’s website, www.equusmining.
com, and on the ASX website, www.asx.com.au, under
ASX code ‘EQE’.
Principle 7 – Recognise and manage risk
The Group has followed Recommendation 7.1 and has
designed policies for the oversight and management of
material business risks as disclosed below.
The Board is responsible for the identification,
monitoring and management of significant business
risks and the implementation of appropriate levels
of internal control, recognising however that no cost
effective internal control system will preclude all errors
and irregularities. The Board regularly reviews and
monitors areas of significant business risk.
Having regard to the current membership of the Board
and the size, organisational complexity and scope
of operations of the Group, Recommendation 7.2 is
not relevant because the Board has the oversight
function of risk management and internal control
systems. Therefore, the risk management functions
and oversight of material business risks are performed
directly by the Board and not by management.
Internal control and risk management
The Board reviews systems of external and internal
controls and areas of significant operational, financial
and property risk and ensures arrangements are in place
to contain such risks to acceptable levels.
1 3
2013 Annual Report Statement of
Corporate Governance
Appropriate insurance policies are kept current to
cover all potential risks and maintaining Directors’ and
Officers’ professional indemnity insurance.
Internal audit function
The internal audit function is carried out by the Board.
The Group does not have an internal audit department
nor has an internal auditor. The size of the Group does
not warrant the need or the cost of appointing an
internal auditor.
CEO and CFO declarations
The Group has followed Recommendation 7.3. The
Board has determined that the Managing Director and
the CFO or the Company Secretary if the Company does
not have a CFO are the appropriate persons to make
the CEO and CFO declarations as required under section
295A of the Corporations Act. The Board is also satisfied
that the internal control system is operating effectively
in all material respects.
The Group has followed Recommendation 7.4 by
disclosing the information above
Principle 8 – Remunerate fairly and
responsibly
Having regard to the current membership of the
Board and the size, organisational complexity and
scope of operations of the Group, a Remuneration
Committee has not been established and therefore
Recommendations 8.1, 8.2, 8.3 and 8.4 have not been
followed.
However, the functions and responsibilities listed below
were carried out by the Board.
Remuneration responsibilities
The role and responsibility of the Board is to review and
make recommendations in respect of:
executive remuneration policy;
executive Director and senior management
remuneration;
executive incentive plan;
non-executive Directors’ remuneration;
•
•
•
•
1 4
•
•
•
•
performance measurement policies and procedures;
termination policies and procedures;
equity based plans; and
required remuneration and remuneration benefits
public disclosure.
Remuneration policy
The Directors’ total remuneration is adopted by
shareholders at the Annual General Meeting. The Board
approves the salary and emoluments paid to officers.
Consultants are engaged as required pursuant to service
agreements. The Group ensures that fees, salaries
and emoluments are in line with general standards
for publicly listed companies of the size and type of
the Group. All salaries of Directors and officers are
disclosed in the Annual Report of the Group.
In line with Recommendation 8.2, the Group has a policy
to remunerate its Directors and officers based on fixed
and incentive component salary packages to reflect the
short and long term objectives of the Group.
The salary component of the Managing Director’s
remuneration is made up of:
•
•
•
fixed remuneration;
Superannuation of 9%; and
equity based remuneration in the form of options
when the Board considers that the executive is able
to influence the generation of shareholders wealth
and thus have a direct impact on the Company’s
performance.
The salary component of non-executive and executive
Directors is made up of:
•
•
fixed remuneration; and
an entitlement to receive options, subject to
shareholders’ approval, when a director is able to
influence the generation of shareholders wealth.
EQUUS MINING LIMITED Directors’ Report
The Directors present their report, together with the consolidated financial statements of the Group, comprising of
Equus Mining Limited (‘Equus’ or ‘the Company’) and its controlled entities for the financial year ended 30 June 2013
and the auditor’s report thereon.
DIRECTORS
The names and details of the Directors in office during
or since the end of the previous financial year are as
follows. Directors were in office for the entire year
unless otherwise stated.
Norman Alfred Seckold BEcon, Non-Executive Chairman
•
Chairman of Cerro Resources Ltd, a precious metals
exploration company with a development project in
Mexico.
Mr Seckold is currently Chairman of the following listed
companies:
Director appointed 5 September 2012
Norman Seckold graduated with a Bachelor of
Economics degree from the University of Sydney in
1970. He has spent more than 30 years in the full time
management of natural resource companies, both in
Australia and overseas, including the role of Chairman
for a number of publicly listed companies including;
• Moruya Gold Mines (1983) N.L., which acquired the
Golden Reward heap leach gold deposit in South
Dakota, USA
•
•
•
•
•
•
•
Pangea Resources Limited, which acquired and
developed the Pauper’s Dream gold mine in
Montana, USA
Timberline Minerals, Inc. which acquired and
completed a feasibility study for the development
of the MacArthur copper deposit in Nevada, USA
Perseverance Corporation Limited, which
discovered and developed the Nagambie gold mine
in Victoria
Valdora Minerals N.L., which developed the
Rustler’s Roost gold mine in the Northern Territory
and the Ballarat East Gold Mine in Victoria
Viking Gold Corporation, which discovered a high
grade gold deposit in northern Sweden and Mogul
Mining N.L., which drilled out the Magistral and
Ocampo gold deposits in Mexico
Bolnisi Gold N.L., which discovered and is currently
operating the Palmarejo and Guadalupe gold and
silver deposits in Mexico
Cockatoo Coal Limited, an Australian coal mining,
exploration and project development company.
•
•
•
Augur Resources Limited, a minerals exploration
and development company operating in Australia
and Indonesia
Santana Minerals Limited, a precious metals
exploration company operating in Mexico
Planet Gas Limited, a coalbed methane exploration
and development company operating in Australia
He is also currently a director of the unlisted public
companies Mekong Minerals Limited and Nickel Mines
Limited.
Edward Jan Leschke BAppScApp Geo, Managing Director
Director appointed 5 September 2012
Mr. Leschke graduated with a Bachelor of Applied
Science – Applied Geology degree from the Queensland
University of Technology. During a 22 year professional
career Mr Leschke initially worked as a mine geologist
at the Elura zinc-lead-silver mine in central New South
Wales as well as holding geological positions in a
number of locations such as the Central Queensland
coal fields, South Australia and Papua New Guinea.
Mr Leschke made the transition to the financial
sector specialising in mining investment, analysis
and corporate finance and has worked for a number
of financial institutions including BZW Stockbroking,
Aberdeen Asset Management and Shaw Stockbroking.
Mr Leschke has been responsible for the inception
of Equus Resources Ltd and the two wholly owned
subsidiaries in the Republic of Chile.
He has not served as a director of any other listed
company during the past three years.
1 5
2013 Annual Report Directors’ Report
Robert John Perring, Non-Executive Director
Appointed 15 February 2013.
Robert Perring is a geologist with more than 30 years
experience in the mineral industry and has held senior
corporate and technical positions in Normandy Mining
Limited and Newmont Australia. While at Newmont, his
regional exploration team discovered the Moolart Well
gold deposit in Western Australia (now in production).
He has also directed exploration within and around
some of Australia and New Zealand’s largest gold and
base metal mines - Boddington (WA), Jundee (WA),
Bronzewing (WA), Golden Grove (WA), Callie (NT), Mt
Leyshon (QLD), Pajingo (QLD) and Waihi (NZ).
Mr Perring has worked in a broad range of geological
terrains within Australia and New Zealand (General
Manager Exploration, Newmont Australia), the Middle
East (Managing Director, Gulf & Asian Mining Limited)
and South America (Technical Director, Equus Resources
Limited).
He is a graduate of Imperial College, London (DIC) and
the University of London (MSc) and is a Member of the
Australian Institute of Geoscientists (MAIG). He has not
served as a director of any other listed company during
the past three years.
Jürg Walker, Non-Executive Director
Director since, 20 May 2002
Jürg Walker is a European portfolio manager and
investor. He has over 20 years experience in the
Swiss banking industry, operating his own portfolio
management company after leaving his position as
senior vice president of a private bank in Zurich. He has
not served as a director of any other listed company
during the past three years.
1 6
Colin John Carson CPA FCIS FCIM, Non-Executive
Director and Company Secretary
Director since 10 October 1994, resigned 27 May 2013
Colin Carson has been involved as a director and
company secretary of a number of Australian public
companies since the early 1980s and is responsible for
joint venture negotiations and corporate and legal
matters. He ceased to serve as Executive Chairman
on 10 September 2012 and, with effect from 1 October
2012, he assumed a non-executive director role until
the date of his resignation. During the past three years
he has also served as a director of the following listed
companies:
•
Perseus Mining Limited
• Manas Resources Limited
Michael John Sandy BSc (Hons), Non-Executive
Independent Director
Appointed 23 September 2005, resigned 15 February 2013
Michael Sandy is a petroleum geologist with over 35
year’s resource industry experience. During the past
three years he has also served as a director of the
following listed companies:
•
•
Burleson Energy Limited
Tap Oil Limited
• Hot Rock Limited
Graeme Leslie Parsons BSc, Executive Director and Chief
Executive Officer
Appointed 18 October 2006, resigned 5 September 2012
Mr Parsons is a Petroleum Geoscientist with over 30
years experience in the Australian and international
oil and gas sectors. His skills set covers a broad
spectrum across the petroleum industry including
exploration (geology & geophysics including basin &
acreage evaluation), appraisal, development, operations
(drilling, completions, fraccing), project management,
production forecasting, economic evaluation, reserves
estimation, portfolio analysis and Government and
landholder relations. During the past three years he has
not served as a director of any other listed company.
EQUUS MINING LIMITED
Directors’ Report
Avraham Ben-Natan - Non-Executive Independent
Director
DIRECTORS’ MEETINGS
Appointed 30 November 2011, resigned 5 September 2012
Mr Ben-Natan is an experienced businessman and
investor who resides in the Kyrgyz Republic. He has not
served as a director of any other listed company during
the past three years.
The number of Directors’ meetings and number of
meetings attended by each of the Directors (while they
were a Director) of the Company during the year are:
Director
Held
Attended
Board Meetings
COMPANY SECRETARIES
Marcelo Mora
Company Secretary Appointed 16 October 2012
Marcelo Mora holds a Bachelor of Business degree and
Graduate Diploma of Applied Corporate Governance,
and is a Chartered Secretary (ACIS). Mr Mora has been an
accountant for more than 25 years and has experience
in resources and mining companies both in Australia
and internationally, providing financial reporting and
company secretarial services to a range of publicly listed
companies.
Susmit Mohanlal Shah BScEcon CA
Norman A. Seckold
Edward J. Leschke
Robert J. Perring
Jürg Walker
Colin J. Carson
Graeme L. Parsons
Michael J. Sandy
Avraham Ben-Natan
1
1
-
1
1
-
1
-
1
1
-
1
1
-
1
-
DIRECTORS’ INTERESTS
Directors’ beneficial shareholdings at the date of this
report are:
Appointed 30 April 2003, resigned 16 September 2013
Director
Fully Paid
Ordinary Shares
Options over
ordinary shares
Susmit Shah is a Chartered Accountant with over 25
years experience. Over the last 15 years, Mr Shah has
been involved with a diverse range of Australian public
listed companies in company secretarial and financial
roles. He ceased to serve as Company Secretary on 16
September 2013.
Colin John Carson
Appointed 20 June 1994, resigned 16 October 2012.
For details relating to Colin Carson, please refer to the
details on Directors above.
Norman A. Seckold
30,377,420
Edward J. Leschke
34,619,471
Robert J. Perring
Jürg Walker
8,100,000
8,297,861
OPTION HOLDINGS
-
-
-
-
Options granted to directors’ and officers’
The Company did not grant any options over unissued
ordinary shares during or since the end of the financial
year to directors as part of their remuneration. The
Directors do not hold any options over unissued shares
at the date of this report nor did they hold any at the
reporting date.
The Company has not granted any options over
unissued ordinary shares during or since the end of the
financial year to officers as part of their remuneration.
1 7
2013 Annual Report Directors’ Report
Unissued shares under option
At the date of this report, unissued ordinary shares of
the Company under option are:
Number of
shares
460,000
1,000,000
1,000,000
1,000,000
1,000,000
Exercise
price
Expiry
date
$0.30
31 October 2013
$0.075
13 November 2015
$0.15
$0.20
$0.25
13 November 2015
13 November 2015
13 November 2015
All options expire on the earlier of their expiry date or
termination of the employee’s employment. Details
of options issued by the Company are set out in the
reserves note to the financial report. The names of
persons who currently hold options are entered in the
register of options kept by the Company pursuant
to the Corporations Act 2001. This register may be
inspected free of charge.
The persons entitled to exercise the options do not
have, by virtue of the options, the right to participate
in a share issue of the Company or any other body
corporate.
The Group has not issued any ordinary shares of the
Company as a result of the exercise of options during or
since the end of the financial year.
CORPORATE INFORMATION
Corporate Structure
Equus Mining Limited is a limited liability company
that is incorporated and domiciled in Australia. It has
prepared a consolidated financial report incorporating
the entities that it controlled during the financial year.
The Group’s structure at 30 June 2013 is outlined below.
Equus Mining
Limited
100%
100%
100%
100%
100%
Hotrock
Enterprises
Pty Ltd
Okore Mining
Pty Ltd
Dataloop
Pty Ltd
Textonic
Consulting
Limited
Equus
Resources
Limited
100%
100%
0.10%
100%
100%
Derrick
Pty Ltd
Leo Shield
Exploration Ghana
Ltd
(Ghana Gold and
Diamond Licences)
JSC Sherik
Incorporated in
Kyrgyz
Equus
Resources
Chile SpA
Brumby
Mining
Pty Ltd
99.9%
Minera
Equus
Chile Ltda
The companies referred to above comprise the “Consolidated Entity” for the purposes of the Financial Statements
included in this report. On 26 September 2012, the Company’s ownership interests in JSC Textonic, LLC South Derrick and
Caspkaz Pty Ltd were disposed and are not included in the above Corporate Structure diagram. The results of the disposed
entities are included in the consolidated financial statements of the Group up until the date of disposal.
1 8
EQUUS MINING LIMITED Directors’ Report
PRINCIPAL ACTIVITIES
CHANGES IN STATE OF AFFAIRS
The principal activity of the Group during the course of
the financial year was the mineral exploration of the
recently acquired Naltagua Copper project in Chile. As
at the date of this report, the objective of the group
is to complete the drilling program at the Yerba and
Araya projects at its Naltagua copper district in Chile
that would create long-term shareholder value through
the discovery or redefining of a JORC copper resource.
In a medium term, the Group’s objective is to seek new
opportunities of mineral prospective areas in the region.
However, there are no guarantees that our existing or
future exploration programs will be successful.
FINANCIAL RESULTS
The consolidated loss after income tax attributable to
members of the Company for the year was $3,590,628
(2012: $3,573,858 loss).
REVIEW OF OPERATIONS
A review of the Group’s operations for the year ended
30 June 2013 is set out on pages 2 to 8 of this Annual
Report.
DIVIDENDS
The Directors do not recommend the payment of a
dividend in respect of the financial year ended 30 June
2013. No dividends have been paid or declared during
the financial year (2012 - $nil)
In the opinion of the Directors, significant changes in
the state of affairs of the Group that occurred during
the year ended 30 June 2013 were as follows:
• On 5 September 2012, the Company issued
108,940,951 ordinary shares to the shareholders
of Equus Resources Limited (the holder of the
Naltagua copper project in Chile), which became a
wholly owned subsidiary of the Company.
• On 26 September 2012, the Group disposed of its
ownership interests in JSC Textonic, LLC South
Derrick and Caspkaz Pty Ltd raising a total of
$789,109.
•
•
•
•
•
•
The Company sold the entirety of its investment in
Perseus Mining Limited raising $1,239,610.
The Company sold part of its investment in Manas
Resources Limited raising $24,210.
The Company sold its royalty interest in the
Tengrela Gold Project raising $2,000,000.
The Company issued 4,570,914 ordinary shares
raising $251,400 before issue costs.
The Company issued 10,000,000 ordinary shares
raising $500,000 before issue costs.
The Company issued 4,000,000 unlisted options
to Mr Damien Koerber, who was appointed Head
of Exploration in Chile. The options were issued
in four tranches of 1,000,000 each with the expiry
date for all tranches being 13 November 2015. The
tranches are exercisable at $0.075, $0.15, $0.20
and $0.25 and all tranches vested in March 2013
when drilling commenced at the Naltagua Copper
projects in Chile.
• Norman Seckold was appointed as Chairman of the
Group effective from 5 September 2012
•
•
Edward Leschke was appointed as Managing
Director of the Group effective from 5 September
2012.
Robert Perring was appointed as Director of the
Group effective 19 February 2013.
• Marcelo Mora was appointed as Company Secretary
on 16 October 2012.
1 9
2013 Annual Report Directors’ Report
ENVIRONMENTAL REGULATIONS
The Group’s operations are not subject to any
significant environmental regulations under either
Commonwealth or State legislation.
The Group’s exploration activities in Chile are subject to
environmental laws, regulations and permit conditions
as they apply in the country of operation. There have
been no breaches of environmental laws or permit
conditions while conducting operations in Chile during
the year.
The Board believes that the Group has adequate
systems in place for the management of its
environmental requirements and is not aware of any
breach of those environmental requirements as they
apply to the Group.
EVENTS SUBSEQUENT TO BALANCE DATE
There has not arisen in the interval between the end of
the financial year and the date of this report any item,
transaction or event of a material or unusual nature
likely, in the opinion of the Directors of the Company,
to affect significantly the operations of the Group, the
results of those operations, or the state of affairs of the
Group, in future financial years.
LIKELY DEVELOPMENTS
Equus considers growth as a vital strategy for the
Company taking into consideration its existing
operations in Naltagua central Chile or by the addition
of new projects through mergers or acquisitions.
The Group will focus on its mineral interest during the
course of 2013/2014 financial year with focus on the
Naltagua project. The Directors expect to receive further
results of the exploration program at Naltagua which
they will make public once the information is received in
accordance with ASX listing rules.
INDEMNIFICATION AND INSURANCE OF
OFFICERS AND AUDITORS
The Company’s Constitution requires it to indemnify
Directors and officers of any entity within the Group
against liabilities incurred to third parties and against
costs and expenses incurred in defending civil or
criminal proceedings, except in certain circumstances.
Directors and officers of the Group have been insured
against all liabilities and expenses arising as a result of
work performed in their respective capacities, to the
extent permitted by law.
2 0
The insurance premium, amounting to $12,765 relates
to:
•
•
costs and expenses incurred by the relevant officers
in defending proceedings, whether civil or criminal
and whatever their outcome; and
other liabilities that may arise from their position,
with the exception of conduct involving a wilful
breach of duty or improper use of information or
position to gain a personal advantage.
REMUNERATION REPORT – Audited
Principals of compensation - Audited
Key management personnel have authority and
responsibility for planning, directing and controlling
the activities of the Group. Key management personnel
comprise the directors of the Company. No other
employees have been deemed to be key management
personnel.
The remuneration policy of Directors and
senior executives is to ensure the remuneration
package properly reflects the persons’ duties and
responsibilities, and that remuneration is competitive
in attracting, retaining and motivating people of the
highest quality. The Board approves the salary and
emoluments paid to officers. Consultants are engaged
when required pursuant to service agreements. The
Group ensures that fees, salaries and emoluments
are in line with general standards for publicly listed
companies of the size and type of the Group.
The Constitution and the ASX Listing Rules specify
that the aggregate remuneration of Non-Executive
Directors shall be determined from time to time by a
general meeting. The latest determination was at a
shareholders meeting on 29 November 2005 when the
shareholders approved an aggregate remuneration of
$200,000 per year.
Directors’ fees cover all main Board activities. Fees may
also be paid to Non-Executive Directors for additional
consulting services provided to the Company. Non-
Executive Directors are entitled to receive options
(subject to shareholder approval) as it is considered
an appropriate method of providing sufficient reward
whilst maintaining cash reserves.
EQUUS MINING LIMITED The Managing Director is employed directly by the
Group. All other Directors, except for Colin Carson
who was paid through the Company’s payroll, are
compensated for their services by way of arrangements
with related parties. The remuneration disclosed
below represents the cost to the Group for the services
provided under these arrangements.
No directors or senior executives receive performance
related remuneration.
There were no remuneration consultants used by the
Company during the year ended 30 June 2013, or in the
prior year.
Remuneration Structure - Audited
In accordance with best practice corporate governance,
the structure of Executive Director and Non-Executive
Director remuneration is separate and distinct.
Service contracts - Audited
There are no service contracts for the key management
personnel.
Executive Directors - Audited
During the financial year ended 30 June 2013, the
following Directors were considered Executive Directors:
• Graeme Parsons until 5 September 2012;
•
Colin Carson until 30 September 2012 - from 1
October 2012 until 27 May 2013 as Non executive
Director;
•
Edward Leschke from 5 September 2012.
The salary component of the Executive Directors was
made up of fixed remuneration plus the 9% statutory
superannuation for year ended 30 June 2013.
Directors’ Report
Non Executive Directors - Audited
During the financial year ended 30 June 2013, the
following Directors were considered Non Executive
Directors:
• Norman Seckold from 5 September 2012;
•
•
•
Colin Carson from 1 October 2012 until 27 May 2013;
Jürg Walker;
Robert Perring from 19 February 2013;
• Michael Sandy until 15 February 2013;
•
Avraham Ben-Natan until 5 September 2012.
The salary component of Non-Executive Directors was
made up of:
•
•
•
fixed remuneration; and
an entitlement to receive options, subject to
shareholders’ approval.
the services of non-executive directors are provided
by way of arrangements with related parties except
for Mr Colin Carson who was paid through the
Company’s payroll.
No Directors of the Company are engaged pursuant to a
service agreement.
Options granted as compensation - Audited
There are no options held by Directors over ordinary
shares.
Modification of terms of equity-settled share-based
payment transactions - Audited
No terms of equity-settled share-based payment
transactions (including options granted as
compensation to a key management person) have been
altered or modified by the issuing entity during the 2013
and 2012 financial years.
Exercise of options granted as compensation - Audited
There were no shares issued on the exercise of options
previously granted as compensation during the 2013
and 2012 financial years.
2 1
2013 Annual Report Directors’ Report
REMUNERATION REPORT – Audited (Con’t)
Details of the nature and amount of each major element of the remuneration of each Director of the Company and
other key management personnel of the Consolidated Entity are:
Short-term employee
benefits
Primary
Salary / Fees
Consulting
Fees
Post
Employment
Benefits
Share based
payments
Superannuation - share options
Total
Year
$
$
$
$
$
Executive Directors
Edward Leschke *
Graeme Parsons ^
Colin Carson ^^^
Non-Executive Directors
Robert Perring **
Colin Carson ^^^
Norman Seckold *
Jürg Walker
Michael John Sandy ^^
Avraham Ben-Natan ^
Total all directors
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
2013
2012
121,154
-
124,382
229,358
128,626
124,000
-
-
-
-
-
-
11,250
53,000
-
20,512
-
24,600
-
30,000
30,000
18,750
30,000
5,346
17,500
-
-
-
-
-
-
-
-
-
-
-
10,904
-
11,194
20,642
3,000
12,000
-
-
1,846
-
-
-
-
-
-
-
-
-
484,620
430,858
53,000
-
26,944
32,642
*
**
^
Director since 5 September 2012
Director since 15 February 2013
Ceased to be Director on 5 September 2012
^^
Ceased to be Director on 15 February 2013
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
132,058
-
135,576
250,000
131,626
136,000
64,250
-
22,358
-
24,600
-
30,000
30,000
18,750
30,000
5,346
17,500
564,564
463,500
Colin Carson ceased to serve as Executive Chairman on 10 September 2012 and, with effect from 1 October 2012,
he assumed a non-executive director role until the date of his resignation on 27 May 2013
^^^
2 2
EQUUS MINING LIMITED Directors’ Report
REMUNERATION REPORT – Audited (Con’t)
Consequences of performance on shareholders’ wealth - Audited
In considering the Group’s performance and benefits for shareholders’ wealth, the Board has regard to the following
indices in respect of the current financial year and the previous four financial years.
2013
$
2012
$
2011
$
2010
$
2009
$
Net loss attributable to equity holders of
the parent
Dividends paid
Change in share price
3,546,382
3,519,829
3,656,276
14,501,622
5,555,012
-
0.00
-
(0.06)
-
0.02
-
-
(0.08)
(0.36)
The overall level of key management personnel’s compensation has been determined based on market conditions,
advancement of the Group’s projects and the financial performance of the Group.
NON-AUDIT SERVICES
During the year ended 30 June 2013 KPMG, the Group’s auditor, has not performed other services in addition to the
audit and review of the financial statements.
Details of the amounts paid to the auditor of the Group, KPMG, and its related practices for audit and non-audit
services provided during the year are set out below.
Statutory Audit
- Audit and review of financial reports - KPMG
Other services
2013
$
83,000
-
83,000
2012
$
-
-
-
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration is set out on page 24 and forms part of the Directors’ Report for the
financial year ended 30 June 2013.
Signed at Sydney this 30th day of September 2013
in accordance with a resolution of the Board of Directors:
Norman A. Seckold
Director
Edward J. Leschke
Director
2 3
2013 Annual Report Lead Auditor’s
Independence Declaration
2 4
EQUUS MINING LIMITED Consolidated Statement of
Profit or Loss and Other
Comprehensive Income
Notes
2013
$
2012
$
Restated*
5
2,000,000
-
(712,092)
(4,781)
(144,000)
-
(44,805)
(4,776)
-
(506,520)
583,026
607,807
(61,224)
546,583
1,129,609
(378,804)
750,805
(798,649)
(2,720)
-
(45,624)
(49,177)
-
(114,658)
(203,326)
(1,214,154)
2,278,093
-
2,278,093
1,063,939
-
1,063,939
(4,341,433)
(3,590,628)
(4,637,797)
(3,573,858)
914,098
(25,010)
2,902,675
(147,735)
-
76,847
(533,315)
3,135,723
(454,905)
(2,263,077)
(2,211,240)
(5,785,098)
(3,546,382)
(44,246)
(3,590,628)
(3,519,829)
(54,029)
(3,573,858)
(553,574)
98,669
(454,905)
(5,738,537)
(46,561)
(5,785,098)
(0.016)
(0.026)
0.003
0.008
5
6
7
30
12
12
18
18
CONTINUING OPERATIONS
Other income
Expenses
Employee, directors and consultants costs
Depreciation expense
Share based compensation expense
Impairment of exploration expenditure
Travel expenses
Pre-licence costs - exploration expenditure
Foreign exchange gain/(loss)
Other expenses
Results from operating activities
Finance income
Finance costs
Net finance income
Profit before tax
Tax expense
Profit from continuing operations
DISCONTINUED OPERATION
Loss from discontinued operation (net of tax)
Loss for the year
Other comprehensive income
Items that may be classified subsequently to profit or loss
Exchange differences on translation of foreign operations
Transfer of foreign currency translation reserve to loss on disposal of
subsidiaries in profit or loss
Net change in fair value of available-for-sale financial assets
Net change in fair value of available-for-sale financial assets reclassified to
profit or loss
Total other comprehensive profit/( loss)
Total comprehensive loss for the year
Loss attributable to:
Owners of the Company
Non-controlling Interests
Comprehensive loss attributable to:
Owners of the Company
Non-controlling Interests
Earnings per share
Basic and diluted loss per share (dollars)
Earnings per share - continuing operations
Basic and diluted loss per share (dollars)
* See Note 30
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
2 5
2013 Annual Report
Consolidated Statement
of Financial Position
Current Assets
Cash and cash equivalents
Receivables
Inventories
Assets held for sale
Other
Total Current Assets
Non-Current Assets
Receivables
Available-for-sale financial assets
Exploration and evaluation expenditure
Property, plant and equipment
Total Non-Current Assets
Total Assets
Current Liabilities
Payables
Provision for tax
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Share capital
Reserves
Other comprehensive income relating to assets held for sale
Accumulated losses
Parent entity interest
Non-controlling interests
Total Equity
Notes
2013
$
8
9
10
26
11
9
12
13
14
15
7
16
17
26
2012
$
607,112
43,538
2,039,772
25,697
-
1,546,628
1,760,797
-
3,675
166,279
3,829,941
2,363,557
12,427
27,730
8,268,874
247,058
8,556,089
12,386,030
249,023
378,804
627,827
627,827
119,090
1,439,318
513,264
685,183
2,756,855
5,120,412
310,964
-
310,964
310,964
11,758,203
4,809,448
106,622,162
99,362,502
261,524
(2,602,033)
(2,804,524)
-
(92,320,959)
(91,852,352)
11,758,203
4,908,117
-
(98,669)
11,758,203
4,809,448
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
2 6
EQUUS MINING LIMITED
Balance at 1 July 2012
Loss for the year
Total other comprehensive income
Total comprehensive loss for the year
Transactions with owners recorded
directly in equity
Ordinary shares issued
Transaction costs on issue of shares
Employee share options
Transfer of expired options
Consolidated Statement of
Changes in Equity
Balance at 1 July 2011
Loss for the year
Total other comprehensive (loss)/income
Total comprehensive loss for the year
Share
Capital
Accumulated
Losses
Reserves
Total
Non-
controlling
Interest
$
$
$
$
$
Total
Equity
$
99,362,502 (88,332,523)
(383,325)
10,646,654
(52,108)
10,594,546
-
-
-
(3,519,829)
-
(3,519,829)
(54,029)
(3,573,858)
-
(2,218,708)
(2,218,708)
7,468
(2,211,240)
(3,519,829)
(2,218,708) (5,738,537)
(46,561)
(5,785,098)
Balance at 30 June 2012
99,362,502 (91,852,352)
(2,602,033)
4,908,117
(98,669)
4,809,448
99,362,502 (91,852,352)
(2,602,033)
4,908,117
(98,669)
4,809,448
-
-
-
(3,546,382)
-
(3,546,382)
(44,246)
(3,590,628)
-
2,992,808
2,992,808
142,915
3,135,723
(3,546,382)
2,992,808
(553,574)
98,669
(454,905)
7,287,860
(28,200)
-
-
-
-
-
-
-
7,287,860
(28,200)
144,000
144,000
3,077,775
(3,077,775)
-
-
-
-
-
-
7,287,860
(28,200)
144,000
-
11,758,203
Balance at 30 June 2013
106,622,162 (92,320,959)
(2,543,000) 11,758,203
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
2 7
2013 Annual Report
Consolidated Statement
of Cash Flows
Cash flows from operating activities
Cash receipts in the course of operations
Cash payments in the course of operations
Net cash used in operations
Interest received
Notes
2013
$
2012
$
406,975
249,220
(2,282,004)
(1,967,216)
(1,875,029)
(1,717,996)
13,267
15,016
Net cash used in operating activities
19
(1,861,762)
(1,702,980)
Cash flows from investing activities
Payments for exploration and development expenditure
(1,490,830)
(1,647,386)
Payments for plant and equipment
Payments for investments
Proceeds on disposal of exploration assets
Proceeds from the sale of royalty interest
Proceeds from sale of plant and equipment
Proceeds from sale of investments
Disposal of subsidiaries, net of cash disposed of
Deposit received for the sale of Leo Ghana
Loans repaid from other entities
Payment for the acquisition of assets (net of cash acquired)
(230,041)
-
-
2,000,000
(113,382)
(20,000)
428,859
-
140,617
104,398
1,263,851
1,587,705
778,260
100,000
9,639
119,392
-
-
136,333
-
Net cash from investing activities
2,690,888
476,527
Cash flows from financing activities
Proceeds from share issues
Share issue expenses
Repayment of borrowings - related party
Net cash provided by financing activities
Net increase / (decrease) in cash held
Cash and cash equivalents at 1 July
Effects of exchange rate fluctuations on cash held
Cash and cash equivalents
Less cash reclassified to assets held for sale
Cash and cash equivalents at 30 June
751,400
(28,200)
(100,000)
623,200
-
-
-
-
1,452,326
(1,226,453)
607,112
1,852,503
-
2,059,438
(19,666)
(18,938)
607,112
-
19
2,039,772
607,112
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
2 8
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
1. REPORTING ENTITY
Equus Mining Limited (the ‘Company’) is a company domiciled in Australia. The address of the Company’s registered
office is Level 2, 66 Hunter Street, Sydney, NSW, 2000. The consolidated financial statements of the Company as at and
for the year ended 30 June 2013 comprises the Company and its subsidiaries (together referred to as the ‘Group’). The
Group is a for-profit entity and is primarily engaged in identifying and evaluating copper and gold resource opportunities
in the metal-rich provinces of Chile, South America. During the year the Company changed its name from Caspian Oil &
Gas Limited to Equus Mining Limited.
2. BASIS OF PREPARATION
(a) Statement of compliance
The consolidated financial statements are general purpose financial statements which have been prepared in
accordance with Australian Accounting Standards (‘AASBs’) adopted by the Australian Accounting Standards Board
(‘AASB’) and the Corporations Act 2001. The consolidated financial statements comply with International Financial
Reporting Standards (‘IFRSs’) and interpretations adopted by the International Accounting Standards Board (‘IASB’).
The consolidated financial statements were authorised for issue by the Directors on 30 September 2013.
(b) Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for available-for-sale
financial assets which are measured at fair value.
(c) Functional and presentation currency
These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency.
(d) Going concern
The consolidated financial statements have been prepared on a going concern basis, which contemplates the realisation
of assets and settlement of liabilities in the ordinary course of business.
The Group has incurred a loss of $3,590,628 for the year ended 30 June 2013 and has accumulated losses of $92,320,959
as at 30 June 2013. The Group has cash of $2,039,772 at 30 June 2013 (excluding cash reclassified to assets held for sale)
and used $3,352,592 of cash in operations, including payments for exploration and evaluation, for the year ended 30
June 2013. The Group has raised equity of $723,200 net of capital raising costs during the year however additional
funding will be required to meet the Group’s expenditure commitments.
These conditions give rise to a material uncertainty that may cast significant doubt upon the Group’s ability to continue
as a going concern. The ongoing operation of the Group is dependent upon:
•
•
•
the Group raising additional funding from shareholders or other parties; and/or
the Group disposing of non-core assets; and/or
the Group reducing expenditure in-line with available funding.
The Directors have prepared cash flow projections that support the ability of the Group to continue as a going concern.
These cash flow projections assume the Group obtains sufficient additional funding from the sale of its remaining non-
core assets, or otherwise from shareholders or other parties. If such funding is not achieved, the Group plans to reduce
expenditure significantly, which may result in an impairment loss on the book value of exploration and evaluation
expenditure recorded at reporting date.
In the event that the Group does not obtain additional funding and/or reduce expenditure in-line with available funding,
it may not be able to continue its operations as a going concern and therefore may not be able to realise its assets and
extinguish its liabilities in the ordinary course of operations and at the amounts stated in the consolidated financial
statements.
(e) Use of estimates and judgements
The preparation of the consolidated financial statements in conformity with IFRS requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected.
2 9
2013 Annual Report Notes to the Consolidated
Financial Statements
2. BASIS OF PREPARATION (Cont.)
(e) Use of estimates and judgements (Cont.)
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material
adjustment within the next financial year are included in the following notes:
• Note 2(d) - Going concern;
• Note 13 - Exploration and evaluation expenditure; and
• Note 26 – Disposal group held for sale.
(f) Changes in accounting policies
Presentation of transactions recognised in other comprehensive income
From 1 July 2012 the Group applied amendments to AASB 101 Presentation of Financial Statements outlined in AASB
2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income. The
change in accounting policy only relates to disclosures and has had no impact on consolidated earnings per share or net
loss. The changes have been applied retrospectively and require the Group to separately present those items of other
comprehensive income that may be reclassified to profit or loss in the future from those that will never be reclassified
to profit or loss. These changes are included in the Statement of Profit or Loss and Other Comprehensive Income.
3. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to all periods presented in these consolidated
financial statements, and have been applied consistently by entities in the Group.
The comparative Consolidated Statement of Profit or Loss and Other Comprehensive Income has been re-presented as
if an operation discontinued during the current year had been discontinued from the start of the comparative year (see
Note 30).
(a) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entities and the
revenue can be reliably measured.
Finance income and finance costs
Finance income comprises interest income on funds invested (including available-for-sale financial assets), dividend
income and gains on the disposal of available-for-sale financial assets. Interest income is recognised as it accrues in
profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the
Group’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.
Finance costs comprise interest expense on borrowings, losses on disposal of available-for-sale financial assets and
impairment losses recognised on financial assets. Borrowing costs that are not directly attributable to the acquisition,
construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.
(b) Exploration and evaluation expenditure
Exploration and evaluation expenditure, including the costs of acquiring licences, are capitalised as intangible
exploration and evaluation assets on an area of interest basis, less any impairment losses. Costs incurred before the
Group has obtained the legal rights to explore an area are recognised in profit or loss.
Exploration and evaluation assets are only recognised if the rights of the area of interest are current and either:
•
•
the expenditures are expected to be recouped through successful development and exploitation of the area of
interest; or
activities in the area of interest have not at the reporting date, reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active and significant
operations in, or in relation to, the area of interest are continuing.
Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility
and commercial viability and facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
For the purposes of impairment testing, exploration and evaluation assets are allocated to cash-generating units to
which the exploration activity relates. The cash generating unit shall not be larger than the area of interest.
3 0
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(b) Exploration and evaluation expenditure (Cont.)
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest
are demonstrable, the relevant exploration and evaluation assets attributable to that area of interest is tested for
impairment and the balance is then reclassified to development.
(c) Property, plant and equipment
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed
assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a
working condition for their intended use, capitalised borrowing costs, and, when the Group has an obligation to remove
the assets or restore the site, an estimate of the costs of dismantling and removing the items and restoring the site on
which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised
as part of that equipment.
Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the
expenditure will flow to the Group. Ongoing repairs and maintenance are expensed as incurred,
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate
items (major components) of property, plant and equipment.
Any gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceeds from
disposal with the carrying amount of the property, plant and equipment, and is recognised net within profit or loss. When
revalued assets are sold, any related amount included in the revaluation reserve is transferred to retained earnings.
Depreciation
Items of property, plant and equipment are depreciated from the date that they are installed and ready for use, or in
respect of internally constructed assets, from the date that the asset is completed and ready for use.
Depreciation is calculated to write off the cost of property, plant and equipment less their estimated residual values
using the straight-line basis over their estimated useful lives. Depreciation is generally recognised in profit or loss,
unless the amount is included in the carrying amount of another asset.
Depreciation rates
Class of assets
Computer and Office Equipment
Motor Vehicles
Building improvements
Plant & equipment
Office Fittings
(d) Financial instruments
Non-derivative financial assets
Depreciation basis
Straight Line
Straight Line
Straight Line
Straight Line
Straight Line
Depreciation rate
20% to 50%
10% to 20%
10%
20%
25%
The Group initially recognises loans and receivables on the date that they are originated. All other financial assets
(including assets designated at fair value through profit or loss) are recognised initially on the trade date, which is the
date that the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it
transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards
of ownership of the financial asset are transferred. Any interest in such transferred financial assets that is created or
retained by the Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the Statement of Financial Position when,
and only when, the Group has a legal right to offset the amounts and intends either to settle them on a net basis or to
realise the asset and settle the liability simultaneously.
3 1
2013 Annual Report Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(d) Financial instruments (Cont.)
Non-derivative financial assets (Cont.)
The Group classifies non-derivative financial assets into the following categories:
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this
category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading
unless they are designated as hedges. Assets in this category are classified as current assets if they are expected to be
settled within 12 months; otherwise they are classified as non-current. Financial assets at fair value through profit or loss
are measured at fair value and changes therein, which take into account any dividend income, are recognised in profit or loss.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. Such assets are recognised at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment
losses. They are included in current assets, except for those with maturities greater than 12 months after the reporting period,
which are classified as non-current assets. Loans and receivables comprise cash and cash equivalents and other receivables.
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed
maturities that the group’s management has the positive intention and ability to hold to maturity. Held-to-maturity
financial assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to
initial recognition, held-to-maturity financial assets are measured at amortised cost using the effective interest
method, less any impairment losses. Held-to-maturity financial assets are included in non-current assets, except for
those with maturities less than 12 months from the end of the reporting period, which are classified as current assets.
Available –for-sale financial assets
The Group’s investments in equity securities are classified as available-for-sale financial assets. Available-for-sale
financial assets are non-derivative financial assets that are designated as available-for-sale or are not classified in any
of the above categories of financial assets. Available-for-sale financial assets are recognised initially at fair value plus
any directly attributable transaction costs.
Subsequent to initial recognition, they are measured at fair value and changes therein, other than impairment losses, are
recognised in other comprehensive income and presented within the fair value reserve in equity. When an investment
is derecognised, the cumulative gain or loss in equity is transferred to profit or loss.
Share Capital
Ordinary Shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are
recognised as a deduction from equity, net of any tax effects.
(e) Basis of consolidation
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to
govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control,
potential voting rights that presently are exercisable or convertible are taken into account. The financial statements
of subsidiaries are included in the consolidated financial statements from the date that control commences until the
date that control ceases. The accounting policies of the subsidiaries have been changed when necessary to align them
with the policies adopted by the Group.
Non-controlling interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group
and are presented separately in the Statement of Profit or Loss and Other Comprehensive Income and within equity in
the Consolidated Statement of Financial Position. Losses are attributed to the non-controlling interests even if that
results in a deficit balance.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of
the controlling and non-controlling interests to reflect their relative interests in the subsidiary.
3 2
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(e) Basis of consolidation (Cont.)
Loss of control
On the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests
and other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is
recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured
at fair value at the date that control is lost. Subsequently that retained interest is accounted for as an equity accounted
investee or as an available-for-sale financial asset depending on the level of influence retained.
Investments in associates and jointly controlled entities
Associates are those entities in which the Group has significant influence, but not control or joint control, over the
financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50
percent of the voting power of another entity. Jointly controlled entities are those entities over whose activities the
Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial
and operating decisions.
Investments in associates and jointly controlled entities are accounted for under the equity method and are initially
recognised at cost. The cost of the investment includes transaction costs.
Jointly controlled operations
A jointly controlled operation is a joint venture carried on by each venturer using its own assets in pursuit of the joint
operations. The consolidated financial statements include the assets that the Group controls and the liabilities that it
incurs in the course of pursuing the joint operation, and the expenses that the Group incurs and its share of the income
that it earns from the joint operation.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements.
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less.
(g) Trade and other receivables and payables
Trade receivables and payables are carried at amortised cost. For receivables and payables with a remaining life of
less than one year, the notional amount is deemed to reflect the fair value. All other receivables and payables are
discounted to determine the fair value.
(h) Impairment
Non-derivative financial assets
A financial asset not classified as at fair value through profit or loss is assessed at each reporting date to determine
whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective
evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset.
For an investment in an equity security classified as available-for-sale, a significant or prolonged decline in its fair value
below its cost is objective evidence of impairment. The Group consider a decline of 20 percent to be significant and a
period of 9 months to be prolonged.
Financial assets measured at amortised cost
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets
are assessed collectively in groups that share similar credit risk characteristics.
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its
carrying amount, and the present value of the estimated future cash flows discounted at the original effective interest
rate. Losses are recognised within profit or loss. When an event occurring after the impairment was recognised causes
the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.
3 3
2013 Annual Report Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(h) Impairment (Cont.)
Non-derivative financial assets (Cont.)
Available-for-sale financial assets
Impairment losses on available-for-sale financial assets are recognised by reclassifying the losses accumulated in the
fair value reserve in equity to profit or loss. The cumulative loss that is reclassified from equity to profit or loss is the
difference between the acquisition cost and the current fair value, less any impairment loss recognised previously in
profit or loss. Any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognised in
other comprehensive income.
Non-financial assets
The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at each reporting
date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable
amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use,
the recoverable amount is estimated each year at the same time.
An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit (CGU) exceeds
its recoverable amount. The recoverable amount of an asset or CGU is the greater of their fair value less costs to sell
and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to
the asset or CGU. For impairment testing, assets are grouped together into the smallest group of assets that generates
cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Impairment
losses are recognised in profit or loss.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount
that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange
rates at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting
date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss
on monetary items is the difference between amortised cost in the functional currency at the beginning of the year,
adjusted for effective interest and payments during the year, and the amortised cost in foreign currency translated at
the exchange rate at the end of the year.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated
to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items
that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of
the transaction.
Foreign currency differences arising on retranslation are recognised in profit or loss.
(j) Foreign operations
The assets and liabilities of foreign operations are translated to the functional currency at the foreign exchange rate
ruling at the reporting date. The income and expenses of foreign operations, are translated to Australian dollars at
exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income, and presented in the foreign currency
translation reserve in equity. However, if the foreign operation is a non-wholly-owned subsidiary, then the relevant
proportion of the translation difference is allocated to the non-controlling interests. When a foreign operation
is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the foreign
currency translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss
on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while
retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests
When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely
in the foreseeable future, foreign exchange gains and losses arising from such items are considered to form part of the
net investment in the foreign operation and are recognised in other comprehensive income, and are presented in the
foreign currency translation reserve in equity.
3 4
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(k) Tax
Current tax and deferred tax is recognised in profit or loss except to the extent that it relates to a business combination,
or items recognised directly in equity or in other comprehensive income.
Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted
or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:
•
•
•
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit or loss
temporary differences related to investments in subsidiaries to the extent that the Group is able to control the timing
of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future
taxable temporary differences arising on the initial recognition of goodwill
The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group
expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse,
using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset if
there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same
tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and
assets on a net basis or their tax assets and liabilities will be realised simultaneously.
A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent
that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are
reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit
will be realised.
(l) Segment reporting
Determination and presentation of operating segments
The Group determines and presents operating segments based on the information that is provided internally to the
Managing Director, who is the Group’s chief operating decision maker.
An operating segment is a component of the Group that engages in business activities from which it may earn revenues
and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other
components. All operating segments’ operating results are regularly reviewed by the Group’s Managing Director to
make decisions about resources to be allocated to the segment and assess its performance, and for which discrete
financial information is available.
Segment results that are reported to the Managing Director include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the
Company’s headquarters), head office expenses, and income tax assets and liabilities.
(m) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions
are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments
of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as a finance cost.
Site restoration
In accordance with the Group’s environmental policy and applicable legal requirements, a provision for site restoration
in respect of contaminated land, and the related expense, is recognised when the land is contaminated.
3 5
2013 Annual Report Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(n) Employee benefits
Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided.
Share-based payment transactions
The grant-date fair value of share-based payment awards granted to employees is recognised as an employee expense,
with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the
awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service
and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense
is based on the number of awards that meet the related service and non-market performance conditions at the vesting
date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based
payment is measured to reflect such conditions and there is no true-up for differences between expected and actual
outcomes.
(o) Assets held for sale, and discontinued operations
Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly
probably that they will be recovered primarily through sale rather than continuing use.
Immediately before classification as held-for-sale, the assets, or components of a disposal group, are remeasured in
accordance with the Group’s other accounting policies. Thereafter generally the assets, or disposal group, are measured
at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is first
allocated to goodwill, and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated
to inventories, financial assets or deferred tax assets, which continue to be measured in accordance with the Group’s
other accounting policies. Impairment losses on initial classification as held-for-sale and subsequent gains or losses on
remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.
Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or
depreciated.
Discontinued operations
A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly
distinguished from the rest of the Group and which:
•
•
•
represents a separate major line of business or geographical area of operations;
is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of
operations; or
is a subsidiary acquired exclusively with a view to re-sale.
Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified
as held-for-sale, if earlier.
When an operation is classified as a discontinued operation, the comparative Consolidated Statement of Profit or
Loss and Other Comprehensive Income is re-presented as if the operation had been discontinued from the start of the
comparative year.
(p) Inventories
Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in
the ordinary course of business, less the estimated costs of completion and estimated costs necessary to make the sale.
(q) New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for annual periods beginning
after 1 July 2012, and have not been applied in preparing these consolidated financial statements. Those which may be
relevant to the Group are set out below. The Group does not plan to adopt these standards early.
3 6
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(q) New standards and interpretations not yet adopted (Cont.)
AASB 9 Financial Instruments (2010), AASB 9 Financial Instruments (2009)
AASB 9 (2009) introduces new requirements for the classification and measurement of financial assets. Under AASB
9 (2009), financial assets are classified and measured based on the business model in which they are held and the
characteristics of their contractual cash flows. AASB 9 (2010) introduces additions relating to financial liabilities.
The IASB currently has an active project that may result in limited amendments to the classification and measurement
requirements of AASB 9 and add new requirements to address the impairment of financial assets and hedge accounting.
AASB 9 (2010 and 2009) are effective for annual periods beginning on or after 1 January 2015 with early adoption
permitted. The adoption of AASB 9 (2010) could change the classification and measurement of financial assets. The
Group does not plan to adopt this standard early and the extent of the impact has not been determined.
AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests in Other
Entities (2011)
AASB 10 introduces a single control model to determine whether an investee should be consolidated. As a result, the
Group may need to change its consolidation conclusion in respect of its investees, which may lead to changes in the
current accounting for these investees.
Under AASB 11, the structure of the joint arrangement, although still an important consideration, is no longer the main
factor in determining the type of joint arrangement and therefore the subsequent accounting.
•
•
The Group’s interest in a joint operation, which is an arrangement in which the parties have rights to the assets
and obligations for the liabilities, will be accounted for on the basis of the Group’s interest in those assets and
liabilities.
The Group’s interest in a joint venture, which is an arrangement in which the parties have rights to the net assets,
will be equity accounted.
AASB 12 brings together into a single standard all the disclosure requirements about an entity’s interests in subsidiaries,
joint arrangements, associates and unconsolidated structured entities. The Group is currently assessing the disclosure
requirements for interests in subsidiaries, interests in joint arrangements and associates and unconsolidated structured
entities in comparison with the existing disclosures. AASB 12 requires the disclosure of information about the nature,
risks and financial effects of these interests.
These standards are effective for annual periods beginning on or after 1 January 2013 with early adoption permitted.
The Group is currently in the process of assessing the impact of these new standards on the financial results of the
Group.
AASB 13 Fair Value Measurement (2011)
AASB 13 provides a single source of guidance on how fair value is measured, and replaces the fair value measurement
guidance that is currently dispersed throughout Australian Accounting Standards. Subject to limited exceptions, AASB
13 is applied when fair value measurements or disclosures are required or permitted by other AASBs. AASB 13 is effective
for annual periods beginning on or after 1 January 2013 with early adoption permitted. The Group has assessed the likely
impact of this new standard on the consolidated financial statements, and it is not expected to have a significant effect
on the financial results of the Group.
3 7
2013 Annual Report Notes to the Consolidated
Financial Statements
4. DETERMINATION OF FAIR VALUES
A number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial
and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes
based on the following methods. When applicable, further information about the assumptions made in determining
fair values is disclosed in the notes specific to that asset or liability.
Equity securities
The fair values of investments in equity securities are determined with reference to their quoted closing bid price at the
measurement date.
Share-based payment transactions
The fair value of the employee share options is measured using the Black-Scholes formula. Measurement inputs include
share price on the measurement date, exercise price of the instrument, expected volatility (based on an evaluation
of the historic volatility of the Company’s share price, particularly over the historical period commensurate with the
expected term), expected term of the instruments (based on historical experience and general option holder behaviour),
expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance
conditions are not taken into account in determining fair value.
3 8
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
5. LOSS FROM OPERATING ACTIVITIES
Continuing operations
Discontinued operations*
Revenue from ordinary
activities
2013
$
-
2012
$
-
2013
$
2012
$
Total
2013
$
Total
2012
$
388,950
179,367
388,950
179,367
The Group revenue relates to the production and sale of oil from its former entities
of LLC South Derrick and JSC Textonic in the Kyrgyz Republic. In addition, the Group
generated revenue from the provision equipment rental from its subsidiary JSF Sherik
*Discontinued - see Note 30.
2013
$
2012
$
Other income
Recognised in profit or loss
Gain on sale of royalty interest
2,000,000
2,000,000
During the year the Group sold its royalty interest in the Tengrela Gold Project raising $2,000,000.
Other expenses
Administration costs Chile
Legal fees Chile
Accounting and secretarial fees
Commissions
Unmarketable parcel
Insurance
ASIC and ASX fees
Share registry
Legal fees
Advertising and corporate relations
Audit fees
Other expenses
39,502
30,220
24,100
48,500
4,939
16,314
37,252
19,181
49,401
15,366
83,000
138,745
506,520
-
-
-
-
-
-
-
21,847
27,370
21,370
-
19,257
41,220
72,262
203,326
6. FINANCE INCOME
Recognised in profit and loss
Interest income on cash deposits
Net gain on disposal of available-for-sale investments
13,268
594,539
607,807
15,016
2,263,077
2,278,093
Impairment of available-for-sale investments reclassified to profit or loss
(61,224)
-
Net finance costs recognised in profit or loss
546,583
2,278,093
Recognised in other comprehensive income
Net change in fair value of available-for-sale financial assets
Net change in fair value of available-for-sale financial assets reclassified to
profit or loss
Finance cost recognised in other comprehensive income, net of tax
(147,735)
76,847
(533,315)
(681,050)
(2,263,077)
(2,186,230)
3 9
2013 Annual Report
Notes to the Consolidated
Financial Statements
INCOME TAX EXPENSE
7.
Current tax expense
Current year
Adjustments for prior year
Losses not recognised
Numerical reconciliation of income tax expense to prima facie tax payable:
Loss before tax
2013
$
2012
$
791,658
(892,067)
-
(412,854)
892,067
378,804
-
(3,211,824)
(3,573,858)
Prima facie income tax benefit at the Australian tax rate of 30% (2012 - 30%)
(963,547)
(1,072,157)
Decrease in income tax benefit due to:
- non-deductible expenses
- tax losses not recognised
- effect of net deferred tax assets not brought to account
Income tax expense
2,475,801
(234,914)
(898,536)
378,804
8,599
892,067
171,491
-
At 30 June 2013 the Company has recorded a provision of $378,804 in relation to an estimate of potential tax payable in a
foreign jurisdiction. The Directors consider the provision to be a conservative estimate based on the analysis performed.
Given the provision is based on an estimate which contains uncertainties there may be an adjustment within future
financial years.
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items:
Capital losses
Tax losses
Net deductible temporary differences
Potential tax benefit at 30%
2013
$
2012
$
6,803,269
6,465,439
3,022,700
8,761,542
(813,277)
(74,254)
9,012,692
15,152,727
The deductible temporary differences and tax losses do not expire under current tax legislation. Deferred tax assets
have not been recognised in respect of these items because it is not probable that future taxable profit will be available
against which the Group can utilise the benefits there-from.
2013
$
2012
$
184,536
607,112
1,855,236
2,039,772
-
607,112
8. CASH AND CASH EQUIVALENTS
Cash at bank
Deposit at call
4 0
EQUUS MINING LIMITED 9. RECEIVABLES
Current
Sundry debtors
Non-current
Loans to outside parties
Bank bond guarantee - credit card
Property bond deposit
Notes to the Consolidated
Financial Statements
2013
$
2012
$
25,697
43,538
-
119,090
10,806
1,621
12,427
-
-
119,090
Trade and sundry debtors are non-interest bearing and generally on 30-day terms.
The Group’s exposure to credit and market risks, and impairment losses related to receivables, are disclosed in Note 22.
10. INVENTORIES
Raw materials and stores - at cost
Inventory write down
2013
$
2012
$
-
-
-
2,151,766
(605,138)
1,546,628
In 2013, the inventories were reclassified to assets held for sale. In 2012 the write down of inventories to net realisable
value amounted to $605,138. The write downs are included within discontinued operations (Note 30).
11. OTHER ASSETS
Current
Prepayments
12. INVESTMENTS
Equity securities - available-for-sale at fair value
2013
$
2012
$
3,675
166,279
27,730
1,439,318
The Company holds 470,000 shares in Manas Resources Limited at 30 June 2013 (2012: 620,000 shares). During the
financial year, 150,000 shares were sold at a loss of $5,750 which was recognised within profit or loss. At 30 June 2013
the Directors compared the carrying value of the remaining investment to market value and recorded an impairment of
$61,224 in profit or loss. This was based on a closing bid price of 5.9 cents at 30 June 2013.
The Company held 557,120 shares in Perseus Mining Limited on 30 June 2012. These securities were sold through the
financial year ended 30 June 2013 and the group recorded a profit on sale of $600,289 within profit or loss during the year.
4 1
2013 Annual Report Notes to the Consolidated
Financial Statements
13. EXPLORATION AND EVALUATION EXPENDITURE
Costs carried forward in respect of areas of interest in the following phases:
Carrying amount at the beginning of the year
Depreciation capitalised to exploration
Capitalised expenditure incurred - Kyrgyz Republic
Impairments
Sale of Romanian oil interest
Acquisition of Chilean mining interest (Note 27)
Payment of instalment on option agreement - Cerro Oveja
Capitalised expenditure incurred - Naltagua, Chile
Foreign currency translation movement
Balance carried forward
2013
$
2012
$
513,264
-
182,482
1,822,641
863,985
1,821,614
(695,746)
(3,436,919)
-
(531,792)
6,591,096
107,009
1,521,658
49,111
8,268,874
-
-
-
(26,265)
513,264
The ultimate recoupment of exploration and evaluation expenditure is dependent on the successful development and
commercial exploitation, or alternatively sale of the respective areas of interest.
During the year the Group fully impaired the carrying value of its oil and gas interests. The total impairment for the
year ended 30 June 2013 is $695,746 (2012: $3,436,919).
14. PROPERTY, PLANT AND EQUIPMENT
Furniture and fittings - at cost
Accumulated depreciation
Net book value
Computer software - at cost
Accumulated depreciation
Net book value
Office equipment - at cost
Accumulated depreciation
Net book value
Motor Vehicles - at cost
Accumulated depreciation
Net book value
Plant and equipment - at cost
Accumulated depreciation
Accumulated impairment expense
Net book value
Property – at cost
Net book value
2013
$
2012
$
170,432
(156,754)
13,678
-
-
-
72,120
(71,400)
720
18,731
(2,188)
16,543
194,811
(183,702)
11,109
82,940
(80,634)
2,306
150,927
(142,305)
8,622
1,131,761
(984,141)
147,620
-
-
-
-
6,169,080
(3,840,862)
(1,812,692)
515,526
216,117
216,117
-
-
Total property, plant and equipment net book value
247,058
685,183
4 2
EQUUS MINING LIMITED 14. PROPERTY, PLANT AND EQUIPMENT (Cont.)
Reconciliation:
Carrying amount at the beginning of the year
Additions
Disposals
Disposal of subsidiary
Depreciation
Depreciation capitalised to exploration
Reclassified as held for sale
Foreign currency translation movement
Carrying amount at the end of the year
15. TRADE AND OTHER PAYABLES
Current liabilities
Trade creditors and accruals
Employee leave entitlements
Notes to the Consolidated
Financial Statements
2013
$
2012
$
685,183
238,561
(359,793)
(120,450)
(4,953)
-
(202,262)
10,772
247,058
1,567,605
113,382
(44,252)
-
(90,301)
(863,985)
-
2,734
685,183
234,509
14,514
249,023
120,461
190,503
310,964
16. ISSUED CAPITAL
256,661,675 (2012: 1,331,500,513) fully paid ordinary shares
106,622,162
99,362,502
2013
2012
Nº
$
Nº
$
Fully paid ordinary shares
Balance at beginning of financial year
1,331,500,513
99,362,502
1,331,500,513
99,362,502
Consolidation of 1 share for every 10
(1,198,350,703)
-
Issued ordinary shares 5 September 2012 *
108,940,951
6,536,460
Issued ordinary shares 15 September 2012 for $0.055
4,570,914
Issued ordinary shares 2 May 2013 for $0.050
10,000,000
251,400
500,000
Less cost of issue
-
(28,200)
-
-
-
-
-
-
-
-
256,661,675
106,622,162
1,331,500,513
99,362,502
* Acquisition of controlled entity - See Note 27
The Company does not have authorised capital or par value in respect of its issued shares. All issued shares are fully paid.
At a general meeting on 31 August 2012, the shareholders of the Company approved a consolidation of the Company’s
issue capital. The number of shares on issue at that date was reduced from 1,331,500,513 to 133,149,810 (after allowing
for rounding down of fractions).
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at the shareholders meetings. In the event of winding up of the Company, ordinary shareholders rank after
creditors and are fully entitled to any proceeds of liquidation.
4 3
2013 Annual Report Notes to the Consolidated
Financial Statements
17. RESERVES
Equity based compensation reserve (a)
Fair value reserve (b)
Foreign currency translation reserve (c)
Option premium reserve (d)
Non-controlling interest (e)
Movements during the period:
(a) Equity based compensation reserve
Balance at beginning of period
Vesting of employee share options
Expired options
Balance at end of period
2013
$
164,700
-
96,824
-
261,524
2012
$
2,509,475
681,050
(6,381,558)
589,000
(2,602,033)
-
(98,669)
2,509,475
144,000
(2,488,775)
164,700
2,509,475
-
-
2,509,475
(b) Fair value reserve
Balance at beginning of period
Net change in fair value of available-for-sale financial assets
Net change in fair value of available-for-sale financial assets reclassified to profit or loss
Balance at end of period
681,050
(147,735)
(533,315)
-
2,867,280
76,847
(2,263,077)
681,050
(c) Foreign currency translation reserve
Balance at beginning of period
Currency translation differences
Transfer of foreign currency translation reserve to loss on disposal of subsidiaries in
profit or loss
Amounts reclassified to other comprehensive income relating to assets held for sale
Balance at end of period
(6,381,558)
914,098
(6,356,548)
(25,010)
2,759,760
2,804,524
96,824
-
-
(6,381,558)
(d) Option premium reserve
Balance at beginning of period
Expired options
Balance at end of period
(e) Non-controlling interest
Opening balance
Current period loss
Foreign currency translation transfer on disposal
589,000
(589,000)
-
589,000
-
589,000
(98,669)
(44,246)
142,915
-
(98,669)
-
-
(98,669)
4 4
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
17. RESERVES (Cont.)
Nature and purpose of reserves
Option premium reserve:
The option premium reserve is used to accumulate proceeds received from the issuing of options.
Equity based compensation reserve:
The equity based compensation reserve is used to record the fair value of options issued but not exercised.
Fair value reserve:
The fair value reserve comprises the cumulative net change in the fair value of available-for-sale investments until the
assets are derecognised or impaired.
Foreign currency translation reserve:
The foreign currency translation reserve records the foreign currency differences arising from the translation of the
financial statements of foreign operations where their functional currency is different to the presentation currency of
the reporting entity.
18. LOSS PER SHARE
Basic and diluted profit/(loss)
per share:
Net profit/(loss) for the year
attributable to equity holders
of the parent
2013
2012
Continuing
operations
Discontinued
operations
$
$
Total
$
Continuing
operations
Discontinued
operations
$
$
Total
$
750,805
(4,297,187)
(3,546,382)
1,063,939
(4,583,768)
(3,519,829)
Weighted average number of ordinary shares (basic and diluted)
Issued ordinary shares at beginning of year
Effect of shares issued (Note 16)
Weighted average ordinary shares at the end of the year
2013
2012
131,149,810
131,149,810
94,166,648
-
225,316,458
131,149,810
As a consequence of a 1 for 10 capital consolidation approved by shareholders on 31 August 2012, the number of shares
on issue at that date was reduced from 1,331,500,513 to 133,149,810 (after allowing for rounding down of fractions).
As the Group is loss making, none of the potentially dilutive securities are currently dilutive in the calculation of total
earnings per share.
Continuing operations recognised a profit in the year ended 30 June 2013 and 30 June 2012, however as the exercise
price of the options on issue exceeded the average market price of the ordinary shares of the Company during both the
current year and the prior year, the options on issue are not deemed to be dilutive.
4 5
2013 Annual Report Notes to the Consolidated
Financial Statements
19. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Cash flows from operating activities
Loss for the year
Non-cash items
Depreciation
Profit on sale of plant and equipment
Profit on sale of investments
Investment impaired
Impairment value added tax in Kyrgyzstan
Exploration expenditure write-off
Share based payments
Loss on sale of subsidiaries net of cash
Income tax expense
Foreign currency loss
Inventory write down
Employee benefits provision
2013
$
2012
$
(3,590,628)
(3,573,858)
13,696
(129,131)
90,301
(60,146)
(594,539)
(2,263,077)
61,224
187,461
695,746
144,000
2,694,373
378,804
20,000
-
3,436,919
-
-
-
-
-
112,992
605,138
(158,659)
(1,251)
Gain on sale of royalty
(2,000,000)
-
Changes in assets and liabilities
(Increase)/decrease in receivables
Decrease in other assets
Increase/(decrease) in payables
Net cash used in operating activities
Reconciliation of cash
(72,889)
162,603
346,177
44,666
33,745
(148,409)
(1,861,762)
(1,702,980)
For the purposes of the statement of cash flows, cash includes cash on hand and at bank
and cash on deposit net of bank overdrafts and excluding security deposits. Cash at the
end of the financial year as shown in the statement of cash flows is reconciled to the
related items in the statement of financial position as follows:
Cash and cash equivalents
Less cash reclassified to assets held for sale
Cash and cash equivalents held by continuing operations
2,059,438
607,112
(19,666)
-
2,039,772
607,112
4 6
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
20. RELATED PARTIES
Parent and ultimate controlling party
Equus Mining Limited is both the parent and ultimate controlling party of the Group.
Key management personnel and director transactions
A number of key management persons, or their related parties, hold positions in other entities that result in them
having control or joint control over the financial or operating policies of those entities.
A number of these entities transacted with the Group during the year as follows:
• During the year ended 30 June 2013, Norman A. Seckold had control over an entity, Mining Services Trust, which
provided full administrative services, including rental accommodation, administrative staff, services and supplies,
to the Group. Fees paid to Mining Services Trust during the year amounted to $176,500 (2012 - nil). There were no
amounts outstanding as at year end (2012 - $nil).
• During the year ended 30 June 2013, Mr Susmit Shah had control over an entity, Corporate Consultants Pty Ltd,
which provided accounting, secretarial and corporate services to the Group. Fees paid to Corporate Consultants
Pty Ltd during the year amounted to $104,833 (2012 - $116,172). There were no amounts outstanding as at year end
(2012 - $7,797).
• During the year ended 30 June 2013, Mr Colin Carson had control over an entity, Ledgar Road Partnership, which
provided rental accommodation to the Group. Fees paid to Ledgar Partnership during the year amounted to $nil
(2012 - $1,436). There were no amounts outstanding as at year end (2012 - $nil).
• During the year ended 30 June 2013, Mr Robert Perring had control over an entity, Quadramin Pty Ltd, which
provided geological consulting services to the Group. Fees paid to Quadramin Pty Ltd during the year amounted
to $117,400 (2012 - $nil). There were no amounts outstanding as at year end (2012 - $nil).
• During the year ended 30 June 2013, Mr Graeme Parson and Mr Avraham Ben Natan, former directors of the
Company acquired from the Group the subsidiary Caspkaz Pty Ltd for $20,000. There are no amounts outstanding.
Movements in shares
Key management
personnel
Graeme L. Parson
Colin J. Carson
Jurg Walker
Michael J. Sandy
Avraham Ben-Natan
Key management
personnel
Norman A. Seckold *
Edward J. Leschke *
Robert J. Perring **
Held at 1 July 2011 Consolidation
Purchases
Sales
1,600,000
14,188,484
82,978,610
3,500,000
50,000,000
-
-
-
-
-
-
12,984,203
-
-
-
-
-
-
-
-
Held at 1 July 2012 Consolidation
Purchases
Sales
-
-
-
-
-
-
30,377,420
34,619,471
8,100,000
-
Graeme L. Parson ^
1,600,000
(1,440,000)
Colin J. Carson ^
27,172,687
(24,455,420)
910,814
Jurg Walker
82,978,610
(74,680,749)
-
Michael J. Sandy ^
3,500,000
(3,150,000)
250,000
Avraham Ben-Natan ^
50,000,000
(45,000,000)
-
* Director since 5 September 2012, ** Director since 15 February 2013,
Held at 30 June
2012
1,600,000
27,172,687
82,978,610
3,500,000
50,000,000
Held at 30 June
2013
30,377,420
34,619,471
8,100,000
n/a
n/a
8,297,861
n/a
n/a
-
-
-
-
-
-
-
-
^ Ceased to be Director before end of reporting period and hence was not a key management person at the reporting date.
4 7
2013 Annual Report Notes to the Consolidated
Financial Statements
20. RELATED PARTIES (Cont.)
Options and rights over equity instruments
Key management personnel do not hold any options over unissued shares at the date of this report nor did they hold
any at the reporting date.
Key management personnel compensation
Primary fees/salary
Consulting fees
Superannuation
2013
$
484,620
53,000
26,944
564,564
2012
$
430,858
-
32,642
463,500
Individual directors and executives compensation disclosures
Information regarding individual key management personnel’s compensation and some equity instruments disclosures as
permitted by Corporations Regulations 2M.3.03 are provided in the Remuneration Report section of the Director’s Report.
Apart from the details disclosed in this note, no Director has entered into a material contract with the Group since the
end of the previous financial year and there were no material contracts involving Director’s interests existing at year end.
Loans to Key management personnel and their related parties
There were no loans made to key management personnel or their related parties during the 2013 and 2012 financial
years and no amounts were outstanding at the year-end (2012: nil).
Loans from Key management personnel and their related parties
During the year ended 30 June 2013, Edward J. Leschke, a director of the Company, provided a short term, interest free,
unsecured loan to the Group of $100,000, which was subsequently repaid in full during the year.
21. SHARE BASED PAYMENTS
The Company makes share based payments to consultants and/or service providers from time to time, not under any
specific plan. The Company also may issue options to directors of the parent entity. Specific shareholder approval is
obtained for any share based payments to directors of the parent entity.
Options outstanding at 30 June 2013
Grant date
24 May 2010
13 November 2012
13 November 2012
13 November 2012
13 November 2012
Number of options
460,000
1,000,000
1,000,000
1,000,000
1,000,000
Exercise price
$0.300
$0.075
$0.150
$0.200
$0.250
Fair value at
grant date
$0.045
$0.044
$0.037
$0.033
$0.030
Vesting Date
24 May 2010
31 March 2013
31 March 2013
31 March 2013
31 March 2013
Expiry date
31 October 2013
13 November 2015
13 November 2015
13 November 2015
13 November 2015
Movement of options during the year ended 30 June 2013
Outstanding at
the beginning of
the year
460,000
-
-
-
-
460,000
Granted
during the
year
-
1,000,000
1,000,000
1,000,000
1,000,000
4,000,000
Cancelled
during the
year
-
-
-
-
-
-
Exercised
during the
year
-
-
-
-
-
-
Grant date
24 May 2010
13 November 2012
13 November 2012
13 November 2012
13 November 2012
4 8
Expired
during the
year
-
-
-
-
-
-
Outstanding at
the end of the
year
460,000
1,000,000
1,000,000
1,000,000
1,000,000
4,460,000
Exercisable at
the end of the
year
460,000
1,000,000
1,000,000
1,000,000
1,000,000
4,460,000
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
21. SHARE BASED PAYMENTS (Cont.)
Options outstanding at 30 June 2012
Grant date
24 May 2010
Number of options
Exercise price
Fair value
Vesting date
Expiry date
460,000
$0.300
$0.045
24 May 2010
31 October 2013
As a consequence of a 1 for 10 capital consolidation approved by shareholders on 31 August 2012, the fair value of options
on issue at that date was revised from $0.0045 to $0.045.
Movement of options during the year ended 30 June 2012
Grant date
24 May 2010
Outstanding at
the beginning of
the year
Granted
during the
year
Cancelled
during the
year
Exercised
during the
year
Expired
during the
year
Outstanding at
the end of the
year
Exercisable at
the end of the
year
460,000
460,000
-
-
-
-
-
-
-
-
460,000
460,000
460,000
460,000
As a consequence of a 1 for 10 capital consolidation approved by shareholders on 31 August 2012, the number of options
on issue at that date was reduced from 4,600,000 to 460,000 (after allowing for rounding down of fractions).
Weighted average exercise price of options
Outstanding at the
beginning of the
year
Granted
during the
year
Forfeited
during the
year
Exercised
during the
year
Expired
during the
year
Outstanding at
the end of the
year
Exercisable at
the end of the
year
$0.410
$0.300
-
$0.169
$0.780
-
-
-
-
-
$0.300
$0.182
$0.300
$0.182
Year
2012
2013
As a consequence of a 1 for 10 capital consolidation approved by shareholders on 31 August 2012, the exercise price of
options on issue at that date was revised from $0.03 to $0.30.
The weighted average remaining contractual life of share options outstanding at the end of the year was 2.16 years
(2012: 1.34 years).
Fair value of options
The fair value of options granted is measured at grant date and recognised as an expense over the period during which
the key management and senior employees become unconditionally entitled to the options. The fair value of the
options granted is measured using an appropriate option valuation methodology, taking into account the terms and
conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual
number of options that vest.
The total fair value of 4,600,000 options granted on 24 May 2010 was $20,700. The options were valued using the Black-
Scholes formula, and the model inputs were the Company’s share price of $0.008 at the grant date, an exercise price of
$0.03, an expected volatility factor of 119% based on historic share price performance, a life of 3.4 years, and a risk free
interest rate of 4.75% based on the corresponding government bond rate and a dividend yield of 0%. The options vested
immediately. The option holding numbers disclosed above are prior to the 1 for 10 capital consolidation that became
effective on 31 August 2012, the number of options on issue at that date was reduced from 4,600,000 to 460,000 and the
exercise price was revised from $0.03 to $0.30.
The total fair value of the 4,000,000 options granted on 13 November 2012 was $144,000. These options were issued to
the exploration Manager at the Naltagua project in Chile. The options were valued using the Black-Scholes formula.
The valuation inputs were the Company’s share price of $0.066 at the grant date, a volatility factor of 115% (based on
historical share price performance), a life of 3 years, a risk-free interest rate of 2.54% based on the 3 year government
bond rate and a dividend yield of 0%. The exercise price ranges from $0.075 - $0.250 as disclosed above. These options
have a non-market performance vesting condition whereby they will not vest until the commencement of exploration
drilling on the Naltagua Copper Project. Drilling commenced on 30 March 2013, and hence the options fully vested on
this date.
Expenses arising from share-based payment transactions
Total expenses from share-based payment transactions recognised during the year were $144,000 (2011: nil).
4 9
2013 Annual Report Notes to the Consolidated
Financial Statements
22. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE
The Group has exposure to the following risks arising from financial instruments:
Liquidity risk.
Credit risk.
•
•
• Market risk.
This note presents information about the Group’s exposure to each of the above risks, its objectives, policies and
processes for measuring and managing risk and the Group’s management of capital.
Risk management framework
The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management
framework. Risk management policies are established to identify and analyse the risks faced by the Group, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. These policies are reviewed regularly
to reflect changes in market conditions and the Group’s activities.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial
liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal
and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.
The following are the contractual maturities of financial liabilities:
Financial liabilities
Carrying
amount
Contractual
cash flows
Less than 6
months
6 to 12
months
1 to 5
years
More than
5 years
Trade and other payables
30 June 2013
30 June 2012
$
$
$
249,023
310,964
249,023
(310,964)
249,023
(310,964)
$
-
-
$
-
-
$
-
-
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly
different amounts.
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
its contractual obligations.
The carrying amount of the Group’s financial assets represents the maximum credit risk exposure. The maximum
exposure to credit risk at the reporting date was:
Cash and cash equivalents
Receivables
Receivables
2013
$
2,039,772
25,697
2,065,469
2012
$
607,112
162,628
769,740
As from the year ended 30 June 2013, the Group stopped its oil production operations and it is solely operates in the
mineral exploration sector. Consequently, it does not have trade receivables and therefore is not expose to credit risk
in relation to trade receivables generated from oil sales. During the year the Company impaired a loan for $141,881. At
balance date, there were no significant concentrations of credit risk.
5 0
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
22. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont.)
Cash and cash equivalents
At 30 June 2013, the Group held cash and cash equivalents of $2,039,772 after reclassifying $19,666 of cash under
assets held for sale (2012: $607,112), which represents its maximum credit exposure on these assets. The cash and cash
equivalents are held with reputable banks and financial institution counterparties, which are rated AA- to AAA+, based
on rating agency ‘Moody’s rating’.
Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will
affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management
is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Interest Rate Risk
The Group’s income statement is affected by changes in interest rates due to the impact of such changes on interest
income and expenses from cash and cash equivalents.
With the exception of cash and cash equivalents, all the Group’s financial assets and liabilities are non-interest
bearing. At the reporting date, the Group’s cash and cash equivalents exposed to variable interest rate risk that are not
designated as cash flow hedges were:
Cash and cash equivalents
2013
$
2012
$
2,039,772
607,112
The Group did not have any interest bearing financial liabilities in the current or prior year, nor does the Group have any
interest rate swap contracts. The Group has two interest bearing accounts from where it draws cash when required to
pay liabilities as they fall due. The Group normally invests its funds in at least two accounts to maximise the available
interest rates. The Group always analyses its interest rate exposure when considering renewals of existing positions
including alternative financing.
Sensitivity analysis
A change of 100 basis points in interest rates at the current and prior reporting date would have increased/(decreased)
equity and loss for the period by an immaterial amount.
Price risk
The Group is exposed to equity securities prices risk. This arises from investments held by the Group and classified in
the balance sheet as available-for-sale.
The Group’s investments are publicly traded on the Australian Stock Exchange.
The table below summarises the impact of increases/decreases of the bid price on the Group’s post-tax profit for the
year and on equity.
Impact on post-tax profit
Impact on other components
of equity
2013
$
2,773
(2,773)
2012
$
5,580
(5,580)
2013
$
-
-
2012
$
5,580
(5,580)
Manas Resources Limited – 10% bid price increase
Manas Resources Limited – 10% bid price decrease
Currency risk
The Group does not hold a significant value of financial instruments that are denominated in a currency other than the
functional currency in which they are measured, and therefore has minimal exposure to currency risk.
5 1
2013 Annual Report Notes to the Consolidated
Financial Statements
22. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont.)
Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and
to sustain future development of the business. Capital consists of the share capital of the Company (refer to Note 16).
There were no changes in the Group’s approach to capital management during the year.
Estimation of Fair Values
The carrying amounts of financial assets and financial liabilities included in the balance sheet approximate fair values.
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have
been defined as follows:
•
•
•
Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).
Available-for-sale financial assets
30 June 2013
30 June 2012
Level 1
Level 2
Level 3
$
$
$
Total
$
27,730
1,439,318
-
-
-
-
27,730
1,439,318
All available-for-sale financial assets relate to investments held in listed equity securities (designated as Level 1 financial
assets). The fair value is based on quoted market prices at the end of the reporting period. The quoted market price used
is the current bid price at the reporting date.
There have been no transfers between the levels of valuation method for each classification of financial assets held
during the years ended 30 June 2013 or 30 June 2012.
The carrying amounts of receivables and payables are assumed to approximate their fair values due to their short-term
nature.
5 2
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
23. CONTROLLED ENTITIES
Parent entity
Equus Mining Limited is an Australian incorporated company listed on the Australian Stock Exchange.
Wholly owned controlled entities
Country of
incorporation
Ownership Interest
Hotrock Enterprises Pty Ltd (ii)
Okore Mining Pty Ltd
Dataloop Pty Ltd
Textonic Consulting Limited (i)
Leo Shield Exploration Ghana Ltd
Equus Resources Limited (iv)
(i) Subsidiaries of Textonic Consulting Limited
JSC Textonic
JSC Sherik
(ii) Subsidiary of Hotrock Enterprises Pty Ltd
Derrick Pty Ltd (iii)
(iii) Subsidiary of Derrick Pty Ltd
LLC South Derrick
(iv) Subsidiary of Equus Resources Limited
Brumby Mining Pty Ltd
Equus Resources Chile SpA (v)
Minera Equus Chile Ltda
(v) Subsidiary of Equus Resources Chile SpA and
Equus Resources Limited
Minera Equus Chile Ltda
24. COMMITMENTS
Exploration expenditure commitments
Australia
Australia
Australia
Canada
Ghana
Australia
Kyrgyz Republic
Kyrgyz Republic
Australia
Kyrgyz Republic
Australia
Chile
Chile
2013
%
100
100
100
100
100
100
-
100
100
-
100
100
99.9
2012
%
100
100
100
100
100
-
100
100
100
70
100
100
99.9
Chile
0.1
0.1
As a consequence of the disposal of the two Kyrgyz subsidiaries that held oil permits during the year ended 30 June 2013,
the Group does not have any minimum expenditure commitments in relation to its mineral interests at the date of this
report. The Group’s mineral interests in West Africa and the Democratic Republic of Congo are subject to farm-in and
joint venture agreements, under the terms of which the farm-in partners are responsible for the annual rates and rents
relating to those properties. On 5 September 2012, the Group acquired an interest in the Naltagua Copper Project in
Chile. This project comprises mining licences and, other than nominal annual rates, there are no minimum expenditure
commitments. However, under the terms of the agreement, which was renegotiated during March 2013, the Group has
the right (but not the obligation) to acquire the Naltagua Copper Project on an outright basis. See Note 27.
5 3
2013 Annual Report
Notes to the Consolidated
Financial Statements
25. OPERATING SEGMENTS
The Group’s chief operating decision maker have considered the requirements of AASB 8, Operating Segments, and have
concluded that, during the year ended 30 June 2013, the Group operated in the mineral exploration and the oil exploration
industry within the geographical segments of Australia, Chile, Ghana and Kyrgyz Republic. The oil exploration segment
was discontinued during the year (see note 30).
30 June 2013
External revenues
Oil Exploration
(discontinued)
$
Mineral
Exploration
$
Total
$
388,950
-
388,950
Reportable segment loss before tax
(4,341,433)
(80,225)
(4,421,658)
Interest income
Interest expense
Depreciation
Other material non-cash items:
Impairment of exploration and evaluation
Reportable segment assets
Reportable segment liabilities
30 June 2012
Revenue from external customers
-
-
(8,915)
838
-
(3,040)
838
-
(11,955)
(695,746)
-
(695,746)
1,760,797
-
8,699,819
94,592
10,406,616
94,592
179,367
-
179,367
Reportable segment loss before tax
(4,637,797)
(45,160)
(4,682,957)
Interest expense
Depreciation
Other material non-cash items:
Impairment of exploration and evaluation
Impairment inventory
Reportable segment assets
Reportable segment liabilities
-
(87,581)
-
-
-
(87,581)
(3,391,295)
(605,138)
(28,899)
-
(3,420,194)
(605,138)
2,971,416
106,172
17,339
22,731
2,988,755
128,903
Reconciliations of reportable segment revenues and profit or loss
Revenues
Total revenue for reportable segments
Elimination of discontinued operations disposed (Note 30)
Consolidated revenue
Profit or loss
Total loss for reportable segments
Elimination of discontinued operations (Note 30)
Unallocated amounts:
Royalty Income
Finance Income
Net other corporate expenses
Consolidated profit before tax
5 4
2013
$
2012
$
388,950
(388,950)
-
179,367
(179,367)
-
(4,421,658)
4,341,433
(4,682,957)
4,637,797
2,000,000
546,583
(1,715,553)
750,805
-
2,278,093
(1,168,994)
1,063,939
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
25. OPERATING SEGMENTS (Cont.)
Reconciliations of reportable segment revenues and profit or loss (Cont.)
Assets
Total assets for reportable segments
Unallocated corporate assets
Consolidated total assets
Liabilities
Total liabilities for reportable segments
Unallocated corporate liabilities
Consolidated total liabilities
Geographical information
2013
$
2012
$
10,460,616
2,988,755
1,925,414
12,386,030
2,131,657
5,120,412
94,592
533,235
627,827
128,903
182,061
310,964
In presenting information on the basis of geography, segment revenue and segment assets are based on the geographical
location of the operations.
Australia
All foreign locations
- Kyrgyz Republic
- Ghana
- Chile
-oil exploration (discontinued) disposed
2013
2012
Revenue
$
Non-current
assets
$
Revenues
$
Non-current
assets
$
-
651,323
-
120,831
388,950
-
-
(388,950)
-
-
937
7,876,099
-
8,528,359
179,367
-
-
(179,367)
-
1,195,769
937
-
1,317,537
The geographical information excludes financial instruments in determining non-current assets.
26. DISPOSAL GROUP HELD FOR SALE
Disposal group held for sale
The oil exploration segment of the Group in the Kyrgyz Republic is presented as a disposal group held for sale following
the commitment of the Group’s management during the year to a plan to sell the three oil exploration entities in the
Kyrgyz Republic. The ownership interests in JSC Textonic and LLC South Derrick were disposed of on 26 September 2012.
The ownership interest in JSC Sherik is expected to be sold during the financial year ending 2014, and has been classified
as assets held for sale at 30 June 2013.
As at 30 June 2013, the disposal group held for sale comprised assets of $1,804,313 less
liabilities of $43,516, detailed as follows:
Cash and cash equivalents
Property, plant and equipment
Consumables and operating supplies
Trade and other receivables
Trade and other payables
$
19,666
202,262
1,582,092
293
(43,516)
1,760,797
In order to support the carrying value of the assets held for sale at 30 June 2013, a fixed asset and inventory valuation
was carried out by an independent valuation specialist in the Kyrgyz Republic. The Group compared the carrying value
of the inventory and property, plant and equipment held within the disposal group against the independent valuation
(which was based on the expected fair value less costs to sell) and determined that no adjustment was necessary
because the fair value less costs to sell reflected the carrying value of the assets.
5 5
2013 Annual Report Notes to the Consolidated
Financial Statements
26. DISPOSAL GROUP HELD FOR SALE (Cont.)
Cumulative income or expense include in other comprehensive income
Included within other comprehensive income is a cumulative foreign currency translation reserve amount of $2,804,524
relating to the disposal group.
Equus has entered into an agreement to sell a ninety percent interest in its wholly owned subsidiary, Leo Shield
Exploration Ghana Ltd (‘Leo Ghana’), for a consideration of US$600,000 (subject to obtaining local government approval)
to an entity incorporated in the Republic of Ghana. A deposit of A$100,000 has been received and the Company will
retain a 10% interest in Leo Ghana. The assets and liabilities held in this entity are immaterial.
27. ACQUISITION OF CONTROLLED ENTITIES
During the year ended 30 June 2013, the Company acquired 100% of the issued capital of Equus Resources Limited.
In consideration for Equus Resources Limited the Company issued 108,940,951 ordinary shares (equivalent to a
consideration paid of fair value $6,536,457, based on the listed share price of the Company at 5 September 2012 of
$0.06 per share) to the shareholders of Equus Resources Limited, a company incorporated in Australia. Equus Resources
Limited holds an option agreement through its Chilean subsidiary Minera Equus Limitada to acquire the Naltagua
Copper project in central Chile.
The agreement has a total cost of US$5,000,000 and it was renegotiated during March 2013 extending the period of the
agreement by one year for no additional payment and no additional consideration. The revised agreement is pursuant
to the following payments:
•
•
•
•
•
a down payment of US$500,000 upon execution of the option agreement which was paid on 29 September 2011;
a first instalment of US$100,000 which was paid on 29 September 2012;
a second instalment of US$100,000 is due on the 29 September 2013;
a third instalment of US$500,000 is due on the 29 September 2014; and
a fourth and final instalment of US$3,800,000 is due on 29 September 2015.
The agreement does not bind the Group to complete the acquisition and it can abandon the project (and the agreement)
at any point in time with no penalties, with the exception that all previous payments are non-refundable.
The above transaction has been accounted for as an acquisition of assets rather than a business combination as Equus
Resources Limited has no business operations and its principal asset is its interest in the Naltagua copper project.
The following summarises the recognised amounts of identifiable assets acquired and liabilities assumed at the
acquisition date:
Cash
Property, plant and equipment
Exploration and evaluation assets
Other assets
Trade and other payables
Related party loan
Recognised
fair value on
acquisition
$
119,392
18,138
6,591,096
48,810
(140,979)
(100,000)
6,536,457
The fair value of exploration and evaluation assets has been determined as being the excess consideration paid over the
acquisition date fair value of the identifiable assets and liabilities of Equus Resources Limited.
Equus Resources Limited’s operations are subject to specific Chilean environmental regulations. The Group conducted
a preliminary assessment of site restoration provisions arising from these regulations, and determined that at the
acquisition date no site restoration provisions were required.
There were no acquisition costs.
5 6
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
27. PARENT ENTITY DISCLOSURES
As at, and throughout, the financial year ending 30 June 2013 the parent entity of the Group was Equus Mining Limited
(formerly named Caspian Oil and Gas Limited).
Result of the parent entity
Net profit/(loss)
Other comprehensive Income
Total comprehensive profit/(loss)
Financial position of the parent entity at year end
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Accumulated losses
Fair value reserve
Equity based compensation reserve
Option premium reserve
Total equity
Company
2013
$
2012
$
525,646
(1,001,311)
681,050
(1,455,733)
1,206,696
(2,457,044)
1,897,685
571,506
6,564,187
4,420,002
8,461,872
4,991,508
533,235
182,060
-
-
533,235
182,060
7,928,637
4,809,448
106,622,162
99,362,502
(98,858,225)
(98,332,579)
-
2,509,475
164,700
-
681,050
589,000
7,928,637
4,809,448
The Directors are of the opinion that no contingencies existed at, or subsequent to year end.
28. SUBSEQUENT EVENTS
There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction
or event of a material or unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the
operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.
5 7
2013 Annual Report Notes to the Consolidated
Financial Statements
30. DISCONTINUED OPERATIONS
In September 2012, the Group discontinued its oil exploration segment. This occurred via management’s commitment
to a plan during the period to sell this segment following a strategic decision to focus on the exploration activities on
the Naltagua copper project in Chile. The entire ownership interest in LLC South Derrick and JSC Textonic were disposed
of on 26 September 2012 and the assets and liabilities in JSC Sherik were classified as held for sale.
The segment was not classified as held for sale or a discontinued operation as at 30 June 2012 and the comparative
Consolidated Statement of Profit or Loss and Other Comprehensive Income has been re-presented to show the
discontinued operation separately from continuing operations.
Results of discontinued operation
Revenue
Other income
Impairment of exploration and evaluation assets
Impairment of inventory
Expenses
Results from operating activities
Income tax expense
Results from operating activities, net of income tax
Loss on sale of discontinued operation (including transfer of foreign currency
translation reserve to profit or loss)
Income tax on loss on sale of discontinued operation
Loss for the year
2013
$
2012
$
388,950
119,730
179,367
60,146
(695,745)
(3,391,295)
-
(605,138)
(1,459,995)
(880,877)
(1,647,060)
(4,637,797)
-
-
(1,647,060)
(4,637,797)
(2,694,373)
-
-
-
(4,341,433)
(4,637,797)
Basic and diluted loss per share
(0.019)
(0.035)
Cash flows from (used in) discontinued operation
Net cash used in operating activities
Net cash from investing activities
Net cash from financing activities
Net cash flows for the year
Effect of disposal on the financial position of the Group
Property plant and equipment
Inventories
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Net assets and liabilities
Consideration received, satisfied in cash
Cash and cash equivalents disposed of
Net cash inflow
5 8
2013
$
2012
$
(395,520)
(523,869)
101,920
(1,094,084)
-
-
(293,600)
(1,617,953)
(120,451)
(643)
(590,525)
(10,849)
174,928
(547,540)
755,841
(10,849)
744,992
EQUUS MINING LIMITED Directors’ Declaration
1.
In the opinion of the Directors of Equus Mining Limited (the ‘Company’):
(a)
the consolidated financial statements and notes thereto, set out on pages 25 to 58, and the Remuneration
Report as set out on pages 20 to 23 of the Directors’ Report are 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 2013 and of its performance,
for the financial year ended on that date;
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(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.
The Directors have been given the declarations required under section 295A of the Corporations Act 2001 for
the financial year ended 30 June 2013.
The Director’s draw attention to Note 2(a) to the consolidated financial statements, which includes a
statement of compliance with International Financial Reporting Standards.
2.
3.
Signed at Sydney this 30th day of September 2013 in accordance with a resolution of the Board of Directors:
Norman A. Seckold
Director
Edward J. Leschke
Director
5 9
2013 Annual Report
Independent Auditor’s Report
6 0
EQUUS MINING LIMITED Independent Auditor’s Report
6 1
2013 Annual Report Additional Stock Exchange
Information
Additional information as at 30 August 2013 required by the Australian Stock Exchange Listing Rules and not disclosed
elsewhere in this report.
Home Exchange
The Company is listed on the Australian Stock Exchange. The Home Exchange is Perth.
Audit Committee
As at the date of the Directors’ Report, an audit committee of the Board of Directors is not considered warranted due to
the composition of the Board and the size, organisational complexity and scope of operations of the Group.
Class of Shares and Voting Rights
As per Listing Rule 4.10.6 the voting rights attached to ordinary shares, as set out in the Company’s Constitution, are
that every member in person or by proxy, attorney or representative, shall have one vote on a show of hands and one
vote for each share held on a poll.
A member holding partly paid shares is entitled to a fraction of a vote equivalent to the proportion, which the amount
paid up bears to the issue price for the share.
Distribution of Shareholders
As per Listing Rule 4.10.7, the total distribution of fully paid shareholders as at 30 August 2013, was as follows:
Range
Fully Paid Ordinary Shares
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Less than Marketable Parcels
273
365
408
888
230
2,164
As per Listing Rule 4.10.8, as at 30 August 2013, 1,566 shareholders held less than marketable parcels of 13,781,251 shares.
On Market Buy Back
As per Listing Rule 4.10.18, the Company advised that there is no current on-market buy-back.
Substantial Holders
Holdings of substantial shareholders as per LR 4.10.4 as advised to the Company are set out below.
Augusta Enterprises Pty Ltd
Permgold Pty Ltd
JP Morgan Nominees Australia
Number of Ordinary Shares
34,619,471
30,377,420
23,341,055
6 2
EQUUS MINING LIMITED Additional Stock Exchange
Information
Twenty Largest Shareholders
As required by Listing Rule 4.10.9, as at 30 August 2013, the twenty largest quoted shareholders held 56.45% of the fully
paid ordinary shares as follows:
Name
Number
%
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Augusta Enterprises Pty Ltd
Permgold Pty Ltd
JP Morgan Nominees Australia Limited
HSBC Custody Nominees (Australia) Limited
Tetramin Pty Ltd
John Wardman & Associates Pty Ltd
Wisevest Pty Ltd
Tendeka Holdings Pty Ltd
Integral Admin Services Pty Ltd
ABN AMRO Clearing Sydney Nominees Pty Ltd
National Nominees Limited
Cadden Nominees Pty Ltd
UBS Nominees Pty Ltd
Bill Brooks Pty Ltd
Berpaid Pty Ltd
16 Wapimala Pty Limited
17
18
19
20
Mitmeg Holdings Pty Ltd
Dr Glen Whisson and Mrs Tania Whisson
Ashabia Pty Ltd
Tendeka Holdings Pty Ltd
The number of holders in each class of securities
34,619,471
30,377,420
23,341,055
14,175,876
8,000,000
4,600,000
3,800,000
2,800,000
2,590,616
2,451,336
2,098,210
2,007,764
2,000,000
1,942,962
1,942,962
1,800,000
1,700,000
1,600,000
1,552,738
1,500,000
13.49
11.84
9.09
5.52
3.12
1.79
1.48
1.09
1.01
0.96
0.82
0.78
0.78
0.76
0.76
0.70
0.66
0.62
0.60
0.58
As per Listing Rule 4.10.5, the numbers of holders in each class of securities on issue at 30 August 2013 were as follows:
Type of security
Ordinary shares
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Number of
holders
Number of
securities
4,110
12
1
1
1
1
256,661,675
460,000
1,000,000
1,000,000
1,000,000
1,000,000
Substantial Optionholders in the entity
As per Listing Rule 4.10.16, the names of the holders of 20% or more options in these unquoted securities are listed below:
Name
Damien Koerber
Number of
options held
% of Options
Held
4,000,000
89.67%
6 3
2013 Annual Report Additional Stock Exchange
Information
Group Mineral Concession Interests at 30 August 2013
As per Listing Rule 4.10.15, the Company provides the following information regarding its mining tenements.
Tenure and Commercial Terms for Naltagua Project acquisition - Chile
The Company’s wholly owned subsidiary, Equus Resources Limited has an option to acquire 100% of a contiguous group
of 14 mining licences covering an area of 18.05 square kilometres and 75% of the known areal extent of the large (4km by
2km) Naltagua copper system. Under the terms of the option agreement, Equus has the right but not the obligation to
acquire the mining licences on an outright basis by making a payment of US$100,000 in September 2013, US$500,000 in
September 2014, with a final payment of US$3.8 million in September 2015 to the licence holder.
On commencement of commercial production at Naltagua, a 1% net smelter royalty is payable to the licence holder
subject to a maximum payment of US$5 million.
Schedule of Mining Licences at Naltagua
A. Granted Exploitation Mining Concessions
Mining Concession’s Name
Register Owner
(100% interest)
Carmencita Siete 1
Tsuyoshi Nishimura Matsumoto
Carmencita Siete 11, 1-30
Tsuyoshi Nishimura Matsumoto
San Lorenzo 1, 1-34
San Lorenzo 2, 1-51
San Lorenzo 3, 1-52
Carmen Alto 2, 1-23
Carmen Alto 3, 1-26
Carmen Alto 4, 1-14
Carmen Alto 5, 1-30
Mater I, 1-30
Mater II, 1-10
Carmencita 1, 1-100
Carmencita 2, 1-114
MaterI II, 1-16
Tsuyoshi Nishimura Matsumoto
Tsuyoshi Nishimura Matsumoto
Tsuyoshi Nishimura Matsumoto
Tsuyoshi Nishimura Matsumoto
Tsuyoshi Nishimura Matsumoto
Tsuyoshi Nishimura Matsumoto
Tsuyoshi Nishimura Matsumoto
Tsuyoshi Nishimura Matsumoto
Tsuyoshi Nishimura Matsumoto
Tsuyoshi Nishimura Matsumoto
Tsuyoshi Nishimura Matsumoto
Tsuyoshi Nishimura Matsumoto
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Location
Concession type
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Exploitation
Exploitation
Exploitation
Exploitation
Exploitation
Exploitation
Exploitation
Exploitation
Exploitation
Exploitation
Exploitation
Exploitation
Exploitation
Exploitation (in process)
The exploitation licences are held in perpetuity under Chilean mining law, subject to compliance with the terms of
relevant laws and timely payment of rents, rates and fees.
Oil interest in the Kyrgyz Republic
Effective 26 September 2012, the Company’s oil interests in the Kyrgyz Republic were disposed as a consequence of the
sale of the subsidiaries, Textonic CJSC and LLC South Derrick.
6 4
EQUUS MINING LIMITED Additional Stock Exchange
Information
Mining interest in African countries
Concession
name
Registered Holder
(or Applicant)
File Number/
Licence Type
Equus Mining
Current equity
interest
Maximum equity
interest capable
of being earned
Location
Ghana
Notes
1
2
Kwatechi
Osenase
Asamankese
Pramkese
Tropical Exploration
and Mining
Company Limited
Leo Shield
Exploration Ghana
Limited
Leo Shield
Exploration Ghana
Limited
Leo Shield
Exploration Ghana
Limited
Equus Mining
Limited
PL3/64
Prospecting
Licence
Prospecting
Licence
Prospecting
Licence
Prospecting
Licence
A2002/019/
DIGM/CPDM
Research Permit
Guinea
Mansounia
Notes
0%
90%
90%
90%
7%
N/A
N/A
N/A
78%
78%
3
1. The governments of African countries in which the Company holds minerals interests are entitled to equity
in mining companies owning projects as follows – Ghana 10% and Guinea 15%. Equus’s quoted equity is
after allowance for that national interest, which occurs when a new project company is established prior to
commencement of mining.
2. Perseus Mining Limited, the current holder of a 16% interest, has the right to earn a further 60% interest in
the Kwatechi property by funding the development of the project to profitable production. In that case, the
Company and a local joint venture partner will each retain a 7% interest which is convertible to a 1.25% net
smelter royalty at the option of those parties within 30 days of completion of a feasibility study.
3. Mansounia is farmed out to Burey Gold Ltd, which can earn a 70% interest in the project by completing a
feasibility study containing at least 200,000oz of gold or the equivalent and paying Equus US$500,000. Equus
then has an 8% interest, which it may elect to convert into a 5% net profit interest.
6 5
2013 Annual Report
2013
Annual Report
EQUUS MINING LIMITED
(formerly Caspian Oil & Gas Limited) and its controlled entities
ABN. 44 065 212 679
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www.equusmining.com
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of members is to be convened at Suite 2, Level 3, 66 Hunter
Street, Sydney, NSW, 2000 on 20 November 2013 at 11.00 am.
AGENDA
ORDINARY BUSINESS
Financial Statements
To receive and consider the Company's Annual Financial Report, the Directors' Report and the Auditor's Report for
the year ended 30 June 2013.
To consider and, if thought fit, pass the following resolutions, with or without amendment:
Resolution 1 Adoption of the Remuneration Report
'That the Remuneration Report for the year ended 30 June 2013 be and is hereby adopted.'
Resolution 2
Re-election of a Director
'That Juerg Walker be and is hereby re-elected as a Director.'
Resolution 3
Election of a Director
'That Robert J. Perring be and is hereby elected as a Director.'
Resolution 4
Ratification of Prior Issue of Options
'That the grant of 4,000,000 options in the Company on 13 November 2012 to Mr Damien Koerber Head of
Exploration in Chile is hereby ratified for the purposes of ASX Listing Rules 7.4 and 7.5.'
Resolution 5
Ratification of Prior Issue of Shares
'That the issue of 10,000,000 fully paid ordinary shares in the Company on 2 May 2013 for A$0.05 per share be
and is hereby ratified for the purposes of ASX Listing Rules 7.4 and 7.5.'
To transact any other business that may be brought forward in accordance with the Company's Constitution.
By order of the Board
Marcelo Mora
Company Secretary
17 October 2013
Equus Mining Limited ABN 44 065 212 679
Level 2, 66 Hunter Street
Sydney NSW 2000
Australia
T +61 2 9300 3366
F +61 2 9221 6333
E info@equusmining.com
W www.equusmining.com
Explanatory Memorandum
to the Notice of Annual General Meeting
This Explanatory Memorandum has been prepared to assist members to understand the business to be put to
members at the Annual General Meeting to be held at Level 3, 66 Hunter Street, Sydney, NSW, on Wednesday, 20
November 2013 at 11.00 am Eastern Daylight Saving Time (EDST).
Financial Report
The Financial Report, Directors' Report and Auditor's Report for the Company for the year ended 30 June 2013 will
be laid before the meeting. There is no requirement for shareholders to approve these reports, however, the Chair
of the meeting will allow a reasonable opportunity to ask the auditor questions about the conduct of the audit and
the content of the Auditor's Report.
1. Adoption of Remuneration Report
The Remuneration Report, which can be found on pages 20 to23 of the Company's 2013 Annual Report, contains
certain prescribed details, sets out the policy adopted by the Board of Directors and discloses the payments to
Directors.
In accordance with section 250R of the Corporations Act, a resolution that the Remuneration Report be adopted
must be put to the vote. The resolution is advisory only and does not bind the Directors or the Company. However,
if at least 25% of the votes cast are against the adoption of the Remuneration Report, the Company's next
Remuneration Report must explain the Board’s proposed action in response or explain why no action has been
taken.
In the following year, if at least 25% of the votes cast on the resolution that the Remuneration Report be adopted
are against adoption, shareholders will then vote to determine whether the Directors, excluding the Managing
Director, will need to stand for re-election. If more than 50% of the votes cast on the resolution are in favour, a
separate re-election meeting must be held within 90 days.
Voting Exclusion Statement
A vote on the resolution must not be cast (in any capacity) by or on behalf of any of the following persons:
a member of the key management personnel details of whose remuneration are included in the
remuneration report;
a close related party of such a member.
However such a person may cast a vote on the resolution if:
the person does so as a proxy appointed by writing that specifies how the proxy is to vote on the proposed
resolution; and
the vote is the chair of the Meeting and the appointment of the chair as proxy.
o Does not specify the way the proxy is to vote on the resolution; and
o Expressly authorises the chair to exercise the proxy even if the resolution is connected directly or
indirectly with the remuneration of a member of the Key Management Personnel for the Company
or, if the Company is part of a consolidated entity, for the entity
Equus Mining Limited ABN 44 065 212 679
Level 2, 66 Hunter Street
Sydney NSW 2000
Australia
T +61 2 9300 3366
F +61 2 9221 6333
E info@equusmining.com
W www.equusmining.com
2. Re-election of Juerg Walker
Pursuant to Article 3.6 of the Company’s Constitution and the Corporations Act, Juerg Walker retires by rotation
and, being eligible, offers himself for re-election.
3. Re-election of Robert J. Perring
Pursuant to Article 3.5 of the Company’s Constitution and the Corporations Act, Robert Perring who was appointed
as a Director during the year retires in accordance with these requirements and, being eligible, offers himself for re-
election.
4. Ratification of the issue of Options
Resolution 4 seeks the ratification by shareholders of the grant of 4,000,000 options in the Company on 13
November 2012 for the purposes of Listing Rule 7.4 and 7.5. This ratification will provide the Company with the
ability to raise further funds, if required, will maximise the flexibility of the Company’s funds management and will
facilitate planning for the Company’s ongoing activities.
Details of the issue, as required by ASX Listing Rule 7.5 are as follows:
Number of securities allotted is 4,000,000 made up as follows:
o
tranche (1) 1,000,000 options, tranche (2) 1,000,000 options, tranche (3) 1,000,000 options and
tranche (4) 1,000,000 options.
Issue price: is Nil cash consideration, the options were issued as incentive to fast track the Naltagua copper
project.
Terms
o Unlisted options
o Each Option entitles the holder to subscribe for and be allotted one ordinary share in Equus Mining
Limited at an exercise price of $0.075 per Option for tranche 1, $0.15 for tranche 2, $0.20 for tranche
3, $0.25 for tranche 4.
o The rights of the optionholder can be change to comply with the listing rules when the company
undertakes a reorganisation of capital.
o The options do not entitle the holder to participate in new issues without exercising the options.
o The options do not confer the right to change the exercise price nor a change to the underlying
number of ordinary shares over which it can be exercised.
o The options are transferable.
o Upon exercise of the options, the options will convert into fully paid ordinary shares which will rank
equally in all respect with existing fully paid ordinary shares.
Name of allottees:
Intended use of funds: No funds were raised.
Damien Koerber.
Voting Exclusion Statement
The Company will disregard any votes cast on Resolution 4 by:
Damien Koerber and any of his associates.
However, the Company need not disregard a vote if:
it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the
proxy form; or
it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance
with a direction on the proxy form to vote as the proxy decides
Equus Mining Limited ABN 44 065 212 679
Level 2, 66 Hunter Street
Sydney NSW 2000
Australia
T +61 2 9300 3366
F +61 2 9221 6333
E info@equusmining.com
W www.equusmining.com
5. Ratification of Prior Issue of Shares
Resolution 5 seeks the ratification by shareholders of the issue of 10,000,000 fully paid ordinary shares in the
Company on 2 May 2013 for the purposes of ASX Listing Rules 7.4 and 7.5. This ratification will provide the
Company with the ability to raise further funds, if required, will maximise the flexibility of the Company’s funds
management and will facilitate planning for the Company’s ongoing activities.
Details of the issue, as required by ASX Listing Rule 7.5 are as follows:
Number of securities allotted: 10,000,000.
Terms:
Issue price:
Names of allottees:
Intended use of funds:
A$0.05 per share.
Fully paid ordinary shares ranking pari passu with existing
fully paid ordinary shares.
A range of Australian investors, none of whom
are related parties.
For exploration at the Naltagua Copper project and working
capital.
Voting Exclusion Statement
The Company will disregard any votes cast on Resolution 5 by:
Participants in the placement and any of their associates.
However, the Company need not disregard a vote if:
it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the
proxy form; or
it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance
with a direction on the proxy form to vote as the proxy decides
Equus Mining Limited ABN 44 065 212 679
Level 2, 66 Hunter Street
Sydney NSW 2000
Australia
T +61 2 9300 3366
F +61 2 9221 6333
E info@equusmining.com
W www.equusmining.com
Equus Mining Limited
ABN 44 065 212 679
FORM OF PROXY
I/we . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
being a member/members of Equus Mining Limited HEREBY APPOINT
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or failing him, the Chairman of the Meeting, as my/our Proxy to vote for me/us and on my/our behalf and to vote in accordance
with the following directions (or if no directions have been given, as the proxy sees fit) at the Annual General Meeting of Members
of the Company to be held at 11.00 am on 20 November 2013 and at any adjournment thereof.
The Proxy is directed by me/us to vote as indicated by the marks in the appropriate boxes below:
RESOLUTIONS
1. Adoption of the Remuneration Report
2. Re-election of Mr Juerg Walker as a Director
3. Re-election of Mr Robert R. Perring as a Director
4. Ratification of Prior Issue of Options
5. Ratification of Prior Issue of Shares
FOR
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AGAINST ABSTAIN
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Important information if the Chairman of the Meeting is your proxy.
By marking this box, you acknowledge that the Chairman of the Meeting may exercise your proxy even if he has an interest in the
outcome of the resolutions and that votes cast by the Chairman for those resolutions other than as a proxy holder will be
disregarded because of that interest. By marking this box, you are directing the Chairman of the Meeting to vote in accordance
with the Chairman's voting intentions on all resolutions, including resolution 1. If you do not mark this box, and you have not
directed your proxy how to vote, the Chairman will not cast your votes on the resolution and your votes will not be counted in
calculating the required majority if a poll is called on the resolution. If you appoint the Chairman of the Meeting as your proxy you
can direct the Chairman how to vote by either marking the voting box above (for example if you wish to vote against or abstain
from voting) or by marking this box (in which case the Chairman of the Meeting will vote in favour of each resolution, including
resolution 1.)
The Chairman of the Meeting intends to vote all undirected proxies in favour of each resolution.
I/We direct the Chairman of the Meeting to vote in accordance with the Chairman's voting intentions on the resolutions
(except where I/we have indicated a different voting intention) and acknowledge that the Chairman of the Meeting may
exercise my proxy even though the Chairman may have an interest in the outcome of the resolutions, including resolution 1
which is connected directly or indirectly with the remuneration of members of key management personnel.
Signature of Securityholder(s) This section must be completed.
Dated this . . . . . . day of . . . . . . . . . . . . . . . . . . . . . . 2013
Signatures of Securityholder(s)
Individual or Securityholder 1
Securityholder 2
Securityholder 3
Sole Director and
Sole Company Secretary
Director
Director
PROXY INSTRUCTIONS
1.
A member entitled to attend and vote is entitled to appoint not more than 2 proxies.
2. Where more than 1 proxy is appointed, each proxy must be appointment to represent a specified
proportion of the member's voting rights.
3.
4.
A proxy need not be a member.
All joint holders must sign.
5. Where the company has a Sole Director and Company Secretary, that person must sign. Otherwise this
form must be signed by a Director jointly with either another Director or a Company Secretary.
6.
7.
8.
All executors of deceased estates must sign.
The Company has determined, in accordance with regulation 7.11.37 of the Corporations Regulations
2001 (Cth), that the Company's shares quoted on the ASX Limited at 7.00 pm Sydney time on 18
November 2013 are taken, for the purposes of the Annual General Meeting to be held by the persons
who held them at that time. Accordingly, those persons are entitled to attend and vote (if not excluded)
at the meeting.
This Proxy form (and the original or certified copy of any power of attorney under which this proxy form
is signed) must be received at an address given below no later than 48 hours before the time appointed
for holding the meeting:
in person or by mail at the Company's registered office, Level 2, 66 Hunter Street, Sydney, NSW
2000 Australia; or
by facsimile on +61 2 9221 6333.