27 October 2015
The Manager Companies
ASX Limited
20 Bridge Street
SYDNEY NSW 2000
Dear Madam
(74 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 2015 and the Company’s Notice of Annual General Meeting to be held at 11.00 am on 27
November 2015.
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
pjn8263
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
2015 Annual Report
EQUUS MINING LIMITED
ABN. 44 065 212 679
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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
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Stock Exchange Information
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24
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53
55
www.equusmining.com
Corporate Directory
Directors
Share Registry
Mark Lochtenberg Non-Executive Chairman
Edward Leschke
Juerg Walker
Robert Yeates
Managing Director
Non-Executive Director
Non-Executive Director
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
Advanced Share Registry Limited
150 Stirling Highway
Nedlands, Western Australia 6009
Telephone:
Facsimile:
(61 8) 9389 8033
(61 8) 9389 7871
Auditors
KPMG
Level 16, Riparian Plaza
71 Eagle Street
Brisbane QLD 4000
Stock Exchange Listings
Australian Securities Exchange
Berlin and Frankfurt Securities Exchanges
(Third Market Segment)
(Code – EQE)
1
2015 Annual Report
Chairman’s Letter
Dear Fellow Shareholders,
Equus Mining’s main priority during the year has been to implement the stated strategy of
dominating prospective coal acreage and infrastructure positioning in the Magallanes basin,
Chile’s largest coal occurrence. This has been largely accomplished at minimal cost culminating
with the acquisition in July 2015 of the remaining 49% equity interest in Andean Coal Pty Ltd.
Dominant land positions are considered a strategic
advantage in the coal industry mainly because coal
seams tend to be laterally extensive and a large land
holding maximises resource potential whilst at the
same time excludes potential competitors. Proximity
to transport is also a strategic consideration. A number
of deep-water sounds transect the Magallanes basin
providing access for bulk-shipping vessels. This deep
water access is a distinct advantage when compared to
other developing coal basins.
Having acquired three thermal coal projects which
in aggregate comprised a dominant position, within
a country that is severely deficient in domestically
supplied energy, and all achieved at a price one order
below that of lesser projects means Equus Mining is
well positioned. The silver lining of a subdued resources
sector is that companies can acquire assets of strategic
importance at a value price if they know where to look.
Equity markets for the resources sector remained
subdued throughout the 2015 fiscal year. Unlike
Australia, Chile’s secured licencing system with no
minimal exploration expenditure requirements means
there isn’t the same time pressure to spend large
amounts of capital at a time when raising capital is
tough. Nevertheless, Equus Mining is not standing
still with ongoing exploration and corporate activities
focussed on the best value creating options available to
the company.
Chile’s strong growth in thermal coal consumption
has been driven by economic growth, the loss of
Argentinean supplied gas and the fervent opposition
to hydro generated power. Alternative imported fuel
sources such as LNG and diesel for power generation
remain significantly more expensive than thermal coal.
Furthermore, Chile has amongst the higher cost power
in South America. This means the growth trajectory in
thermal coal demand is expected to continue. Despite
this demand outlook, Chile’s coal industry is small by
world standards with just one significant producer.
Clearly, there is ample room for a new large local
supplier of thermal coal.
Yours sincerely,
Mark H. Lochtenberg
Chairman
2
EQUUS MINING LIMITED MANAGING DIRECTOR’S REVIEW
OF OPERATIONS
The Magallanes Basin is recognised as the largest coal
occurrence in Chile and is the centre of a fledgling coal
mining industry. Equus Mining Limited (‘Equus’ or
‘the Company’) controls exploration licences centred
over the main coal bearing unit, the Loreto Formation.
This unit extends for a distance over 200km (See Map
1). Despite Chile importing 80% to 90% of its current
thermal coal needs, Chile has just one operating mine in
the Magallanes basin.
Equus Mining’s three projects Rubens, Perez and Mina
Rica (See Maps 2 to 4) have strong potential to host
shallow dipping coal deposits suitable for bulk, open
cut extraction. This is demonstrated by a combination
of coal outcrop, float and intercepts in oil and gas wells
in the general licence areas as well as regional work
done by BHP Coal and Chile’s state owned petroleum
company ENAP. Both Rubens and Perez cover significant
strike lengths of the coal bearing Loreto Formation
whilst Mina Rica is located adjacent to the idle Pecket
port and coal loader owned by a third party.
During the 2015 financial year, Equus Mining continued
to position itself in order to take advantage of the
opportunity that is presented by Chilean energy
deficiency and high dependency on coal imports.
Equus Mining’s four simple strategic components are to:
• Dominate prospective coal acreage
Strategic infrastructure positioning
•
• Define coal seams though drilling
•
Invite JV offers from potential strategic partners
Key steps taken during the year to achieve these
strategies include:
Acquisition Completion of Andean Coal
Initially earning a 51% interest in Andean Coal Pty Ltd
(‘Andean’ or ‘Andean Coal’) through the expenditure
of A$0.2 million on exploration and administration at
Andean’s coal projects. In July 2015, Equus completed
the acquisition of the remaining 49% equity interest in
Andean Coal by the early exercising of a 2 year option for
the consideration of 16 million Equus shares.
Review of Operations
Data Acquisition
Collection and correlation of historic geological
information including seismic data, oil & gas wells log
data, geological maps and drilling reports. This data
acquisition effort can take some time as Chile has no
compulsory or formal reporting of exploration activities
and results to government agencies and there is no
central depository of historical information.
Exploration Licence Applications
During the year, the Company applied for new
exploration licences as ground became available. Since
the acquisition announcement of Andean Coal in 2014,
the total area controlled by Equus has increased from
170km2 to 435km2. Equus is now the largest holder of
prospective ground centred on the Loreto Formation
with a potential for and near surface coal within the
Magallanes basin, Chile’s largest coalfield.
Surface Work
Despite limited outcrop mapping, the general
understanding of the stratigraphy within the
Equus Mining’s project areas has improved. During
this process, several outcropping coal seams were
discovered.
Drill target delineation
A number of exploration targets were delineated
during the year with early stage drilling commencing
towards the end of the financial year. Drilling of initial
stratigraphic holes is been carried out at Mina Rica in
order to better define the lithological sequence and
to identify the optimum paleo-depositional position
within the stratigraphy to host coal. Mina Rica is
strategically located adjacent to an idle port and ship
loader infrastructure, which means low capital costs
and a short time frame for shipping of initial production
should a resource be outlined. The sequence of target
testing is being done in such a way so as to not impede
on Equus Mining’s ground acquisition strategy.
Marketing
Early stage discussions where held with both domestic
and international thermal coal buyers.
Establishment of surface landowner relationships
Considerable time has been spent working to build
solid relationships with landowners which will ensure
ongoing seamless land access during the critical drilling
phase.
3
2015 Annual Report Review of Operations
Map 1. Andean Coal Project Locations
4
EQUUS MINING LIMITED Review of Operations
Map 2. Rubens Project
Map 3. Perez Project
Map 4. Mina Rica Project
5
2015 Annual Report
Review of Operations
Investment Thesis - Chile’s Energy Deficiency
Chile is an energy deficient country. Chile’s economic
development is driving strong growth in energy
demand. However, domestic energy production has
stagnated resulting in Chile currently importing the
majority of its energy needs including that needed
for power generation. Over the last 20 years Chilean
power generation has transformed from predominately
domestic sourced energy, which was mostly
hydroelectric, to predominately imported sourced
energy in the form of thermal coal, LNG and diesel (see
Chart 1).
Chart 1. Chile’s Power Generation by Energy Source (1996-2012)
Source: Comisión Nacional de Energía,
Gobierno de Chile
6
EQUUS MINING LIMITED Review of Operations
million tonnes per annum in 2015 to approximate 30
million tonnes per annum over the next 10 years based
on government power consumption growth forecast
figures (6% - 7%) and coal remaining at just 27% of
the current power generation fuel mix compared
to a world average of 43%. The potential for import
replacement together with forecasted strong growth
in thermal coal demand by domestic power producers
provides an excellent opportunity for new coal project
developments in Chile. Equus is strategically positioned
to take advantage of Chile’s growing energy needs.
Demand for thermal coal has grown significantly since
the curtailment of gas exports from Argentina in 2007.
Coal fired power generation (coal consumption) has
tripled since 2005. Industry data by the largest power
producers indicates costs of power generation to be
$45/MWh for coal, $90/MWh for LNG and $140/MWh
for diesel. Producing power from coal is an important
solution to reducing Chile’s high cost of power
production, which are amongst the highest in South
America, and maintaining a reliable power supply.
The Chilean government forecasts that 8,000 MW of
new power generation capacity (from all fuels sources)
is needed by 2020 to meet demand growth. Thermal
coal consumption can be expected to grow from 15
Photo 1. Chile has 12 Coal Fired Power (80% to 90% of thermal requirements are imported)
7
2015 Annual Report Review of Operations
Compliance statement
No Material Changes
The information in this report that relates to
Exploration Results is based on information compiled
by Damien Koerber, who is a geological consultant to
the Company. Mr Koerber is a Member of the Australian
Institute of Geoscientists and has sufficient experience
which is relevant to the style of mineralisation and
type of deposits under consideration and to the
activities which he is undertaking to qualify as a
Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’. Mr Koerber holds
options in the Company and consents to the inclusion
in this report of the matters based on his information in
the form and context in which it appears.
Equus Mining Limited confirms that it is not aware of
any new information or data that materially affects the
information included in this Annual Report and that all
information continues to apply.
Yours sincerely
Ted Leschke
Managing Director
Dated this 28th day of September 2015
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 Company’s activities and ensure transparency, fair
dealing and protection of the interests of stakeholders. The Company has reviewed its corporate governance practices
against the Corporate Governance Principles and Recommendations (3rd edition) published by the ASX Corporate
Governance Council.
The 2015 corporate governance statement is dated 1 September 2015 and reflects the corporate governance
practices throughout the 2015 financial year. The board approved the 2015 corporate governance on 1 September
2015. A description of the Company’s current corporate governance practices is set out in the Company’s corporate
governance statement, which can be viewed at http://www.equusmining.com/corporate-governance/
8
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 2015 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.
Mark Hamish Lochtenberg, Non-Executive Chairman
Director since 10 October 2014.
Mr Lochtenberg graduated with a Bachelor of Law (Hons)
degree from Liverpool University, U.K. and has been actively
involved in the coal industry for more than 25 years.
Mark Lochtenberg is the former Executive Chairman
and founding Managing Director of ASX-listed Cockatoo
Coal Limited. He was a principal architect of Cockatoo’s
inception and growth from an early-stage grassroots
explorer through to its current position as an emerging
mainstream coal producer. He was also formerly the
co-head of Glencore International AG’s worldwide coal
division, where he spent 13 years overseeing a range
of trading activities including the identification, due
diligence, negotiation, acquisition and aggregation of the
coal project portfolio that would become Xstrata Coal.
Prior to this Mark established a coal “swaps” market for
Bain Refco, (Deutsche bank) after having served as a
senior coal trader for Hansen Neuerburg AG and as coal
marketing manager for Peko Wallsend Limited.
Mr Lochtenberg has previously been a Director of
ASX-listed Cumnock Coal Limited and of privately held
United Collieries Pty Limited and is currently a Director
of Australian Transport and Energy Corridor Pty Limited,
(ATEC).
Mark has served as director of listed Company Cockatoo
Coal Limited in the last three years.
Edward Jan Leschke, Managing Director
Director since 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.
Juerg Marcel Walker, Non-Executive Director
Director appointed 20 May 2002
Juerg 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.
Robert Ainslie Yeates, Non-Executive Director
Director appointed 20 July 2015
Rob Yeates is a graduate of the University of NSW,
completing a Bachelor of Engineering (Honours 1) in
1971 and a PhD in 1977 and then an MBA in 1986 from
Newcastle University. He began his career with Peko
Wallsend working in a variety of roles including mining
engineering, project management, mine management
and marketing.
He became General Manager Marketing for Oakbridge
Pty Limited in 1989 following a merger with the Peko
Wallsend coal businesses and went on to become
Managing Director of Oakbridge, which was the largest
coal mining company in NSW at that time, operating
one open cut and five underground coal mines.
Dr Yeates has gained operating, business development
and infrastructure experience as a director of Port
Waratah Coal Services (Newcastle Port), Port Kembla
Coal Terminal, Great Northern Mining Corporation NL
and Cyprus Australia Coal and for the past 18 years
has been principal of his own mine management
consultancy, providing a wide range of technical,
management and strategic planning services to the
mining industry. Until last year he was also Project
9
2015 Annual Report Directors’ Report
Director then CEO of Newcastle Coal Infrastructure
Group, which has developed and is operating coal export
facilities in Newcastle.
•
Planet Gas Limited, an energy explorer in
conventional and unconventional oil and gas
resources operating in Australia.
Dr Yeates was until recently and for the past three years
a director in Cockatoo Coal Limited.
He is also a director of the unlisted public companies
Mekong Minerals Limited and Nickel Mines Limited
COMPANY SECRETARY
Marcelo Mora
Company Secretary since 16 October 2012
Marcelo Mora holds a Bachelor of Business degree and
Graduate Diploma of Applied Corporate Governance,
and is a Chartered Secretary (AGIA). Mr Mora has
been an accountant for more than 29 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.
DIRECTORS’ MEETINGS
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
Mark H. Lochtenberg
Edward J. Leschke
Juerg M. Walker
Norman A. Seckold
Board Meetings
Held
Attended
2
3
3
1
2
3
3
1
DIRECTORS’ INTERESTS
Directors’ beneficial shareholdings at the date of this
report are:
Director
Mark H. Lochtenberg
Edward J. Leschke
Juerg M. Walker
Norman A. Seckold *
Fully Paid
Ordinary
Shares
20,034,000
34,368,889
8,297,861
31,877,420
Options
over
ordinary
shares
-
-
-
-
* At the time of resignation on 10 October 2014.
Norman Alfred Seckold, Non-Executive Chairman
Director appointed 5 September 2012 and resigned 10
October 2014
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.
•
•
•
•
•
• 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.
Cerro Resources NL, a precious metals exploration
company with a development project in Mexico.
Mr Seckold is currently Chairman of the following listed
companies:
•
•
Augur Resources Ltd, a minerals exploration and
development company operating in Australia and
Indonesia.
Santana Minerals Limited, a precious metals
exploration company operating in Mexico.
10
EQUUS MINING LIMITED Directors’ Report
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
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.
Unissued shares under option
At the date of this report, unissued ordinary shares of
the Company under option are:
Number of
shares
1,000,000
1,000,000
1,000,000
1,000,000
Exercise price
Expiry date
$0.075
$0.150
$0.200
$0.250
13 November 2015
13 November 2015
13 November 2015
13 November 2015
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
2015 is outlined below.
EQUUS MINING LIMITED – GROUP STRUCTURE AT 30 JUNE 2015
51%
Andean Coal
Pty Ltd
Minera
Carbones Del
Sur Limitada
0.1%
11
2015 Annual Report Directors’ Report
The Companies referred above comprise the
“Consolidated Entity” for the purposes of the Financial
Statements included in this report. On 31 July 2015, the
Group acquired the remaining 49% ownership interest
in Andean Coal Pty Ltd to the already 51% owned by the
Group as at 30 June 2015.
PRINCIPAL ACTIVITIES
The principal activity of the Group during the course
of the financial year was the mineral exploration in
the Magallanes Basin after securing the rights to
acquire 100% of Andean Coal Pty Ltd which has seen the
Group’s focus move to exploring for coal and applying
for additional coal prospecting tenements in southern
Chile.
In the medium term, the Group’s objective is to
complete the diamond drilling program aiming at
defining a coal resource at its Mina Rica prospect.
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 $1,048,648
(2014: $9,856,444 loss).
REVIEW OF OPERATIONS
A review of the Group’s operations for the year ended
30 June 2015 is set out on pages 3 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
2015. No dividends have been paid or declared during
the financial year (2014 - $nil)
CHANGES IN STATE OF AFFAIRS
In the opinion of the Directors, significant changes in
the state of affairs of the Group that occurred during
the year ended 30 June 2015 were as follows:
• On 7 July 2014, the Company completed the sale of
its equity interest in the Mansounia Gold Project in
the Republic of Guinea for a consideration of up to
US$700,000 comprising of US$42,857 in cash plus
the issue of two tranches of shares in a US over the
counter traded company, Blox-Inc. At 30 June 2014,
the Company had received an initial deposit of
12
AUD$2,857 and on 7 July 2014 the Company received
the remaining cash balance of US$40,000. On 31
July 2014, the Company received the first tranche
of 1,861,150 shares in Blox-Inc. In addition, upon
commencement of commercial gold production
Equus will receive a second tranche of shares in
Blox-Inc. calculated by dividing US$328,555 by the
lower of $0.20 or the volume weighted average
share price of Blox-Inc shares traded on a security
exchange platform over a 20-day period preceding
the issue date.
• On 21 July 2014, the Group offered all eligible
shareholders of Equus Mining Limited to
participate in a Share Purchase Plan (‘SPP’). The
offered closed on 22 August 2014 and shareholders
subscribed for 52,100,000 ordinary shares under
the SPP, raising $521,000. In conjunction with the
SPP, on 2 September 2014 the Company issued
22,500,000 new shares for a total consideration of
$225,000 to sophisticated investors.
• On 29 August 2014, the Group notified in writing
the owner of the Naltagua Copper Project in Chile
that Equus would not acquire the project.
• On 3 October 2014, the Company issued 12,534,000
new shares under a placement for a total
consideration of $125,340.
• On 10 October 2014, Mark H. Lochtenberg was
appointed as Non Executive Chairman of the
Company and Norman Seckold resigned from the
Board of Equus.
• On 31 October 2014, under the terms of the Sale and
Purchase agreement entered into between Equus
Mining Limited and Andean Coal Pty Ltd, Equus
earned a 51% interest in Andean Coal Pty Limited
after expending $200,000 on exploration related
activities. In accordance with the agreement
Andean issued 312 shares to Hotrock Enterprises
Pty Ltd (a wholly owned subsidiary of Equus Mining
Limited). In addition, Equus has the option to
acquire the remaining 49% of Andean Coal for the
consideration of 16 million ordinary shares in Equus.
• On 16 January 2015 the Group completed a share
placement for 30,500,000 ordinary shares at 1
cent raising $305,000. In addition, on 3 March
2015 shareholders approved the issue of 5,000,000
ordinary shares to present and past directors
raising a further $50,000.
EQUUS MINING LIMITED Directors’ Report
• On 6 February 2015, Equus executed an amended
LIKELY DEVELOPMENTS
Equus considers growth as a vital strategy for the
Company taking into consideration its existing
operations in the Magellan province in southern Chile,
the addition of new exploration licences in the Magellan
Basin or by the addition of new ventures, projects
through mergers or acquisitions are part of the natural
evolution of its business. The Group will continue to
seek good partners and good projects to create business
synergies for Equus.
The Group will focus on its coal interest during the
course of 2015/2016 financial year. The Directors expect
to receive results of the exploration program in the
Magellan province, which they will make public once the
information is received in accordance with ASX listing
rules.
Further information as to likely developments in the
operations of the Group and the expected results of
those operations in subsequent years has not been
included in this report because disclosure of this
information would be likely to result in unreasonable
prejudice to the Group.
INDEMNIFICATION AND INSURANCE OF
OFFICERS AND AUDITORS
During or since the end of the financial, the Company
has not indemnified or made a relevant agreement to
indemnify an officer or auditor of the Company against
a liability incurred as such by an officer or auditor.
The Group has not paid or agreed to pay, a premium in
respect of a contract insuring against a liability incurred
by an officer or auditor.
agreement for the sale of the drilling rig, plant and
equipment and consumables held in the Kyrgyz
Republic. The amended agreement supersedes
the previous version executed on 23 September
2014. The amended consideration for the sale was
US$700,000 in cash which was paid on 6 February
2015 and the AUD$100,000 deposit already paid was
no longer refundable.
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
On 20 July 2015, the Group appointed Dr Robert Yeates
as non Executive-Director of Equus Mining Limited for
whom a detailed background of Dr Yeates is set out on
page 9 of this Annual Report.
On 31 July 2015, the Group exercised its options to
acquire the remaining 49% interest in Andean Coal Pty
Ltd by issuing 16,000,000 ordinary shares in the capital
of Equus to Sambas Energy Pty Ltd as consideration.
Other than the matters discussed above, no other
matters or circumstances have 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.
13
2015 Annual Report Directors’ Report
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 is responsible for reviewing its own performance. The evaluation process is
designed to assess the Group’s business performance, whether long-term strategic objectives are being achieved, and
the achievement of individual performance objectives.
The Constitution and 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.
Remuneration generally comprises of salary and superannuation. Long-term incentives are able to be provided
through the Company’s share option program, which acts, to align the Director’s and senior executive’s actions with
the interests of the shareholders, no options were granted or outstanding to key management personnel for the
year ended 30 June 2015, or in the prior year. The remuneration disclosed below represents the cost to the Group for
services provided under these arrangements.
Edward Leschke and Mark Lochtenberg are paid through the Company’s payroll. All other Directors services are pay by
way of arrangement with related parties.
There were no remuneration consultants used by the Company during the year ended 30 June 2015, or in the prior year.
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.
2015
$
2014
$
2013
$
2012
$
2011
$
Net loss attributable to equity holders of the parent
1,048,648
9,856,444
3,546,382
3,519,829
3,656,276
Dividends paid
Change in share price
-
0.01
-
(0.02)
-
0.00
-
(0.06)
-
0.02
Return on capital employed*
(61.84%)
(748.56%)
(30.16%)
(73.19%)
(34.51%)
*
Return on capital employed is calculated by dividing the profit or loss for the year by total assets less current
liabilities.
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.
14
EQUUS MINING LIMITED 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 Company and Group are:
Short-term employee
benefits
Post
Employment
Benefits
Primary
Salary / Fees
Consulting
Fees
Super-
annuation
Year
$
$
$
Share based
payments
share
options
$
Executive Directors
Edward Leschke
Non-Executive Directors
Norman Seckold ^
Robert Perring *
Juerg Walker
Mark Lochtenberg **
Total all directors
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
150,000
150,000
8,306
30,000
-
15,833
30,000
30,000
21,774
-
210,080
225,833
-
-
-
-
-
-
-
-
-
-
-
-
^
*
Ceased to be Director on 10 October 2014.
Ceased to be Director on 10 January 2014.
** Director since 10 October 2014.
14,250
13,875
-
-
-
-
-
-
2,069
-
16,319
13,875
-
-
-
-
-
-
-
-
-
-
-
-
Total
$
164,250
163,875
8,306
30,000
-
15,833
30,000
30,000
23,843
-
226,399
239,708
15
2015 Annual Report Directors’ Report
REMUNERATION REPORT - Audited (Con’t)
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
In accordance with best practice corporate governance the company provided each key management personnel with a
letter detailing the terms of appointment, including their remuneration.
Executive Directors - Audited
During the financial year ended 30 June 2015, only Edward Leschke was considered an Executive Director. His salary
comprised of fixed remuneration plus 9.5% statutory superannuation paid through the Company’s payroll.
Non Executive Directors - Audited
During the financial year ended 30 June 2015, the following Directors were considered Non Executive Directors:
• Mark Lochtenberg since 10 October 2014;
•
• Norman Seckold until 10 October 2014;
Juerg Walker;
The salary component of Non-Executive Directors was made up of:
•
•
•
fixed remuneration;
9.5% statutory superannuation for Australian resident directors pay through the Company’s payroll; and
an entitlement to receive options, subject to shareholders’ approval.
The services of non-executive directors who are not paid through the Company’s payroll system are provided by way of
arrangements with related parties.
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 2015 and 2014 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 2015 and 2014
financial years.
Options and rights over equity instruments - Audited
Directors or 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.
16
EQUUS MINING LIMITED Directors’ Report
REMUNERATION REPORT - Audited (Con’t)
Loans to key management personal and their related parties - Audited
There were no loans made to key management personnel or their related parties during the 2015 and 2014 financial
years and no amounts were outstanding at 30 June 2015 (2014 - $nil).
Other transactions with key management personnel - Audited
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 2015, 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 $240,000 (2014 - $240,000). There were
amounts outstanding for the year ended 30 June 2015 (2014 - $20,000).
Movements in shares - audited
The movement during the reporting period in the number of ordinary shares in the Company held directly, indirectly or
beneficially, by each key management person, including their related parties, is as follows:
Fully paid ordinary shareholdings and transactions - 2015
Key management personnel
Held at
1 July 2014
Purchases
Sales
Held at
30 June 2015
Mark H. Lochtenberg
-
20,034,000
-
20,034,000
Edward J. Leschke
35,068,889
300,000
1,000,000
34,368,889
Juerg M. Walker
8,297,861
-
Norman A. Seckold *
30,377,420
1,500,000
-
-
8,297,861
31,877,420
* Number of shares held at date of resignation as a Director.
17
2015 Annual Report
Directors’ Report
NON-AUDIT SERVICES
During the year ended 30 June 2015 KPMG, the Group’s auditor, has not performed certain 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 network firms for audit and non-audit services
provided during the year are set out below.
Services other than audit and review of financial statements:
Other services
Taxation advisory services
Audit and review of financial statements
2015
$
2014
$
-
-
11,000
11,000
86,750
84,300
86,750
95,300
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration is set out on page 19 and forms part of the Directors’ Report for the
financial year ended 30 June 2015.
Signed at Sydney this 28th day of September 2015
in accordance with a resolution of the Board of Directors:
Mark H. Lochtenberg
Chairman
Edward J. Leschke
Managing Director
18
EQUUS MINING LIMITED
Lead Auditor’s Independence Declaration
Lead Auditor’s Independence Declaration
under Section 307C of the Corporations Act 2001 to the Directors of Equus Mining Limited
I declare that, to the best of my knowledge and belief, in relation to the audit for the financial year ended 30 June 2015,
there have been:
(i)
no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation
to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Adam Twemlow
Partner
Brisbane
28 September 2015
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG International
Liability limited by a scheme approved under
Cooperative (“KPMG International”), a Swiss entity.
Professional Standards Legislation
19
2015 Annual Report Consolidated Statement of Profit or
Loss and Other Comprehensive Income
For the Year Ended 30 June 2015
CONTINUING OPERATIONS
Other income
Expenses
Employee, directors and consultants costs
Depreciation expense
Impairment of exploration expenditure
Impairment of property
Travel expenses
Business development
Other expenses
Results from operating activities
Finance income
Finance costs
Net finance income/(expense)
Profit/(loss) before tax
Tax benefit/(expense)
Profit/(loss) from continuing operations
DISCONTINUED OPERATION
Loss from discontinued operation (net of tax)
Loss for the year
Other comprehensive income for the year
Items that may be classified subsequently to profit or loss:
Exchange differences on translation of foreign operations
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 income/(loss)
Total comprehensive loss for the year
Loss for the year attributable to:
Equity holders of the Company
Non-controlling Interests
Total comprehensive loss attributable to:
Equity holders of the Company
Non-controlling Interests
Earnings per share
Basic and diluted loss per share attributable to ordinary equity holders
(dollars)
Earnings per share - continuing operations
Basic and diluted loss per share attributable to ordinary equity holders
(dollars)
Notes
2015
$
2014
$
4
293,218
2,857
(402,261)
(862)
-
-
(7,546)
-
(413,301)
(530,752)
65,403
(97,251)
(31,848)
(562,600)
-
(562,600)
(499,285)
(2,608)
(8,832,568)
(192,710)
(26,908)
(47,112)
(377,316)
(9,975,650)
24,912
(7,790)
17,122
(9,958,528)
378,804
(9,579,724)
(479,561)
(1,042,161)
(276,720)
(9,856,444)
29,745
(97,251)
(585,027)
(7,790)
97,251
29,745
(1,012,416)
(1,048,648)
6,487
(1,042,161)
(1,018,903)
6,487
(1,012,416)
7,790
(585,027)
(10,441,471)
(9,856,444)
-
(9,856,444)
(10,441,471)
-
(10,441,471)
(0.003)
(0.038)
(0.002)
(0.037)
11
12
4
5
5
6
28
15
10
10
16
16
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
20
EQUUS MINING LIMITED
Consolidated Statement of
Financial Position
As at 30 June 2015
Notes
7
8
27
9
10
11
12
13
14
15
15
22
2015
$
644,765
5,120
-
6,014
2014
$
167,597
25,307
1,442,125
2,863
655,899
1,637,892
194,503
1,073,712
937
1,269,152
1,925,051
229,377
229,377
229,377
1,695,674
-
43,092
1,775
44,867
1,682,759
366,027
366,027
366,027
1,316,732
107,814,973
144,000
(3,262,982)
(103,205,351)
106,622,162
(125,930)
(3,022,797)
(102,156,703)
1,490,640
205,034
1,695,674
1,316,732
-
1,316,732
Current Assets
Cash and cash equivalents
Receivables
Assets held for sale
Other
Total Current Assets
Non-Current Assets
Available-for-sale financial assets
Exploration and evaluation expenditure
Property, plant and equipment
Total Non-Current Assets
Total Assets
Current Liabilities
Payables
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Share capital
Reserves
Foreign currency translation reserve
Accumulated losses
Parent entity interest
Non-controlling interests
Total Equity
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
21
2015 Annual Report
Consolidated Statement of
Changes in Equity
Share
Capital
$
Accumulated
Losses
$
Reserves
$
controlling Total
Equity
$
Interest
$
Total
$
Non-
Balance at 1 July 2013
106,622,162
(92,320,959) (2,543,000) 11,758,203
Loss for the year
Total other comprehensive (loss)/income
Total comprehensive loss for the year
-
-
-
(9,856,444)
-
(9,856,444)
-
(585,027)
(585,027)
(9,856,444)
(585,027) (10,441,471)
Transactions with owners recorded
directly in equity
Transfer of expired options
-
20,700
(20,700)
-
Balance at 30 June 2014
106,622,162 (102,156,703)
(3,148,727)
1,316,732
Balance at 1 July 2014
106,622,162 (102,156,703)
(3,148,727)
1,316,732
-
-
-
-
-
-
-
11,758,203
(9,856,444)
(585,027)
(10,441,471)
-
1,316,732
1,316,732
Profit/(Loss) for the year
Total other comprehensive income
Total comprehensive profit/(loss)
for the year
Transactions with owners recorded
directly in equity
-
-
-
(1,048,648)
-
(1,048,648)
6,487
(1,042,161)
-
29,745
29,745
-
29,745
(1,048,648)
29,745
(1,018,903)
6,487
(1,012,416)
Ordinary shares issued
1,226,340
Transaction costs on issue of shares
(33,529)
Changes in ownership interest in
subsidiaries
Non-controlling interest on acquisition of
subsidiaries
-
-
-
-
-
-
-
1,226,340
(33,529)
-
-
1,226,340
(33,529)
- 198,547
198,547
Balance at 30 June 2015
107,814,973 (103,205,351)
(3,118,982)
1,490,640 205,034
1,695,674
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
22
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015
Consolidated Statement of
Cash Flows
Notes
2015
$
2014
$
16,887
15,036
(856,695)
(1,260,016)
(839,808)
(1,244,980)
12,283
17,283
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
Net cash used in operating activities
17
(827,525)
(1,227,697)
Cash flows from investing activities
Payments for exploration and development expenditure
(823,250)
(861,739)
Proceeds from sale of plant and equipment
Proceeds from sale of investments
Proceed from sale of tenement interest
Deposit received for the sale of drill rig
Net cash from/(used in) investing activities
Cash flows from financing activities
Proceeds from share issues
Share issue expenses
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
893,883
-
41,249
74,273
19,940
2,857
-
100,000
111,882
(664,669)
1,226,340
(33,529)
1,192,811
-
-
-
477,168
(1,892,366)
167,597
2,059,438
-
525
Cash and cash equivalents at 30 June
17
644,765
167,597
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
23
2015 Annual ReportFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2015
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 2015 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 coal resource opportunities in
southern Chile, South America.
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 28 September 2015.
(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.
During the year the Company raised $1,192,811 (net of associated costs) through several placements. In addition, the
Company completed the sale of the drilling rig, plant and equipment and associated consumables held in the Kyrgyz
Republic on 6 February 2015 for US$700,000 (A$893,883).
The Group recorded a loss attributable to equity holders of the Company of $1,048,648 for the year ended 30 June 2015
and has accumulated losses of $103,205,351 as at 30 June 2015. The Group has cash on hand of $644,765 at 30 June 2015
and used $1,650,775 of cash in operations, including payments for exploration and evaluation, for the year ended 30
June 2015. Additional funding will be required to meet the Group’s projected cash outflows for a period of 12 months
from the date of the directors’ declaration.
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 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 shareholders or
other parties. If such funding is not achieved, the Group plans to reduce expenditure to the level of funding available.
In the event that the Group does not obtain additional funding and 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.
24
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015 Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2015
2. BASIS OF PREPARATION (Cont.)
(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.
In particular, information about significant areas of estimation uncertainty and critical judgements in applying
accounting policies that have the most significant effect on the amount recognised in the consolidated financial
statements are described in the following notes:
• Note 2(d) - Going concern;
• Note 6 - Income tax expense;
• Note 11 - Exploration and evaluation expenditure; and
• Note 29 – Acquisition of controlled entities.
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.
(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.
Foreign currency gains and losses are reported on a net basis.
(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.
25
2015 Annual ReportFor the Year Ended 30 June 2015 Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(b) Exploration and evaluation expenditure (Cont.)
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.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are
demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment
and then reclassified to developing mine properties.
(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, the costs of dismantling and removing the items and restoring the site
on which they are located and capitalised borrowing costs. Cost also may include transfers from equity of any gain
or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Purchased
software that is integral to the functionality of the related equipment is capitalised as part of that equipment.
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.
The 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 other
income/other expenses in 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
Depreciation basis
Depreciation rate
Computer and Office Equipment
Straight Line
20% to 50%
Motor Vehicles
Straight Line
10% to 20%
Building improvements
Plant & equipment
Office Fittings
26
Straight Line
Straight Line
Straight Line
10%
20%
25%
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015 Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(d) Financial instruments
Non-derivative financial assets
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 at which 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 on the financial asset 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.
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 trade and other receivables.
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 in the fair
value reserve in equity. When an investment is derecognised, the cumulative gain or loss is reclassified to profit or loss.
Non-derivative financial liabilities
The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated.
All other financial liabilities 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 liability when its contractual obligations are discharged, cancelled or expire.
Other financial liabilities comprise trade and other payables.
27
2015 Annual ReportFor the Year Ended 30 June 2015 Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(d) Financial instruments (Cont.)
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. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power
over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from
the date that control commences until the date that control ceases.
Loss of control
When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and any
related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any interest
retained in the former subsidiary is measured at fair value when control is lost.
Transactions eliminated on consolidation
Intra-group balances and any unrealised gains and losses or income and expenses arising from intragroup
transactions, are eliminated in preparing the consolidated financial statements.
(f) 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.
(g) Impairment
Non-derivative financial assets
A financial asset not classified 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 per cent 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.
28
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015 Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(g) Impairment (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
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.
Reversals of impairment
An impairment loss in respect of a financial asset carried at amortised cost is reversed if the subsequent increase in
recoverable amount can be related objectively to an event occurring after the impairment loss was recognised.
In respect of non-financial assets, an impairment loss is reversed if there has been a conclusive change in the
estimates used to determine the recoverable amount. 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.
(h) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less.
(i) Income 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; or
taxable temporary differences arising on the initial recognition of goodwill.
29
2015 Annual ReportFor the Year Ended 30 June 2015 Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(i) Income Tax (Cont.)
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.
(j) Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction.
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 period, adjusted for effective
interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate
at the end of the reporting period.
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. Foreign currency differences
arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-
sale equity instruments, a financial liability designated as a hedge of the net investment in a foreign operation or qualifying
cash flow hedges, which are recognised in other comprehensive income. 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.
(k) Foreign operations
The assets and liabilities of foreign operations are translated to Australian dollars at foreign exchange rates ruling
at the reporting date. The income and expenses of foreign operations are translated to Australian dollars at rates
approximating the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences
arising on retranslation are recognised directly in the foreign currency translation reserve (‘FCTR’), a separate
component of equity.
Foreign exchange gains and losses arising from a monetary item receivable or payable to a foreign operation, the
settlement of which is neither planned nor likely in the foreseeable future, are considered to form part of a net
investment in a foreign operation and are recognised directly in the FCTR.
Any references to functional currency, unless otherwise stated, are to the functional currency of the Company,
Australian dollars.
When a foreign operation is disposed of, in part or in full, the relevant amount in the FCTR is transferred to profit or
loss as part of the profit or loss on disposal.
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 a monetary item are considered
to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are
presented within equity in the FCTR.
30
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015 Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(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.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment,
and intangible assets other than goodwill.
(m) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Taxation Office. In these circumstances, the GST is recognised as part of the
cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are
shown inclusive of GST.
Cash flows are presented in the Consolidated Statement of Cash Flows on a gross basis, except for the GST component
of investing and financing activities, which are disclosed as operating cash flows.
(n) Employee benefits
Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount
expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past
service provided by the employee and the obligation can be estimated reliably.
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) 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.
31
2015 Annual ReportFor the Year Ended 30 June 2015 Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(o) Provisions (Cont.)
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.
(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) 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.
Investments in equity securities
The fair values of investments in equity securities are determined with reference to the quoted market price that is
most representative of the fair value of the security 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 measurement date, exercise price of the instrument, expected volatility (based on weighted
average historic volatility), expected dividends, and the risk-free interest rate (based on government bonds).
The grant-date fair value of share-based payment awards is recognised as an expense, with a corresponding increase
in equity, over the period that the recipient unconditionally become 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. Service and
non-market performance conditions are not taken into account in determining fair value.
(r) 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.
32
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015 Notes to the Consolidated
Financial Statements
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(r) Assets held for sale, and discontinued operations (Cont.)
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.
(s) 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 2014, and have not been applied in preparing these financial statements. Those which may be relevant to
the Company are set out below. The Company does not plan to adopt these standards early.
AASB 9 Financial Instruments
AASB 9 replaces the existing guidance in AASB 139 Financial Instruments: Recognition and Measurement. AASB 9
includes revised guidance on the classification and measurement of financial instruments, including a new expected
credit loss model for calculating impairment on financial assets and the new general hedge accounting requirements.
It also carries forward the guidance on recognition and derecognition of financials instruments from AASB 139.
AASB 9 is effective for the Company’s annual reporting period beginning 1 July 2018 and can be early adopted. The
Company does not plan to adopt this standard early and the standard is not expected to have a significant effect on
the financial statements.
33
2015 Annual ReportFor the Year Ended 30 June 2015 Notes to the Consolidated
Financial Statements
4. LOSS FROM OPERATING ACTIVITIES
Revenue from ordinary activities
Continuing operations
Discontinued operations*
2015
2014
$
-
$
-
2015
$
7,756
2014
$
7,419
Total
2015
$
7,756
Total
2014
$
7,419
The Group generated rental income from the provision of equipment from its subsidiary JSC Sherik
*Discontinued - see Note 28.
Other income
Recognised in profit or loss
Gain on sale of tenement interest
Other
2015
$
279,883
13,335
293,218
2014
$
2,857
-
2,857
On 7 July 2014, the Group completed the sale of its tenement interest in the Mansounia Gold Project in the Republic
of Guinea West Africa for a cash consideration of US$42,857 and the allotment of 1,861,150 ordinary shares in a US
over the counter traded company, Blox-Inc at US$0.12 with a total value of AUD$238,634. Equus had received an initial
amount of AUD$2,857 during 2014 with the balance of US$40,000 and the allotment of the shares in July 2014.
Other expenses
Administration costs
Accounting and secretarial fees
Commissions
Insurance
ASIC and ASX fees
Share registry fees
Legal fees
Audit fees – KPMG Australia audit and
review of financial reports
Loss on sale of plant and equipment
Other expenses
5. FINANCE INCOME AND FINANCE COSTS
Recognised in profit and loss
Interest income on cash deposits
Income on sale of minor assets
Foreign exchange gain
Impairment of available-for-sale investments reclassified to profit or loss
Net finance income/(costs) recognised in profit or loss
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
34
2015
$
32,871
61,220
37,500
10,269
17,159
22,078
46,885
86,750
-
98,569
413,301
12,283
-
53,120
65,403
(97,251)
(31,848)
(97,251)
97,251
-
2014
$
9,800
107,771
54
14,577
25,838
12,650
26,438
84,300
10,227
84,186
377,316
17,283
7,618
11
24,912
(7,790)
17,122
(7,790)
7,790
-
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
2015
$
2014
$
(18,289)
-
18,289
-
(134,834)
(378,804)
134,834
(378,804)
1,042,161
(312,648)
(10,235,248)
(3,070,574)
272,075
-
16,343
24,230
-
1,797,849
378,804
248,475
266,642
(378,804)
6,845,041
3,177,403
(568,853)
9,453,591
6. INCOME TAX EXPENSE
Current tax expense
Current year
Overprovision in prior year
Losses not recognised
Numerical reconciliation of income tax expense to prima facie tax payable:
Loss before tax
Prima facie income tax benefit at the Australian tax rate of 30% (2014 - 30%)
Decrease in income tax benefit due to:
- non-deductible expenses
- overprovision in prior year
- tax losses not recognised
- effect of net deferred tax assets not brought to account
Income tax expense/(benefit)
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%
6,845,041
3,141,021
298,812
10,284,874
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.
7. CASH AND CASH EQUIVALENTS
Cash at bank
Deposits at call
8. RECEIVABLES
Current
Bank bond guarantee - credit card
Property bond deposit
Sundry debtors
Trade and sundry debtors are non-interest bearing and generally on 30-day terms.
2015
$
98,536
546,229
644,765
-
-
5,120
5,120
2014
$
58,979
108,618
167,597
10,602
1,171
13,534
25,307
35
2015 Annual ReportFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
9. OTHER ASSETS
Current
Prepayments
10. INVESTMENTS
2015
$
2014
$
6,014
2,863
Equity securities - available-for-sale at fair value
194,503
-
On 31 July 2014, the Company received 1,861,150 shares in Blox.Inc, a US over the counter traded company as part
consideration for the sale of the tenement interests in the Mansounia Gold Project in the Republic of Guinea. The shares
had a fair value of US$0.12 each based on the closing share price on the date of acquisition. Based on a closing share price
of US$0.08 at 30 June 2015 a net decrease in fair value of US$74,446 (AUD$97,251) has been recorded in profit or loss.
11. 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
Additions
Acquisitions (including non-controlling interest)
Impairments
Foreign currency translation movement
Balance carried forward
2015
$
2014
$
43,092
665,924
353,545
-
11,151
1,073,712
8,268,874
861,741
-
(8,832,568)
(254,955)
43,092
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 prior year, the Group assessed its exploration and evaluation expenditure assets for impairment and
recorded $8,832,568 of impairment relating to the Naltagua project in central Chile.
12. PROPERTY, PLANT AND EQUIPMENT
Furniture and fittings - at cost
Accumulated depreciation
Net book value
Office equipment - at cost
Accumulated depreciation
Net book value
Property – at cost
Impairment
Net book value
2015
$
1,892
(955)
937
2,785
(2,785)
-
192,710
(192,710)
-
2014
$
157,173
(155,546)
1,627
69,751
(69,603)
148
192,710
(192,710)
-
Total property, plant and equipment net book value
937
1,775
During the year ended 30 June 2015, the Group assessed the carrying value of its fixed assets for impairment/reversal
and recorded no impairment or reversal (2014: $192,710 fully impaired the carrying value of the property held at
Naltagua, Central Chile).
36
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
2015
$
2014
$
1,775
-
(862)
-
24
937
247,058
(23,466)
(2,608)
(192,710)
(26,499)
1,775
216,025
13,352
229,377
343,090
22,937
366,027
12. PROPERTY, PLANT AND EQUIPMENT (Cont.)
Reconciliation:
Carrying amount at the beginning of the year
Disposals
Depreciation
Impairment
Foreign currency translation movement
Carrying amount at the end of the year
13. TRADE AND OTHER PAYABLES
Current liabilities
Trade creditors and accruals
Employee leave entitlements
14. ISSUED CAPITAL
379,295,675 (2014: 256,661,675) fully paid ordinary shares
107,814,973
106,622,162
Fully paid ordinary shares
Balance at beginning of financial year
Issued ordinary shares 28 August 2014 for $0.01
Issued ordinary shares 2 September 2014 for $0.01
Issued ordinary shares 3 October 2014 for $0.01
Issued ordinary shares 16 January 2015 for $0.01
Issued ordinary shares 3 March 2015 for $0.01
Less cost of issue
2015
2014
Nº
$
Nº
$
256,661,675
52,100,000
22,500,000
12,534,000
30,500,000
5,000,000
-
379,295,675
106,622,162 256,661,675
521,000
225,000
125,340
305,000
50,000
(33,529)
-
-
-
-
-
-
107,814,973 256,661,675
106,622,162
-
-
-
-
-
-
106,622,162
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.
37
2015 Annual ReportFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
15. RESERVES
Equity based compensation reserve (a)
Fair value reserve (b)
Foreign currency translation reserves (c)
Movements during the period:
(a) Equity based compensation reserve
Balance at beginning of period
Expired options
Balance at end of period
(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
(c) Foreign currency translation reserves
Balance at beginning of period
Currency translation differences
Balance at end of period continuing operations
Nature and purpose of reserves
2015
$
2014
$
144,000
-
(3,262,982)
(3,118,982)
144,000
-
(3,292,727)
(3,148,727)
144,000
-
144,000
-
-
-
-
164,700
(20,700)
144,000
-
(7,790)
7,790
-
(3,292,727)
29,745
(3,262,982)
(2,707,700)
(585,027)
(3,292,727)
Equity based compensation reserve:
The equity based compensation reserve is used to record the fair value of options issued but not exercised.
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.
38
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
16. LOSS PER SHARE
Basic and diluted profit/(loss)
per share:
Net profit/(loss) for the year
attributable to equity holders
of the parent
Continuing
operations
$
2015
Discontinued
operations
$
2014
Total
$
Continuing Discontinued
operations
operations
$
$
Total
$
(569,087)
(479,561)
(1,048,648)
(9,579,724)
(276,720)
(9,856,444)
Weighted average number of ordinary shares (basic and diluted)
Issued ordinary shares at beginning of year
Effect of shares issued (Note 14)
Weighted average ordinary shares at the end of the year
2015
256,661,675
86,922,685
343,584,360
2014
256,661,675
-
256,661,675
As the Group is loss making, none of the potentially dilutive securities are currently dilutive in the calculation of total
earnings per share.
17. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
Cash flows from operating activities
Loss for the year
Non-cash items
Depreciation
Loss/(Profit) on sale of plant and equipment
Impairment of available for sale financial assets
Impairment of value added tax in Kyrgyzstan
Impairment of property, plant and equipment
Impairment of exploration and evaluation expenditure
Income tax expense/(benefit)
Foreign currency gain
Gain on sale of tenement interest
Changes in assets and liabilities
Decrease/(increase) in receivables
Decrease/(increase) in other assets
(Decrease)/Increase in payables
(Decrease)/Increase in other liabilities
Net cash used in operating activities
Reconciliation of cash
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
2015
$
2014
$
(1,042,161)
(9,856,444)
862
-
97,251
-
494,266
-
-
(53,120)
-
20,187
(183,034)
(152,190)
(9,586)
(827,525)
2,608
(50,808)
7,790
8,526
192,710
8,832,568
(378,804)
-
(2,857)
390
812
15,812
-
(1,227,697)
644,765
167,597
39
2015 Annual ReportFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
18. 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 2015, 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 $240,000 (2014 - $240,000). For the year
ended 30 June 2015 no amounts were outstanding (2014 - $20,000).
19. KEY MANAGEMENT PERSONNEL DISCLOSURES
Information regarding individual key management personnel’s compensation and some equity instruments
disclosures as permitted by Corporations Act and Corporations Regulations 2M.3.03 are provided in the Remuneration
Report section of the Director’s Report.
Key management personnel compensation
Primary fees/salary
Superannuation
2015
$
210,080
16,319
226,399
2014
$
225,833
13,875
239,708
At 30 June 2015 no fees were outstanding (2014 - $18,656). There were no loans made to key management personnel or
their related parties during the 2015 and 2014 financial years.
The Board reviews remuneration arrangements annually based on services provided. Apart from the details disclosed
in this note and Note 18, there were no material contracts involving Directors’ interest’s existing at year-end.
40
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
20. 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 2015
Grant date
13 November 2012
13 November 2012
13 November 2012
13 November 2012
Number of options
1,000,000
1,000,000
1,000,000
1,000,000
Exercise price
$0.075
$0.150
$0.200
$0.250
Movement of options during the year ended 30 June 2015
Fair value at
grant date
$0.044
$0.037
$0.033
$0.030
Vesting Date
31 March 2013
31 March 2013
31 March 2013
31 March 2013
Expiry date
13 November 2015
13 November 2015
13 November 2015
13 November 2015
Outstanding
Granted
Cancelled
Exercised
Expired Outstanding at Exercisable at
at the beginning during the during the during the during the
Grant date
13 November 2012
13 November 2012
13 November 2012
13 November 2012
of the year
1,000,000
1,000,000
1,000,000
1,000,000
4,000,000
year
-
-
-
-
-
year
-
-
-
-
-
year
-
-
-
-
-
year
-
-
-
-
-
the end of
the year
1,000,000
1,000,000
1,000,000
1,000,000
4,000,000
the end of
the year
1,000,000
1,000,000
1,000,000
1,000,000
4,000,000
Options outstanding at 30 June 2014
Grant date
13 November 2012
13 November 2012
13 November 2012
13 November 2012
Number of options
1,000,000
1,000,000
1,000,000
1,000,000
Exercise price
$0.075
$0.150
$0.200
$0.250
Movement of options during the year ended 30 June 2014
Fair value at
grant date
$0.044
$0.037
$0.033
$0.030
Vesting Date
31 March 2013
31 March 2013
31 March 2013
31 March 2013
Expiry date
13 November 2015
13 November 2015
13 November 2015
13 November 2015
Outstanding
Granted
Cancelled
Exercised
Expired Outstanding at Exercisable at
at the beginning during the during the during the during the
Grant date
24 May 2010
13 November 2012
13 November 2012
13 November 2012
13 November 2012
of the year
460,000
1,000,000
1,000,000
1,000,000
1,000,000
4,460,000
year
-
-
-
-
-
-
year
-
-
-
-
-
-
year
-
-
-
-
-
-
year
460,000
-
-
-
-
460,000
the end of
the year
-
1,000,000
1,000,000
1,000,000
1,000,000
4,000,000
the end of
the year
-
1,000,000
1,000,000
1,000,000
1,000,000
4,000,000
41
2015 Annual ReportFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
20. SHARE BASED PAYMENTS (Cont.)
Weighted average exercise price of options
Outstanding
Granted
Cancelled
Exercised
Expired Outstanding at Exercisable at
at the beginning during the during the during the during the
Year
2014
2015
of the year
$0.182
$0.169
year
-
-
year
-
-
year
-
-
year
$0.300
-
the end of
the year
$0.169
$0.169
the end of
the year
$0.169
$0.169
The weighted average remaining contractual life of share options outstanding at the end of the year was 0.37 years
(2014: 1.37 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.
During the year ended 30 June 2015, no options expired unexercised (2014: 460,000 options expired unexercised).
The total fair value of the 4,000,000 options granted on 13 November 2012 was $144,000. The 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 ranged from $0.075 - $0.250 as disclosed above. These options
had a non-market performance vesting condition whereby they did 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 ended 30 June 2015 was $nil (2014:
$nil).
21. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE
The Group’s financial instruments comprise deposits with banks, receivables, trade and other payables and from time
to time short term loans from related parties. The Group does not trade in derivatives.
The main risks arising from the Group’s financial instruments are market risk, credit risk and liquidity risks. This note
presents information about the Group’s exposure to each of these 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. The primary responsibility to monitor the financial
risks lies with the Managing Director and the Company Secretary under the authority of the Board.
42
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
21. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont.)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligation as they fall due. 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 Group monitors rolling forecasts of liquidity based on expected fund raisings, trade payables and other
obligations for the ongoing operation of the Group. At balance date, the Group has available funds of $644,765 for its
immediate use.
The following are the contractual maturities of financial liabilities:
Financial liabilities
Trade and other payables
30 June 2015
30 June 2014
Carrying
amount
$
Contractual
cash flows
$
Less than
6 months
$
6 to 12
months
$
1 to
5 years
$
More than
5 years
$
229,377
366,027
(229,377)
(366,027)
(229,377)
(366,027)
-
-
-
-
-
-
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 as follows:
Cash and cash equivalents
Receivables
Cash and cash equivalents
2015
$
644,765
5,120
649,885
2014
$
167,597
25,307
192,904
At 30 June 2015, the Group held cash and cash equivalents of $644,765 (2014: $167,597), 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’.
Receivables
For the year ended 30 June 2015, the Group does not a significant value of trade receivables, and therefore has minimal
exposure to credit risk.
43
2015 Annual ReportFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
21. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont.)
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.
At year-end, the interest rate risk profile of the Group’s interest bearing financial instruments was:
Cash and cash equivalents
There are no fixed rate instruments (2014 - $nil).
2015
$
644,765
2014
$
167,597
The Group does not have 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 the two interest
bearing accounts to maximise the available interest rates. The Group analyses its interest rate exposure when
considering renewals of existing positions including alternative financing arrangements.
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.
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.
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 Over-The-Counter-Market (‘OTC market’) in the USA.
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 other components
Impact on post-tax profit
of equity
2015
$
19,450
(19,450)
2014
$
-
-
2015
$
19,450
(19,450)
2014
$
-
-
Blox-Inc. - 10% bid price increase
Blox-Inc. - 10% bid price decrease
44
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
21. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont.)
Capital management
Management controls the capital of the Group in order to maintain an appropriate debt to equity ratio, provide
the shareholders with adequate returns and ensure that the Group can fund its operations and continue as a going
concern.
The Group’s capital includes ordinary share capital supported by financial assets. There are no externally imposed
capital requirements on the Group.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of cash
levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the
prior 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 - fair value measurements are those instruments valued based on quoted prices (unadjusted) in active
markets for identical assets or liabilities.
Level 2 - fair value measurements are those instruments valued based on 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 - fair value measurements are those instruments valued based on inputs for the asset or liability that are
not based on observable market data (unobservable inputs).
Available-for-sale financial assets
30 June 2015
30 June 2014
Level 1
$
Level 2
$
Level 3
$
Total
$
194,503
-
-
-
-
-
194,503
-
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 2015 or 30 June 2014.
45
2015 Annual ReportFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
22. CONTROLLED ENTITIES
Parent entity
Equus Mining Limited is an Australian incorporated company listed on the Australian Securities Exchange.
Wholly owned controlled entities
Hotrock Enterprises Pty Ltd (ii)
Okore Mining Pty Ltd (iii)
Dataloop Pty Ltd
Textonic Consulting Limited (i)
Equus Resources Limited (iv)
(i) Subsidiaries of Textonic Consulting Limited
JSC Sherik
(ii) Subsidiary of Hotrock Enterprises Pty Ltd
Derrick Pty Ltd
Andean Coal Pty Ltd (vii)
(vii) Subsidiary of Andean Coal Pty Ltd
Minera Carbones Del Sur Limitada
(iii) Subsidiary of Okore Mining Pty Ltd
Leo Shield Exploration Ghana Ltd
(iv) Subsidiary of Equus Resources Limited
Equus Resources Chile SpA (v)
Minera Equus Chile Ltda
(v) Subsidiary of Equus Resources Chile SpA
Minera Equus Chile Ltda
Country of
incorporation
Australia
Australia
Australia
Canada
Australia
Kyrgyz Republic
Australia
Australia
Chile
Ghana
Chile
Chile
Chile
Ownership Interest
2014
2015
%
%
100
100
100
100
100
100
100
100
100
100
100
100
51
99.9
100
100
99.9
100
100
-
-
100
100
99.9
0.1
0.1
During the year the Company acquired a 51% interest in Andean Coal Pty Ltd and its 99.9% owned subsidiary Minera
Carbones Del Sur Limitada (‘the Andean Group’) (refer to Note 29).
The Andean Group reported a profit of $13,239 for the period to 30 June 2015, with $6,487 being allocated to the non-
controlling interests. Further details of the assets and liabilities acquired have been disclosed in Note 29.
23. COMMITMENTS
Exploration expenditure commitments
The Group does not have any minimum expenditure commitments in relation to its mineral interests in the Magellan
Basin in southern Chile at the date of this report. The Group’s mineral interests in West Africa 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.
24. OPERATING SEGMENTS
The Group’s chief operating decision maker has considered the requirements of AASB 8, Operating Segments, and
has concluded that, during the year ended 30 June 2015, 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 ended 30 June 2013 (see Note 27).
46
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
24. OPERATING SEGMENTS (Cont.)
30 June 2015
External revenues
Oil
Exploration
(discontinued)
$
Mineral
Exploration
$
Investing
$
Total
$
7,756
-
-
7,756
Reportable segment loss before tax
(479,561)
(50,543)
247,909
(282,195)
Interest income
Interest expense
Depreciation
Other material non-cash items:
Impairment of investment
Reportable segment assets
Reportable segment liabilities
30 June 2014
External revenues
-
-
-
-
126
-
(862)
12,157
-
-
12,283
-
(862)
-
(97,251)
(97,251)
28,557
37,233
1,137,282
27,257
194,644
-
1,360,483
64,490
7,419
-
Reportable segment loss before tax
(276,720)
(9,131,597)
Interest income
Interest expense
Depreciation
Other material non-cash items:
Impairment of exploration and evaluation
Impairment of property, plant & equipment
-
-
-
907
-
(2,608)
-
(119,054)
(8,832,568)
(192,710)
Reportable segment assets
Reportable segment liabilities
1,488,477
29,114
64,421
20,105
Reconciliations of reportable segment revenues and profit or loss
Revenues
Total revenue for reportable segments
Elimination of discontinued operations disposed (Note 27)
Consolidated revenue
Profit or loss
Total loss for reportable segments
Elimination of discontinued operations (Note 27)
Unallocated amounts:
Proceeds from sale of tenement interest
Proceeds from other income
Net finance Income
Net other corporate expenses
Consolidated (loss)/profit before tax from continuing operations
-
-
-
-
-
-
-
-
-
2015
$
7,756
(7,756)
-
7,419
(9,408,317)
907
-
(2,608)
(8,832,568)
(311,764)
1,552,898
49,219
2014
$
7,419
(7,419)
-
(282,195)
479,561
(9,408,317)
276,720
-
9,130
-
(769,096)
(562,600)
2,857
-
17,122
(468,106)
(9,579,724)
47
2015 Annual ReportFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
24. 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
2015
$
1,360,483
564,568
1,925,051
64,490
164,887
229,377
2014
$
1,552,898
129,861
1,682,759
49,219
316,808
366,027
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
2015
2014
Non-current
assets
$
-
-
937
-
Revenues
$
-
7,419
-
-
Non-current
assets
$
-
-
937
44,867
Revenue
$
-
7,756
-
-
The geographical information excludes financial instruments in determining non-current assets.
25. SUBSEQUENT EVENTS
On 20 July 2015, the Group appointed Dr Robert Yeates as non Executive-Director of Equus Mining Limited for whom a
detailed background of Dr Yeates is set out on page 8 of this Annual Report.
On 31 July 2015, the Group exercised its options to acquire the remaining 49% interest in Andean Coal by issuing
16,000,000 ordinary shares in the capital of Equus as consideration to the seller.
Other than the matters discussed above, no matters or circumstances have 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.
48
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
26. PARENT ENTITY DISCLOSURES
As at, and throughout, the financial year ending 30 June 2015 the parent entity of the Group was Equus Mining Limited.
Result of the parent entity
Net (loss)/profit
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
2015
$
2014
$
(454,689)
-
(454,689)
(8,051,734)
-
(8,051,734)
564,709
194,503
759,212
164,887
-
164,887
594,325
129,919
43,092
173,011
316,808
-
316,808
(143,797)
107,814,973
(107,364,648)
-
144,000
-
594,325
106,622,162
(106,909,959)
-
144,000
-
(143,797)
The Directors are of the opinion that no contingencies existed at, or subsequent to year end.
27. ASSETS HELD FOR SALE
Certain assets within the oil exploration segment of the Group in the Kyrgyz Republic have been presented as assets
held for sale following the continued commitment of the Group’s management to a plan to sell certain assets within
its one remaining oil exploration entity in the Kyrgyz Republic, JSC Sherik. A Sale and Purchase Agreement was signed
with an Australian Private Company during June 2014, subsequently amended in September 2014.
Completion under the original sale agreement did not occur, and the original agreement and previous amendment
were terminated and replaced with a revised agreement. The new consideration under the revised agreement was
executed and paid by the purchaser, net of taxes on 6 February 2015. Total consideration received was US$700,000
(approximately A$893,883).
49
2015 Annual ReportFor the Year Ended 30 June 2015
Notes to the Consolidated
Financial Statements
27. ASSETS HELD FOR SALE (Cont.)
The agreement was only for the fixed assets of the subsidiary in the Kyrgyz Republic and not the ownership interest.
The subsidiary JSC Sherik is expected to be wound up by the Group now that the sale of the drill rig including the plant
and equipment has been completed. These assets were classified as assets held for sale at 30 June 2014.
As at 30 June the disposal group comprised the following assets and liabilities:
Property, plant and equipment
Consumables and operating supplies
2015
$
-
-
-
2014
$
71,081
1,371,044
1,442,125
The Group determined that an adjustment was necessary to the carrying value of the assets held for sale prior to
disposal because the fair value less costs to sell was considered lower than the carrying value of the fixed assets
and inventory with reference to the amended Sale and Purchase Agreement signed. An impairment of $494,266 was
recorded against the disposal group (refer to Note 28) (2014: $119,054).
Included within equity is a cumulative foreign currency translation reserve amount of $2,986,853 (2014: $3,022,797)
relating to JSC Sherik (refer to Note 15).
Measurement of fair values
Fair value hierarchy
In the prior year the non-recurring fair value measurement for the disposal group of $1,442,125 had been categorised as
a Level 3 fair value based on the inputs to the valuation technique used.
Valuation technique
A valuation technique was used in measuring the fair value of the disposal group in the prior year. The fair value
was measured with reference to the signed Sale and Purchase agreement in place at that time for consideration of
US$2.0 million of convertible notes (face value). The fair value of the convertible notes had been calculated based on a
present value calculation of the expected cash flows with a discount rate applied.
Disposal group held for sale
In the 2013 year Equus entered into an agreement to sell a ninety percent interest in its wholly owned subsidiary, Leo
Shield Exploration Ghana Ltd (‘Leo Ghana’), for consideration of US$600,000 (subject to obtaining local government
approval) to an entity incorporated in the Republic of Ghana. A refundable deposit of AUD$100,000 has been received
and the Company will retain a 10% interest in Leo Ghana. The subsidiary has been classified as a disposal group held
for sale. The assets and liabilities held in this entity are immaterial.
28. DISCONTINUED OPERATIONS
In September 2012 the Group committed to discontinue 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 exploration
activities in Chile. At 30 June 2014 and during the current period, certain fixed assets and consumables within JSC
Sherik were classified as held for sale and on 6 February 2015 the Group sold these fixed assets and consumables for
US$700,000.
50
EQUUS MINING LIMITEDFor the Year Ended 30 June 2015
28. DISCONTINUED OPERATIONS (Cont.)
Results of discontinued operation
Revenue
Other income
Expenses
Results from operating activities
Income tax expense
Results from operating activities, net of income tax
Notes to the Consolidated
Financial Statements
2015
$
7,756
211,277
(204,328)
14,705
-
14,705
2014
$
7,419
72,482
(237,567)
(157,666)
-
(157,666)
Impairment of assets held for sale
(494,266)
(119,054)
Income tax on loss on sale of discontinued operation
-
-
Loss for the year
Basic and diluted loss per share
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
29. ACQUISITION OF CONTROLLED ENTITIES
(479,561)
(276,720)
(0.001)
(0.001)
(201,455)
183,660
-
(17,795)
(244,372)
270,544
-
26,172
On 1 November 2014, the Company acquired a 51% interest in Andean Coal Pty Ltd (‘Andean’). The Company paid
$200,000 for exploration and administration expenditure relating to Andean’s subsidiary Minera Carbones Del Sur
Limitada, a company incorporated in Chile. Minera Carbones Del Sur Limitada holds explorations licences covering
three projects, Mina Rica, Rubens and Perez in the Magallanes Basin in southern Chile.
The above transaction has been accounted for as an acquisition of assets and the consideration paid of $200,000 has
been attributed to exploration and evaluation assets. The value attributed to the 49% non-controlling interest was
$196,637 which has been accounted for as a step-up in exploration and evaluation assets upon acquisition (refer to
Note 11).
The fair value of exploration and evaluation assets was determined as being the excess consideration paid over the
acquisition date fair value of the identifiable assets and liabilities of Andean Coal Pty Ltd.
Andean Coal Pty Ltd’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 associated acquisition costs.
Under the terms of the Share subscription deed Equus had the option to acquire the remaining 49% of Andean for the
consideration of 16 million ordinary shares in Equus. Subsequent to 30 June 2015, the Group exercised this option and
completed the acquisition of the remaining 49% in Andean on 31 July 2015. The impact of acquiring the remaining 49%
non-controlling interest has not been reflected in these financial statements.
51
2015 Annual ReportFor the Year Ended 30 June 2015
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 20 to 51, and the Remuneration
Report as set out on pages 14 to 17 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 2015 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.
2. The Directors have been given the declarations required under section 295A of the Corporations Act 2001 for the
financial year ended 30 June 2015.
3. 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.
Signed at Sydney this 28th day of September 2015 in accordance with a resolution of the Board of Directors:
Mark H. Lochtenberg
Director
Edward J. Leschke
Director
52
EQUUS MINING LIMITED
Independent Auditor’s Report
Report on the financial report
We have audited the accompanying financial report of Equus Mining Limited (the ‘Company’), which comprises the Consolidated
Statement of Financial Position as at 30 June 2015, and Consolidated Statement of Profit or Loss and Other Comprehensive Income,
Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows for the year ended on that date, Notes 1 to
29 comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the
Group comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year.
Directors’ responsibility for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance
with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine
is necessary to enable the preparation of the financial report that is free from material misstatement whether due to fraud or
error. In Note 2(a), the directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial statements of the Group comply with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with
Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to
audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The
procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the
financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to
the entity’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
the directors, as well as evaluating the overall presentation of the financial report.
We performed the procedures to assess whether in all material respects the financial report presents fairly, in accordance with the
Corporations Act 2001 and Australian Accounting Standards, a true and fair view which is consistent with our understanding of the
Group’s financial position and of its performance.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
Auditor’s opinion
In our opinion:
(a)
the financial report of the Group is in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2015 and of its performance for the year ended on
that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b)
the financial report also complies with International Financial Reporting Standards as disclosed in Note 2(a).
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG International
Liability limited by a scheme approved under
Cooperative (“KPMG International”), a Swiss entity.
Professional Standards Legislation
53
2015 Annual Report
Independent Auditor’s Report
Material uncertainty regarding continuation as a going concern
Without modifying our opinion, we draw attention to Note 2(d), “Going Concern”, in the financial report. The
conditions disclosed in Note 2(d), including the need to raise additional funding from shareholders or other parties,
and the Group reducing expenditure in-line with available funding, indicate the existence of a material uncertainty
which may cast significant doubt about the Group’s ability to continue as a going concern and, therefore, whether it
will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the
financial report.
Report on the remuneration report
We have audited the Remuneration Report included in pages 14 to 17 of the Directors’ Report for the year ended 30
June 2015. The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with Section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on
the Remuneration Report, based on our audit conducted in accordance with auditing standards.
Auditor’s opinion
In our opinion, the Remuneration Report of Equus Mining Limited for the year ended 30 June 2015 complies with
Section 300A of the Corporations Act 2001.
KPMG
28 September 2015
Adam Twemlow
Partner
Brisbane
54
EQUUS MINING LIMITED
Additional Stock Exchange
Information
Additional information as at 31 August 2015 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
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
The total distribution of fully paid shareholders as at 31 August 2015, was as follows:
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
Total
shareholders
Shares
275
339
361
713
276
1,964
Total
Number of
129,241
975,542
3,275,022
23,736,704
367,179,166
395,295,675
13 November 2015
Option holders
$0.075
$0.150
$0.200
$0.250
1
1
1
1
1
1
1
1
Less than Marketable Parcels
On 31 August 2015, 1,439 shareholders held less than marketable parcels of 31,250 shares.
On Market Buy Back
There is no current on-market buy-back.
Substantial Holders
The name of the substantial shareholders in Equus Mining Limited as advised to the Company are set out below.
Permgold Pty Ltd
Augusta Enterprises Pty Ltd
Mark Lochtenberg
Number of Ordinary Shares
34,377,420
33,619,471
20,034,000
55
2015 Annual Report
Additional Stock Exchange
Information
Twenty Largest Shareholders
As at 31 August 2015, the twenty largest quoted shareholders held 55.89% 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
16
17
18
19
20
Permgold Pty Ltd
Augusta Enterprises Pty Ltd
HSBC Custody Nominees (Australia) Limited
JP Morgan Nominees Australia Limited
Mark Hamish Lochtenberg & Michael Lochtenberg
Sambas Energy Pty Ltd
Peter John Bartter
John Wardman & Associates Pty Ltd
Tetramin Pty Ltd
Cynthia Wardman
Annlew Investments Pty Ltd < Annlew Investments PL SF A/C>
John Desmond Martin
Karen Aviva Schumer & Gary Leon Lewis
DRYCA Pty Ltd
CRX Investments Pty Limited
Integral Admin Services Pty Ltd
Colin James McCavana & Debra Dianne McCavana < Colin McCavana S/Fund A/C>
Rosignol Pty Ltd
A M Van Heyst Superannuation Pty Ltd < A Van Heyst Private S/F A/C>
Marc Sampson
The number of holders in each class of securities
34,377,420
33,619,471
20,918,024
20,880,046
20,034,000
16,000,000
15,000,000
8,096,566
8,000,000
6,000,000
6,000,000
5,000,000
5,000,000
5,000,000
3,582,943
2,890,616
2,850,000
2,795,308
2,600,000
2,550,668
8.70
8.50
5.29
5.28
5.07
4.05
3.79
2.05
2.02
1.52
1.52
1.26
1.26
1.26
0.91
0.73
0.72
0.71
0.66
0.65
As at 31 August 2015, the numbers of holders in each class of securities on issue were as follows:
Type of security
Ordinary shares
Unlisted options
Unlisted options
Unlisted options
Unlisted options
Number of
holders
Number of
securities
1,964
1
1
1
1
395,295,675
1,000,000
1,000,000
1,000,000
1,000,000
Substantial Optionholders in the entity
The Company provides the names of the holders of 20% or more options in these unquoted securities below:
Name
Damien Koerber
Escrow securities
Number of
options held
% of Options
Held
4,000,000
100.00%
As at 31 August 2015, 16,000,000 ordinary shares are voluntary escrow until 23 May 2016.
56
EQUUS MINING LIMITED
Additional Stock Exchange
Information
Group Mineral Concession Interests at 31 August 2015
The Company provides the following information regarding its mining tenements:
Project
Mina Rica
Location
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Tenement
Mina Rica 1
Mina Rica 2
Mina Rica 3
Mina Rica 4
Mina Rica 5
Mina Rica 6
Mina Rica 7
Mina Rica 8
Mina Rica 9
Mina Rica 10
Mina Rica 11
Mina Rica 12
Mina Rica 13
Mina Rica 14
Mina Rica 15
Mina Rica 16
Mina Rica 17
Mina Rica 18
Mina Rica 19
Mina Rica 20
Mina Rica 21
Mina Rica 22
Mina Rica 23
Mina Rica 24
Mina Rica 25
Mina Rica 26
Mina Rica 27
Mina Rica 28
Mina Rica 29
Mina Rica 30
Mina Rica 31
Kol 1
Kol 2
Kol 3
Kol 4
Kol 5
Kol 6
Kol 7
Kol 8
Kol 9
Kol 10
Kol 11
Kol 12
Kol 14
Kol 15
Kol 16
Ownership
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Type of Tenement
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
57
2015 Annual Report
Additional Stock Exchange
Information
Location
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Project
Perez
58
Tenement
Rio Perez A
Rio Perez B
Rio Perez C
Rio Perez D
Rio Perez E
Rio Perez F
Rio Perez G
Rio Perez H
Charbon 1
Charbon 2
Charbon 3
Charbon 4
Charbon 5
Charbon 6
Charbon 7
Charbon 13
Charbon 15
Charbon 17
Charbon 21
Charbon 22
Charbon 23
Charbon 25
Charbon 27
Charbon 31
Charbon 32
Charbon 35
Charbon 36
Charbon 38
Charbon 40
Charbon I
Charbon II
Charbon III
Charbon IV
Charbon V
Charbon VI
Charbon VII
Charbon VIII
Charbon IX
Charbon X
Charbon XI
Charbon XII
Charbon XIII
Charbon XIV
Charbon XV
Charbon XVI
Charbon XVII
Charbon XVIII
Charbon XIX
Charbon XX
Charbon XXI
Charbon XXII
Ownership
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Type of Tenement
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
EQUUS MINING LIMITED
Additional Stock Exchange
Information
Project
Perez
Rubens
Location
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Tenement
Charbon XXIII
Charbon XXIV
Charbon XXV
Skyring 1
Skyring 2
Skyring 3
Skyring 4
Skyring 5
Skyring 6
Skyring 7
Skyring 8
Skyring 9
Skyring 10
Skyring 11
Skyring 12
Skyring 13
Skyring 14
Skyring 15
Skyring 16
Skyring 17
Skyring 18
Skyring 19
Skyring 20
Skyring 21
Skyring 22
Skyring 23
Skyring 24
Skyring 25
Skyring 26
Skyring 27
Skyring 28
Skyring 29
Skyring 30
Skyring 31
Ownership
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Rio Rubens Este 1 Minera Carbones Del Sur Limitada1
Rio Rubens Este 2 Minera Carbones Del Sur Limitada1
Rio Rubens Este 3 Minera Carbones Del Sur Limitada1
Rio Rubens Este 4 Minera Carbones Del Sur Limitada1
Rio Rubens Este 5 Minera Carbones Del Sur Limitada1
Rio Rubens Este 6 Minera Carbones Del Sur Limitada1
Rio Rubens Este 7 Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Rio Rubens 1
Minera Carbones Del Sur Limitada1
Rio Rubens 2
Minera Carbones Del Sur Limitada1
Rio Rubens 3
Minera Carbones Del Sur Limitada1
Rio Rubens 4
Minera Carbones Del Sur Limitada1
Rio Rubens 5
Minera Carbones Del Sur Limitada1
Rio Rubens 6
Minera Carbones Del Sur Limitada1
Rio Rubens 7
Minera Carbones Del Sur Limitada1
Rio Rubens 8
Minera Carbones Del Sur Limitada1
Rio Rubens 9
Type of Tenement
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
59
2015 Annual Report
Additional Stock Exchange
Information
Project
Rubens
Location
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Tenement
Rio Rubens 10
Rio Rubens 11
Kull 20
Kull 21
Kull 22
Kolen 1
Kolen 2
Kolen 3
Kolen 5
Kolen 6
Kolen 7
Kolen 8
Balmaceda 1
Balmaceda 2
Ownership
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Minera Carbones Del Sur Limitada1
Type of Tenement
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Mining interest in African countries
Concession
name
Osenase
Asamankese
Pramkese
Kwatechi
File Number /
Licence Type
Location
Equus Mining 90%
Ghana 2
Equus Mining 90%
Ghana 2
Ghana 2
Equus Mining 90%
Ghana 2 Kwatechi PL3/64 Prospecting Licence Equus Mining 0%
Registered Holder
Osenase Prospecting Licence
Asamankese Prospecting Licence
Pramkese Prospecting Licence
Equus current Concession
equity interest
N/A
N/A
N/A
7%3
Type
Exploration
Exploration
Exploration
Exploration
Notes
Subsequent to 30 June 2015, Equus acquired the remaining 49% equity interest in Andean Coal Pty Ltd for
consideration of 16 million ordinary shares in Equus Mining Limited. This has resulted in Andean Coal Pty Ltd
becoming a wholly owned subsidiary.
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.
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.
1
2
3
60
EQUUS MINING LIMITED
2015 Annual Report
EQUUS MINING LIMITED
ABN. 44 065 212 679
I
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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 27 November 2015 at 11 am.
ORDINARY BUSINESS
Financial Statements
AGENDA
To receive and consider the Company's Annual Financial Report, the Directors' Report and the Auditor's Report for the year ended 30 June
2015.
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 2015 be and is hereby adopted.'
Resolution 2
Re-election of a Director
'That Mark H. Lochtenberg be and is hereby re-elected as a Director.'
Resolution 3
Re-election of a Director
'That Robert A. Yeates be and is hereby elected as a Director.'
Resolution 4
Ratification of Prior Issue of Shares
'That the issue of 16,000,000 fully paid ordinary shares in the Company on 31 July 2015 as consideration to the vendors of Andean Coal
Pty Ltd (‘Andean’ or ‘Andean Coal’) be and is hereby ratified for the purposes of ASX Listing Rules 7.4 and 7.5 on the terms and conditions
as set out in the explanatory memorandum accompanying this Notice of Meeting.
Resolution 5
Ratification of Prior Issue of Shares
'That the issue of 36,213,783 fully paid ordinary shares in the Company on 19 October 2015 for A$0.011 per share be and is hereby
ratified for the purposes of ASX Listing Rules 7.4 and 7.5.'
Resolution 6
Approval of the Proposed Issue and allotment of Shares
'That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, Shareholders authorise and is hereby approve Mr Robert
Yeates and/or his nominee R&D Yeates Holdings Pty Ltd to participate in the placement to the extent of up to 1,090,909 fully paid
ordinary shares in the Company as set out in the Explanatory Memorandum accompanying this Notice of Meeting.'
Resolution 7
Approval of the Proposed Issue and allotment of Shares
''That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, Shareholders authorise and is hereby approve Mr Mark Pty
Lochtenberg and/or his nominee The Rigi Super Fund Account to participate in the placement to the extent of up to 2,272,727 fully paid
ordinary shares in the Company as set out in the Explanatory Memorandum accompanying this Notice of Meeting.'
Resolution 8
Additional capacity to issue securities
'That the additional capacity to issue equity securities up to 10% of the issued capital of the Company as set out in the Explanatory
Memorandum attached to this Notice of Meeting be and is hereby approved for the purposes of ASX Listing Rule 7.1A.'
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
27 October 2015
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 Friday, 27 November 2015 at 11 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 2015 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 forms part of the Directors’ Report in the Company’s 2015 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.
Shareholders will be given a reasonable opportunity at the meeting to comment on and ask questions about the Company’s
Remuneration Report.
The Chair intends to exercise all undirected proxies in favour of Resolution 1. If the Chair of the Meeting is appointed as your proxy
and you have not specified the way the Chair is to vote on Resolution 1, by signing and returning the Proxy Form, you are considered
to have provided the Chair with an express authorisation for the Chair to vote the proxy in accordance with the Chair's intention.
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 not cast on behalf of such a person.
The Directors recommend that you vote IN FAVOUR of this advisory Resolution 1.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 1.
2. Re-election of Mark Lochtenberg
Pursuant to Article 3.6 of the Company’s Constitution and the Corporations Act, Mark Lochtenberg who retires by rotation and, being
eligible, offers himself for re-election.
Mr Lochtenberg graduated with a Bachelor of Law (Hons) degree from Liverpool University, U.K. and has been actively involved in the
coal industry for more than 25 years.
Mark Lochtenberg is the former Executive Chairman and founding Managing Director of ASX-listed Cockatoo Coal Limited. He was a
principal architect of Cockatoo’s inception and growth from an early-stage grassroots explorer through to its current position as an
emerging mainstream coal producer. He was also formerly the co-head of Glencore International AG’s worldwide coal division, where
he spent 13 years overseeing a range of trading activities including the identification, due diligence, negotiation, acquisition and
aggregation of the coal project portfolio that would become Xstrata Coal.
Prior to this Mark established a coal “swaps” market for Bain Refco, (Deutsche bank) after having served as a senior coal trader for
Hansen Neuerburg AG and as coal marketing manager for Peko Wallsend Limited. He has previously been a Director of ASX-listed
Cumnock Coal Limited and of privately held United Collieries Pty Limited and is currently a Director of Australian Transport and Energy
Corridor Pty Limited, (ATEC).
With Mark Lochtenberg abstaining, the Directors recommend that you vote IN FAVOUR of Resolution 2.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 2.
3. Election of Robert A. Yeates
Pursuant to Article 3.5 of the Company’s Constitution and the Corporations Act, Robert Yeates who was appointed as a Director
during the year retires in accordance with these requirements and, being eligible, offers himself for re-election.
Robert Yeates is a graduate of the University of NSW, completing a Bachelor of Engineering (Honours 1) in 1971 and a PhD in 1977
and then an MBA in 1986 from Newcastle University. He began his career with Peko Wallsend working in a variety of roles including
mining engineering, project management, mine management and marketing.
He became General Manager Marketing for Oakbridge Pty Limited in 1989 following a merger with the Peko Wallsend coal businesses
and went on to become Managing Director of Oakbridge, which was the largest coal mining company in NSW at that time, operating
one open cut and five underground coal mines.
Dr Yeates has gained operating, business development and infrastructure experience as a director of Port Waratah Coal Services
(Newcastle Port), Port Kembla Coal Terminal, Great Northern Mining Corporation NL and Cyprus Australia Coal and for the past 18
years has been principal of his own mine management consultancy, providing a wide range of technical, management and strategic
planning services to the mining industry. Until last year he was also Project Director then CEO of Newcastle Coal Infrastructure Group,
which has developed and is operating coal export facilities in Newcastle. He currently served as Non-executive Director of Cockatoo
Coal Limited.
With Robert Yeates abstaining, the Directors recommend that you vote IN FAVOUR of Resolution 3.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 3.
4. Ratification of Prior Issue of Shares
Resolution 4 seeks the ratification by shareholders of the issue of 16,000,000 fully paid ordinary shares in the capital of Equus Mining
Limited (‘Equus’) to the vendors of Andean Coal Pty Ltd as consideration for 49% equity interest. Andean Coal owns 99.9% interest in
Carbones del Sur Limitada (‘Carbones’) a company incorporated in the Republic of Chile that holds a package of exploration licenses
located in Chile’s largest coal fields in the Magellan basin.
As announced on 23 May 2014 Equus secured the rights to acquire 100% of Andean Coal in two tranches. On 3 November 2014 Equus
announced that it has met the requirements of tranche one and received 51% interest in Andean Coal.
On the 20 July 2015, Equus announced the acquisition of the remaining 49% equity interest in Andean Coal and accordingly on 31 July
2015 Equus issued 16,000,000 ordinary shares to the vendors of Andean Coal Pty Ltd.
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:
Issue price:
Terms:
Names of allottees:
Intended use of the funds:
16,000,000.
There is no issue price for the securities as they were issued as consideration for the
acquisition of 49% interest in Andean Coal Pty Ltd.
Fully paid ordinary shares ranking pari passu with existing fully paid ordinary shares.
Sambas Energy Pty Ltd
No funds were raised, the issued was in consideration for the acquisition of 49% interest
in Andean Coal Pty Ltd.
Voting Exclusion Statement
The Company will disregard any votes cast on Resolution 4 by:
Sambas Energy Pty Ltd 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
The Directors recommend that you vote IN FAVOUR of Resolution 4.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 4.
5. Ratification of Prior Issue of Shares
Resolution 5 seeks the ratification by shareholders of the issue of 36,213,783 fully paid ordinary shares in the Company on 19 October
2015 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:
Issue price:
Terms:
Names of allottees:
36,213,783.
A$0.011 per share.
Fully paid ordinary shares ranking pari passu with existing
fully paid ordinary shares.
Allottees
Dolphin Partners Pty Ltd
Peter David Koller
Taycol Nominees Pty Ltd
Chifley Portfolios Pty Ltd
Mikaliz Pty Ltd
Equity Trustees Limited
Cynthia Wardman
Rosignol Pty Ltd
Colvic Pty Ltd
Christopher John Morgan-Hunn
Lee United Pty Ltd
T & E Brabin Super Fund Pty Ltd
Martin James Pyle
Geoffrey Guild Hill
Ordinary shares
allotted
2,000,000
1,000,000
6,000,000
5,909,091
1,500,000
2,000,000
5,000,000
2,204,692
3,600,000
1,000,000
1,000,000
1,000,000
2,000,000
2,000,000
Intended use of funds:
To accelerate the Company’s strategy of further increasing its ground
dominance in the Magallanes thermal coal basin 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
The Directors recommend that you vote IN FAVOUR of Resolution 5.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 5.
6. Approval of the proposed issue and allotment of shares
Resolution 6 seeks the approval by shareholders of the issue and allotment of 1,090,909 fully paid ordinary shares in the Company to
R&D Yeates Holdings Pty Ltd as soon as practicable after the date of this Annual General Meeting, and in any event, within 1 month of
the date of this Annual General Meeting for the purposes of ASX Listing Rule 10.11. If approval is given under ASX Listing Rule 10.11,
approval is not required under ASX Listing Rule 7.1.
This proposed issue, which was announced to the ASX on 7 October 2015 and in conjunction with the placement completed on that
day, will provide funding for the drilling activities at the Mina Rica thermal coal project in southern Chile.
Shareholder approval is required in accordance with Listing Rule 10.11 and Section 228 of the Corporations Act because Robert Yeates
a Director of Equus has a beneficial interest in R&D Yeates Holdings Pty Ltd. If approved, the shares are issue on the same terms and
conditions as the placement completed 7 October 2015.
Furthermore, Shareholder approval of the issue placement to the Directors means that these issues will not reduce the Company’s
15% placement capacity under Listing Rule 7.1.
Details of the issue, as required by ASX Listing Rule 7.1 and 10.11 are as follows:
Number of securities to be allotted:
1,090,909.
Issue price:
Terms:
Names of allottees:
Allotment date:
Intended use of funds:
Voting Exclusion Statement
A$0.011 per share.
Fully paid ordinary shares ranking pari passu with existing
ordinary shares.
R&D Yeates Holdings Pty Ltd 1,090,909 ordinary shares.
Within one month of the date of this Annual General Meeting.
To fund initial drilling activities at Mina Rica thermal coal project in Chile
and to provide and working capital
The Company will disregard any votes cast on this Resolution by Robert Yeates and his nominee R&D Yeates Holdings Pty Ltd 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.
The Directors recommend that you vote IN FAVOUR of Resolution 6.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 6.
7. Approval of the proposed issue and allotment of shares
Resolution 7 seeks the approval by shareholders of the issue and allotment of 2,272,727 fully paid ordinary shares in the Company to
The Rigi Super Fund Account as soon as practicable after the date of this Annual General Meeting, and in any event, within 1 month of
the date of this Annual General Meeting for the purposes of ASX Listing Rule 10.11. If approval is given under ASX Listing Rule 10.11,
approval is not required under ASX Listing Rule 7.1.
This proposed issue, which was announced to the ASX on 7 October 2015 and in conjunction with the placement completed on that
day, will provide funding for the drilling activities at the Mina Rica thermal coal project in southern Chile.
Shareholder approval is required in accordance with Listing Rule 10.11 and Section 228 of the Corporations Act because Mark
Lochtenberg a Directors of Equus has a beneficial interest in The Rigi Super Fund Account. If approved, the shares are issue on the
same terms and conditions as the placement completed 7 October 2015.
Furthermore, Shareholder approval of the issue placement to the Directors means that these issues will not reduce the Company’s
15% placement capacity under Listing Rule 7.1.
Details of the issue, as required by ASX Listing Rule 7.1 and 10.11 are as follows:
Number of securities to be allotted:
2,272,727.
Issue price:
Terms:
Names of allottees:
Allotment date:
Intended use of funds:
Voting Exclusion Statement
A$0.011 per share.
Fully paid ordinary shares ranking pari passu with existing
ordinary shares.
The Rigi Super Fund Account 2,272,727 ordinary shares.
Within one month of the date of this General Meeting.
To fund initial drilling activities at Mina Rica thermal coal project in Chile
and to provide and working capital
The Company will disregard any votes cast on this Resolution by Mark Lochtenberg and his nominee The Rigi Super Fund Account 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.
The Directors recommend that you vote IN FAVOUR of Resolution 7.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 7.
8. Approval of additional capacity to issue securities
ASX Listing Rule 7.1A enables the Company to issue equity securities up to 10% of its issued share capital through placements over a
12 month period after the AGM ('10% Placement Facility'). The 10% Placement Facility is in addition to the Company's 15% placement
capacity under ASX Listing Rule 7.1.
Resolution 8, which is a Special Resolution requiring 75% of votes cast to be in favour of the resolution, seeks shareholder approval for
the Company to have the ability to issue equity securities under the 10% Placement Facility on the following terms:
(a) Placement Period
Shareholder approval of the 10% Placement Facility is valid from the date of the AGM and expires on the earlier of:
(i) the date that is 12 months after the date of the AGM; or
(ii) the date of the approval by shareholders of a transaction under ASX Listing Rules 11.1.2 (a significant change to the
nature or scale of activities) or 11.2 (disposal of main undertaking).
(b) Equity Securities
Any equity securities issued under the 10% Placement Facility must be in the same class as an existing quoted class of equity securities
of the Company which, in the Company's case, are fully paid ordinary shares.
(c) Formula for calculating 10% Placement Facility
The maximum number of shares that can be issued under the 10% Placement Facility is calculated as follows:
(A x D) - E
Where: A is the number of fully paid ordinary shares on issue 12 months before the date of issue or agreement:
(i)
(ii)
plus the number of fully paid ordinary shares issued in the 12 months under an exception in ASX Listing Rule 7.2;
plus the number of partly paid ordinary shares that became fully paid in the 12 months;
(iii)
plus the number of fully paid shares issued in the 12 months with approval of holders of shares under Listing Rule 7.1
and 7.4;
(iv)
less the number of fully paid shares cancelled in the 12 months.
D is 10%.
E is the number of fully paid ordinary shares issued or agreed to be issued under ASX Listing Rule 7.1A.2 in the 12 months
before the date of the issue or agreement to issue that are not issued with the approval of shareholders under ASX Listing
Rules 7.1 or 7.4.
The current maximum number of shares, as at the date of this meeting, that can be issued under the 10% Placement Facility is
37,929,568. The Company’s current capacity to issue securities as at the date of the meeting pursuant to listing rule 7.1 is 56,894,351.
(d) Minimum Issue Price
The minimum issue price of equity securities issued for the purpose of Listing Rule 7.1.A.3 must be not less than 75% of the volume
weighted average price of equity securities in the same class calculated over the 15 trading days on which trades were recorded
immediately before:
(i)
(ii)
the date on which the price at which the equity securities are to be issued is agreed; or
if the equity securities are not issued within 5 trading days of the date in paragraph (i) above, the date on which the
equity securities are issued.
(e) Risk of Economic and Voting Dilution
If Resolution 8 is approved by shareholders and the Company issues equity securities under the 10% Placement Facility, the existing
shareholders' voting power in the Company will be diluted as shown in the table below. Further, there is a risk that:
(i)
the market price for the Company's equity securities may be significantly lower on the date of the issue of the equity
securities than on the date of the AGM; and
(ii) the equity securities may be issued at a price that is at a discount to the market price for the Company's equity
securities on the issue date.
Because Variable A in the formula for calculating 10% Placement Facility, and consequently the number of shares that can be issued
under the 10% Placement Facility, can change during the Placement Period, the table below shows a matrix of scenarios of the
potential dilution of existing shareholders as at the date of the AGM on the basis of:
(i)
(ii)
the issue price of equity securities being the current approximate market price of fully paid ordinary shares, plus 50%
and minus 50%; and
the maximum number of shares that can be issued under the 10% Placement Facility in accordance with the definition
of Variable A in the formula for calculating 10% Placement Facility increasing by 50% and 100%.
Variable A in
10% Placement Facility
under ASX Listing Rule
7.1A.2
Voting Dilution
and Placement
Facility Capacity
Current Variable A
379,295,675 shares
50% increase in current
Variable A
568,943,513 shares
100% increase in current
Variable A
758,591,350 shares
10%
37,929,568
Shares
13.0%
56,894,351
Shares
16.7%
75,859,135
shares
Issue Price and
Funds Raised
50% Decrease in
Current
Approximate
Market Price
$0.006
Current
Approximate
Market Price
$0.012
50% Increase in
Current Approximate
Market Price
$0.018
$227,577
$455,155
$682,732
$341,366
$682,732
$1,024,098
$455,155
$910,310
$1,365,464
As an example, if Variable A is increased to 758,591,350 shares, the 10% Placement Facility capacity is 75,859,135 shares and
therefore the dilution of existing shares as at the date of the AGM, being 379,295,675 shares, is calculated as:
75,859,135 ÷ (379,295,675 + 75,859,135) = 16.7%
(f) Other Matters
The Company may issue equity securities under the 10% Placement Facility for cash consideration to support the Company's ongoing
exploration activities and working capital or non-cash consideration for the acquisition of compatible business opportunities which
may arise. In such circumstances the Company will provide a valuation of the non-cash consideration as required by ASX Listing Rule
7.1A.
The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the
10% Placement Facility. As there is no issue currently proposed, the identity of the allottees is not currently known and will be
determined on a case-by-case basis at the time of allotment, having regard to factors including, but not limited to, the following:
(i)
the methods of raising funds that are available to the Company, including but not limited to, rights issues or other issues
in which existing security holders can participate;
(ii) the effect of the issue of the equity securities on the control of the Company;
(iii) the financial situation and solvency of the Company; and
(iv) advice from corporate, financial and broking advisers (if applicable).
The allottees under the 10% Placement Facility have not currently been determined but may include existing substantial shareholders
and/or new shareholders who are not related parties or associates of a related party of the Company.
As the Company has not previously obtained shareholder approval under ASX Listing Rule 7.1A, no equity securities have been issued
under the 10% Placement Facility.
Voting Exclusion:
The Company will disregard any votes cast on Resolution 8 by:
a person who may participate in the proposed issue; and
a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution
is passed and any such associates of that person.
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.
The Directors recommend that you vote IN FAVOUR of Resolution 8.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 8.
Shareholder Name:
Shareholder Address
Sub Register
HIN / SRN
CHESS
X
I/we being a member/members of Equus Mining Limited HEREBY APPOINT
the Chair of the Meeting (mark box)
FORM OF PROXY
OR if you are not appointing the Chair of the Meeting as your proxy, please write the name of the person or body corporate (excluding the registered
shareholder) you are appointing as your proxy below
or failing him, the Chair 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 am
on 27 November 2015 and at any adjournment thereof.
The Chair of the Meeting is authorised to exercise undirected proxies on remuneration related matter (Resolution 1): If I/we have appointed the
Chair of the Meeting as my/our proxy or the Chair of the Meeting becomes my/our proxy by default, by signing and submitting this form I/we
expressly authorise the Chair of the Meeting to exercise my/our proxy in respect of Resolution 1 (except where I/we have indicated a different voting
intention above) even though Resolution 1 is connected directly or indirectly with the remuneration of a member of key management personnel for
Equus Mining Limited, which includes the Chair.
The Chair of the Meeting intends to vote all undirected proxies in favour of each resolution (including Resolution 1). If you have appointed the
Chair of the Meeting as your proxy (or the Chair of the Meeting becomes your proxy by default), and you wish to give the Chair specific voting
directions on an item, you should mark the appropriate box/es opposite those resolutions below (directing the Chair to vote for, against or to abstain
from voting).
If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your
vote will not be counted in calculating the required majority if a poll is called.
FOR
AGAINST
ABSTAIN
RESOLUTIONS
1. Adoption of the Remuneration Report
2. Re-election of Mr Mark Lochtenberg
3. Re-election of Mr Robert Yeates
4. Ratification of prior issued shares
5. Ratification of prior issued shares
6. Approval of proposed issue shares
7. Approval of proposed issue shares
8. Approval the additional capacity to issue equity securities
Signature of Securityholder(s) This section must be completed.
Dated this . . . . . . day of . . . . . . . . . . . . . . . . . . . . . . 2015
Signatures of Securityholder(s)
Individual or Securityholder 1
Securityholder 2
Securityholder 3
Sole Director and
Sole Company Secretary
Director
Director
1.
A member entitled to attend and vote is entitled to appoint not more than 2 proxies.
PROXY INSTRUCTIONS
2. Where more than 1 proxy is appointed, each proxy must be appointment to represent a specified proportion of
the member's voting rights. If you appoint 2 proxies and the appointment does not specify the proportion or
number of your votes the proxy may exercise, each proxy may exercise half of the votes.
3.
4.
5.
The vote on the resolutions will be decided on a show of hands unless a poll is demanded. On a show of hands,
every shareholder who is present in person or by proxy, or by representative or by attorney, will have one vote.
Upon a poll, every shareholder who is present in person or by proxy, or by representative or by attorney, will
have one vote for each Share held by that shareholder.
A proxy need not be a member.
All joint holders must sign.
6. 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.
7.
8.
9.
All executors of deceased estates must sign.
Corporate Representatives
If a representative of the corporation is to attend the meeting. The representative must bring to the
Annual General Meeting evidence of his or her appointment, including any authority under which it was
signed in accordance with section 253B of the Corporations Act 2001.
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 25 November 2015 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.
10.
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.