30 October 2017
The Manager Companies
ASX Limited
20 Bridge Street
SYDNEY NSW 2000
Dear Sir/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 2017 and the Company’s Notice of Annual General Meeting to be held at 2.30 pm on 30 November
2017.
Yours sincerely
Marcelo Mora
Company Secretary
pjn9123
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
2017
Annual Report
EQUUS MINING LIMITED
and its controlled entities
ABN 44 065 212 679
Contents
Corporate Directory
Chairman’s Letter
Review of Operations
Corporate Governance Statement
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 Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Additional Stock Exchange Information
1
2
3
8
9
17
18
19
20
21
22
49
50
56
Corporate Directory
Directors
Share Registry
Mark Lochtenberg Non-Executive Chairman
Edward Leschke
Juerg Walker
Robert Yeates
Managing Director
Non-Executive Director
Non-Executive Director
Advanced Share Registry Limited
150 Stirling Highway
Nedlands, Western Australia 6009
Telephone:
Facsimile:
(61 8) 9389 8033
(61 8) 9389 7871
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
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
2017 Annual Report Chairman’s Letter
Dear Fellow Shareholders,
Equus Mining’s focus during the year was the acquisition of the rights to 100% of the
Los Domos gold-silver project located in Chile’s XI Region, adjacent to the Cerro Bayo
silver-gold mine, and the commencement of exploration activities with initial,
excellent and encouraging results at this project.
To that end, Equus continues to assess new and
prospective opportunities within Chile, in particular
those opportunities where the entry cost are minimal
for a quality project. Unlike Australia, Chile’s secure
licencing system with no minimum exploration
expenditure requirements means there is not the same
time pressure to spend large amounts of capital.
Equity markets for the junior resources sector remained
subdued throughout most of the 2017 fiscal year.
However, subsequent to year’s end there has been a
noticeable renewed level of interest across the broader
mining sector which is now beginning to filter down to
the junior end of the market. Reasonable world growth
coupled with an absence of new metal supply (stemming
from a dearth of new mining projects across the globe)
has seen a sharp improvement in commodity prices,
many of which have now broken long-term down trends.
With Los Domos shaping up to be a high quality project,
and against a backdrop of improving commodity prices
and investor sentiment, I am optimistic about what lies
ahead for our growing Company.
Finally, on behalf of the Board of Directors I would like
to thank our many shareholders for their continued
support as we look forward to what promises to be a
highly exciting next 12 months.
Mark H. Lochtenberg
Chairman
In addition to the Los Domos gold-silver project’s
significant prospectivity, this acquisition is consistent
with the Company’s focus on developing natural
resource projects strategically located near existing
mines and other infrastructure.
Initial field activities were primarily focussed on
continuous diamond saw channel sampling and detailed
geological mapping designed to better define extensions
of high grade gold-silver and base metal mineralisation
prior to drill testing. To date eight prospect drill targets,
exhibiting characteristic epithermal metal zonation,
have been defined through vein sampling. Four of these
have returned high grade gold and silver mineralisation
and base metal values from quartz veins outcropping
at surface and are considered to be within or just
above the precious metal zone. Another four have
returned anomalous gold and silver values and elevated
epithermal pathfinder metals typically found above
epithermal precious metal zones.
This preliminary surface work was followed up by an
inaugural drill campaign which commenced towards the
end of the year. The first drill hole at the T7 Structure
Prospect intercepted a spectacular base and precious
metal intercept of 8.39m grading 0.71 g/t Au, 248 g/t
Ag, 20.72% Pb and 7.07% Zn from 45.75m down hole.
This result is considered an early “proof of concept” for
the vertical zonation model developed during the initial
stages of the Los Domos project.
The Republic of Chile ranks as one of the leading
destinations globally for mineral explorers and miners
due to the country’s sound licensing system and high
mineral prospectivity. Despite Chile’s leading position
in the global minerals industry the paucity of previous
modern exploration in many areas close to existing
mining activities demonstrates what Chile has to
offer in terms of attractive mineral exploration and
development opportunities.
2
EQUUS MINING LIMITED Review of Operations
Corporate Activities
On 25 October 2016, Equus announced that it had
acquired the rights to 100% of the Los Domos gold-silver
project via an earn-in and purchase agreement with
Terrane Minerals SpA (‘Terrane’). The project is located in
Chile’s XI region, adjacent to the Cerro Bayo silver-gold
mine.
Under the agreement Equus is to fund a programme of
systematic surface sampling and 2,000m of drilling. On
completion of the drilling program, Terrane Minerals
SpA is to transfer its Los Domos project assets into a
newly formed Joint Venture Company (‘JV’) of which
Equus will hold a 51% equity interest and Terrane a
49% equity interest. Equus has a two-year option to
buy the remaining 49% interest in the JV by issuing
Terrane A$450,000 worth of ordinary shares of Equus at
an issue price of 1.2 cents, equivalent to 37.5m shares.
Upon exercising this option Equus will own 100% of the
project. The shares will be voluntarily escrowed for a
period of 12 months. In addition, Equus has reimbursed
historic costs of US$141k incurred by Terrane.
On 4 November 2016, the Company issued 100,000,000
new ordinary shares under a placement for a total
consideration of $1,000,000.
On 17 March 2017, the Company announced a placement
of 133,333,333 of new issue shares in two tranches, the
first tranche was completed on 27 March 2017 with the
issue of 43,487,309 new shares and second tranche was
completed on 3 May 2017 with the issue of 89,846,024
new shares. The consideration received for the two
tranches was $1,600,000.
3
2017 Annual Report Review of Operations
Los Domos Gold-Silver Project
The Los Domos gold-silver project is located 10km south
of the township of Chile Chico, Region XI, Chile. The
project area´s altitude range of 800-1200m and a dry,
moderate climate permits near year-round exploration.
The project area is located 15km southeast of the Cerro
Bayo gold-silver mine and 500ktpa treatment plant
which is owned by TSX-listed Mandalay Resources.
Mapping and rock chip sampling to date throughout
the Los Domos Project area (See Map 2) has delineated
multiple structural corridors hosting chalcedonic -
saccaroidal quartz veins and hydrothermal breccias.
Apart from reconnaissance style mapping and sampling,
these newly discovered structural corridors have never
received any modern systematic exploration and hence
have never been drill tested.
Several surface sampling campaigns to better define
and extend known multiphase high grade gold-silver
and base metal mineralisation zones were carried
out during the year. Rock channel sampling was
predominantly being carried out using a diamond saw to
give continuous, representative results. The aim of this
systematic sampling and mapping of surface mineralised
vein and breccia structures and peripheral stockwork
zones was to better define potential extensions to
mineralised structures at surface and provide vectors to
mineralisation at depth for subsequent drill testing.
Map 1. Los Domos Gold-Silver Project Location in Chile’s Region XI
4
EQUUS MINING LIMITED Review of Operations
Vein mapping and sample results have shown typical
vertical precious metal, pathfinder element and quartz
texture zonation:
• High grade gold and silver grades are reported
predominantly in saccaroidal veins which outcrop at
lower altitudes throughout the Los Domos Project
area – typically below 1,100m. See areas T1 & T7 in
Map 2.
• Areas where both relatively higher antimony and
arsenic and intermittent gold and silver grades have
been recorded within quartz veins typically occur
between 1,100m and 1,200m. See areas T2 and T8.
• Areas where relatively higher antimony and arsenic
and other pathfinder element values are reported
with only anomalous precious metal values within
quartz veins are typically at higher altitude above
1,200m. See areas T3, T4, T5, and T6.
Map 2. Los Domos Gold-Silver Geochemical Sampling Results
5
2017 Annual Report Review of Operations
Understanding the vertical metal zonation within the
epithermal vein system at Los Domos is key to guiding
exploration, including drill testing. Increased recognition
of geochemical, vein quartz texture and alteration
zonation of epithermal Au-Ag systems is delivering the
next generation of discoveries of concealed deposits,
such as those of Cerro Bayo (Mandalay) and Cerro Negro
(Goldcorp).
An inaugral drill campaign commenced towards the
end of the year. The first drill hole at the T7 Structure
Prospect intercepted a shallow 8.39m mineralised
interval which returned a weighted average of 0.71 g/t
Au, 248 g/t Ag, 20.72% Pb and 7.07% Zn from 45.75m
down hole. See Map 3.
The high grade mineralisation intersected in LDD 001
at the T7 Structure Prospect comprised brecciated,
sphalerite and galena rich, banded epithermal quartz
veins and hydrothermal breccias hosted in quartz
crystal-rich tuff. This mineralisation is interpreted as
representing part of a multiphase, possibly telescoped
more Intermediate Sulphidation epithermal style of
mineralisation which occurs within the dominantly Low
Sulphidation epithermal style Los Domos project area.
Importantly this high grade intercept occurred directly
beneath previously reported surface channel sampling
which was low grade (7m @ 0.82g/t Au, 18g/t Ag, 1.40%
Pb, 1.26% Zn) but enriched in high level pathfinder metals
such as antimony and arsenic. This is an early “proof of
concept” for the vertical zonation model developed during
the early stages of the Los Domos project.
Map 3. Cross Section of Drill Hole LDD-001 at the T7 Structure Prospect
Mina Rica Thermal Coal Project
During the year, minimal work was undertaken at the
Company’s Mina Rica thermal coal project. The Directors
have assessed the area for impairment and have fully
impaired the Rio Perez project. The directors have
planned further exploration for the Mina Rica and Rio
Rubens areas and continue to carry the capitalised
exploration and evaluation expenditure in relation to
these projects.
6
EQUUS MINING LIMITED Review of Operations
Compliance statement
The information in this report that relates to Exploration Results for the Los Domos Gold-Silver project is based on
information compiled by Damien Koerber. Mr Koerber 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 has a beneficial interest as shareholder and Director of Terrane Minerals SpA (‘vendor’) in Los Domos
Gold-Silver project and consents to the inclusion in this report of the matters based on his information in the form and
context in which it appears.
No Material Changes
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.
(i) All the material assumptions underpinning exploration results for sample numbers LD00001 to LD00102 are outlined
in Table 1 and Appendix 1 in the initial public report titled Los Domos Gold-Silver project (see ASX release dated 25
October 2016) and continue to apply and have not materially changed.
(ii) All the material assumptions underpinning exploration results for sample numbers LD00103 to LD00205 are outlined
in Table 1 and Appendix 1 in the December 2016 Quarterly Activities Report (see ASX release dated 31 January 2017)
continue to apply and have not materially changed.
(iii) All the material assumptions underpinning exploration results for sample numbers LD00206 to LD00382 are outlined
in Table 1 and Appendix 1 in the report titled Los Domos Gold-Silver Project High Grade Assay Results (see ASX release
dated 3 March 2017) continue to apply and have not materially changed.
(iv) All the material assumptions underpinning exploration results for sample numbers LD00283 to LD00400 are outlined
in Table 1 and Appendix 1 in the report titled Los Domos Gold-Silver Project Yields Further High Grade Assay Results
(see ASX release dated 31 March 2017) continue to apply and have not materially changed.
(v) All the material assumptions underpinning exploration results for sample numbers LDD0001 to LDD00050 are
outlined in Table 1 in the report titled Significant High Grade Assays From Shallow Depth Intercept In First Drill Hole
At Los Domos Gold-Silver Project (see ASX release dated 12 July 2017) continue to apply and have not materially
changed.
AuEq(g/t) = Au(g/t) + Ag(g/t) x
ie Ag:Au = 68:1
Price per 1 Ag(g) x Ag Recovery (%)
Price per 1 Au(g) x Au Recovery (%)
Gold Equivalent Calculation Assumptions
US$1244 per ounce US$40 per gram The metallurgical recoveries for Au and Ag are based
Gold Price:
US$18.35 per ounce US59c per gram
Silver Price:
on the recoveries being achieved by a neighbouring
2016 Gold Recovery*:
84.93%
Cerro Bayo mine which is operating in the same
2016 Silver Recovery*: 87.40%
geologic setting as the Los Domos project. It is EQE’s
opinion that all the elements included in the metal
equivalents calculation have a reasonable potential
to be recovered and sold.
*Source: http://www.mandalayresources.com/wp-content/uploads/2013/09/Cerro_Bayo_Operating_Statistics_Q4_2016.pd
(a) www.mandalayresources.com
Yours sincerely
Ted Leschke
Managing Director
Dated this 25th day of September 2017
7
2017 Annual Report
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 2017 corporate governance statement is dated 1
September 2017 and reflects the corporate governance
practices throughout the 2017 financial year. The
board approved the 2017 corporate governance on
1 September 2017. 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 2017 and the auditor’s report thereon.
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 30 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.
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
30 years.
Mark Lochtenberg is the former Executive Chairman
and founding Managing Director of ASX-listed Baralaba
Coal Company Limited (formerly Cockatoo Coal Limited).
He was a principal architect of Cockatoo’s inception
and growth from an early-stage grassroots explorer
through to 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 is the immediate past Managing
Director of Pacific American Coal Limited and 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, Energy Corridor Pty Limited, (ATEC) and
unlisted public company Nickel Mines Pty Limited.
He has not served as a director of any other listed
company during the past three years.
9
2017 Annual Report Directors’ Report
Robert Ainslie Yeates, Non-Executive Director
Director since 20 July 2015
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
Robert A. Yeates
Board Meetings
Held
Attended
2
2
2
2
2
2
2
2
DIRECTORS’ INTERESTS
Directors’ beneficial shareholdings at the date of this
report are:
Fully Paid
Ordinary
Shares
27,306,727
34,368,889
8,297,861
2,090,909
Options
over
ordinary
shares
–
–
–
–
Director
Mark H. Lochtenberg
Edward J. Leschke
Juerg M. Walker
Robert A. Yeates
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
During the year, the Company issued 8,718,273 unlisted
options over ordinary shares (2016: nil options)
Number of shares
Exercise price
Expiry date
8,718,273
$0.02
4 May 2018
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 also 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 20 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 2014 he was also Project
Director then CEO of Newcastle Coal Infrastructure
Group, which has developed and is operating coal export
facilities in Newcastle.
Dr Yeates was until 2015 and for the prior ten years a
director in ASX-listed Baralaba Coal Company Limited
(formerly Cockatoo Coal Limited), and since 2016 he has
been a director of Watagan Mining Ltd.
He has not served as a director of any other listed
company during the past three years.
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 30 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.
10
EQUUS MINING LIMITED Directors’ Report
CORPORATE INFORMATION
Corporate Structure
Equus Mining Limited is a limited liability company that is incorporated and domiciled in Australia. It has prepared
a consolidated financial report incorporating the entities that it controlled during the financial year. The Group’s
structure at 30 June 2017 is outlined below.
EQUUS MINING LIMITED – GROUP STRUCTURE AT 30 JUNE 2017
Equus
Resources
Pty Ltd
Southern
Gold
SpA
0.1%
100%
Andean Coal
Pty Ltd
Minera
Carbones Del
Sur Limitada
The Companies referred above comprise the “Consolidated Entity” for the purposes of the Financial Statements
included in this report. On 18 October 2016, the Group incorporated Southern Gold SpA in the Republic of Chile.
11
2017 Annual Report Directors’ Report
PRINCIPAL ACTIVITIES
The principal activity of the Group during the course of
the financial year was the incorporation of Southern
Gold SpA in the Republic of Chile to acquire the rights to
100% of the Los Domos gold-silver project via an earn-in
and purchase agreement with Terrane Minerals SpA and
the mineral exploration in the Magallanes Basin of its
coal assets.
FINANCIAL RESULTS
The consolidated loss after income tax attributable to
members of the Company for the year was $899,548
(2016: $3,573,850 loss).
REVIEW OF OPERATIONS
A review of the Group’s operations for the year ended
30 June 2017 is set out on pages 3 to 7 of this Annual
Report.
DIVIDENDS
The Directors do not recommend the payment of a
dividend in respect of the financial year ended 30 June
2017. No dividends have been paid or declared during
the financial year (2016 - $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 2017 were as follows:
• On 25 October 2016, the Group announced that it
had acquired the rights to 100% of the Los Domos
gold-silver project via an earn-in and purchase
agreement with Terrane Minerals SpA (‘Terrane’).
The project is located in Chile’s XI region, adjacent to
the Cerro Bayo gold-silver mine.
• Under the agreement Equus is to fund a programme
of systematic surface sampling and 2,000m of
drilling. On completion of the drilling program,
Terrane is to transfer its Los Domos project assets
into a the newly formed Joint Venture Company,
Southern Gold SpA incorporated in the Republic of
Chile (‘JV’) of which Equus will hold a 51% equity
interest and Terrane a 49% equity interest.
Equus has a two-year option to buy the remaining
49% interest in the JV by issuing Terrane A$450,000
worth of Ordinary shares in the capital of Equus
Mining Limited at an issue price of 1.2 cents,
equivalent to 37.5m shares. Upon exercising
•
12
this option Equus will own 100% of the project.
The shares issued to Terrane will be voluntarily
escrowed for a period of 12 months. In addition,
Equus reimbursed historical costs of US$141,000
incurred by Terrane during the period ended 31
December 2016.
• On 4 November 2016, the Company issued
100,000,000 new ordinary shares under a placement
for a total consideration of $1,000,000.
• On 4 November 2016, the Company issued 8,718,273
unlisted options as part consideration for the
capital raising completed during the period. Each
option entitles the holder to subscribe for and be
allotted one ordinary share in Equus Mining Limited
at an exercise price of $0.02 per option. The options
are exercisable at any time on or before 4 May 2018
and are fully vested.
• On 27 March 2017, the Company issued 43,487,309
new ordinary shares for tranche one under a two
tranche placement for a total consideration of
$521,848.
• On 3 May 2017, the Company issued 89,846,024 new
ordinary shares under the placement for tranche
two for a total consideration of $1,078,152.
• On 15 June 2017, the Company announced the
results of the first drill hole (LDD 001) with strong
mineralisation intersected at shallow depth
intersecting a cumulative 12.9 metres downhole
interval hosting visual indications of precious and
base metal mineralisation.
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.
EQUUS MINING LIMITED Directors’ Report
EVENTS SUBSEQUENT TO BALANCE DATE
On 20 September 2017, the Company issued 6,974,618
ordinary shares through the exercise of options for cash
totalling $139,492.
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.
LIKELY DEVELOPMENTS
Equus considers growth as a vital strategy for the
Company taking into consideration its existing
operations in southern Chile. The addition of the Los
Domos gold-silver project in Chile region XI during
the second half of 2016 has added substantial value
to the Company as has the acquisition of several new
exploration coal licences in the Magellan Basin.
During the course of 2018 financial year, the Company
will focus on its drilling program at Los Domos and its
ongoing strategic assessment of its coal assets in the
Magellan basin. The Directors expect to receive results
of future exploration programs at Los Domos gold-silver
project, which they will make public in accordance with
ASX listing rules once the information is received.
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.
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 2017, 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 paid by
way of arrangement with related parties.
There were no remuneration consultants used by the Company during the year ended 30 June 2017, or in the prior year.
13
2017 Annual Report Directors’ Report
REMUNERATION REPORT – Audited (Con’t)
Consequences of performance on shareholders’ wealth - Audited
In considering the Group’s performance and benefits for shareholders’ wealth, the Board has regard to the following
indices in respect of the current financial year and the previous four financial years.
2017
$
2016
$
2015
$
2014
$
2013
$
Net loss attributable to equity holders of the parent
899,548
3,573,850
1,048,648
9,856,444
3,546,382
Dividends paid
Change in share price
–
0.02
(0.01)
–
0.01
–
(0.02)
–
0.00
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.
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
Share based
payments
share options
Year
$
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
150,000
150,000
30,000
28,370
30,000
30,000
30,000
30,000
240,000
238,370
$
–
–
–
–
–
–
–
–
–
–
$
14,250
14,250
–
–
–
–
2,850
2,850
17,100
17,100
$
–
–
–
–
–
–
–
–
–
–
Total
$
164,250
164,250
30,000
28,370
30,000
30,000
32,850
32,850
257,100
255,470
Executive Directors
Edward Leschke
Non-Executive Directors
Robert Yeates
Juerg Walker
Mark Lochtenberg
Total all directors
Remuneration Structure
In accordance with best practice corporate governance, the structure of Executive Director and Non-Executive Director
remuneration is separate and distinct.
Service contracts
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.
14
EQUUS MINING LIMITED Directors’ Report
REMUNERATION REPORT – Audited (Con’t)
Executive Directors
During the financial year ended 30 June 2017, 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
During the financial year ended 30 June 2017, the following Directors were considered Non Executive Directors:
• Mark Lochtenberg;
Juerg Walker;
•
Robert Yeates;
•
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
There are no options held by Directors over ordinary shares.
Modification of terms of equity-settled share-based payment transactions
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 2017 and 2016 financial years.
Exercise of options granted as compensation
There were no shares issued on the exercise of options previously granted as compensation during the 2017 and 2016
financial years.
Options and rights over equity instruments
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.
Loans to key management personal and their related parties
There were no loans made to key management personnel or their related parties during the 2017 and 2016 financial
years and no amounts were outstanding at 30 June 2017 (2016 - $nil).
Other transactions with key management personnel
There were no other transactions with key management personnel or their related parties during 2017.
At 30 June 2017, the amount outstanding for salaries, superannuation and directors fees was Nil (2016: $114,862).
15
2017 Annual Report Directors’ Report
REMUNERATION REPORT – Audited (Con’t)
Movements in shares
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 - 2017
Key management personnel
Mark H. Lochtenberg
Edward J. Leschke
Juerg M. Walker
Robert A. Yeates
Held at
1 July 2016
22,306,727
34,368,889
8,297,861
1,090,909
Purchases
5,000,000
–
–
1,000,000
Sales
–
–
–
–
Held at
30 June
2017
27,306,727
34,368,889
8,297,861
2,090,909
END OF REMUNERATION REPORT
NON-AUDIT SERVICES
During the year ended 30 June 2017 KPMG, the Group’s auditor, did not perform 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
2017
$
–
–
2016
$
8,500
8,500
Audit and review of financial statements
80,100
76,900
80,100
85,400
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration is set out on page 17 and forms part of the Directors’ Report for the
financial year ended 30 June 2017.
Signed at Sydney this 25th day of September 2017
in accordance with a resolution of the Board of Directors:
Mark H. Lochtenberg
Chairman
16
Edward J. Leschke
Managing Director
EQUUS MINING LIMITED Lead Auditor’s Independence Declaration
17
2017 Annual Report Consolidated Statement of Profit or
Loss and Other Comprehensive Income
For the Year Ended 30 June 2017
CONTINUING OPERATIONS
Other income
Expenses
Employee, directors and consultants costs
Depreciation expense
Travel expenses
Reversal impairment of property
Impairment exploration expenditure
Gain on disposal of subsidiary
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
Notes
2017
$
2016
$
4
–
3,517
27
11
4
5
5
6
28
15
10
10
(437,100)
(376,858)
–
(8,319)
–
(165,878)
(937)
(9,290)
70,819
–
–
177,917
(327,486)
(296,739)
(938,783)
(431,571)
39,607
11,558
(372)
(174,515)
39,235
(162,957)
(899,548)
(594,528)
–
–
(899,548)
(594,528)
–
(2,977,730)
(899,548)
(3,572,258)
(66,746)
2,798,518
410,741
(174,515)
(34,748)
174,515
309,247
2,798,518
(590,301)
(773,740)
(899,548)
(3,573,850)
–
1,592
(899,548)
(3,572,258)
(590,301)
(776,447)
–
2,707
(590,301)
(773,740)
Basic and diluted loss per share attributable to ordinary equity holders (dollars)
16
(0.002)
(0.008)
Earnings per share - continuing operations
Basic and diluted loss per share attributable to ordinary equity holders (dollars)
16
(0.002)
(0.001)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
18
EQUUS MINING LIMITED Consolidated Statement of
Financial Position
As at 30 June 2017
Notes
2017
$
2016
$
7
8
27
9
10
11
9
12
13
14
15
15
1,120,683
119,261
36,255
–
1,369
13,378
70,819
2,023
1,158,307
205,481
403,093
27,976
1,897,038
1,534,227
84,978
–
–
–
2,385,109
1,562,203
3,543,416
1,767,684
367,029
367,029
367,029
435,504
435,504
435,504
3,176,387
1,332,180
110,921,315
108,545,219
434,405
–
(532,325)
(465,579)
(107,647,008) (106,747,460)
3,176,387
1,332,180
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
Other
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
Total Equity
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
19
2017 Annual Report Consolidated Statement of
Changes in Equity
For the Year Ended 30 June 2017
Share
Capital
$
Accumulated
Losses
Other
Reserves
$
Foreign
Currency
Translation
Reserves
$
Non
controlling
Interest
$
Total
Equity
$
Total
$
Balance at 1 July 2015
107,814,973 (103,205,351) 144,000 (3,262,982) 1,490,640
205,034
1,695,674
Profit/(Loss) for the year
Total other comprehensive
income
Total comprehensive
profit/(loss) for the year
Transactions with owners
recorded directly in equity
–
–
–
(3,573,850)
–
(3,573,850)
Ordinary shares issued
435,352
Transaction costs on issue
of shares
(25,106)
–
–
–
–
–
–
–
–
144,000
(144,000)
Transfer of expired
options
Changes in ownership
interest in subsidiaries
Acquisition of non–
controlling interest
– (3,573,850)
1,592
(3,572,258)
2,797,403
2,797,403
1,115
2,798,518
2,797,403
(776,447)
2,707
(773,740)
–
–
–
435,352
(25,106)
–
–
–
–
–
207,741
(207,741)
435,352
(25,106)
–
–
(465,579) 1,332,180
–
1,332,180
320,000
(112,259)
Balance at 30 June 2016
108,545,219 (106,747,460)
Balance at 1 July 2016
108,545,219 (106,747,460)
–
–
–
–
Profit/(Loss) for the year
Total other comprehensive
income / (loss)
Total comprehensive
profit/(loss) for the year
–
–
–
Transactions with owners
recorded directly in equity
Ordinary shares issued
2,600,000
Transaction costs on issue
of shares
Share options
(223,904)
–
(899,548)
(465,579) 1,332,180
–
(899,548)
–
375,993
(66,746)
309,247
(899,548)
375,993
(66,746)
(590,301)
–
–
–
–
–
58,412
–
–
–
2,600,000
(223,904)
58,412
Balance at 30 June 2017
110,921,315 (107,647,008) 434,405
(532,325) 3,176,387
–
–
–
–
–
–
–
–
1,332,180
(899,548)
309,247
(590,301)
2,600,000
(223,904)
58,412
3,176,387
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
20
EQUUS MINING LIMITED Consolidated Statement of
Cash Flows
For the Year Ended 30 June 2017
Notes
2017
$
2016
$
–
4,560
(949,226)
(524,817)
(949,226)
(520,257)
4,487
3,570
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
(944,739)
(516,687)
Cash flows from investing activities
Payments for exploration and development expenditure
Proceeds from sale of property
Proceed from sale of financial assets
Net cash 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
(481,410)
(419,063)
75,530
17,667
–
–
(388,213)
(419,063)
2,450,000
435,352
(117,492)
(25,106)
2,332,508
410,246
999,556
(525,504)
119,261
644,765
1,866
–
Cash and cash equivalents at 30 June
17
1,120,683
119,261
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
21
2017 Annual Report Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
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 2017 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 mineral 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 25 September 2017.
(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 $2,332,508 (net of associated costs) through several placements.
The Group recorded a loss attributable to equity holders of the Company of $899,548 for the year ended 30 June 2017
and has accumulated losses of $107,647,008 as at 30 June 2017. The Group has cash on hand of $1,120,683 at 30
June 2017 and used $1,426,149 of cash in operations, including payments for exploration and evaluation, for the year
ended 30 June 2017. 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 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 reduced 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.
22
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
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; and
• Note 11 - Exploration and evaluation expenditure.
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.
(b) 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.
(c) 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.
23
2017 Annual Report Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(c) 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.
(d) 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
Motor Vehicles
Building improvements
Plant & equipment
Office Fittings
Straight Line
Straight Line
Straight Line
Straight Line
Straight Line
20% to 50%
10% to 20%
10%
20%
25%
24
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(e) 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:
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.
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.
25
2017 Annual Report Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(f) 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.
(g) Trade and other receivables and payables
Trade receivables and payables are carried at amortised cost. For receivables and payables with a remaining life of
less than one year, the notional amount is deemed to reflect the fair value. All other receivables and payables are
discounted to determine the fair value.
(h) Impairment
Non-derivative financial assets
A financial asset not classified 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.
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.
26
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(h) Impairment (Cont.)
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.
(i) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less.
(j) 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.
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.
27
2017 Annual Report Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(j) Income tax (Cont.)
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.
(k) 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.
(l) 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.
28
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(m) 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.
(n) 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.
(o) 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.
(p) 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 is recognised as an employee and consultants
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.
29
2017 Annual Report Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(q) Provision 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.
(r) 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 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.
(s) 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.
30
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(s) 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.
(t) 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 2016, 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 Company have not determined which elections it will
make under the new standard.
31
2017 Annual Report Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
4. LOSS FROM OPERATING ACTIVITIES
Other income
Recognised in profit or loss
Other
Other expenses
Administration costs
Accounting and secretarial fees
Commissions
Insurance
ASIC and ASX fees
Share registry fees
Legal fees
Audit and review services – KPMG
Other services – KPMG
Other expenses
5. FINANCE INCOME AND FINANCE COSTS
Recognised in profit and loss
Interest income on cash deposits
Profit on sale of financial assets
Foreign exchange gain / (loss)
Impairment of available-for-sale investments reclassified to profit or loss
Net finance income/(costs) recognised in profit or loss
2017
$
2016
$
–
–
44,996
35,771
186
11,300
19,904
18,291
60,711
80,100
–
56,227
327,486
3,517
3,517
25,585
58,237
29,809
14,234
24,403
12,074
846
76,900
8,500
46,151
296,739
4,487
35,120
(372)
39,235
–
39,235
3,570
–
7,988
11,558
(174,515)
(162,957)
Recognised in other comprehensive income
Net change in fair value of available-for-sale financial assets
410,741
(174,515)
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
(34,748)
375,993
174,515
–
32
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
2017
$
2016
$
(205,668)
(163,599)
–
–
205,668
163,599
–
–
899,548
3,572,258
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 27.5% (2016 - 30%)
(247,376)
(1,071,677)
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 27.5%
66,934
842,724
–
196,113
(15,671)
–
–
163,599
65,354
–
6,188,097
3,193,247
331,582
6,761,076
3,343,838
371,697
9,712,926
10,476,611
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
Sundry debtors
Trade and sundry debtors are non-interest bearing and generally on 30-day terms.
9. OTHER ASSETS
Prepayments
Current
Non-current
2017
$
80,462
1,040,221
1,120,683
2016
$
88,010
31,251
119,261
36,255
13,378
1,369
84,978
86,347
2,023
–
2,023
33
2017 Annual Report Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
10. INVESTMENTS
Equity securities - available-for-sale at fair value
2017
$
2016
$
403,093
27,976
At 30 June 2017 the Directors compared the carrying value of the 1,722,550 shares (2016: 1,861,150 ) in Blox Inc., a
US over the counter traded company to market value and recorded an increase in fair value within equity of $375,993
(2016 reduction in equity- $174,515) based on a closing share price of US$0.018 at 30 June 2017. The increase in fair
value of $375,117 has been recognised in non-current assets. A foreign exchange loss of $877 has also been recorded on
translation of the USD investment.
11. EXPLORATION AND EVALUATION EXPENDITURE
Carbones del Sur
Los Domos gold-silver
Net Book Value
Carbones del Sur
Carrying amount at the beginning of the year
Additions
Impairment
Foreign currency translation movement
Net book value
Los Domos gold-silver
Carrying amount at the beginning of the year
Additions
Foreign currency translation movement
Balance carried forward
2017
$
2016
$
1,395,431
1,534,227
501,607
–
1,897,038
1,534,227
1,534,227
1,073,712
61,596
(165,878)
(34,514)
467,568
–
(7,053)
1,395,431
1,534,227
–
523,398
(21,791)
501,607
–
–
–
–
During the year, the Company surrendered the licences to the Rio Perez area and impaired 100% of the projects carrying
value.
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.
34
EQUUS MINING LIMITED 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
Accumulated depreciation
Net book value
Total property, plant and equipment net book value
Reconciliation:
Carrying amount at the beginning of the year
Disposals
Depreciation
Impairment reversal
Transfer to assets held for sale
Carrying amount at the end of the year
13. TRADE AND OTHER PAYABLES
Current liabilities
Trade creditors and accruals
Employee leave entitlements
Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
2017
$
1,892
(1,892)
–
2,785
(2,785)
–
2016
$
1,892
(1,892)
–
2,785
(2,785)
–
192,710
(192,710)
192,710
(192,710)
–
–
–
–
–
–
–
–
–
–
937
–
(937)
70,819
(70,819)
–
367,029
–
367,029
428,142
7,362
435,504
35
2017 Annual Report Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
14. ISSUED CAPITAL
668,206,427 (2016: 434,873,094) fully paid ordinary shares
2017
$
2016
$
110,921,315 108,545,219
2017
2016
Nº
$
Nº
$
(a) Fully paid ordinary shares
Balance at beginning of financial year
434,873,094 108,545,219 379,295,675 107,814,973
Issued ordinary shares 31 July 2015 – non-cash1
Issued ordinary shares 19 October 2015 for $0.011
Issued ordinary shares 16 December 2015 for $0.011
Less cost of issue
–
–
–
–
–
–
–
–
Issued ordinary shares 4 November 2016 for $0.010
100,000,000
1,000,000
Issued ordinary shares 27 March 2017 for $0.012
43,487,309
521,848
Issued ordinary shares 3 May 2017 for $0.012
89,846,024
1,078,152
Less cost of issue
–
(223,904)
16,000,000
36,213,783
3,363,636
–
–
–
–
–
320,000
398,352
37,000
(25,106)
–
–
–
–
668,206,427 110,921,315 434,873,094 108,545,219
1 Shares issued on 31 July 2015 relate to the acquisition of the remaining 49% shareholding in Andean Coal Pty Ltd.
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.
(b) Share Options
During the year ended 30 June 2017 the Company issued 8,718,273 options (30 June 2016 Nil) as part consideration for
the capital raising completed on 4 November 2016. The options vested immediately and expire on 4 May 2018. Each
option entitles the holder to subscribe for and be allotted one ordinary share in Equus Mining Limited at an exercise
price of $0.02 per option.
The fair value of the options granted on 4 November 2016 was $58,412 and the Black-Scholes formula model inputs
applied were the Company’s share price of $0.014 at the grant date, a volatility factor of 124.16% based on historic
share price performance, a risk free rate of 1.65% based on government bonds, and a dividend yield of 0%.
36
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
2017
$
2016
$
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
Share base payment - vested share 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
Balance at end of period
(c) Foreign currency translation reserves
Balance at beginning of period
Transfer of foreign currency translation reserve to loss on disposal of subsidiary in
profit or loss – discontinued operations
Transfer of foreign currency translation reserve to gain on disposal of subsidiary in
profit or loss
Currency translation differences
Balance at end of period continuing operations
Nature and purpose of reserves
Equity based compensation reserve:
58,412
375,993
(532,325)
(97,920)
–
–
58,412
58,412
–
375,993
375,993
–
–
(465,579)
(465,579)
144,000
(144,000)
–
–
–
–
–
(465,579)
(3,262,982)
–
–
(66,746)
(532,325)
2,976,499
(177,981)
(1,115)
(465,579)
The equity based compensation reserve is used to record the fair value of options issued but not exercised.
Fair value reserve:
The fair value reserve comprises the cumulative net change in the fair value of available-for-sale investments until the
assets are derecognised or impaired.
Foreign currency translation reserve:
The foreign currency translation reserve records the foreign currency differences arising from the translation of the
financial statements of foreign operations where their functional currency is different to the presentation currency of
the reporting entity.
37
2017 Annual Report Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
16. LOSS PER SHARE
2017
2016
Continuing
operations
Discontinued
operations
Basic and diluted profit/(loss) per share:
Net profit/(loss) for the year attributable
to equity holders of the parent
(899,548)
$
$
–
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
Total
$
Continuing
operations
Discontinued
operations
$
$
Total
$
(899,548) (596,120)
(2,977,730)
(3,573,850)
2017
2016
434,873,094
379,295,675
90,800,997
41,686,205
525,674,091
420,981,880
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
Gain on sale of property
Impairment of available for sale financial assets
Gain on sale of available for sale financial assets
Impairment/(reversal of impairment) of property, plant and equipment
Impairment of exploration and evaluation expenditure
Foreign currency exchange loss/(gain)
Gain on disposal of subsidiary
Loss on sale of subsidiary, net of cash
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
2017
$
2016
$
(899,548)
(3,572,258)
–
(6,011)
937
–
–
174,515
(34,748)
–
–
(70,819)
165,878
5,366
–
–
–
(7,988)
(177,917)
2,976,499
(22,877)
(84,324)
(68,475)
–
(944,739)
(8,258)
3,991
170,601
(5,990)
(516,687)
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
1,120,683
119,261
38
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
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
During the year ended 30 June 2017 and 2016, No key management persons, or their related parties, held positions
in other entities that provide material professional services resulting in them having control or joint control over the
financial or operating policies of those entities.
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
2017
$
240,000
17,100
257,100
2016
$
238,370
17,100
255,470
At 30 June 2017 no fees were outstanding including superannuation (2016 – 114,862). There were no loans made to key
management personnel or their related parties during the 2017 and 2016 financial years.
The Board reviews remuneration arrangements annually based on services provided. Apart from the details disclosed in
this note, there were no material contracts involving Directors’ interest’s existing at year-end.
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.
Movement of options during the year ended 30 June 2017
Grant date
Outstanding at
the beginning of
the year
Granted
during
the year
Cancelled
during
the year
Exercised
during
the year
Expired
during
the year
Outstanding
at the end
of the year
Exercisable
at the end
of the year
4 November 2016
8,718,273
8,718,273
–
–
–
8,718,273
8,718,273
Options outstanding at 30 June 2017
Grant date
Number of options
Exercise price
Fair value at
grant date
Vesting Date
Expiry date
4 November 2016
8,718,273
$0.02
$0.0067
4 November 2016
4 May 2018
39
2017 Annual Report Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
20. SHARE BASED PAYMENTS (Cont.)
Movement of options during the year ended 30 June 2016
Grant date
Outstanding at
the beginning
of the year
13 November 2012
1,000,000
13 November 2012
1,000,000
13 November 2012
1,000,000
13 November 2012
1,000,000
Exercise
Price
$0.075
$0.150
$0.200
$0.250
Options outstanding at 30 June 2016
Granted
during
the year
Cancelled
during
the year
Exercised
during
the year
Expired
during
the year
Outstanding
at the end
of the year
Exercisable
at the end
of the year
–
–
–
–
–
–
–
–
–
–
–
–
(1,000,000)
(1,000,000)
(1,000,000)
(1,000,000)
–
–
–
–
–
–
–
–
There were no options outstanding at 30 June 2016.
Weighted average exercise price of options
Outstanding at
the beginning
of the year
–
$0.169
Granted
during
the year
$0.02
–
Forfeited
during
the year
Exercised
during
the year
–
–
–
–
Expired
during
the year
–
$0.169
Outstanding
at the end
of the year
Exercisable
at the end
of the year
$0.02
–
$0.02
–
Year
2017
2016
The weighted average remaining contractual life of share options outstanding at the end of the year was 0.84 years
(2016: nil).
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 option holder 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 2017, no options expired unexercised (2016: 4,000,000).
The total fair value of the 8,718,273 options granted on 4 November 2016 was $58,412. The options were issued
Bell Potter Nominees Ltd. The options were valued using the Black-Scholes formula. The valuation inputs were
the Company’s share price of $0.014 at the grant date, a volatility factor of 124% (based on historical share price
performance), a life of 18 months, a risk-free interest rate of 1.65% based on the 2 year government bond rate and a
dividend yield of 0%. The exercise price of $0.02. These options had a non-market performance vesting condition and
hence the options fully vested on grant date.
Expenses arising from share-based payment transactions
During the year ended 30 June 2017, the Company issued 15 million ordinary fully paid shares at $0.01 per share as
share-base payment to the Directors of Mining Services Trust, for services provided and outstanding. Total share-based
payment during the year ended 30 June 2017 amounted to $150,000 (2016: $nil).
40
EQUUS MINING LIMITED
Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
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.
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 $1,120,683
for its immediate use.
The following are the contractual maturities of financial liabilities:
Carrying
amount
$
Contractual
cash flows
Less than
6 months
6 to 12
months
1 to 5
years
More than
5 years
$
$
Financial liabilities
Trade and other payables
30 June 2017
30 June 2016
367,029
435,504
(367,029)
(435,504)
(367,029)
(435,504)
$
–
–
$
–
–
$
–
–
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
2017
$
1,120,683
36,255
1,156,938
2016
$
119,261
13,378
132,639
41
2017 Annual Report Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
21. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont.)
Credit risk (Cont.)
Cash and cash equivalents
At 30 June 2017, the Group held cash and cash equivalents of $1,120,683 (2016: $119,261), 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 2017, the Group does not hold a significant value of trade receivables, and therefore has
minimal exposure to credit risk.
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 (2016 - $nil).
2017
$
2016
$
1,120,683
119,261
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 is exposed to currency risk on bank account denominated in USD totalling $16,926 at 30 June 2017 (2016 –
US$59,676) and equity investments in shares in the United States totalling US$310,059 (2016 – US$20,845). The
Group’s gross financial position exposure to foreign currency risk at balance date was US$326,985 (2016 - US$80,521).
Sensitivity analysis
A 10% strengthening of the Australian dollar against the United States dollar at 30 June 2017 would have decreased
post-tax profit and net assets of the Group by $38,637. A 10% weakening of the Australian dollar against the United
States dollar at 30 June 2017 would have an increased post-tax profit and net assets of the Group by $47,219, on the
basis that all other variables remain constant.
42
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
21. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont.)
Currency risk (Cont.)
Exchange rates applied:
AUD/USD
Price risk
Reporting date spot rate
2017
0.7692
2016
0.7451
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 post-tax profit
Impact on Total equity
Blox-Inc. - 10% bid price increase
2017
2016
$
–
$
–
Blox-Inc. - 10% bid price decrease
(40,309)
(2,798)
Capital management
2017
$
40,309
(40,309)
2016
$
2,798
(2,798)
Management aim to control 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).
43
2017 Annual Report Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
21. FINANCIAL RISK MANAGEMENT AND FINANCIAL INSTRUMENTS DISCLOSURE (Cont.)
Estimation of Fair Values (Cont.)
Available-for-sale financial assets
30 June 2017
30 June 2016
Level 1
$
–
–
Level 2
$
403,093
27,976
Level 3
$
–
–
Total
$
403,093
27,976
All available for sale financial assets relate to investments held in quoted equity securities and were designated as
available-for-sale financial assets.
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 (i)
Okore Mining Pty Ltd (ii)
Dataloop Pty Ltd
Equus Resources Pty Ltd (iii)
(i) Subsidiary of Hotrock Enterprises Pty Ltd
Derrick Pty Ltd
Andean Coal Pty Ltd (iv)
(iv) Subsidiary of Andean Coal Pty Ltd
Minera Carbones Del Sur Limitada
(ii) Subsidiary of Okore Mining Pty Ltd
Leo Shield Exploration Ghana Ltd
(iii) Subsidiary of Equus Resources Pty Ltd
Equus Resources Chile SpA (v)
Minera Equus Chile Ltda
Southern Gold SpA
(v) Subsidiary of Equus Resources Chile SpA
Minera Equus Chile Ltda
Country of
incorporation
Australia
Australia
Australia
Australia
Australia
Australia
Chile
Ghana
Chile
Chile
Chile
Chile
Ownership Interest
2017
2016
%
100
100
100
100
100
100
99.9
100
100
99.9
100
0.1
%
100
100
100
100
100
100
99.9
100
100
99.9
–
0.1
On 18 October 2016, Southern Gold SpA was incorporated to explore Los Domos Gold-Silver project in region XI
southern Chile.
23. COMMITMENTS
Exploration expenditure commitments
The Group does not have any minimum expenditure commitments in relation to its mineral interests in the Magallanes
Basin in southern Chile or at Los Domos Gold-Silver project 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.
44
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
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 2017, the Group operated in the mineral exploration within
the geographical segments of Australia, Chile and Ghana. The oil exploration segment in the Kyrgyz Republic was
discontinued during the year ended 30 June 2013 and JSC Sherik was disposed of on 17 March 2016. The Company holds
shares in Blox Inc., a US over the counter traded company and has concluded that during the year ended 30 June 2017,
to recognise the investment in Blox Inc., as a separate operating segment.
Oil Exploration
(discontinued)
Mineral
Exploration
$
$
Investing
$
Total
$
30 June 2017
External revenues
Reportable segment profit /(loss) before tax
Interest income
Interest expense
Depreciation
Other material non-cash items:
Impairment of investment
Reportable segment assets
Reportable segment liabilities
30 June 2016
External revenues
–
–
–
–
–
–
–
–
80
–
–
–
2,001,894
153,478
1,043
–
–
–
–
(235,613)
39,325
(196,288)
4,407
4,487
–
–
–
–
–
–
403,093
2,404,987
–
–
153,478
1,043
Reportable segment loss before tax
(2,977,730)
42,888
(163,017)
(3,097,859)
Interest income
Interest expense
Depreciation
Other material non-cash items:
Impairment of investment
Reversal impairment plant and equipment
Reportable segment assets
Reportable segment liabilities
–
–
–
–
–
–
–
60
–
(937)
3,510
–
–
3,570
–
(937)
–
(174,515)
(174,515)
70,819
–
70,819
1,617,432
16,409
27,976
1,645,408
–
16,409
45
2017 Annual Report Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
24. OPERATING SEGMENTS (Cont.)
Reconciliations of reportable segment revenues and profit or loss
Revenues
Total revenue for reportable segments
Elimination of discontinued operations disposed (Note 28)
Consolidated revenue
Profit or loss
Total loss for reportable segments
Elimination of discontinued operations (Note 28)
Unallocated amounts:
Proceeds from other income
Net other corporate expenses
Consolidated loss before tax from continuing operations
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
2017
$
–
–
–
2016
$
1,043
(1,043)
–
(196,288)
(3,097,859)
–
–
(703,260)
(899,548)
2,404,987
1,138,429
3,543,416
153,478
213,551
367,029
2,977,730
3,517
(477,916)
(594,528)
1,645,408
122,276
1,767,684
16,409
419,095
435,504
In presenting information on the basis of geography, segment revenue and segment assets are based on the
geographical location of the operations.
2017
2016
Revenue
$
Non-current
assets
$
Revenues
$
Non-current
assets
$
–
–
–
–
–
–
–
–
1,514,768
403,093
–
1,043
–
–
–
–
–
–
1,337,589
27,976
Australia
All foreign locations
– Kyrgyz Republic
– Ghana
– Chile
– United States of America
The geographical information excludes financial instruments in determining non-current assets.
46
EQUUS MINING LIMITED Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
25. SUBSEQUENT EVENTS
On 20 September 2017, the Company issued 6,974,618 ordinary shares through the exercise of options for cash
totalling $139,492.
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.
26. PARENT ENTITY DISCLOSURES
As at, and throughout, the financial year ending 30 June 2017 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
Reserve
Total equity
Company
2017
$
2016
$
(1,213,686)
(1,449,415)
–
–
(1,213,686)
(1,449,415)
1,138,429
403,093
1,541,522
122,276
27,976
150,252
213,551
419,096
–
213,551
1,327,971
–
419,096
(268,844)
110,921,315
108,545,219
(110,027,749)
(108,814,063)
434,405
1,327,971
–
(268,844)
The Directors are of the opinion that no commitments or contingent liabilities existed at, or subsequent to year end.
47
2017 Annual Report Notes to the Consolidated
Financial Statements
For the Year Ended 30 June 2017
27. ASSETS HELD FOR SALE
The Naltagua property held in the Republic of Chile was sold during the year ended 30 June 2016 following Group
management’s decision to sell the property.
A Sale and Purchase Agreement was executed during June 2016. The consideration under the agreement was for
CLP$38 million (AUD$76,889). This asset was classified as assets held for sale at 30 June 2016.
As at 30 June assets held for sale comprised the following:
Property, plant and equipment – Land
2017
$
–
2016
$
70,819
During the year ended 30 June 2016, the Group determined to reverse $70,819 of the impairment processed during
2014 for the Naltagua property.
28. DISCONTINUED OPERATIONS
In September 2012 the Group committed to discontinue its oil exploration segment. On 6 February 2015 the Group sold
the segment fixed assets and consumables for US$700,000. On 17 March 2016 the Group sold its 100% interest in JSC
Sherik for consideration of KGS100,000 (AUD$2,000).
Results of discontinued operation
Revenue
Other income
Expenses
Results from operating activities
Income tax expense
Results from operating activities, net of income tax
Loss on sale of discontinue operation (including transfer of foreign currency
translation reserve to profit or loss)
Impairment of assets held for sale
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
48
2017
$
2016
$
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,043
113,410
(115,684)
(1,231)
–
(1,231)
(2,976,499)
–
–
(2,977,730)
(0.007)
(96,182)
1,043
–
(95,139)
EQUUS MINING LIMITED Directors’ Declaration
1.
In the opinion of the Directors of Equus Mining Limited (the ‘Company’):
(a)
the consolidated financial statements and notes thereto, set out on pages 18 to 48, and the Remuneration
Report as set out on pages 13 to 16 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 2017 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 2017.
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 25th day of September 2017 in accordance with a resolution of the Board of Directors:
Mark H. Lochtenberg
Director
Edward J. Leschke
Director
49
2017 Annual Report Independent Auditor’s Report
50
EQUUS MINING LIMITED Independent Auditor’s Report
51
2017 Annual Report Independent Auditor’s Report
52
EQUUS MINING LIMITED Independent Auditor’s Report
53
2017 Annual Report Independent Auditor’s Report
54
EQUUS MINING LIMITED Independent Auditor’s Report
55
2017 Annual Report Additional Stock Exchange Information
Additional information as at 31 August 2017 required by the Australian Stock Exchange Listing Rules and not disclosed
elsewhere in this report.
Home Exchange
The Company is listed on the Australian Securities Exchange. The Home Exchange is Sydney.
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 2017 was as follows:
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Less than Marketable Parcels
Total
Shareholders
Total
Number of Shares
274
325
312
704
388
2003
129,809
936,612
2,828,269
23,869,033
640,442,704
668,206,427
On 31 August 2017, 1,001 shareholders held less than marketable parcels of 12,500 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.
Norm Seckold
Gerard C Toscan Management Pty Limited
Augusta Enterprises Pty Ltd
Mark Lochtenberg
Number of
Ordinary Shares
61,877,420
54,668,862
33,619,471
27,306,727
56
EQUUS MINING LIMITED Additional Stock Exchange Information
Twenty Largest Shareholders
As at 31 August 2017, the twenty largest quoted shareholders held 52.05% of the fully paid ordinary shares as follows:
Name
Gerard C Toscan Management Pty Limited
Permgold Pty Ltd
Augusta Enterprises Pty Ltd
Mark Hamish Lochtenberg & Michael Lochtenberg
JP Morgan Nominees Australia Limited
Altinova Nominees Pty Ltd
HSBC Custody Nominees (Australia) Limited – A/C 2
Peter John Bartter
Sambas Energy Pty Ltd
John Wardman & Associates Pty Ltd
Cynthia Wardman
Ringwood Management Pty Limited
Rosignol Pty Ltd
Northcliffe Holdings Pty Ltd < Northcliffe Holdings A/C>
BT Portfolio Services Limited
DRYCA Pty Ltd
James Christopher Toscan
John Desmond Martin
Berkshire Nominees Pty Ltd
John Wardman & Mrs Lesley Jean Wardman
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Number
42,220,000
41,877,420
33,619,471
27,306,727
21,407,437
20,000,000
18,567,768
18,500,000
16,000,000
15,010,000
15,000,000
13,929,969
12,500,000
12,000,000
9,140,968
7,000,000
6,500,000
6,500,000
5,711,281
5,000,000
%
6.32
6.27
5.03
4.09
3.20
2.99
2.78
2.77
2.39
2.25
2.24
2.08
1.87
1.80
1.37
1.05
0.97
0.97
0.85
0.75
The number of holders in each class of securities
As at 31 August 2017, the numbers of holders in each class of securities on issue were as follows:
Type of security
Ordinary shares
Unlisted options
Number of
holders
2,003
1
Number of
securities
668,206,427
8,718,273
Substantial Optionholders in the Company
The Company provides the names of the holders of 20% or more options in these unquoted securities below:
Bell Potter Nominees Ltd
Number of
options held
% of
Options Held
8,718,273
100.00%
57
2017 Annual Report Additional Stock Exchange Information
Escrow securities
As at 31 August 2017, there were escrow securities.
Group Mineral Concession Interests at 31 August 2017
The Company provides the following information regarding its mining tenements:
Project
Location
Tenement
Ownership
% interest
Type of Tenement
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
Mina Rica 12
Minera Carbones Del Sur Limitada
Mina Rica 15
Minera Carbones Del Sur Limitada
Mina Rica 16
Minera Carbones Del Sur Limitada
Mina Rica 19
Minera Carbones Del Sur Limitada
Mina Rica 20
Minera Carbones Del Sur Limitada
Mina Rica 23
Minera Carbones Del Sur Limitada
Mina Rica 26
Minera Carbones Del Sur Limitada
Mina Rica 29
Minera Carbones Del Sur Limitada
Mina Rica 30
Minera Carbones Del Sur Limitada
Mina Rica 31
Minera Carbones Del Sur Limitada
Mina Rica 32
Minera Carbones Del Sur Limitada
Mina Rica 33
Minera Carbones Del Sur Limitada
Mina Rica 34
Minera Carbones Del Sur Limitada
Mina Rica 35
Minera Carbones Del Sur Limitada
Mina Rica 36
Minera Carbones Del Sur Limitada
Mina Rica 37
Minera Carbones Del Sur Limitada
Mina Rica 38
Minera Carbones Del Sur Limitada
Mina Rica 39
Minera Carbones Del Sur Limitada
Mina Rica 40
Minera Carbones Del Sur Limitada
Mina Rica 41
Minera Carbones Del Sur Limitada
Mina Rica 42
Minera Carbones Del Sur Limitada
Mina Rica 43
Minera Carbones Del Sur Limitada
Mina Rica 44
Minera Carbones Del Sur Limitada
Mina Rica 45
Minera Carbones Del Sur Limitada
Mina Rica 46
Minera Carbones Del Sur Limitada
Mina Rica 47
Minera Carbones Del Sur Limitada
Brunswick 3A
Minera Carbones Del Sur Limitada
Brunswick 4A
Minera Carbones Del Sur Limitada
Glo 1
Glo 2
Glo 3
Glo 4
Glo 5
Glo 6
Glo 7
Glo 8
Minera Carbones Del Sur Limitada
Minera Carbones Del Sur Limitada
Minera Carbones Del Sur Limitada
Minera Carbones Del Sur Limitada
Minera Carbones Del Sur Limitada
Minera Carbones Del Sur Limitada
Minera Carbones Del Sur Limitada
Minera Carbones Del Sur Limitada
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
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
Mina Rica
Rubens
58
EQUUS MINING LIMITED Additional Stock Exchange Information
Project
Location
Tenement
Ownership
% interest
Type of Tenement
Los Domos
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Chile
Electrum 1A
Terrane Minerals SpA
Electrum 2A
Terrane Minerals SpA
Electrum 3A
Terrane Minerals SpA
Electrum 4A
Terrane Minerals SpA
Electrum 5A
Terrane Minerals SpA
Electrum 6A
Terrane Minerals SpA
Electrum 7A
Terrane Minerals SpA
Electrum 8
Electrum 9
Terrane Minerals SpA
Terrane Minerals SpA
Electrum 10
Terrane Minerals SpA
Electrum 11
Terrane Minerals SpA
Electrum 12A
Terrane Minerals SpA
Pedregoso I
Patagonia Gold SC.
Pedregoso VIII
Patagonia Gold SC.
Honda 20
Patagonia Gold SC.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Exploration
Mining Concession
Mining Concession
Mining Concession
The Company’s wholly owned subsidiary, Southern Gold SpA has an option to acquire 100% of the Los Domos gold-
silver project. The Company is earning a 51% interest in the project through the drilling program of 2,000 metres.
As part of Los Domos gold-silver project, Terrane Mineral SpA has an option to acquire 100% of the Mining Concessions
from Patagonia Gold SC.
Mining interest in African countries
Concession
name
Location
Registered Holder
File Number /
Licence Type
Equus equity
interest
Concession
Type
Osenase
Ghana1
Osenase Prospecting Licence
Equus Mining 90%
Asamankese
Ghana1
Asamankese Prospecting Licence
Equus Mining 90%
Pramkese
Kwatechi
Ghana1
Ghana1
Pramkese Prospecting Licence
Equus Mining 90%
Kwatechi PL3/64 Prospecting Licence
Equus Mining 0%
N/A
N/A
N/A
7% 2
Exploration
Exploration
Exploration
Exploration
1 The governments of African countries in which the Company holds minerals interests are entitled to equity in mining
companies owning projects as follows – Ghana 10% and Guinea 15%. Equus’s quoted equity is after allowance for
that national interest, which occurs when a new project company is established prior to commencement of mining.
2 Perseus Mining Limited, the current holder of a 16% interest, has the right to earn a further 60% interest in the
Kwatechi property by funding the development of the project to profitable production. In that case, the Company
and a local joint venture partner will each retain a 7% interest which is convertible to a 1.25% net smelter royalty at
the option of those parties within 30 days of completion of a feasibility study.
59
2017 Annual Report www.equusmining.com
NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting of members is to be convened at Level 5, 56 Pitt Street,
Sydney, NSW, 2000 on 30 November 2017 at 2.30 pm Eastern Daylight Saving Time (EDST).
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 2017.
To consider and, if thought fit, pass the following resolutions, with or without amendment:
Resolution 1 Adoption of the Remuneration Report
To consider and, if thought fit, to pass with or without amendment, as an advisory resolution the following:
'That the Remuneration Report for the year ended 30 June 2017 be and is hereby adopted.'
Resolution 2
Re-election of Mr. Robert Yeates as a Director
To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:
'That Robert A. Yeates having retired in accordance with the Company’s Constitution and the Listing Rules, and being
eligible, offers himself for re-election, be re-elected as a Director of the Company with immediate effect.'
Resolution 3
Ratification of 43,487,309 Shares - Listing Rule 7.4
To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:
'That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, shareholders hereby ratify and approve the
issue and allotment of 43,487,309 fully paid ordinary shares issued under Listing Rule 7.1A on 27 March 2017, on the
terms and conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting.'
Resolution 4
Ratification of 64,549,828 Shares - Listing Rule 7.4
To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:
'That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, shareholders hereby ratify and approve the
issue and allotment of 64,549,828 fully paid ordinary shares issued under Listing Rule 7.1 on 27 October 2017, on the
terms and conditions set out in the Explanatory Memorandum accompanying this Notice of Meeting.'
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
Resolution 5 Approval of the Proposed Issue of Shares to Mark Lochtenberg
To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:
'That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of up to
4,054,054 Shares to a director, Mr Mark Lochtenberg and/or his nominee, on the terms and conditions set out in the
Explanatory Memorandum accompanying this Notice of Meeting.'
Resolution 6 Approval of the Proposed Issue of Shares to Robert Yeates
To consider and, if thought fit, to pass with or without amendment, as an ordinary resolution the following:
'That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, Shareholders approve the issue of up to
500,000 Shares to a director, Mr Robert Yeates and/or his nominee, on the terms and conditions set out in the
Explanatory Memorandum accompanying this Notice of Meeting.'
Resolution 7 Approval of 10% Placement Facility
To consider and, if thought fit, to pass with or without amendment, as a special resolution the following:
“That pursuant to and in accordance with Listing Rule 7.1A and for all other purposes, Shareholders approve the issue
of Equity Securities up to 10% of the issued capital of the Company (at the time of issue) on the terms and conditions
set out in the Explanatory Memorandum.”
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
30 October 2017
pjn9113
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 5, 56 Pitt Street, Sydney, NSW, on Thursday, 30
November 2017 at 2.30 pm 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 2017 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.
Resolution 1 Adoption of Remuneration Report
The Remuneration Report, which forms part of the Directors’ Report in the Company’s 2017 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.
Resolution 2
Re-election of Mr. Robert Yeates as a Director
In accordance with Article 3.6 of the Company’s Constitution and the Corporations Act, Robert Yeates who retires by
rotation and, being eligible, offers himself for re-election.
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 also 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 20 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 2014
he was also Project Director then CEO of Newcastle Coal Infrastructure Group, which has developed and is operating
coal export facilities in Newcastle.
Dr Yeates was until 2015 and for the prior ten years a director in ASX-listed Baralaba Coal Company Limited (formerly
Cockatoo Coal Limited), and since 2016 he has been a director of Watagan Mining Ltd.
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.
Resolution 3 to 4
Ratification of Prior Issue of Securities - Listing Rule 7.4
Resolution 3 to 4 seeks the approval of Shareholders of the prior issues of ordinary shares that have occurred in the
12 months prior to the date of this Notice that have not already been approved by Shareholders for the purposes of
Listing Rule 7.4.
Under Listing Rule 7.4, an issue of Securities under Listing Rule 7.1 and 7.1A will be treated as having been made
with the approval of Shareholders if the issue did not breach the Listing Rules and Shareholders subsequently
approve the issue of the Securities. The Company confirms that the issue of the Placement Shares did not breach
Listing Rule 7.1 and 7.1A.
The Company is now seeking Shareholders ratification for the purposes of ASX Listing Rules 7.4. 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:
By way of background, the Company has issued the following Shares under the Company’s 15% (LR 7.1) and 10% (LR
7.1A) placement capacity. All shares issued rank equally with all other existing Shares.
(a) As announced on 27 March 2017, pursuant to its then available listing rule 7.1A capacity, the Company issued
43,487,309 Shares at $0.012 per share to professional and sophisticated investors (none of whom were related
parties of the Company), the proceeds of which were used in the initial stage of the 2,000 metres drilling
program at Los Domos Gold-Silver project in Chile and for general working capital purposes.
(b) As announced on 27 October 2017, pursuant to its then available listing rule 7.1 capacity, the Company issued
64,549,828 Shares at $0.037 per share to professional and sophisticated investors (none of whom were related
parties of the Company), the proceeds of which will be used to promptly commence a planned minimum 7,500m
drilling program to test those high priority targets that could not be tested during the winter months;
extensional step out drilling both along strike and at depth of previously tested targets and for working capital
purposes.
Voting Exclusion Statement
The Company will disregard any votes cast on this Resolutions by a person who participated 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 Resolutions 3 and 4.
The Chairman of the Meeting intends to vote undirected proxies IN FAVOUR of Resolutions 3 and 4.
Resolution 5 to 6
Approval of Directors Participation in Tranche 2 Placement
Resolutions 5 and 6 seeks the approval by shareholders of the issue and allotment of 4,554,054 fully paid ordinary
shares in the Company 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 18 October 2017 and in conjunction with the placement as
announced to the asx on 27 October 2017, will provide funding to continue with the drilling program at the Los
Domos Gold-Silver project in Chile which started during the quarter ended 30 June 2017.
Shareholder approval is required in accordance with Listing Rule 10.11 and Section 228 of the Corporations Act
because Directors and former Directors of the Company that ceased to be directors in the last 6 months prior to this
notice of meeting are related parties. If approved, the shares are issue on the same terms and conditions as the
placement announced on 27 October 2017.
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:
4,554,054.
•
•
Issue price:
$0.037 per share.
Terms:
Fully paid ordinary shares ranking pari passu with existing ordinary shares.
• Names of allottees: Mark Lochtenberg or his nominee 4,054,054 ordinary shares; and
Robert Yeates or his nominee 500,000 ordinary shares.
•
•
Allotment date:
Within one month of the date of this Annual General Meeting.
Intended use of funds: To promptly commence a planned minimum 7,500m drilling program to test those
high priority targets that could not be tested during the winter months; extensional
step out drilling both along strike and at depth of previously tested targets and for
working capital purposes
Voting Exclusion Statement
The Company will disregard any votes cast on Resolutions 5 by Mark Lochtenberg or his nominee and Resolution 6
by Robert Yeates or his nominee 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 Resolutions 5 and 6.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolutions 5 and 6.
Resolution 7 Approval of 10% Placement Facility
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 7, 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) plus the number of fully paid ordinary shares issued in the 12 months under an exception in ASX Listing Rule
7.2;
(ii) 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 19,682,064. The Company’s current capacity to issue securities as at the date of the meeting pursuant to
listing rule 7.1 is 30,204,232.
(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)
the date on which the price at which the equity securities are to be issued is agreed; or
(ii)
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 7 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)
the issue price of equity securities being the current approximate market price of fully paid ordinary shares,
plus 50% and minus 50%; and
(ii) 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
631,693,736 shares
50% increase in current
Variable A
947,540,604 shares
100% increase in current
Variable A
1,263,387,472 shares
8.6%
63,169,374
Shares
12.3%
94,754,060
Shares
15.8%
126,338,747
shares
50% Decrease in
Current Approximate
Market Price
$0.021
Issue Price and
Funds Raised
Current
Approximate
Market Price
$0.042
50% Increase in
Current Approximate
Market Price
$0.063
$1,326,557
$2,653,114
$3,979,671
$1,989,835
$3,979,671
$5,969,506
$2,653,114
$5,306,227
$7,959,341
As an example, if Variable A is increased to 1,263,387,472 shares, the 10% Placement Facility capacity is 126,338,747
shares and therefore the dilution of existing shares as at the date of the AGM, being 739,730,873 shares, is calculated
as:
126,338,747 ÷ (739,730,873 + 126,338,747) = 14.58%
(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.
The Company obtained shareholder approval under ASX Listing Rule 7.1A at its 2016 Annual General Meeting. The
Company issued 204,857,779 ordinary fully paid shares during the 12 months preceding the date of this Annual General
Meeting which based on the number of Equity Securities on issue at the commencement of that period represents
38.30% of the Company’s Equity Securities.
Information relating to the issue of Equity Securities in the preceding 12 months is as follows:
Date of
Appendix
3B
Number of
Equity
Securities
Names of recipients
or basis on which
recipients were
determined
Class of
Equity
Securities
and
summary
of the
terms of
that class
Issue price
of Equity
Securities
and
discount to
closing
market
price on the
trading day
prior to the
issue
If issued for cash - the
total consideration,
what it was spent on
and the intended use
of any remaining funds
If issued for non-cash
consideration – a
description of the
consideration and the
current value of
consideration
27/3/2017
43,487,309 Fully paid
ordinary
shares
To professional and
sophisticated investors
who participated in
the placement the
subject of the
announcement dated
27/3/2017.
Issue Price
was $0.012
and the
closing price
on the
previous
trading day
was $0.013.
$521,848 was raised and
was used to fund a
2,000 metre drilling
program at the Los
Domos Gold-Silver
project and for working
capital purposes.
3/5/2017
89,846,024 Fully paid
ordinary
shares
Issue price
was $0.012
and closing
price on the
previous
trading day
was $0.014.
$1,078,152 was raised
and was used to fund a
2,000 metre drilling
program at the Los
Domos Gold-Silver
project and for working
capital purposes.
Pursuant to
shareholder approval
obtained on 28 April
2017, 83,846,024
shares were issued to
professional and
sophisticated investors
and 6,000,000 shares
to the Directors of the
Company who
participated in the
placement the subject
of the announcement
dated 3/5/2017.
20/9/2017
6,974,618
R&C Australia Pty Ltd.
Fully paid
ordinary
shares
Issue price
was $0.02
and closing
price on the
previous
trading day
was $0.042
27/10/2017
64,549,828 Fully paid
ordinary
shares
To professional and
sophisticated investors
who participated in
the placement the
subject of the
announcement dated
27/10/2017.
Issue price
was $0.037
and closing
price on the
previous
trading day
was $.040.
$139,492 was raised on
the exercise of
6,974,618 unlisted
options at $0.02 each.
The funds raised were
used to fund a 2,000
metre drilling program
at the Los Domos Gold-
Silver project and for
working capital
purposes.
$2,388,343 was raised
and the funds will be
used to promptly
commence a planned
minimum 7,500m drilling
program to test those
high priority targets that
could not be tested
during the winter
months; extensional step
out drilling both along
strike and at depth of
previously tested targets
and for working capital
purposes.
Voting Exclusion:
The Company will disregard any votes cast on Resolution 7 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 7.
The Chair of the Meeting intends to vote undirected proxies IN FAVOUR of Resolution 7.
FORM OF PROXY
Sub-Register
ISSUER
HIN/SRN
I/we . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
being a member/members of Equus Mining Limited HEREBY APPOINT
the Chair of the Meeting (mark box)
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 the individual or body corporate named, or if no individual or body corporate is named, the Chair of the meeting, as
my/our proxy to act generally at the Meeting on my/our behalf and to vote in accordance with the following directions (or if no
directions have been given, and to the extent permitted by law, as the proxy sees fit) at the Annual General Meeting of Equus Mining
Limited to be held at Level 5, 56 Pitt Street, Sydney, NSW, 2000 on Thursday 30 November 2017 at 2.30 pm (AEDT) and at any
adjournment or postponement of that Meeting.
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.
RESOLUTIONS
FOR
AGAINST
ABSTAIN
1. Adoption of the Remuneration Report
2. Re-election of Mr. Robert Yeates as a Director
3. Ratification of 43,487,309 Shares - Listing Rule 7.4
4. Ratification of 64,549,828 Shares- Listing Rule 7.4
5. Approval of the Proposed Issue of Shares to Mark Lochtenberg
6. Approval of the Proposed Issue of Shares to Robert Yeates
7. Approval of 10% Placement Facility
Signature of Securityholder(s) This section must be completed.
Dated this . . . . . . day of . . . . . . . . . . . . . . . . . . . . . . 2017
Signatures of Securityholder(s)
Individual or Securityholder 1
Securityholder 2
Securityholder 3
Sole Director and
Sole Company Secretary
Director
Director
PROXY INSTRUCTIONS
1. Appointment of a Proxy
If you wish to appoint the Chair of the Meeting as your proxy, mark the box. If the individual or body corporate you wish
to appoint as your proxy is someone other than the Chair of the Meeting please write the full name of that individual or
body corporate in the space provided. If you leave this section blank, or your named proxy does not attend the meeting,
the Chair of the Meeting will be your proxy. A proxy need not be a securityholder of the company.
2. Appointment of a Second Proxy
A member entitled to attend and vote and is entitled to appoint not more than 2 proxies to attend the meeting and vote
on a poll.
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.
A proxy need not be a member.
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:
3. Voting
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.
4.
Signing Instructions
All joint holders must sign.
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.
All executors of deceased estates must sign.
5. Persons entitle to attend and vote
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 28 November 2017 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.
6. 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.
•
•
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.