ABN 91 124 752 745
ANNUAL REPORT 2018
Corporate Directory
GBM Resources Limited (GBM or the Company)
ASX Code
GBZ and GBZO
Directors
Peter Thompson – Executive Chairman
Hun Seng Tan – Non-Executive Director
Neil Norris – Exploration Director – Executive
Company Secretary
Kevin Hart
Registered & Principal Office
Suite 8, 7 The Esplanade
Mt Pleasant WA 6153
Australia
Telephone: +61 8 9316 9100
+61 8 9 315 5475
Facsimile:
Exploration Office
10 Parker Street
Castlemaine Vic 3450
Australia
Telephone: +61 3 5470 5033
Postal Address
PO Box 658
Castlemaine Vic 3450
Website
www.gbmr.com.au
Auditor
HLB Mann Judd
Level 4, 130 Stirling Street
Perth WA 6000
Australia
Share Registry
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace
Perth WA 6000
Stock Exchange
ASX Limited
Level 40, Central Park
152-158 St Georges Terrace
Perth WA 6000
Australia
Solicitors
Steinepreis Paganin – Lawyers and Consultants
Level 4, The Read Buildings
16 Milligan Street
Perth WA 6000
Australia
GBM Resources Annual Report 2018
Page 2
CONTENTS
1. Chairman’s Report
2. Our Vision – Our Values
3. Highlights in 2018
4. Company Project Snapshot
5. Review of Operations
6.
Tenement Schedule
7. Annual Mineral Resource Statement
8.
Sustainable Development
9. Directors’ Report
10. Auditor’s Independence Declaration
11. Consolidated Statement of Profit or Loss and Other Comprehensive income
12. Consolidated Statement of Financial Position
13. Consolidated Statement of Changes in Equity
14. Consolidated Statement of Cash Flows
15. Notes to the Financial Statements
16. Directors’ Declaration
17.
Independent Auditor’s Report
18. ASX Additional Information
Contents
Page
4
5
6
7
8 - 16
17
18 - 21
22
23 - 30
31
32
33
34
35
36 - 63
64
65 - 68
69 - 70
GBM Resources Annual Report 2018
Page 3
Chairman’s Report
CHAIRMAN’S REPORT
Dear Fellow Shareholders
The focus of GBM Resources continues to be on the development of the Mt Coolon Gold Project
and extension of the known resources within the Company’s highly prospective tenement holding
in the Drummond Basin, Queensland.
Over the past year your Company has been successful in delivering on a number of key milestones for the Mt Coolon
Gold Project. It has also set in place a development strategy targeted to deliver its objective of short-term gold
production and cash flow generation.
Key events for the Mt Coolon Gold Project over the past year include:
Scoping Study completion. Confirmed robust development economics with an estimated pre-tax IRR of
48% and pre-tax NPV10% of A$37 million.
New exploration permit applications (EPMA 26914 and 26842) adjacent to the large Bimurra and Eugenia
epithermal gold systems. This further secures the exploration strategy underpinning GBM’s targeted
growth within this world class gold province.
The Queensland Department of Environment and Heritage Protection approved a variation to the
Environmental Authority covering the Koala and Glen Eva deposits. This variation allows for mining of
the Koala South and Central Pit and means the Koala deposit is effectively ready for mining start-up.
GBM signed an Ore Purchase Agreement with Minjar Gold to treat ore through the nearby Pajingo
processing facility from 2019. This delivers clear opportunity for a very low-capital entry to gold production
and cash flow generation for the Company.
Recent agreement to acquire the Twin Hills Gold Project from Minjar Gold. This acquisition delivers the
clear potential to rapidly double GBM’s existing resource base. Upon completion, we believe the
acquisition can further underwrite the development of the Mt Coolon Gold Project via the potential
contribution of high-margin satellite ore feed.
While equity markets remain challenging for gold project developers, the Company believes that the milestones
achieved over the past year greatly increase the opportunity for accelerated development of the Mt Coolon Gold
Project in the short term.
We have also delivered our seventh consecutive year with the outstanding performance of zero harm in safety and
environment. This is a credit to our people and an indication of the Company’s committed approach to operating
in a safe, sustainable, and socially and environmentally responsible manner.
On behalf of the Board, I would like to thank GBM shareholders and all of our employees and contractors who have
made this a successful year. We look forward to your continued support.
Yours sincerely
Peter Thompson
Executive Chairman
GBM Resources Annual Report 2018
Page 4
Our Vision – Our Values
OUR VISION
GBM Resources Limited is focused on delivering value to our shareholders through discovery,
acquisition and development of projects in key commodities of gold and copper in Australia.
OUR VALUES
We are committted to achieving our vision in a safe and responsible manner with the highest regard for the
environment and communiities in which we operate.
CORPORATE STRATEGY
To unlock the potential, GBM’s focus is on a number of key drivers for both short and long-term success:
Identify opportunities for early production and cashflow in deposits with potential for major resource growth.
Focus on discovery of world-class gold and copper-gold deposits.
Continue to consolidate and improve the quality of GBM's highly prospective tenement holdings.
Apply a mineral systems approach to exploration.
Operate safely and effectively.
Maximise in-ground exploration expenditure.
GBM Resources Annual Report 2018
Page 5
Highlights for 2018
HIGHLIGHTS FOR 2018
Sustainable Development;
Our excellent record continues of zero LTI’s and environmental incidents this year – this is the seventh
year that GBM has achieved zero harm.
This is a credit to our people and an indication of the Company’s stringent and high safety and
environment standards.
Mount Coolon Gold Project, QLD
o
o
o
o
Completion of the Mt Coolon Scoping Study (MCSS) which demonstrates the potential economic
viability of mining the Koala, Glen Eva and Eugenia resources using a combination of Heap
Leaching and CIL processing. The MCSS forecasts strong cashflow and returns (48% IRR and
A$37M NPV10%)
Updated mineral resource estimates for the Koala, Glen Eva and Eugenia gold deposits, with
over 56% classified in the measured and indicated categories.
GBM entered into an ore sale and purchase agreement with Minjar Gold Limited which allows
for mining of the existing Mt Coolon gold deposits and transport to the Pajingo Gold Operations
for processing, allowing for potential accelerated gold production and cash flow.
Heads of Agreement signed with Minjar Gold Limited in respect of the proposed acquisition of
a 100% interest in the Twin Hills gold deposit by GBM. Completion of a formal agreement was
executed in September 2018.
Pan Pacific Copper Co Ltd – IOCG Joint Venture
o
o
Pan Pacific Copper Co Ltd committed to a $478,000 budget for the 12 month period to 31 March
2019.
Induced Polarisation and gravity geophysical surveys undertaken on the project with the
resulting targeted diamond drilling commencing in August 2018.
Mt Morgan Copper-Gold Project
o
Mapping and geochemical sampling undertaken at the Mt Usher gold prospect defining a
continuous fault with sulphide alteration and lode quartz corridor over a 5km length and 500
metre width.
GBM Resources Annual Report 2018
Page 6
Company Snapshot
COMPANY SNAPSHOT
Diversified portfolio of tenements – located in world-class gold and copper regions in Australia
Mayfield
100% wholly-owned
Project area 172km2
Commodity: IOCG
VICTORIA
Malmsbury
100% wholly-owned
Project area: 6.7km2
Resources: containing 104,000 ozs gold
Yea
100% wholly-owned
Project area: 86km2
Resources: IRGS
GBM PROJECT LOCATIONS
QUEENSLAND
Mount Coolon Gold Mines
100% wholly-owned
Project area: 770km2
Commodity: Epithermal and IRGS Gold
Resources: Totaling 330,500 ounces of gold
Mount Morgan
100% wholly-owned
Project area 1420km,
Commodity: Gola and Copper-Gold Porphyry
Brightlands
100%wholly-owned
Project area: 143 km2
Commodity: Defined Cu-U-Mo-REE-P
Resource: containing 108,000 t TREEYO, 97,000t Cu 14 M
lbs U3O8
Pan Pacific Copper Joint Venture Projects
Project area: 531km2
Commodity: IOCG
GBM Resources Annual Report 2018
Page 7
Review of Operations
REVIEW OF OPERATIONS
GBM’s vision and our exploration efforts are focussed on developing and expanding our known
resource and securing tenements and projects that improve the quality and potential of our
highly prospective tenement holdings in Queensland and Victoria, Australia.
The Company remains strongly focused on delivery of shareholder value through discovery,
acquisition and development in its key commodities.
GBM has been successful in sourcing additional funding via both joint venture and capital raising activities which
has allowed the Company to maintain active exploration programs on its prospective tenements, particular on its
flagship project, Mount Coolon Gold Project.
GBM tenements cover an area greater than 2,600 square kilometres in seven major project areas in Queensland
and Victoria.
Figures; Left, Location of GBM Gold and Copper projects in Queensland. Right, location of gold deposits, Drummond Basin and
GBM Gold Projects in Queensland.
Exploration activity during the year was focused on developing the known resources at Mount Coolon Gold Project
three main deposits being the Koala, Glen Eva and Eugenia to support options for near-term development.
The Company continues to review and develop an exploration strategy to extend the current resource base in the
Mount Coolon area with the objective of building resources in excess of 1 million ounces of gold.
Total exploration expenditure on the Company’s tenements for 2018 was approximately A$2.5 million compared
to a total of A$2.9 million in the 2017 year.
GBM plans to step up activities in the 2019 financial year with a focus of bringing the Mount Coolon Gold Project
into gold production.
GBM Resources Annual Report 2018
Page 8
Review of Operations
MOUNT COOLON GOLD PROJECT (100% OWNED GBM)
The Company holds a 100% interest in the Project which lies in the Drummond Basin, one of Queensland’s most
prolific gold province. The Drummond Basin is an established gold mining region which has proven fertile for
discovery of epithermal and intrusive relation gold systems. The Basin’s past production of more than 4.5 million
ounces of gold and has a total known gold endowment in excess of 7.5 million ounces of gold.
Mineralisation in the Drummond Basin is typified by epithermal style precious metal Deposits. Examples include
Pajingo (3.0 Moz), Wirralie (1.1 Moz), Yandan (0.6 Moz) and Koala. Epithermal mineralisation is typified by very
fine-grained gold, sometimes occurring in electrum, in quartz veins and or breccias. These Deposits are variously
interpreted to have formed in locally extensional jogs or bends of transform fault systems.
The Project is located 250 km to the West of Mackay in North Queensland, the tenement package covers a total
area of over 1,000km2 and holds potential for further significant discoveries.
Mount Coolon Scoping Study
During the year GBM announced the outcome of the Mount Coolon Scoping Study (MCSS). The MCSS demonstrates
that the redevelopment of the Mount Coolon Gold Project (MCGP) with its current resources has the potential to
generate a strong positive cash flow (refer to the full ASX release on 4 December 2017 for the MCSS).
Key Results of the MCSS are:
Scoping Study demonstrates the current potential economic viability of mining the Koala, Glen Eva and Eugenia
resources using a combination of Heap Leaching and CIL processing.
LOM Highlights Summary:
Au Produced
Pre-Tax Cash Flow
Production Life
Pre-production and CIL/HL Plant Capital
Operating Cash Cost (C1)
AISC Cost (all-in-sustaining)
Oz
A$M
Years
A$M
A$/oz
A$/oz
155,000
60.5
5.5
25.2
909
1,020
72% of Au produced is from Indicated Resources based on updated mineral resources estimates for the Koala,
Glen Eva and Eugenia Deposits.
The resource areas remain open and are expected to hold high potential to extend mine life.
Scoping Study completed by Independent Consultants, Mining One Pty Ltd with input from GBM and external
consultants.
Koala and Glen Eva deposits are on granted mining leases.
The Directors of GBM consider that the MCSS, which is based on an accuracy of +/- 30%, has successfully
demonstrated that the MCGM has the potential to add significant economic value to the Group’s assets. The MCSS
has outlined the potential and preferred mining and treatments plans and capital/operating costs which support
the proposed MCGP production plans. The demonstrated economic value of the MCSS also gives a bench mark for
potential joint venture parties.
While the redevelopment of MCGP is on a small scale the MCSS shows it has strong cash flows, supports its capital
investment, risk is manageable and has low cash costs per ounce, and can move the Company forward from an
explorer to a gold producer.
GBM Resources Annual Report 2018
Page 9
Review of Operations
The redevelopment of MCGP has significant advantage over a number of other small producing gold projects due
to its various production options which gives it flexibility in achieving its funding support.
Production Options include:
Achieving full funding support of A$30million to redevelop the three deposits with CIL and heap leach
processing; or
Develop the MCGP by staged development commencing with the Koala and Glen Eva deposits through a CIL
Plant which will require funding of A$20Million; or
Develop the Eugenia Heap Leach deposit which will require funding of A$10 million; or
Mine the Koala and Glen Eva deposits and Toll Treat or sell the ore to 3rd parties in the district. Funding required
is estimated at A$5 million.
Figure: Resources, exploration targets and tenement locations in the Mount Coolon Gold Project.
Mt Coolon Mineral Resources
Project Location
Resource Category
Total
Cut-off
Measured
Indicated
Inferred
000' t
Au g/t Au ozs
000' t Au g/t
Au ozs
000' t Au g/t Au ozs
000' t Au g/t
Au ozs
Koala
Open Pit
Underground Extension
Tailings
Total
114
114
1.6
1.7
6,200
6,200
Eugenia Oxide
Sulphide
Total
Glen Eva Open Pit
Total
114
0.0
6,200
670
50
9
729
885
905
1,790
1,070
3,590
2.6
3.2
1.6
2.6
1.1
1.2
1.1
1.6
1.6
55,100
440
1.9
26,700
1,120
5,300
260
4
34,400
320
124
400
60,800
32,400
700
597
33,500
1,042
65,900
1,639
55,200
580
181,900
2,919
2.7
1.0
1.2
1.1
1.2
1.5
61,100
1,563
19,300
1,482
38,900
1,947
58,200
3,430
23,100
1,660
142,400
6,653
2.3
3.9
1.6
2.5
1.1
1.2
1.1
1.5
1.5
81,800
39,700
6,600
128,100
51,700
72,400
124,100
0.4
2.0
1
0.4
0.4
78,300
0.4
330,500
Table: November 2017 Resource Summary for the MCGP. Please note rounding (1,000’s tonnes, 100’s ounces, 0.1 g/t) may
cause minor variations to totals. For full details please refer to ASX release dated the 4th of December 2017.
GBM Resources Annual Report 2018
Page 10
Review of Operations
Ore Sale and Purchase Agreement
During the year GBM entered into an Ore Sale and Purchase Agreement (OSPA) with Minjar Gold Limited (Minjar).
The OSPA envisages Mt Coolon ore being mined by GBM and then trucked to the Pajingo Gold Operations (Pajingo)
for processing by Minjar. This agreement provides GBM with an opportunity to achieve accelerated gold production
and cashflow coupled with a considerably lower upfront capital requirement. It also provides a staged approach to
development of Mt Coolon that could enable full-scale development of the three existing deposits alongside a stand-
alone CIL plant and heap leach processing facility on site (refer ASX announcement 18 July 2018).
Key terms of the OSPA are as follows:
i.
GBM will be responsible for the pre-development, mining and haulage of Mt Coolon ore to the Pajingo plant.
Minjar will be responsible for processing the ore and plant sustaining capital.
ii.
Ore deliveries are targeted to commence from the June 2019 quarter.
The initial term is two years.
iii.
iv.
v. Mining is scheduled from the Glen Eva pit, which has been modelled and designed for the OSPA economics.
GBM receives attributable free cash flow equating to approximately 58.5% of contained gold.
vi.
Other terms regarding delivery, title and risk, production reconciliation and quality which are typical for this
type of arrangement.
The next step under the OSPA is finalisation of the detailed mining and milling schedule for Mt Coolon ore sales.
Twin Hills Acquisition
GBM signed a Heads of Agreement (HoA) with Minjar on 22 December 2017 to acquire a 100% interest in the nearby
Twin Hills deposit (refer ASX releases dated 22 December 2017, 28 February 2018 and 3 April 2018).
A binding Sale and Purchase Agreement was signed with Minjar Gold Pty Ltd in September 2018.
Key terms of the Sale and Purchase Agreement include:
I.
II.
Acquisition cost is A$1.5 million on a partially deferred settlement basis.
Twin Hills acquisition further underwrites the economic potential of the Mt Coolon Gold Project, potentially
doubling its resource base and adding significant exploration potential.
GBM considers that the inclusion of Twin Hills has the potential to increase the global resource for Mt Coolon. The
Company sees excellent potential for Twin Hills to contribute high margin satellite ore feed to any stand-alone
development at Mt Coolon. This dynamic also increases the range of potential funding and investment opportunities
for a stand-alone development of Mt Coolon. GBM achieving requisite funding remains a key condition of both the
OSPA and Twin Hills Acquisition.
For further details see GBM resources ASX announcement of 22 December 2017.
Exploration
Exploration during the year has resulted in targeting new areas for epithermal and porphyry style gold targets in
the region. Two new exploration permits EPM26842 ‘Bungonunna’ and EPM26314 ‘Black Creek’ were lodged
during the year.
Further compilation and review of previous exploration data continues to enhance the prospectivity of the Mount
Coolon Gold Project area. Many highly prospective targets remain underexplored within the identified
mineralization corridors hosted within the project area.
GBM Resources Annual Report 2018
Page 11
Review of Operations
Figure: Resources, exploration targets and tenement locations in the Mount Coolon Gold Project.
GBM Resources Annual Report 2018
Page 12
Review of Operations
PAN PACIFIC COPPER CO.,Ltd JOINT VENTURE – Iron Oxide Copper Gold ( IOCG) Style
Projects in
The Mount ISA Region (GBM 47.8% Interest)
GBM is the manager of the Joint Venture and retains a free carried interest of 10% through to completion of a
bankable feasibility study. These projects are part of a Farm-In JV arrangement with Pan Pacific Copper and have
an approved budget of $478,000 and work program to conduct further geophysical surveys and drill test both
features during the 2018 field season. Drilling commenced during August 2018.
Processing of new gravity data for the Tommy Creek and FC-2 Prospects was completed during the year using new
data collected during the second half of 2017 when GBM completed ground-based gravity programs at Tommy
Creek and FC2 prospects. These prospects are located approximately 20 km north-west of the Ernest Henry IOCG
Cu-Au mine in the Mt Isa Eastern Succession. Both are concealed below 50-100m of cover sediments and express
coincident high magnetic and gravity response typical of many IOCG systems, and of a scale and intensity similar to
Ernest Henry (2.4 Mt Cu, 3.5Mozs Au). Data collected during these surveys has been digitally modelled and the
results are outlined below (refer ASX announcement 30 April 2018).
Figure: Snapshot of Tommy Creek 3D inversion. 3D shells are derived from the Point model, 2D contours are a slice through the
3D grid model showing the similarity between models in the region of the main anomaly. Proposed drill hole TCk_Prop01
shown intersecting strongest lobe of anomaly.
Figure: FC2 new gravity inversion; vertical slice looking NW through grid model (blue shells) with magnetic shells (orange) and latest
3DIP chargeability inversion shells (yellow to pink). MMA010 shown intersecting south end of gravity anomaly with Cu down hole.
GBM Resources Annual Report 2018
Page 13
Review of Operations
Figure: Tenement locations within the North West Mineral Province.
MOUNT MORGAN PROJECT, QUEENSLAND (100% OWNED GBM)
Porphyry Copper-Gold
The Mount Morgan Project is adjacent to the world-class Mount Morgan Gold Mine which has
produced over 8 million ounces of gold and 400,000 tonnes of copper as is one of the largest
known porphyry copper systems in Eastern Australia.
The tenement package which is located approximately 250kms to the West of Mackay in North Queensland
incorporates 11 granted leases covering a total area of approximate 520km2 and holds highly prospective
tenements including the Smelter Return and Limonite Hill prospects, other buried targets within the Sandy Creek
and Oakey Creek prospects, and the Mt Gordon porphyry system. EPM25362 Bajool, was sold during August.
GBM Resources Annual Report 2018
Page 14
Review of Operations
Mt Usher Gold Project
During the year, GBM undertook an initial program of surface mapping, rock-chip sampling and airborne drone
topographic-imagery surveying at the Mt Usher prospect. A review of historical mine references and modern
exploration was also completed. Mapping has defined for the first time a continuous fault, sulphide alteration and
lode quartz corridor of at least 5 km in strike length and 500 m wide enclosing the Mt Usher mine and numerous
lesser production centres including the Anglo Saxon, Caledonian and Victor mines. This fault zone is hosted by mixed
Devonian volcanic and sedimentary rocks at the eastern and western ends and by magnetic diorite or tonalite in
the central zone. Gold mineralisation has developed in all rock types within the corridor.
GBM believes the Mt Usher fault corridor is highly prospective for near surface, high-grade vein-hosted, epithermal
gold-silver mineralisation and that evidence is mounting for the existence of a deeper, large tonnage, high-grade
Mt Morgan analogue within the prospect area. It seems remarkable given the extensive modern exploration effort
to find another Mt Morgan that such limited attention has been paid to the second biggest producer, Mt Usher.
GBM Resources Annual Report 2018
Page 15
Review of Operations
MALMSBURY PROJECT, VICTORIA (100% OWNED GBM)
Intrusive Related Gold
The Malmsbury Project is located in the same region as the large, high grade Fosterville Gold
Mine. The Malmsbury Project has a known gold resource containing 104,000 ounces of gold at
an average grade of 4 g/t Au. The project has high order exploration targets with previous mining
to shallow depths that remain to be tested with modern exploration.
The Project is now covered by a single retention licence application RL6587(EL4515 was relinquished on 29 June
2018). This area hosts an inferred resource estimated to contain 104,000 ounces of gold and a further 91,000 ounces
from historical production. Drilling by GBM has demonstrated that the characteristics of an IRGS persist to at least
1km depth in the project area. Reviews of structural and mineralogical characteristics of the mineralisation have
confirmed a number of key similarities with the large, high grade Fosterville Gold Mine which has produced over 1.5
million ounces of gold and has current published reserves and resources containing 4.8Mozs as is one of the largest
known gold systems in Eastern Australia. In addition, recently discovered mineralisation is among the highest grade
resources in the world today. The current resource at Malmsbury is hosted within a 450m section of a single
structure within the Drummond Goldfield which has an identified strike length in excess of 4 kilometres. The
resource remains open at depth and along strike.
YEA PROJECT, VICTORIA (100% OWNED GBM)
Intrusive Related Tungsten, Molybdenum and Gold
Monkey Gully Prospect was acquired by GBM as a possible IRGS with significant evidence of
Tungsten and Molybdenum mineralisation representing the upper levels of an IRGS system.
Previous drilling by GBM intersected 17 metres averaging 0.19% W2O3 and 262 ppm Mo from 101 metres downhole,
including 8 metres averaging 0.34% W2O3 and 493ppm Mo. Review of previous exploration data has also highlighted
a number of significant geochemical and geophysical anomalies which represent targets for future exploration.
Two target styles have been proposed at Monkey Gully; a near surface target of multiple close-spaced dykes and
dyke contacts and a deeper mineralised carapace over the tonalite source intrusion. Given the size of the central
magnetic high (2 kilometre x 0.8 kilometre) and the modelled association with a mineralised tonalite carapace,
the deep target has significant exploration potential for a large-tonnage W-Mo +- Au IRGS deposit.
Figure: Major goldfields and structural domains in Victoria showing the location of the Malmsbury Au Project and Yea W,Mo,Au
Project.
GBM Resources Annual Report 2018
Page 16
Tenement Schedule
GBM’S TENEMENT SCHEDULE
Project / Name
Tenement No.
Owner
Manager
Interest
Status
Granted
Approx Area
(km2)
sub-blocks
Victoria
Malmsbury
Drummond (?)
Yea
Monkey Gully
Queensland
Mount Morgan (Project Status)
Dee Range
Boulder Creek
Black Range
Smelter Return
Limonite Hill
Mt Hoopbound
Limonite Hill East
Mt Victoria
Bajool
Mountain Maid
Moonmera
M+L26+A26:D26+A26:N26
Mount Isa Region
Mount Margaret (Project Status)
Mt Malakoff Ext
Cotswold
Dry Creek
Dry Creek Ext
Mt Marge
Corella
Tommy Creek
Brightlands
Brightlands
Brightlands West Ext.
Bungalien
Bungalien 2
The Brothers
Mayfield
Mayfield
Mt Coolon
Mt Coolon
Mt Coolon North
Mt Coolon East
Conway
Bungonunna
Black Creek
Koala 1
Koala Camp
Koala Plant
Glen Eva
RL6587
GBMR*1/Belltopper Hill
GBMR
100%
Application
EL5293
GBMR
GBMR
100%
Granted
23-Mar-11
EPM16057
EPM17105
EPM17734
EPM18366
EPM18811
EPM18812
EPM19288
EPM25177
EPM25362
EPM25678
EPM19849
ML100184
EPM16398
EPM16622
EPM18172
EPM18174
EPM19834
EPM25545
EPM25544
EPM14416
EPM18672
EPM18207
EPM25213
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR*3
GBMR
GBMR*2 /Isa Tenements
GBMR*2 /Isa Tenements
GBMR*2/Isa Tenements
GBMR*2/Isa Tenements
GBMR/Isa Tenements
GBMR/Isa Tenements
GBMR/Isa Tenements
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR*2/Isa Brightlands
GBMR/Isa Brightlands
GBMR
GBMR
GBMR*2/Isa Tenements
GBMR/Isa Tenements
GBMR
GBMR
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Granted
Granted
Granted (RA)
Granted
Granted
Granted
Granted
Granted
Granted
Granted (RA)
Granted
Application
Granted
Granted
Granted
Granted
Granted (RA)
Granted
Granted
Granted
Granted
Granted
Granted
27-Sep-07
26-Mar-08
20-May-09
21-Jun-12
21-Nov-12
26-Jul-12
31-Oct-13
26-Aug-14
27-Nov-14
09-Apr-15
12-Apr-13
19-Oct-10
30-Nov-12
13-Jul-12
25-Oct-11
04-Mar-13
20-Mar-15
11-Nov-14
5-Aug-05
16-Jun-16
24-May-12
16-Oct-14
EPM19483
GBMR*2,/Isa Tenements GBMR
100%
Granted
11-Mar-14
EPM15902
EPM25365
EPM25850
EPM7259
EPM26842
EPM26314
ML 1029
ML 1085
ML 1086
ML 10227
GBMR/MCGM
GBMR/MCGM
GBMR/MCGM
GBMR/MCGM
GBMR/MCGM
GBMR/MCGM
GBMR/MCGM
GBMR/MCGM
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
GBMR
100%
100%
100%
100%
100%
100%
100%
100%
Granted
Granted
Granted
Granted
Application
Application
Granted
Granted
Granted
Granted
13-Jun-08
18-Sep-14
07-Sep-15
18-May-90
30-May-74
27-Jan-94
27-Jan-94
05-Dec-96
TOTALS
Note
* 1 subject to a 2.5% net smelter royalty to vendors.
* 2 subject to a 2% net smelter royalty is payable to Newcrest Mining Ltd. On all or part of the tenement area.
* 3 subject to 1% smelter royaly and other conditions to Rio Tinto; transfer documents with Department
Figure: GBM Tenements summary table. (RA- renewal application lodged).
6.7
86
36
88
72
62
111
23
13
3
88
26
16
6
85
16
189
23
3
46
33
127
16
120
10
172
325
146
260
39
325
325
0.7
0.0
1.0
1.3
2897
86
11
27
22
19
34
7
4
1
27
8
5
2
26
5
58
7
1
14
10
39
5
37
3
53
100
45
80
12
100
100
GBM Resources Annual Report 2018
Page 17
Mineral Resources Statement
2018 Annual Mineral Resources Statement
The following Annual Statement of Mineral Resources statement reflects the Company’s mineral resources
(including wholly owned subsidiary companies) as at the 30th of June 2018.
For the purpose of preparing this Annual Statement of Mineral resources as at 30th of June 2018, GBM has
completed a review of each resource taking into account long term metal price, foreign exchange rates, cost
assumptions based on current industry conditions, any changes that may affect the capability for these resources
to be exploited or which may result in material changes to cut-off grades and physical mining parameters. It should
be emphasised that this is a summary only and for further detail the reader is referred to the respective ASX
releases.
In relation to commodities key to GBM’s resource base the company holds the following views;
Operating costs in the industry have recovered somewhat in the last 12 months but still remain at levels lower
than at the end of the commodities boom. In particular the availability and cost of labour, fuel and mining
equipment remain at reduced levels.
Gold price finished the year around US$1250 after trading in a range between US$1220 and US$1350. Forecasts
appear to be variable in the last 12 months with most forecasting the price to hold at least in the short to
medium term. Importantly for GBM, the long term upward trend which has continued since 2006 in AUD gold
prices appears to be continuing.
Commentators continue to forecast copper to enter a period of production shortfall in the long term putting
upward pressure on prices.
The REE market remains complex, however REE demand continues to grow and prices for almost all REE appears
to have stabilised with those REE metals deemed as critical experiencing increases during the last twelve
months. Uncertainty over the level of REE production sourced from illegal mining in China continues to support
forecasts of a resultant supply shortage and price increases in the critical REE elements, particularly Neodymium,
in the medium to longer term.
The continued decline of the Australian dollar in relation to the US dollar is, in conjunction with recovering metal
prices resulting in significant improvement in the outlook for Australian ore deposits.
The company believes that, considering the outlook for commodity prices there is a reasonable expectation that
resources at all projects will eventually support mining operations.
GBM Resources Annual Report 2018
Page 18
Mineral Resources Statement
Mount Coolon Gold Project Resources
The Mount Coolon Project is located in the Drummond Basin in Queensland. Tenements and resources are
owned by 100% owned subsidiary, Mount Coolon Gold Mines Pty. Ltd.
Project Location
Resource Category
Total
Cut-off
Measured
Indicated
Inferred
000' t
Au g/t Au ozs
000' t Au g/t
Au ozs
000' t Au g/t Au ozs
000' t Au g/t
Au ozs
Koala
Open Pit
Underground Extension
Tailings
Total
114
114
1.6
1.7
6,200
6,200
Eugenia Oxide
Sulphide
Total
Glen Eva Open Pit
Total
114
0.0
6,200
670
50
9
729
885
905
1,790
1,070
3,590
2.6
3.2
1.6
2.6
1.1
1.2
1.1
1.6
1.6
55,100
440
1.9
26,700
1,120
5,300
260
4
34,400
320
124
400
60,800
32,400
700
597
33,500
1,042
65,900
1,639
55,200
580
181,900
2,919
2.7
1.0
1.2
1.1
1.2
1.5
61,100
1,563
19,300
1,482
38,900
1,947
58,200
3,430
23,100
1,660
142,400
6,653
2.3
3.9
1.6
2.5
1.1
1.2
1.1
1.5
1.5
81,800
39,700
6,600
128,100
51,700
72,400
124,100
0.4
2.0
1
0.4
0.4
78,300
0.4
330,500
Table: November 2017 Resource Summary for the MCGP. Please note rounding (1,000’s tonnes, 100’s ounces, 0.1 g/t) may
cause minor variations to totals. For full details please refer to ASX release dated the 4th of December 2017.
Details relating to changes in the Mount Coolon resources since the last Annual Statement of Mineral Resources
are contained in the ASX announcement on the 4 December 2017.
The overall change from the Annual Statement of Mineral Resources at June 30th 2017 (refer 2017 Annual Report)
is a net decrease 9% in overall tonnage, but only 4% in contained gold with a minor increase in grade. The key
reasons for these re-estimations were further drilling and location of additional QA/QC data at Koala and Glen Eva
Deposits and a revised interpretation of mineralisation at Eugenia which resulted in a modest increase in grade and
decrease in tonnage at this deposit.
The Koala Resource estimate has been updated reflecting increased confidence in the area adjacent to the
underground mine workings largely exploited during the 1930’s. This is based on data from drilling completed by
GBM during 2017 (please refer to ASX release April 27th 2017) and also improved survey information including a
high resolution, survey controlled LIDAR survey flown by the company. (LIDAR, Light Detection and Ranging, a
surveying method that measures distance to a target by illuminating that target with a pulsed laser light, and
measuring the reflected pulses with a sensor). The overall net change is an increase of 2% in contained gold and a
3% increase in overall tonnage.
The Glen Eva resource estimate has been updated to reflect a lower cut-off grade for open pit mining and improved
survey control. The net change to the previous published resource is a significant increase in tonnage and contained
gold at a lower grade reflecting the lower cut-off grade used. However, when compared to the previous resource
at the same cut-off grade there is negligible difference.
The new resource estimate for Eugenia contains approximately 18% less ounces than the previous estimate
resulting from a tighter geological interpretation. The only new data since the previous resource estimate is a
survey controlled high resolution LIDAR digital terrain model.
The information in this report that relates to Koala and Glen Eva Mineral Resources is based on information compiled
by Kerrin Allwood, who is a Member of The Australasian Institute of Mining and Metallurgy and The Australasian
Institute of Geoscientists. Refer ASX announcement dated 4 December 2017.
The information in this report that relates to the Eugenia Mineral Resource is based on information compiled by
Scott McManus, who is a Member of The Australasian Institute of Mining and Metallurgy and The Australasian
Institute of Geoscientists. Refer ASX announcement dated 4 December 2017.
GBM Resources Annual Report 2018
Page 19
Mineral Resources Statement
Malmsbury Gold Project Resources
The Malmsbury Gold Project is located in Victoria. For original release refer to ASX release dated 19th of January
2009 (CP K Allwood).
Resource
Tonnes
Au
Classification
(g/t)
Au
(ozs)
Inferred
820,000
4.0
104,000
There has been no change in the resource for the Malmsbury Project from the previous year.
The information in this report that relates to Malmsbury Mineral Resource is based on information compiled by
Kerrin Allwood, who is a Member of The Australasian Institute of Mining and Metallurgy and The Australasian
Institute of Geoscientists.
Milo IOCG Project Resources
Details of the Milo resources can be located in ASX release dated 22nd of November 2012 (CP K. Allwood).
Milo - TREEYO Inferred Resource
tonnes
TREEYO
(ppm, t)
P2O5
(%, t)
(Mt)
LREEO
La2O3
Others
Er2O3
Dy2O3
CeO2
Y2O3
Gd2O3
Eu2O3
Sm2O3
Pr2O3
Nd2O3
(ppm, t)
(ppm, t)
(ppm, t)
(ppm, t)
(ppm, t)
(ppm, t)
(ppm, t)
(ppm, t)
(ppm, t)
(ppm, t)
HREEY
(ppm, t)
cutoff
(TREEYO
ppm)
Grades
300
176
620
0.75
260
150
80
24
12
4
10
52
8
5
9
Contained Metal
108,000
1,330,000
46,140
26,460
13,850
4,230
2,170
710
1,780
9,150
1,480
850
1,620
There has been no change to the Milo TREEYO resource estimate during the current reporting year.
Milo - Copper Equivalent Resource
Resource
Classification
cutoff
(CuEQ %)
tonnes
CuEQ
(%, t)
(Mt)
Au
Cu
Ag
Mo
Co
( ppm,
ozs)
(ppm, t)
( ppm,
ozs)
(ppm/ t)
(ppm/t)
U3O8
(ppm/
Mlbs)
Inferred
0.10
88.4
0.34
0.04
1090
1.63
65
130
72
Contained Metal
301,000
126,000
96,500
4,638,000
5,700
11,700
14.0
There has been no change to the copper equivalent resource estimate during the current reporting year.
The information in this report that relates to the Milo Mineral Resources is based on information compiled by Kerrin
Allwood, who is a Member of The Australasian Institute of Mining and Metallurgy and The Australasian Institute of
Geoscientists.
GBM Resources Annual Report 2018
Page 20
Mineral Resources Statement
Explanatory Notes
* Copper Equivalent calculation represents the total metal value for each metal, multiplied by the conversion factor,
summed and expressed in equivalent copper percentage. These results are exploration results only and no allowance
is made for recovery losses that may occur should mining eventually result. However, it is the company’s opinion
that elements considered here have a reasonable potential to be recovered. It should also be noted that current
state and federal legislation may impact any potential future extraction of Uranium. Prices and conversion factors
used are summarised below, rounding errors may occur.
Commodity
Price
Units
unit value
unit
Conversion factor
(unit value/Cu % value)
copper
gold
cobalt
silver
uranium
molybdenum
6836
1212
40000
18
40
38000
US$/t
US$/oz
US$/t
$/oz
US$/lb
US$/t
68.36 US$/%
38.97 US$/ppm
0.04 US$/ppm
0.58 US$/ppm
0.08 US$/ppm
0.04 US$/ppm
1.0000
0.5700
0.0006
0.0085
0.0012
0.0006
The information in this Annual Mineral Resources Statement is based on and fairly represents information and
supporting documentation prepared by the competent persons named in the relevant sections of this report.
The information in this Annual Mineral Resources Statement as a whole that relates to Mineral Resources is based
on information compiled by Neil Norris, who is a Member of The Australasian Institute of Mining and Metallurgy.
Mr Norris is a holder of shares and options in the company and is a full-time employee of the company. Mr Norris
has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and
to the activity 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 Norris consents
to the inclusion in the report of the matters based on his information in the form and context in which it appears.
GBM Resources Annual Report 2018
Page 21
Sustainable Development
Sustainable Development
GBM’s remain committed to providing a safe and healthy work environment for all of its employees, contractors,
consultants and visitors at all sites. Our aim is to operate in a safe and environmentally responsible manner
meeting industry’s highest standards. The Board, Management and Staff of GBM support and promote the
Company’s Core Values (see page 2) in all endeavours.
We are committed to upholding the company key values which include developing strong and lasting relationships
with our employees, and with the communities in which we operate. The company is committed to maintaining
regular and open communication with the landholders and stakeholders in the areas we operate. GBM’s strong
commitment to safety ensures that all employees, including employees of contractors, suppliers and consultants,
are fully instructed, trained and assessed in their activities by providing the facilities, equipment, tools, procedures,
safety programs and training for employees to carry out their assigned tasks in a safe and appropriate manner.
Safety
Protection of the environment and the health and safety of its people remain at the core of GBM’s culture. The
company manages risk through the identification, elimination, monitoring and control of hazards, by implementing
procedures accordingly, whilst reviewing performance on a daily basis. GBM seeks continuous improvement in
safety and health performance by maintaining best practice procedures and taking into account evolving knowledge
and technology. GBM recognises the importance of communication and consultation with all staff and stakeholders
to foster a culture of commitment to health, safety and the environment by promoting healthy lifestyles through
appropriate awareness and training programs.
GBM continued to demonstrate excellent results of zero LTI’s, MTI’s and Environmental Incidents, the Company’s
will strive to maintain and improve these high Safety and Environment standards.
Community & Environment
GBM Resources is committed to monitoring and managing the environmental impacts of our activities to secure a
sustainable environmental future for communities surrounding our sites.
GBM continually strives to improve its environmental performance and complies with the environmental laws and
regulations as a minimum standard. GBM -proactively manages and assesses environmental risks on a site-specific
basis to achieve planned environmental outcomes.
GBM informs and consults with the community about its activities and projects on a regular basis. As part of GBM’s
involvement with community, the company supported Writing and Illustration workshops at the Cloncurry Primary
school. This was part of a programme of workshops conducted by the Children’s Charity Network.
During 2018 FY, GBM continued monitoring rehabilitation performance on the disturbed areas around the Mount
Coolon Gold Mine sites of Koala and Glen Eva. Preliminary results from the initial two surveys confirms that
rehabilitation completed by previous operators has been largely successful, however some areas will require
further remedial action and a rehabilitation strategy is being developed to ensure this is completed to the highest
standards. The company will continue to monitor this and to undertake minor remediation and additional
rehabilitation on areas where these surveys identify it is
necessary.
Statistics / Achievements:
• No lost time injuries were sustained during the
2017/18 field season.
• No medically treated injuries were sustained
during operations in 2017/18.
• No environmental incidents occurred during the
reporting period.
• Ongoing reviews of GBM’s Risk Register and
procedures continued throughout the year.
GBM LTIFR V's Industry
Industry
GBM
4
3
2
1
0
Source: Qld mines and quarries - Safety performance and health report
GBM Resources Annual Report 2018
Page 22
Directors’ Report
The Directors present their report together with the consolidated financial statements for the Company and its
controlled entities (‘Group’) for the financial year ended 30 June 2018.
DIRECTORS
The names of Directors in office at any time during or since the end of the year are:
Peter Thompson – B.Bus, CPA, FCIS
Executive Chairman
Experience
Mr Thompson is a CPA qualified accountant and Fellow of Governance Institute of Australia. He has over 35 years’
experience in the mining industry in Australia, UK and South America. He has held senior roles with several major
companies including Xstrata Plc, MIM Holdings Ltd and Mt Edon Gold Mines.
Since 2000, Mr Thompson has been involved in the development of various infrastructure projects, including mine
and refinery expansions and establishment of infrastructure including roads, rail, port and power utilities. Mr
Thompson was appointed as a non-executive director of Nova MSC Berhad, a Malaysian public company on 1 June
2017.
Mr Thompson has held no other directorships of listed companies in the last 3 years.
Neil Norris – BSc (Hons), MAIMM, MAIG
Exploration Director - Executive
Experience
Mr. Norris is a geologist with over 30 years’ experience gained in Australia and overseas. Prior to joining GBM, he
was Group Exploration Manager for Perseverance Corporation Limited and spent over ten years with Newmont
Australia Limited holding senior positions in both mining and exploration areas. A key achievement was his
development of the geological models which contributed to the discovery of the Phoenix ore body at Fosterville.
Mr. Norris was also involved in the discovery of the world class Cadia and Ridgeway deposits. Mr. Norris has a track
record in the successful identification of mineral deposits and his experience will greatly advance GBM’s exploration
efforts.
Mr Norris has held no other directorships of listed companies in the last 3 years.
Hun Seng Tan - MBA
Non-Executive Director
Mr Tan has over 30 years’ experience in the process engineering sector both in China and Singapore. He was founder
of BMS Technology PL, a manufacturer for the hard disk industry in Singapore and China. Mr Tan led BMS
Technology in a successful merger and later 100% acquisition of that company by Nidec Corporation of Japan which
is listed on both the New York and Tokyo stock exchanges.
Mr Tan holds a Master of Business Administration from University of Hull, United Kingdom and obtained his
Advanced Diploma in Management Study and Production Engineering. Mr Tan has a proven track record in business
development and extensive business relations in China and the Asia capital markets.
Mr Tan has held no other directorships of listed companies in the last 3 years.
COMPANY SECRETARY
Mr Kevin Hart – B.Comm FCA
Mr Hart is a Chartered Accountant and was appointed to the position of Company Secretary on 3 February 2010.
He has over 30 years’ experience in accounting and the management and administration of public listed entities in
the mining and exploration industry.
He is currently a partner in an advisory firm which specialises in the provision of company secretarial services to
ASX listed entities.
GBM Resources Annual Report 2018
Page 23
Directors’ Report
MEETINGS OF DIRECTORS
During the financial year, the following meetings of Directors (including committees) were held:
P Thompson
N Norris
H Tan
DIRECTORS’ MEETINGS
Number Eligible to Attend
16
16
16
Number Attended
16
15
16
PRINCIPAL ACTIVITIES
The principal activity of the Group during the financial year was exploration and undertaking scoping studies in
respect of its gold projects in Australia.
OPERATING AND FINANCIAL REVIEW
During the financial year the Group’s activities were focused on exploration at its wholly owned Mt Coolon Gold
Project.
On 4 December 2017 the Company published its scoping study for the Mt Coolon Gold Project comprising various
development and production strategies for the three current gold deposits.
In December 2017 the Company entered into a non-binding ore purchase term sheet with Minjar Gold (Minjar)
contemplating the treatment of certain resources from Mt Coolon at Minjar’s Pajingo gold processing plant.
In December 2017 the Company entered into a binding heads of agreement with Minjar to acquire the Twin Hills
Gold Project for the issue of 50 million ordinary fully paid shares and cash of $1.5 million on a deferred settlement
basis. Settlement of the acquisition is subject to completion of due diligence.
Operating Results
The net loss after income tax attributable to members of the Group for the financial year to 30 June 2018 amounted
to $5,781,089 (2017: $1,540,602). The current year loss includes an impairment charge of $325,951 in respect of
the change in value of investments to 30 June 2018 (2017: $1,242,164). In addition, the Group has recognised
$4,388,934 in respect of exploration costs written off, impaired and expensed (2017: $163,142).
Financial Position
At the end of the financial year, the Group had $351,438 (2017: $739,718) in cash on hand and on deposit. Carried
forward exploration and evaluation expenditure was $11,983,627 (2017: $14,428,442).
During the year the Company disposed of its interest in Anchor Resources Pte Ltd (Anchor Resources), a Company
holding the Lubuk Mandi mining concession which is quoted on the Catalist Board of the Singapore Stock Exchange
(SGX). As at 30 June 2017 the Group recognised an asset amounting to $2,655,492 in respect of its investment.
GBM Resources Annual Report 2018
Page 24
Directors’ Report
EQUITY SECURITIES ON ISSUE
Ordinary fully paid shares
Options over unissued shares
30 June 2018
863,566,975
203,391,744
30 June 2017
863,566,975
203,391,744
Ordinary Fully Paid Shares
No shares have been issued during the financial year.
Subsequent to the end of the financial year the Company issued 47,030,000 shares pursuant to a share purchase
plan and 140,000,000 shares pursuant to a share placement.
Options over Ordinary Shares
No options have been issued, vested, exercised or cancelled during or since the end of the financial year.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Other than as stated in the Operational and Financial Review section above, there were no other significant changes
in the state of affairs of the Group during the financial year, not otherwise disclosed in this Directors’ Report or in
the Review of Operations.
EVENTS SUBSEQUENT TO BALANCE DATE
Other than the following, there has not arisen in the interval between the end of the financial year and the date of
this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of
the Company to affect substantially the operations of the Group, the results of those operations or the state of
affairs of the Group in subsequent financial years:
• On 6 August 2018 the Company issued 47,030,000 ordinary fully paid shares at 0.5 cents per share
pursuant to a share purchase plan raising $235,150 before costs;
• On 14 August 2018 the Company issued 140,000,000 ordinary fully paid shares at 0.5 cents per share
pursuant to a share placement raising $700,000;
• On 11 September 2018 the Company received shareholder approval to issue up to 40,000,000 ordinary
fully paid shares to directors of the Company at 0.5 cents per share pursuant to a share placement raising
$200,000. These shares have not been issued at the date of signing this report; and
• On 28 September 2018 the Company announced the execution of the Twin Hills Gold Project tenement
sale agreement, the completion of which is subject to various conditions including securing project
funding.
DIVIDENDS
No dividends were paid during the year and the Directors recommend that no dividends be paid or declared for the
financial year ended 30 June 2018.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Comments on expected results of the operations of the Company are included in this report under the Review of
Operations.
Disclosure of other information regarding likely developments in the operations of the Company in future financial
years and the expected results of those operations is likely to result in unreasonable prejudice to the Company.
Accordingly, this information has not been disclosed in this report.
GBM Resources Annual Report 2018
Page 25
Directors’ Report
ENVIRONMENTAL ISSUES
The Group holds participating interests in a number of exploration tenements. The various authorities granting such
tenements require the tenement holder to comply with the terms of the grant of the tenement and all directions
given to it under those terms of the tenement.
There have been no known breaches of the tenement conditions, and no such breaches have been notified by any
government agencies during the year ended 30 June 2018.
REMUNERATION REPORT (AUDITED)
The remuneration report is set out in the following manner:
Policies used to determine the nature and amount of remuneration
•
• Details of remuneration
•
Service agreements
•
Share based compensation
Remuneration Policy
The Board of Directors is responsible for remuneration policies and the packages applicable to the Directors of the
Company. Whilst the broad remuneration policy is to ensure that packages offered properly reflect a person’s
duties and responsibilities and that remuneration is competitive and attracts, retains, and motivates people of the
highest quality, the Board has consciously been focused on conserving the Company’s funds to ensure the maximum
amount is spent on exploration, and this is reflected in the modest level of Director fees.
The policy of the Group is to offer competitive salary packages which provide incentive to Directors and executives
and are designed to reward and motivate. Total remuneration for all Non-Executive Directors was voted on by
shareholders, whereby it is not to exceed in aggregate $200,000 per annum. Non-Executive Directors receive fees
agreed on an annual basis by the Board.
At the date of this report, the Company had not entered into any remuneration packages with Directors or senior
executives which include performance-based components.
Details of Remuneration for Directors and Executive Officers
The remuneration of each Director of the Company and relevant executive officers (together known as Key
Management Personnel or KMP) are set out in the attached Table.
Remuneration levels are competitively set to attract and retain appropriately qualified and experienced Directors
and senior executives. The Board of Directors obtains independent advice when appropriate in reviewing
remuneration packages.
GBM Resources Annual Report 2018
Page 26
Directors’ Report
REMUNERATION REPORT (AUDITED)
Details of Remuneration for Directors and Executive Officers (Continued)
During the year, there were no senior executives who were employed by the Company for whom disclosure is
required.
2018
Short term
Post
Employment
Share
Based
Payments
Salary
and fees
$
215,000
198,173
48,000
Other
$
-
8,176
-
Directors
P Thompson1
N Norris1
H Tan
Super -
annuation
$
Options /
shares
$
Total
$
Performance
Based
Payments as %
of
remuneration
%
20,425
18,827
-
-
-
-
235,435
225,176
48,000
-
-
-
Total Directors
461,173
8,176
39,252
-
Included in director remuneration in the table above for 2018 are amounts of $64,454 that were accrued for
payment as at 30 June 2018.
-
508,601
1During the 2017 and 2018 financial years, total remuneration payable to the Executive Directors Peter Thompson
and Neil Norris continued to be paid on a temporarily reduced basis. This is a temporary measure to ensure that
the current strategies in place are achieved by the Company.
2017
Short term
Post
Employment
Share
Based
Payments
Salary
and fees
$
215,000
197,565
148,000
Other
$
-
8,436
-
Directors
P Thompson
N Norris
H Tan2
Super -
annuation
$
Options /
shares
$
Total
$
Performance
Based
Payments as %
of
remuneration
%
20,424
18,769
-
-
-
-
235,424
224,770
148,000
-
-
-
Total Directors
560,565
8,436
39,193
-
2During the 2017 financial year, the Company paid Mr Tan an amount of $100,000 in respect of his special duty
role in Singapore including recovery of outstanding debt and managing the Company’s interests and investments
in the Lubuk Mandi gold project and Anchor Resources Limited. This amount was paid in addition to his non-
executive director fees of $4,000 per month.
-
608,194
See disclosure relating to service agreements for further details of remuneration of executive directors.
GBM Resources Annual Report 2018
Page 27
Directors’ Report
REMUNERATION REPORT (AUDITED) (CONTINUED)
Details of Remuneration for Directors and Executive Officers (Continued)
Options Provided as Remuneration
During the years ended 30 June 2018 and 30 June 2017 no options have been granted and issued to KMP of the
Company.
No shares were issued to KMP of the Company in respect of the exercise of options previously granted as
remuneration.
Service Agreements
Remuneration and other terms of employment for the Executive Directors are set out in Service Agreements:
Peter Thompson – Executive Chairman
The service agreement expires 30 June 2020. Total remuneration under the contract of $300,000 per annum
inclusive of superannuation has been temporarily reduced to $235,425 per annum as part of the Company’s cost
reduction program. This reduced remuneration level will remain in place until otherwise decided by the Board.
The Service agreement contains certain provisions typically found in contracts of this nature. The Company may
terminate the Service Agreement without cause by providing nine months written notice to the individual or by
making a payment in lieu of notice. The Service Agreement may be terminated immediately in the case of serious
misconduct.
The Service Agreement is subject to annual review.
There is no specific cash bonus or other performance based compensation contemplated in the agreement. Long
term and short term incentives, may be awarded subject to Board discretion.
Neil Norris - Exploration Director
The service agreement expires 30 June 2020. Total remuneration under the contract of $300,000 per annum
inclusive of superannuation has been temporarily reduced to $217,000 per annum as part of the Company’s cost
reduction program. This reduced remuneration level will remain in place until otherwise decided by the Board.
The Service agreement contains certain provisions typically found in contracts of this nature. The Company may
terminate the Service Agreement without cause by providing nine months written notice to the individual or by
making a payment in lieu of notice. The Service Agreement may be terminated immediately in the case of serious
misconduct.
The Service Agreement is subject to annual review.
There is no specific cash bonus or other performance based compensation contemplated in the agreement. Long
term and short term incentives, may be awarded subject to Board discretion.
Share Based Compensation
At the date of this report the Company has not entered into any agreements with KMP which include performance
based components. Options issued to Directors are approved by shareholders and were not the subject of an
agreement or issued subject to the satisfaction of a performance condition.
Options may be issued to provide an appropriate level of incentive using a cost effective means given the Company’s
size and stage of development.
GBM Resources Annual Report 2018
Page 28
Directors’ Report
REMUNERATION REPORT (AUDITED) (CONTINUED)
DIRECTORS’ INTERESTS
The relevant interest of each Director in the ordinary shares and options issued by the Company as notified by the
Directors to the Australian Securities Exchange at the date of this report, is set out in the table below.
Ordinary shares
Director
P Thompson
N Norris
H Tan
Options
Director
P Thompson
N Norris
H Tan
Ordinary shares
held at 1 July
2017
11,200,000
11,141,667
18,666,667
Movement during
the financial year
-
-
-
Ordinary Shares
held at 30 June
2018
11,200,000
11,141,667
18,666,667
Ordinary shares
held at the date of
the Directors’
Report
14,200,000
14,141,667
21,666,667
Options held at 1
July 2017
2,800,000
2,556,250
4,666,667
Movement during
the financial year
-
-
-
Options held at 30
June 2018
2,800,000
2,556,250
4,666,667
Options held at the
date of the
Directors’ Report
2,800,000
2,556,250
4,666,667
LOANS TO DIRECTORS AND EXECUTIVES
There were no loans entered into with Directors or executives during the financial year ended 30 June 2018.
OTHER TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL
Other than the above, there are no transactions with Directors, or Director related entities or associates.
End of Remuneration Report
GBM Resources Annual Report 2018
Page 29
Directors’ Report
INDEMNIFICATION AND INSURANCE OF OFFICERS AND AUDITORS
During the year, the Company paid an insurance premium to insure certain officers of the Company. The officers
of the Company covered by the insurance policy include the Directors named in this report.
The Directors and Officers Liability insurance provides cover against all costs and expenses that may be incurred in
defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against
the officers in their capacity as officers of the Company. The insurance policy does not contain details of the
premium paid in respect of individual officers of the Company. Disclosure of the nature of the liability cover and
the amount of the premium is subject to a confidentiality clause under the insurance policy.
Other than the above, the Group has not, during or since the end of the financial year, given an indemnity or entered
an agreement to indemnify, or paid or agreed to pay insurance premiums for the Directors, officers or auditors of
the Company or the controlled entity.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of
taking responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under
section 237 of the Corporations Act 2001.
NON-AUDIT SERVICES
No non-audit services were provided by the external auditors in respect of the current or preceding financial year.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001, is
set out on the following page.
Signed in accordance with a resolution of the Board of Directors.
Dated this 28th day of September 2018
PETER THOMPSON
Executive Chairman
GBM Resources Annual Report 2018
Page 30
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of GBM Resources Limited for the
year ended 30 June 2018, I declare that, to the best of my knowledge and belief, there have been no
contraventions of:
(a)
the auditor independence requirements as set out in the Corporations Act 2001 in relation to
the audit; and
(b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
28 September 2018
D I Buckley
Partner
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a world-wide organisation of accounting firms and business advisers
GBM Resources Annual Report 2018
Page 31
Consolidated Statement of Profit or Loss and
Other Comprehensive Income
for the Year ended 30 June 2018
Note
Consolidated
2018
$
Revenue
Gain/(loss) on sale of investments
Other gains and losses
Consulting and professional services
Corporate and project assessment costs
Depreciation
Employee benefits expense
Impairment expense – available for sale financial
assets
Exploration expenditure written off and expensed
Exploration assets impairment expense
Travel expenses
Administration and other expenses
Profit/(loss) before income tax
Income tax benefit
Profit/(loss) for the year
Other comprehensive income
Total comprehensive income/(loss) for the year
Basic earnings/(loss) per share
Diluted earnings/(loss) per share
3a
3b
3c
4
4
10
4
4
5
6
6
2017
$
39,984
74,227
750,000
(157,498)
(44,099)
(41,087)
(401,304)
(1,242,164)
(163,142)
-
(136,707)
(218,512)
96,690
(201,053)
-
(166,297)
(27,363)
(27,430)
(358,312)
(325,951)
(1,851,058)
(2,537,876)
(124,837)
(257,602)
(5,781,089)
(1,540,602)
-
-
(5,781,089)
(1,540,602)
-
-
(5,781,089)
(1,540,602)
Cents
(0.7)
(0.7)
Cents
(0.2)
(0.2)
GBM Resources Annual Report 2018
Page 32
The accompanying notes form part of these financial statements
Consolidated Statement of Financial Position
as at 30 June 2018
Current assets
Cash and cash equivalents
Trade and other receivables
Investments – available for sale financial assets
Total Current Assets
Non-current assets
Trade and other receivables
Exploration and evaluation expenditure
Property, plant and equipment
Investments – available for sale financial assets
Total Non-current Assets
TOTAL ASSETS
Current liabilities
Trade and other payables
Total Current Liabilities
Non-current liabilities
Provision for rehabilitation
Total Non-current Liabilities
TOTAL LIABILITIES
NET ASSETS
Equity
Issued capital
Option reserve
Accumulated losses
Consolidated
2018
$
351,438
47,060
-
2017
$
739,718
63,058
2,655,492
398,498
3,458,268
746,488
11,983,627
92,101
-
754,904
14,428,442
116,501
75,075
12,822,216
15,374,922
13,220,714
18,833,190
430,566
430,566
706,907
706,907
1,137,473
255,283
255,283
706,907
706,907
962,190
12,083,241
17,871,000
31,795,094
610,175
(20,322,028)
31,801,764
610,175
(14,540,939)
Note
20
7
10
7
8
9
10
11
12
13
15
15
TOTAL EQUITY
12,083,241
17,871,000
The accompanying notes form part of these financial statements
GBM Resources Annual Report 2018
Page 33
Consolidated Statement of Changes in Equity
for the Year Ended 30 June 2018
Consolidated
Note
Issued capital Option reserve
$
$
Balance at 1 July 2016
Shares issued (net of
costs)
Options issued pursuant
to non-renounceable
entitlement offer
Loss attributable to
members of the
Company
13
15
15
28,785,654
3,016,110
-
-
-
-
610,175
Accumulated
losses
$
Total
$
(13,000,337)
15,785,317
-
-
3,016,110
610,175
-
(1,540,602)
(1,540,602)
Balance at 30 June 2017
31,801,764
610,175
(14,540,939)
17,871,000
Balance at 1 July 2017
31,801,764
610,175
(14,540,939)
17,871,000
Shares issued costs
Loss attributable to
members of the
Company
13
15
(6,670)
-
-
-
-
(6,670)
(5,781,089)
(5,781,089)
Balance at 30 June 2018
31,795,094
610,175
(20,322,028)
12,083,241
The accompanying notes form part of these financial statements
GBM Resources Annual Report 2018
Page 34
Consolidated Statement of Cash Flows
for the Year Ended 30 June 2018
Cash flows from operating activities
Interest received
Other income
JV management fee income
Payments to suppliers and employees
Note
Consolidated
2018
$
7,297
5,563
72,456
(809,369)
2017
$
9,315
6,553
18,049
(1,084,997)
Net cash flows (used in) operating activities
20(c)
(724,053)
(1,051,080)
Cash flows from investing activities
for
sale
sale of available
Payments for bonds and security deposits
Proceeds on disposal of bonds and security
deposits
Proceeds on
investments
Funds provided by JV partner under Farm-in
agreement
Payments
including JV Farm-in spend
Proceeds on sale of property, plant and
equipment
Payments to acquire property, plant and
equipment
Payments made for loans advanced
for exploration and evaluation,
(1,500)
10,000
2,203,563
603,799
(342,716)
-
387,270
145,979
(2,477,059)
(2,986,038)
-
6,000
(3,030)
-
(982)
(150,000)
Net cash flows provided by/(used in) investing
activities
335,773
(2,940,487)
Cash flows from financing activities
Proceeds from the issue of shares and options
Share issue costs
Loans received
Net cash flows provided by financing activities
in
cash and
increase/(decrease)
Net
equivalents
Cash and cash equivalents at the beginning of the
financial year
Cash and cash equivalents at the end of the
financial year
cash
-
-
-
-
(388,280)
739,718
351,438
3,178,175
(301,996)
1,500,000
4,376,179
384,612
355,106
739,718
20(a)
The accompanying notes form part of these financial statements
GBM Resources Annual Report 2018
Page 35
Notes to the Financial Statements
for the Year Ended 30 June 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
GBM Resources Limited (‘the Company’) is a listed public company domiciled in Australia. The consolidated
financial report of the Company for the financial year ended 30 June 2018 comprises the Company and its
subsidiaries (together referred to as the ‘Group’).
The following is a summary of the material accounting policies adopted by the Group in the preparation of the
financial report. The accounting policies have been consistently applied, unless otherwise stated.
a) Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, and Australian Accounting Standards and Interpretations. The
financial report has also been prepared on an historical cost basis, unless otherwise stated. The financial report
is presented in Australian dollars. For the purpose of preparation of the consolidated financial statements the
Company is a for-profit entity.
Going Concern Basis for the Preparation of Financial Statements
The financial statements have been prepared on the going concern basis which contemplates the continuity of
normal business activities and the realisation of assets and discharge of liabilities in the normal course of
business. The ability of the Group to continue to adopt the going concern assumption will depend on future
successful capital raisings, the successful exploration and subsequent exploitation of the Group’s tenements
and/or sale of non-core assets.
As at 30 June 2018 the Group has cash assets of $351,438, and total current liabilities at that date amounting
to $430,566 (including employee leave liabilities of $166,407). The loss for the 2018 financial year was
$5,781,089 of which $325,951 related to impairment charges recognised in respect of investments in equity
securities, a loss of $201,053 in respect of the disposal of equity securities and a total expense of $4,388,934
in respect of exploration costs written off, expensed and impaired.
Subsequent to the end of the financial year the Company raised $235,150 pursuant to a share purchase plan
and $700,000 pursuant to share placements, with shareholder approval for an additional $200,000.
The Directors will continue to manage the Group’s activities with due regard to current and future funding
requirements. The directors reasonably expect that the Company will be able to raise sufficient capital to fund
the Group’s exploration and working capital requirements, and that the Group will be able to settle debts as
and when they become due and payable. On this basis, the Directors are therefore of the opinion that the use
of the going concern basis is appropriate in the circumstances.
Should the Company be unable to raise the required funding, there is a material uncertainty that may cast
significant doubt on whether the Company will be able to continue as a going concern and therefore, whether
it will be able to realise its assets and extinguish its liabilities in the normal course of business and at the
amounts stated in the financial report.
Adoption of New and Revised Standards - Changes in accounting policies on initial application of accounting
standards
In the year ended 30 June 2018, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Group’s operations and effective for the current
annual reporting period. It has been determined by the Directors that there is no impact, material or otherwise,
of the new and revised Standards and Interpretations on the Group’s business and, therefore, no change is
necessary to Group accounting policies.
The Directors have also reviewed all new Standards and Interpretations that have been issued but are not yet
effective for the year ended 30 June 2018. As a result of this review the Directors have determined that there
is no material impact, of the new and revised Standards and Interpretations on the Group’s business and,
therefore, no change necessary to Group accounting policies, including an assessment of AASB 9, AASB 15 and
AASB 16.
GBM Resources Annual Report 2018
Page 36
Notes to the Financial Statements
for the Year Ended 30 June 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
b) Statement of Compliance
The financial report was authorised for issue on 28 September 2018.
The financial report complies with Australian Accounting Standards, which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report,
comprising the financial statements and notes thereto, complies with International Financial Reporting
Standards (IFRS).
c) Principles of Consolidation
The consolidated financial statements comprise the financial statements of GBM Resources Limited and its
subsidiaries as at 30 June each year (the Group). The financial statements for the subsidiaries are prepared for
the same reporting period as the parent company, using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income and
expenses and profit and losses resulting from intra-group transactions have been eliminated in full. Subsidiaries
are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated
from the date on which the control is transferred out of the Group.
The acquisition of subsidiaries has been accounted for using the purchase method of accounting. The purchase
method of accounting involves allocating the cost of the business combination to the fair value of the assets
acquired and the liabilities and contingent liabilities assumed at the date of acquisition. Accordingly, the
consolidated financial statements include the results of subsidiaries for the period from their acquisition. Non-
controlling interests represent the portion of profit and loss and net assets in subsidiaries not held by the Group
and are presented separately in the consolidated statement of profit or loss and other comprehensive income
and within equity in the consolidated statement of financial position.
d) Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured. The following specific recognition criteria must also be met before
revenue is recognised:
Interest Revenue
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the
financial asset.
Management Fees
Revenue from farm-in management fees is recognised at the time the fees are invoiced.
e)
Income Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from, or paid to, the taxation authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or
liability in a transaction that is not a business combination and that, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries, associates or
interests in joint ventures, and the timing of the reversal of the temporary difference can be
controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
GBM Resources Annual Report 2018
Page 37
Notes to the Financial Statements
for the Year Ended 30 June 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e)
Income Tax (Continued)
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused
tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses
can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at
the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries, associates
or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that
it is probable that the temporary difference will reverse in the foreseeable future and taxable profit
will be available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Unrecognised deferred income tax assets are re-assessed at each balance date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted
or substantively enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same
taxable entity and the same taxation authority.
f) Other Taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• when the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part
of the expense item as applicable; and
•
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the consolidated statement of financial position.
g) Financing Costs
Net financing costs comprise interest payable on borrowings calculated using the effective interest method.
Borrowing costs are expensed as incurred and included in net financing costs, where there is no qualifying
asset.
h) Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and
rewards of ownership to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are initially recognised at their fair value or, if lower, the present value of the
minimum lease payments, each determined at the inception of the lease. The corresponding liability to the
lessor is included in the consolidated statement of financial position as a finance lease obligation.
Lease payments are apportioned between finance charges and reduction of the lease obligation so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged
directly against income, unless they are directly attributable to qualifying assets, in which case they are
capitalised in accordance with the general policy on borrowing costs – refer Note 1(g).
GBM Resources Annual Report 2018
Page 38
Notes to the Financial Statements
for the Year Ended 30 June 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
h)
Leases (Continued)
Finance leased assets are depreciated on a straight line basis over the estimated useful life of the asset.
Operating lease payments are recognised as an expense on a straight line basis over the lease term, except
where another systematic basis is more representative of the time pattern in which economic benefits from
the leased asset are consumed.
i)
Cash and Cash Equivalents
Cash and short-term deposits in the consolidated statement of financial position comprise cash at bank and
in hand. Cash equivalents are short-term, highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of cash and
cash equivalents as defined above, net of outstanding bank overdrafts.
j)
Trade and Other Receivables
Trade receivables, which generally have 30–90 day terms, are recognised and carried at original invoice
amount less an allowance for any uncollectible amounts. An allowance for doubtful debts is made when there
is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when
identified.
k) Plant and Equipment
Plant and equipment is stated at cost, less accumulated depreciation and any accumulated impairment losses.
Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the
parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying
amount of the plant and equipment as a replacement only if it is eligible for capitalisation.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Property and improvements
Office furniture and equipment
Plant and equipment
Motor Vehicles
10 – 40 years
2.5 - 20 years
0 - 40 years
8 years
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate,
at each financial year end.
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each reporting date, with
recoverable amount being estimated when events or changes in circumstances indicate that the carrying value
may be impaired.
The recoverable amount of plant and equipment is the higher of 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. For an asset that does not generate largely independent cash inflows, recoverable amount is
determined for the cash-generating unit to which the asset belongs, unless the asset's value in use can be
estimated to be close to its fair value.
An impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated
recoverable amount. The asset or cash-generating unit is then written down to its recoverable amount.
GBM Resources Annual Report 2018
Page 39
Notes to the Financial Statements
for the Year Ended 30 June 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
k) Plant and Equipment (Continued)
(ii) De-recognition and Disposal
An item of property, plant and equipment is de-recognised upon disposal or when no further future economic
benefits are expected from its use or disposal.
Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is de-
recognised.
l)
Investments and Other Financial Assets
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified
as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity
investments, or available-for-sale investments, as appropriate. When financial assets are recognised initially,
they are measured at fair value, plus, in the case of investments not at fair value through profit or loss, directly
attributable transactions costs. The Group determines the classification of its financial assets after initial
recognition and, when allowed and appropriate, re-evaluates this designation at each financial year-end.
All regular way purchases and sales of financial assets are recognised on the trade date i.e. the date that the
Group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets
under contracts that require delivery of the assets within the period established generally by regulation or
convention in the marketplace.
(i) Financial Assets at Fair Value through Profit or Loss
Financial assets classified as held for trading are included in the category ‘financial assets at fair value through
profit or loss’. Financial assets are classified as held for trading if they are acquired for the purpose of selling
in the near term. Derivatives are also classified as held for trading unless they are designated as effective
hedging instruments. Gains or losses on investments held for trading are recognised in profit or loss.
(ii) Held-to-Maturity Investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified as held-
to-maturity when the Group has the positive intention and ability to hold to maturity.
Investments intended to be held for an undefined period are not included in this classification. Investments
that are intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost. This
cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative
amortisation using the effective interest method of any difference between the initially recognised amount
and the maturity amount. This calculation includes all fees and points paid or received between parties to the
contract that are an integral part of the effective interest rate, transaction costs and all other premiums and
discounts. For investments carried at amortised cost, gains and losses are recognised in profit or loss when
the investments are de-recognised or impaired, as well as through the amortisation process.
(iii) 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 carried at amortised cost using the effective interest method.
Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired,
as well as through the amortisation process.
(iv) Available-for-Sale Investments
Available-for-sale investments are those non-derivative financial assets that are designated as available-for-
sale or are not classified as any of the three preceding categories. After initial recognition available-for sale
investments are measured at fair value with gains or losses being recognised as a separate component of
equity until the investment is derecognised or until the investment is determined to be impaired, at which
time the cumulative gain or loss previously reported in equity is recognised in profit or loss.
GBM Resources Annual Report 2018
Page 40
Notes to the Financial Statements
for the Year Ended 30 June 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
l)
Investments and Other Financial Assets (Continued)
Upon disposal of available for sale investments the carrying value of the disposed assets are transferred to
profit or loss to match with the consideration received, less costs to sell. A gain or loss on disposal is recognised
in the period in which the disposal occurred.
The fair value of investments that are actively traded in organised financial markets is determined by reference
to quoted market bid prices at the close of business on the balance date. For investments with no active
market, fair value is determined using valuation techniques. Such techniques include using recent arm’s length
market transactions; reference to the current market value of another instrument that is substantially the
same; discounted cash flow analysis and option pricing models.
(v) Investment in Associated Entities
The Group’s investment in its associate is accounted for using the equity method of accounting in the
consolidated financial statements, after initially being recognised at cost. The associate is an entity in which
the Group has significant influence and which is neither a subsidiary nor a joint venture. Significant influence is
the power to participate in the financial and operating decisions of the investee but is not control or joint
control over those policies.
Under the equity method, the investment in the associate is carried in the consolidated statement of financial
position at cost plus post-acquisition changes in the Group's share of net assets of the associate. Goodwill
relating to an associate is included in the carrying amount of the investment and is not amortised. After
application of the equity method, the Group determines whether it is necessary to recognise any additional
impairment loss with respect to the Group’s net investment in the associate.
Goodwill included in the carrying amount of the investment in an associate is not tested separately; rather the
entire carrying amount of the investment is tested for impairment as a single asset. If an impairment is
recognised, the amount is not allocated to the goodwill of the associate.
The consolidated statement of profit or loss and other comprehensive income reflects the Group's share of the
results of operations of the associate, and its share of post-acquisition movements in reserves is recognised in
reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the
investment.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any
unsecured long-term receivable and loans, the Group does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.
Upon disposal of an associate that results in the Group losing significant influence over that associate, any
retained investment is measured at fair value at that date and the fair value is regarded as its fair value on
initial recognition as a financial asset in accordance with AASB 139. The difference between the previous
carrying amount of the associate attributable to the retained interest and its fair value is included in the
determination of the gain or loss on disposal of the associate. In addition, the Group accounts for all amounts
previously recognised in other comprehensive income in relation to that associate on the same basis as would
be required if that associate had directly disposed of the related assets or liabilities. Therefore, if a gain or loss
previously recognised in other comprehensive income by that associate would be reclassified to profit or loss
on disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss
(as a reclassification adjustment) when it loses significant influence over that associate.
When a Group entity transacts with its associate, profits and losses resulting from those transactions with the
associate are recognised in the Group’s consolidated financial statements only to the extent of interests in the
associate that are not related to the Group.
GBM Resources Annual Report 2018
Page 41
Notes to the Financial Statements
for the Year Ended 30 June 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
m) Exploration and Evaluation Expenditure (Continued)
Exploration and evaluation expenditures in relation to each separate area of interest are recognised as an
exploration and evaluation asset in the year in which they are incurred where the following conditions are
satisfied: (i) the rights to tenure of the area of interest are current; and (ii) at least one of the following
conditions is also met:
(a)
the exploration and evaluation expenditures are expected to be recouped through successful
development and exploitation of the area of interest, or alternatively, by its sale; or
(b) exploration and evaluation activities in the area of interest have not at the reporting date reached a
stage which permits a reasonable assessment of the existence or otherwise of economically
recoverable reserves, and active and significant operations in, or in relation to, the area of interest
are continuing.
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore,
studies, exploratory drilling, trenching and sampling and associated activities and an allocation of depreciation
and amortised of assets used in exploration and evaluation activities. General and administrative costs are only
included in the measurement of exploration and evaluation costs where they are related directly to operational
activities in a particular area of interest.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the
carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The recoverable
amount of the exploration and evaluation asset (for the cash generating unit(s) to which it has been allocated
being no larger than the relevant area of interest) is estimated to determine the extent of the impairment loss
(if any). Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the
revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised for
the asset in previous years.
n)
Impairment of Assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
such indication exists, or when annual impairment testing for an asset is required, the Group makes an
estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less
costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of assets and the asset's value
in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part
of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit
exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down
to its recoverable amount.
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. Impairment losses relating to continuing operations are recognised in those expense categories
consistent with the function of the impaired asset unless the asset is carried at re-valued amount (in which
case the impairment loss is treated as a re-valuation decrease).
An assessment is also made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists, the
recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been
a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss
was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount.
That increased amount cannot exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised
in profit or loss unless the asset is carried at re-valued amount, in which case the reversal is treated as a re-
valuation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the
asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
GBM Resources Annual Report 2018
Page 42
Notes to the Financial Statements
for the Year Ended 30 June 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
o) Trade and Other Payables
Trade payables and other payables are carried at amortised costs and represent liabilities for goods and
services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group
becomes obliged to make future payments in respect of the purchase of these goods and services.
p) Interest Bearing Liabilities
All loans and borrowings are initially recognised at the fair value of the consideration received less directly
attributable transaction costs.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost
using the effective interest method.
Gains and losses are recognised in profit or loss when the liabilities are de-recognised.
q) Employee Benefits
(i) Wages, Salaries, Annual Leave and Sick Leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and non-accumulating sick
leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect
of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when
the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and
are measured at the rates paid or payable.
(ii) Long Service Leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the
present value of expected future payments to be made in respect of services provided by employees up to the
reporting date using the projected unit credit method. Consideration is given to expected future wage and
salary levels, experience of employee departures, and period of service. Expected future payments are
discounted using market yields at the reporting date on national government bonds with terms to maturity
and currencies that match, as closely as possible, the estimated future cash outflows.
r) Share Based Payments
Equity Settled Transactions:
The Group provides benefits to employees (including senior executives) of the Group in the form of share
based payments, whereby employees render services in exchange for shares or rights over shares (equity-
settled transactions).
The cost of these equity-settled transactions with employees is measured by reference to the fair value of
the equity instruments at the date at which they are granted. The fair value of options is determined by using
a Black and Scholes model. Share rights are valued at the underlying market value of the ordinary shares over
which they are granted.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than
conditions linked to the price of the shares of GBM Resources Limited (market conditions) if applicable.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over
the period in which the performance and/or service conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (the vesting period).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects (i) the extent to which the vesting period has expired and (ii) the Group’s best estimate of the number
of equity instruments that will ultimately vest. No adjustment is made for the likelihood of market
performance conditions being met as the effect of these conditions is included in the determination of fair
value at grant date. The charge or credit to the consolidated statement of profit or loss and other
comprehensive income for a period represents the movement in cumulative expense recognised as at the
beginning and end of that period.
GBM Resources Annual Report 2018
Page 43
Notes to the Financial Statements
for the Year Ended 30 June 2018
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
r) Share Based Payments (Continued)
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is only
conditional upon a market condition.
If the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms
had not been modified. In addition, an expense is recognised for any modification that increases the total fair
value of the share based payment arrangement, or is otherwise beneficial to the employee, as measured at
the date of modification.
If an equity-settled award is cancelled, the cumulative expense recognised in respect of that award is
transferred from its respective reserve to accumulated losses. However, if a new award is substituted for the
cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new
awards are treated as if they were a modification of the original award, as described in the previous
paragraph.
Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
Earnings Per Share
Basic earnings per share ("EPS") is calculated by dividing the net profit or loss attributable to members of the
Company for the reporting period, after excluding any costs of servicing equity (other than ordinary shares
and converting preference shares classified as ordinary shares for EPS calculation purposes), by the weighted
average number of ordinary shares of the Company, adjusted for any bonus element.
Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs
associated with dilutive potential ordinary shares and the effect on revenues and expenses of conversion, by
the weighted average number of ordinary shares and potential dilutive ordinary shares, adjusted for any
bonus element.
s)
t)
u) Business Combinations
The acquisition method of accounting is used to account for all business combinations, including business
combinations involving entities or business under common control, regardless of whether equity instruments
or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the
fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any contingent consideration arrangement and the
fair value of any pre-existing equity interest in the subsidiary. Acquisition-related costs are expensed as
incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On
an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either
at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and
the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s
share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair
value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been
reviewed, the difference is recognised directly in profit or loss as a bargain purchase.
Where a business combination is achieved in stages, the Group’s previously held equity interest in the
acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group attains control) and
the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree
prior to the acquisition date that have previously been recognised in other comprehensive income are
reclassified to profit or loss where such treatment would be appropriate if that interest were disposed of.
GBM Resources Annual Report 2018
Page 44
Notes to the Financial Statements
for the Year Ended 30 June 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
u) Business Combinations (Continued)
If the initial accounting for a business combination is incomplete by the end of the reporting period in which
the combination occurs, the Group reports provisional amounts for the items for which the accounting is
incomplete. These provisional amounts are adjusted during the measurement period (see above), or
additional assets or liabilities recognised, to reflect new information obtained about facts and circumstances
that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that
date.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Where the consideration transferred by the Group in a business combination includes assets or liabilities
resulting from a contingent consideration arrangement, the contingent consideration is measured at its
acquisition-date fair value. Changes in the fair value of the contingent consideration that qualify as
measurement period adjustments are adjusted retrospectively, with corresponding adjustments against
goodwill. Measurement period adjustments are adjustments that arise from additional information obtained
during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and
circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as
measurement period adjustments depends on how the contingent consideration is classified. Contingent
consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent
settlement is accounted for within equity. Contingent consideration that is classified as an asset or liability is
remeasured at subsequent reporting dates in accordance with AASB 139, or AASB 137 ‘Provisions, Contingent
Liabilities and Contingent Assets’, as appropriate, with the corresponding gain or loss being recognised in
profit or loss.
v) Provision for Restoration and Rehabilitation
A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of
development activities undertaken, it is probable that an outflow of economic benefits will be required to
settle the obligation, and the amount of the provision can be measured reliably. The estimated future
obligations include the costs of abandoning sites, removing facilities and restoring the affected areas.
The provision for future restoration costs is the best estimate of the present value of the expenditure required
to settle the restoration obligation at the balance date. Future restoration costs are reviewed annually and
any changes in the estimate are reflected in the present value of the restoration provision at each balance
date.
The initial estimate of the restoration and rehabilitation provision is capitalised into the cost of the related
asset and amortised on the same basis as the related asset, unless the present obligation arises from the
production of inventory in the period, in which case the amount is included in the cost of production for the
period. Changes in the estimate of the provision for restoration and rehabilitation are treated in the same
manner, except that the unwinding of the effect of discounting on the provision is recognised as a finance
cost rather than being capitalised into the cost of the related asset.
w) Parent Entity Financial Information
The financial information for the parent entity, GBM Resources Limited, disclosed in Note 28 has been
prepared on the same basis as the consolidated financial statements, except as set out below.
Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the parent
entity’s financial statements. Dividends received from associates are recognised in the parent entity’s profit
or loss, rather than being deducted from the carrying amount of these investments.
GBM Resources Annual Report 2018
Page 45
Notes to the Financial Statements
for the Year Ended 30 June 2018
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
x) Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that may have a financial impact on the Group and that are believed
to be reasonable under the circumstances.
Accounting for capitalised mineral exploration and evaluation expenditure
The Group’s accounting policy is stated at 1(m). A regular review is undertaken of each area of interest to
determine the reasonableness of continuing to carry forward costs in relation to that area of interest.
Share based payments
The Group uses independent advisors to assist in valuing share based payments.
Estimates and assumptions used in these valuations are disclosed in the notes in periods when these share
based payments are made.
2. FINANCIAL RISK MANAGEMENT
The Group has exposure to a variety of risks arising from its use of financial instruments. This note presents
information about the Group’s exposure to the specific risks, and the policies and processes for measuring and
managing those risks. Further quantitative disclosures are included throughout this financial report. The Board of
Directors has overall responsibility for the risk management framework.
(a) 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, and arises principally from transactions with customers and investments.
Trade and other receivables
The current nature of the business activity does not result in trading receivables. The receivables that the
Group recognises through its normal course of business are short term in nature and the most significant (in
quantity) is the receivable from the Australian Taxation Office and interest receivable. The risk of non-recovery
of receivables from this source is considered to be negligible.
Cash deposits
The Group’s primary banker is Commonwealth Bank. At balance date all operating accounts and funds held on
deposit are with this bank. The Directors believe any risk associated with the use of only one bank is mitigated
by its size and reputation. Except for this matter the Group currently has no significant concentrations of credit
risk.
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations 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 manages its liquidity risk by monitoring its cash reserves and forecast spending. Management is
cognisant of the future demands for liquid finance resources to finance the Group’s current and future
operations, and consideration is given to the liquid assets available to the Group before commitment is made
to future expenditure or investment.
(c) 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 any return.
GBM Resources Annual Report 2018
Page 46
Notes to the Financial Statements
for the Year Ended 30 June 2018
2. FINANCIAL RISK MANAGEMENT (CONTINUED)
(c) Market risk (Continued)
Currency risk
The Group is not exposed to any currency risk other than the respective functional currencies of each Company
within the Group, the Australian dollar (AUD).
Interest rate risk
The Group is not exposed to significant interest rate risk and no financial instruments are employed to mitigate
risk (Note 18 – Financial Instruments).
Equity price risk
The Group was exposed to price risk during the financial year in respect of its holding of ordinary securities of
Anchor Resources Limited (Singapore), WCB Resources Limited (Canada) and Kingston Resources Limited
(Australia). The investments were classified as an available for sale financial assets with unrealised movements
in the market values of the investments recognised in equity, unless management considers that a material
impairment has arisen in which case any unrealised losses will be accounted for through profit or loss. There
was no hedging activities undertaken regarding these investments. As at the end of the financial year the Group
no longer had any exposure to equity price risk (Note 18 – Financial Instruments).
(d) Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence
and to sustain future development of the business. The Board of Directors monitors capital expenditure and
cash flows as mentioned in (b).
3. REVENUE AND OTHER GAINS/LOSSES
a) Other Revenue
Gain on disposal of assets
Interest income
Joint venture management fee
Other income
b) Gain/(loss) on sale of investments
Loss on disposal of available for sale financial
assets
c) Other gains and losses
Gain on settlement of loan agreement1
Note
Consolidated
2018
$
-
7,381
72,456
16,853
96,690
(201,053)
(201,053)
2017
$
6,000
9,382
18,049
6,553
39,984
74,227
74,227
-
-
750,000
750,000
1Gain represents the difference between the loan liability settled by the issue of equity securities and the
fair value of equity issued in settlement.
GBM Resources Annual Report 2018
Page 47
Notes to the Financial Statements
for the Year Ended 30 June 2018
Note
Consolidated
2018
$
2017
$
4. EXPENSES
Employee expenses
Gross employee benefit expense:
Wages and salaries
Directors’ fees
Superannuation expense
Other employee costs
Less amount allocated to exploration
Net consolidated statement of profit or loss and
other comprehensive income employee benefit
expense
Depreciation expense:
Property and improvements
Office equipment and software
Site equipment
Motor vehicles
Exploration costs:
Unallocated exploration costs
Exploration costs written off
Impairment expense – exploration costs
9
9
9
9
8
8
840,726
48,000
79,834
71,932
1,040,492
(682,180)
1,104,944
136,000
103,295
44,323
1,388,562
(987,258)
358,312
401,304
3,512
2,157
6,205
15,556
27,430
115,084
1,735,974
1,851,058
2,537,876
4,388,934
4,549
2,806
18,175
15,557
41,087
129,719
33,423
163,142
-
163,142
GBM Resources Annual Report 2018
Page 48
Notes to the Financial Statements
for the Year Ended 30 June 2018
Note
Consolidated
2018
$
2017
$
5.
INCOME TAX
a)
Income tax recognised in
profit and loss
The prima facie tax benefit on the operating
result is reconciled to the income tax provided
in the financial statements as follows:
Accounting profit/(loss) before income tax
from continuing operations
Income tax (benefit)/expense calculated at
27.5% (2017: 27.5%)
Impairment expense
Capital raising costs claimed
Exploration costs written off and impaired
Unused tax losses and temporary
differences not recognised as
deferred tax assets
tax
reported
(benefit)
Income
the
consolidated statement of profit or loss and
other comprehensive income
in
(5,781,089)
(1,540,602)
(1,589,799)
89,636
(33,557)
1,175,309
(423,666)
372,694
(47,601)
10,027
358,411
88,546
-
-
The tax rate used in the above reconciliation is the corporate tax rate of 27.5% payable by Australian corporate
entities on taxable profits under Australian tax law.
b) Unrecognised deferred tax assets and
liabilities
The following deferred tax assets and liabilities
have not been brought to account:
Unrecognised deferred tax
assets relate to:
Losses available for offset
against future taxable income
Capital raising costs
Accrued expenses and leave liabilities
Rehabilitation provisions
Unrecognised deferred tax liabilities relate to:
Exploration expenditure
8,265,125
67,034
63,487
194,399
8,590,045
8,107,589
107,735
43,547
212,072
8,470,943
(3,295,497)
(4,328,532)
Net unrecognised deferred tax asset
5,294,548
4,142,411
GBM Resources Annual Report 2018
Page 49
Notes to the Financial Statements
for the Year Ended 30 June 2018
5.
INCOME TAX (CONTINUED)
The deductible temporary differences and tax losses do not expire under current tax legislation. Potential
deferred tax assets attributable to tax losses carried forward have not been brought to account because the
Directors do not believe it is appropriate to regard realisation of the future tax benefit as probable.
The potential future income tax benefit will only be obtained if:
(i) the Group derives future assessable income of a nature and an amount sufficient to enable the benefit to
be realised in accordance with Division 170 of the Income Tax Assessment Act 1997;
(ii) the Group companies continue to comply with the conditions for deductibility imposed by the law; and
(iii) no changes in tax legislation adversely affect the Group in realising the benefits.
6. EARNINGS/(LOSS) PER SHARE
Profit/(loss) used in calculation of earnings/(loss) per
share
Basic and diluted earnings/(loss) per share
Consolidated
2018
$
2017
$
(5,781,089)
(1,540,602)
Cents
(0.7)
#
Cents
(0.2)
#
Weighted average number of shares used
calculation of earnings per share
in the
863,566,975
814,491,427
Options and performance share rights
Options and share rights to acquire ordinary shares granted by the Company and not exercised at the reporting
date have been included in the determination of diluted earnings per share to the extent to which they are
dilutive. There are no options on issue at 30 June 2018 that are considered to be dilutive.
7. TRADE AND OTHER RECEIVABLES
Current
Amounts due from farm-in partner
GST recoverable
Other debtors
Non-current
Security and environmental bonds1
Consolidated
2018
$
2017
$
-
7,771
39,289
47,060
746,488
746,488
29,485
10,751
22,822
63,058
754,904
754,904
1 Included in non-current assets at 30 June 2018 is an amount of $713,899 (2017: $713,899) in respect of
security deposits paid to the Queensland State Government in respect of the exploration licences and
mining leases recognised on acquisition of Mt Coolon Gold Mines Pty Ltd.
GBM Resources Annual Report 2018
Page 50
Notes to the Financial Statements
for the Year Ended 30 June 2018
8.
EXPLORATION AND EVALUATION EXPENDITURE
Exploration and evaluation phase:
Capitalised costs at the start of the financial
year
Capitalisation of Mt Coolon Gold Project
additional rehabilitation costs
Costs capitalised during the financial year
Capitalised costs written off during the
financial year
Impairment of exploration costs
Capitalised costs at the end of the financial year
Note
12
4
4
Consolidated
2018
$
2017
$
14,428,442
11,350,307
-
1,829,035
(1,735,974)
(2,537,876)
11,983,627
310,853
2,800,705
(33,423)
-
14,428,442
Ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful
development and commercial exploitation or alternatively, sale of the respective areas.
The Group has recognised an impairment in previously capitalised exploration costs in respect of the Milo
mineral resource to reflect a reduction in applicable commodity prices, and that the focus of the Company is
the Mt Coolon Gold Project.
9.
PROPERTY, PLANT AND EQUIPMENT
Carrying values at 30 June:
Property and improvements:
Cost
Depreciation
Office equipment and software:
Cost
Depreciation
Site equipment and plant:
Cost
Depreciation
Motor vehicles:
Cost
Depreciation
193,117
(127,230)
65,887
176,223
(171,528)
4,695
221,124
(209,843)
11,821
161,638
(151,400)
10,238
193,117
(123,718)
69,399
173,193
(169,371)
3,822
221,124
(203,638)
17,486
161,638
(135,844)
25,794
Total
92,101
116,501
Reconciliation of movements:
Property and improvements:
Opening net book value
Depreciation
Closing net book value
4
69,399
(3,512)
65,887
73,948
(4,549)
69,399
GBM Resources Annual Report 2018
Page 51
Notes to the Financial Statements
for the Year Ended 30 June 2018
Note
Consolidated
2018
$
2017
$
9. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Reconciliation of movements (Continued):
Office equipment and software:
Opening net book value
Cost of additions
Depreciation
Closing net book value
Site equipment and plant:
Opening net book value
Depreciation
Closing net book value
Motor vehicles:
Opening net book value
Depreciation
Closing net book value
Total
10. AVAILABLE FOR SALE FINANCIAL ASSETS
Current
Investment – Anchor Resources Limited
Non-current
Investment – WCB Resources Ltd
4
4
4
3,822
3,030
(2,157)
4,695
17,486
(6,205)
11,821
25,794
(15,556)
10,238
92,101
5,645
983
(2,806)
3,822
35,661
(18,175)
17,486
41,351
(15,557)
25,794
116,501
-
-
2,655,492
75,075
Investment – Anchor Resources Limited
The Company sold its investment in Anchor Resources Ltd (Anchor), a Company quoted on the Catalist Board
of the Singapore Stock Exchange (SGX), during the financial year.
The Group received the Anchor shares pursuant to a share swap agreement relating to its original shareholding
in Angka Alamjaya Sdn Bhd (AASB), which were vended into the Initial Public Offer of Anchor.
Prior to the completion of the share swap agreement, the Group accounted for its investment in AASB as an
associate using the equity method.
Balance at the start of the financial year
Carrying value of shares disposed during the
year
Impairment expense1
Carrying amount at the end of the financial year
2,655,492
4,135,744
(2,329,541)
(325,951)
-
(313,013)
(1,167,239)
2,655,492
1 The directors have reviewed the decline in value of the investment and have considered it to be significant and as
such it has been reclassified from equity to profit or loss.
The investment is within the level 1 fair value hierarchy.
The loss on sale during the year in addition to the impairment loss was $420,528. Proceeds of $1,909,013 were
received on sale of the investment.
GBM Resources Annual Report 2018
Page 52
Notes to the Financial Statements
for the Year Ended 30 June 2018
Note
Consolidated
2018
$
2017
$
10. AVAILABLE FOR SALE FINANCIAL ASSETS (CONTINUED)
Investment – WCB Resources Limited
The investment relates to a holding in WCB Resources Limited (WCB), a Company quoted on the Venture Board
of the Toronto Stock Exchange (TSX:V). The shares were acquired by the Company at a deemed price of
CAD$0.05 per share in full settlement and satisfaction of a loan previously advanced to WCB by the Company.
During the financial year, the Company received 13,500,000 ordinary fully paid shares in Kingston Resources
Limited (Kingston) following the merger of Kingston and WCB. During the financial year the Company sold its
entire investment in Kingston.
Balance at the start of the financial year
Recognition of investment on issue of shares
Impairment expense1
Carrying value of shares disposed in the
period
Carrying amount at the end of the financial year
75,075
-
-
(75,075)
-
-
150,000
(74,925)
-
75,075
1 The directors have reviewed the decline in value of the investment and have considered it to be significant
and as such it has been reclassified from equity to profit or loss.
The investment is within the level 1 fair value hierarchy.
On sale the Company received $294,550 and recognised a profit on sale of $219,475.
11. TRADE AND OTHER PAYABLES
Current
Unspent funds received from farm-in partner
Acquisition costs payable1
Trade creditors2
Sundry creditors and accruals
Employee leave liabilities
93,923
12,500
83,704
74,033
166,406
-
12,500
70,009
63,060
109,714
430,566
255,283
1 Acquisition costs payable to Drummond Gold Limited pursuant to the acquisition of Mt Coolon Gold Mines
Pty Ltd.
2 Trade payables are non-interest bearing and are normally settled on 30 day terms.
12. PROVISIONS
Non-current
Rehabilitation provision1
706,907
706,907
1 An additional $310,853 provision for rehabilitation was recognised in the 2017 financial year following an
environmental approval assessment (Note 8).
GBM Resources Annual Report 2018
Page 53
Notes to the Financial Statements
for the Year Ended 30 June 2018
Issue
price
2018
No.
2017
No.
2018
$
2017
$
13. ISSUED CAPITAL
Issued capital at the balance date
863,566,975
863,566,975
31,801,764
31,801,764
Movements in issued capital:
On issue at the start of the year
Shares issued on the exercise
of options
Share placement
Shares issued in settlement of
loan liability
Share issue costs
On issue at the end of the
reporting year
$0.035
$0.016
$0.015
863,566,975
653,063,975
31,801,764
28,785,654
-
-
-
-
3,000
160,500,000
-
-
105
2,568,000
50,000,000
-
-
(6,670)
750,000
(301,995)
863,566,975
863,566,975
31,795,094
31,801,764
Shares Subject to Restriction Agreement
At balance date there were no ordinary shares subject to any restrictions.
2018
No.
2017
No.
14. OPTIONS
Details of the Company’s Incentive Option Scheme are provided at Note 16.
(a)
Options over unissued shares
Options on issue at the balance date
203,391,744
203,391,744
Movements in options:
Options on issue at the start of the year
Options issued pursuant to a non-renounceable entitlement
offer1
203,391,744
-
-
203,391,744
Options on issue at the end of the reporting year
203,391,744
203,391,744
1 Options exercisable at 5 cents each and expiring 30 September 2019 issued pursuant to a non-renounceable
entitlement offer.
GBM Resources Annual Report 2018
Page 54
Notes to the Financial Statements
for the Year Ended 30 June 2018
Note
Consolidated
2018
$
2017
$
15. RESERVES AND ACCUMULATED LOSSES
Option reservei
Opening balance
subscribed
Options
renounceable entitlement offer
Transfer to accumulated losses on expiry of
exercise period
for under non-
Closing balance
Accumulated losses
Opening balance
Transfer from share based payments reserve
on expiry of options
Transfer from option reserve on expiry of
options
Net profit/(loss) attributable to the
members of the Company
Closing balance
i Option reserve
610,175
-
-
-
610,175
-
610,175
610,175
(14,540,939)
(13,000,337)
-
-
-
-
(5,781,089)
(1,540,602)
(20,322,028)
(14,540,939)
The option reserve represents the proceeds received on the issue of options.
16. EMPLOYEE BENEFITS
Details of the Company’s performance right and share option plans, under which performance rights and
options are issuable to employees, directors and consultants are summarised below. Details of share rights and
options issued to Directors and executives are set out in the Remuneration Report that forms part of the
Directors’ Report.
Incentive Option Plan
The Company has a formal option plan for the issue of options to employees, directors and consultants, which
was last approved by shareholders at the Company’s Annual General Meeting on 28 October 2016. Options are
granted free of charge and are exercisable at a fixed price in accordance with the terms of the grant. Options
over unissued shares are issued under the terms of the Plan at the discretion of the Board.
There are no options on issue under the Incentive Option Plan at 30 June 2018 (2017: nil).
Performance Rights Plan
The Company has a formal plan for the issue of performance share rights to employees, which was approved
by shareholders at the Company’s Annual General Meeting on 28 October 2016. Share rights are granted free
of charge and are exercisable into ordinary fully paid shares in accordance with the terms of the grant. Share
rights are issued to employees under the terms of the Plan at the discretion of the Board.
There are no share rights on issue under the Performance Rights Plan at 30 June 2018 (2017: nil).
GBM Resources Annual Report 2018
Page 55
Notes to the Financial Statements
for the Year Ended 30 June 2018
17. SEGMENT REPORTING
Operating segments are identified, and segment information disclosed, where appropriate, on the basis of
internal reports reviewed by the Company’s Board of Directors, being the Group’s Chief Operating Decision
Maker, as defined by AASB 8.
The Group has identified its operating segments based on the internal reports that are reviewed and used by
the Board of Directors in assessing performance and determining the allocation of resources. Reportable
segments disclosed are based on aggregating operating segments, where the segments have similar
characteristics.
The Group’s core activity is mineral exploration and resource development within Australia. During the 2018
and 2017 financial years the Group has recognised an investment in a company in Singapore (note 10).
The reportable segments are represented as follows:
30 June 2018
Revenue
Joint venture management fee
Gain/(loss) on disposal of available for sale
financial asset
Total segment revenue
Australia
$
Singapore
$
Consolidated
$
72,456
219,475
291,931
-
72,456
(420,528)
(420,528)
(201,053)
(128,597)
Segment net operating profit/(loss) after tax
(5,034,610)
(746,479)
(5,781,089)
Other revenue - unallocated
Depreciation
Exploration expenditure written off, expensed
and impaired
Segment assets
Capital expenditure during period
Other non-current assets acquired
Segment liabilities
Segment non-current assets
24,234
(27,430)
(4,388,934)
13,220,714
3,030
-
(1,137,473)
12,822,216
-
-
-
-
-
-
-
-
24,234
(27,430)
(4,388,934)
13,220,714
3,030
-
(1,137,473)
12,822,216
GBM Resources Annual Report 2018
Page 56
Notes to the Financial Statements
for the Year Ended 30 June 2018
17. SEGMENT REPORTING (CONTINUED)
30 June 2017
Revenue
Joint venture management fee
Gain on disposal of available for sale financial asset
Total segment revenue
Segment net operating profit/(loss) after tax
Other revenue - unallocated
Depreciation
Exploration expenditure written off and expensed
Segment assets
Capital expenditure during period
Other non-current assets acquired
Segment liabilities
Australia
$
Singapore
$
Consolidated
$
18,049
-
18,049
(447,620)
21,935
(41,087)
(163,142)
-
18,049
74,227
74,227
74,227
92,276
(1,092,982)
(1,540,602)
-
-
-
21,935
(41,087)
(163,142)
16,177,698
2,655,492
18,833,190
982
3,078,135
(962,190)
-
-
-
982
3,078,135
(962,190)
Segment non-current assets
15,374,922
2,655,492
18,030,414
18. FINANCIAL INSTRUMENTS
Credit risk
The Directors do not consider that the Group’s financial assets are subject to anything more than a negligible
level of credit risk, and as such no disclosures are made (note 2(a)).
Impairment losses
The Directors do not consider that any of the Group’s financial assets are subject to impairment at the reporting
date. No impairment expense or reversal of impairment charge has occurred during the reporting period.
Currency risk
The Group does not have any direct exposure to foreign currency risk, other than in respect of its impact on the
economy and commodity prices generally (note 2 (c)).
GBM Resources Annual Report 2018
Page 57
Notes to the Financial Statements
for the Year Ended 30 June 2018
18. FINANCIAL INSTRUMENTS (CONTINUED)
Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting agreements (note 2(b)):
Consolidated
30 June 2018
Carrying
amount
$
Contractual
cash flows
$
6 months
or less
$
6-12
months 1-2 years
$
$
2-5years
$
Trade and other payables
157,237
157,237
157,237
157,237
157,237
157,237
30 June 2017
Trade and other payables
97,626
97,626
97,626
97,626
97,626
97,626
-
-
-
-
-
-
-
-
-
-
-
-
The Group does not have any interest bearing liabilities to report a weighted average interest rate.
Interest rate risk
At the reporting date the interest profile of the Group’s interest-bearing financial instruments were:
More
than 5
years
$
-
-
-
-
Fixed rate instruments:
Financial liabilities
Variable rate instruments:
Financial assets
Consolidated
2018
$
-
-
2017
$
-
-
351,438
351,438
739,718
739,718
The Group is not materially exposed to interest rate risk on its variable rate investments.
GBM Resources Annual Report 2018
Page 58
Notes to the Financial Statements
for the Year Ended 30 June 2018
18. FINANCIAL INSTRUMENTS (CONTINUED)
Equity risk
The Group is no longer exposed to equity price risk, which arose through its holding of available for sale financial
assets, being the investments in shares in Anchor Resources Limited and WCB Resources Limited (see note 10
for details).
Sensitivity analysis – Equity Price Risk
The Group’s equity investments are listed on the Catalist Board of the Singapore Securities Exchange (SGX) and
the Venture Board of the Toronto Stock Exchange (TSX-V). A 10% change in the equity price of the Group’s
investments at the reporting date would have the following impact on the financial statements:
Profit or Loss
Equity
10%
increase
$
10%
decrease
$
10%
increase
$
10%
decrease
$
-
-
-
-
273,057
(273,057)
273,057
(273,057)
30 June 2018
Available for sale financial assets
30 June 2017
Available for sale financial assets
Fair values
Fair values versus carrying amounts
The carrying amounts of financial assets and liabilities not measured at fair value on a recurring basis, as
described in the consolidated statement of financial position represent their estimated net fair value.
19. COMMITMENTS
Exploration
(a)
The Group has certain obligations to perform minimum exploration work on mineral leases held. These obligations
may vary over time, depending on the Group’s exploration programmes and priorities. As at balance date, total
exploration expenditure commitments on tenements held by the Group have not been provided for in the financial
statements. These obligations are also subject to variations by farm-out arrangements or sale of the relevant
tenements.
Minimum expenditure requirements for the following 12 months on the Group’s exploration licences as at 30 June
2018, including licences subject to farm-in arrangements are approximately $1,868,500 (2017: $2,807,000).
(b)
Operating Lease Commitments
The Group has no operating lease commitments.
(c)
Contractual Commitment
The Group has no contractual commitments.
GBM Resources Annual Report 2018
Page 59
Notes to the Financial Statements
for the Year Ended 30 June 2018
20. NOTES TO THE STATEMENT OF CASH FLOWS
a) Cash and cash equivalents
Cash at bank and on hand
Bank at call cash account
Total cash and cash equivalents
Consolidated
2018
$
2017
$
242,425
109,013
351,438
633,880
105,838
739,718
The Bank at call account holds funds at call subject to certain restrictions (note 20(b)) and pays interest at an
average of 2.3% (2017:3.00%), and matures on 24 September 2018.
b) Cash balances not available for use
Included in cash and cash equivalents are amounts pledged as guarantees for the following:
Corporate credit card facility
109,013
105,838
c) Reconciliation of Loss from Ordinary
Activities after Income Tax to Net Cash
Used in Operating Activities
Profit/(Loss) after income tax
Add (less) non-cash items:
Gain on equity settlement of loan liability
Loss/(gain) on sale of investments
Gain on sale of assets
Impairment charge
Depreciation
Exploration expenditure written off,
expensed and impaired
Changes in assets and liabilities:
Increase/(decrease) in trade creditors and
accruals
(Increase)/decrease in sundry receivables
(5,781,089)
(1,540,602)
-
201,053
-
325,951
27,430
(750,000)
(74,227)
(6,000)
1,242,614
41,087
4,388,934
163,142
133,888
(20,220)
(127,753)
659
Net cash flow from operations
(724,053)
(1,051,080)
Material non-cash transactions
2017
During the 2017 financial year the Group issued 50,000,000 ordinary fully paid shares at a fair value of 1.5 cents per
share in settlement of a $1.5 million loan liability (Note 13).
GBM Resources Annual Report 2018
Page 60
Notes to the Financial Statements
for the Year Ended 30 June 2018
21. AUDITOR’S REMUNERATION
Amounts received or receivable by HLB Mann
Judd for:
-
Audit and review of financial reports
22. CONTROLLED ENTITIES
a) Particulars in Relation to Ownership of Controlled Entities
Belltopper Hill Pty Ltd
Syndicated Resources Pty Ltd
Willaura Minerals Pty Ltd
Isa Brightlands Pty Ltd
Isa Tenements Pty Ltd
Bungalien Phosphate Pty Ltd
Mt Coolon Gold Mines Pty Ltd
Consolidated
2018
$
2017
$
36,000
30,500
2018
%
2017
%
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and not disclosed in the note. Details of transactions between the Group
and other related parties are disclosed in note 24.
23. KEY MANAGEMENT PERSONNEL DISCLOSURES
a) Details of Key Management Personnel
The following were key management personnel of the Group at any time during the year and unless otherwise
stated were key management personnel for the entire year.
Non-Executive Director
Hun Seng Tan – Non-Executive Director
Executive Directors
Peter Thompson – Managing Director/Executive Chairman
Neil Norris – Exploration Director
GBM Resources Annual Report 2018
Page 61
Notes to the Financial Statements
for the Year Ended 30 June 2018
23. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
Total remuneration paid to key management personnel during the year:
Short-term benefits
Post-employment benefits
Consolidated
2018
$
469,349
39,252
508,601
2017
$
569,001
39,193
608,194
b) Other Transactions and Balances with Key Management Personnel
There are no other transactions with Directors, or Director related entities or associates, other than those
reported in note 24. As at 30 June 2018 an amount of $64,454 has been accrued for payment to Key
Management Personnel in respect of remuneration.
24. RELATED PARTY TRANSACTIONS
Total amounts receivable and payable from entities
in the wholly-owned group (see Note 22 for details
of controlled entities) at balance date:
Non-Current Receivables
Loans to controlled entities
Non-Current Payables
17,149,806
15,632,859
Loans from controlled entities
-
-
25. DIVIDENDS
There are no dividends paid or payable during the year ended 30 June 2017 or the 30 June 2018 comparative
year.
26. EVENTS SUBSEQUENT TO BALANCE DATE
Other than the following, there has not arisen in the interval between the end of the financial year and the date of
this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of
the Company to affect substantially the operations of the Group, the results of those operations or the state of
affairs of the Group in subsequent financial years:
• On 6 August 2018 the Company issued 47,030,000 ordinary fully paid shares at 0.5 cents per share pursuant
to a share purchase plan raising $235,150 before costs;
• On 14 August 2018 the Company issued 140,000,000 ordinary fully paid shares at 0.5 cents per share
pursuant to a share placement raising $700,000;
• On 11 September 2018 the Company received shareholder approval to issue up to 40,000,000 ordinary
fully paid shares to directors of the Company at 0.5 cents per share pursuant to a share placement raising
$200,000. These shares have not been issued at the date of signing this report; and
• On 28 September 2018 the Company announced the execution of the Twin Hills Gold Project tenement
sale agreement, the completion of which is subject to various conditions including securing project funding.
GBM Resources Annual Report 2018
Page 62
Notes to the Financial Statements
for the Year Ended 30 June 2018
27. CONTINGENCIES
(i) Contingent liabilities
There were no material contingent liabilities not provided for in the financial statements of the Group as at 30
June 2017 or 30 June 2018.
(i) Native Title and Aboriginal Heritage
Native title claims have been made with respect to areas which include tenements in which the Group has an
interest. The Group is unable to determine the prospects for success or otherwise of the claims and, in any
event, whether or not and to what extent the claims may significantly affect the Group or its projects.
Agreement is being or has been reached with various native title claimants in relation to Aboriginal Heritage
issues regarding certain areas in which the Group has an interest.
(iii) Contingent assets
There were no material contingent assets as at 30 June 2017 or 30 June 2018.
28. PARENT ENTITY INFORMATION
Financial position
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total Liabilities
NET ASSETS
Equity
Issued capital
Option reserve
Accumulated losses
TOTAL EQUITY
Financial performance
Profit/(loss) for the year
Other comprehensive income
Total comprehensive profit/(loss)
Contingent liabilities
For full details of contingent liabilities see Note 27.
Commitments
For full details of commitments see Note 19.
2018
$
2017
$
430,735
12,083,324
3,457,916
14,668,619
12,514,059
18,126,535
(430,818)
-
(255,535)
-
(430,818)
(255,535)
12,083,241
17,871,000
31,795,094
610,175
(20,322,028)
31,801,764
610,175
(14,540,939)
12,083,241
17,871,000
(5,781,089)
-
(1,540,602)
-
(5,781,089)
(1,540,602)
GBM Resources Annual Report 2018
Page 63
Directors’ Declaration
1.
In the opinion of the Directors:
a)
the accompanying financial statements and notes are in accordance with the Corporations Act
2001 including:
i.
ii.
giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its
performance for the year then ended; and
complying with Accounting Standards and Corporations Regulations 2001.
b)
c)
there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they become due and payable.
the financial statements and notes are in accordance with International Financial Reporting
Standards issued by the International Accounting Standards Board.
2.
This declaration has been made after receiving the declarations required to be made to the directors in
accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2018.
This declaration is made in accordance with a resolution of the Board of Directors.
PETER THOMPSON
Executive Chairman
Dated this 28th day of September 2018
GBM Resources Annual Report 2018
Page 64
Independent Auditor’s Report to the Members of GBM Resources Limited
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of GBM Resources Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June
2018, the consolidated statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year then ended,
and notes to the financial statements, including a summary of significant accounting policies, and the
directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its financial
performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (“the Code”) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1(a) in the financial report, which indicates the existence of material
uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters. In addition to the matter described in the Material Uncertainty
Related to Going Concern section, we have determined the matters described below to be the key audit
matters to be communicated in our report.
HLB Mann Judd (WA Partnership) ABN 22 193 232 714
Level 4 130 Stirling Street Perth WA 6000 | PO Box 8124 Perth BC WA 6849 | Telephone +61 (08) 9227 7500 | Fax +61 (08) 9227 7533
Email: mailbox@hlbwa.com.au | Website: www.hlb.com.au
Liability limited by a scheme approved under Professional Standards Legislation
HLB Mann Judd (WA Partnership) is a member of
International, a world-wide organisation of accounting firms and business advisers
GBM Resources Annual Report 2018
Page 65
Key Audit Matter
How our audit addressed the key audit
matter
Carrying amount of exploration and evaluation
expenditure
Note 8 of the financial report
At 30 June 2018, the exploration and evaluation
(2017:
expenditure was carried at $11,983,627
$14,428,442). In accordance with AASB 6 Exploration
and Evaluation of Mineral Resources, the Group
capitalises acquisition costs of rights to explore and
applies the cost model after recognition.
Our procedures included but were not
limited to the following:
We obtained an understanding of the
key
associated with
management’s review of the exploration
and evaluation asset carrying values;
processes
Our audit focussed on the Group’s assessment of the
carrying amount of the capitalised exploration and
evaluation asset. We considered this to be a key audit
matter because this is one of the significant assets of
the Group. There is a risk that the capitalised
expenditure no longer meets the recognition criteria of
the standard.
We
considered
Directors’
assessment of potential indicators of
impairment;
the
We obtained evidence that the Group
has current rights to tenure of its area of
interest;
We tested a sample of exploration
expenditures to see that it met the
requirements for capitalisation;
We examined the exploration budget for
2018/19
with
management the nature of planned
ongoing activities;
discussed
and
We
enquired with management,
reviewed ASX announcements and
minutes of Directors’ meetings
to
ensure that the Group had not decided
and
to
evaluation at its area of interest; and
We examined the disclosures made in
discontinue
exploration
the financial report.
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2018, but does not include the financial
report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and
for such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or
error.
GBM Resources Annual Report 2018
Page 66
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Australian Auditing Standards will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
GBM Resources Annual Report 2018
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From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2018.
In our opinion, the Remuneration Report of GBM Resources Limited for the year ended 30 June 2018
complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
28 September 2018
D I Buckley
Partner
GBM Resources Annual Report 2018
Page 68
ASX Additional Information
Pursuant to the Listing Rules of the Australian Securities Exchange Limited, the shareholder information set out
below was applicable as at 2 October 2018.
a. Distribution of Equity Securities
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Quoted Shares (GBZ)
Quoted Options (GBZO)
Number of Holders
Securities Held
59
67
121
412
304
963
13,428
258,139
1,067,471
17,226,326
1,032,031,611
1,050,596,975
Number of
Holders
2
26
13
57
47
Securities Held
525
81,104
109,610
2,432,411
200,768,094
145
203,391,744
There are 629 shareholders holding less than a marketable parcel of shares.
b. Twenty Largest Holders – Ordinary Shares (GBZ)
Shareholder
Citicorp Nominees Pty Ltd
BNP Paribas Nominees Pty Ltd
Longru Zheng
HSBC Custody Nominees (Australia) Limited
National Federal Capital Limited
Chew Leok Chuan
Weijun Chen
Li Rongzhi
Bikun Lin
Bradley Green
Leok Chuan Chew
Kok Yong Lim
Superfine Nominees Pty Ltd
Richgroup Holdings International Pte Ltd
Choong Jun Yen
Chung Hoi Ching
Ou Hsin Hung
Richgroup Holdings International Pte Ltd
BNP Paribas Nominees Pty Ltd
Neil Norris
Chen Yafeng
Total
Shares Held % of Issued Capital
202,539,842
19.28%
91,648,444
88,718,593
77,094,919
50,000,000
41,598,226
39,520,100
35,000,000
32,261,307
23,000,000
20,000,000
20,000,000
14,200,000
12,000,000
10,750,000
10,000,000
10,000,000
10,000,000
9,719,618
8,600,000
8,600,000
8.72%
8.44%
7.34%
4.76%
3.96%
3.76%
3.33%
3.07%
2.19%
1.90%
1.90%
1.35%
1.14%
1.02%
0.95%
0.95%
0.95%
0.93%
0.82%
0.82%
815,251,049
77.60%
GBM Resources Annual Report 2018
Page 69
ASX Additional Information
c. Substantial Shareholders
An extract of the Company’s register of Substantial Shareholders (who hold 5% or more of the issued capital) is set
out below:
Shareholder
Chew Leok Chuan
Longru Zheng
Guan Huat Loh
d. Twenty Largest Holders – Quoted Options (GBZO)
Shareholder
Chew Leok Chuan
Citicorp Nominees Pty Ltd
Longru Zheng
Richgroup Holdings International Pte Ltd
Guan Huat Sunny Loh
HSBC Custody Nominees (Aust) Ltd
BNP Paribas Noms Pty Ltd
Weijun Chen
Bikun Lin
Leok Chuan Chew
Rosegate Investments Pty Ltd
Kok Yong Lim
Timewise Holdings Pty Ltd
Beachstone Nominees Pty Ltd
Rosegate Investments Pty Ltd
Superfine Nominees Pty Ltd
Richgroup Holdings International Pte Ltd
Mainlight Investments Pty Ltd
Bradley Green
Lay Hong Lim
Total
Shares Held % of Issued Capital
121,731,560
88,718,593
60,810,708
11.59%
8.44%
5.79%
Options Held % of Issued Capital
26,931,078
25,451,468
22,179,649
19,531,521
16,531,521
12,580,616
12,339,657
9,880,025
8,065,327
5,000,000
5,000,000
5,000,000
4,094,375
3,200,000
2,997,248
2,800,000
2,500,000
2,271,788
2,000,000
1,735,837
13.24%
12.51%
10.90%
9.60%
8.13%
6.19%
6.07%
4.86%
3.97%
2.46%
2.46%
2.46%
2.01%
1.57%
1.47%
1.38%
1.23%
1.12%
0.98%
0.85%
190,090,110
93.46%
e. Voting Rights
In accordance with the Company’s Constitution, voting rights in respect of ordinary shares are on a show of hands
whereby each member present in person or by proxy shall have one vote and upon a poll, each share will have one
vote.
f. Restricted Securities
There are no restricted securities.
GBM Resources Annual Report 2018
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