ANNUAL REPORT
2016
Gold Mountain Limited
(ACN 115 845 942)
ASX:GMN
Cover image: Pan with gold and platinum in dark coatings
collected from recent trenching
CORPORATE DIRECTORY
GOLD MOUNTAIN LIMITED
ABN 95 112 425 788
ASX: GMN
Directors
Share Register
Graham Kavanagh Non-Executive Chairman
Boardroom Pty Limited
Sin Pyng “Tony” Teng Managing Director
Matthew Morgan Director - Explorations
Grosvenor Place, Level 12, 225 George Street,
SYDNEY NSW 2000,
GPO Box 3993, SYDNEY NSW 2001
Management
Eric Kam Company Secretary
David Clark Chief Financial Officer
Registered and Principal Office
Suite 2501, Level 25
31 Market Street
SYDNEY NSW 2000 Australia
Telephone: +61 2 9283 3880
Facsimile: +61 2 9477 5565
info@goldmountainltd.com.au
www.goldmountainltd.com.au
Telephone: 1300 737 760
Facsimile: 1300 653 459
Solicitor
HWL Ebsworth Lawyers
Level 14, Australia Square
264 – 278 George Street
SYDNEY NSW 2000
Banker
Australia and New Zealand Banking Group Limited
Westpac Banking Corporation Limited
Auditor
KS Black & Co. Chartered Accountants
Level 5, 350 Kent Street, SYDNEY NSW 2000
GOLD MOUNTAIN LIMITED ANNUAL REPORT
1
TABLE OF CONTENTS
CORPORATE DIRECTORY ............................................................................................................................................... 1
LETTER TO SHAREHOLDERS.......................................................................................................................................... 2
DIRECTORS’ REPORT ...................................................................................................................................................... 4
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY ............................................................................ 5
OPERATIONS REPORT................................................................................................................................................ 8
REMUNERATION REPORT (Audited)......................................................................................................................... 17
SCHEDULE OF TENEMENTS ......................................................................................................................................... 21
AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................................... 22
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME.......................................................... 23
STATEMENT OF FINANCIAL POSITION......................................................................................................................... 24
STATEMENT OF CHANGES IN EQUITY......................................................................................................................... 25
STATEMENT OF CASHFLOWS....................................................................................................................................... 26
NOTES TO THE FINANCIAL STATEMENTS ................................................................................................................... 27
DIRECTORS’ DECLARATION.......................................................................................................................................... 52
INDEPENDENT AUDITORS REPORT ............................................................................................................................. 53
ADDITIONAL SHAREHOLDER INFORMATION .............................................................................................................. 55
GOLD MOUNTAIN LIMITED ANNUAL REPORT
3
DIRECTORS’ REPORT
Your Directors submit the annual financial report of Gold Mountain Limited for the financial year ended 30 June 2016.
order to comply with the provisions of the Corporations Act, the Directors’ report as follows:
In
KEY MANAGEMENT PERSONNEL DISCLOSURES
DIRECTORS
The names of Directors who held office during or since the end of the year and until the date of this report are as follows.
Directors were in office for this entire period unless otherwise stated.
Graham Kavanagh
Matthew Morgan
Sin Pyng “Tony” Teng
Names, qualifications, experience and special responsibilities
Graham Kavanagh
Non-Executive Chairman
Qualifications
B Comm ASIA
Experience
Interest in shares
and Options
Directorships held in
other listed entities
Mr Kavanagh has an extensive background over more than 25 years in securities and fund
management, property investment and development as well as earlier experience in the
Department of Mines. He has held senior positions as securities analyst, general manager
and director in fund management and property investment.
None
No directorships held of ASX listed entities
Sin Pyng “Tony” Teng Managing Director
Qualifications
B. Econ. Dip. Fin. Mangt. CPA, FAICD, AFAIM
Experience
Mr Teng has had experience as a management consultant and with merger and acquisitions,
corporate restructuring and public company capital raising. He was co-founder and former
director of Coalworks Limited that was acquired by Whitehaven in 2012 in a $200m takeover
bid.
Interest in shares
and Options
510,000 ordinary shares
8,510,000 ordinary shares (indirect interest)
Directorships held in
other listed entities
No directorships held of ASX listed entities in the past three years
GOLD MOUNTAIN LIMITED ANNUAL REPORT
4
Matthew Morgan
Director - Explorations
Qualifications
BSc (Geology)
Experience
Mr Morgan brings over twenty years of experience in exploration and mine development with
companies including, inter alia, BHP Billiton, Rio Tinto and Theiss. Mr Morgan has filled CEO
and senior management roles in both listed and unlisted companies. His technical experience
has included exploration and mine geology, resource estimation, mine engineering and
operational management in minerals such as gold, iron ore and coal. In addition to his
experience in Australia, Mr Morgan has had international experience including Malaysia and
Mongolia, and has negotiated off-take mineral contracts with several foreign governments
Interest in shares
and Options
750,000 ordinary shares
100,000 ordinary shares (indirect interest)
Directorships held in
other listed entities
No directorships held of ASX listed entities
MANAGEMENT
Eric Kam
Company Secretary
Qualifications: FCPA, FCMA, MBA, MAICD
Mr Kam has extensive experience in finance and operations management across diverse businesses and industries in
engineering, construction, mining & resources,
finance, marketing and distribution. He is involved in
corporate change and listing of companies, and is on the board of several other companies. Mr Kam has had extensive
experience as Company Secretary in several public listed and unlisted companies.
technology,
David Clark
Chief Financial Officer
Qualifications: CA, CPA, AGIS, B Comm. (UNSW), MBA Executive (AGSM), Registered Tax Agent
Mr Clark is a Chartered Accountant, Chartered Secretary and Registered Tax Agent of over fifteen (15) years standing
and holds a Bachelor of Commerce degree from UNSW and a Master of Business of Administration (Executive) from the
Australian Graduate School of Management. Mr Clark is principal of D.W. Clark & Co., Chartered Accountant, an
innovative, results-driven chartered accounting practice providing corporate financial, taxation and secretarial services
and advice to listed and unlisted companies in the mineral exploration and oil and gas industries.
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY
DIRECTORS’ SHAREHOLDINGS
As at the date of this report, the interests of the Directors in the securities of Gold Mountain Limited were:-
Director
Name
Graham Kavanagh
Matthew Morgan
Shares and Options
Shares and Options
Direct
Nil
Nil
Indirect
Nil
850,000 shares
Sin Pyng “Tony” Teng
510,000 shares
8,510,000 shares
GOLD MOUNTAIN LIMITED ANNUAL REPORT
5
MOVEMENT IN EQUITY INSTRUMENTS (OTHER THAN OPTIONS AND RIGHTS)
Details of the movement in equity instruments (other than options and rights) held directly, indirectly or beneficially by
Directors and Key Management Personnel and their related parties are as follows:
30 June 2016
Graham Kavanagh
Matthew Morgan
Sin Pyng “Tony” Teng
Total
30 June 2015
Graham Kavanagh
Matthew Morgan2
Sin Pyng “Tony” Teng
Total
Balance at
beginning of the
Year
Granted as
remuneration
during the Year
Issued on
Exercise of
Options during
the Year
-
750,000
7,620,000
8,370,000
-
-
-
-
-
-
-
-
Other changes
during the Year
Balance at end of
the Year
-
-
100,000
850,000
1,400,000
9,020,000
1,500,000
9,870,000
Balance at
beginning of the
Year
Granted as
remuneration
during the Year
-
500,000
1,020,000
1,520,000
-
-
-
-
Issued on
Exercise of
Options during
the Year
-
250,000
Other changes
during the Year
Balance at end of
the Year
-
-
-
750,000
-
6,600,000
7,620,000
250,000
6,600,000
8,370,000
Exercise of Options
No ordinary shares were issued by the Company during and/or since the end of the financial year as a result of the
exercise of options. There are no unpaid amounts on the shares issued.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
6
Options and Rights Holdings
Details of movements in options and rights held directly, indirectly or beneficially by Directors and Key Management
Personnel and their related parties are as follows:
30 June 2016
Graham Kavanagh
Matthew Morgan
Sin Pyng “Tony” Teng
Total
30 June 2015
Graham Kavanagh
Matthew Morgan
Sin Pyng “Tony” Teng
Total
Balance at
beginning of
period
Granted as
remuneration
Options
exercised or
vested
Net change
Other
Balance at
end of period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
beginning of
period
Granted as
remuneration
Options
exercised or
vested
Net change
Other
Balance at
end of period
-
250,000
-
250,000
-
-
-
-
-
(250,000)
-
(250,000)
-
-
-
-
-
-
-
-
Options on issue at the date of this report are:-
Grant Date
16 Mar 2012
Dividends
Number
500,000
Expiry Date
31 Dec 2016
Exercise price
$0.07
Number of holders
1
No dividends have been paid or declared since the start of the financial year and/or the Directors do not recommend the
payment of a dividend in respect of the financial year.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
7
OPERATIONS REPORT
Principal Activities
The principal activity of the Company during the financial period was to acquire, explore and develop areas that are
highly prospective for gold and other precious and base metals and minerals in Australia, Papua New Guinea and
elsewhere.
Operating and Financial Review
(i)
Operations
Gold Mountain is an exploration company operating in Australia and Papua New Guinea to acquire, explore and develop
areas that are highly prospective for gold and other precious and base metals and minerals.
The Company creates value for shareholders, through exploration activities which develop and quantify mineral assets.
Once an asset has been developed and quantified within the framework of the JORC guidelines the Company may elect
to move to production, to extract and refine ore which is then sold as a primary product.
The Company is actively exploring and developing gold projects in Australia and Papua New Guinea.
Please refer to the Review of Operations for more information on the status of the projects.
(ii)
Financial Performance & Financial Position
The Company listed on the Australian Securities Exchange (ASX) on 2 September 2011 as Commissioners Gold
Limited. Following shareholder approval at the 2014 AGM, the Company changed its name to Gold Mountain Limited on
16 December 2014. The financial results of the Company for the five (5) years to 30 June 2016 are:
30 June 2016
30 June 2015
30 June 2014
30 June 2013
30 June 2012
Cash and cash equivalents
1,189,947
759,938
200,070
51,406
513,888
Net assets
3,404,265
2,460,399
1,371,820
567,107
1,333,159
Revenue & financial income
3,178
5,046
38,151
13,293
28,627
Net loss after tax
(1,515,979)
(847,685)
(526,993)
(1,559,101)
(935,084)
EBITDAX
(1,351,697)
(659,879)
(468,681)
(742,346)
(598,035)
Share price at 30 June
Loss per share (cents)
$0.036
(0.69)
$0.039
(0.57)
$0.023
(0.69)
$0.034
(3.58)
$0.044
(2.80)
a)
Financial Performance
The net loss after tax of the Company for the financial year after tax amounted to $1,515,979 (2015: Loss $847,685).
The Company is creating value for shareholders through its exploration expenditure and currently has no revenue
generating operations. Revenue and financial income are generated from interest income from funds held on deposit and
miscellaneous income. As the average funds held on deposit have increased during the year, accordingly interest
income has increased from no interest income when compared to the prior year.
During the year, the operations relating to the Papua New Guinea gold project continued and expanded as the Company
undertook its rapid exploration program, accordingly capitalised exploration increased from $1,210,941 in the 2015 FY to
$1,675,098 in the 2016 FY. Personnel and external consulting requirements increased marginally, an increase of legal
GOLD MOUNTAIN LIMITED ANNUAL REPORT
8
and professional costs from $314,225 in the 2015 FY to $346,240 in the 2016 FY. There has been an increase in public
and investor relations expense from $12,233 in the 2015 FY to $16,128 in the 2016 FY.
b)
Financial Position
The Company’s main activity during the year was the investment of cash of $1,189,947 (2015: $759,938). The carrying
value of the exploration assets and the capitalised exploration assets increased by $464,157 or 38% to $1,675,098
(2015: $1,210,941).
The 30 June 2016 financial report has been prepared on the going concern basis that contemplates the continuity of
normal business activities and the realisation of assets and extinguishment of liabilities in the ordinary course of
business. For the year ended 30 June 2016, the Company recorded a loss after tax of $1,515,979 (2015: Loss $847,685)
and had a net working capital deficiency of $77,662 (30 June 2015: Surplus of $579,856).
During the 2016 year, a share placement liability arose due to share application funds of $1,182,000 received as at
30June 2016 for unissued shares. Share application funds were received from key sophisticated and professional
investors and subsequent to the end of the year, placement to these investors took place on 8 August 2016. The
placement raised $2,402,300 through the issue of 57,197,619 shares at the placement price of $0.042 per share.
As the Company is an exploration and development entity, ongoing exploration and development activities are reliant on
future capital raisings. Based on these facts, the Directors consider the going concern basis of preparation to be
appropriate for this financial report.
(iii)
Business Strategies and Prospects for future financial years
The Company actively evaluates the prospects of each project as results from each program become available, these
results are available via the ASX platform for shareholders information. The Company then assesses the continued
exploration expenditure and further asset development. The Company will continue the evaluation of its mineral projects
in the future and undertake generative work to identify and acquire new resource projects.
There are specific risks associated with the activities of the Company and general risks which are largely beyond the
control of the Company and the Directors. The risks identified below, or other risk factors, may have a material impact on
the future financial performance of the Company and the market price of the Company’s shares.
a)
Operating Risks
The operations of the Company may be affected by various factors, including failure to locate or identify mineral deposits,
failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in mining,
sovereign risk difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown,
unanticipated metallurgical problems which may affect extraction costs, adverse weather conditions, industrial and
environmental accidents, industrial disputes and unexpected shortages or increases in the costs of consumables, spare
parts, plant and equipment.
b)
Environmental Risks
The operations and proposed activities of the Company are subject to the laws and regulations of Australia and Papua
New Guinea concerning the environment. As with most exploration projects and mining operations, the Company’s
activities are expected to have an impact on the environment, particularly if advanced exploration or mine development
proceeds. It is the Company’s intention to conduct its activities to the highest standard of environmental obligation,
including compliance with all environmental laws.
c)
Economic
General economic conditions, movements in interest and inflation rates and currency exchange rates may have an
adverse effect on the Company’s exploration, development and production activities, as well as on its ability to fund
those activities.
d)
Market conditions
Share market conditions may affect the value of the Company’s quoted securities regardless of the Company’s operating
performance. Share market conditions are affected by many factors such as:
GOLD MOUNTAIN LIMITED ANNUAL REPORT
9
(i)
(ii)
(iii)
(iv)
(v)
(vi)
general economic outlook;
introduction of tax reform or other new legislation;
interest rates and inflation rates;
changes in investor sentiment toward particular market sectors;
the demand for, and supply of, capital; and
terrorism or other hostilities.
The market price of securities can fall as well as rise and may be subject to varied and unpredictable influences on the
market for equities in general and resource exploration stocks in particular. Neither the Company nor the Directors
warrant the future performance of the Company or any return on an investment in the Company.
e)
Additional requirements for capital
The Company’s capital requirements depend on numerous factors. Depending on the Company’s ability to generate
income, the Company will require further financing. Any additional equity financing will dilute shareholdings, and debt
financing, if available, may involve restrictions on financing and operating activities. If the Company is unable to obtain
additional financing as needed, it may be required to reduce the scope of its operations and scale back its exploration
programs as the case may be. There is however no guarantee that the Company will be able to secure any additional
funding or be able to secure funding on terms favourable to the Company.
f)
Speculative investment
The above list of risk factors ought not to be taken as exhaustive of the risks faced by the Company or by investors in the
Company. The above factors, and others not specifically referred to above, may in the future materially affect the
financial performance of the Company and the value of the Company’s shares. Potential investors should consider that
the investment in the Company is speculative and should consult their professional advisers before deciding whether to
invest.
5.
Significant Changes in the State of Affairs
On 15 July, 2015, 19,510,000 ordinary shares were issued to sophisticated investors at $0.04 each pursuant to the
Underwriting Agreement to raise $780,400. Previously, on 28 May 2015, the Company announced that an Underwriting
Agreement had been entered into with a sophisticated and professional investor in respect of 27,733,455 unlisted options
which were due to expire on 29 May, 2015.
On 30 July 2015, the Company, Viva No. 20 Limited (Viva) and the Vendors (Khor Eng Hock & Sons (PNG) Limited, Mr
Siew Hong Koh and Mr Hin Hong Koh) entered into a share purchase agreement pursuant to which the Vendors agreed
to sell and the Company agreed to purchase a further 125 ordinary shares in Viva (Tranche 2 Viva Shares), comprising
50% of the issue capital of Viva in consideration for the issue by the Company to the Vendors of an aggregate of 60
million shares in the Company at an issue price of 8 cents per share. This transaction was subsequently approved by
shareholders at the 2015 AGM held on 26 November 2015.
On 2 November 2015, GMN announced that Inca One and Montan along with the shareholders of Goldsmith Resources
SAC (“Goldsmith Shareholders”) announced that the parties have entered into a binding letter agreement pursuant to
which Inca One has agreed to acquire certain assets of Montan including the Peruvian Gold Project. However, Inca One
did not proceed to complete the acquisition of any of the assets.
On 26 November 2015, the Company announced the results of the Company’s Annual General Meeting where
shareholders ratified the prior issue of securities during the period and approved the Tranche 2 share purchase
agreement between GMN, Viva and the Vendors.
On 14 March 2016, GMN announced the successful placement of 6,501,666 ordinary shares to professional and
sophisticated investors at $0.042 each to raise $273,070 for general working capital purposes.
On 22 March 2016 GMN announced completion of the acquisition of the initial 20% of the entire issued capital of Viva
No.20 Limited (“Viva”) and the issue 50 million consideration shares at $0.03 each to the Vendors in accordance to the
terms and conditions set out in the Letter Agreement of 30 June 2014 and approved by shareholders at the Annual
General Meeting held on 15 December 2014. The issue of GMN shares to the Vendors are subject to a voluntary escrow
arrangement for a period of 12 months and will be released from escrow on 22 March 2017.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
10
During the 2016 year, a share placement liability arose due to share application funds of $1,182,000 received as at 30
June 2016 for unissued shares. Share application funds were received from key sophisticated and professional
investors and placement to these investors took place on 8 August 2016. The placement raised $2,402,300 through the
issue of 57,197,619 shares at the placement price of $0.042 per share.
Review of Operations
A.
Papua New Guinea Project
Wabag, PNG (EL1966, EL1967, EL1968, EL2426, & EL2430)
As previously announced on 30 June 2014, the Company entered into an Agreement with Viva No.20 Limited (Viva), a
company incorporated in PNG, to acquire an initial 20% interest (Tranche 1) in three (3) exploration licences in Enga
province, Papua New Guinea (collectively termed the Wabag Project) with an option to acquire a further 50% (Tranche 2)
subject to certain conditions.
On 16 June 2016, the Company announced that GMN 6768 (PNG) Ltd, a 100% owned subsidiary has been successful
and granted two (2) new tenements EL2426 and EL2430 which are situated adjacent to the three (3) exploration leases
held by Viva.
• Tranche 1 Viva share purchase approved at 2014 AGM
In July 2014, Geos Mining was contracted to undertake an independent technical assessment and valuation of the
Wabag Project. Later, Nexia Australia was engaged to complete an independent expert’s report on the proposed
acquisition of the interest in Viva.
The purpose of these reports were to assist the Directors and advise the shareholders of the Company of the fairness
and reasonableness of the proposed Tranche 1 acquisition transaction. A full report can be found on the Company’s
website and ASX Announcements under the header “2014 AGM – Independent Expert’s Report” of 13 November 2014.
At the 2014 AGM held on 15 December 2014, shareholders approved the Tranche 1 share purchase agreement for the
issue of 50,000,000 ordinary shares to the Vendors. Simultaneously, the Vendors will issue 50 ordinary shares to GMN
comprising 20% of the entire issued capital of Viva held by the Vendors.
On 22 March 2016 GMN completed the acquisition of the initial 20% of the entire issued capital of Viva No.20 Limited
(“Viva”) and issued 50 million consideration shares at $0.03 each to the Vendors in accordance to the terms and
conditions set out in the Letter Agreement of 30 June 2014 and approved by shareholders at the Annual General
Meeting held on 15 December 2014. The issue of GMN shares to the Vendors are subject to a voluntary escrow
arrangement for a period of 12 months and will be released from escrow on 22 March 2017.
• Tranche 2 Viva share purchase approved at 2015 AGM
On 30 July 2015, the Company entered into an Agreement with Viva No.20 Limited (Viva), a company incorporated in
PNG, to acquire a further 50% interest in three (3) exploration licences in Enga province, Papua New Guinea (collectively
termed the Wabag Project). Nexia Australia was engaged, again, to complete an independent expert’s report on the
proposed acquisition of the 50% interest in Viva.
A full report can be found on the Company’s website and ASX Announcements under the header “2015 AGM – Section
D Independent Expert’s Report” of 27 October 2015.
At the 2015 AGM held on 26 November 2015, shareholders approved the Tranche 2 share purchase agreement between
GMN, Viva and the Vendors.
Following the completion of certain administrative procedures relating to the transfer of Viva shares and subsequent to
the end of the financial year on 16 August 2016, the Company completed the acquisition of a additional 50% interest in
the PNG project company, Viva No. 20 Limited (Viva) and issued the Appendix 3B for the consideration shares.
The project covers a suite of Miocene intermediate intrusive rocks, related volcanics and younger metasediments of the
New Guinea Thrust Belt, a strongly mineralised structural zone that dominates the Central Highlands region of PNG.
Previous exploration has identified gold and platinum anomalies in stream sediments, most noticeably in the Timun River
area of EL1968, where historic production of around 100kg gold and 3.5kg platinum has been recorded from alluvial
mining operations since 1948. Artisanal gold mining is currently being undertaken in several locations within the Wabag
Project area (Figure 1).
GOLD MOUNTAIN LIMITED ANNUAL REPORT
11
Exploration conducted by Gold Mountain Limited during 2014 & 2015 has detected anomalous gold and base metal
zones over numerous locations including the Sak Creek prospect (EL1966) and Crown Ridge prospect (EL1968).
Figure 1: Location of Wabag Project Exploration Leases, PNG
Crown Ridge Prospect EL1968
The Mineral Resource Authority (MRA) of Papua New Guinea were contracted to conduct a ground magnetics
geophysical survey on GMN's highly prospective Crown Ridge project (EL1968) in order to define and enhance GMN's
conceptual model for the gold and platinum mineralisation discovered.
Following the completion of a ground magnetics geophysical survey an independent Geophysical Consultants has been
engaged to review, process and model the data.
The aim of the survey is as follows:
• Ground magnetics to outline the current Geological Structural setting, and assist in planning future hard rock drill
targets.
• Ground magnetics to help in differentiating the varying lithology recovered in float sampling programs.
This review and modelling of the data was completed in May 2016.
Sak Creek Prospect EL1966
Gold Mountain Limited completed a helicopter supported, combined soil and rock sampling program on the Sak Creek
prospect (EL1966), designed to follow up on previous anomalous results from the initial late 2014 field investigation.
Testing of streams and tributaries in the sampling area was conducted using traditional gold panning methods with
positive results with gold grains recovered in all instances.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
12
B.
Peruvian Project
Goldsmith Resources SAC
At the 2014 AGM held on 15 December 2014, shareholders were advised that the current investments in the Peruvian
Project whereby the Company has 18.75% interest in Goldsmith Resources SAC, Peru is being placed under review
following reports of continuing production delays and further calls for additional capital requirements.
On 29 October 2015, Inca One Gold Corp. (TSX.V: IO) (“Inca One”) and Montan Mining Corp. (TSX.V:MNY) (“Montan”)
along with the shareholders of Goldsmith Resources SAC (“Goldsmith Shareholders”) announced that the parties have
entered into a binding letter agreement pursuant to which Inca One has agreed to acquire certain assets of Montan
including the Peruvian Gold Project.
Following the review of the Peruvian project and subsequent announcement by Inca One, the GMN Board have decided
to impair the carrying amount of this investment and the associated receivable resulting in an asset impairments expense
of $514,640 and doubtful debts expense of $158,054 (respectively).
The changed circumstances and inherent uncertainties in the transaction indicate the carrying amount may not be
recoverable. Accordingly, the value of these assets are carried at a nominal value of $1 each and will be written back to
realisable values should the assets in the Peruvian project can eventually be disposed.
C.
Australian Projects
The Company continues to assess its exploration assets in NSW, with particular focus on Cowarra gold project, in
southern NSW. The Company has been approached by several individual companies expressing interests in the NSW
tenement suite. Non disclosure agreements have been executed and the projects are currently under due diligence and
consideration.
Cowarra, NSW (EL5939) – (acquiring 100% interest)
The Cowarra Project (EL5939) is held by Gold Mountain Limited (50%) and Capital Mining Limited (ASX:CMY) under a
farm-in agreement whereby Gold Mountain can earn up to 85% by exploration expenditure.
Cowarra is a gold mineralisation project 2.8 km by 300-400m and to date a JORC inferred resource of 38,000 ozs in
open pittable oxides has been identified. Good access, power and water is readily available. Further exploration will be
required to establish an economic reserve and progress it to project status.
On 6th January 2015, the Company announced that it had entered into an agreement with Capital Mining Limited to
purchase the remaining unearned interest in the Cowarra Project.
No further work was completed on the tenement during the half year to 30 June 2016. Application for renewal of the
tenement, reduced to 7 graticular sub-blocks, was lodged on 20 April 2015.
In recent conversations with NSW
Department of Industry, Resources and Energy Gold Mountain Limited have been informed the transfer of the title to
Gold Mountain is still in progress.
Dalton, NSW (EL6922) – (100%)
This Exploration Licence in which GMN has a 100% interest consists of a regional shear zone hosting gold
mineralisation. Shallow rotary core drilling has returned a high gold value of 32g/t over 1 metre. Follow up work is
planned along strike in a northerly direction. The licence covers a number of historic workings. Expenditure
commitments to 2016 total $154,500.
No further work was completed on the tenement during the year to 30 June 2016. The renewal application submitted to
NSW Department of Industry, Resources and Energy was approved on 17 February 2016 for further term of 24 months,
ending 24 October 2017.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
13
Grenfell, NSW (EL8263) – (100%)
The Company holds a 100% interest in Exploration Licence 8263 granted on 16 May 2014 and covers the historic
Grenfell gold field in Central NSW. EL 8263 embraces 22 shallow gold quartz reefs which were worked a century ago to
produce approximately 150,000 ozs of gold. The exploration plan is to focus on possible extensions on the line of strike
from the old gold workings and subsequently at depth.
No further work was completed on the tenement during the year to 30 June 2016. The EL is due to expire on 30 April
2017.
Capital Raisings
During the reporting period, the Company conducted two capital raisings. In total, the Company raised $1,053,470 to
fund ongoing operations in Papua New Guinea and Australia.
Capital Raising
Date
Shares Issued
Price
Amount Raised
Placement
Placement
Placement to Vendor
Total
15-07-2015
14-03-2016
22-03-2016
19,510,000
6,501,666
50,000,000
76,011,666
$0.040
$0.042
$0.030
780,400
273,070
-
$1,053,470
On 15 July 2015, the Company completed a successful capital raising of $780,400 through the issue of 19,510,000
ordinary shares at $0.04 per share by way of a private placement pursuant
to
professional and sophisticated investors.
to the Underwriting Agreement
On 14 March 2016, the Company completed a successful capital raising of $273,070 through the issue of 6,501,666
ordinary shares at $0.042 per share by way of a private placement to professional and sophisticated investors.
On 22 March 2016, the acquisition of the initial 20% of the issued capital of Viva No.20 Limited was completed. 50 million
shares at $0.03 each were issued as non cash consideration to the Vendors in accordance with the terms and conditions
set out in the Letter Agreement of 30 June 2014 and approved by shareholders at the Annual General Meeting held on
15 December 2014.
During the 2016 year, a share placement liability arose due to share application funds of $1,182,000 received as at 30
June 2016 for unissued shares. Share application funds were received from key sophisticated and professional
investors and placement to these investors took place on 8 August 2016. The placement raised $2,402,300 through the
issue of 57,197,619 shares at the placement price of $0.042 per share.
Risk management
Details of the Company’s Risk Management policies are contained within the Corporate Governance Statement.
Corporate Governance
A statement disclosing the extent to which the Company has followed the best practice recommendations set by the ASX
Corporate Governance Council during the period is displayed on the Company’s website.
Subsequent events after balance date
On 3 August 2016, the Company announced it had successfully raised $2.3 million through the issue of 54 million new
shares at an issue price of $0.042 per share under the Company’s existing placement capacity. The company also
announced it will seek shareholder approval to issue options to subscribers of the Placement Shares, at no additional
cost, on the basis of one option for each two Placement Shares subscribed.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
14
On 9 August 2016, the Company issued Appendix 3B for the issue of 57,197,619 new fully paid ordinary shares in the
Company raising a total of $2,402,300. Of these shares, 25,447,359 shares were issued under Listing Rule 7.1A
Additional Placement Capacity approved by shareholders at the 2015 Annual General Meeting.
On 9 August 2016, the Company announced the recommencement of exploration activity at the Company’s flagship
Crown Ridge gold project within EL1968 in the PNG Highlands region following completion of the three-dimensional (3D)
modelling of the Magnetic Survey and that 35 shallow anomalous targets had been identified and an extensive trenching
program commenced over these target areas.
On 16 August 2016, the Company announced completion of the acquisition of additional 50% interest in the PNG project
company, Viva No. 20 Limited (Viva) and issued the Appendix 3B for the consideration shares. The Company also
advised that on completion of this acquisition, the Company now holds a controlling interest of 70% in Viva.
On 23 August 2016, the Company announced it had signed an exclusive agreement with the owner of the highly
prospective EL2306 tenement, which adjoins flagship Crown Ridge gold project. In consideration for the payment by the
Company of the fee of AUD150,000 the owner has granted the Company an exclusive dealing period of 270 days ending
on 19 May 2017.
On 29 August 2016 the Company announced the issue of 18,900,000 share options to employees, consultants and
directors of the Company pursuant to the Company’s Employee Share Option Plan. The options have an exercise price
of $0.30, expire 36 months after the grant date and are subject to certain vesting conditions such that the Company's
underlying share price must exceed $0.50 based on volume weighted average price (VWAP) over a 5 day consecutive
period; the holder must be an actual consultant to or employee of the Company at the time of exercise of the relevant
Granted Options and the exercise period shall not commence until a date that is at least 12 months after the date of the
grant of the Granted Options to the holder.
On 1 September 2016 the Company announced preliminary results from its ongoing trenching program, which confirmed
visible gold, from initial 92 metres of trenching at its flagship project, Crown Ridge, EL1968, Wabag, PNG. The trenching
program is being undertaken to investigate magnetic anomalies defined by the processing of the ground magnetics
surveyed during 2015.
On 8 September 2016, the Company announced the Notice of an Extraordinary General Meeting to be held on 11
October 2016 to seek approval from shareholders for the prior issue of ordinary shares and refresh the Company's 15%
placement capacity; for the issue of options to August 2016 placement investors and promoters; to raise additional
capital by issue of up to 80m shares (up to $10m); and for the issue of options under the Employee Share Option Plan.
On 22 September 2016 the Company announced the completion of an extensive airborne magnetic survey over
tenements EL1966, EL1968, & EL2306, as well as the commencement of an extensive bulk sampling program at the
Crown Ridge Gold Project following discovery of high presence of free gold in the majority of trenches (see figure 2). At
about the same time, due diligence exploration work has commenced on the prospective EL2306 tenement targeting an
“interpreted crater rim” diatreme.
Figure 2: Gold and platinum recovered from trenching EL1968 (Sample on pan weighs
approximately 10g Au and 2g Pt)
GOLD MOUNTAIN LIMITED ANNUAL REPORT
15
There has not been any other matter or circumstance that has arisen after balance date that has significantly affected, or
may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the
Company in future financial periods.
Environmental legislation
The Company is subject to significant environmental and monitoring requirements in respect of its natural resource
exploration activities. The Directors are not aware of any significant breaches of these requirements during the period.
Indemnification and insurance of Directors and Officers
The Company has agreed to indemnify all the Directors of the Company for any liabilities to another person (other than
the Company or related entity) that may arise from their position as Directors of the Company, except where the liability
arises out of conduct involving a lack of good faith.
During the financial year, GMN paid a premium in respect of a contract insuring the Directors and officers of the
Company against any liability incurred in the course of their duties to the extent permitted by the Corporations Act 2001.
The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
Options
No options over issued shares or interest in the Company were granted during or since the end of the financial year.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
16
REMUNERATION REPORT (AUDITED)
in consultation with the Remuneration Committee,
The Board,
is responsible for determining and reviewing
compensation arrangements for the directors and executive management. The Board assesses the appropriateness of
the nature and amount of remuneration of key personnel on an annual basis. In determining the amount and nature of
officers’ packages, the Board takes into consideration the Company’s financial and operational performance along with
industry and market conditions.
The Committee has the authority to retain any outside advisor at the expense of the Company, without the Board’s
approval, at any time and has the authority to determine any such advisor’s fees and other retention terms.
In setting corporate goals and objectives relevant to Senior Executives’ compensation, the Committee considers both
short-term and long-term compensation goals and the setting of criteria around this. In relation to setting Directors’
remuneration the Committee looks at and considers comparative data from similar companies.
This report outlines the remuneration arrangements in place for Directors and Key Management Personnel of Gold
Mountain Limited (the “Company”) for the financial year ended 30 June 2016.
The following persons acted as Directors during or since the end of the financial year:
Graham Kavanagh
Matthew Morgan
Sin Pyng “Tony” Teng
The term ‘Key Management Personnel’ is used in this remuneration report to refer to the following persons. Except as
noted, the named persons held their current position for the whole of the financial year and since the end of the financial
year:
Graham Kavanagh
Matthew Morgan
Sin Pyng “Tony” Teng
Remuneration Philosophy
Eric Kam
David Clark
The performance of the Company depends upon the quality of the Directors and executives. The philosophy of the
Company in determining remuneration levels is to:
•
•
•
set competitive remuneration packages to attract and retain high calibre employees;
link executive rewards to shareholder value creation; and
establish appropriate, demanding performance hurdles for variable executive remuneration
Remuneration Committee
The Remuneration Committee of the Board of Directors of the Company is responsible for determining and reviewing
compensation arrangements for the Directors and the Senior Management team.
The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of Directors and
senior executives on a periodic basis by reference to relevant employment market conditions with an overall objective of
ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
17
Remuneration Structure
In accordance with best practice Corporate Governance,
remuneration is separate and distinct.
the structure of Non-Executive Director and executive
Non-Executive Director Remuneration
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain
Directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.
Each Director is entitled to such remuneration from the Company as the Directors decide, but the total amount provided
to all non-executive directors must not exceed in aggregate the amount fixed by the Company in a general meeting. The
aggregate remuneration for all non-executive directors has been set at an amount of $300,000 per annum.
The ASX Listing Rules specify that the aggregate remuneration of Non-Executive Directors shall be determined from
time to time by a general meeting.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned
amongst Directors is reviewed annually. The Board considers advice from external shareholders as well as the fees paid
to Non-Executive Directors of comparable companies when undertaking the annual review process.
Each Director is entitled to receive a fee for being a Director of the Company.
The remuneration of Non-Executive Directors for the year ended 30 June 2016 is detailed in the Remuneration of
Directors and named executives section of this report on the following pages of this report.
Senior Manager and Executive Director Remuneration
Remuneration consists of fixed remuneration and Company options (as determined from time to time). In addition to the
Company employees and Directors,
the Company has contracted key consultants on a contractual basis. These
contracts stipulate the remuneration to be paid to the consultants.
Fixed Remuneration
Fixed remuneration is reviewed annually by the Independent Directors’ Committee (which assumes the role of the
Remuneration Committee). The process consists of a review of relevant comparative remuneration in the market and
internally and, where appropriate, external advice on policies and practices. The Committee has access to external,
independent advice where necessary.
Fixed remuneration is paid in the form of cash payments.
The fixed remuneration component of the six most highly remunerated Company executives is detailed in Table 1.
Employment Contracts
During the year and to the date of this report there are no employment contracts with the Company.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
18
Remuneration of Directors and named executives
Table 1: Directors’ and named executives remuneration for the year ended 30 June 2016
Short-term employee benefits
Salary &
Fees
Bonuses
Non-
Monetary
Benefits
Post-employment
benefits
Super-
annuation
Prescribed
Benefits
Equity
Other
Total
%
Options
Shares
Deferred
Benefits
Performance
Related
Graham Kavanagh 1
36,000
Matthew Morgan 2
Sin Pyng “Tony”
Teng 3
Eric Kam 4
David Clark 5
Total
108,000
108,000
72,000
44,400
368,400
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,140
-
-
1,140
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
36,000
108,000
109,140
72,000
44,400
369,540
0%
0%
0%
0%
0%
-
1. Paid to Drumcliffe Investments Pty Ltd for corporate advisory services of which Mr Kavanagh is a director and shareholder.
2. Paid to Mineral X Pty Ltd for corporate advisory services of which Mr Morgan is a director and shareholder.
3. Paid to Rodby Holdings Pty Ltd for corporate advisory services of which Mr Teng is a director.
4. Paid to Useful Ways Pty Ltd for corporate advisory services of which Mr Kam is a director and shareholder.
5. Paid to D.W. Clark & Co., Chartered Accountant for corporate advisory services of which Mr Clark is principal.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
19
Table 2: Directors’ and named executives remuneration for the year ended 30 June 2015
Short-term employee benefits
Salary &
Fees
Bonuses
Non-
Monetary
Benefits
Post-employment
benefits
Super-
annuation
Prescribed
Benefits
Equity
Other
Total
%
Options
Shares
Deferred
Benefits
Performance
Related
Graham Kavanagh 1
36,000
Matthew Morgan 2
Sin Pyng “Tony”
Teng 3
Eric Kam 4
David Clark 5
Total
100,000
100,000
72,000
24,405
332,405
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,140
-
-
1,140
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
36,000
100,000
101,140
72,000
24,405
333,545
0%
0%
0%
0%
0%
-
GOLD MOUNTAIN LIMITED ANNUAL REPORT
20
Other Key Management Personnel Transactions
The Company has established the Gold Mountain Limited Employee Share Option Plan (ESOP) and a summary of the
terms and conditions of the Plan are set out below:
i.
ii.
iii.
iv.
v.
vi.
vii.
All employees (full time and part time) will be eligible to participate in the Plan.
Options are granted under the Plan at the discretion of the board and if permitted by the board, may be
issued to an employee's nominee.
Each option is to subscribe for one ordinary share in the Company and will expire 5 years from its date of
issue. An option is exercisable at any time from its date of issue provided all relevant vesting conditions, if
applicable, have been met. Options will be issued free. The exercise price of options will be determined by
the board. The total number of shares the subject of options issued under the Plan, when aggregated with
issues during the previous 5 years pursuant to the Plan and any other employee share plan, must not exceed
5% of the Company's issued share capital.
If, prior to the expiry date of options, a person ceases to be an employee of the Company for any reason
than retirement at age 60 or more (or such earlier age as the board permits), permanent
other
disability,
that person's nominee)
to occur of a) the expiry of the period of 30 days from the date of such
automatically lapse on the first
occurrence, and b) the expiry date.
the options held by that person will be
If a person dies,
exercisable by that person's legal personal representative.
the options held by that person (or
redundancy or death,
Options cannot be transferred other
holder.
than to the legal personal
representative of a deceased option
The Company will not apply for official quotation of any options.
Shares issued as a result of
issued shares.
the exercise of options will rank equally with the Company's previously
viii.
Option holders may only participate in new issues of securities by first exercising their options.
ix.
x.
Options are granted under the plan for no consideration.
Each share options converts into one ordinary shares of Gold Mountain Limited.
The Board may amend the terms and conditions of the plan subject to the requirements of the Listing Rules.
There have been no other transactions involving equity instruments other than those described in the tables above. For
details of other transactions with Key Management Personnel, refer to Note 18: Related Party Disclosures.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
21
SCHEDULE OF TENEMENTS
Tenement
Number
Name
Location
(sq.km.) Holder
Area
GMN
Interest
19.5
Capital Mining Limited
50 – 100%
EL 5939 1
Cowarra
EL 6922
Dalton
EL 8263
Glenfell
EL1966
Sak Creek
NSW
NSW
NSW
PNG
19.5
Gold Mountain Limited
11.4
Gold Mountain Limited
120
Viva No.20 Limited
EL 1967
Pocket Creek
PNG
147
Viva No.20 Limited
EL 1968
Crown Ridge
PNG
164
Viva No.20 Limited
EL 2426
Keman
PNG
99
GMN 6768 (PNG) Limited
EL 2330
Meriamanda
PNG
311
GMN 6768 (PNG) Limited
Notes:
1. EL 5939 in the name of Capital Mining Limited, registration of transfer of authority to
Gold Mountain Limited in process at NSW Resources.
100%
100%
70%
70%
70%
100%
100%
GOLD MOUNTAIN LIMITED ANNUAL REPORT
23
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2016
Other income
Administration costs
Depreciation expenses
Doubtful debts expense
Employment costs
Exploration expense
Impairments expense
Investor and public relations expense
Legal and professional costs
Other expenses
Loss before income tax expense
Income tax expense
Net loss for the year
Other comprehensive income
Total comprehensive loss for the year
Loss per share
Basic loss per share (cents)
Diluted loss per share (cents)
Note
3
9
11
2016
$
3,178
3,178
2015
$
5,046
5,046
(238,426)
(196,137)
(643)
(158,054)
(62,600)
(164,925)
(642)
(52,685)
(64,740)
(225)
(514,640)
(187,581)
(16,128)
(12,233)
(346,240)
(314,226)
(17,501)
(24,262)
(1,515,979)
(847,685)
5
-
-
(1,515,979)
(847,685)
-
-
(1,515,979)
(847,685)
20
(0.69)
N/A
(0.57)
N/A
The statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
25
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment
Deferred exploration and evaluation expenditure
Equity accounted investees
Available-for-sale financial assets
Investments
Other assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Other current liabilities
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
2016
$
2015
$
6
7
8
9
10
11
12
13
14
15
16
17
1,189,947
45,817
1,235,764
759,938
226,045
985,983
1,273
1,461
1,675,098
1,210,941
1,575,000
1
200,555
30,000
-
514,641
124,500
30,000
3,481,927
1,881,543
4,717,691
2,867,526
131,426
1,182,000
1,313,426
1,313,426
86,727
320,400
407,127
407,127
3,404,265
2,460,399
9,645,792
7,185,947
23,250
52,425
(6,264,777)
(4,777,973)
3,404,265
2,460,399
The statement of financial position should be read in conjunction with the accompanying notes.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
26
STATEMENT OF CHANGES IN EQUITY
FOR YEAR ENDED 30 JUNE 2016
Balance at 1 July 2014
Share Capital
Reserves
Accumulated
Losses
$
$
$
Total
$
5,249,683
90,975
(3,968,838)
1,371,820
Total comprehensive income/(loss)
Total comprehensive income/(loss) for
the year
-
-
Transactions with owners in their
capacity as owners
Issue of share capital
Share issue costs
Lapse of options
Total transactions with owners in their
capacity as owners
2,074,321
(138,057)
-
-
-
-
(847,685)
(847,685)
(847,685)
(847,685)
-
-
2,074,321
(138,057)
-
(38,550)
38,550
-
1,936,264
(38,550)
38,550
1,936,264
Balance at 30 June 2015
7,185,947
52,425
(4,777,973)
2,460,399
Balance at 1 July 2015
7,185,947
52,425
(4,777,973)
2,460,399
Total comprehensive income/(loss)
Total comprehensive income/(loss) for
the year
-
-
Transactions with owners in their
capacity as owners
Issue of share capital
Share issue costs
Lapse of options
Total transactions with owners in their
capacity as owners
2,553,470
(93,625)
-
-
-
-
(1,515,979)
(1,515,979)
(1,515,979)
(1,515,979)
-
-
2,553,470
(93,625)
-
(29,175)
29,175
-
2,459,845
(29,175)
29,175
2,459,845
Balance at 30 June 2016
9,645,792
23,250
(6,264,777)
3,404,265
The statement of changes in equity should be read in conjunction with the accompanying notes.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
27
STATEMENT OF CASHFLOWS
FOR YEAR ENDED 30 JUNE 2016
Cash flows from operating activities
Interest received
Payments to suppliers and employees
Note
2016
$
2015
$
3,178
4,046
(620,893)
(632,093)
Net cash (used in) provided by operating activities
26
(617,715)
(628,047)
Cash flows from investing activities
Payments for plant and equipment
Payments for other investments
Payments for exploration and evaluation
Net cash (used in) provided by investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments for share issue costs
Proceeds from borrowings
Net cash provided by (used in) financing activities
Net increase/(decrease) in cash
and cash equivalents
12
9
(455)
(2,103)
(150,000)
(124,500)
(623,266)
(742,145)
(773,721)
(868,748)
733,070
1,874,320
(93,625)
(138,057)
1,182,000
320,400
1,821,445
2,056,663
430,009
559,868
Cash and cash equivalents at beginning of financial year
759,938
Cash and cash equivalents at end of financial year
6
1,189,947
200,070
759,938
The statement of cashflows should be read in conjunction with the accompanying notes.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
28
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
This financial report includes the financial statements and notes of Gold Mountain Limited.
Number
Notes to the Financial Statements
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
Summary of significant accounting policies
Operating segments
Revenue & other income
Loss for the year
Income tax expense
Current assets - Cash and cash equivalents
Current assets - Trade and other receivables
Non-current assets – Plant and equipment
Non-current assets – Deferred exploration and evaluation expenditure
Non-current assets – Equity accounted investees
Non-current assets – Available for sale financial assets
Non-current assets – Investments
Non-current assets – Other assets
Current liabilities – Trade and other payables
Current liabilities – Other current liabilities
Contributed equity
Reserves
Related party disclosures
Key management personnel compensation
Loss per share
Financial Risk Management
Auditor’s remuneration
Commitments and contingencies
Dividends
Events subsequent to reporting date
Cash flow information
GOLD MOUNTAIN LIMITED ANNUAL REPORT
29
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES
a.
Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with
Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of
the Australian Accounting Standards Board (AASB) and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in
financial statements containing relevant and reliable information about transactions, events and conditions.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply
with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in
the preparation of these financial statements are presented below and have been consistently applied unless
otherwise stated.
The financial statements have been prepared on an accruals basis and are based on historical costs, modified,
where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial
liabilities
b.
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
When the Company applies an accounting policy retrospectively, makes a retrospective restatement or
reclassifies items in its financial statements, financial statements as at the beginning of the earliest comparative
period will be disclosed.
c.
Principles of consolidation
Business combinations
For every business combination, the Company identifies the acquirer, which is the combining entity that obtains
control over the other combining entities. An investor controls an investee when it is exposed to, or has rights to,
variable returns from its involvement with the investee and has the ability to affect those returns through its
power over the investee. In assessing control, the Company takes into consideration potential voting rights that
are currently exercisable. The acquisition date is the date on which control is transferred from the acquirer.
Interests in equity-accounted investees
The Company’s interests in equity-accounted investees comprise the interest in a joint venture. A joint venture is
a joint arrangement, whereby the Group and other parties have joint control and have rights to the net assets of
the arrangement. The interest in the joint venture is accounted for using the equity method. It is recognised initial
at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements
include the Company’s share of the profit or loss and OCI of equity-accounted investees, until the date on which
significant influence or joint control ceases.
Joint arrangements
As a result of AASB 11, the Company has changed its accounting policy for its interests in joint arrangements.
Under AASB 11, the Company has classified its interests in joint arrangements as either joint operations (if the
Group has rights to the assets, and obligations for the liabilities, relating to an arrangement) or joint ventures (if
the Group has rights only to the net assets of an arrangement).
When making this assessment, the Company considered the structure of the arrangements, the legal form of
any separate vehicles, the contractual terms of the arrangements and other facts and circumstances. Previously,
the structure of the arrangement was the sole focus of classification.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
30
The Company did not have any joint arrangements at the start of the financial year. On 22 March 2016, GMN
announced the acquisition of the initial 20% of the entire issued capital of Viva No.20 Limited. As a result of the
acquisition and in accordance with AASB 11, the new arrangement has been recognised as a joint venture. In
accordance with AASB 11, the investment has been equity accounted for.
d.
Impairment of Assets
At the end of each reporting period, the Company assesses whether there is any indication that an asset may be
impaired. The assessment will include the consideration of external and internal sources of information. If such
an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the
asset, being the higher of the asset’s fair value less costs to sell and value in use, to the asset’s carrying
amount. Any excess of the asset’s carrying amount over its recoverable amount is recognised immediately in
profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (eg in
accordance with the revaluation model in AASB 116). Any impairment loss of a revalued asset is treated as a
revaluation decrease in accordance with that Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
e.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks and other short-
term highly liquid investments with original maturities of three months or less.
f.
Provisions
Provisions are recognised when the Company has a legal or constructive obligation, as a result of past events,
for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of
the reporting period.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
31
g.
Trade and other payables
Trade and other payables represent the liability outstanding at the end of the reporting period for goods and
services received by the Company during the reporting period which remain unpaid. The balance is recognised
as a current liability with the amounts normally paid within 30 days of recognition of the liability.
h.
Income Tax
The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred
tax expense (income).
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities
(assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during
the year as well unused tax losses.
Current and deferred income tax expense (income) is charged or credited outside profit or loss when the tax
relates to items that are recognised outside profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when
is realised or the liability is settled and their measurement also reflects the manner in which
the asset
management expects to recover or settle the carrying amount of the related asset or liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent
that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset
can be utilised.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended
that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur.
Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the
deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same
taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and
settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred
tax assets or liabilities are expected to be recovered or settled.
i.
Exploration and Development Expenditure
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)
(ii)
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
(a)
(b)
the exploration and evaluation expenditures are expected to be recouped through successful
development and exploration of the area of interest, or alternatively, by its sale; or
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.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
32
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.
Where a decision has been made to proceed with development in respect of a particular area of interest, the
relevant exploration and evaluation asset is tested for impairment and the balance is then reclassified to
development.
Costs of site restoration are provided over the life of the project from when exploration commences and are
included in the costs of that stage. Site restoration costs include the dismantling and removal of mining plant,
equipment and building structures, waste removal, and rehabilitation of the site in accordance with local laws and
regulations and clauses of the permits. Such costs have been determined using estimates of future costs,
current legal requirements and technology on an undiscounted basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs of site
restoration, there is uncertainty regarding the nature and extent of the restoration due to community expectations
and future legislation. Accordingly the costs have been determined on the basis that the restoration will be
completed within one year of abandoning the site.
j.
Revenue and Other Income
Revenue is measured at
the consideration received or receivable. When the inflow of
consideration is deferred, it is treated as the provision of financing and is discounted at a rate of interest that is
generally accepted in the market
initially
recognised and the amount ultimately received is interest revenue.
The difference between the amount
for similar arrangements.
the fair value of
All revenue is stated net of the amount of goods and services tax (GST).
k.
Earnings (Loss) per share
Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude
any costs of servicing equity (other than dividends) divided by the weighted average number of ordinary shares,
adjusted for any bonus element.
Diluted earnings per share is calculated as net profit attributable to members, adjusted for:
(i)
(ii)
(iii)
costs of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
other non-discretionary changes in revenues or expenses during the period that would result from the
dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and
dilutive potential ordinary shares, adjusted for any bonus element.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
33
l.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of
GST recoverable from, or payable to, the ATO is included with other receivables or payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows
included in receipts from customers or payments to suppliers.
m.
Plant and Equipment
Each class of plant and equipment is carried at cost or fair value as indicated less, where applicable, any
accumulated depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation
In the event the carrying amount of plant and equipment is greater than the
and any accumulated impairment.
estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable
amount and impairment losses are recognised either in profit or loss or as a revaluation decrease if the
impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when
impairment indicators are present.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the
recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net
cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash
flows have been discounted to their present values in determining recoverable amounts.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Company and the
cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of
profit or loss and other comprehensive income during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset’s useful life to the
Company commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Plant and equipment
20%-32%
The assets’ residual values and useful
reporting period.
lives are reviewed, and adjusted if appropriate, at the end of each
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are included in the statement of profit or loss and other comprehensive income. When revalued
assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained
earnings.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
34
n.
Financial Instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the Company commits itself to
either the purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is
classified “at fair value through profit or loss”, in which case transaction costs are expensed to profit or loss
immediately.
Classification and subsequent measurement
Finance instruments are subsequently measured at fair value, amortised cost using the effective interest rate
method, or cost.
Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition less
principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the
difference between that initial amount and the maturity amount calculated using the effective interest method.
The effective interest method is used to allocate interest income or interest expense over the relevant period and
is equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction
costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the
contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability.
to the carrying value with a
Revisions to expected future net cash flows will necessitate an adjustment
consequential recognition of an income or expense item in profit or loss.
(i)
Financial assets at fair value through profit or loss
Financial assets are classified at “fair value through profit or loss” when they are held for trading for the
purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated
as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial
assets is managed by key management personnel on a fair value basis in accordance with a documented
risk management or investment strategy. Such assets are subsequently measured at fair value with
changes in carrying value being included in profit or loss.
(ii)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, where they are expected to mature within 12
months after the end of the reporting period.
(iii)
Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or
determinable payments, and it is the Company’s intention to hold these investments to maturity. They are
subsequently measured at amortised cost.
Held-to-maturity investments are included in non-current assets where they are expected to mature within
12 months after the end of the reporting period. All other investments are classified as current assets.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
35
(iv)
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be
classified into other categories of financial assets due to their nature, or they are designated as such by
management. They comprise investments in the equity of other entities where there is neither a fixed
maturity nor fixed or determinable payments.
They are subsequently measured at fair value with changes in such fair value (ie gains or losses)
recognised in other comprehensive income (except for impairment losses and foreign exchange gains and
losses). When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset
previously recognised in other comprehensive income is reclassified into profit or loss.
Available-for-sale financial assets are included in non-current assets where they are expected to be sold
within 12 months after the end of the reporting period. All other financial assets are classified as current
assets.
(v)
Financial liabilities
Non-derivative financial
amortised cost.
Impairment
liabilities (excluding financial guarantees) are subsequently measured at
At the end of each reporting period, the Company assesses whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the
value of the instrument is considered to determine whether an impairment has arisen. Impairment losses are
recognised in profit or
loss. Also, any cumulative decline in fair value previously recognised in other
comprehensive income is reclassified to profit or loss at this point.
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is
transferred to another party whereby the Company no longer has any significant continuing involvement in the
risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations
liability
are discharged, cancelled or expired. The difference between the carrying value of
extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-
cash assets or liabilities assumed, is recognised in profit or loss.
the financial
o.
Employee Benefits
Provision is made for the Company’s liability for employee benefits arising from services rendered by employees
to the end of the reporting period. Employee benefits that are expected to be settled within one (1) year have
been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later
than one (1) year have been measured at the present value of the estimated future cash outflows to be made for
those benefits. In determining the liability, consideration is given to employee wages increases and the probability
that the employee may satisfy vesting requirements. Those cash flows are discounted using market yields on
national government bonds with terms to maturity that match the expected timing of cash flows.
p.
Rounding of Amounts
The parent entity has applied the relief available to it under ASIC Class Order 98/100 and accordingly, amounts in
the financial statements and directors’ report have been rounded off to the nearest one dollar ($1).
GOLD MOUNTAIN LIMITED ANNUAL REPORT
36
q.
Critical Accounting Estimates and Judgments
The directors evaluate estimates and judgments incorporated into the financial statements based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events
and are based on current trends and economic data, obtained both externally and within the Company.
Key estimates
(i)
Impairment
The Company assesses impairment at the end of each reporting period by evaluating conditions and
events specific to the Company that may be indicative of impairment triggers. Recoverable amounts of
relevant assets are reassessed using value-in-use calculations which incorporate various key assumptions.
Key judgments
(i)
Exploration and evaluation expenditure
The Company capitalises expenditure relating to exploration and evaluation where it is considered likely to
be recoverable or where the activities have not reached a stage that permits a reasonable assessment of
the existence of reserves. While there are certain areas of interest from which no reserves have been
extracted, the directors are of the continued belief that such expenditure should not be written off since
feasibility studies in such areas have not yet concluded.
r.
Going concern
The financial statements have been prepared on the going concern basis, the validity of which depends upon the
positive cash position. The Company’s existing projections show that
further funds will be required to be
generated, either by capital raisings, sales of assets or other initiatives, to enable the Company to fund its
currently planned activities for at least the next twelve months from the date of signing these financial statements.
Should new opportunities present
take action to reprioritise
activities, dispose of assets and or raise further funds.
funds the Directors will
that require additional
Notwithstanding this issue, accordingly the Directors have prepared the financial statements of the Company on a
going concern basis. In arriving at this position, the Directors have considered the following pertinent matter:
-
Australian Accounting Standard, AASB 101 “Accounting Policies”, states that an entity shall prepare
financial statements on a going concern basis unless management either
intends to liquidate the
entity or to cease trading, or has no realistic alternative but
to do so.
In the Directors’ opinion, at
believe that
prepared on a going concern basis.
there are reasonable grounds to
the matters set out above will be achieved and therefore the financial statements have been
the date of signing the financial
report,
s.
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction from the proceeds.
t.
Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of Directors of Gold Mountain Limited.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
37
u.
Associates
Associates are entities over which the Company has significant
influence but not control or joint control.
Investments in associates are accounted for using the equity method. Under the equity method, the share of the
profits or losses of the associate is recognised in profit or loss and the share of the movements in equity is
recognised in other comprehensive income. Investments in associates are carried in the statement of financial
position at cost plus post-acquisition changes in the Company's share of net assets of the associates. Dividends
received or receivable from associates reduce the carrying amount of the investment.
When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any
unsecured long-term receivables, the consolidated entity does not recognise further losses, unless it has incurred
obligations or made payments on behalf of the associate.
v.
Joint Ventures
A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is
subject to joint control. The Company's interest in joint venture entities are accounted for using the proportionate
consolidation method of accounting. The Company recognises its interest in the assets that it controls and the
liabilities that it incurs and the expenses that it incurs and its share of the income that it earns from the sale of
goods or services by the joint venture, classified according to the nature of the assets, liabilities, income or
expense.
Profits or losses on transactions establishing the joint venture entities and transactions with the joint venture are
eliminated to the extent of the Company's ownership interest until such time as they are realised by the joint
venture entity on consumption or sale, unless they relate to an unrealised loss that provides evidence of the
impairment of an asset transferred.
The Company discontinues the use of proportionate consolidation from the date on which it ceases to have joint
control over a jointly controlled entity.
w.
Fair Value of Assets and Liabilities
Equity Instruments
The fair value of available-for-sale financial assets is determined by reference to their quoted closing bid price at
the reporting date.
Trade and Other Receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at
the market rate of interest at the reporting date. This fair value is determined for disclosure purposes. Due to the
short term nature of other receivables, their carrying value is assumed to approximate their fair value.
Non-Derivative Financial Liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future
principal and interest cash flows, discounted at the market rate of interest at the reporting date.
x.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Company for the annual reporting period ended 30 June 2016.
The Company’s assessment of the impact of these new or amended Accounting Standards and Interpretations
are that they will have no material effect.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
38
NOTE 2: OPERATING SEGMENTS
Segment Information
Identification of reportable segments
During the year, the Company operated principally in one business segment being mineral exploration and in three
geographical segments being Australia, Papua New Guinea (from 1 July 2014) and Peru.
The Company’s revenues and assets and liabilities according to geographical segments are shown below.
June 2016
June 2015
Total
Australia
PNG
$
$
$
Peru
$
Total
Australia
PNG
Peru
$
$
$
$
3,178
3,178
3,178
3,178
-
-
-
-
5,046
5,046
5,046
5,046
-
-
-
-
REVENUE
Revenue
Total segment revenue
RESULTS
Net loss before income tax
(1,524,731)
(733,390)
(118,647)
(672,694) (1,847,685)
(710,677.)
(70,062)
(66,946)
Income tax
Net loss
-
-
-
-
-
-
-
-
(1,524,731)
(733,390)
(118,647)
(672,694) (1,847,685)
(710,677)
(70,062)
(66,946)
ASSETS AND LIABILITIES
Assets
Liabilities
4,717,691 1,596,771
3,120,918
1,313,426 1,309,449
3,977
2
-
2,687,526
1,332,920
861,909
672,696
407,127
356,001
51,126
-
NOTE 3: REVENUE AND OTHER INCOME
a.
Revenue
Note
2016
$
2015
$
Other income
Interest received 1
Debt forgiveness
Total other income
Total revenue
1 Interest received from:
Bank
3,178
-
3,178
3,178
4,046
1,000
5,046
5,046
3,178
4,046
GOLD MOUNTAIN LIMITED ANNUAL REPORT
39
NOTE 4: LOSS FOR THE YEAR
Loss before income tax includes the following specific expenses:
—
—
—
a.
Consultants fees
Legal costs
Rental expense on operating leases
Significant expenses
The following significant expense items are relevant in explaining the financial
performance:
—
—
Doubtful debts expense
Impairments expense
NOTE 5: INCOME TAX EXPENSE
The prima facie tax on the loss before income tax is reconciled to
income tax as follows:
Loss before income tax expense
Prima facie tax benefit on the loss before income tax at 30%
(2013: 30%)
Add:
Tax effect of:
Other non-allowable items
Less:
Tax effect of:
Other deductible expenses
Future tax benefits not brought to account
Income tax attributable to the Company
2016
$
2015
$
236,800
109,440
19,216
180,900
61,325
30,720
158,054
514,640
52,685
912,962
2016
$
2015
$
(1,515,979)
(1,520,381)
(454,794)
(456,114)
129,919
292,889
129,919
292,889
(77,969)
(114,106)
402,844
277,331
-
-
The Company has tax losses arising in Australia of $5,796,420 (2015: $4,371,439) that are available indefinitely to offset
against future taxable profits.
Deferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set
out in Note 1(h) occur.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
40
NOTE 6: CASH AND CASH EQUIVALENTS
Cash at bank
Short-term bank deposits
2016
$
12,229
2015
$
16,884
1,177,718
743,054
1,189,947
759,938
Reconciliation of cash
Cash at the end of the financial year as shown in the statement of cash flows is
reconciled to items in the statement of financial position as follows:
Cash and cash equivalents
1,189,947
759,938
Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying
periods of between one day and three months, depending on the immediate cash requirements of the Company, and earn
interest at the respective short-term deposit rates.
NOTE 7: TRADE AND OTHER RECEIVABLES
Current
PNG Project Advance
Security Deposits
Other receivables
Goldsmith Resources SAC
Less: Provision for Doubtful Debts
2016
$
-
26,600
19,216
1
-
2015
$
22,671
26,600
18,719
210,740
(52,685)
Total current trade and other receivables
45,817
226,045
NOTE 8: PLANT AND EQUIPMENT
Plant and equipment – at cost
Accumulated depreciation
Reconciliation of the carrying amount of plant and equipment at the beginning
and end of the current and previous financial year:
Carrying amount at beginning of the year
Additions
Disposals
Depreciation expense
Carrying amount at end of the year
GOLD MOUNTAIN LIMITED ANNUAL REPORT
2016
$
2,557
(1,284)
1,273
1,461
455
-
(643)
1,273
2015
$
2,103
(642)
1,461
-
2,103
-
(642)
1,461
41
NOTE 9: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE
Assets in Development
Balance at the beginning of the year
Expenditure incurred
Impairment loss on existing tenements
Net carrying value
2016
$
2015
$
1,210,941
629,082
626,376
742,371
(164,925)
(157,806)
1,675,098
1,210,941
The recoupment of costs carried forward in relation to expenditure in the exploration and evaluation phase are dependent
on the successful development and commercial exploitation or sale of the respective areas.
NOTE 10: EQUITY ACCOUNTED INVESTEES
Viva No. 20 Limited
Equity investment in Viva No. 20 Limited
Total Investment
2016
$
2015
$
1,575,000
1,575,000
-
-
On 22 March 2016, GMN announced the acquisition of the initial 20% of the entire issued capital of Viva No.20 Limited.
The issue of 50 million consideration shares at $0.03 each to the Vendors are in accordance to the terms and conditions
as set out in the Letter Agreement of 30 June 2014 and approved by shareholders at the Annual General Meeting held on
15 December 2014. The issue of GMN shares to the Vendors are subject to a voluntary escrow arrangement for a period
of 12 months and will be released from escrow on 22 March 2017. As a result of the issue, Viva No.20 Limited became an
equity-accounted investee of GMN. The non refundable exclusivity fee of $75,000 paid on 1 July 2014 was reclassified
from Other Investments.
NOTE 11: AVAILABLE FOR SALE FINANCIAL ASSETS
Interests are accounted for at fair value. Information relating to Available for sale financial assets is set out below:
(a) Carrying amounts
Percentage interest
Company
Unlisted entity
Principal activities
Goldsmith Resources SAC
Mineral processing
2016
%
18.75
2015
%
18.75
2016
$
2015
$
514,641
514,641
(b) Movements in carrying amounts
Carrying amount at the beginning of the financial year
514,641
514,641
Acquisition of shares in associate
Less: Asset impairments expense
Carrying amount at the end of the financial year
(shown as investment cost)
-
(514,640)
-
-
1
514,641
GOLD MOUNTAIN LIMITED ANNUAL REPORT
42
As previously announced to the ASX on 30th April 2015, Goldsmith Resources SAC (“Goldsmith”) entered into a binding
agreement on behalf of its shareholders interest with Montan Mining Corporation of Vancouver Canada (TSX.V: MNY)
(“Montan”) to acquire the Peruvian Gold Project. Gold Mountain Limited (the “Company” or “GMN”) holds an 18.75 %
interest in Goldsmith.
The Company announced on 2 November 2015 that Inca One Gold Corp. (TSX.V: IO) (“Inca One”) and Montan along
with the shareholders of Goldsmith (“Goldsmith Shareholders”) entered into a binding letter agreement pursuant to
which Inca One has agreed to acquire certain assets of Montan including the Peruvian Gold Project. Full details of this
announcement can be found on the Company’s website and the ASX Announcements portal under the header “Inca
One to Acquire Certain Assets of Montan Mining” of 2 November 2015.
Following the review of the Peruvian project and subsequent announcement by Inca One, the GMN Board decided to
impair, in full, the carrying amount of this investment resulting in an asset impairments expense of $514,640.
The changed circumstances and inherent uncertainties in the transaction indicate the carrying amount may not be
recoverable. Accordingly, the value of these assets are carried at a nominal value of $1 each and will be written back to
realisable values should the assets in the Peruvian project can eventually be disposed.
NOTE 12: INVESTMENTS
Non-Current
Gold nuggets
Papua New Guinea exclusive option fee
NOTE 13: OTHER ASSETS
Non-Current
Performance bonds with NSW Mines Department
NOTE 14: TRADE AND OTHER PAYABLES
Current
Unsecured liabilities:
Trade payables and accrued expenses
Amounts payable to Director and related entities
2016
$
2015
$
50,555
150,000
200,555
49,500
75,000
124,500
2016
$
30,000
30,000
2015
$
30,000
30,000
2016
$
2015
$
65,965
65,461
131,426
62,741
23,986
86,727
GOLD MOUNTAIN LIMITED ANNUAL REPORT
43
2016
$
2015
$
1,182,000
320,400
1,182,000
320,400
NOTE 15: OTHER CURRENT LIABILITIES
Current
Share placement liability
Total other current liabilities
Summary of borrowing arrangements:
Share placement liability
During the year ended 30 June 2016, a share placement liability arose due to
share application funds of $1,182,000 received as at 30 June 2016 for
unissued shares. Share application funds were received from key
investors and placement to these investors
sophisticated and professional
took place on 8 August 2016. The placement raised $2,402,300 through the
issue of 57,197,619 shares at the placement price of $0.042 per share.
During the year ended 30 June 2015, a share placement liability arose due to
share application funds of $320,400 received as at 30 June 2015 for unissued
shares. The share application funds relate to the placement of the shortfall
from the exercise of unlisted options with an exercise price of $0.04 which
were required to be exercised by 5:00pm on 29 May 2015. A share placement
to key sophisticated investors took place on 15 July 2015 in accordance with a
shortfall Underwriting Agreement entered into on 28 May 2015. The placement
raised $780,400 through the issue of 19,510,000 shares at the placement
price of $0.04 per share.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
44
NOTE 16: CONTRIBUTED EQUITY
(a) Ordinary shares
Ordinary Shares, issued
Share issue costs
Total issued capital
2016
Number of
shares
261,514,508
2015
Number of
shares
185,502,842
2016
$
10,872,368
(1,226,576)
9,645,792
2015
$
8,318,898
(1,132,951)
7,185,947
Ordinary shares carry one vote per share and carry the rights to dividends.
Ordinary shares participate in dividends and the proceeds on winding-up of the parent entity in proportion to the number
of shares held.
At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is called, otherwise each
shareholder has one vote on a show of hands.
(b) Movements in ordinary shares on issue
Date
Particulars
At 1 July 2014
Number of
shares
117,868,987
01-08-14
Placement to professional and sophisticated investors
13,000,000
15-12-14
Placement to professional and sophisticated investors
10,000,000
19-12-14
Issue of shares on conversion of convertible notes
8,000,000
27-02-15
Placement to professional and sophisticated investors
28,103,300
05-06-15
Issue of shares on exercise of options
8,530,555
30-06-15
Share issue costs
At 1 July 2015
185,502,842
15-07-15
Placement to professional and sophisticated investors
19,510,000
14-03-16
Placement to professional and sophisticated investors
6,501,666
22-03-16
Placement to Viva No.20 Ltd for 20% of issued capital
50,000,000
30-06-16
Share issue costs
At 30 June 2016
261,514,508
Issue Price
$
$0.030
$0.030
$0.025
$0.030
$0.040
$0.040
$0.042
$0.030
5,249,683
390,000
300,000
200,000
843,099
341,222
(138,057)
7,185,947
780,400
273,070
1,500,000
(93,625)
9,645,792
GOLD MOUNTAIN LIMITED ANNUAL REPORT
45
(c) Movement in options over ordinary shares on issue
Date
Particulars
Number of
Options
Exercise
Price
16-Mar-2011 Unlisted options – Director
16-Mar-2011 Unlisted options – Director
01-Mar-2012 Unlisted options – KMP
01-Mar-2013 Unlisted options – KMP
30-Jun-2013 Total options issued
24-Dec-2013 Issue of unlisted options – rights issue free attaching
31-Dec-2013 Expiry of unlisted options
14-Feb-2014 Issue of unlisted options – rights issue free attaching
750,000
750,000
500,000
500,000
2,500,000
3,235,913
(750,000)
7,500,000
Expiry Date
31-Dec-2013
31-Dec-2015
31-Dec-2014
31-Dec-2016
$0.30
$0.25
$0.18
$0.07
$0.04
29-May-2015
$0.30
31-Dec-2013
$0.04
29-May-2015
07-Mar-2014 Issue of unlisted options – rights issue free attaching
16,997,542
$0.04
29-May-2015
30-Jun-2014 Total options issued
31-Dec-2014 Expiry of unlisted options
29-May-2015 Exercise of unlisted options
29,483,455
(500,000)
(8,530,555)
$0.18
31-Dec-2014
$0.04
29-May-2015
29-May-2015 Expiry of unlisted options
(19,202,900)
$0.04
29-May-2015
30-Jun-2015 Total options issued
31-Dec-2015 Expiry of unlisted options
30-Jun-2016 Total options issued
1,250,000
(750,000)
500,000
$0.25
31-Dec-2015
$0.07
31-Dec-2016
On 31 December 2015, 750,000 ex-employee options with an exercise price of $0.25 expired unexercised.
On 29 May 2015, 19,202,900 options with an exercise price of $0.04 cents expired unexercised. These options were
issued to participants in the 2015 non-renounceable rights issue. A share placement to sophisticated investors took place
on 15 July 2015 in accordance with an options shortfall underwriting agreement entered into on 28 May 2015 for the
balance of the shortfall options. The placement raised $780,400 through the issue of 19,510,000 shares at the placement
price of $0.04 per share. No options were granted by the Company as remuneration.
(d) Capital Management
The Directors’ objectives when managing capital are to safeguard the Company’s ability to continue as a going concern,
so that they may continue to provide returns for shareholders and benefits for other stakeholders. The Group’s overall
strategy remains unchanged from the 2016 financial year.
The focus of the Company’s capital risk management is the current working capital position against the requirements of
the Company to meet exploration programs and corporate overheads. The Company’s strategy is to ensure appropriate
liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as
required.
The Company’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the Company’s capital by assessing the Company’s financial risks and adjusting its
capital structure in response to changes in these risks and in the market. These responses include the management of
debt levels, budgeting and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Company since the
prior year.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
46
NOTE 17: RESERVES
Reserves
Share based payments reserve
Movements in options over ordinary shares on issue
At 1 July 2015
Options lapsed during this period and prior periods
At 30 June 2016
2016
$
23,250
23,250
52,425
(29,175)
23,250
2015
$
52,425
52,425
90,975
(38,550)
52,425
Nature and purpose of reserves
The share based payments reserve records the value of options issued by the Company.
Detailed movement in options over ordinary shares on issue
Date
Particulars
Number of
options
Exercise
Price
Expiry Date
Valuation
16-Mar-2011
Unlisted options – Director
16-Mar-2011
Unlisted options – Director
01-Mar-2012
Unlisted options – KMP
01-Mar-2013
Unlisted options – KMP
30-Jun-2013
Closing balance
31-Dec-2013
Expiry of unlisted options
30-Jun-2014
Closing balance
31-Dec-2014
Expiry of unlisted options
31-Dec-2014
Closing balance
31-Dec-2015
Expiry of unlisted options
31-Dec-2015
Closing balance
750,000
750,000
500,000
500,000
2,500,000
(750,000)
1,750,000
(500,000)
1,250,000
(750,000)
500,000
$0.30
31-Dec-2013
$0.25
31-Dec-2015
$0.18
31-Dec-2014
$0.07
31-Dec-2016
$0.30
31-Dec-2013
$0.18
31-Dec-2014
$0.25
31-Dec-2015
20,850
29,175
17,700
23,250
$90,975
(20,850)
$70,125
(17,700)
$52,425
(29,175)
$23,250
GOLD MOUNTAIN LIMITED ANNUAL REPORT
47
NOTE 18: RELATED PARTY DISCLOSURES
Related Parties
a.
The Company’s main related parties are as follows:
i.
Key management personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the activities of the
Company, directly or indirectly, including any director (whether executive or otherwise), are considered key
management personnel.
The directors in office during the year were as follows:
Graham Kavanagh
Matthew Morgan
Sin Pyng “Tony” Teng
Appointed 5 June 2014
Appointed 3 July 2014
Appointed 9 July 2014
For details of disclosures relating to key management personnel, refer to Key Management Personnel
disclosures Directors and Remuneration Report.
b.
Transactions with related parties:
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
The following transactions occurred with related parties:
i.
Other related parties:
Purchase of goods and services:
Corporate advisory fees paid to Drumcliff Investment Pty Ltd as Directors
Fees, an entity associated with Mr Graham Kavanagh.
Corporate advisory fees paid to Mineral X Pty Ltd as Directors Fees and
Consulting Fees, an entity associated with Mr Matthew Morgan.
Corporate advisory fees paid to Rodby Holdings Pty Ltd as Directors Fees
and Consulting Fees, an entity associated with Mr Sin Pyng “Tony” Teng.
2016
$
2015
$
39,600
39,600
105,600
100,000
105,600
101,140
GOLD MOUNTAIN LIMITED ANNUAL REPORT
48
c.
Amounts payable to related parties:
Trade and other payables:
Amounts payable to Directors and related entities, as follows:
Directors fees
Superannuation
Reimbursement of expenses
Corporate advisory services
Total trade and other payable related party amounts
Loans to/from related parties:
Unsecured, at-call loans are provided by directors on an arm’s length basis.
Interest is charged at 0% (2012: 0%) is repayable monthly within the next twelve
(12) months.
i.
Loans from key management personnel related entities:
Beginning of the year
Loans advanced
Loan forgiven
Loans repaid
Interest charged
End of the year
NOTE 19: KEY MANAGEMENT PERSONNEL COMPENSATION
Short-term employee benefits
Post-employment benefits
Share based payments
Non Executive Directors Fee
Balance at the end of year
2016
$
2015
$
65,461
23,986
6,600
-
1,461
57,400
65,461
1,100
1,140
4,146
17,600
23,986
-
-
-
-
-
-
-
-
-
-
-
-
2016
$
308,400
1,140
-
60,000
369,540
2015
$
272,405
1,140
-
60,000
333,545
GOLD MOUNTAIN LIMITED ANNUAL REPORT
49
NOTE 20: LOSS PER SHARE
a.
i
ii.
iii.
b.
Basic Loss per share
Basic Loss (cents per share)
2016
$
2015
$
(0.69)
(0.57)
Net loss used to calculate basic loss per share
(1,515,979)
(847,685)
Loss used to calculate basic EPS from continuing operations
No.
No.
Weighted average number of ordinary shares outstanding during the year
used in calculating basic loss per share
220,000,661
149,596,668
Diluted loss per share
The Company’s potential ordinary shares, being its options granted, are not
considered dilutive as the conversion of these options would result in a
decrease in the net loss per share.
Not applicable
Not applicable
NOTE 21: FINANCIAL RISK MANAGEMENT
The Company’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term
investments, accounts receivable and payable, loans to and from related parties, bills and leases. The following table
details the expected maturities for the Company’s non-derivative financial assets. These have been drawn up based on
undiscounted contractual maturities of the financial assets including interest that will be earned on those assets except
where the Company anticipates that the cash flow will occur in a different period.
Financial Risk Management Policies
The Board has overall responsibility for the establishment and oversight of the risk management framework. The Board
reviews and agrees policies for managing each of these risks as summarised below. The Audit and Risk Committee (ARC)
has been delegated responsibility by the Board of Directors for, among other issues, monitoring and managing financial
risk exposures of the Company. The ARC monitors the Company’s financial risk management policies and exposures and
approves financial transactions within the scope of its authority. It also reviews the effectiveness of internal controls relating
to commodity price risk, counterparty credit risk, currency risk, financing risk and interest rate risk.
The ARC’s overall risk management strategy seeks to assist the Company in meeting its financial targets, while minimising
potential adverse effects on financial performance. Its functions include the review of the use of hedging derivative
instruments, credit risk policies and future cash flow requirements.
Specific Financial Risk Exposures and Management
The main risks the Company is exposed to through its financial instruments are credit risk, liquidity risk and market risk
consisting of interest rate risk. This note presents the information about the Company’s exposure to each of the above
risks, their objectives, policies and processes for measuring and managing risk, and the management of capital.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
50
a.
Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of
contract obligations that could lead to a financial loss to the Company.
Credit risk is managed through the maintenance of procedures (such procedures include the utilisation of systems
for the approval, granting and renewal of credit limits, regular monitoring of exposures against such limits and
monitoring of the financial stability of significant customers and counterparties), ensuring to the extent possible, that
customers and counterparties to transactions are of sound credit worthiness. Such monitoring is used in assessing
receivables for impairment. Depending on the division within the Company, credit terms are generally 14 to 30 days
from the invoice date.
Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating, or in
entities that the FRMC has otherwise cleared as being financially sound. Where the Company is unable to ascertain
a satisfactory credit risk profile in relation to a customer or counterparty, the risk may be further managed through
title retention clauses over goods or obtaining security by way of personal or commercial guarantees over assets of
sufficient value which can be claimed against in the event of any default.
Credit risk exposures
The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period
excluding the value of any collateral or other security held, is equivalent to the carrying value and classification of
those financial assets (net of any provisions) as presented in the statement of financial position.
The Company has no significant concentrations of credit risk with any single counterparty or company of
counterparties. Details with respect to credit risk of trade and other receivables are provided in Note 7.
Trade and other receivables that are neither past due nor impaired are considered to be of high credit quality.
b.
Liquidity risk
Liquidity risk arises from the possibility that the Company might encounter difficulty in settling its debts or otherwise
liabilities. The Company manages this risk through the following
meeting its obligations related to financial
mechanisms:
preparing forward-looking cash flow analysis in relation to its operational, investing and financing activities;
using derivatives that are only traded in highly liquid markets;
monitoring undrawn credit facilities;
obtaining funding from a variety of sources;
maintaining a reputable credit profile;
managing credit risk related to financial assets;
only investing surplus cash with major financial institutions; and
comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation. Actual
timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial
liabilities reflects the earliest contractual settlement dates and does not reflect management’s expectations that
banking facilities will be rolled forward.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
51
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 Company’s income or value of the holdings of financial instruments. The Company is exposed to
movements in market interest rates on short term deposit. The policy is to monitor the interest rate yield curve out to
120 days to ensure a balance is maintained between the liquidity of cash assets and the interest rate return. The
Company does not have short or long term debt, and therefore this risk is minimal. The Company limits its exposure
to credit risk by only investing in liquid securities and only with counterparties that have acceptable credit ratings.
d.
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the reporting
period whereby a future change in interest rates will affect future cash flows or the fair value of fixed rate financial
instruments. The Company is also exposed to earnings volatility on floating rate instruments. The Company is
exposed to interest rate risk as the Company deposits the bulk of its cash reserves in Term Deposits. The risk is
managed by the Company by maintaining an appropriate mix between short term and medium-term deposits. The
Company’s exposures to interest rate on financial assets and financial
liabilities are detailed in the liquidity risk
management section of this note.
Interest rate sensitivity
At 30 June 2016, the effect on loss and equity as a result of changes in the interest rate, with all other variable
remaining constant would be as follows:
Increase in interest rate by 1%
Decrease in interest rate by 1%
Interest rate risk is not material to the Company.
2016
$
1,000
2015
$
7,500
(1,000)
(7,500)
GOLD MOUNTAIN LIMITED ANNUAL REPORT
52
The totals for each category of financial instruments, measured in accordance with AASB 139 as detailed in the accounting policies to
these financial statements, are as follows:
Note
2016
2015
Floating
Interest
Rate
Non-
interest
bearing
Fixed
Interest
Rate
Total
2016
Floating
Interest
Rate
Non-
interest
bearing
Fixed
Interest
Rate
Total
2015
Financial Assets
Cash and cash
equivalents
Trade and other
receivables
Other financial assets
6
7
13
1,189,947
-
- 1,189,947
759,938
-
-
-
45,817
30,000
-
-
45,817
30,000
-
-
226,045
30,000
Total financial assets
1,189,947
75,817
- 1,265,764
759,938
256,045
Financial liabilities at amortised cost:
Financial Liabilities
- Trade and other payables
- Borrowings
Total financial liabilities
14
15
-
-
-
131,426
-
131,426
1,182,000
- 1,182,000
1,313,426
- 1,313,426
-
-
-
86,727
320,400
407,127
Net Financial Assets
1,189,947 (1,237,609)
-
(47,662)
759,938 (151,082)
-
-
-
-
-
-
-
-
759,938
226,045
30,000
1,015,983
86,727
320,400
407,127
608,856
NOTE 22: AUDITORS REMUNERATION
Remuneration of the auditor of the Company for:
2016
$
2015
$
Auditing or reviewing the financial statements
29,830
28,960
NOTE 23: COMMITMENTS AND CONTINGENCIES
Remuneration Commitments
There are no remuneration commitments apart from ongoing director and management fees incurred on a monthly basis.
Guarantees
Gold Mountain Limited did not commit to nor make guarantees of any form as at 30 June 2016.
Contingent liabilities
There are no contingent liabilities as at 30 June 2016.
Exploration licence expenditure requirements
In order to maintain the Company’s tenements in good standing with the various mines departments, the Company will be
required to incur exploration expenditure under the terms of each licence of $25,000 per annum per licence area. It is likely
that
the granting of new licences and changes in licence areas at renewal or expiry, will change the expenditure
commitment to the Company from time to time.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
53
NOTE 24: DIVIDENDS
The Directors of the Company have not declared any dividends for the year ended 30 June 2016.
NOTE 25: EVENTS SUBSEQUENT TO REPORTING DATE
On 3 August 2016, the Company announced it had successfully raised $2.3 million through the issue of 54 million new
shares at an issue price of $0.042 per share under the Company’s existing placement capacity. The company also
announced it will seek shareholder approval to issue options to subscribers of the Placement Shares, at no additional
cost, on the basis of one option for each two Placement Shares subscribed.
On 9 August 2016, the Company issued Appendix 3B for the issue of 57,197,619 new fully paid ordinary shares in the
Company raising a total of $2,402,300. Of these shares, 25,447,359 shares were issued under Listing Rule 7.1A
Additional Placement Capacity approved by shareholders at the 2015 Annual General Meeting..
On 9 August 2016, the Company announced the recommencement of exploration activity at the Company’s flagship
Crown Ridge gold project within EL1968 in the PNG Highlands region following completion of the three-dimensional (3D)
modelling of the Magnetic Survey and that 35 shallow anomalous targets had been identified and an extensive trenching
program commenced over these target areas.
On 16 August 2016, the Company announced completion of the acquisition of additional 50% interest in the PNG project
company, Viva No. 20 Limited (Viva) and issued the Appendix 3B for the consideration shares. The Company also
advised that on completion of this acquisition, the Company now holds a controlling interest of 70% in Viva.
On 23 August 2016, the Company announced it had signed an exclusive agreement with the owner of the highly
prospective EL2306 tenement, which adjoins flagship Crown Ridge gold project. In consideration for the payment by the
Company of the fee of AUD150,000, the owner has granted the Company an exclusive dealing period of 270 days
ending on 19 May 2017.
On 29 August 2016 the Company announced the issue of 18,900,000 share options to employees, consultants and
directors of the Company pursuant to the Company’s Employee Share Option Plan. The options have an exercise price
of $0.30, expire 36 months after the grant date and are subject to certain vesting conditions such that the Company's
underlying share price must exceed $0.50 based on volume weighted average price (VWAP) over a 5 day consecutive
period; the holder must be an actual consultant to or employee of the Company at the time of exercise of the relevant
Granted Options and the exercise period shall not commence until a date that is at least 12 months after the date of the
grant of the Granted Options to the holder.
On 1 September 2016 the Company announced preliminary results from its ongoing trenching program, which confirmed
visible gold, from initial 92 metres of trenching at its flagship project, Crown Ridge, EL1968, Wabag, PNG. The trenching
program is being undertaken to investigate magnetic anomalies defined by the processing of the ground magnetics
surveyed during 2015.
On 8 September 2016, the Company announced the Notice of an Extraordinary General Meeting to be held on 11
October 2016 to seek approval from shareholders for the prior issue of ordinary shares and refresh the Company's 15%
placement capacity; for the issue of options to August 2016 placement investors and promoters; to raise additional
capital by issue of up to 80m shares (up to $10m); and for the issue of options under the Employee Share Option Plan.
On 22 September 2016 the Company announced the commencement of bulk sampling program at the Crown Ridge
Gold Project following discovery of high presence of free gold in the majority of trenches (see figure 2). At about the
targeting an
same time, due diligence exploration work has commenced on the prospective EL2306 tenement
“interpreted crater rim” diatreme.
There has not been any other matter or circumstance that has arisen after balance date that has significantly affected, or
may significantly affect, the operations of the Company, the results of those operations, or the state of affairs of the
Company in future financial periods.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
54
NOTE 26: CASH FLOW INFORMATION
Reconciliation of Net Cash (used in) provided by operating activities with Loss
after Income Tax
Loss
Non-cash flows in profit:
Impairments expense
Doubtful debts expense
Depreciation expense
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables
2016
$
2015
$
(1,515,979)
(847,685)
514,640
134,896
158,054
52,685
643
180,228
642
181
Increase/(decrease) in trade payables and other payables
44,699
31,234
Net Cash (used in) provided by operating activities
(617,715)
(628,047)
GOLD MOUNTAIN LIMITED ANNUAL REPORT
55
ADDITIONAL SHAREHOLDER INFORMATION
AS AT 28 SEPTEMBER 2016
A.
Corporate Governance
A statement disclosing the extent to which the Company has followed the best practice recommendations set by the
ASX Corporate Governance Council during the period is contained within the Directors’ Report.
B.
Shareholding
1. Substantial Shareholders
Shareholders
SUWARDI
G H A DEVELOPMENT PTY LTD
1
2
Substantial
Holding
% of Issued
Capital
31,850,000
22,013,694
8.41
5.81
2. Number of holders in each class of equity securities and the voting rights attached (as at 28 September 2016)
Ordinary Shares
In accordance with the Company’s Constitution, on a show of hands every number present in person or by proxy or
attorney or duly authorised representative has one vote. On a poll every member present in person or by proxy or
attorney or duly authorised representative has one vote for every fully paid ordinary share held.
Options
There was one (1) holder of options at 28 September 2016.
3. Distribution schedule of the number of holders in each class of equity security as at close of business
on 28 September 2016.
Ordinary Shares
Spread of Holdings
Holders
Units
% of Issued Capital
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
TOTAL ON REGISTER
4. Marketable Parcel
14
12
114
202
218
560
2,077
41,283
1,102,024
8,494,630
369,072,113
378,712,127
0.001
0.011
0.291
2.243
97.455
100.00
There are 19 non marketable parcels at 28 September 2016, representing 12,904 shares.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
59
5. Twenty largest holders of each class of quoted equity security
The names of the twenty largest holders of each class of quoted security, the number of equity security each holds and
the percentage of capital each holds (as at 28 September 2016) is as follows:
Ordinary Shares Top 20 holders and percentage held
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Shareholder
SUWARDI
G H A DEVELOPMENT PTY LTD
HSBC CUSTODY NOMINEES
ISMAIL HARITH MERICAN
SIEW HONG KOH
MR GHINAN MOHAMED SANI
KO CHU HONG
MS IRENE TENG
HARDIE OCEANIC PTY LTD
MINPAX RESOURCES LIMITED
MS IRENE TENG
GHINAN MOHAMED SANI
MS GAN YOKE LAN
MR DUNCAN JOHN HARDIE
MS QIN ZHANG
ASLAN EQUITIES PTY LTD
MR SUWEI CHEN
BLUEPRINT CONSOLIDATED PTY LTD
RODBY HOLDINGS PTY LIMITED
MS NYOK CHIN WONG
TOP 20 TOTAL
Other shareholders
TOTAL ISSUED CAPITAL
6. Company Secretary
The name of the Company Secretary is Eric Kam.
Holding
31,850,000
22,013,694
16,812,403
12,000,000
12,000,000
10,266,667
10,250,000
9,993,311
9,334,444
9,000,000
8,900,000
8,750,000
8,750,000
7,500,000
7,406,334
5,325,000
5,000,000
4,649,000
4,500,000
4,300,000
208,600,853
170,111,274
378,712,127
% of Issued
Capital
8.410%
5.813%
4.439%
3.169%
3.169%
2.711%
2.707%
2.639%
2.465%
2.376%
2.350%
2.310%
2.310%
1.980%
1.956%
1.406%
1.320%
1.228%
1.188%
1.135%
55.082%
44.918%
100%
GOLD MOUNTAIN LIMITED ANNUAL REPORT
60
Address and telephone details of the Company’s registered administrative office and principal place of business:
Suite 2501, Level 25
31 Market Street
SYDNEY NSW 2000 Australia
Telephone: +61 2 9283 3880
Facsimile: +61 2 9477 5565
info@goldmountainltd.com.au
www.goldmountainltd.com.au
Address and telephone details of the office at which a registry of securities is kept:
Boardroom Pty Limited
Grosvenor Place, Level 12, 225 George Street, SYDNEY NSW 2000
GPO Box 3993, SYDNEY NSW 2001
Telephone: 1300 737 760
Facsimile: 1300 653 459
Stock exchange on which the Company’s securities are quoted:
The Company’s listed equity securities are quoted on the Australian Securities Exchange – code GMN.
Restricted Securities
Ordinary Shares
There are restricted ordinary shares
50,000,000 ordinary shares escrowed to 22 March 2017
60,000,000 ordinary shares escrowed to16 August 2017
Options
Number
500,000
Strike
$0.07
Expiry
Restricted until
31 December 2016
Review of Operations
A review of operations is contained in the Directors’ Report on page 11 of this Annual Report.
Schedule of Tenements
The Company’s Schedule of Tenements is on page 23 of this Annual Report.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
61
[ Blank ]
GOLD MOUNTAIN LIMITED ANNUAL REPORT
62
Gold Mountain Limited Annual Report 2016