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
Douglas Smith Executive Director – Exploration
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
info@goldmountainltd.com.au
www.goldmountainltd.com.au
Telephone: 1300 737 760
Facsimile: 1300 653 459
Solicitor
Bird & Bird Lawyers
Level 11, 68 Pitt Street
SYDNEY NSW 2000
Banker
Australia and New Zealand Banking Group Limited
Westpac Banking Corporation Limited
Auditor
KS Black & Co. Chartered Accountants
Level 1, 251 Elizabeth Street, SYDNEY NSW 2000
GOLD MOUNTAIN LIMITED ANNUAL REPORT
1
GOしD MOUNTAINしIMITED
REPOR丁TO SHAREHOLDERS
Dear Sharehoiders,
On behalfofthe Board of Directors, l am pIeased to present the Annual Report ofGold Mountainしimited
(GMN) forthe financiai yearended 30」une 2018.
It has been a positive year and i am pIeased to reportthat during the yearthe Company has made progress
in its quest to identify new goId and copper deposits in the highIy-PrOSPeCtive region of Wabag in the
CentraI highIands ofPapua New Guinea.
During the first haIfofthe FY2018, the Company successfu=y raised ;6.5 m冊on that led to the launching of
a comprehensive exploration program, incIuding dr冊ng and surface sampiing programs at Crown Ridge
and Mongai Creek.
The expioration programs resuited in:
- discovery ofporphyry copper-gOld mineraIisation at the Mongai Creek;
- PrOmising indicators ofporphyry copper-gOld mineraiisation at SakCreek;
- improved understanding of controIs on gold and pIatinum minera=sation in the congiomerates at
Crown Ridge; and
- a POtentia=ow-SuIphidation epithermaI goid system at LaiIam.
Community support, reSPeCt for the environment and good reばtjons with loca=andowners are criticai
factors for the Company′s operations in PNG. The Company has piaced high priority on community
reiationships′ inciuding the use of locai services′ emPIoyment of locai peopIe and engagement of
Iandowners. Such rapport creates a more cooperative, PeaCeful and safer environment to conduct
expIoration and wiiI pave the wayfor more e冊cient operating environments in the yearsto come.
CruciaI to ongoing expIoration e什orts′ the Company has estabiished a fuiiy serviced 50-man CamP and is
now in a position to e簡ciently support expIoration programmes on muItipIe prospects simuitaneousIy. The
Company has aIso expanded its technicai team with more diverse expertise to extract vaiue from aII the
information resuiting from the expIoration work.
The Board wishes to express its appreciation of the continued support of Iong-term SharehoIde「s, Of new
SharehoIders who joined the Company during the year, and of other investor groups who’ve come on
board to progress the Company’s interests.
Yours sincereIy
/嬢祐
Graham Kavanagh
Chairman
篭㊨㊧篭と￣鰐緯線懸㊧㊨態も鰐〆、怠篭釣縞を管も怠篭釣鱒b管〆亀駕釣篭多、㊧
GOLD MOUN丁AiN LIMITED ANNUAL REPORT 2
TABLE OF CONTENTS
CORPORATE DIRECTORY ............................................................................................................................................... 1
LETTER TO SHAREHOLDERS.......................................................................................................................................... 2
DIRECTORS’ REPORT ...................................................................................................................................................... 4
INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY ............................................................................ 6
OPERATIONS REPORT................................................................................................................................................ 9
REMUNERATION REPORT (Audited)......................................................................................................................... 18
SCHEDULE OF TENEMENTS ......................................................................................................................................... 24
AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................................... 25
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME.......................................................... 26
STATEMENT OF FINANCIAL POSITION......................................................................................................................... 27
STATEMENT OF CHANGES IN EQUITY......................................................................................................................... 28
STATEMENT OF CASHFLOWS....................................................................................................................................... 29
NOTES TO THE FINANCIAL STATEMENTS ................................................................................................................... 30
DIRECTORS’ DECLARATION.......................................................................................................................................... 56
INDEPENDENT AUDITORS REPORT ............................................................................................................................. 57
ADDITIONAL SHAREHOLDER INFORMATION .............................................................................................................. 62
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
In order to comply with the provisions of the Corporations Act, the Directors’ report as follows:
June 2018.
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
Sin Pyng “Tony” Teng
Douglas Smith
Names, qualifications, experience and special responsibilities
Graham Kavanagh
Non-Executive Chairman
Qualifications
B Comm ASIA
Experience
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.
Interest in shares and
Options
1,500,000 unlisted options granted under the Employee Share Option Plan exercisable at
$0.30 and expiring on 28 November 2019 (indirect interest) (GMNAB)
1,000,000 unlisted options exercisable at $0.15 subject to vesting conditions and expiring on
26 July 2021 (indirect interest) (GMNAD)
Directorships held in
other listed entities
No directorships held of ASX listed entities
Sin Pyng “Tony” Teng Managing Director
Qualifications
B. Econ. Dip. Fin. Mangt. CPA, FAICD, AFAIM
Experience
Interest in shares
and Options
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.
700,000 ordinary shares
8,710,000 ordinary shares (indirect interest)
5,000,000 unlisted options granted under the Employee Share Option Plan exercisable at
$0.30 and expiring on 28 November 2019 (indirect interest) (GMNAB)
1,000,000 unlisted options exercisable at $0.15 and expiring on 26 July 2021 subject to
vesting conditions (indirect interest) (GMNAD)
3,000,000 unlisted options granted under the Employee Share Option Plan exercisable at
$0.15 and expiring on 26 July 2021 (indirect interest) (GMNAE)
Directorships held in
other listed entities
No directorships held of ASX listed entities in the past three years
GOLD MOUNTAIN LIMITED ANNUAL REPORT
4
Douglas Smith
Executive Director – Exploration (appointed 29 December 2016)
Qualifications
Experience
Interest in shares
and Options
B.Sc (Geology), MAusIMM
Mr Smith is a very experienced geologist with a 20+ year career working on major precious
metals projects and exploration assets in Canada, Alaska, Australia, and more recently PNG
where he has worked since 2011 on projects such as Ok Tedi and Highland Pacific’s Star
Mountains exploration tenements. Mr Smith also worked on the giant Pebble Alaska 100M oz
gold, 80B lbs copper project, jointly managing over 200 contractors and the design of the
original geophysical survey (89 square miles), as well as executing an extensive drilling
program to bring the resource to the Indicated category and take the project to a pre-
feasibility stage.
Nil ordinary shares
2,000,000 unlisted options granted under the Employee Share Option Plan exercisable at
$0.30 and expiring on 28 November 2019 (indirect interest) (GMNAB)
3,000,000 unlisted options granted under the Employee Share Option Plan exercisable at
$0.15 and expiring on 26 July 2021 (direct interest) (GMNAE)
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 twenty (20) 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 providing
corporate financial,
taxation and secretarial services and advice to listed and unlisted companies in the mineral
exploration and oil and gas industries.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
5
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
Shares and Options
Shares and Options
Direct
Indirect
Graham Kavanagh
Nil
Douglas Smith
Nil
1,500,000 unlisted options granted under
the
Employee Share Option Plan exercisable at
Options $0.30 and expiring on 28 November
2019 (GMNAB)
1,000,000 unlisted options granted exercisable at
$0.15 subject to vesting conditions and expiring
on 26 July 2021 (GMNAD)
2,000,000 unlisted options granted under
the
Employee Share Option Plan exercisable at
$0.30 and expiring on 28 November 2019
(GMNAB)
3,000,000 unlisted options granted under
the
Employee Share Option Plan exercisable at
$0.15 and expiring on 26 July 2021 (direct
interest) (GMNAE)
Sin Pyng “Tony” Teng
700,000 shares
8,710,000 ordinary shares.
5,000,000 unlisted options granted under
the
Employee Share Option Plan exercisable at
$0.30 and expiring on 28 November 2019
(indirect interest) (GMNAB)
1,000,000 unlisted options exercisable at $0.15
subject to vesting conditions and expiring on 26
July 2021 (GMNAD)
3,000,000 unlisted options granted under
the
Employee Share Option Plan exercisable at
$0.15 and expiring on 26 July 2021 (GMNAE)
GOLD MOUNTAIN LIMITED ANNUAL REPORT
6
-
-
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:
Balance at
beginning of the
Year
Granted as
remuneration
during the Year
Issued on
Exercise of
Options during
the Year
Other changes
during the Year
Balance at end
of the Year
30 June 2018
Graham Kavanagh
Sin Pyng “Tony” Teng
9,020,000
Douglas Smith
Total
-
9,020,000
-
-
-
-
-
-
-
-
-
-
390,000
9,410,000
-
-
390,000
9,410,000
Balance at
beginning of the
Year
Granted as
remuneration
during the Year
Issued on
Exercise of
Options during
the Year
-
-
-
-
-
-
-
-
-
-
Other changes
during the Year
Balance at end
of the Year
-
-
-
(850,000)
-
9,020,000
-
-
(850,000)
9,020,000
30 June 2017
Graham Kavanagh
Sin Pyng “Tony” Teng
9,020,000
Douglas Smith1
Matthew Morgan2
Total
-
850,000
9,870,000
(1) Deemed acquisition when joined the Board or Company.
(2) Deemed disposal when left the Board or Company.
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 by Directors and Key Management Personnel and their related parties. There are no unpaid amounts
on the shares issued.
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 2018
Balance at
beginning of
period
Granted as
remuneration
Options
exercised or
vested
Net change
Other
Balance at
end of period
Graham Kavanagh
1,500,000
1,000,000
Sin Pyng “Tony” Teng
5,000,000
4,000,000
Douglas Smith
2,000,000
3,000,000
Total
8,500,000
8,000,000
-
-
-
-
-
-
-
-
2,500,000
9,000,000
5,000,000
16,500,000
GOLD MOUNTAIN LIMITED ANNUAL REPORT
7
30 June 2017
Graham Kavanagh
Sin Pyng “Tony” Teng
Douglas Smith1
Matthew Morgan2
Total
Balance at
beginning of
period
Granted as
remuneration
Options
exercised or
vested
Net change
Other
Balance at
end of period
-
-
-
-
-
1,500,000
5,000,000
2,000,000
3,600,000
12,100,000
-
-
-
-
-
-
-
-
(3,600,000)
1,500,000
5,000,000
2,000,000
-
(3,600,000)
8,500,000
(1) Deemed acquisition when joined the Board or Company.
(2) Deemed disposal when left the Board or Company.
Options on issue at the date of this report are:-
Issue Date
Number
Expiry Date
Exercise price
28 Nov 2016
29 Jun 2017
26 Sep 2017
26 Sep 2017
14,800,000
61,237,300
2,000,000
7,800,000
28 Nov 2019
30 Jun 2019
26 Jul 2021
26 Jul 2021
$0.303
$0.15
$0.154
$0.155
Number of
holders
9
73
2
6
ASX Code
GMNAB
GMNAC
GMNAD
GMNAE
(3) GMNAB ESOP Options are exercisable at $0.30 until expiry date 28/11/2019 and subject to the vending condition that the
Company’s share price must exceed $0.50 based on VWAP over a 5 day consecutive period.
(4) GMNAD Options are exercisable at $0.15 until expiry date 26/07/2021 and subject to the vending condition that the total
granted options shall be vested over 3 periods of 12 months per period.
(5) GMNAE ESOP Options are exercisable at $0.15 until expiry date 26/07/2021 and subject to the vending condition that the total
granted options shall be vested over 3 periods of 12 months per period.
Dividends
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
8
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 will then be available for sale 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 financial results of the Company for the five (5) years to 30 June 2018 are:
30 June 2018
30 June 2017
30 June 2016
30 June 2015
30 June 2014
Cash and cash equivalents
2,985,066
2,693,337
1,189,947
759,938
200,070
Net assets
19,275,974
12,420,975
3,404,265
2,460,399
1,371,820
Revenue & financial income
119,426
32,874
3,178
5,046
38,151
Net loss after tax
(1,484,473)
(1,279,915)
(1,515,979)
(847,685)
(526,993)
EBITDAX
(1,257,241)
(840,424)
(1,351,697)
(659,879)
(468,681)
Share price at 30 June
Loss per share (cents)
$0.100
(0.32)
$0.086
(0.35)
$0.036
(0.69)
$0.039
(0.57)
$0.023
(0.69)
a)
Financial Performance
The net loss after tax of the Company for the financial year after tax amounted to $1,484,473 (2017: Loss $1,279,915).
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 $6,874 to $25,400 when compared to the prior year. The Company also received $51,792 as
rental income in FY 2018 (FY 2017: $26,000) from sub-leasing unused office space at its Sydney CBD office.
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 deferred exploration expenditure increased from $3,038,522 at 30
June 2017 FY to $11,816,184 at 30 June 2018. This increase includes additional exploration expenditure incurred of
$3,578,730 and $5,350,000 booked from the acquisition of EL2306.
Personnel and external consulting requirements and legal and professional costs remained constant. There was an
increase in public and investor relations expense from $141,854 in the 2017 FY to $240,944 in the FY 2018.
b)
Financial Position
The Company’s main activity during the year was the investment of cash of $2,985,066 (2017: $2,693,337). The carrying
value of the exploration assets and the capitalised exploration assets increased by $8,777,662 or 289% to $11,816,184
(2017: $3,038,522).
GOLD MOUNTAIN LIMITED ANNUAL REPORT
9
The 30 June 2018 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 2018, the Company recorded a loss after tax of $1,484,473 (2017: Loss
$1,279,915) and had a net working capital surplus of $2,061,160 (30 June 2017: Surplus of $2,692,751).
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:
(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.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
10
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 5 July 2017, the NSW Department of Industry (Resources & Energy) approved the cancellation of the Dalton, NSW
exploration licence EL6922.
On 19 July 2017, the Company announced it had entered into agreement to acquire 70% interest in highly prospective
328 km² tenement adjoining the flagship Crown Ridge Gold Project. The key terms of the acquisition include:
The purchase price for the Tenement is $5.2 million comprising of $3 million in cash ($300,000 of which was paid as
a non-refundable deposit) and 22 million GMN shares @ $0.10 per share (Consideration Shares);
Completion of the acquisition of the Tenement Interest is due to occur on the business day immediately following the
second anniversary of the registration of EL 2306 (14th December 2017) by the PNG Mineral Resources Authority;
On Completion on or before 16/12/2017;
o
o
o
o
Full title and risk in the Tenement Interest passes to the Company;
The Company must issue the Consideration Shares and pay a Completion instalment of $450,000;
The issue of Consideration Shares will be put to Shareholders approval at the next general meeting of the
Company; and
The Consideration Shares are subject to agreed voluntary escrow conditions for 24 months
The balance of the cash consideration ($2,250,000) is payable in six (6) bi-annual
December 2020.
instalments ending on 16
Completion of the acquisition of the Tenement Interest is conditional on conditions precedent including GMN has
first right of refusal to acquire the remaining 30% of the project from the vendor.
On 24 July 2017, the Company announced it had secured $3.7 million in funding commitments (increased by $700,000
from $3.0 million in funding commitments announced on 2 June 2017). The funds raised will be used for general working
capital requirements and ongoing exploration and project development activities at the flagship Crown Ridge Project in
PNG.
On 9 August 2017, the Company announced the allotment of 7,984,800 new shares at a price of $0.10 per share and
3,992,400 free attaching options, one (1) free option entitlement for every two (2) shares issued. The options are
exercisable at $0.15 and expire on 30 June 2019.
On 23 August 2017, the Company announced it had secured $5.0 million in funding commitments (increased by $1.3
million from $3.7 million in funding commitments announced on 24 July 2017). Subject to the Company's placement
capacity under Listing Rule 7.1A, new shares will be allotted at $0.10 per share with a free option entitlement of one (1)
option for every two (2) shares issued. The options will be exercisable at $0.15 and expire on 30 June 2019.
On 26 September 2017, the Company announced that it is well advanced for drilling and bulk sampling program at the
Crown Ridge Gold Project with the view of delivering a JORC (2012) compliant maiden resource estimate and the work
is expected to be completed in early 2018.
On 26 September 2017, the Company announced the granting of 7,800,000 share options to employees and consultants
including directors (subject to shareholders approval) according to the Company’s Employee Share Options Plan. The
granted options have an exercise price of $0.15 and expires 46 months from the grant date and the granted options shall
be vested over 3 periods of 12 months per period.
On 27 September 2017, the Company lodged on its website an investment research report on the Company. The report,
commissioned by the Company is prepared by Independent Investment Research who is an independent investment
research house based in Australia and the United States.
On 5 October 2017, the Company announced it had secured $6.65 million in funding commitments (increased by $1.65
million from $5 million in funding commitments announced on 23 August 2017). The Private Placement Offer which is “By
Invitation Only” raised funds at an issue price of $0.10 per Fully Paid share. Each two shares subscribed for have an
GOLD MOUNTAIN LIMITED ANNUAL REPORT
11
attaching free share options exercisable at $0.15 on or before 30 June 2019. The Company will put a resolution to
shareholders at the forthcoming Annual General Meeting in November to approve the issue of securities for the over
subscription.
On 6 October the Company announced that 2,500,000 unlisted Options exercisable at $0.055 were exercised raising
additional $137,500.00 towards the general working capital of the Company.
On 6 October 2017, the Company made an Appendix 3B new issue announcement for the exercise of share options
and the issue of 19,245,000 shares and 9,622,500 options to the 2017 Private Placement investors within the limit of
the Company’s placement capacity under Listing Rule 7.1A.
On 3 November 2017, the Company announced that an initial exploratory 3-hole, circa 600 metre diamond drilling
program had commenced at its flagship Crown Ridge prospect in the Highlands region of Papua New Guinea. The
drilling will target the hard rock gold potential at Crown Ridge along the margins of the interpreted volcanic crater.
Additionally, the Company has begun a program of pitting and bulk sampling, together with shallow diamond drilling
program, circa 400 metre (9-holes 40m-60m deep), aimed at defining a near-surface JORC 2012 compliant Mineral
Resource of free gold.
On 29 November 2017, following approval by shareholders at the Annual General Meeting held on 28 November 2017,
the Company issued 10,000,000 shares and 5,000,000 options at an exercise price of $0.15 and expiring on 30 June
2019 to the August 2017 Placement Investor.
On 14 December 2017, the Company announced the Hard Rock Exploration drilling has continued to progress with
positive indications of mineralisation. Diamond drill hole CRD005 showed visible gold mineralisation at various depths
from 230 to 398m mixed mafic volcanics with variable sulphides and quartz
between 88m and 230m downhole,
carbonate chlorite veining were encounter. Four (4) diamond drill holes have been completed with CRD005 continuing to
drill. Total drilling metreage to date was 1,178.7m. In addition, the Company announced pitting work, aimed at defining a
near-surface JORC 2012 compliant Mineral Resource, with 10 of the planned 32, 1x1x4m deep pits completed to date.
Concentrate samples were dispatched to the ALS Laboratory in Perth, Australia with results and grade determination
work ongoing.
On 19 December 2017 the Company announced the discovery of a mineralised porphyry outcrop with visual
chalcopyrite, chalcocite and bornite mineralisation observed in the outcrop, all common copper ore minerals. The host
rocks show classic porphyry-style alteration and veining with the mineralised quartz-pyrite veins found in the outcrop
similar in appearance to float samples from Crown Ridge that assayed up to 29.2 grams per tonne gold, offering the
potential for a large immediate gold resource tonnage potential.
On 29 December 2017, following approval by shareholders at the Annual General Meeting on 28 November 2017, the
Company issued 2,000,000 share options (GMNAD) to Participating Directors pursuant to resolutions 9 and 10 of the
2017 AGM and 7,800,000 share options under the Employee Share Option Plan (ESOP) pursuant to resolution 12 of
the 2017 AGM. Both the GMNAD and the GMNAE (ESOP options granted on 26 September 2017) have an exercise
price at $0.15 with vesting conditions that the total granted options shall be vested over 3 periods of 12 months per
period.
On 22 January 2018 the Company announced that 40,110,715 unlisted Options (GMNAA) exercisable at $0.055 were
exercised raising additional $2,206,089 towards the general working capital of the Company.
On 22 January 2018 the Company announced that 28,000,000 unlisted Options (GMNAC) exercisable at $0.15 and
expiring on 30 June 2019 were issued to Promoters following Shareholder approval of Resolution 7 at the Annual
General Meeting held on 28 November 2017.
On 16 February 2018, the Company issued 22,000,000 shares to the EL2306 Vendors as part consideration for the
acquisition by the Company of the EL2306 Interest on the terms as set out in an agreement, announced to the market on
19 July 2017 and approved by shareholders at the Annual General Meeting held on 28 November 2017. The issue of
the consideration shares is subject to a voluntary escrow arrangement for a period of 24 months from shareholders’
approval date and will be released from escrow on 28 November 2019.
On 5 March 2018, the Company announced confirmation of a Dendritic-Wire Gold Diagnostic of Bonanza Grade Type
Gold discovered at Crown Ridge. This type of mineralisation is frequently found in the high grade gold zones of Low
Sulphidation Epithermal Gold Systems. The delicate gold structures discovered at Crown Ridge have not been
transported far and are very close to the in-ground source. The mineralisation and diagnostic textures of Low
Sulphidation Epithermal Gold Systems discovered in EL1968 and EL2306 have the potential for a concealed porphyry
GOLD MOUNTAIN LIMITED ANNUAL REPORT
12
system. Geophysical data has also identified structures interpreted as fault intersections hosting ore shoots of fluid
mixing and gold deposition as Drill-ready Targets.
On 9 March 2018, the Company released supplementary information that the bonanza type gold nuggets are affinities to
Porgera’s Zone VII. This is indicative that Crown Ridge is a low sulphidation epithermal system which can be quite large,
and quite rich in contained gold, as with neighbouring Porgera 24M oz. The Company is vectoring the source area to
design the drill testing of possible host rocks.
On 22 March 2018, the Company announced that analysis of heavy mineral concentrates and drill core using a portable
handheld XRF analyser have discovered Cobalt of up to 0.44% in heavy mineral concentrates derived from panning
stream sediments in the current drainage. A low capex gravity process to recover gold and platinum could also recover
high Cobalt contents in heavy mineral concentrates as a by-product. Diamond drilling and bulk pit sampling continue on
site with the aim to achieve a maiden Mineral Resource Estimation.
On 12 April 2018, the Company announced Phase 5 of the resource assessment program at Crown Ridge has
commenced with the purchase of a portable bulk sampling plant, planned to be on-site during June 2018. Phase 4 Scout
diamond drilling program confirms that the gold-platinum hosting conglomerate is continuous over hundreds of metres
laterally and 70 to 90 metres thick. Furthermore, the re-interpretation of geophysics has identified potential bonanza
grade gold-bearing structures, which are being tested by deeper diamond drill-holes.
On 18 April 2018, the Company announced the appointment of the highly experienced Senior Geologist Mr. Michael Leu
to assist in fast tracking the exploration program in addition to developing the Flagship Crown Ridge Conglomerate Gold
Project. Mr. Leu has over 37 years geological experience and has held a variety of managerial roles including Chief
Geologist, CEO and Managing Director of ASX listed exploration companies.
On 3 May 2018, the Company announced the mobile bulk sampling gold plant for testing nugget-bearing conglomerate
gold unit was completed and containerised for shipping to PNG. The bulk sampling gold plant will expedite definition of
near surface the Mineral Resource Estimate from close-spaced large volume (125m3) conglomerate samples. A new
Caterpillar Excavator 320DL2 is now permanently on site to expedite exploration trenching to sample potential Bonanza
grade gold-bearing structures identified in geophysical data. Four exploration teams have been mobilised to fast track
ground-truthing multiple targets in unexplored terrain of Papuan Mobile Belt that hosts World Class mines
On 17 May 2018, the Company announced the discovery of bonanza-type gold has now been extended along the key
drainage headwaters of several creeks starting from the flanks, ridges and spurs of Crown Ridge. The location
constrained around the headwaters to an area of 1,000m x 1,000m. The Company is fortunate to have a narrow target
area and is aggressively exploring to pinpoint location. Multiple field teams have been mobilised and helipads and fly
camps are being constructed. This expanded exploration program includes detailed mapping and sampling to locate drill
targets at the large porphyry copper target discovered at Mongae Creek (or “Mongai Creek”).
On 29 May 2018, the Company announced the initial 50m x 100m-spaced pitting program has been successfully
completed with full results pending. Diamond drilling is ongoing. The best pitting interval results to date (first 10 pits, 1m x
1m dimensions) include: 3.0m @ 240 mg/m3 and include 0.5m @ 415 mg/m3. Pitting results confirm gold mineralisation
from Discovery Pit 200. Larger processing plant are being shipped to site to fast-track sample processing and aid with
resource reconciliation through trial mining. Two Komatsu PC 200 excavators will be on site dedicated to expanded
exploration. One will feed the mobile bulk sampling plant to be commissioned late June and the other will be dedicated to
extensively costean the ridges shedding Bonanza-type Gold into juxtaposed, isolated creek drainages
On 13 June 2018, the Company announced the exploration program confirming characteristics of a potentially large
porphyry Au‐Cu system. The mineralised system is only 77km north‐east of the world class 24 million ounces Porgera
gold mine. Free gold has been panned from outcropping gossanous rocks. Abundant coarse gold is also present in all
creeks draining the porphyry system. This classic signature typically represents mineral and alteration suites of large
porphyry systems. This system has the potential for a world class discovery. The Company is now fast tracking the
geochemical survey to define drill targets for the 3rd Quarter 2018.
On 26 June 2018, the Company announced analyses of black sand concentrates from gold-bearing sediments in the
creek systems at Crown Ridge suggest potential for vanadium, titanium and chrome bi-products of gold recovery.
QEMSCAN analysis is planned to determine mineral species and relative quantities in the black sand concentrates and
metallurgical testwork is planned to separate minerals into individual concentrates.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
13
Review of Operations
A.
Papua New Guinea Project
The Company holds rights and interests in various exploration leases in the Enga Province Papua New Guinea at
Wabag that covers a contiguous area of over 2,000 km². The exploration licences fall within the fertile gold-copper
endowed Papuan Mobile Belt that hosts several world class mines.
In 2014 and 2015, the Company assimilated the rights and interests of the first three (3) leases, EL1966 Sak Creek,
EL1967 Pocket Creek and EL1968 Crown Ridge through the acquisition of 70% interest in Viva No.20 Limited.
In 2016, two (2) new exploration licences were granted by the PNG Mineral Resources Authority to GMN 6768 (PNG)
Limited, a wholly own subsidiary of the Company registered in Papua New Guinea. EL2426 Keman and EL2430
Meriamanda both granted on 26 May 2016 was a recovery of area relinquished by Viva No.20 Limited to maintain status
quo of the highly-prospective area within the tenement portfolio.
On 19 July 2017, the Company announced the acquisition of 70% interest in the prospective tenement EL2306 that
adjoins the flagship Crown Ridge Gold Project at a purchase price of $5.2 million, comprising of a mixed consideration of
$3.0 million in cash and 22 million in GMN Shares at $0.10 per share (Consideration Shares). Consistent to the terms of
the acquisition agreement, the outstanding balance of the cash consideration as at 30 June 2018 of $1,950,000 shall be
payable to the Vendor in bi-annual instalments ending 16 December 2020.
Exploration Programs
The primary focus of the Company is the implementation of its exploration drilling and the bulk pit sampling programs
aimed to deliver an initial mineral resource estimate that is compliant with the JORC guidelines.
Drilling plant and equipment were mobilised on site in September 2017 after having conducted detailed surveys of
selected drill locations, prepared access roads, constructed camp facilities and cleared drill pads. Quest Exploration
Drilling (PNG) Ltd has been contracted to undertake the exploration drilling program.
Large volume bulk samples are essential to define gold grades more accurately, as opposed to the low probability of
sampling representative gold grades with drilling due to “nugget effect” of the uneven nature of mineralisation. The
diamond drilling program complements the bulk sampling program from shallow pits with dimensions of 1m x 1m x 5m.
The pits have been excavated and sampled at nominal 0.5m intervals. The bulk sampling program is managed and
supervised by the Company’s team of competent geologists.
Drilling Program
During the reporting period, the Company completed a diamond drilling program of 19 drill-holes totalling 3,761.8m at
Crown Ridge (EL1968) and commenced drilling the potential Mongai Creek porphyry copper-gold system (EL2306).
The Crown Ridge drilling program was aimed at gaining a more insightful understanding of the Timun Conglomerate unit
hosting free gold and platinum, its stratigraphy, mineralisation and gold grades within the structurally controlled quartz-
pyrite veins around the rim of the interpreted volcanic crater.
Drill cores were progressively sent for various laboratory analyses and testing after completion of geological logging and
core photography. Samples were also used for geological studies of any alteration or mineralisation zones within the drill
core.
Notably diamond drill-hole CRD005 showed visible gold mineralisation at various depths between 88m and 230m
downhole, and from 230m to 398m of mixed mafic volcanics, variable sulphides and quartz-carbonate-chlorite veining
which were encouraging signs of possible mineralisation where both crustiform and fine wire gold was observed.
Pitting Program
A total of 38 pits with dimensions of 1m x 1m and depths varying between 4m and 5.3m were excavated in the
prospective Crown Ridge area identified by soil geochemistry and by previous bulk processing samples.
All bulk samples are processed on-site through a Knelson concentrator with sluice box collection of heavy mineral
concentrates. The concentrates and representative samples of tailings are sent to Australian Laboratory Services Pty
Ltd (ALS) for laboratory testing and analysis.
Larger processing plant is required to fast-track bulk sample processing and aid with reconciliation and validation, by trial
mining of the expected Mineral Resource estimate. A purpose-built, mobile, large-capacity plant is being assembled at
the Crown Ridge Project site and is expected to be in full operation by early September 2018.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
14
Reconnaissance exploration
Reconnaissance exploration program of geological mapping, stream sediment and rock sampling in an area north of
Alakula village has uncovered mineralised porphyry outcrops with visual chalcopyrite, chalcocite and bornite, which were
indicative of a porphyry copper system with added potential for gold at the Mongai Creek prospect.
Helicopter-supported exploration work confirmed that the Mongai Creek-Mount Wirit area hosts mineralisation indicative
of a large porphyry copper-gold system.
Field sampling at Crown Ridge area 50km north of Pit 200 has discovered mineralisation of dentritic-wire gold diagnostic
of bonanza grade gold associated with low sulphidation epithermal gold system. Further geophysical data indicated
structures that may host ore shoots of gold deposition, these are potentially drill ready targets to be tested by deeper
diamond drill-holes.
Laboratory analysis on black sand pan concentrates collected from the gold-bearing sediments of Kiangap-Uman-Timun
creek system indicate potential for the bi-product of gold recovery to contain Vanadium, Titanium and Chrome.
It is
planned that the concentrates will be analysed by QEMSCAN to identify the relative mineral contents to assist in further
metallurgical studies.
B.
Australian Projects
The Company considered the prospects of past exploration leases held in southern New South Wales do not meet the
aspirations of the Company and has since relinquished all exploration leases held in NSW.
EL6922 Dalton was cancelled on 5 July 2017. The Company received confirmation of the last cancellation EL5939
Cowarra from the NSW Department of Industry (Resources & Energy) on 3 July 2018.
Capital Raisings
During the reporting period, the Company completed three placements to institutional and sophisticated investors, the
first in August 2017, the second in October 2017 and the third in November 2017 following approval by shareholders at
the 2017 AGM.
In addition, the Company raised $2,343,589 from the exercise of unlisted options with an exercise price of $0.055
expiring on 18 January 2018. In total, the Company raised $6,066,569 to fund ongoing operations in Papua New Guinea
and Australia.
Separately, the Company issued 22,000,000 shares at the issue price of $0.10 to raise $2,200,000 as part consideration
for the acquisition of a 70% interest in EL2306 approved by Shareholders at the Annual General Meeting held on 28
November 2017.
Capital Raising
Date
Shares Issued
Price
Amount Raised
August 2017 Placement
October 2017 Placement
Exercise of options
November 2017 Placement
Exercise of options
Placement to Khor Eng Hock & Sons
(PNG) Limited to acquire 70% EL2306
Total
09-08-2017
06-10-2017
06-10-2017
29-11-2017
22-01-2018
19-02-2018
7,984,800
19,245,000
2,500,000
10,000,000
40,110,715
22,000,000
101,840,515
$0.100
$0.100
$0.055
$0.100
$0.055
$0.100
798,480
1,924,500
137,500
1,000,000
2,206,089
-
$6,066,569
Risk management
Details of the Company’s Risk Management policies are contained within the Corporate Governance Statement.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
15
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 July 2018, the Company announced a helicopter-assisted drill program initiated for the large Mongae Creek (or
Mongai Creek) Porphyry Cu-Au System in EL2306. Abundant coarse gold is present in creeks within the Mongai Creek
system and gold has been panned from gossanous rocks. Copper mineralisation is located in outcrops.
Reconnaissance mapping and sampling in adjoining drainage systems is planned to determine the extent of the
mineralisation.
On 12 and 13 July 2018, the Company announced the progress of its mineral exploration programs on the Crown
Ridge prospect in Enga Province, Papua New Guinea. The Company has completed a diamond drilling program of 19
drill-holes totalling 3761.8m, drilled between 14 October 2017 and 10 June 2018. The drilling targeted shallow
conglomerate-hosted free gold-platinum mineralisation (Target 1) and high-grade gold mineralisation hosted by
structurally controlled quartz-pyrite veins (Target 2). The Target 1 drill-holes were undertaken in conjunction with bulk
sampling pits and aimed to define a Mineral Resource for the shallow conglomerate material. The Company will
release the laboratory analysis and test results of the drill cores and the bulk pit samples as and when they become
available. Assay results for the samples from the remaining 26 pits have been received and logged into the LIMS
system by ALS in Perth. The results are expected in mid to late August 2018. However, the assays will require
compilation and assessment against geological data before final results can be released. This is not expected until at
least December 2018.
On 24 July 2018, the Company announced the arrival of a custom-built mobile bulk sampling plant at Crown Ridge and
is undergoing commissioning. A helicopter-portable drill rig has also arrived on site at the Mongae Creek Au-Cu
prospect with diamond drilling starts this week. Assays are underway on Mongae Creek rock samples. An Excavator
continues costeaning at Crown Ridge, exploring for hard-rock source of large gold nuggets and coarse free gold found
in shallow sampling programmes to date. Regional heli-borne geophysical survey is planned to search for Porgera-
style gold systems. Metallurgical investigations on black sand pan concentrates will be undertaken to identify hosts of
vanadium, titanium and chrome.
On 7 August 2018, the Company announced the maiden diamond drill hole at Mongai Creek confirmed diagnostic
characteristics of a porphyry copper-gold system. Also noted that visible copper and molybdenite mineralisation was
observed in drill cones.
On 14 August 2018, the Company announced the finalisation of assembly and commissioning of large capacity mobile
plant for processing of coarse-gold and platinum bulk samples, and recovery heavy black sands to test titanium,
vanadium and chrome concentrations. The plant would improve processing time of infill and extensional pitting
samples that form the basis of the Mineral Resource estimation that is in progress.
On 28 August 2018, the Company announced the results for 35 rock chip samples from outcrop and float that
confirmed the potential for economic grades of copper and gold mineralisation at Mongai Creek. This is supported by a
petrographic report on test of samples from Mongai Creek which confirmed the expected diagnostics of porphyry
copper-gold mineralisation, hydrothermal alterations, porphyritic texture, and primary mineralogical compositions.
It is
complimented with a maiden diamond drill-hole MCD001 completed at 521m down-hole below the mineralised outcrop
with logging data providing a first view at the 3D geological framework of the system.
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
16
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
The maximum terms of options granted during the year are as follows:
18,614,900 unlisted options were granted (GMNAC) to participants who were entitled to one option for every two shares
issued as part of placements completed in August 2017, October 2017 and November 2017. In addition, 28,000,000
unlisted options were granted to a promoter as approved by Shareholders at the Annual General Meeting held on 28
November 2017. The remaining unexercised options expire on 30 June 2019 and are exercisable at $0.15 with no
vesting conditions.
2,000,000 unlisted options (GMNAD) were granted to participating directors on 29 December 2017 as approved by
Shareholders at the Annual General Meeting held on 28 November 2017. The remaining unexercised options expire on
26 July 2021, have an exercise price of $0.15 with vesting conditions that the total granted options shall be vested over 3
periods of 12 months per period.
7,800,000 unlisted options (GMNAE) were granted on 29 December 2017 pursuant to the Company’s Employee Share
Option Plan, have an exercise price of $0.15 with vesting conditions that the total granted options shall be vested over 3
periods of 12 months per period.
The options must be exercised on or before the expiry date in cash.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
17
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 2018.
The following persons acted as Directors during or since the end of the financial year:
Graham Kavanagh
Sin Pyng “Tony” Teng
Douglas Smith
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
Sin Pyng “Tony” Teng
Douglas Smith
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
18
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 2018 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
19
Remuneration of Directors and named executives
Table 1: Directors’ and named executives remuneration for the year ended 30 June 2018
Short-term employee benefits
Post-employment benefits
Equity
Other
Total
%
Salary &
Fees
Bonuses
Non- Monetary
Benefits
Super-
annuation
Prescribed
Benefits
Options
Shares
Deferred
Benefits
Performance
Related
Graham Kavanagh 1
36,000
Sin Pyng “Tony” Teng 2
108,000
Douglas Smith 3
Eric Kam 5
David Clark 6
Total
232,000
108,000
36,000
520,000
-
-
-
-
-
-
-
-
-
-
-
-
-
1,140
1,140
-
-
2,280
-
-
-
-
-
-
35,524
35,524
-
-
-
71,048
Table 2: Directors’ and named executives remuneration for the year ended 30 June 2017
Short-term employee benefits
Post-employment benefits
Equity
Salary &
Fees
Bonuses
Non- Monetary
Benefits
Super-
annuation
Prescribed
Benefits
Options
Shares
Graham Kavanagh 1
36,000
Sin Pyng “Tony” Teng 2
108,000
Douglas Smith 3
182,000
Matthew Morgan 4
Eric Kam 5
David Clark 6
Total
99,000
77,500
36,000
538,500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,140
570
-
-
-
1,710
-
-
-
-
-
-
-
-
-
-
-
-
-
-
GOLD MOUNTAIN LIMITED ANNUAL REPORT
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
71,524
144,664
233,140
108,000
36,000
593,328
0%
0%
0%
0%
0%
-
Other
Total
%
Deferred
Benefits
Performance
Related
0%
0%
0%
0%
0%
0%
-
36,000
109,140
182,570
99,000
77,500
36,000
540,210
-
-
-
-
-
-
-
20
1. Paid to Drumcliffe Investments Pty Ltd for corporate advisory services of which Mr Kavanagh is a director and shareholder.
2. Paid to Rodby Holdings Pty Ltd for corporate advisory services of which Mr Teng is a director.
3. Paid to of Dougnic Pty Ltd for geological services which Mr Smith is a director and shareholder and Dougie Downunder which Mr Smith is principal.
4. Paid to Mineral X Pty Ltd for corporate advisory services of which Mr Morgan is a director and shareholder.
5. Paid to Useful Ways Pty Ltd for corporate advisory services of which Mr Kam is a director and shareholder and Ekam Commercial of which Mr Kam is principal.
6. Paid to D.W. Clark & Co., Chartered Accountant for corporate advisory services of which Mr Clark is principal.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
21
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
other than retirement at age 60 or more (or such earlier age as the board permits), permanent
that person’s nominee)
redundancy or death,
disability,
automatically lapse on the first
the expiry of the period of 30 days from the date of
such occurrence, and b) the expiry date.
If a person dies, the options held by that person will be
exercisable by that person’s legal personal representative.
the options held by that person (or
to occur of a)
Options cannot be transferred other than to the legal personal representative of a deceased option holder.
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.
xi.
Options are granted under the plan for no consideration.
Each share options converts into one ordinary shares of Gold Mountain Limited.
14,800,000 unlisted options granted on 29 August 2016 pursuant to the Company’s Employee Share
Option Plan have an exercise price of $0.30 and are subject to the following vesting conditions:
(1) The Company's underlying share price must exceed $0.50 based on volume weighted average price
(VWAP) over a 5 day consecutive period;
(2) The holder must be an actual consultant to or employee of the Company at the time of exercise of the
relevant Granted Options. In addition, the exercise of the Granted Options is subject to the following
conditions:
(3) 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; and
(4) a granted option expires 36 months after the date on which the relevant granted options were
granted.
The unlisted options granted under the Employee Share Option Plan are exercisable at $0.30 expire on
28 November 2019.
xii.
7,800,000 unlisted options granted on 29 December 2017 pursuant to the Company’s Employee Share
Option Plan have an exercise price of $0.15 and are subject to the vending condition that the total
granted options shall be vested over 3 periods of 12 months per period. The unlisted options
granted under the Employee Share Option Plan are exercisable at $0.15 expire on 26 July
2021.
The Board may amend the terms and conditions of the plan subject to the requirements of the Listing Rules.
There have been no other transactions involving equity instruments other than those described in the tables above. For
details of other transactions with Key Management Personnel, refer to Note 18: Related Party Disclosures.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
22
Directors’Meetings
The number of meetings of Directors (inciuding meetings of committees of Directors) heId du「ing the yea「 and the numbe「 of
meetings attended by each Directo「 was as foliows:
Board Meetings
Directo「 Attended E悪霊O
G「aham Kavanagh 6 6
Douglas Smith 6 6
Sin Pyng “Tony’’Teng 6 6
In addition, th「ee ci「cuIar 「esolutions we「e signed by the Boa「d during the period.
Audito「 independence
Section 307C of the Co「po「ations Act 2001 「equi「es ou「 auditors to provide the Directo「S Of the Company with an
Independence Deciaration in relation to the audit ofthe annuaI 「eport. This lndependence Declaration is set out on
Page 25, and forms part of this Di「ecto「s’「eport fo「 the yea「 ended 30 June 2018.
Non-Audit Services
DetaiIs of amounts paid o「 payabIe to the audito「 fo「 non-audit services provided during the yea「 by the audito「 are
Ou佃ned in Note 22 to the financial statements. The Di「ecto「s a「e satisfied that the p「ovision of non-audit services is
COmPatibie with the gene「aI standa「d of independence fo「 audito「S imposed by the Corpo「ations Act 2001.
The Di「ecto「s a「e of the opinion that the services do not comp「Omise the audito「’s independence as a= non-audit
Services have been 「eviewed to ensure that they do not impact the integrity and objectivity of the audito「 and none
Of the services unde「mine the gene「ai p「incipies 「eIating to audito「 independence.
Signed in acco「dance with a 「esoIution of the Di「ectors.
/彩縁㌣し字へ
Non-Executive Chai「man
D。t。d this 。Z啓a, 。f S。。t。mb。。 2018
繊㊨㊨罷宅t、餞吋も漫壁紗の蝿b節々・$薦多㊥鱒♂鰐雪無電の㊧篭め呼声恵贈鵬と,曹
GOLD MOUNTAIN LIMiTED ANNUAL REPORT 23
SCHEDULE OF TENEMENTS
EL No.
Holder
EL1966
Sak Creek
EL1967
Pocket Creek
EL1968
Crown Ridge
EL2426
Keman
EL2430
Meriamanda
ELA2522
ELA2563
ELA2565
EL2306
Viva No.20 Limited
Viva No.20 Limited
Viva No.20 Limited
GMN
Interest
70%
70%
70%
Location
Enga Province, PNG
Enga Province, PNG
Enga Province, PNG
GMN 6768 (PNG) Ltd
100%
Enga Province, PNG
GMN 6768 (PNG) Ltd
100%
Enga Province, PNG
GMN 6768 (PNG) Ltd
Abundance Valley (PNG)
Limited
Viva Gold (PNG) Limited
Khor Eng Hock & Sons (PNG)
Limited / Abundance Valley
(PNG) Limited
Application
Application
Enga Province, PNG
Enga Province, PNG
Enga Province, PNG
Enga Province, PNG
Application
Registration
of transfer
pending
Area
(sq km)
103
103
103
48
154
841
226
537
164
Expiry
26/06/2017
(Renewal pending)
27/11/2017
(Renewal pending)
27/11/2017
(Renewal pending)
27/05/2018
(Renewal pending)
27/05/2018
(Renewal pending)
-
-
-
13/12/2017
(Renewal pending)
Figure 1 – Suite of tenements located at the Enga Province in Papua New Guinea
GOLD MOUNTAIN LIMITED ANNUAL REPORT
24
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2018
Other income
Administration costs
Depreciation expense
Employment costs
Exploration expense
Impairments expense
Investor and public relations expense
Legal and professional costs
Other expenses
Loss before income tax expense
Note
3
2018
$
119,426
119,426
2017
$
32,874
32,874
(369,322)
(302,398)
(56,164)
(11,049)
(62,280)
(62,010)
9
(171,068)
(428,442)
-
(2)
(240,944)
(141,854)
(308,167)
(319,474)
(395,954)
(47,560)
(1,484,473)
(1,279,915)
Income tax expense
Net loss for the period
Attributable to the owners of Gold Mountain Limited
5
-
-
(1,484,473)
(1,279,915)
Other comprehensive income
Total other comprehensive income for the year, net of tax
Total comprehensive loss for the period
Attributable to the owners of Gold Mountain Limited
-
-
-
-
(1,484,473)
(1,279,915)
Loss per share
Basic loss per share (cents)
Diluted loss per share (cents)
20
(0.32)
N/A
(0.35)
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
26
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2018
Note
2018
$
2017
$
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
Intangible assets
Investments
Other assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Other current liabilities
TOTAL CURRENT LIABILITIES
NON CURRENT LIABILITIES
Other non current liabilities
TOTAL NON CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
6
7
8
9
10
11
12
13
14
14
15
16
2,985,066
2,693,337
82,239
125,439
3,067,305
2,818,776
489,797
108,620
11,816,184
3,038,522
6,002,733
6,004,982
50,555
55,545
500,555
75,545
18,414,814
9,728,224
21,482,119
12,547,000
238,545
767,600
126,025
-
1,006,145
126,025
1,200,000
1,200,000
-
-
2,206,145
126,025
19,275,974
12,420,975
27,885,834
19,942,315
395,953
-
(9,005,876)
(7,521,403)
Total equity attributable to equity holders of the Company
19,275,911
12,420,912
Non controlling interest
TOTAL EQUITY
63
63
19,275,974
12,420,975
The statement of financial position should be read in conjunction with the accompanying notes.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
27
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
Issued Capital
Reserves
Accumulated
Losses
Non
Controlling
Interest
Total
$
$
$
$
$
Balance at 1 July 2016
9,645,792
23,250
(6,264,777)
Comprehensive Income
Net loss for the period
Other comprehensive
income
Total comprehensive
income for the year
Transactions with owners
in their capacity as
owners
Accumulated losses - Non
controlling interest
Issue of share capital
Share issue costs
Lapse of options
Total transactions with
owners in their capacity
as owners
-
-
-
-
10,412,173
(115,650)
-
-
-
-
-
-
(1,279,915)
-
(1,279,915)
39
-
-
-
(23,250)
23,250
10,296,523
(23,250)
23,289
Balance at 30 June 2017
19,942,315
Balance at 1 July 2017
19,942,315
-
-
-
-
-
-
-
(7,521,403)
(7,521,403)
(1,484,473)
-
(1,484,473)
-
-
-
-
-
-
-
-
8,266,569
(323,050)
(1)
-
395,954
7,943,519
395,953
Comprehensive Income
Net loss for the period
Other comprehensive
income
Total comprehensive
income for the year
Transactions with owners
in their capacity as
owners
Issue of share capital
Share issue costs
Foreign Currency
Translation
Options expense
Total transactions with
owners in their capacity
as owners
-
-
-
-
(39)
102
-
-
63
63
63
-
-
-
-
-
-
-
-
3,404,265
(1,279,915)
-
(1,279,915)
-
10,412,275
(115,650)
-
10,296,625
12,420,975
12,420,975
(1,484,473)
-
(1,484,473)
8,266,569
(323,050)
(1)
395,954
8,339,472
Balance at 30 June 2018
27,885,834
395,953
(9,005,876)
63
19,275,974
GOLD MOUNTAIN LIMITED ANNUAL REPORT
28
STATEMENT OF CASHFLOWS
FOR YEAR ENDED 30 JUNE 2018
Cash flows from operating activities
Interest received
Payments to suppliers and employees
Other receipts
Note
2018
$
2017
$
25,400
6,874
(825,903)
(982,519)
94,936
50,200
Net cash (used in) provided by operating activities
27
(705,567)
(925,445)
Cash flows from investing activities
Payments for plant and equipment
Payments for security deposits
Payments for other investments
(407,996)
(118,398)
-
(35,545)
14
(750,000)
(470,000)
Receipt of tenement security deposits
10,000
10,000
Payments for exploration and evaluation
9
(3,598,227)
(1,261,990)
Net cash (used in) provided by investing activities
(4,746,223)
(1,875,933)
Cash flows from financing activities
Proceeds from issue of shares
Payments for share issue costs
Net cash provided by (used in) financing activities
Net increase/(decrease) in cash
and cash equivalents
6,066,569
4,330,873
(323,050)
(26,105)
5,743,519
4,304,768
291,729
1,503,390
Cash and cash equivalents at beginning of financial year
2,693,337
1,189,947
Cash and cash equivalents at end of financial year
6
2,985,066
2,693,337
Non-cash financing activities
(i) Share issue
On 19 February, 2018 the Company issued 22,000,000 shares at the issue price of $0.10 to raise $2,200,000 as part
consideration for the acquisition of a 70% interest in EL2306 as approved by Shareholders at the Annual General
Meeting held on 28 November 2017.
The statement of cashflows should be read in conjunction with the accompanying notes.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
29
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
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
27
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 – Intangible assets
Non-current assets – Investments
Non-current assets – Other assets
Current liabilities – Trade and other payables
Current and non current liabilities – Other
Contributed equity
Reserves
Share based payments
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
Controlled entities
Cash flow information
GOLD MOUNTAIN LIMITED ANNUAL REPORT
30
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 other comprehensive income 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 arrangements and other facts and circumstances.
Previously, the structure of the arrangement was the sole focus of classification.
the contractual
terms of
GOLD MOUNTAIN LIMITED ANNUAL REPORT
31
The Company did not have any joint arrangements at the start of the financial year.
On 16 August 2016, the Company completed the acquisition of an additional 50% of the issued capital of Viva
No. 20 Limited (“Viva”) through the issue of 60,000,000 shares at $0.08 each to the Vendors. Simultaneously,
the Vendors issued 125 ordinary shares to GMN comprising 50% of the entire issued capital of Viva held by the
Vendors. On completion of this acquisition, the Company now holds a controlling interest of 70% in Viva.As a
result of the acquisition and in accordance with AASB 11, this new arrangement has been recognised on a
consolidated basis.
On 18 July 2017, the Company announced that it had entered a binding agreement for the acquisition of the
EL2306 Interest from the EL2306 Vendor for purchase price of $5,200,000 comprising 22 million Shares at a
notional price of $0.10 per Share and $3,000,000 in cash. The cash consideration of $3,000,000 is payable in
instalments. An exclusivity fee of $150,000 was also paid and capitalised as Deferred Expenditure in FY 2016.
On 19 February, 2018 the Company issued 22,000,000 shares at the issue price of $0.10 to raise $2,200,000
as part consideration for the acquisition of a 70% interest in EL2306 as approved by Shareholders at the
Annual General Meeting held on 28 November 2017.
Instalment costs of $1,050,000 were paid by the
Company in FY 2017 and FY 2018. The remaining instalment costs of $1,950,000 is payable over 30 months
with $750,000 payable by 30 June 2019 and $1,200,000 payable by 31 December 2020. As a result of the
this new arrangement has been recognised as a joint
acquisition and in accordance with AASB 11,
arrangement. See Note 14 for further information.
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.
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.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
32
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
the asset is realised or the liability is settled and their measurement also reflects the manner in which
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.
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.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
33
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
the
expectations and future legislation. Accordingly the costs have been determined on the basis that
restoration will be completed within one year of abandoning the site.
j.
Revenue and Other Income
the consideration received or receivable. When the inflow of
Revenue is measured at
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.
for similar arrangements. The difference between the amount
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.
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
less accumulated
Plant and equipment are measured on the cost basis and therefore carried at cost
In the event the carrying amount of plant and equipment is
depreciation and any accumulated impairment.
greater than the estimated recoverable 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
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.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
34
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.
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.
Revisions to expected future net cash flows will necessitate an adjustment
to the carrying value with a
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.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
35
(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.
(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
GOLD MOUNTAIN LIMITED ANNUAL REPORT
36
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).
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.
take action to reprioritise
Should new opportunities present
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,
GOLD MOUNTAIN LIMITED ANNUAL REPORT
37
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.
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 2018.
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 2018
June 2017
Total
Australia
PNG
Peru
Total
Australia
PNG
$
$
$
$
$
$
$
Peru
$
119,426
119,426
119,426
119,426
-
-
-
-
32,874
32,874
32,874
32,874
-
-
REVENUE
Revenue
Total segment revenue
RESULTS
Net loss before income tax
(1,484,473)
(1,381,637)
(102,836)
- (1,279,915)
(815,176)
(464,737)
Income tax
Net loss
-
-
-
-
-
-
-
(1,484,473)
(1,381,637)
(102,836)
- (1,279,915)
(815,176)
(464,737)
ASSETS AND LIABILITIES
Assets
Liabilities
21,482,119
2,795,323 18,686,796
- 12,547,000
2,954,395 9,592,605
2,206,145
121,226 2,084,919
-
126,025
117,475
8,550
-
-
(2)
-
(2)
-
-
NOTE 3: REVENUE AND OTHER INCOME
Note
2018
$
2017
$
a.
Revenue
Other income
Interest received 1
Rental income
Foreign exchange gains
Total other income
Total revenue
1 Interest received from:
Bank
25,400
51,792
42,234
119,426
119,426
6,874
26,000
-
32,874
32,874
25,400
6,874
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:
—
—
Exploration expense
Impairments expense
NOTE 5: INCOME TAX EXPENSE
2018
$
2017
$
170,200
28,862
100,373
149,000
53,474
12,976
171,068
428,442
-
2
2018
$
2017
$
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 27.5%
(2017: 27.5%)
(1,484,473)
(1,279,915)
(408,230)
(351,977)
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
195,692
144,012
195,692
144,012
(84,579)
(77,297)
297,117
285,262
-
-
The Company has tax losses arising in Australia of $7,340,591 (2017: $6,238,066) 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
2018
$
2017
$
136,973
198,524
2,848,093
2,494,813
2,985,066
2,693,337
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
2,985,066
2,693,337
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
Performance bonds with NSW Mines Department
Other receivables
Total current trade and other receivables
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
2018
$
8,566
-
73,673
82,239
2017
$
77,246
10,000
38,192
125,438
2018
$
2017
$
558,295
120,954
(68,498)
(12,334)
489,797
108,620
108,620
437,341
1,273
118,398
-
-
(56,164)
(11,049)
489,797
108,620
GOLD MOUNTAIN LIMITED ANNUAL REPORT
41
NOTE 9: DEFERRED EXPLORATION AND EVALUATION EXPENDITURE
Assets in Development
Balance at the beginning of the year
Expenditure incurred
2018
$
2017
$
3,038,522
1,675,098
3,578,730
1,261,990
Expenditure incurred on acquisition of 70% interest in EL2306
5,350,000
-
Expenditure incurred on acquisition of subsidiary
Impairment loss on existing tenements
Net carrying value
-
294,876
(151,068)
(193,442)
11,816,184
3,038,522
Recoverability of the carrying amount of deferred exploration and evaluation expenditure is dependent on the successful
development and commercial exploitation or sale of the areas of interest. Management reassess the carrying value of the
Company’s tenements at each half year, or at a period other than that should there be an indication of impairment.
During the year to 30 June 2018, an impairment expense of $171,068 (2017: $193,442) was recognised. This impairment
refers to past costs incurred in maintaining the Company’s NSW exploration projects.
NOTE 10: INTANGIBLE ASSETS
Intangible assets
Goodwill on acquisition
Total intangible assets
2018
$
2017
$
6,002,733
6,002,733
6,004,982
6,004,982
Movements in Carrying Amounts
Movement in the carrying amounts for intangible assets between the beginning and the end of the current financial year:
Carrying amount at 30 June 2017
Additions
Disposals
Movement in foreign exchange
Carrying amount at 30 June 2018
Goodwill on acquisition
2018
$
2017
$
6,004,982
6,004,982
-
-
(2,249)
-
-
-
6,002,733
6,004,982
On 16 August 2016, the Company completed the acquisition of an additional 50% of the issued capital of Viva through
the issue of 60,000,000 shares at $0.08 each to the Vendors. Simultaneously, the Vendors issued 125 ordinary shares
to GMN comprising 50% of the entire issued capital of Viva held by the Vendors.
On completion of this acquisition, the Company now holds a controlling interest of 70% in Viva. Goodwill of $6,002,733
was recorded from the acquisition.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
42
NOTE 11: INVESTMENTS
Non-Current
Gold nuggets
Papua New Guinea exclusive option fees
NOTE 12: OTHER ASSETS
Non-Current
Security deposits
Acquisition costs - EL5939 Cowarra NSW
NOTE 13: TRADE AND OTHER PAYABLES
Current
Unsecured liabilities:
Trade payables and accrued expenses
Amounts payable to Director and related entities
NOTE 14: OTHER CURRENT AND NON CURRENT LIABILITIES
Current
Rental deposit received
Instalment costs - EL2306
Total other current liabilities
Non current
Instalment costs - EL2306
Total other non current liabilities
Instalment costs - EL2306
2018
$
2017
$
50,555
50,555
-
450,000
50,555
500,555
2018
$
55,545
-
55,545
2017
$
55,545
20,000
75,545
2018
$
2017
$
206,445
108,425
32,100
17,600
238,545
126,025
2018
$
2016
$
17,600
750,000
767,600
1,200,000
1,200,000
-
-
-
-
-
On 18 July 2017, the Company announced that it had entered a binding agreement for the acquisition of the EL2306
Interest from the EL2306 Vendor for purchase price of $5,200,000 comprising 22 million Shares at a notional price of $0.10
per Share and $3,000,000 in cash. The cash consideration of $3,000,000 is payable in instalments. An exclusivity fee of
$150,000 was also paid and capitalised as Deferred Expenditure in FY 2016. On 19 February, 2018 the Company issued
22,000,000 shares at the issue price of $0.10 to raise $2,200,000 as part consideration for the acquisition of a 70% interest
in EL2306 as approved by Shareholders at the Annual General Meeting held on 28 November 2017. Instalment costs of
$1,050,000 were paid by the Company in FY 2017 and FY 2018. The remaining instalment costs of $1,950,000 is payable
over 30 months with $750,000 payable by 30 June 2019 and $1,200,000 payable by 31 December 2020.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
43
NOTE 15: CONTRIBUTED EQUITY
(a) Ordinary shares
Ordinary Shares, issued
Share issue costs
Total issued capital
2018
Number of
shares
2018
$
2017
Number of
shares
2017
$
515,142,680
29,551,110
413,302,165
21,284,541
(1,665,276)
27,885,834
(1,342,226)
19,942,315
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 30 June 2016
Number of
shares
261,514,508
08-08-16
Placement to professional and sophisticated investors
57,197,619
Placement to Viva No.20 Ltd for 50% of issued capital
(escrowed for 12 months)
60,000,000
Issue Price
$
$0.042
$0.080
9,645,792
2,402,300
4,800,000
placement
Additional
and
sophisticated investors following over-subscription of
8 August placement.
professional
to
1,238,095
$0.042
52,000
17-08-16
18-10-16
13-12-16
Issue of shares on exercise of options
1,150,000
13-12-16
Issue of shares on exercise of 2013 employee options
500,000
20-01-17
Issue of shares on exercise of options
31-03-17
Issue of shares on exercise of options
1,000,000
707,143
15-05-17
Placement to professional and sophisticated investors
10,660,000
15-05-17
Issue of shares on exercise of options
750,000
05-06-17
Placement to professional and sophisticated investors
17,034,000
29-06-17
Placement to professional and sophisticated investors
1,550,800
30-06-17
Share issue costs
At 30 June 2017
413,302,165
09-08-17
Placement to professional and sophisticated investors
7,984,800
06-10-17
Placement to professional and sophisticated investors
19,245,000
06-10-17
Issue of shares on exercise of options
2,500,000
29-11-17
Placement to professional and sophisticated investor
10,000,000
22-01-18
Issue of shares on exercise of options
40,110,715
$0.055
$0.070
$0.055
$0.055
$0.100
$0.055
$0.100
$0.100
$0.100
$0.100
$0.055
$0.100
$0.055
63,250
35,000
55,000
38,893
1,066,000
41,250
1,703,400
155,080
(115,650)
19,942,315
798,480
1,924,500
137,500
1,000,000
2,206,089
19-02-18
Placement to acquire 70% of EL2306 (as approved at
2017 AGM and escrowed for 24 months)
22,000,000
$0.100
2,200,000
30-06-18
Share issue costs
At 30 June 2018
515,142,680
(323,050)
27,885,834
GOLD MOUNTAIN LIMITED ANNUAL REPORT
44
Ex. Price
$0.07
Exp
31Dec16
Ex. Price
$0.055
Exp
18Jan18
Code:
GMNAA
Ex. Price
$0.15
Exp
30Jun19
Code:
GMNAB
Ex. Price
$0.301
Exp
28Nov19
Code:
GMNAC
Ex. Price
$0.15
Exp
26Jul21
Code:
GMNAD
Ex. Price
$0.152
Exp
26Jul21
Code:
GMNAE
Movement in options over ordinary shares on issue
Date
Particulars
30-Jun-16
18-Oct-16
18-Oct-16
18-Oct-16
28-Nov-16
13-Dec-16
13-Dec-16
29-Dec-16
Total options on issue
Issue of unlisted options to
Aug 16 placement investors
Issue of unlisted options to
promoters following
shareholder approval
Issue of unlisted options to
Aug 16 placement investors
Issue of unlisted ESOP(1)
options subject to vending
conditions
Exercise of unlisted options
Exercise of 2012 KMP
unlisted options
Lapse of unlisted ESOP
options on departure of
employee
20-Jan-17
Exercise of unlisted options
31-Mar-17
Exercise of unlisted options
15-May-17
29-Jun-17
Exercise of unlisted options
Issue of unlisted options to
May17 placement investors
30-Jun-17
Total options on issue
10 Aug 17
06 Oct 17
6 Oct 17
28 Nov 17
29 Dec 17
29 Dec 17
22 Jan 18
22 Jan 18
Issue of unlisted options to
Aug17 placement investors
Issue of unlisted options to
Oct17 placement investors
Exercise of unlisted options
Issue of unlisted options to
placement investor
Issue of unlisted options to
participating directors
Issue of unlisted options
under Employee Share
Option Plan
Exercise of unlisted options
Issue of unlisted options to
promoter as approved by
shareholders at 2017 AGM
30-Jun-18
Total options on issue
500,000
-
-
28,598,810
-
-
-
-
17,000,000
619,048
-
(1,150,000)
-
-
(1,000,000)
(707,143)
(750,000)
(500,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18,400,000
-
-
(3,600,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,800,000
-
-
-
-
-
-
-
-
-
-
-
14,622,400
42,610,715
14,622,400
14,800,000
-
3,992,400
-
(2,500,000)
9,622,500
-
5,000,000
-
-
-
(40,110,715)
-
28,000,000
-
-
61,237,300
14,800,000
2,000,000
7,800,000
(1) ESOP options are exercisable at $0.30 until expiry date 28/11/2019 and subject to vending condition that the Company’s
share price must exceed $0.50 based on VWAP over a 5 day consecutive period.
(2) ESOP options are exercisable at $0.15 until expiry date 26/07/2021 and subject to vending condition that the total options
granted shall be vested over 3 periods of 12 months per period.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
45
(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 2017 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.
NOTE 16: RESERVES
Reserves
Foreign currency translation reserve
Share based payments reserve
Movements in the Foreign Currency Translation Reserve
At 1 July 2017
Foreign Currency Translation
At 30 June 2018
Movements in options over ordinary shares on issue
At 1 July 2017
Options issued during the year
Options exercised/lapsed during the period
At 30 June 2018
NOTE 17: SHARE BASED PAYMENTS
(a) Share-based payments
Options issued during the year
Write-back arising from exercise of options
Total allocated against Share Based Payment Reserve
2018
$
(1)
395,954
395,953
-
(1)
(1)
-
395,954
-
395,954
2018
$
395,954
-
395,954
2017
$
-
-
-
-
-
-
23,250
-
(23,250)
-
2017
$
-
(23,250)
(23,250)
GOLD MOUNTAIN LIMITED ANNUAL REPORT
46
(b) Unlisted options
The following table details the number, weighted average exercise prices (WAEP) and movements in share
options issued as capital raising purposes, employment incentives or as payments to third parties for
services during the year.
2018
2018
2017
2017
Number
WAEP
Number
WAEP
Outstanding at the beginning of the year
Unlisted options granted during the year
Options lapsed during the year(1)
Exercised during the year
72,033,115
56,414,900
$0.12
$0.15
500,000
79,240,258
-
-
(3,600,000)
(42,610,715)
$0.055
(4,107,143)
Outstanding at the end of the year
85,837,300
$0.176
72,033,115
$0.07
$0.13
$0.30
$0.06
$0.12
(c) Options exercisable at reporting date
2018
Exercise
2017
Exercise
Unlisted options expiring 18 January 2018
Unlisted options expiring 30 June 2019
Unlisted options expiring 28 November 2019(1)
Unlisted options expiring 26 July 2021
Unlisted options expiring 26 July 2021(2)
Exercisable at reporting date
Number
-
61,237,300
14,800,000
2,000,000
7,800,000
85,837,300
Price
$0.055
$0.150
$0.300
$0.150
$0.150
Number
Price
42,610,715
14,622,400
14,800,000
$0.055
$0.150
$0.300
-
-
72,033,115
(1) ESOP options are exercisable at $0.30 until expiry date 28/11/2019 and subject to vending condition that the
Company’s share price must exceed $0.50 based on VWAP over a 5 day consecutive period.
(2) ESOP options are exercisable at $0.15 until expiry date 26/07/2021 and subject to vending condition that the total
options granted shall be vested over 3 periods of 12 months per period.
(d) Options issued during the year
The maximum terms of options granted during the year are as follows:
3,992,400 unlisted options granted to participants who were entitled to one option for every two shares issued as part of
a placement during August 2017. The remaining unexercised options expire on 30 June 2019 and are exercisable at
$0.15 with no vesting conditions.
9,662,500 unlisted options granted to participants who were entitled to one option for every two shares issued as part of
a placement during August 2017. The remaining unexercised options expire on 30 June 2019 and are exercisable at
$0.15 with no vesting conditions.
5,000,000 unlisted options granted to an August 2017 Placement investor following approval by shareholders at the
Annual General Meeting of the Company held on 28 November 2017. The options expire on 30 June 2019 and are
exercisable at $0.15 with no vesting conditions.
2,000,000 unlisted options were granted to participating directors following approval by shareholders at the Annual
General Meeting of the Company held on 28 November 2017. The options expire on 26 July 2021 and are exercisable at
$0.15 with no vesting conditions.
7,800,000 unlisted options granted on 29 December 2017 pursuant to the Company’s Employee Share Option Plan have
an exercise price of $0.15 and are subject to vending condition that the total options granted shall be vested over 3
periods of 12 months per period.
The options must be exercised on or before the expiry date in cash.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
47
(e) Fair value of unlisted options
The following table lists the fair value of options granted during the year ended 30 June 2018 and the total number of
unexercised at 30 June 2018. The inputs to the Black-Scholes model used to determine each valuation are stated after
taking into account the terms and conditions upon which the options were granted. The unlisted options were issued in
separate tranches during the year on 10 August 2017, 6 October 2017, 28 November 2017, 29 December 2017 and 21
January 2018.
Unlisted ESOP options expiring 28 November 2019 (Code: GMNAB)
Fair value at grant date (29 August 2016)
Share price at grant date
Exercise price
Expected volatility
Expected life
Expected dividends
Risk-free interest rate
Number of options issued
Valuation
Unlisted options
Nil
$0.170
$0.300
10%
39 months
Nil
2.67%
14,800,000
Nil
The total value of these options was $Nil at the date they were granted.
GMNAC ESOP options are exercisable at $0.30 until expiry date 28/11/2019 and subject to the vending condition that the
Company’s share price must exceed $0.50 based on VWAP over a 5-day consecutive period.
Unlisted options expiring 30 June 2019 (issued 10 August 2017, 6 October
2017, 28 November 2017 and 21 January 2018) (Code: GMNAC)
Fair value at Placement Offer date (3 May 2017)
Share price at Placement Offer date
Exercise price
Expected volatility
Expected life
Expected dividends
Risk-free interest rate
Number of options issued FY 2017
Number of options issued FY 2018
Total number of options issued
Valuation
$0.01 per option
$0.090
$0.150
10%
24 months
Nil
2.60%
14,622,400
46,614,900
61,237,700
$612,373
The total value of these options was $612,373 at the date they were granted.
Unlisted options expiring 26 July 2021 (Code: GMNAD)
Fair value at grant date (26 September 2017)
$0.0036 per option
Share price at grant date
Exercise price
Expected volatility
Expected life
Expected dividends
Risk-free interest rate
Number of options issued
Valuation
$0.090
$0.150
68%
3.8 years
Nil
2.75%
2,000,000
$71,048
The total value of these options was $71,048 at the date they were granted.
GMNAD options are exercisable at $0.15 until expiry date 26/07/2021 and subject to vending condition that the total options granted
shall be vested over 3 periods of 12 months per period.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
48
Unlisted ESOP options expiring 26 July 2021(2) (Code: GMNAE)
Fair value at grant date (26 September 2017)
Share price at grant date
Exercise price
Expected volatility
Expected life
Expected dividends
Risk-free interest rate
Number of options issued
Valuation
Nil
$0.09
$0.150
10%
46 months
Nil
2.75%
7,800,000
Nil
The total value of these options was $Nil at the date they were granted.
GMNAE ESOP options are exercisable at $0.15 until expiry date 26/07/2021 and subject to vending condition that the total options
granted shall be vested over 3 periods of 12 months per period.
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
Sin Pyng “Tony” Teng
Douglas Smith
Appointed 5 June 2014
Appointed 9 July 2014
Appointed 29 December 2016
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 Rodby Holdings Pty Ltd as Directors Fees
and Consulting Fees, an entity associated with Mr Sin Pyng “Tony” Teng.
Corporate advisory fees paid to Dougnic Pty Ltd and Dougie Downunder
as Directors and Consulting Fees, entities associated with Mr Doug Smith.
Corporate advisory fees paid to Mineral X Pty Ltd as Directors Fees and
Consulting Fees, an entity associated with Mr Matthew Morgan.
2018
$
2017
$
36,000
36,000
108,000
108,000
232,000
176,000
-
99,000
GOLD MOUNTAIN LIMITED ANNUAL REPORT
49
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
NOTE 19: KEY MANAGEMENT PERSONNEL COMPENSATION
Short-term employee benefits
Post-employment benefits
Share based payments
Non Executive Directors Fees
Balance at the end of year
NOTE 20: LOSS PER SHARE
2018
$
2017
$
32,100
23,018
-
-
-
32,100
32,100
2018
$
460,000
2,280
71,048
60,000
593,328
9,300
570
4,348
8,800
23,018
2017
$
478,500
1,710
-
60,000
540,210
2018
$
2017
$
(0.32)
(0.35)
Basic Loss per share
Basic Loss (cents per share)
a.
i
ii.
iii.
b.
Net loss used to calculate basic loss per share
(1,484,473)
(1,279,915)
Weighted average number of ordinary shares outstanding during the year used in
calculating basic loss per share
467,801,944
370,116,937
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
No.
No.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
50
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.
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.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
51
b.
Liquidity risk
Liquidity risk arises from the possibility that the Company might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial
liabilities. The Company manages this risk through the following
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.
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 2018, 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.
2018
$
2017
$
29,851
26,933
(29,851)
(26,933)
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:
Not
e
6
7
12
Financial Assets
Cash and cash
equivalents
Trade and other
receivables
Other financial assets
2018
2017
Floating
Interest
Rate
Non-
interest
bearing
Fixed
Interest
Rate
Total
2018
Floating
Interest
Rate
Non-
interest
bearing
Fixed
Interest
Rate
Total
2017
2,985,066
-
- 2,985,066
2,693,337
-
- 2,693,337
-
-
82,239
55,545
-
-
82,239
55,545
-
-
115,438
75,545
-
-
115,438
75,545
Total financial assets
2,985,066
137,784
- 3,122,850
2,693,337
190,983
- 2,884,320
Financial liabilities at amortised cost:
Financial Liabilities
- Trade and other payables
13
- Other financial liabilities
14
Total financial liabilities
-
-
-
238,545
-
238,545
-
-
-
238,545
-
238,545
-
-
-
126,025
-
126,025
-
-
-
126,025
-
126,025
Net Financial Assets
2,985,066 (100,761)
- 2,884,305
2,693,337
64,958
- 2,758,295
NOTE 22: AUDITOR'S REMUNERATION
Remuneration of the auditor of the Company for:
Auditing or reviewing the financial statements
NOTE 23: COMMITMENTS AND CONTINGENCIES
Remuneration Commitments
2018
$
34,585
34,585
2017
$
30,900
30,900
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 2018.
Contingent liabilities
There are no contingent liabilities as at 30 June 2018.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
53
Exploration licence expenditure requirements
The Company holds six (6) exploration licences covering an area of about 1,600 sq km in the Enga province, Papua New
Guinea (collectively termed the Wabag Project) and is required to incur $600,000 minimum expenditure per year on the
development and maintenance on these licences.
The Company has also made applications for additional three (3) exploration licences in the areas surrounding the existing
tenements. Pending Warden Hearing, approval granting of these new exploration licenses will incur additional expenditure
commitments of $350,000 spread over two (2) years.
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. 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.
NOTE 24: DIVIDENDS
The Directors of the Company have not declared any dividends for the year ended 30 June 2017.
NOTE 25: EVENTS SUBSEQUENT TO REPORTING DATE
On 3 July 2018, the Company announced a helicopter-assisted drill program initiated for the large Mongae (or Mongai) Creek
Porphyry Au-Cu System in EL2306. Abundant coarse gold is present in creeks within the Mongae Creek system and gold has
been panned from gossanous rocks. Copper mineralisation is located in outcrops. Reconnaissance mapping and sampling in
adjoining drainage systems is planned to determine the extent of the mineralisation.
On 12 and 13 July 2018, the Company announced the progress of its mineral exploration programs on the Crown Ridge
prospect in Enga Province, Papua New Guinea. The Company has completed a diamond drilling program of 19 drill-holes
totalling 3761.8m, drilled between 14 October 2017 and 10 June 2018. The drilling targeted shallow conglomerate-hosted free
gold-platinum mineralisation (Target 1) and high-grade gold mineralisation hosted by structurally controlled quartz-pyrite veins
(Target 2). The Target 1 drill-holes were undertaken in conjunction with bulk sampling pits and aimed to define a Mineral
Resource for the shallow conglomerate material. The Company will release the laboratory analysis and test results of the drill
cores and the bulk pit samples as and when they become available. Assay results for the samples from the remaining 26 pits
have been received and logged into the LIMS system by ALS in Perth. The results are expected in mid to late August 2018.
However, the assays will require compilation and assessment against geological data before final results can be released.
This is not expected until at least December 2018.
On 24 July 2018, the Company announced the arrival of a custom-built mobile bulk sampling plant at Crown Ridge and is
undergoing commissioning. A helicopter-portable drill rig has also arrived on site at the Mongae Creek Au-Cu prospect with
diamond drilling starts this week. Assays are underway on Mongae Creek rock samples. An Excavator continues costeaning
at Crown Ridge, exploring for hard-rock source of large gold nuggets and coarse free gold found in shallow sampling
programmes to date. Regional heli-borne geophysical survey is planned to search for Porgera-style gold systems.
Metallurgical investigations on black sand pan concentrates will be und
ertaken to identify hosts of vanadium, titanium and chrome.
On 7 August 2018,
the Company announced the maiden diamond drill hole at Mongai Creek confirmed diagnostic
characteristics of a porphyry copper-gold system. Also noted that visible copper and molybdenite mineralisation was
observed in drill cones.
On 14 August 2018, the Company announced the finalisation of assembly and commissioning of large capacity mobile plant
for processing of coarse-gold and platinum bulk samples, and recovery heavy black sands to test titanium, vanadium and
chrome concentrations. The plant would improve processing time of infill and extensional pitting samples that form the basis
of the Mineral Resource estimation that is in progress.
On 28 August 2018, the Company announced the results for 35 rock chip samples from outcrop and float that confirmed the
potential for economic grades of copper and gold mineralisation at Mongai Creek. This is supported by a petrographic report
on test of samples from Mongai Creek which confirmed the expected diagnostics of porphyry copper-gold mineralisation,
It is complimented with a maiden
hydrothermal alterations, porphyritic texture, and primary mineralogical compositions.
diamond drill-hole MCD001 completed at 521m down-hole below the mineralised outcrop with logging data providing a first
view at the 3D geological framework of the system.
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: CONTROLLED ENTITIES
Controlled Entities Consolidated
Country of Incorporation
Percentage Owned (%)
Subsidiaries of Gold Mountain Limited:
Viva No. 20 Limited
GMN 6768 (PNG) Limited
Viva Gold (PNG) Limited
Abundance Valley (PNG) Limited
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
70%
100%
100%
100%
Unless otherwise stated, the subsidiary listed above has share capital consisting solely of ordinary shares, which are held
directly by the group, and the proportion of ownership interests held equals to the voting rights held by the group. The
country of incorporation or registration is also their principal place of business.
NOTE 27: 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
Options expense
Exploration expense
Depreciation expense
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade payables and other payables
2018
$
2017
$
(1,484,473)
(1,279,915)
-
395,954
171,068
56,164
43,200
112,520
2
-
428,442
11,049
(79,622)
(5,401)
Net Cash (used in) provided by operating activities
(705,567)
(925,445)
GOLD MOUNTAIN LIMITED ANNUAL REPORT
55
D音RECTORS’DECLARA丁ION
ln the opinion ofthe Di「ecto「s of Gold Mountain Limited (the Company):
1. The financiai statements and notes thereto, aS Set Out On PageS 26 to 55 are in acco「dance with the Corporations Act
2001incIuding:
a・ givi=g a t「ue and fai「 view ofthe Company’s financiaI position as at 30 June 2018 and of its performance
fo「the yearthen ended; and
b. complying with Accounting Standards and Corpo「ations Reguiations 2001; and
2. there are reasonabie g「ounds to beIieve that the Company wili be abIe to pay its debts as and when they become due
andpayabie.
3. The血anciai statements and notes thereto a「e in accordance with lnte「national Financial Reporting Sta=da「ds issued
by the lnte「nationaI Accounting Standards Boa「d.
This decIa「ation has been made a償e「 「eceiving the declarations 「equired to be made to the Di「ectors in acco「dance with Section
295A ofthe Co「po「ations Act 2001 for the financiai yea「 ended 30 June 2018.
This decIa「ation is signed in accordance with a 「esoiution of the Board of Di「ecto「s.
畿竹ん、
Non-Executive Chairman
Dat。d this;汗も。f S。。t。mb。. 201 8
私の㊨壁缶チ曹}恵篭の㊧篭り餞〆⑧篭釣 宅チ曾野禽亀董㊦篭め呼〆愈筒釣篤♂徳
GOLD MOUNTAIN 」IMITED ANNUAL REPORT 56
Independent Auditors
Report
GOLD MOUNTAIN LIMITED ANNUAL REPORT
57
ADDITIONAL
SHAREHOLDER INFORMATION
GOLD MOUNTAIN LIMITED ANNUAL REPORT
62
ADDITIONAL SHAREHOLDER INFORMATION
AS AT 12 SEPTEMBER 2018
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
1
2
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
Substantial
Holding
% of Issued
Capital
30,368,070
25,911,974
5.895%
5.030%
2. Number of holders in each class of equity securities and the voting rights attached (as at 12 September 2018)
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 were four (4) classes of options and ninety (90) holder of options at 12 September 2018.
Option Code
Holders
Units
GMNAB
GMNAC
GMNAD
GMNAE
Total on Register
9
73
2
6
90
14,800,000
61,237,300
2,000,000
7,800,000
85,837,300
3. Distribution schedule of the number of holders in each class of equity security as at close of business
on 12 September 2018.
Ordinary Shares
Spread of Holdings
Holders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
Total on Register
25
29
152
304
323
833
Units
3,813
112,872
1,399,850
13,557,476
% of Issued
Capital
0.001%
0.022%
0.272%
2.632%
500,068,669
97.074%
515,142,680
100%
GOLD MOUNTAIN LIMITED ANNUAL REPORT
63
4. Marketable Parcel
There are 63 non-marketable parcels at 12 September 2018, representing 165,506 shares.
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 12 September 2018) is as follows:
Ordinary Shares Top 20 holders and percentage held
Shareholder
Holding
% of Issued
Capital
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
30,850,912
CITICORP NOMINEES PTY LIMITED
MR GHINAN MOHAMED SANI
MS IRENE TENG
PAY CHUAN LIM
SYED HIZAM ALSAGOFF
MS SIOW KWEE HENG
26,434,074
24,016,667
21,423,311
20,000,000
12,250,000
12,000,000
ASLAN EQUITIES PTY LTD
11,684,588
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
KO CHU HONG
ISMAIL HARITH MERICAN
G H A DEVELOPMENT PTY LTD
MINPAX RESOURCES LIMITED
MISS YOKE LAN GAN
MR SUWEI CHEN
MS QIN ZHANG
RASHIDAH MOHD SANI
SIEW HONG KOH
DR PETER ASLAN
MS NYOK CHIN WONG
JUDITH CHRISTINE LING
TOP 20 TOTAL
Other shareholders
TOTAL ISSUED CAPITAL
5.99%
5.13%
4.66%
4.16%
3.88%
2.38%
2.33%
2.27%
1.99%
1.81%
1.76%
1.75%
1.56%
1.44%
1.44%
1.43%
1.30%
1.00%
0.89%
0.87%
10,250,000
9,350,000
9,070,562
9,000,000
8,050,000
7,410,000
7,406,334
7,350,000
6,700,000
5,177,341
4,590,000
4,500,000
247,513,789
48.05%
267,628,891
51.95%
515,142,680
100%
GOLD MOUNTAIN LIMITED ANNUAL REPORT
64
6. Company Secretary
The name of the Company Secretary is Eric Kam.
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
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 (In Australia)
+61 2 9290 9600 (International)
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
There are restricted ordinary shares
22,000,000 ordinary shares escrowed to 29 November 2018
Options
Code
Number
Strike
Expiry
Restriction
GMNAB
14,800,000
$0.30
28 November 2019
ESOP Vesting VWAP $0.50
GMNAC
61,237,300
$0.15
30 June 2019
GMNAD
2,000,000
$0.15
26 July 2021
GMNAE
7,800,000
$0.15
26 July 2021
Vesting over 3 periods of 12
months per period
ESOP Vesting over 3 periods
of 12 months per period
Review of Operations
A review of operations is contained in the Directors’ Report on page 14 of this Annual Report.
Schedule of Tenements
The Company’s Schedule of Tenements is on page 24 of this Annual Report.
GOLD MOUNTAIN LIMITED ANNUAL REPORT
65
Front Cover
Pictogram
Front Cover Picture
1.
2.
Stratigraphy in Crown Ridge Pit 006
Alluvial gold flakes recovered from EL2306
3. Geologists investigating alteration in diamond core
sample from MCD002
4.
5.
6.
Excavator digging Pit 200 at Crown Ridge
Trench digging at Crown Ridge
Coarse platinum nuggets recovered at Crown Ridge
7. Drill crew working at Mongai Creek
8.
Chalcocite, chalcopyrite and pyrite mineralization in
quartz vein recovered from Laialam Area
9. Gold in quartz recovered from stream at Crown Ridge,
specimen was nicknamed ‘The Golden Kangaroo’
GOLD MOUNTAIN LIMITED ANNUAL REPORT
66
Annual Report 2018
Gold Mountain Limited