At the forefront of
Greenland’s emerging
minerals industry.
2013
AnnUAl
RePORT
Corporate Directory
direcTors
Michael Hutchinson
non-executive Chairman
Roderick McIllree
Managing Director
Simon Cato
executive Director
John Mair
executive Director
Anthony Ho
non-executive Director
Jeremy Whybrow
non-executive Director
CHIef fInAnCIAl OffICeR/
COMPAny SeCRetARy
Miles Guy
ReGISteRed And HeAd OffICe
Unit 6, 100 Railway Road
Subiaco WA 6008
Greenland
nuugaarmiunt B-847
3921 narsaq, Greenland
HOMe StOCk exCHAnGe
Australian Securities exchange, Perth
Code: GGG
GGGO
audiTors
Deloitte Touche Tohmatsu
SHARe ReGIStRy
Advanced Share Registry
150 Stirling Highway
nedlands WA 6009
COMPAny WeBSIte
www.ggg.gl
Greenland Minerals and enerGy lTd - AnnUAl RePORT 2013
Contents
Introduction
Highlights of 2013
Review of Operations
1
2
4
The Historical Backdrop to the Repeal of the
Zero-Tolerance Policy
The Modern era
The next Steps
Project Developments in 2013
Advances to the Refinery Circuit
2013 Field Work in Greenland
Background Radiation Monitoring
Geotechnical Mapping
Stakeholder engagement Program
Update on the eURARe Project
2013 Summary
Table of Identified Mineral Resources
6
7
8
9
10
11
12
12
12
14
14
16
17
Annual financial Report
18
Corporate Governance Statement
22
directors’ report
47
Auditor’s independence declaration
48
Independent auditor’s report
50
director’s declaration
Statement of profit and loss and comprehensive income 51
52
Statement of financial position
53
Statements of changes in equity
54
Statement of cash flows
55
notes to the accounts
55
55
64
65
65
65
67
68
68
69
69
70
72
72
72
73
73
75
75
75
76
76
77
77
86
89
90
94
94
95
95
96
10 Other assets
11 Property plant and equipment
12 Capitalised exploration and evaluation expenditure
13 Trade and other payables
14 Other liabilities
15 Provisions
16 Issued capital
17 Reserves
18 Dividends
19 Accumulated loss
20 loss per share
21 Commitments for expenditure
22 Subsidiaries
23 Notes to the statement of cash flows
24 Share based payments
25 Financial instruments
26 Key management personnel compensation
27 Key management personnel equity holdings
28 Transactions with related parties
29 Parent company information
30 Remuneration of auditors
31 Subsequent events
1 General information
2 Significant accounting policies
3 Critical accounting estimates and judgments
4 Segmented information
5 Revenue
6 expenditure
7 Income tax expense
8 Cash and equivalents
9 Trade and receivables
Additional stock exchange information
4
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Introduction
Greenland Minerals and energy (“GMe”, or “the Company”) is positioned at
the forefront of Greenland’s emerging minerals industry. the Company has
been operating in southern Greenland since 2007, with a primary focus on the
kvanefjeld rare earth - uranium project.
the kvanefjeld project is unique; ideally located amongst the fjords of
southern Greenland, the project area offers direct year-round shipping access,
and has an international airport nearby. the mineral resources are world-class.
drilling to date has established a 956Mt JORC-code compliant resource base
that contains one of the world’s largest resources of both rare earth elements
and uranium in near-surface, bulk ore bodies. Clear scope remains to expand
this resource base several fold.
feasibility studies on kvanefjeld are well-advanced, with an advantageous
and highly effective metallurgical flow-sheet developed by a respected
metallurgical team. A prefeasibility study on kvanefjeld (2012), highlighted
that the project could be developed as a long-life, cost-competitive specialty
metals project, with strong growth potential. Subsequent studies have
reinforced the Company’s confidence in kvanefjeld, with multiple revenue
streams standing to deliver a robust economic proposition.
kvanefjeld is now recognised as a priority project by the Greenland
government, and will be entering the permitting pipeline at the start of 2015.
Greenland Minerals and enerGy lTd - AnnUAl RePORT 2013
1
2013
HIGHlIGHTS
In late October Greenland’s parliament voted in favour of removing a long-standing zero-
tolerance policy against the exploitation of radioactive materials. this landmark decision places
Greenland on the path to uranium-producer status, and thereby opens up coincident resources
of rare earth elements to exploitation. the parliamentary decision received broad coverage in the
international press, and sent a strong message that Greenland is prepared to make the important
and sometimes difficult decisions that are required to advance the quest of establishing a
minerals industry.
As announced in January 2014, Greenland and denmark are working to have a cooperation
agreement in place in 2014 to map out the regulatory responsibilities associated with uranium
production. Greenland is aiming to be positioned to issue a mining license for kvanefjeld in
early 2016. this is in line the Company’s forward schedule and ongoing feasibility program.
technical work programs continued to advance the kvanefjeld project through 2013, and
served to progress the de-risking of the project, and build confidence in the advantageous
process flow sheet.
test work for the concentrator circuit was completed in late-2012, with the second of two
highly successful pilot plant operations. An updated study was then released in March 2013 (the
Mine and Concentrator Study), that captured the technical advances to the beneficiation circuit,
and the initial 3Mtpa start-up capacity.
An effective hydrometallurgical process route has been developed for the treatment of the
rare earth- and uranium-rich mineral concentrates generated via froth flotation. the refinery
circuit utilises simple equipment and elegant chemistry, with scaled-up test work in 2013
demonstrating the production of a high purity rare earth intermediate product.
2
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 Greenland’s world class
mining opportunity.
the Company has been conducting extensive environmental baseline studies in the kvanefjeld
project area for several years, as a basis to evaluate the potential environmental impacts of a
mining operation. the baseline studies provide an indication of the natural chemistry of the
broader project area, and the background concentrations of many chemical elements in soil,
water, dust and biological matter.
Comprehensive background radiation monitoring was also undertaken in the broader project
area along with the town of narsaq, and builds on data gathered over several years.
In 2014, GME is focussed on finalising
a mining (exploitation) license for the
Kvanefjeld project; the next key milestone.
In parallel, the Company is looking
to progress relations with potential
development partners. With continued
de-risking of the world-class Kvanefjeld
project, GMe remains focussed on
delivering share-holder value.
3
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 20132014 Review of Operations
In 2013, much of the attention on Greenland Minerals and energy related to political
events in Greenland, and the impact that these events would have on how the
Company’s Kvanefjeld multi-element project would proceed. Specifically, in late
October Greenland’s parliament voted in favour of removing a long-standing
zero-tolerance policy against the exploitation of radioactive materials. This landmark
decision places Greenland on the path to uranium-producer status, and thereby opens
up coincident resources of rare earth elements to exploitation. The parliamentary
decision received broad coverage in the international press, and sent a strong
message that Greenland is prepared to make the important and sometimes difficult
decisions that are required to advance the quest of establishing a minerals industry.
revenues generated from mining operations
to replace and exceed those from Danish
block grants that have subsidised Greenland’s
economic viability, and to complement revenues
from the ailing fishing industry.
This agenda has brought a number of key
issues and decisions to the political fore as
Greenland prepares the rules and regulations
that are required to effectively interface with
the international resources industry. Of the key
issues, the long-standing zero-tolerance policy
against the exploitation of radioactive minerals
had been undoubtedly significant, and its
repeal would mark another major step by
Greenland in its committed quest to establishing
quality mining projects, a viable economy, and
greater independence.
In many respects, Greenland’s removal of the
political impedance that had otherwise hindered
the development of one of the world’s most
prolific resources of both rare earth elements and
uranium punctuates 2013 as the most important
year in GMel’s history.
The internationally mining community’s strong
endorsement of Greenland’s positive uranium
vote was highlighted in December at europe’s
largest mining conference, hosted in london,
where Greenland received the 2013 Country
Award under the Mining Journal’s ‘Outstanding
Achievements Awards’.
The parliamentary vote on zero-tolerance
took place on October 24th, and represented
the culmination of several years of discussion
and debate in Greenland on whether such a
significant step should be taken. As in many
places, the viewpoints in Greenland on the
exploitation of radioactive materials and
nuclear power have been varied, with the topic
generating emotive debate in both political and
community forums. However, the positive vote
represented the critical event that would see
Greenland and Denmark progress in earnest
to establish the regulatory framework required
to responsibly manage the exploitation of
radioactive minerals in Greenland. never before,
in its multi-decade history, has the Kvanefjeld
project had a clearer path to mine development.
Greenland’s push for the development of mining
projects accelerated in 2009, when it took
the official step of assuming increased self-
governance with the move from ‘Home Rule’
to ‘Self Rule’. This major political step provided
Greenland with authority to preside over the
exploitation of natural resources; an authority
that had previously been managed jointly with
Denmark. ‘Self Rule’ in Greenland has brought
a strong focus on pushing toward a stronger
economy, with the aim of establishing a new
generation of mining operations to provide
the cornerstone. In time, there is a desire for
4
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 Greenland -
the gateway to
the Arctic.
figure 1. An overview of the Arctic region highlighting renowned major mining
operations. It stands as an obvious anomaly that Greenland does not yet have
a significant mining operation, particularly in consideration of Greenland’s
prospective geology. However, with several large-scale projects now moving
through the permitting process, this is expected to change in the coming years.
The opening up of the Arctic shipping lanes provides increased access to the
Asia-Pacific markets, enhancing Greenland’s appeal to Asian investors.
5
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 Review of Operations (continued)
the Historical Backdrop to the Repeal of the Zero-tolerance Policy
The presence of significant quantities of
uranium resources in southern Greenland has
been known for several decades. The Danish
government had conducted initial evaluations into
extracting uranium from the unique rocks and
minerals of the Ilimaussaq complex located near
Greenland’s southern tip, between the 1960’s and
early 1980’s, largely driven by the consideration
of establishing civil nuclear power in Denmark.
The pursuit of nuclear power fell out of political
favour in Denmark in the early 1980s, and
investigations into establishing a uranium
mine in Greenland were halted. In 1988, the
zero-tolerance policy concerning radioactive
materials was introduced. However, the studies
had highlighted the potential for vast resources.
Internationally renowned geoscientist Henning
Sørensen, who had played a key role in driving
the investigations, had put forward geological
resource estimations for well over a billion
pounds of uranium oxide to be hosted within
the northern portion of the Ilimaussaq complex;
the potential for globally-significant resources
was clear.
When Denmark ceased the investigations
into uranium mining in southern Greenland
in the early 1980’s, scientific studies on the
extraordinary rocks of the Ilimaussaq complex
continued, largely driven by Sørensen and
his colleagues. Continued studies led to the
recognition that aside from uranium (and
thorium), the unique minerals were also strongly
enriched in a variety of specialty metals, in
particular rare earth elements. This recognition
led to the concept of multi-element exploitation; a
thesis that has been the focus of the new era of
investigations conducted by GMel since 2007.
figure 2. Since 2007, drill programs conducted by
Greenland Minerals and Energy have defined one of
the largest resources of rare earth elements and ura-
nium globally within the northern Ilimaussaq Complex.
6
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 the Modern era
Initial drill programs conducted by GMEL in 2007 and 2008 confirmed that resources
in the northern Ilimaussaq Complex were indeed polymetallic and were increasingly
expansive, as scientists had previously forecast. Drill programs initially focussed on
an area known as Kvanefjeld – a broad plateau near the headwaters of the narsaq
valley that had been the focal point of historic investigations.
The reinvigoration of mineral exploration at Kvanefjeld led to the zero-tolerance policy
and its potential removal being raised for discussion in Greenland’s parliament in late
2008; approximately 25 years since previous evaluations of Kvanefjeld had ceased.
As work programs continued to advance
Kvanefjeld, new licensing requirements were
necessary to effectively evaluate the project.
In September 2010, the Greenland Government,
led by the Inuit Ataqatigiit (IA) Party, introduced
an amendment to the ‘Standard Terms for
exploration licenses in Greenland’. This allowed
for organizations to apply for approval from the
Bureau of Minerals and Petroleum (BMP) to
conduct feasibility studies on potential mining
projects which contain elevated concentrations
of radioactive elements. At the direction of the
government, information briefs on uranium
were produced by technical agencies and
made available to the populous. A delegation
of politicians and government officials then
made study tour of Canada to learn more
about the Canadian uranium mining industry
and its governance.
In november, 2011 the BMP then amended
GMel’s exploration license over Kvanefjeld
to include uranium. This move provided the
Company with the right to apply to exploit uranium
along with other economic minerals. This licensing
development was important as it created a
framework in which a mining application could be
submitted for processing by regulators for a project
that includes uranium. However, despite these
developments, the zero-tolerance policy remained,
shrouding Kvanefjeld in political uncertainty.
In the 2012 autumn session of parliament,
the Greenland Government initiated a series
of reports to address the consequences of
removing the zero-tolerance policy. These
reports, conducted by independent experts,
set out to address the regulatory roles of both
Greenland and Denmark in managing uranium
exploitation, identify all international conventions
that would need to be adhered to, as well
as investigating the potential environmental
and health risks. The series of reports were
completed through the course of 2013, and
provided a solid information basis for Greenland
to remove the zero-tolerance policy and map out
a path to uranium producer status, in accordance
with best international practice.
In March, 2013, a national election in Greenland
saw the Siumut Party return to power, with
a clear intent to remove the zero-tolerance
policy, and move to effectively regulate uranium
production. The election took place just prior
to the time window in which the ‘spring sitting’
of parliament would traditionally take place.
With the election result bringing a change
of government, the sitting of parliament was
deferred until late in 2013, with matters that
required parliamentary address being placed on
hold until that point.
The debate surrounding uranium exploitation in
Greenland has largely been ideological. Interest
in the topic has led to an increased awareness of
the facts involved in uranium production, nuclear
power, and the regulation of the nuclear fuel
cycle. This understanding has led to a growing
awareness that nuclear power offers the main
base-load energy source that does not contribute
to carbon-fuelled climate change. The Arctic
regions are already feeling the environmental
and societal changes that are presented by a
changing climate. In this context, Kvanefjeld’s
relevance is heightened, with uranium providing
an efficient energy source free of carbon
emissions, and rare earths being utilised in both
efficient energy generation and usage.
Whilst uranium has largely been the political
focus on Kvanefjeld, the potential for Kvanefjeld
to become a major new supplier of rare earth
elements has driven much of the commercial
interest. Revenues from uranium have the
potential to cover a significant portion of
Kvanefjeld’s operating costs, making for
cost-competitive rare earth production; an
attribute that differentiates Kvanefjeld from other
emerging projects slated to have significant rare
earth production.
With a growing awareness that the northern
Ilimaussaq Complex is host to one of the most
significant resources of both rare earth elements
and uranium globally, Greenland’s decision to
repeal the zero-tolerance policy could ultimately
influence the global supply of these important
elements for many decades.
7
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 Review of Operations (continued)
the next Steps
With the zero-tolerance policy removed, Green-
land and Denmark are now progressing toward
the establishment of a cooperation agreement
to map out the responsibilities required to ef-
fectively regulate uranium production. In early
January, the Danish Prime Minister outlined that
both parties were aiming to have the cooperation
agreement in place in 2014. In early February,
a delegation of Greenlandic officials conducted
another fact-finding visit, this time to Australia
where they visited Olympic Dam, the rehabili-
tated uranium mine Mary Kathleen (Queens-
land), and the Australian nuclear Science and
Technology Organisation (AnSTO) in Sydney.
While there remains further work to ensure all
regulations are in place, Greenland has indicated
a desire to be positioned to grant exploitation
licenses for projects that include radioactive
materials in 2016.
These developments bring increased clarity to
the forward timeline for the Kvanefjeld project,
which has been otherwise hindered whilst the
zero-tolerance policy remained. In parallel to the
establishment of regulations, GMel can now
work to finalise an exploitation license applica-
tion. This involves finalising the development
strategy in close consultation with Greenland
stakeholders, with the key decision being wheth-
er refining of mineral concentrates takes place in
Greenland, or offshore. The Company will then
work to complete the environmental and social
impact assessments, which build on many years
of extensive data generation for the base lines
studies. Subject to financing, the Company is
aiming to be in a position to lodge an exploitation
license application in early 2015, and Greenland
should be positioned to award an exploitation
license in 2016.
figure 3. GME has looked to
support community initiatives in
south Greenland, and has worked
to ensure local participation and
employment opportunities.
8
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 Project developments in 2013
Technical work programs continued to advance
the Kvanefjeld project through 2013, and served
to progress the de-risking of the project, and
build confidence in the advantageous process
flow sheet. In May, 2012 GMEL released a
prefeasibility study on the Kvanefjeld rare
earth – uranium project. The prefeasibility study
(PFS) was based upon substantial test work
and technical studies, and involved a rigorous
flow-sheet selection process to determine the
optimal means of treating Kvanefjeld ores. The
PFS outcomes indicated the clear potential for
Kvanefjeld to be developed as a long-life, cost-
competitive producer of rare earth concentrates
and uranium oxide.
Since the release of the Kvanefjeld PFS, further
technical advances were made that served to
improve the PFS outcomes significantly. A PFS
update was released in August 2012 outlining
simplifications to the proposed processing
circuit that result in a reduction in capital costs,
and a 27% increase in the output of rare earth
concentrate. The substantial increase in rare
earth recovery and output drove the Company to
evaluate a smaller start-up capacity for Kvanefjeld
than the 7.2 Mt capacity evaluated in the PFS.
A reduction in the initial rare earth production
capacity would reduce the market risk brought
about by the material improvements in rare earth
recovery, and also serves to significantly reduce
the capital costs of project development.
For these reasons, the Company looked to a
staged development strategy with an initial mine-
throughput of 3Mtpa, expanding to 6Mtpa. This
provides a low-risk path to ultimately reach a
large-scale production capacity.
Test work for the concentrator circuit was
completed in late-2012, with the second of
two highly successful pilot plant operations.
An updated study was then released in March
2013 (the Mine and Concentrator Study),
that captured the technical advances to the
beneficiation circuit, and the initial 3Mtpa start-
up capacity. With a high degree of confidence
in the ability to produce a low-mass, high-grade
mineral concentrate, the Company commenced
assessing the potential to export the mineral
concentrate from Greenland, for processing
offshore. There are many points to consider in
the assessment of this scenario. Through 2013
workshops were held with representatives of
Greenland’s government and regulatory bodies,
the outcomes of which indicated a general
position to see as much processing take place in
Greenland as possible. Ultimately, the Company
is looking to firm-up the best scenario over
the longer term, and the optimal outcome for
Greenland stakeholders.
figure 4. Pilot
plant operation
of the Kvanefjeld
concentrator circuit
proved to be highly
successful, and
came as a precursor
to the completion
of the Mine and
Concentrator Study,
released in 2013.
9
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 Review of Operations (continued)
Advances to the Refinery Circuit
An effective hydrometallurgical process route
has been developed for the treatment of the rare
earth- and uranium-rich mineral concentrates
generated via froth flotation. The refinery circuit
utilises simple equipment and elegant chemistry,
with scaled-up test work in 2013 demonstrating
the production of a high purity rare earth
intermediate product.
The refinery flow sheet utilises a sulphuric acid
leach that achieves high extraction levels of
both uranium and rare earth elements from the
Re and uranium-rich minerals; in particular the
heavy Rees. The uranium is stable in solution
in the leach liquor, whereas the rare earths
react to form solid Ree salts that remain with
the leach residue. This creates a very effective
break between the uranium recovery, and further
treatment steps to generate a clean, high purity
rare earth product.
In Q3, 2013 a full flow sheet laboratory test run on
the Kvanefjeld mineral concentrate produced 1.1
kg’s of a high-purity mixed rare earth carbonate.
The rare earth intermediate product is a
chemical precipitate formed by the addition
of sodium carbonate to a purified rare earth
chloride stream. This produces a mixed rare
earth carbonate intermediate product. It is low in
impurities and contains >95% rare earth oxide
(ReO) after calcination. The rare earth carbonate
product has a favourable ReO distribution
with 14.75% of the contained rare earths
being the more valuable heavy Re elements
(see Table 1).The concentrate also contains a
significant quantity of the major light RE magnet
components in praseodymium and neodymium.
low levels of calcium (1.26%), aluminium
(0.12%) and silica (0.5%) were the most
significant impurities. Very low levels of uranium
(11 ppm), lead (1.4 ppm) and thorium (2.5 ppm)
were measured in the sample by tests conducted
by AnSTO, which reveals how well these
radionuclides were controlled by the impurity
removal processes.
A subsequent program involved a 100 hour
weak acid leach test on 20 kg’s of mineral
concentrate. This aimed to ensure that silica
could be effectively managed through the weak
acid leach as the key ore minerals at Kvanefjeld
are phospho-silicate minerals. The management
of silica in the leach process remains a challenge
for many proposed Ree producing operations
that are dealing with silicate minerals; most
of which involve significantly lower-grade
minerals than steenstrupine; the dominant Ree
and uranium bearing mineral at Kvanefjeld.
Importantly, the 100 hour leach test has
confirmed that silica can be effectively managed
throughout the leach process on the Ree-
uranium mineral concentrates from Kvanefjeld.
The testwork program also demonstrated that
high extractions of Rees and uranium can be
readily achieved with the weak acid leaching
stage only, owing to the non-refractory nature
of the value minerals. A pregnant leach solution
containing uranium can be produced which is
free of solids providing a suitable feed to uranium
solvent extraction. This is achieved using an
optimised combination of flocculating chemicals
and standard thickeners.
The highly successful test work programs on the
leach circuit through 2013 served to confirm the
effectiveness of the Kvanefjeld refining process in
producing a high quality product, with an excellent
distribution of the important, or critical, Ree’s. All
process steps in the refining stage have now been
tested at small continuous scale. The process
engineering for the refinery is well advanced with
key process design documents completed. The
unique non-refractory nature of the Kvanefjeld ore
minerals allows for simple, atmospheric acid leach
circuits, without the complex high-temperature
acid bake or caustic cracking processes that are
required in many Re operations.
Kvanefjeld is now emerging from peer projects,
on the basis of the systematic development
of an effective process flowsheet. In contrast,
numerous other companies that are pursuing
Re production continue to reassess their
processing options, which can be partly
attributed to complex, highly-refractory styles
of mineralisation.
table 1. Distribution of rare earth elements
in the intermediate rare earth carbonate
produced from Greenland’s Kvanefjeld project.
The product contains a favourable distribution
of the important heavy REO’s (Eu – Y).
element % ReO distribution
la
Ce
Pr
nd
Sm
eu
Gd
Tb
Dy
Ho
er
Tm
Yb
lu
Y
27.19
37.15
4.57
13.42
2.92
0.20
1.76
0.31
1.36
0.23
0.60
0.07
0.30
0.02
9.89
14.75%
HReO
Distribution
10
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 2013 field Work in Greenland
GMel has been conducting extensive
environmental baseline studies in the Kvanefjeld
project area for several years, as a basis to
evaluate the potential environmental impacts of a
mining operation. The baseline studies provide an
indication of the natural chemistry of the broader
project area, and the background concentrations
of many chemical elements in soil, water, dust
and biological matter. The Ilimaussaq Alkaline
Complex is the geological entity that hosts defined
mineral resources, and is renowned for its unusual
minerals and chemistry. Rocks of the Ilimaussaq
Complex are actively eroded into the narsaq
valley and surrounding areas, resulting in naturally
elevated levels of many trace elements in the
surrounding environment. Such an environment
is therefore well-suited for mining and the
establishment of processing infrastructure.
The environmental baseline studies have been
conducted in conjunction with Orbicon, GMel’s
primary environmental consultant. In 2013 a
botanical survey was completed and marine biota
along the fjord at the base of the narsaq valley
were sampled for analysis of ecotoxicological
and radioactivate components. Freshwater and
stream sediment sampling stations were revisited
to build on data gathered in previous years, with
samples also to be analysed for ecotoxicology
and radioactivity. Terrestrial sampling stations
were also revisited with samples of both soils
and lichens collected.
figure 5. An overview of the Narsaq Peninsula, south Greenland, and the broader Kvanefjeld
project area. Infrastructure to support the proposed mining operation would mostly be located within
the Narsaq valley. The Ilimaussaq Complex is comprised of extremely alkaline and unusual rock
types that have been actively eroded into the surrounding environment. JORC-code compliant
mineral resources have been established at Kvanefjeld, Sørensen and Zone 3. Mining is proposed
to commence at the Kvanefjeld deposit which is conducive to simple open-pit mining methods.
11
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 Review of Operations (continued)
Background Radiation Monitoring
Geotechnical Mapping
Comprehensive background radiation monitoring
was also undertaken in the broader project area
along with the town of narsaq, and builds on
data gathered over several years.
Short term (several days) passive monitoring
of radon and thoron was conducted and long
term (three month) monitoring devices will be
collected sequentially over the coming months.
Water and soil samples were also collected for
radionuclide analyses. High volume air samplers
have recently been installed for the purpose of
dust and air monitoring.
A gamma radiation survey was also conducted
to repeat the surveys carried out in previous
years. new additional points in the narsaq valley
were included to provide more detailed coverage
from the town of narsaq to where ore material
outcrops on the Kvanefjeld plateau.
Geological and geotechnical mapping programs
were undertaken in areas that are currently being
investigated as potential infrastructure sites.
These programs set out to assess foundation
conditions including rock and soil types, as
well as identifying potential geohazards and
areas that require further geotechnical drilling.
The outcomes provide important information to
support the selection of infrastructure locations.
Stakeholder engagement Program
GMel has maintained an active stakeholder
engagement program in relation to the
Kvanefjeld project since 2008. This has primarily
focussed on participating in community hall
meetings in the main townships of south
Greenland, which includes narsaq, Qaqortoq,
and nanortalik. The aim of these meetings is to
provide updates on the Kvanefjeld project and
potential development scenarios, and importantly
to identify the key areas of interest from the local
populace. These forums provide the opportunity
for local stakeholders to put forward questions,
voice concerns and identify areas where they
would like further information.
large, outcropping ore
bodies allow for simple, low
cost, open pit mining.
12
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
In south Greenland, the majority of the populace
live in the three major towns, however, a
considerable proportion lives in settlements
outside of these townships. GMel personnel
undertook a tour of these regional settlements
in August to present overviews of the Kvanefjeld
project, and to provide a forum in which people
could put forward questions. The settlement tour
was aimed to ensure that all local stakeholders
in south Greenland are included in the ongoing
dialogue surrounding the potential development
of the Kvanefjeld project.
eight settlements were visited where
presentations were made and followed by
informal discussions. The presentations
focussed on the potential development
scenarios for the Kvanefjeld project, and the
work programs involved in the environmental
and social impact assessments. The meetings
were all well attended, with the most frequently
asked questions focussed on employment
opportunities, and the environmental and
social impacts.
In early 2014, meetings were conducted with
representatives of the key stakeholder groups
including both the employees and employers
unions, and the Mayor of South Greenland.
figure 6. An overview of southern Greenland highlighting the three major towns of Qaqortoq,
narsaq and nanortalik, and the communities visited on GMel’s settlement tour in August
2013. The Kvanefjeld project is located approximately 10km to the northeast of narsaq. The
exercise represented an important part of the Company’s broader stakeholder engagement
program, and ensures that efforts have been made to provide forums to discuss the
Kvanefjeld project with the majority of the south Greenland populace.
13
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 Review of Operations (continued)
Update on the eURARe Project
2013 Summary
The eURARe Project is an initiative backed by
the european Union that aims to establish a rare
earth element value creation chain in europe. The
second round of eURARe meetings since the
Projects commencement took place on June 17th
and 18th in Copenhagen. As announced on July
25th, GMel has an important role in the eURARe
Project through the provision of bulk sample
material from Kvanefjeld, as well as managing a
key work stream. The eURARe Project stands
to be of great benefit and provides both direct
and indirect funding, an excellent collective of
technical expertise to collaborate with, and pilot
plant facilities that will utilise Kvanfjeld sample
material. A second meeting was held late in the
year in leuven, Belgium. The program continues
to offer a great forum in which a diverse collective
of high-level expertise can exchange ideas on the
processing of rare earth ores.
figure 7. The collection of bulk sample
material for ongoing metallurgical testwork
on the Kvanefjeld project. Ore extracted from
the historic adit provides excellent material for
scaled-up testwork and pilot plant operations.
To conclude, 2013 will always be viewed as
historical year for both Greenland’s mining
industry and GMel. Whilst the removal of the
zero-tolerance policy against the exploitation
of radioactive minerals was undoubtedly the
headline development, the Company was
able to continue to make significant advances
to the Kvanefjeld project. These advances
included important technical developments
on the refinery circuit that clearly demonstrate
the ability to achieve high extraction levels
for both Rees and uranium, and importantly
manage all impurities throughout the process
to ensure, clean, high purity products. The
composition of the Re carbonate is particularly
pleasing with 14.75% heavy Re, which along
with significant neodymium and praseodymium,
makes for a mix that correlates well with market
demand and volumes. Continued environmental
baseline studies on the narsaq peninsula in the
Kvanefjeld area ensure that a comprehensive
baseline has been developed to effectively
assess the impact of the proposed development
scenarios. GMel will continue its commitment
to keep Greenland stakeholders up-to-date
and take on board input toward Kvanefjeld’s
development through the active stakeholder
engagement program.
14
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 Finally, the Company would like to acknowledge shareholders
that have made possible the progression of the Kvanefjeld project
from a concept in 2007, to what is now recognised globally as
quality emerging mining project of strategic significance.
figure 8. Exploration
licenses held by
Greenland Minerals and
Energy over the northern
Ilmaussaq Complex,
and surrounding areas.
JORC-code compliant
mineral resource
estimates have been
established at Kvanefjeld,
Sørensen and Zone 3.
figure 9. Exploration
license 2010/02 covers
the northern Ilimaussaq
Complex that is host
to REE-U resources.
Drilling to date has only
evaluated a small part of
the prospective area.
15
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 Table of Identified Mineral Resources
Statement of Identified Mineral Resources, Kvanefjeld Multi-Element Project (Independently Prepared
by SRK Consulting)
Multi-Element Resources Classification, Tonnage and Grade
Contained Metal
Cut-off
Classification
(U3O8 ppm)1
Kvanefjeld - March 2011
150
150
150
200
200
200
250
250
250
300
300
300
350
350
350
Indicated
Inferred
Grand total
Indicated
Inferred
Grand total
Indicated
Inferred
Grand total
Indicated
Inferred
Grand total
Indicated
Inferred
Grand total
Sørensen - March 2012
150
200
250
300
350
Inferred
Inferred
Inferred
Inferred
Inferred
Zone 3 - May 2012
150
200
250
300
350
Project total
Inferred
Inferred
Inferred
Inferred
Inferred
M
tonnes Treo2 u3o8
ppm
ppm
Mt
lreo HReO reo
ppm
ppm
ppm
y2o3
ppm
Zn
ppm
Treo HReO y2o3
Mt
Mt
Mt
u3o8
M lbs
Zn
Mt
274
216
257
9626
8630
9333
402 10029
356
389
8986
9721
325 10452
419 10871
275
9932
343 10275
314 10341
403 10743
900
776
864
978
811
942
352 10950
443 11389
1041
324 10929
366 11319
886
347 10947
431 11378
1017
374 11437
469 11906
1107
362 11763
396 12158
962
373 11475
460 11935
1090
404 12040
503 12543
403 12239
436 12675
404 12059
497 12556
1192
1054
1179
304
9729
398 10127
344 10223
399 10622
375 10480
407 10887
400 10671
414 11084
895
932
961
983
422 10967
422 11389
1004
300 10242
396 10638
310 10276
400 10676
330 10471
410 10882
358 10887
433 11319
392 11392
471 11864
971
989
1026
1087
1184
2212
2134
2189
2343
2478
2372
2363
2598
2398
2414
2671
2444
2487
2826
2519
2602
2802
2932
3023
3080
2768
2806
2902
3008
3043
4.77
1.78
6.55
3.45
0.88
4.32
2.84
0.46
3.33
2.30
0.31
2.61
1.52
0.16
1.68
2.67
2.15
1.75
1.44
1.14
1.11
1.03
0.84
0.58
0.31
0.18
0.06
0.24
0.12
0.03
0.15
0.10
0.02
0.12
0.08
0.01
0.09
0.06
0.01
0.06
0.10
0.07
0.06
0.05
0.04
0.04
0.04
0.03
0.02
0.01
0.39
0.14
0.53
0.28
0.06
0.35
0.24
0.03
0.27
0.20
0.02
0.22
0.13
0.01
0.14
0.22
0.17
0.14
0.12
0.09
0.09
0.09
0.07
0.05
0.03
263
86
350
208
48
256
178
29
208
146
19
164
98
10
108
162
141
123
105
85
63
60
51
37
21
0.97
0.39
1.36
0.68
0.20
0.88
0.55
0.11
0.65
0.43
0.06
0.49
0.27
0.03
0.31
0.63
0.52
0.43
0.36
0.28
0.26
0.25
0.2
0.14
0.07
10929
9763
10585
11849
11086
11686
12429
12204
12395
13013
13120
13025
13735
13729
13735
11022
11554
11847
12068
12393
11609
11665
11907
12407
13048
437
182
619
291
79
370
231
41
272
177
24
200
111
12
122
242
186
148
119
92
95
89
71
47
24
M
Cut-off
Classification
(U3O8 ppm)1
tonnes Treo2 u3o8
ppm
ppm
Mt
lreo HReO reo
ppm
ppm
ppm
y2o3
ppm
Zn
ppm
Treo HReO y2o3
Mt
Mt
Mt
u3o8
M lbs
Zn
Mt
150
150
150
Indicated
Inferred
Grand total
437
520
956
10929
10687
10798
274
272
273
9626
9437
9524
402 10029
383
392
9820
9915
900
867
882
2212
2468
4.77
5.55
2351
10.33
0.18
0.20
0.37
0.39
0.45
0.84
263
312
575
0.97
1.28
2.25
1 There is greater coverage of assays for uranium than other elements owing to historic spectral assays. U3O8 has therefore been used to define the cut-off grades
to maximise the confidence in the resource calculations.
2 Total Rare earth Oxide (TReO) refers to the rare earth elements in the lanthanide series plus yttrium.
note: Figures quoted may not sum due to rounding.
JORC Code Compliance – Consent of Competent Persons
The information in this report that relates to exploration targets, exploration results, geological interpretations, appropriateness of
cut-off grades, and reasonable expectation of potential viability of quoted rare earth element, uranium, and zinc resources is based on
information compiled by Mr Jeremy Whybrow. Mr Whybrow is a director of the Company and a Member of the Australasian Institute
of Mining and Metallurgy (AusIMM). Mr Whybrow has sufficient experience relevant to the style of mineralisation and type of deposit
under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined by the 2004 edition of the
“Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr Whybrow consents to the reporting
of this information in the form and context in which it appears.
The geological model and geostatistical estimation for the Kvanefjeld, Sorensen and Zone 3 deposits were prepared by Robin Simpson
of SRK Consulting. Mr Simpson is a Member of the Australian Institute of Geoscientists (AIG), and has sufficient experience relevant to
the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent
Person as defined by the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves”. Mr Simpson consents to the reporting of information relating to the geological model and geostatistical estimation in the form
and context in which it appears.
This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the JORC
Code 2012 on the basis that the information has not materially changed since it was last reported.
16
Greenland Minerals and enerGy liMiTed – AnnUAl RePORT 2013
ACn 118 463 004
ASX listed, Greenland-focussed
mineral explorer and developer.
2013
Greenland Minerals and energy
limited and Controlled entities –
FInAnCIAl RePORT
for the year ended 31 december 2013.
17
17
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
CORPORATE GOVERNANCE
Principles of Best Practice Recommendations commentary
The Board of Directors is responsible for the overall strategy, governance and performance of Greenland
Minerals & Energy Limited (hereafter GMEL or the Company). The Company is an exploration company
whose strategy is to add substantial shareholder value through the acquisition, exploration, development
and commercialisation of projects in Greenland with a focus on the Kvanefjeld project. The Board has
adopted a corporate governance framework which it considers to be suitable given the size, history and
strategy of the Company.
Principles of Best Practice Recommendations
In accordance with ASX Listing Rule 4.10, GMEL is required to disclose the extent to which it has
followed the Principles of Best Practice Recommendations during the financial period. Where GMEL has
not followed a recommendation, this has been identified and an explanation for the departure has been
given.
Principle 1: Lay solid foundations for management and oversight
The Board has established a framework within the Group that:
clarifies the respective roles and responsibilities of Board members and senior executives;
(cid:31) enables it to provide strategic guidance and effective supervision of management;
(cid:31)
(cid:31) ensures a balance of authority so that no single individual has unfettered powers; and
(cid:31)
identifies significant business risks and ensures that those risks are well managed.
The day-to-day management of the Consolidated Group has been delegated to the Managing Director,
Mr Roderick McIllree.
The executives (whether or not a director) have clearly identified areas of responsibility and report directly
to an executive director or the Managing Director who monitors their role.
The Board has also adopted a Board Charter which details the functions and responsibilities of the Board
and those delegated to management. In addition, each executive director and senior executive has
signed an employment agreement. A copy of the Board Charter has been placed on the Company’s
website.
Principle 2: Structure the Board to add value
The Board has been structured so that it has effective composition, size and commitment to adequately
discharge its responsibilities and duties. The names and qualifications of the Directors are stated in the
annual report along with the date of appointment. With the prior consultation with the Chairman, each
Director is entitled to receive independent professional advice at the Company’s expense.
Mr Michael Hutchinson, Mr Anthony Ho and Mr Jeremy Whybrow are non-executive Directors, with Mr
Hutchinson and Mr Ho fulfilling the independence criteria outlined in the guidelines, Jeremy Whybrow is
not an independent non-executive director.
The Board believes that it is able to exercise independence and judgment and does possess the
necessary skills, expertise and experience required to effectively discharge their duties. The focus has
been on the ability of the Board to add value by effectively exercising independence and discharging their
duties, rather than on meeting the independence test in the guidelines.
The role of the Chairman is fulfilled by Mr Michael Hutchinson and Mr Roderick McIllree fills the role of
Managing Director and Chief Executive Officer.
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18
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
CORPORATE GOVERNANCE
The Board has convened an Audit and Risk Committee as well as a Remuneration Committee.
The Board maintains the role of Nomination to itself as it considers that the Company is not of a size to
justify this as a separate committee.
The executive director board members have full time, executive responsibility for the operations of the
Company.
The responsibilities are split into 3 sections:
(cid:31)
In Conjunction with the Chairman, the Managing Director’s role includes allocating priorities and
tasks to the executives of the Company, leading the Company generally, raising capital as
required and public relations at all levels.
(cid:31) Business and strategic development.
(cid:31) Other corporate support.
The executive directors are responsible for business strategic development and other corporate support,
report on their activities to the Managing Director, who monitors their role and then reports to the board as
required. The board as a whole monitors the Chairman’s and the Managing Director’s performance.
Principle 3: Promote ethical and responsible decision-making
Ethical and responsible decision-making is promoted by the Board in a top-down approach.
The Board has adopted a Code of Conduct to guide the Directors, the Chairman, the Managing Director
and other key executives as to practices necessary to maintain confidence in the Company’s integrity and
to the responsibility and accountability of individuals for reporting and investigating reports of unethical
behavior.
The Board recognises legal ethical and other obligations to all legitimate stakeholders and the
requirement to act in accordance with these obligations. The Company has formalised its policies
accordingly.
The Board has also adopted a Securities Trading Policy, to guide investment decisions. The Company
has not adopted compliance standards and procedures to facilitate the implementation and assessment
of the Code of Conduct and Securities Trading Policy. Given the Company’s size, history and strategy it
was not considered appropriate to adopt these policies during the reporting period. The Company will
largely comply with these recommendations during future reporting periods.
The Company has formalised its policy accordingly.
The Board has adopted a Diversity Policy as part of the Company’s commitment to workplace diversity
and to ensure a diverse mix of skills and talent exists amongst its directors, senior management and
employees, the policy can be viewed on the Company’s website. Diversity includes, but is not limited to,
diversity in gender, age, ethnicity and cultural backgrounds.
No Measurable Objectives were specifically set by the Board during the year, other than the recruitment
of the most suitable candidate for a position, regardless of the individual’s gender or background.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
CORPORATE GOVERNANCE
As a result of the developing nature of the project and associated works program, there has been a
reduction in staff numbers across the Consolidated Group. Decisions regarding the retaining of staff were
based solely on the skills required for the project development and future work programs and not on an
individual’s age, gender or background.
At 31 December 2013 there were 18 employees including directors in the Consolidated Group and 28%
of these employees were women. This compares to 31 December 2012, when there were 28 employees
including directors, of which 32% were women.
The positions held by women in the Consolidated Group at 31 December 2013 include one senior
corporate position and two senior positions within the project team. There are currently no women
holding board or senior management positions (as defined in the remuneration report).
Principle 4: Safeguard integrity in financial reporting
The integrity of the Company’s financial reporting is a critical aspect of GMEL’s corporate governance
and structures are in place to verify and safeguard the integrity of the Company’s financial reporting,
which is overseen by the Audit and Risk Committee.
The Company’s financial statements are reviewed or audited, each half year. The financial statements
are reviewed by the Board which operates under formal terms of reference. The Board Charter is placed
on the website.
The Board has requested that the Managing director as the Chief Executive Officer and the Chief
Financial Officer to state in writing that the financial statements present a true and fair view, in all material
respects, of the Company’s financial condition and operational results and that,
(cid:31) The financial records have been properly maintained in accordance with s286 of the Corporations
Act 2001
(cid:31) The financial statements are in accordance with the Corporations Act 2001, comply with relevant
Accounting Standards and Corporation Regulations 2001.
(cid:31) The financial statements are founded on sound system of risk management, as outlined in
principle 7.
Principle 5: Make timely and balanced disclosure
The Board promotes timely and balanced disclosure of all material matters concerning the Company.
The Company has formalised its policy to promote a culture whereby all senior management understands
the processes in relation to the timely disclosure of information.
A copy of the Reporting Policy has been placed on the Company’s website.
Principle 6: Respect the rights of shareholders
The Board respects the rights of all shareholders and, to facilitate the effective exercise of those rights,
the Company is committed to effective communication with shareholders. This occurs by electronic ASX
releases to the market, through GMEL e-list email communications (registration is available via the
Company’s website) and by the provision to shareholders of balanced and understandable information in
relation to corporate proposals.
20
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
CORPORATE GOVERNANCE
Shareholders generally participate in shareholder meetings, in person or through the appointment of a
proxy. The Company’s external Auditor is invited to attend these meetings.
Principle 7: Recognise and manage risk
The Company recognises the importance of managing risk and has established systems to assess
monitor and manage risk based on the Company’s size, history and strategy. The exploration and
development of natural resources is a speculative activity that involves a high degree of financial risk.
The Company has formalised its policy to identify, monitor and manage risk. The Company as part of its
risk management, formally established an Audit and Risk Committee
The Company’s executives and senior management, through the Managing Director are responsible for
the identification of material risks to the business and the design and implementation of internal control
systems to manage the identified risks.
The Board has received from management, reports on the effectiveness of the Company’s management
of its material business risks.
The Board has obtained a written confirmation from the Managing Director and the Chief Financial Officer
that the statement in relation to principle 4, that the financial reports are founded on a sound system of
risk management and internal compliance and control and the Company’s risk management and internal
compliance control systems are operating efficiently and effectively in all material respects.
The principle areas of risk for the Company are in the areas of:
(cid:31) Occupational health and safety and work related safety risks
(cid:31) Environment risks
(cid:31) Security of tenure over tenements
(cid:31) Financial risk in the areas of maintaining sufficient funding for the continuation of operations and
risks related to fraud, misappropriation and errors.
The Company has implemented and maintains adequate policies to monitor these areas and to reduce
risk exposure.
Principle 8: Remunerate fairly and responsibly
The Board is committed to ensuring that the level and composition of remuneration is sufficient and
reasonable and that its relationship to corporate and individual performance is defined.
Executive Remuneration Policy
The Company remunerates its senior executives in a manner that is market competitive, consistent with
best practice and aligned to the interests of shareholders. Remuneration comprises a fixed salary,
determined from a market review, to reflect core performance requirements and expectations of the
relevant position and statutory superannuation where applicable, as well as stock options and rights
issues.
Non-Executive Remuneration Policy
Non-Executive Directors are paid a fixed fee out of the maximum aggregate amount which has been
approved by shareholders. Non-executive Directors are entitled to statutory superannuation where
applicable.
There are no schemes for retirement benefits, other than statutory superannuation, for any non-executive
Director.
A copy of the Code of Conduct has been placed on the Company’s website.
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21
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
The directors of Greenland Minerals and Energy Limited submit herewith the annual financial report for
the financial year ended 31 December 2013, pursuant to the provisions of the Corporations Act 2001. The
directors report the following:
Directors
The names of directors in office at any time during or since the end of the financial year are:
Michael Hutchinson, Non-Executive Chairman
Roderick Claude McIllree, Managing Director
Simon Kenneth Cato, Executive Director
John Mair, Executive Director
Anthony Ho, Non-Executive Director
Jeremy Sean Whybrow, Non-Executive Director
Chief Financial Officer/Company Secretary
The following person held the position of Company secretary at the end of the financial year:
Miles Simon Guy – M. Com(PA) is an accountant with 17 years’ experience in both public practice and
commercial environments. Mr Guy is also currently the Chief Financial Officer for Greenland Minerals
and Energy Limited.
Principal Activities
The principal activity of the Consolidated Group during the financial year was mineral exploration and
project evaluation. Specifically the continued evaluation of the Consolidated Group’s Kvanefjeld project,
located in Southern Greenland.
There were no significant changes in the nature of the Consolidated Group’s principal activities during the
financial year.
Operating Results
The net loss after providing for income tax amounted to $8,768,670 (2012: loss $17,344,249)
Significant Changes in State of Affairs
During the financial year, there were no significant changes in the state of affairs of the Consolidated
Group.
Subsequent Events
In March 2014 the Consolidated Group entered a non-binding Memorandum of Understanding (“MoU”)
with China Non-Ferrous Metal Industry’s Foreign Engineering and Construction Co Limited (“NFC”). The
MoU sets out a framework for both parties to cooperate in aligning the rare earth concentrates from the
Consolidated Group’s Kvanefjeld project, with NFC’s substantial rare earth separation experience and
capacity.
Please refer to the Company announcement released to the ASX on 24 March 2014.
Other than the matter above, there have been no matters or circumstances occurring subsequent to the
financial period that has significantly affected, or may significantly affect, the operations of the
Consolidated Group, the results of those operations, or the state of affairs of the Consolidated Group in
future years.
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22
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Future Developments
The Consolidated Group will continue to evaluate the Kvanefjeld project and the development alternatives
for the project, as referred to elsewhere in this report, particularly in the Review of Operations on pages 7
to 9.
Environmental Regulations
The Consolidated Group operates within the resources sector and conducts its business activities with
respect for the environment while continuing to meet the expectations of shareholders, customers,
employees and suppliers. The Consolidated Group’s exploration activities are currently regulated by
significant environmental regulation under laws of Greenland and the Commonwealth and states and
territories of Australia. The Consolidated Group aims to ensure that the highest standard of
environmental care is achieved, and that it complies with all relevant environmental legislation.
The directors are not aware of any particular or significant environmental issues, which have been raised
in relation to the Consolidated Group’s operations during the period covered by this report.
Dividends
In respect of the financial year ended 31 December 2013, no dividends have been paid or declared since
the start of the financial year and the directors do not recommend the payment of a dividend in respect of
the financial year. No dividends were paid in the comparative period ended 31 December 2012.
Shares
During the year ended 31 December 2013, the following ordinary shares of Greenland Minerals and
Energy Limited were issued, as detailed in Note 16 to the financial report.
The total number of ordinary shares on issue at 31 December 2013 was 574,572,911 (31 December
2012: 567,937,409).
The total number of shares issued during the current financial year was 6,635,502. .
There is no other class of shares issued by the Company and the Company has no un-issued shares,
other than those registered to options and performance rights which are disclosed in the next section.
Details of shares issued during the year or shares issued since the end of the financial year as a result of
exercised options are:
Issuing entity
Greenland Minerals
and Energy limited
Greenland Minerals
and Energy limited
Greenland Minerals
and Energy limited
Greenland Minerals
and Energy limited
Greenland Minerals
and Energy limited
Number of
shares
issued
Class of share
Amount paid for/
fair value of
shares
Amount unpaid
on shares
3,287,854
Ordinary shares
750,000
Ordinary shares
744,833
Ordinary shares
897,344
Ordinary shares
955,471
Ordinary shares
$0.39
$0.25
$0.29
$0.37
$0.28
-
-
-
-
-
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23
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Options and performance rights
During the year ended 31 December 2013 the number of options and performance rights of Greenland
Minerals and Energy Limited that were issued are detailed in Note 24 to the financial report.
Details of unissued shares or interests under option and performance rights at the date of this report are:
Issuing entity
Greenland Minerals and
Energy Limited (i)
Greenland Minerals and
Energy Limited (i)
Greenland Minerals and
Energy Limited (ii)
Greenland Minerals and
Energy Limited (ii)
Number of
shares
under
option
Number of
shares under
performance/
employee
rights
-
-
12,000,000
9,685,500
4,999,520
25,769,191
-
-
Class of
shares
Exercise
price of
option
Expiry date of
option
Ordinary
shares
Ordinary
shares
Ordinary
shares
Ordinary
shares
NA
15 May 2014
NA
4 October 2016
$0.75 15 October 2014
$0.60
5 October 2014
(i)
(ii)
12,000,000 employee rights were issued in the current year and 1,000,000 performance
rights were issued in the previous financial year. In addition 4,860,000 performance rights
issued in a previous financial year and were cancelled in the current year.
Options were issued in a previous financial year and remain outstanding at 31 December
2013.
The holders of these options and performance rights do not have the right, by virtue of being holders, to
participate in any share issue or interest issue of the Consolidated Group or of any other body corporate.
Review of operations
The Consolidated Group’s principal activity is a mineral exploration and project evaluation in southern
Greenland. The Company is primarily focused on advancing the 100% owned Kvanefjeld multi-element
project (both light and heavy rare earth elements, uranium, and zinc) through the feasibility and permitting
phase and into mine development.
The Kvanefjeld project is centred on the northern Ilimaussaq Intrusive Complex in southern Greenland.
The project includes several large scale multi-element deposits including Kvanefjeld, Sørensen and Zone
3. The deposits are characterised by thick, persistent mineralisation hosted within sub-horizontal lenses
that can exceed 100m in true thickness. Highest grades generally occur in the uppermost portions of
deposits, with overall low waste-ore ratios.
While the resources are extensive, a key advantage to the Kvanefjeld project is the unique rare earth and
uranium-bearing minerals. These minerals can be effectively beneficiated into a low-mass, high value
concentrate, then leached with conventional acidic solutions under atmospheric conditions to achieve
particularly high extraction levels of both heavy rare earths and uranium. This contrasts to the highly
refractory minerals that are common in many rare earth deposits.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Review of operations (cont’d)
The Kvanefjeld project area is located adjacent to deep-water fjords that allow for shipping access directly
to the project area, year round. An international airport is located 35km away, and a nearby lake system
has been positively evaluated for hydroelectric power.
The Consolidated Group released a feasibility-level study for the mine and concentrator circuit in 2013.
Ongoing feasibility studies are focussed on the refinery circuit that has been evaluated up to stage of pilot
plant operation. The study outcomes have been positive and reiterate the potential for Kvanefjeld to
become one of the largest rare earth producing mines globally, occupying a dominant position at the low
end of the future production cost-curve. A large heavy REE output and significant uranium output
differentiate Kvanefjeld from many other emerging RE projects.
Rare earth elements (REEs) are now recognised as being critical to the global manufacturing base of
many emerging consumer items and green technologies. Uranium forms an important part of the global
base-load energy supply, with demand set to grow in coming years as developing nations expand their
energy capacity.
A detailed report on the Consolidated Group’s activities and project achievements will included in the
Annual Report.
Key highlights for the Consolidated Group during the financial year included:
(cid:31)
In late October Greenland’s parliament voted in favour of removing a long-standing zero-
tolerance policy against the exploitation of radioactive materials. This landmark decision places
Greenland on the path to uranium-producer status, and thereby opens up coincident resources of
rare earth elements to exploitation. The parliamentary decision received broad coverage in the
international press, and sent a strong message that Greenland is prepared to make the important
decisions that are required to advance the quest of establishing a minerals industry.
(cid:31) Technical work programs continued to advance the Kvanefjeld project through 2013, and served
to progress the de-risking of the project, and build confidence in the advantageous process flow
sheet.
(cid:31) Test work for the concentrator circuit was completed in late-2012, with the second of two highly
successful pilot plant operations. An updated study was then released in March 2013 (the Mine
and Concentrator Study), that captured the technical advances to the beneficiation circuit, and the
initial 3Mtpa start-up capacity. With a high degree of confidence in the ability to produce a low-
mass, high-grade mineral concentrate, the Consolidated Group commenced assessing the
potential to export the mineral concentrate from Greenland, for processing offshore.
(cid:31) An effective hydrometallurgical process route has been developed for the treatment of the rare
earth- and uranium-rich mineral concentrates generated via froth flotation. The refinery circuit
utilises simple equipment and elegant chemistry, with scaled-up test work in 2013 demonstrating
the production of a high purity rare earth intermediate product.
(cid:31) The Consolidated Group has been conducting extensive environmental baseline studies in the
Kvanefjeld project area for several years, as a basis to evaluate the potential environmental
impacts of a mining operation. The baseline studies provide an indication of the natural chemistry
of the broader project area, and the background concentrations of many chemical elements in
soil, water, dust and biological matter.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Review of operations (cont’d)
(cid:31) Comprehensive background radiation monitoring was also undertaken in the broader project area
along with the town of Narsaq, and builds on data gathered over several years.
(cid:31) The Consolidated Group has maintained an active stakeholder engagement program in relation
to the Kvanefjeld project since 2008. This has primarily focussed on participating in community
hall meetings in the main townships of south Greenland, which includes Narsaq, Qaqortoq, and
Nanortalik. The aim of these meetings is to provide updates on the Kvanefjeld project and
potential development scenarios, and importantly to identify the key areas of interest from the
local populace. These forums provide the opportunity for local stakeholders to put forward
questions, voice concerns and identify areas where they would like further information.
The Consolidated Group’s strategy for future financial years includes:
(cid:31) The continued evaluation of development alternatives for the Kvanefjeld project, including the
potential engagement of strategic partners.
(cid:31) Continue to prudently control cash flow and implement operational and project cost reductions
where possible.
(cid:31) Retain key staff vital to the future development of the project.
(cid:31) Maintain an open dialogue with the Greenland Government, communities and other stakeholder
groups.
(cid:31) Continue to evaluate the project to ensure the future development in carried out in a manner that
will ensure the enhancement of value to shareholders and other stakeholders.
Financial Position
The net assets of the Consolidated Group were $71,230,107 as at 31 December 2013 (2012:
$64,991,703).
The information in this report that relates to exploration targets, exploration results, geological interpretations, appropriateness
of cut-off grades, and reasonable expectation of potential viability of quoted rare earth element, uranium, and zinc resources is
based on information compiled by Mr Jeremy Whybrow. Mr Whybrow is a director of the Company and a Member of the
Australasian Institute of Mining and Metallurgy (AusIMM). Mr Whybrow has sufficient experience relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent
Person as defined by the 2004 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves”. Mr Whybrow consents to the reporting of this information in the form and context in which it appears.
The geological model and geostatistical estimation for the Kvanefjeld, Sorensen and Zone 3 deposits were prepared by Robin
Simpson of SRK Consulting. Mr Simpson is a Member of the Australian Institute of Geoscientists (AIG), and has sufficient
experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined by the 2004 edition of the “Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves”. Mr Simpson consents to the reporting of information relating to the
geological model and geostatistical estimation in the form and context in which it appears.
This information was prepared and first disclosed under the JORC Code 2004. It has not been updated since to comply with the
JORC Code 2012 on the basis that the information has not materially changed since it was last reported.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Information on Directors
Michael Hutchinson - Non-Executive Chairman – Appointed 25 November 2008
Special responsibilities
Member of the Remuneration Committee (Chairman)
Member of the Audit Committee
Qualifications
BSc (Hons) Geography
Experience
Mr Michael Hutchinson has had a distinguished career in resources and commodity trading, having
served as Director of the London Metal Exchange, the world's largest market in options and futures
contracts on base and other metals.
Mr Hutchinson was previously Chairman of RBS Sempra Metals Limited, and Wogen PLC; a trader of
off-exchange metals that sources metals worldwide for industrial end users. In addition, Mr
Hutchinson previously served as a director of MG PLC.
Interest in shares, options and performance rights
210,638 Ordinary shares
1,400,000 Unvested performance rights
Directorships held in other listed entities
Non-executive chairman – Noricum Gold Limited – since November 2013
Non-executive director - Mecom Plc – since April 2009
Former directorships in other- listed entities in the last 3 years
Nil
Roderick McIllree - Managing Director – Appointed 23 March 2007
Qualifications
B.Sc. (Mineral Exploration and Mining Geology), G.Cert. (Mineral Economics) MAusIMM.
Experience
Mr McIllree is a corporate geologist. A graduate of Curtin University School of Mines he has global
experience from grassroots discovery through mine finance and production. This broad base of
experience both in capital markets and the global minerals space provides the platform necessary to
implement operations in remote and difficult locations. He was an active and early member of a
number of successful mining ventures including Medusa Mining (Philippines), Anvil Mining (Congo)
and Kingsrose Mining Ltd (Sumatra) where he was involved in the process of de-risking mining
operations in frontier jurisdictions.
Roderick was a founding Director of Greenland Minerals and Energy Ltd and identified and executed
the Greenland opportunity with the acquisition of Kvanefjeld in 2007 being the result.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Information on Director (cont’d)
Roderick McIllree (cont’d)
Interest in shares, options and performance rights
13,346,956 Ordinary Shares
2,700,000 Unvested performance rights
Directorships held in other listed entities
Non-executive Director – Noricum Gold Limited – 11 April 2012
Other board positions held in the last 3 years
Convergent Minerals Limited – July 2006, Resigned 19 Dec 2011
Simon Cato - Executive Director – Appointed 21 February 2006
Qualifications
B.A. (USYD)
Experience
Mr Simon Cato has had over 30 years capital markets experience in broking, regulatory roles and as
director of listed companies. He initially was employed by the ASX in Sydney and then in Perth.
From 1991 until 2006 he was an executive director and/or responsible executive of three stockbroking
firms and in those roles he has been involved in many aspects of broking including management
issues such as credit control and reporting to regulatory bodies in the securities industry. As a broker
he was also involved in the underwriting of a number of IPO’s and has been through the process of
IPO listing in the dual role of broker and director. Currently he holds a number of executive and non-
executive roles with listed companies in Australia.
Interest in shares, options and performance rights
4,762,198 Ordinary shares
600,000 Unvested performance rights
Other board positions held
Chairman - Advanced Share Registry Limited - since August 2007.
Positions held in the last 3 Years
Queste Communications Limited – February 2008 to 3 April 2013
Transaction Solutions International Limited – February 2010 to 30 September 2013
Convergent Minerals Limited - July 2006 to 19 December 2011
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Information on Directors (cont’d)
Dr John Mair – Executive Director – Appointed 7 October 2011
Qualifications
PhD (Geol), MAus IMM
Experience
Dr John Mair completed a Bachelor of Science with Honours, majoring in geology, at the University of
Western Australia, before commencing a career in the minerals sector, working in gold exploration
and mining in Western Australia's goldfields. He returned to the university system to undertake a PhD
study on the gold and base metal deposits of Canada's Yukon Territory and east-central Alaska. After
completing the PhD in 2004, John returned to the minerals industry working in exploration for
porphyry Cu-Au deposits in New South Wales, and gold deposits in China. In mid-2005 John took the
position of Post-Doctoral Research Fellow at the University of British Columbia, with a focus on the
metallogeny of southwest Alaska.
At completion of the project in 2006, John returned to the minerals industry as a project co-
coordinator for Vancouver-based exploration group Geoinformatics Exploration Inc., who in alliance
with Kennecott, were exploring for Cu-Mo-Au deposits in western North America from Mexico to
Alaska. During this period, John planned and implemented large-scale exploration programs through
remote northern British Columbia, as well as providing technical expertise to exploration programs in
Alaska and Mexico. In mid-2008 John returned to Australia to join Greenland Minerals and Energy
Limited as General Manager.
John has published several papers in leading international scientific journals on tectonics, structural
geology, mineral deposit geology, igneous petrology and mineralogy. He has also presented at
Masters short courses on ore deposit geology. Of particular relevance is his understanding of the
behavior of rare earth elements, and is experienced in separating pure rare earth elements from a
wide variety of rock types from start to finish. He is a member of the Society of Economic Geologists
and the Australian Institute of Mining and Metallurgy.
Since 2008, John has been instrumental in the technical development of the Kvanefjeld project, and
also in the corporate evolution of the company. He presents on the Company's behalf in commercial,
technical and political forums internationally.
Interest in shares, options and performance rights
5,564,166 Ordinary Shares
2,100,000 Unvested performance rights
Other board positions held
Nil
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Information on Directors (cont’d)
Anthony Ho - Non-Executive Director - Appointed 9 August 2007
Special responsibilities
Member of the Audit Committee (Chairman)
Member of the Remuneration Committee
Qualifications
B.Comm, CA, FAICD, FCIS, FGIA
Experience
Mr Tony Ho is an experienced company director having held executive directorships and chief
financial officer roles with a number of publicly listed companies. Tony was executive director of
Arthur Yates & Co Limited, retiring from that position in April 2002. His corporate and governance
experience include being chief financial officer/finance director of M.S. McLeod Holdings Limited,
Galore Group Limited, the Edward H O'Brien group of companies and Volante Group Limited.
Mr Ho was the past non-executive chairman of St. George Community Housing Limited (November
2002 to December 2009) where he was also a member of the Audit and Remuneration Committees.
Prior to joining commerce, Mr Ho was a partner of Cox Johnston & Co, Chartered Accountants, which
has since merged with Ernst & Young.
Mr Ho holds a Bachelor of Commerce degree from the University of New South Wales and is a
member of the Institute of Chartered Accountants in Australia and a fellow of the Institute of Chartered
Secretaries, Governance Institute of Australia and the Australian Institute of Company Directors.
Interest in shares & options
550,000 Ordinary Shares
1,600,000 Unvested performance rights
Other board positions held
Chairman - Apollo Minerals Limited, July 2009 and chairman of the Audit Committee
Non-executive director - Hastings Rare Metals Limited, March 2011 and chairman of the Audit
Committee
Non-executive Chairman – Bioxyne Limited – November 2012
Board positions held in the last 3 years
Non-executive Chairman – Metal Bank Limited, October 2011 to August 2013
Non-executive director - DoloMatrix International Limited, April 2007 – August 2012
30
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Information on Directors (cont’d)
Jeremy Sean Whybrow – Non-executive director – Appointed 21 February 2006
Qualifications
B.Sc. (Mineral Exploration and Mining Geology), G.Cert(Minerals Economics), M.Aus.I.M.M
Experience
Mr Jeremy Whybrow graduated from Curtin University of Technology in 1996 with a Bachelor of
Science degree (Mineral Exploration and Mining Geology), and has had over 15 years experience in
the minerals industry both domestically and internationally.
Jeremy has worked for companies such as Sons of Gwalia Ltd, PacMin Ltd, Teck Australia Ltd, Mount
Edon Gold Mines Ltd and Croesus Mining NL. His experience has been mainly in the operational
environment and includes significant exposure to exploration and mining operations, project
evaluation and feasibility studies.
Jeremy also has extensive international exploration experience having worked in China, Africa and
the Philippines as well as numerous localities in Australia.
As a founding director of Greenland Minerals and Energy, Jeremy has been instrumental in
conducting the exploration programs that have seen the Kvanefjeld project emerge as the world's
largest resource of rare earth elements (as defined by internationally recognized reporting standards).
Drawing on his solid foundation of operational experience Jeremy put in place many of the systems
critical to generating the high-quality datasets that underpin the projects mineral resources.
Interest in Shares, options and performance rights
6,010,200 Ordinary shares
1,000,000 Unvested performance rights
Directorships held in other listed entities
Noricom Gold Limited – November 2010, Executive director
Positions held in the last 3 Years
Convergent Minerals Limited. – January 2006 to 19 December 2011
Remuneration Report – Audited
This remuneration report, which forms part of the directors’ report, details the nature and amount of
remuneration for each director of Greenland Minerals and Energy Limited and senior management,
for the financial year ended 31 December 2013.
Director and senior management details
The following persons acted as directors of the Company during or since the end of the financial year:
Michael Hutchinson, Chairman
Roderick Claude McIllree, Managing Director
Simon Kenneth Cato, Executive Director
John Mair, Executive Director
Anthony Ho, Non-Executive Director
Jeremy Sean Whybrow, Non-Executive Director
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Remuneration Report – Audited (cont’d)
The term ‘senior management’ is used in this remuneration report to refer to the following persons.
Except as noted above, the named persons held their current position for the whole of the financial
year and since the end of the financial period:
Shaun Bunn, Chief Operations Officer
Miles Guy, Chief Financial Officer and Company Secretary
Remuneration Policy
The remuneration policy of Greenland Minerals and Energy Limited has been designed to align
director and senior management objectives with shareholder and business objectives by providing a
fixed remuneration component and offering specific long-term incentives based on meeting service
period requirements and share price vesting hurdles. It is the Board’s opinion that significant project
advancements would be required for the share price vesting hurdles to be met and therefore
increasing value to all stakeholders. The board of Greenland Minerals and Energy Limited believes
the remuneration policy to be appropriate and effective in its ability to attract and retain the best senior
management and directors to run and manage the Consolidated Group, as well as create alignment
of interests between directors, senior management and shareholders.
The board’s policy for determining the nature and amount of remuneration for board members and
senior executives of the Consolidated Group is as follows:
All senior management receive a market rate base salary (which is based on factors such as length of
service and experience) and superannuation.
The directors and senior management, where applicable receive a superannuation guarantee
contribution required by the government, which is currently 9.25% and do not receive any other
retirement benefits.
All remuneration paid to directors and senior management is valued at the cost to the Consolidated
Group and expensed. Options and rights granted to directors and senior management as part of
remuneration are valued at grant date using appropriate valuation techniques.
The board policy is to remunerate non-executive directors with a base fee and, for special exertion, at
market rates for time, commitment and responsibilities. The board as a whole determines payments to
the non-executive directors and reviews their remuneration annually, based on market rates, their
specific duties and responsibilities. Additional consultancy fees may be payable where the non-
executive director has had additional responsibilities associated with specific tasks or responsibilities
outside their normal duties.
The maximum aggregate amount of fees that can be paid to non-executive directors is subject to
approval by shareholders at the Annual General Meeting. The current shareholder approved cap on
these fees is $400,000 per annum. Fees for non-executive directors are not linked to the
performance of the Consolidated Group. However, to align directors’ interests with shareholder
interests, the directors are encouraged to hold shares in the Company.
Remuneration –Cash payment
Cash payments is the recognition of short term remuneration and the provision for long term
remuneration that has or will be settled in cash payments.
Remuneration – Share based payments
Share based payments is the recognition of shares that have been issued and are to be issued to
directors and senior management as compensation for the directors and senior management
agreeing to a reduction in salaries and other employment entitlements that would have otherwise
been payable in cash.
32
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Remuneration Report – Audited (cont’d)
The share based payments are also the recognition of long term remuneration that does not provide a
present value to the directors and senior management. The value of the long term remuneration has
been realised over the service vesting period and are subject to the satisfying of vesting and other
conditions.
At 31 December 2013, all of the outstanding performance rights remained un-vested as the share
price vesting conditions had not been satisfied. The performance options expired on 31 August 2013
being the expiry date of the options and as a result of the share price vesting conditions not being
satisfied by the expiry date.
Short term incentives
The Consolidated Group does not have a short term incentive scheme that is in addition to the short
term employee benefits. The Consolidated Group considers that short term incentive schemes would
not be consistent with shareholder value at the Consolidated Group’s current stage of development.
Details of Remuneration
The remuneration for the directors and senior management of the Company during the current
financial year was as follows:
Remuneration – Cash payments
Short term employee benefits
Year ended
31 Dec 2013
Salary/
consultancy
fees
Director fees
Allowances
Post-
employment
Super-
annuation
Long-term
Remuneration
Provision for
long service
leave
TOTAL
REMUNERATION
PAID OR
PAYABLE IN
CASH
$
$
$
$
$
Executive Directors
Roderick McIllree
Simon Cato
John Mair
Non-executive
Directors
Anthony Ho
Michael Hutchinson
Jeremy Whybrow
Senior Management
Shaun Bunn
Miles Guy
TOTAL
238,750
52,916
235,417
-
-
59,583
242,167
181,667
1,010,500
-
-
-
86,612(i)
-
-
11,812
4,866
21,469
(18,668) (ii)
(11,084) (ii)
-
318,506
46,698
256,886
50,000
139,317
45,000
-
-
234,317
-
-
-
86,612
4,500
-
1,875
14,719
16,575
75,816
-
-
-
-
-
(29,752)
54,500
139,317
106,458
256,886
198,242
1,377,493
(i)
Allowance for the payment of expenses related to R McIllree relocating to the UK.
(ii)
A reduction in salaries has resulted in a lower salary base for the calculation of long service leave and
other statutory entitlements. This has resulted in a reduction in the provision for long service leave
recognised in prior years.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Remuneration Report – Audited (cont’d)
Remuneration – Share based payments at fair value
Shares in
lieu of salary
Long term
remuneration
Shares (i)
Rights (ii)
Options (iii)
Total share
based
payments
TOTAL
REMUNER-
ATION
%
Consisting
of share
based
payments
$
$
$
$
$
453,044
-
198,703
-
123,228
-
609,578
217,444
1,601,997
206,302
24,610
160,457
188,545
60,357
42,831
249,182
65,567
997,851
121,852
-
91,674
-
-
-
781,198
24,610
450,834
188,545
183,585
42,831
1,099,704
71,308
707,720
243,045
322,902
149,289
91,674
-
305,200
950,434
283,011
2,905,048
1,207,320
481,253
4,282,541
71%
34%
64%
77%
57%
29%
79%
59%
68%
Year ended
31 Dec 2013
Executive Directors
Roderick McIllree
Simon Cato
John Mair
Non-executive Directors
Anthony Ho
Michael Hutchinson
Jeremy Whybrow
Senior Management
Shaun Bunn
Miles Guy
TOTAL
(i) Shares were issued to directors and senior management as compensation for the directors and senior
management agreeing to a reduction in salary and other employment entitlements that would have
otherwise been payable in cash. The shares are to be issued in up to four tranches over a two year
period, the values stated above represent the fair value of all four tranches granted in the current year.
This includes the tranches where shares were issued in the current year as well as a proportion of the
value of tranches that will vest during the year ended 31 December 2014. This vesting profile results in
79% of the total fair value of the four tranches being recognised in the current year. Refer to note 24 for
further details.
(ii) All rights are Long Term Incentives that are subject to service period and share price vesting conditions
which are detailed further in note 24 to the financial statements. The rights do not vest into fully paid
shares unless the vesting conditions are satisfied. At 31 December 2013 all rights remain unvested
and as a result the rights represent no immediate monetary value to the holder of the rights, at this
date, with a monetary benefit only arising if the vesting conditions are satisfied prior to the expiry date.
The above share based payment values are for reporting purposes only.
(iii) All options are Long Term Incentives that are subject to service period and share price vesting
conditions which are detailed further in note 24 to the financial statements. The options expired in
August 2013 due to failing to satisfy market based (share-price) vesting conditions consequently this
will result in no monetary value being realised by the holders of the options.
(iv) The value of the options and rights granted to management personnel as part of their remuneration is
calculated on the grant date using an appropriate pricing model. The amounts disclosed as part of
remuneration for the financial year have been determined by allocating the grant date value on a
straight-line basis over the service vesting period.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Remuneration Report – Audited (cont’d)
The remuneration for the directors and senior management of the Company during the prior financial
year was as follows:
Remuneration – Cash payments
Short term employee benefits
Salary/
consultancy
fees
Director fees
Allowances
Post-
employment
Super-
annuation
Long-term
Remuneration
Provision for
long service
leave
TOTAL
REMUNERATION
PAID OR
PAYABLE IN
CASH
$
$
$
$
$
Year ended
31 Dec 2012
Executive Directors
Roderick McIllree
Simon Cato
John Mair
Non-executive
Directors
Anthony Ho
Michael Hutchinson
Jeremy Whybrow
Senior Management
Shaun Bunn
Miles Guy
TOTAL
520,000
140,000
350,000
42,025
-
205,000
350,000
200,000
1,807,025
-
-
-
50,000
150,323
45,000
-
-
245,323
-
-
-
-
-
-
-
46,800
12,600
31,500
4,500
-
22,500
31,500
18,000
167,400
43,752
16,334
-
-
-
29,168
-
-
89,254
Remuneration – Share based payments at fair value
Shares in
lieu of salary
Long term
remuneration
Shares
Rights (i)
Options (ii)
Total share
based
payments
TOTAL
REMUNER-
ATION
$
$
$
$
$
-
-
-
487,409
-
366,695
825,210
94,422
641,830
1,312,619
94,422
1,008,525
Year ended
31 Dec 2012
Executive Directors
Roderick McIllree
Simon Cato
John Mair
Non-executive Directors
Anthony Ho
Michael Hutchinson
Jeremy Whybrow
Senior Management
Shaun Bunn
Miles Guy
TOTAL
(i) All rights are Long Term Incentives that are subject to service period and share price vesting conditions
which are detailed further in note 24 to the financial statements. The rights do not vest into fully paid
shares unless the vesting conditions are satisfied. At 31 December 2012 all rights remain unvested
and as a result the rights represent no immediate monetary value to the holder of the rights, at this
date, with a monetary benefit only arising if the vesting conditions are satisfied prior to the expiry date.
366,695
-
-
-
- 3,077,930 1,220,799
1,008,525
59,469
4,298,729
1,390,025
277,469
6,607,731
1,923,171
263,356
1,390,025
402,417
241,429
171,323
402,417
241,429
171,323
498,942
391,752
472,991
641,830
59,469
-
-
-
-
-
-
68%
36%
72%
80%
62%
36%
72%
21%
65%
(ii) All options are Long Term Incentives that are subject to service period and share price vesting
conditions which are detailed further in note 24 to the financial statements. At 31 December 2012 all
options remain unvested and as a result the options represent no immediate monetary value to the
holder of the options, at this date, with a monetary benefit only arising if the vesting conditions are
satisfied prior to the expiry date.
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35
610,552
168,934
381,500
96,525
150,323
301,668
381,500
218,000
2,309,002
%
Consisting
of share
based
payments
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Remuneration Report – Audited (cont’d)
No director or senior management person appointed during the current or prior period received a
payment as part of his consideration for agreeing to hold the position.
No cash bonuses were paid to any directors or senior management during the current or prior period.
Shares in lieu of salaries
In February 2013 as part of a strategy to preserve cash reserves, directors, senior management and a
number of other staff agreed to a reduction in salary and other employment entitlements that would
have been payable by the Company in cash. As compensation for agreeing to these reductions, the
Company agreed to issue shares to the individuals concerned. The number of shares to be issued
was established by calculating the dollar value of foregone employment entitlements and issuing the
equivalent value in shares based on a share price of $0.30. The shares are to vest four tranches
over a two year period except for Michael Hutchinson who will be issued shares over three tranches.
The shares that have been and are to be issued to directors were approved by shareholders at the
Company’s Annual General Meeting on 15 May 2013.
In accordance with AASB2, the value of the shares in lieu of salaries has been recognised as the fair
value of the shares issued in the first two tranches during the year ended 31 December 2013 and a
proportion of the fair value of the remaining two trances to be issued in the year ended 31 December
2014. All four tranches require continuous service through to the respective vesting date. As a result
of this vesting profile, 79% of the total fair value of the four tranches has been recognised at 31
December 2013, with the balance to be recognised during the year ended 31 December 2015.
The following shares were issued in the current year or will be issued in the year ended 31 December
2014 and have been issued in lieu of salaries and other employment entitlements.
Director/ senior
management
R McIllree
Grant date
Number
Fair value @
grant date
$
Issue
Date
Share value
@date
of issue
$
Tranche 1
15/05/2013
517,750
Tranche 2
15/05/2013
517,750
Tranche 3
15/05/2013
517,750
Tranche 4
15/05/2013
517,500
Total
2,071,000
J Mair
Tranche 1
15/05/2013
227,083
Tranche 2
15/05/2013
227,083
Tranche 3
15/05/2013
227,083
Tranche 4
15/05/2013
227,083
150,147
145,022
145,073
145,177
585,419
65,854
63,609
63,637
63,665
908,333
256,765
M Hutchinson
15/05/2013
31/10/2013
30/04/2014
31/10/2014
15/05/2013
31/10/2013
30/04/2014
31/10/2014
Tranche 1
15/05/2013
210,638
Tranche 2
15/05/2013
210,637
Tranche 3
15/05/2013
210,633
59,003
59,028
59,053
31/10/2013
30/04/2014
31/10/2014
631,908
177,084
150,147
155,325
-
-
305,472
65,854
68,125
-
-
133,979
63,191
-
-
63,191
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36
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Remuneration Report – Audited (cont’d)
Director/ senior
management
S Bunn
Grant date
Number
Fair value @
grant date
$ (i)
Issue
Date
Share value
@date
of issue
$
Tranche 1
25/02/2013
480,758
Tranche 2
25/02/2013
485,586
Tranche 3
25/02/2013
490,462
Tranche 4
25/02/2013
495,387
Total
1,952,193
M Guy
Tranche 1
25/02/2013
171,492
Tranche 2
25/02/2013
173,214
Tranche 3
25/02/2013
174,954
Tranche 4
25/02/2013
176,711
185,092
182,192
184,070
185,968
737,322
66,024
64,990
65,660
66,337
696,371
263,011
25/02/2013
30/09/2013
31/03/2014
30/09/2014
25/02/2013
30/09/2013
31/03/2014
30/09/2014
185,092
121,396
-
-
306,488
66,024
43,303
-
-
109,327
(i) Fair value for shares issued or to be issued to directors has been based on the Company share
price on 15 May 2013 and the Company shares price on 25 February 2013 for senior
management, given that these tranches vested immediately on the grant date, with no future
service conditions. The fair value has been established for the later tranches by applying a Black
Scholes model and taking into account the future service period requirements (refer to note 24).
Employee rights plan
In September 2013 the Remuneration Committee and the Board approved the Employee Rights Plan
(“ERP”) and approved the issue of Employee Rights under the plan. All employees of the
Consolidated Group were invited to participate in the ERP. The number of rights being offered to
employees was determined by the seniority of the employee, with three levels of seniority being
established and a factor based on the seniority being applied to the employee’s base salary.
The Employee Rights will convert to Ordinary fully paid shares on subject to a twelve month
continuous service period vesting condition and in three tranches subject to share price vesting
conditions. The Employee Rights were offered to assist in retaining and to further incentivise
employees.
In accepting the offer of the Employee Rights, employees agreed that the Employee Performance
Rights issued in 2011 would be cancelled. At the time the Employee Performance Rights were
cancelled the fair value of the cancelled rights had been fully expensed.
The Employee Rights were not offer to directors and no directors participated in the Employee Rights
Issue.
The market based vesting hurdles are based on the Company’s share price based on a 5 day Volume
Weighted Average Price (“VWAP”) as detailed in the following table.
Tranche
Tranche 1
Tranche 2
Tranche 3
5 Day VWAP share
price hurdle
$0.50
$0.75
$1.00
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37
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Remuneration Report – Audited (cont’d)
No amounts are paid or payable by the recipient on receipt of the performance right. The
performance rights carry neither rights to dividends nor voting rights and are non-transferrable.
The following un-vested performance rights were issued to senior management during the current
financial year.
Senior
management
S Bunn
Grant date
Number
Fair value @
grant date
$
Expiry
date
Vesting
date
Tranche 1
4/10/2013
700,000
Tranche 2
4/10/2013
700,000
Tranche 3
4/10/2013
700,000
Total
2,100,000
M Guy
Tranche 1
4/10/2013
400,000
Tranche 2
4/10/2013
400,000
Tranche 3
4/10/2013
400,000
151,410
119,770
96,810
367,990
86,520
68,440
55,320
1,200,000
210,280
30/09/2016
Refer above
30/09/2016
Refer above
30/09/2016
Refer above
30/09/2016
Refer above
30/09/2016
Refer above
30/09/2016
Refer above
(i) Fair value at grant date has been calculated using a binominal model (refer to note 24) the
value will be recognised in remuneration on a pro-rata basis over the service vesting period in
accordance with Australian Accounting Standards.
Performance rights
On the 23 January 2012, shareholders approved the issue of 1,000,000 un-vested performance rights
to Anthony Ho. These rights were issued to Mr Ho in recognition of the work and his valuable input in
securing the settlement to acquire the remaining 39% interest in the Kvanefjeld project.
The performance rights will vest in three tranches based on the Company’s Volume Weighted
Average Share Price (“VWAP”) exceeding price hurdles for 10 consecutive trading days. In addition
Mr Ho was required to remain an employee of the Company until 30 June 2013. Upon satisfying the
clearly pre-determined vesting conditions, each right issued will be convertible into one fully paid
ordinary share of the Company.
Tranche
Tranche 1
Tranche 2
Tranche 3
10 Day VWAP share
price hurdle
$0.75
$1.00
$1.50
No amounts are paid or payable by the recipient on receipt of the performance right. The
performance rights carry neither rights to dividends nor voting rights and are non-transferrable.
No Performance Rights were issued during the year ended 31 December 2013.
38
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Remuneration Report – Audited (cont’d)
The following un-vested performance rights were issued to Anthony Ho during the previous financial
year.
Director/ senior
management
A Ho
Grant date
Number
Fair value @
grant date
$
Expiry
date
Vesting
date
Tranche 1
23/01/2012
500,000
Tranche 2
23/01/2012
250,000
Tranche 3
23/01/2012
250,000
242,000
114,500
103,500
15/05/2014
Refer above
15/05/2014
Refer above
15/05/2014
Refer above
(ii)
1,000,000
Total
Fair value at grant date has been calculated using a binominal model (refer to note 24)
the value will be recognised in remuneration on a pro-rata basis over the service vesting
period in accordance with Australian Accounting Standards.
460,000
Employee performance rights plan
At the Company’s Annual General Meeting, on 12 May 2011, members approved the implementation
of an Employee Performance Rights Plan (“EPRP”). The plan is a result of a comprehensive
remuneration review the Company conducted. The aim of the plan is to assist in the retention of
existing staff and the recruitment of future employees.
Under the EPRP, the Company will issue incentive shares to employees as part of their total
remuneration package. The plan will result in a direct cash saving to the Company through a
reduction in the salary component payable in remuneration packages.
Upon satisfying clearly pre-determined vesting conditions, each right issued under the EPRP will be
convertible into one fully paid ordinary share of the Company. To meet the vesting criteria, the
employee must remain an employee of the Company for a minimum of two years (service period).
In addition the performance rights will vest in three tranches based on the Company’s Volume
Weighted Average Share Price (“VWAP”) exceeding price hurdles for 10 consecutive trading days.
Details of these hurdles are included in the following table.
Tranche
Tranche 1
Tranche 2
Tranche 3
10 Day VWAP share
price hurdle
$1.50
$1.85
$2.50
No amounts are paid or payable by the recipient on receipt of the performance right. The
performance rights carry neither rights to dividends nor voting rights and are non-transferrable.
There were no performance rights issued under the EPRP during the financial year ended 31
December 2013 or the previous year ended 31 December 2012.
At 31 December 2013, all of the Rights remained un-vested as the vesting conditions had not been
satisfied.
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39
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Remuneration Report – Audited (cont’d)
Options exercised
The following options issued to directors and senior management, were exercised during the financial
year ended 31 December 2013. Each options converts into one ordinary share of Greenland Minerals
and Energy Limited:
Number
Exercised
(i)
Exercise
Price
Date
Share
price @
exercise
date
Amount
Paid
$
Amount
unpaid
$
Option
value at
date of
exercise
$
S Bunn
28/03/2013
750,000
$0.25
$0.30
187,500
-
225,000
(i) The number of options exercised relates only to options exercised that were granted as
compensation and recognised in remuneration in prior years.
There were no options were exercised by directors of senior management during the year ended 31
December 2012.
Lapsed options
During the current financial year the following options issued to directors and senior management
lapsed as a result of vesting conditions not being satisfied.
Director/senior
management
R McIllree (i)
J Mair (i)
S Bunn (i)
Number
2,800,000
2,100,000
2,100,000
Value @ grant
date
974,819
733,390
733,390
Lapse date
31/08/2013
31/08/2013
31/08/2013
Value @ lapse
date
(i) Options lapsed as a result of not meeting vesting conditions prior to the option expiry date.
During the previous financial year no options issued to directors or senior management lapsed.
Rights cancelled
During the current financial year the following un-vested Employee Performance Rights were
cancelled upon acceptance of participation in the Employee Rights Plan offered during the year.
Senior
management
S Bunn (i)
M Guy (i)
Number
2,100,000
350,000
Value @ grant
date
1,283,660
118,938
Cancellation
date
04/10/2013
04/10/2013
Value @
Cancellation
date
-
-
-
-
-
On the date the Employee performance Rights were cancelled, the service period vesting condition
had been satisfied but the market price vesting conditions had not been met, therefore the rights were
un-vested at the time of cancellation. The fair value of the cancelled rights had been fully expensed
prior to the cancellation.
40
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Remuneration Report – Audited (cont’d)
During the financial year, the following share-based payment arrangements were applicable;
Options series
Performance rights
Performance options
Employee options
Performance rights
Shares in lieu of salary (employees)
Share in lieu of salary (directors)
Employee Rights
Grant date Expiry date
15/05/2014
15/05/2011
31/08/2013
15/05/2011
30/06/2013
21/10/2011
15/05/2014
23/01/2012
-
25/02/2013
-
15/05/2013
30/09/2016
04/10/2013
Grant date
fair value
$
5,568,606
2,441,599
261,587
460,000
1,000,333
1,019,268
578,270
Vesting date
(i)
(ii)
21/10/2011
(iii)
(iv)
(iv)
(v)
(i)
The performance rights are subject to a 2 year service period vesting requirement and
Company share price hurdles. The performance rights will vest in 3 tranches subject to the
Company share price based on the volume weighted average price (‘VWAP’) exceeding the
following price hurdles:
Tranche 1
Tranche 2
Tranche 3
10 Day VWAP share
price hurdle
$1.50
$1.85
$2.50
(ii)
The performance options are subject to continued employment until 30 June 2013 and
Company share price hurdles. The performance options will vest in 3 tranches subject to the
Company Share price based on the volume weighted average price (‘VWAP’) exceeding the
following price hurdles:
Tranche
Tranche 1
Tranche 2
Tranche 3
10 Day VWAP share
price hurdle
$3.75
$5.00
$6.25
There are no further service or performance criteria that need to be met in relation to any of the above
option series.
(iii)
The performance rights are subject to continued employment until 30 June 2013 and Company
share price hurdles.
The performance rights will vest in 3 tranches subject to the Company share price based on the
volume weighted average price (‘VWAP’) exceeding the following price hurdles:
Tranche
Tranche 1
Tranche 2
Tranche 3
10 Day VWAP share
price hurdle
$0.75
$1.00
$1.50
(iv) The shares issued in lieu of salary will be issued in four tranches (three tranches in the case of
M Hutchinson), the issue of the shares is subject to continued employment at the date of the
tranche issue. If the director or employee resigns or their employment is terminated with cause
prior to a tranche date, there will not be any entitlement to un-issued/vested tranches.
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41
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Remuneration Report – Audited (cont’d)
If the director or employee is terminated as a result of redundancy, all unissued tranches will be
issued on the date of termination.
(v)
The employee rights are subject to a 1 year service period vesting requirement and Company
share price hurdles. The performance rights will vest in 3 tranches subject to the Company
share price based on the volume weighted average price (‘VWAP’) exceeding the following
price hurdles:
Tranche
Tranche 1
Tranche 2
Tranche 3
5 Day VWAP share
price hurdle
$0.50
$0.75
$1.00
Consolidated Group performance, shareholder wealth and director and senior management
remuneration
The remuneration policy has been tailored to align the interests of shareholders, directors and senior
management. To achieve this aim, the entity may issue options to directors and senior management.
Any issue of options is based on the performance of the Consolidated Group and or individual and is
limited to the achievement of clearly defined bench marks and milestones. These bench marks and
milestones may include:
(cid:31) Share price and or the market capitalisation of the Company exceeding pre-determined
levels.
(cid:31) Completion of specific projects or pre-determined stages of projects.
(cid:31) Periods of service with the Company.
(cid:31) Accretion of shareholder value.
The following table shows the gross revenue and profits for the period from 31 December to 31
December 2013 for the listed entity, as well as the share price at the end of each financial period.
Remuneration Report
Revenue
Net loss before and after tax
Share price at beginning of
period
Share price at end of period
Dividend
Basic loss per share
Diluted loss per share
12 month
period ended
31 Dec
2013
12 Month
period ended
31 Dec
2012
$351,106 $1,116,879
($8,768,670) $(17,344,250) $(14,209,550)
12 Month
period ended
31 Dec
2011
$297,067
12 Month
period ended
31 Dec
2010
$717,276
$(7,163,998)
6 Month
period ended
31 Dec
2009
$387,977
$(3,823,380)
$0.27
$0.21
-
$0.02
$0.02
$0.46
$0.27
-
$0.04
$0.04
$1.20
$0.46
-
$0.04
$0.04
$0.58
$1.20
-
$0.03
$0.03
$0.36
$0.58
-
$0.02
$0.02
42
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Remuneration Report – Audited (cont’d)
Key terms of employment contracts
Directors
Michael Hutchinson, Non-executive Chairman
(cid:31) Director fee excluding superannuation of $100,000 per annum reduced from £100,000 per
annum on 1 July 2013.
(cid:31) Entitled to shares equal in value to the reduction in director fees based on a $0.30 share
price.
(cid:31) Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the
performance of his duties including relating to travel, entertainment, accommodation, meals
and telephone.
(cid:31) No fixed term.
Roderick McIllree, Managing Director
(cid:31) Term and type of contract – service agreement subject to annual review.
(cid:31) Base salary of $215,000 per annum per annum and is paid monthly two weeks in advance
and two weeks in arrears, reduced from $500,000 per annum on 1 February 2013.
(cid:31) Entitled to shares equal in value to the reduction in salary based on a $0.30 share price.
(cid:31) Superannuation at 9% is payable on the base salary up to 30 June 2013, there is no
entitlement to superannuation post this date.
(cid:31) Rental expenses while residing in the UK.
(cid:31) Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the
performance of their duties including relating to travel, entertainment, meals and telephone.
(cid:31) Either the Company or the director may terminate their engagement without cause by
giving the other party twelve months written notice, there are no other specific payout
clauses.
(cid:31) Remuneration will be reviewed every 12 months or as otherwise agreed between the
parties.
Simon Cato, Executive Director
(cid:31) Term and type of contract – service agreement limited to a maximum of 26 hours per
month subject to annual review.
(cid:31) Base salary, of $45,000 and is paid monthly two weeks in advance and two weeks in
arrears.
(cid:31) Superannuation at 9.25% is payable on the base salary.
(cid:31) Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the
performance of his duties including relating to travel, entertainment, accommodation, meals
and telephone.
(cid:31) Either the Company or the director may terminate their engagement without cause by
giving the other party twelve months written notice, there are no other specific payout
clauses.
(cid:31) Remuneration will be reviewed every 12 months or as otherwise agreed between the
parties.
John Mair, Executive Director
(cid:31) Term and type of contract – service agreement subject to annual review.
(cid:31) Base salary, of $225,000 per annum and is paid monthly two weeks in advance and two
weeks in arrears, reduced from $350,000 on 1 February 2013.
(cid:31) Entitled to shares equal in value to the reduction in salary based on a $0.30 share price
(cid:31) Superannuation at 9.25% is payable on the base salary.
(cid:31) Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the
performance of his duties including relating to travel, entertainment, accommodation,
meals and telephone.
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43
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Remuneration Report – Audited (cont’d)
John Mair, Executive Director (cont’d)
(cid:31) Either the Company or the employee may terminate his engagement without cause by
giving the other party twelve months written notice, there are no other specific payout
clauses.
(cid:31) Remuneration will be reviewed every 12 months or as otherwise agreed between the
parties.
Anthony Ho, Non-Executive Director
$50,000 per annum.
(cid:31) No fixed term.
(cid:31)
(cid:31) Superannuation at 9.25% is payable on the director’s fee
(cid:31) Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the
performance of his duties including relating to travel, entertainment, accommodation, meals
and telephone.
Jeremy Whybrow, Non-Executive Director
(cid:31) Term and type of contract – service agreement subject to annual review.
(cid:31) Director fees $45,000 per annum
(cid:31) Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the
performance of his duties including relating to travel, entertainment, accommodation,
meals and telephone.
(cid:31) Either the Company or the employee may terminate his engagement without cause by
giving the other party twelve months written notice, there are no other specific payout
clauses.
(cid:31) Remuneration will be reviewed every 12 months or as otherwise agreed between the
parties.
Senior Management
Shaun Bunn, Chief Operations Officer
(cid:31) Term and type of contract – service agreement subject to annual review.
(cid:31) Base salary, of $225,000 per annum and is paid monthly two weeks in advance and two
weeks in arrears, reduced from $350,000 on 1 February 2013.
(cid:31) Entitled to shares equal in value to the reduction in salary and notice period, based on a
$0.30 share price.
(cid:31) Superannuation at 9.25% is payable on the base salary.
(cid:31) Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the
performance of his duties including relating to travel, entertainment, accommodation,
meals and telephone.
(cid:31) Either the Company or the employee may terminate his engagement without cause by
giving the other party three months written notice, there are no other specific payout
clauses.
(cid:31) Remuneration will be reviewed every 12 months or as otherwise agreed between the
parties.
Miles Guy, Chief Financial Officer and Company Secretary
(cid:31) Term and type of contract – service agreement subject to annual review.
(cid:31) Base salary, of $180,000 per annum and is paid monthly two weeks in advance and two
(cid:31)
weeks in arrears, reduced from $200,000 per annum on 1 February 2013.
Entitled to shares equal in value to the reduction in salary and notice period, based on a
$0.30 share price.
(cid:31) Superannuation at 9.25% is payable on the base salary.
44
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Remuneration Report – Audited (cont’d)
Miles Guy, Chief Financial Officer and Company Secretary (cont’d)
(cid:31) Entitled to be reimbursed for all out of pocket expenses necessarily incurred in the
performance of his duties including relating to travel, entertainment, accommodation,
meals and telephone.
(cid:31) Either the Company or the employee may terminate his engagement without cause by
giving the other party twelve months written notice, there are no other specific payout
clauses. (Notice period has been reduced to 3 months from 1 Feb 2013)
(cid:31) Remuneration will be reviewed every 12 months or as otherwise agreed between the
parties.
Meetings of Directors
During the financial year, 15 meetings of directors were held. Attendances by each director during the
year were as follows:
Directors Meetings
Director
M Hutchinson
R McIllree
S Cato
J Mair
A Ho
J Whybrow
Number of meetings
eligible to attend
15
15
15
15
15
15
Number
attended
15
15
15
15
15
15
Audit and Risk Committee
The audit and risk committee was convened at the Directors’ Board Meeting on the 22 April 2009.
The audit committee members are Anthony Ho (Chairman), Michael Hutchinson and Jeremy
Whybrow. The audit and risk committee is to meet at least twice a year and must have a quorum of
two members. There were 2 audit and risk committee meetings held during the current financial year,
as follows:
Member
A Ho
M Hutchinson
J Whybrow
Audit Committee Meetings
Number of meetings
eligible to attend
2
2
2
Number
Attended
2
1
2
Remuneration Committee
The remuneration committee was convened at the Directors’ Board Meeting on the 22 April 2009.
The audit committee members are Michael Hutchinson (Chairman), Anthony Ho and Jeremy
Whybrow. The remuneration committee meeting must have a quorum of two members. There were
2 remuneration committee meetings held during the current financial year, as follows:
Member
M Hutchinson
A Ho
J Whybrow
Audit Committee Meetings
Number of meetings
eligible to attend
2
2
2
Number
Attended
2
2
2
P a g e
| 28
45
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
DIRECTORS’ REPORT
Indemnifying Officers
During or since the end of the financial period the Company has given an indemnity or entered into an
agreement to indemnify, or paid or agreed to pay insurance premium to insure the directors against
liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of
their conduct while acting in the capacity of the director of the Consolidated Group, other than conduct
involving a willful breach of duty in relation to the Consolidated Group.
Proceedings on Behalf of Consolidated Group
No person has applied for leave of court to bring proceedings on behalf of the Consolidated Group or
intervene in any proceedings to which the Consolidated Group is a party for the purpose of taking
responsibility on behalf of the Consolidated Group for all or any part of those proceedings.
The Consolidated Group was not a party to any such proceedings during the period.
Non-audit Services
Details of amounts paid to the auditors of the Company, Deloitte Touche Tohmatsu and its related
practices for audit and any non audit services for the year, are set out in note 30.
Auditor’s Independence Declaration
The auditor’s independence declaration for the year ended 31 December 2012 has been received and
47
is included on page 30 the financial report.
2013
Rounding off of amounts
The Consolidated Group is a Consolidated Group of the kind referred to in ASIC Class Order
98/0100, dated 10 July 1998. In accordance with that Class Order amounts in the directors’ report and
the financial report are rounded off to the nearest thousand dollars, unless otherwise indicated.
Signed in accordance with a resolution of directors, made pursuant to section 298(2) of the
Corporations Act 2001.
On behalf of the Directors.
Roderick McIllree
Managing Director
46
P a g e
| 29
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Woodside Plaza
Level 14
240 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Tel: +61 8 9365 7000
Fax: +61 (0) 9365 7007
www.deloitte.com.au
The Board of Directors
Greenland Minerals and Energy Limited
Ground Floor,
Unit 6, 100 Railway Road,
Subiaco WA 6008
26 March 2014
Dear Board Members
Greenland Minerals and Energy Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the directors of Greenland Minerals and Energy
Limited.
As lead audit partner for the audit of the financial statements of Greenland Minerals and Energy
Limited for the financial year ended 31 December 2013, I declare that to the best of my
knowledge and belief, there have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
David Newman
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited.
47
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 Deloitte Touche Tohmatsu
ABN 74 490 121 060
Woodside Plaza
Level 14
240 St Georges Terrace
Perth WA 6000
GPO Box A46
Perth WA 6837 Australia
Independent Auditor’s Report to the
members of Greenland Minerals and Energy
Limited
DX 206
Tel: +61 (0) 8 9365 7000
Fax: +61 (0) 8 9365 7001
www.deloitte.com.au
Report on the Financial Report
We have audited the accompanying financial report of Greenland Minerals and Energy Limited, which
comprises the statement of financial position as at 31 December 2013, the statement of profit or loss
and other comprehensive income, the statement of cash flows and the statement of changes in equity
for the year ended on that date, notes comprising a summary of significant accounting policies and
other explanatory information, and the directors’ declaration of the consolidated entity comprising the
company and the entities it controlled at the year’s end or from time to time during the financial year
as set out on pages 33 to 78.
50 to 95
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the
directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial statements comply with International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control, relevant to the entity’s
preparation of the financial report that gives a true and fair view, in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the directors, as well
as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Touche Tohmatsu Limited
48
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 Auditor’s Independence Declaration
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001,
which has been given to the directors of Greenland Minerals and Energy Limited would be in the same
terms if given to the directors as at the time of this auditor’s report.
Opinion
In our opinion:
(a) the financial report of Greenland Minerals and Energy Limited is in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 31 December
2013 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the consolidated financial statements also comply with International Financial Reporting
Standards as disclosed in Note 2.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 14 to 28 of the directors’ report for the
year ended 31 December 2013. The directors of the company are responsible for the preparation and
presentation of the Remuneration Report in accordance with section 300A of the Corporations Act
2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
31 to 45
Opinion
In our opinion the Remuneration Report of Greenland Minerals and Energy Limited for the year ended
31 December 2013, complies with section 300A of the Corporations Act 2001.
DELOITTE TOUCHE TOHMATSU
David Newman
Partner
Chartered Accountants
Perth, 26 March 2014
49
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013 Directors’ declaration
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
The directors declare that:
(a)
in the directors’ opinion, there are reasonable grounds to believe that the Company will be able
to pay its debts as and when they become due and payable;
in the directors’ opinion, the attached financial statements and notes thereto are in accordance
with the Corporations Act 2001, including compliance with accounting standards and giving a
true and fair view of the financial position and performance of the Consolidated Group;
the attached financial statements and notes thereto, are in compliance with International
Financial Reporting Standards as stated in note 2 of the financial statements; and
the directors have been given the declarations required by s.295A of the Corporations Act 2001.
(b)
(c)
(d)
Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations
Act 2001.
On behalf of the Directors
Roderick McIllree
Managing Director
Subiaco, 26 March 2014
50
P a g e
| 33
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Consolidated statement of profit or loss and other comprehensive income
for the year ended 31 December 2013
Revenue from continuing operations
Expenditure
Director and employee benefits
Professional fees
Occupancy expenses
Listing costs
Write-down of royalty acquisition
Other expenses
Loss before tax
Income tax expense
Loss for year
Other comprehensive income
Items that may be reclassified subsequently to profit
and loss
Exchange difference arising on translation of foreign
operations
Income tax relating to components of
comprehensive income
Other comprehensive income for the year
Total comprehensive income for the year
Loss attributable to:
Owners of the parent
Non-controlling interest
Total comprehensive income attributable to:
Owners of the parent
Non-controlling interest
Basic loss per share – cents per share
Diluted loss per share – cents per share
Note
5
6(a)
6(b)
6(c)
6(d)
6(e)
6(f)
7
7
20
Dec
2013
$' 000
Dec
2012
$' 000
297
351
(5,923)
(523)
(405)
(102)
-
(2,113)
(8,769)
-
(8,769)
(9,205)
(1,224)
(409)
(217)
(5,075)
(1,565)
(17,344)
-
(17,344)
9,893
1,450
-
9,893
1,124
-
1,450
(15,894)
(8,769)
-
(8,769)
1,124
-
1,124
1.53
1.53
(16,675)
(669)
(17,344)
(15,247)
(647)
(15,894)
3.72
3.72
Notes to the financial statements are included on pages 55 to 95.
Notes to the financial statements are included on pages 38 to 78
P a g e
| 34
51
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Note
8
9
10
Dec
2013
$' 000
Dec
2012
$' 000
5,343
10,801
49
275
5,667
326
311
11,438
11
12
13
14
15
15
16
17
19
41
1,505
64,859
66,405
31
1,540
53,642
55,213
72,072
66,651
543
125
144
812
1,240
-
331
1,571
30
30
89
89
842
71,230
1,660
64,991
336,950
334,399
(10,246)
(22,703)
(255,474)
71,230
(246,705)
64,991
Consolidated statement of financial position
as at 31 December 2013
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total Current Assets
Non-Current Assets
Investments in associates
Property, plant and equipment
Capitalised exploration and evaluation expenditure
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and Other Payables
Other liabilities
Provisions
Total Current Liabilities
Non-Current Liabilities
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued Capital
Reserves
Accumulated Losses
Total Equity
Notes to the financial statements are included on pages 55 to 95.
Notes to the financial statements are included on pages 38 to 78
52
P a g e
| 35
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Consolidated statement of changes in equity
for the year ended 31 December 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
f
o
r
C
o
n
s
o
l
i
t
h
e
Total
y
d
e
a
a
$' 000
t
r
e
e
d
n
57,992
s
d
t
e
a
t
d
e
(17,344)
3
m
1
e
D
n
t
e
1,450
c
o
e
f
m
c
h
(15,894)
b
a
e
n
r
g
2
e
15,858
0
s
1
3
i
n
5,075
e
q
u
i
t
6,961
y
(669)
22
(647)
I
s
s
u
e
d
O
p
t
i
o
n
-
-
F
o
r
e
i
g
n
-
t
r
a
n
s
l
a
t
i
o
n
c
u
r
r
e
n
c
y
o
t
e
s
t
o
t
h
e
f
i
n
a
n
c
i
a
l
s
t
a
t
e
m
e
n
t
s
a
r
e
i
n
c
l
u
d
e
d
o
n
p
a
g
e
s
3
8
t
o
7
8
P
a
g
e
|
3
6
i
b
R
I
a
I
Non -
s
s
a
c
e
s
s
q
s
c
u
u
Controlling
e
u
o
e
e
d
g
s
o
o
i
n
interest
p
t
f
f
i
i
a
o
t
s
i
y
n
o
h
m
n
a
r
e
o
e
reserve
n
f
s
t
s
s
f
h
r
$’000
o
a
m
r
e
s
h
a
r
e
s
f
o
r
r
o
y
(5,611)
a
l
t
y
7
5
3
6
,
2
0
8
5
,
0
7
5
-
-
-
-
-
-
t
r
a
n
s
a
c
t
i
o
n
c
o
s
t
s
1
5
,
0
4
6
8
1
2
-
-
-
(34,061)
N
2
0
1
3
B
a
l
a
n
c
e
a
t
3
1
D
e
c
e
m
b
e
r
o
p
t
i
o
n
e
x
e
r
c
s
e
i
I
s
s
u
e
o
f
s
h
a
r
e
s
b
a
s
e
d
p
a
y
m
e
n
t
s
f
r
o
m
R
e
c
o
g
n
i
t
i
o
n
o
f
s
h
a
r
e
I
s
s
u
e
o
f
s
h
a
r
e
s
f
r
o
m
f
o
r
t
h
e
y
e
a
r
T
o
t
a
l
i
n
c
o
m
e
c
o
m
p
Issued
r
e
capital
h
e
n
s
$' 000
v
e
i
2
0
1
3
N
e
t
l
o
s
s
f
o
Option
r
t
h
reserve
e
y
e
$' 000
a
r
O
t
h
e
r
C
o
m
p
r
e
h
e
n
s
v
e
i
B
a
l
a
n
c
e
a
t
1
J
a
n
u
a
r
y
14,997
i
n
reserve
g
n
t
e
r
e
s
t
3
1
D
e
$' 000
c
e
m
(6,783)
b
e
r
i
a
c
q
u
s
i
t
i
o
n
o
f
2
n
o
0
n
1
Foreign
-
2
c
o
currency
n
t
r
o
translation acquisition Accumulated
R
e
c
o
g
n
i
t
i
o
n
B
a
l
a
n
c
e
a
t
t
h
e
y
e
a
r
n
c
o
m
e
I
s
s
u
e
T
o
t
a
n
e
t
f
o
r
o
f
o
f
i
l
l
l
i
O
t
h
e
r
C
o
m
p
r
e
h
e
n
s
v
e
i
l
N
e
t
2
0
1
2
B
a
l
a
Attributable
o
n
s
c
to equity
s
e
f
a
o
holders of
t
r
1
t
h
the parent
J
e
a
n
u
a
r
y
$' 000
y
e
a
r
64,399
Non-
controlling
interest
$' 000
(6,407)
s
h
a
r
e
s
c
o
m
p
r
e
losses
h
e
n
s
$' 000
v
e
i
(230,030)
(16,675)
Balance at 1 January
2012
4
4
9
2
,
8
2
5
Net loss for the year
3
3
Other Comprehensive
2
6
,
,
1
9
income
5
0
0
2
Total comprehensive
for the year
2
4
(
Issue of shares
2
,
8
6
8
1
net of transaction costs
8
)
Issue of shares for royalty
acquisition
Issue of shares from
4
Recognition of share
,
5
based payments
3
8
Recognition acquisition of
non-controlling interest
Balance at 31 December
2012
(
3
9
,
6
7
2
)
Balance at 1 January
2013
-
-
-
-
-
(
2
Net loss for the year
5
5
Other Comprehensive
,
4
7
income
4
)
Total comprehensive
for the year
Issue of shares from
7
4
1
Recognition of share
,
,
9
1
2
based payments
2
8
3
7
8
0
Issue of shares from
option exercise
Balance at 31 December
2013
-
2
1
,
6
1,428
9
9
3
3
4
,
3
9
9
1,428
2
2
,
3
2
4
3
0
-
7
-
-
-
-
291,826
-
-
-
-
-
-
15,046
-
-
-
5,075
-
3
3
4
,
3
-
9
9
-
2
2
,
3
2
812
4
-
9
,
8
9
3
9
,
8
753
9
3
(
5
,
3
5
6,208
5
)
-
(
5
,
3
5
5
)
21,699
307
334,399
-
-
(
3
22,324
9
,
6
7
2
)
-
(
8
,
7
6
9
)
(
8
,
7
6
9
)
-
-
-
-
(
2
-
4
6
,
7
0
-
5
)
-
(
2
4
6
,
7
0
5
)
1
,
1
2
4
9
,
8
2,102
9
3
(
8
,
7
6
9
)
6
4
,
9
2,825
9
1
6
4
,
9
9
1
449
(261)
336,950
24,888
-
-
-
-
-
-
-
(16,675)
2
9
1
,
8
1,428
2
6
$
'
0
0
0
(15,247)
1
4
,
9
9
15,858
7
$
'
0
0
0
5,075
$
'
0
0
0
(
6
,
7
8
6,961
3
)
(12,055)
$
’
0
0
0
(
64,991
5
,
6
1
1
)
$
'
0
0
0
(
2
(8,769)
3
0
,
0
3
9,893
0
)
1,124
$
'
0
0
0
6
4
,
3
4,927
9
9
188
$
'
0
0
0
,
(
71,230
6
4
0
7
)
c
a
p
i
t
a
l
r
e
s
e
r
v
e
r
e
s
e
r
v
e
r
e
s
e
r
v
e
l
o
s
s
e
s
t
h
e
p
a
r
e
n
t
i
n
t
e
r
e
s
t
$
'
0
0
0
T
o
t
a
l
5
7
,
9
9
2
-
-
-
-
(16,675)
-
1
,
4
2
8
-
-
-
-
-
1
,
4
-
2
8
-
(
1
6
,
6
7
5
)
(8,769)
(
1
5
,
2
4
7
)
1
,
4
-
2
8
-
(255,474)
(
6
4
7
)
2
2
(
1
5
,
8
9
4
)
1
,
4
5
0
(
1
6
,
6
7
5
)
(
1
6
,
6
7
5
)
(
6
6
9
)
(
1
7
,
3
4
4
)
(
(
3
3
(5,355)
9
4
,
,
6
0
7
6
2
1
)
)
(39,672)
(246,705)
-
-
-
-
-
-
-
(8,769)
9,893
-
-
-
-
-
-
-
9,893
(
1
2
,
0
5
-
5
)
-
6
,
9
6
1
-
-
5
,
0
7
5
1
5
,
8
5
8
,
4,538
7
0
5
4
-
(39,672)
-
-
-
7
1
,
2
3
0
4
,
1
,
9
,
6
4
,
6
4
,
6
,
5
,
1
5
,
9
Notes to the financial statements are included on pages 38 to 78
9
1
9
9
1
8
5
8
8
9
3
1
2
4
1
8
8
9
2
7
0
7
5
9
6
1
(
5
,
0
0
1
)
(
8
,
7
6
9
)
334,399
22,324
(5,355)
(39,672)
(246,705)
64,991
i
7,054
C
o
n
n
t
t
e
r
-
r
o
e
s
t
l
l
i
a
c
q
u
i
s
i
t
i
o
n
n
g
-
-
-
A
-
t
t
r
i
b
u
t
a
b
-
l
e
-
-
t
o
e
q
u
i
t
y
N
o
n
-
A
c
c
u
m
u
l
a
t
e
d
l
h
o
d
e
r
s
o
f
c
o
n
t
r
o
l
l
i
n
g
(5,001)
64,991
N
o
n
-
64,991
(8,769)
9,893
1,124
4,927
188
71,230
G
r
e
e
n
l
a
n
d
M
i
n
e
r
a
l
s
a
n
d
E
n
e
r
g
y
L
i
m
i
t
e
d
A
n
d
C
o
n
t
r
o
l
l
e
d
E
n
t
i
t
i
e
s
3
1
D
e
c
e
m
b
e
r
2
0
1
3
F
n
a
n
c
i
i
a
l
R
e
p
o
r
t
Notes to the financial statements are included on pages 55 to 95.
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53
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Consolidated statement of cash flows
for the year ended 31 December 2013
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Net cash used in operating activities
Cash flows from investing activities
Interest received
Payments for property, plant and equipment
Payments for exploration and development
Payment related to acquisition of non-controlling interest
Payment for investments
Payment for investments in associates
Proceeds from sale of property, plant and equipment
Proceeds from sale of investments
Proceeds from sale of investments in associates
Proceeds from government grants and rebates
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares/options
Payment for shares/options issue costs
Net cash from financing activities
Net decrease in cash and equivalents
Cash and equivalents at the beginning of the financial year
Cash and equivalents at the end of the
Financial year
Note
23
31 Dec
2013
$' 000
31 Dec
2012
$' 000
24
(4,156)
(4,132)
267
(9)
(2,332)
-
-
(10)
3
1
-
566
(1,514)
188
-
188
(5,458)
10,801
114
(5,890)
(5,776)
283
(38)
(6,008)
(5,000)
(245)
-
133
50
(10,825)
17,058
(522)
16,536
(65)
10,866
8
5,343
10,801
Notes to the financial statements are included on pages 55 to 95.
Notes to the financial statements are included on pages 38 to 78
54
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
1. General information
Greenland Minerals and Energy Limited is a public Company listed on the Australian Securities
Exchange, incorporated in Australia and operating in Greenland with its head office in Perth.
Greenland Minerals and Energy Limited registered office and its principal place of business are as
follows:
Registered office
Unit 6, 100 Railway Road Subiaco WA
Principal place of business
Unit 6, 100 Railway Road Subiaco WA
The Company’s principal activities are mineral exploration and evaluation.
2. Significant accounting policies
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with
the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other
requirements of the law.
The financial report includes the consolidated financial statements of the group.
Accounting Standards
include Australian Accounting Standards. Compliance with Australian
Accounting Standards ensures that the financial statements and notes of the Consolidated Group
comply with International Financial Reporting Standards (‘IFRS’). The Consolidated Group is a for-
profit entity for the purpose of preparing the financial statements.
The financial statements were authorised for issue by the directors on 26 March 2014.
Basis of preparation
The financial report has been prepared on the basis of historical cost, except for the revaluation of
certain non-current assets and financial instruments. Cost is based on the fair values of the
consideration given in exchange for assets. All amounts are presented in Australian dollars, unless
otherwise noted.
The Company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998,
and in accordance with that Class Order amounts in the financial report are rounded off to the nearest
thousand dollars, unless otherwise indicated.
Critical accounting judgments and key sources of estimation uncertainty
In the application of the Consolidated Group’s accounting policies, management is required to make
judgments, estimates and assumptions about carrying values of assets and liabilities that are not
readily apparent from other sources. The estimates and associated assumptions are based on
historical experience and other factors that are considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the revision
affects only that period or in the period of the revision and future periods if the revision affects both
current and future periods. Refer to note 3 for a discussion of critical judgements in applying the
entity’s accounting policies, and key sources of estimation uncertainty.
Adoption of new and revised Accounting Standards
In the current period, the Consolidated Group has adopted all of the new and revised Standards and
The following Standards and Interpretations have been adopted in the current year:
-
-
-
-
-
-
AASB 10 – Consolidated Financial Statements
AASB 11 – Joint arrangements
AASB 12 – Disclosure of interest in Other Entities
AASB 127 – Separate Financial Statements (2011)
AASB 128 – Investments in Associates and Joint Ventures (2011)
AASB 13 – Fair value measurement and related AASB 2011-8 Amendments to Australian
Accounting Standards arising from AASB 13
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55
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
-
-
-
-
-
AASB 119 – Employee benefits (2011), AASB 2011-10 Amendments to Australian Accounting
Standards arising from AASB 119 (2011) and AASB 2011-11 Amendments to AASB 119
(2011)
AASB 2011-4 – Amendments to Australian Accounting Standards arising from the
Consolidation and Joint Arrangement Standards
AASB 2011-9 – Amendments to Australian Accounting Standards - Presentation of other
comprehensive income
AASB 2012-2 – Amendments to Australian Accounting Standards - Disclosures - Offsetting
financial assets and financial liabilities (Amendments to AASB 7)
AASB 2012-5 – Amendments to Australian Accounting Standards arising from Annual
Improvements 2009-2011 Cycle
The adoption of these standards did not result in changes in accounting policies or adjustments to the
amounts recognised in the financial statements. The standards only affected disclosures in the notes
to the financial statements.
Impact of the application of AASB 10
AASB 10 changes the definition of control such that an investor has control over an investee when a)
it has power of the investee b) it is exposed, or has rights, to variable returns from its involvement with
the investee and c) has the ability to use its power to affect its returns. All three of these criteria must
be met for an investor to have control over an investee. Previously, control was defined as the power
to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The application of AASB 10 has had no impact on the consolidated financial statements.
Impact of the application of AASB 11
AASB 11 deals with how a joint arrangement of which two or more parties have joint control should be
classified and accounted for. Under AASB 11, there are only two types of joint arrangements – joint
operations and joint ventures. The classification of joint arrangements under AASB 11 is determined
based on the rights and obligations of parties to the joint arrangements by considering the structure,
the legal form of the arrangements, the contractual terms agreed by the parties to the arrangement,
and when relevant, other facts and circumstances. A joint operation is a joint arrangement whereby
the parties that have joint control of the arrangement (i.e joint operators) have rights to the assets,
and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement
whereby the parties that have joint control of the arrangement (i.e joint venturers) have rights to the
net assets of the arrangement. Previously, AASB 31 contemplated three types of joint arrangements –
jointly controlled entities, jointly controlled operations and jointly controlled assets. The classification
of joint arrangement under AASB 31 was primarily determined based on the legal form of the
arrangement.
The application of AASB 11 has had no impact on the consolidated financial statements.
Impact of the application of AASB 12
AASB 12 is a new disclosure standard and is applicable to entities that have interest in subsidiaries,
joint arrangements, associates and/or unconsolidated structured entities. In general, the application of
AASB 12 has resulted in more extensive disclosures in the consolidated financial statements but this
has not had a material impact on the current year consolidated financial statements.
Impact of the application of AASB 13
The Consolidated Entity has applied AASB 13 for the first time in the current year. AASB 13
establishes a single source of guidance for fair value measurement and disclosures about fair value
measurements. The scope of AASB 13 is broad, the fair value measurement requirements of AASB
13 apply to both financial instrument items and non-financial instrument items for which other AASB
require or permit fair value measurements and disclosures about fair value measurements, except
share-based payment transactions that are within the scope of AASB 2, leasing transactions within
the scope of AASB 17 and measurements that have some similarities to fair value but are not fair
value.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
AASB 13 defines fair value as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction in the principal (or most advantageous) market at the measurement
date under current market conditions. Fair value under AASB 13 is an exit price regardless of whether
that price is directly observable or estimated using another valuation n technique. Also, AASB 13
includes extensive disclosure requirements.
AASB 13 requires prospective application from 1 January 2013. The application of AASB 13 has not
had any material impact on the amounts recognised in the consolidated financial statements.
Impact of the application of AASB 119
In the current year, the Consolidated Entity has applied AASB 119 (as revised in 2011) ‘Employee
Benefits’ and the related consequential amendments for the first time.
AASB 119 (as revised in 2011) changes the accounting for defined benefit plans and termination
benefits.
The application of AASB 119 has had no impact on the consolidated financial statements.
Impact of the application of AASB 2012-2
The Consolidated Entity has applied the amendments to AASB 7 “Disclosures – Offsetting Financial
Assets and Financial Liabilities’ for the first time in the current year. The amendments to AASB 7
require entities to disclose information about rights of offset and related arrangements (such as
collateral posting requirements) for financial instruments under an enforceable master netting
agreement or similar arrangement.
As the Consolidated Entity does not have any offsetting arrangements in place, the application of the
amendments has had no material impact on the disclosures or on the amounts recognised in the
consolidated financial statements.
The Consolidated Entity has not elected to early adopt any new standards or amendments.
At the date of authorisation of the financial report, a number of Standards and Interpretations were on
issue but not yet effective:
At the date of authorisation of the financial report, a number of Standards and interpretations were on
issue but not yet effective:
Standard/Interpretation
Effective for annual
reporting periods
beginning on or after
AASB 9 ‘Financial Instruments’(December 2009) and AASB
a)
2009-11 ‘Amendments to Australian Accounting Standards arising from
AASB 9’
b)
– Mandatory Effective Date of AASB 8 and Transition Disclosure’
AASB 2013-9 ‘Amendments to Australian Accounting Standards – Conceptual
Framework, Materiality and Financial Instruments’
AASB 2012-6 ‘Amendments to Australian Accounting Standards
AASB 1031 ‘Materiality’ (2013)
ASB 2011-4 ‘Amendments to Australian Accounting Standards to Remove
Individual Key Management Personnel Disclosure Requirements’
AASB 2012-3 ‘Amendments to Australian Accounting Standards – Offsetting
Financial Assets and Financial Liabilities’
AASB 2013-3 ‘Amendments to AASB 136 - Recoverable Amount Disclosures
for Non-Financial Assets’
AASB 2013-4 ‘Amendments to Australian Accounting Standards - Novation of
Derivatives and Continuation of Hedge Accounting’
AASB 2013-9 ‘Amendments to Australian Accounting Standards – Conceptual
Framework, Materiality and Financial Instruments’
1 January 2017
1 January 2014
1 July 2013
1 January 2014
1 January 2014
1 January 2014
1 January 2014
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
2. Significant accounting policies (cont’d)
The Directors note that the impact of the initial application of the Standards and Interpretations is not
yet known or is not reasonably estimable. These Standards and Interpretations will be first applied in
the financial report of the Consolidated Entity that relates to the annual reporting period beginning on
or after the effective date of each pronouncement.
The following significant accounting policies have been adopted in the preparation and presentation of
the financial report:
(a) Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and
entities (including special purpose entities) controlled by the Company (its subsidiaries). Control
is achieved where the Company has the power to govern the financial and operating policies of
an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the
consolidated statement of comprehensive income from the effective date of acquisition and up
to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring
their accounting policies into line with those used by other members of the Consolidated Group.
All intra-group transactions, balances, income and expenses are eliminated in full on
consolidation.
Non-controlling interests in subsidiaries are identified separately from the Group’s equity
therein. The interests of non-controlling shareholders may be initially measured either at fair
value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s
identifiable net assets. The choice of measurement basis is made on an acquisition-by-
acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is
the amount of those interests at initial recognition plus the non-controlling interests’ share of
subsequent changes in equity. Total comprehensive income is attributed to non-controlling
interests even if this results in the non-controlling interests having a deficit balance.
Changes in the Consolidated Group’s interests in subsidiaries that do not result in a loss of
control are accounted for as equity transactions. The carrying amounts of the Consolidated
Group’s interests and the non-controlling interests are adjusted to reflect the changes in their
relative interests in the subsidiaries. Any difference between the amount by which the non-
controlling interests are adjusted and the fair value of the consideration paid or received is
recognised directly in equity and attributed to owners of the Company.
(b) Joint venture arrangements
Jointly controlled operations
Where the Consolidated Group is a venturer and so has joint control in a jointly controlled
operation, the Consolidated Group recognises the assets that it controls and the liabilities and
expenses that it incurs, as a party to the joint venture.
(c) Foreign currency
The individual financial statements of each group entity are presented in its functional currency
being the currency of the primary economic environment in which the entity operates. For the
purpose of the consolidated financial statements, the results and financial position of each entity
are expressed in Australian dollars, which is the functional currency of Greenland Minerals and
Energy Limited and the presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other
than the entity’s functional currency are recorded at the rates of exchange prevailing on the
dates of the transactions. At each balance sheet date, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at the balance sheet date. Non-monetary
items carried at fair value that are denominated in foreign currencies are retranslated at the
rates prevailing on the date when the fair value was determined. Non-monetary items that are
measured in terms of historical cost in a foreign currency are not retranslated.
58
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
2. Significant accounting policies (cont’d)
Exchange differences are recognised in profit or loss in the period in which they arise except for:
(cid:31)
exchange differences on monetary items receivable from or payable to a foreign
operation for which settlement is neither planned or likely to occur, which form part of
the net investment in a foreign operation, and which are recognised in the foreign
currency translation reserve and recognised in profit or loss on disposal of the net
investment.
On consolidation, the assets and liabilities of the Consolidated Group’s foreign operations are
translated into Australian dollars at exchange rates prevailing on the balance sheet date.
Income and expense items are translated at the average exchange rates for the period, unless
exchange rates fluctuated significantly during that period, in which case the exchange rates at
the dates of the transactions are used. Exchange differences arising, if any, are classified as
equity and transferred to the Consolidated Group’s foreign currency translation reserve. Such
exchange differences are recognised in profit or loss in the period in which the foreign operation
is disposed.
(d) Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax
(GST), except:
i.
where the amount of GST incurred is not recoverable from the taxation authority, it is
recognised as part of the cost of acquisition of an asset or as part of an item of expense;
or
for receivables and payables which are recognised inclusive of GST.
ii.
The net amount of GST recoverable from, or payable to, the taxation authority is included as
part of receivables or payables.
Cash flows are included in the cash flow statement on a gross basis. The GST component of
cash flows arising from investing and financing activities which is recoverable from, or payable
to, the taxation authority is classified within operating cash flows.
(e) Revenue
Revenue is measured at the fair value of the consideration when received or receivable.
Interest revenue
Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the
effective interest rate applicable, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to that asset’s net carrying amount.
Rental income
Revenue from operating sub-leases is recognised in accordance with the Consolidated Group’s
accounting policy.
(f) Share-based payments
Equity-settled share-based payments with employees and others providing similar services are
measured at the fair value of the equity instrument at the grant date. Fair value is measured by
use of an appropriate valuation method. The expected life used in the model has been adjusted,
based on management’s best estimate, for the effects of non-transferability, exercise
restrictions, and behavioural considerations. Further details on how the fair value of equity-
settled share-based transactions are in note 24.
The fair value determined at the grant date of the equity-settled share-based payments is
expensed on a straight-line basis over the vesting period, based on the Consolidated Group’s
estimate of equity instruments that will eventually vest.
At each reporting date, the Consolidated Group revises its estimate of the number of equity
instruments expected to vest. The impact of the revision of the original estimates, if any, is
recognised in profit or loss over the remaining vesting period, with corresponding adjustment to
the equity-settled employee benefits reserve.
Equity-settled share-based payment transactions with other parties are measured at the fair
value of the goods and services received, except where the fair value cannot be estimated
reliably, in which case they are measured at the fair value of the equity instruments granted,
measured at the date the entity obtains the goods or the counterparty renders the service.
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59
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
2. Significant accounting policies (cont’d)
(g)
Income tax
Current tax
Current tax is calculated by reference to the amount of income taxes payable or recoverable in
respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws
that have been enacted or substantively enacted by reporting date. Current tax for current and
prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).
Deferred tax
Deferred tax is accounted for using the balance sheet liability method. Temporary differences
are differences between the tax base of an asset or liability and its carrying amount in the
balance sheet. The tax base of an asset or liability is the amount attributed to that asset or
liability for tax purposes.
In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred
tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be
available against which deductible temporary differences or unused tax losses and tax offsets
can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary
differences giving rise to them arise from the initial recognition of assets and liabilities (other
than as a result of a business combination) which affects neither taxable income nor accounting
profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary
differences arising from the initial recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with
investments in subsidiaries and interests in joint ventures except where the Consolidated Group
is able to control the reversal of the temporary differences and it is probable that the temporary
differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible
temporary differences associated with these investments and interests are only recognised to
the extent that it is probable that there will be sufficient taxable profits against which to utilise the
benefits of the temporary differences and they are expected to reverse in the foreseeable future.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
period(s) when the asset and liability giving rise to them are realised or settled, based on tax
rates (and tax laws) that have been enacted or substantively enacted by reporting date. The
measurement of deferred tax liabilities and assets reflects the tax consequences that would
follow from the manner in which the Consolidated Group expects, at the reporting date, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the
same taxation authority and the Company/Consolidated Group intends to settle its current tax
assets and liabilities on a net basis.
Current and deferred tax for the period
Current and deferred tax is recognised in profit or loss, except when it relates to items credited
or debited directly to equity, in which case the deferred tax is also recognised directly in equity,
or where it arises from the initial accounting for a business combination, in which case it is taken
into account in the determination of goodwill or excess.
(h) Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly
liquid investments that are readily convertible to known amounts of cash, which are subject to
an insignificant risk of changes in value and have a maturity of three months or less at the date
of acquisition.
(i)
Financial assets
Financial assets are recognised and derecognised on trade date where the purchase or sale of
a financial asset is under a contract whose terms require delivery of the financial asset within
the timeframe established by the market concerned, and are initially measured at fair value, net
of transaction costs except for those financial assets classified as at fair value through profit or
loss which are initially measured at fair value.
Financial assets are classified into the following specified categories: ‘Financial assets at fair
value through profit and loss (FVTPL)’, ‘available-for-sale’ financial assets, and ‘loans and
receivables’. The classification depends on the nature and purpose of the financial assets and is
determined at the time of initial recognition.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Notes to the accounts
2. Significant accounting policies (cont’d)
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset
and of allocating interest income over the relevant period. The effective interest rate is the rate
that exactly discounts estimated future cash receipts (including all fees on points paid or
received that form an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the financial asset, or, where appropriate, a
shorter period.
Income is recognised on an effective interest rate basis for debt instruments other than those
financial assets ‘at fair value through profit or loss’.
Financial assets at fair value through profit or loss
Financial assets are classified as financial assets at fair value through profit or loss where the
financial asset:
(cid:31)
(cid:31)
has been acquired principally for the purpose of selling in the near future;
is a part of an identified portfolio of financial instruments that the Consolidated Group
manages together and has a recent actual pattern of short-term profit-taking; or
is a derivative that is not designated and effective as a hedging instrument.
(cid:31)
Financial assets at fair value through profit or loss are stated at fair value, with any resultant
gain or loss recognised in profit or loss. The net gain or loss recognised in profit or loss
incorporates any dividend or interest earned on the financial asset. Fair value is determined in
the manner described in note 10.
Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that
are not quoted in an active market are classified as ‘loans and receivables’. Loans and
receivables are measured at amortised cost using the effective interest method less impairment.
Interest income is recognised by applying the effective interest rate.
Impairment of financial assets
Financial assets are assessed for indicators of impairment at each reporting date. Financial
assets are impaired where there is objective evidence that as a result of one or more events that
occurred after the initial recognition of the financial asset the estimated future cash flows of the
investment have been impacted.
For financial assets carried at amortised cost, the amount of the impairment is the difference
between the asset’s carrying amount and the present value of estimated future cash flows,
discounted at the original effective interest rate.
The carrying amount of financial assets including uncollectible trade receivables is reduced by
the impairment loss through the use of an allowance account.
Subsequent recoveries of amounts previously written off are credited against the allowance
account. Changes in the carrying amount of the allowance account are recognised in profit or
loss.
With the exception of available-for-sale equity instruments, if, in a subsequent period, the
amount of the impairment loss decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised, the previously recognised impairment loss
is reversed through profit or loss to the extent the carrying amount of the receivable at the date
the impairment is reversed does not exceed what the amortised cost would have been had the
impairment not been recognised.
In respect of available-for-sale equity instruments, any subsequent increase in fair value after an
impairment loss is recognised directly in equity.
Derecognition of financial assets
The Consolidated Group de-recognises a financial asset only when the contractual rights to the
cash flows from the asset expire, or it transfers the financial asset and substantially all the risks
and rewards of ownership of the asset to another entity. If the Consolidated Group neither
transfers nor retains substantially all the risks and rewards of ownership and continues to control
the transferred asset, the Consolidated Group recognises its retained interest in the asset and
an associated liability for amounts it may have to pay. If the Consolidated Group retains
substantially all the risks and rewards of ownership of a transferred financial asset, the
Consolidated Group continues to recognise the financial asset and also recognises a
collateralised borrowing for the proceeds received.
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61
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
2. Significant accounting policies (cont’d)
(j)
Property, plant and equipment
Plant and equipment and leasehold improvements are stated at cost less accumulated
depreciation and impairment. Cost includes expenditure that is directly attributable to the
acquisition of the item. In the event that settlement of all or part of the purchase consideration is
deferred, cost is determined by discounting the amounts payable in the future to their present
value as at the date of acquisition.
Depreciation on plant and equipment is calculated on a diminishing value basis so as to write off
the net cost or other devalued amount of each asset over its expected useful life to its estimated
residual value. Leasehold improvements are depreciated over the period of the lease or
estimated useful life, whichever is the shorter, using the diminishing value method. The
estimated useful lives, residual values and depreciation method are reviewed at the end of each
annual reporting period, with the effect of any changes recognised on a prospective basis.
Assets held under finance leases are depreciated over their expected useful lives on the same
basis as owned assets or, where shorter, the term of the relevant lease.
The gain or loss arising on disposal or retirement of an item of property, plant and equipment is
determined as the difference between the sales proceeds and the carrying amount of the asset
and is recognised in profit or loss.
The following useful lives are used in the calculation of depreciation:
Leasehold improvements
Plant and equipment
Buildings
10 – 15 years
4 – 10 years
20 years
(k) Leased assets
Leases are classified as finance leases when the terms of the lease transfer substantially all the
risks and rewards incidental to ownership of the leased asset to the lessee. All other leases are
classified as operating leases.
Group as lessor
Rental income from operating leases is recognised on a straight-line basis over the term of the
relevant lease. However, contingent rentals arising under operating leases are recognised as
income in a manner consistent with the basis on which they are determined.
Initial direct costs incurred in negotiating and arranging an operating lease are added to the
carrying amount of the leased asset and recognised on a straight-line basis over the lease term.
(l) Employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries,
annual leave, long service leave, and sick leave when it is probable that settlement will be
required and they are capable of being measured reliably.
Liabilities recognised in respect of short-term employee benefits, are measured at their nominal
values using the remuneration rate expected to apply at the time of settlement.
Liabilities recognised in respect of long-term employee benefits, are measured as the present
value of the estimated future cash outflows to be made by the Consolidated Group in respect of
services provided by employees up to reporting date.
(m) Financial instruments issued by the Consolidated Group
Debt and equity instruments
Debt and equity instruments are classified as either liabilities or as equity in accordance with the
substance of the contractual arrangement. An equity instrument is any contract that evidences a
residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments
issued by the Consolidated Group are recorded at the proceeds received, net of direct issue
costs.
Financial liabilities
Financial liabilities are classified as either financial liabilities ‘at fair value through profit or loss’
or other financial liabilities.
62
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
2. Significant accounting policies (cont’d)
Other financial liabilities
Other financial liabilities, including borrowings, are initially measured at fair value, net of
transaction costs.
Other financial liabilities are subsequently measured at amortised cost using the effective
interest method, with interest expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant period. The effective interest rate is the rate
that exactly discounts estimated future cash payments through the expected life of the financial
liability, or, where appropriate, a shorter period.
(n)
Impairment of long-lived assets excluding goodwill
At each reporting date, the Consolidated Group reviews the carrying amounts of its assets to
determine whether there is any indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Consolidated Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs. Where a reasonable and
consistent basis of allocation can be identified, corporate assets are also allocated to individual
cash-generating units, or otherwise they are allocated to the smallest group of cash-generating
units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-
generating unit) 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 (cash-generating unit)
in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
(o) Capitalisation of exploration and evaluation 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) the rights to tenure of the area of interest are current; and
(ii) 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 amortisation 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.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
2. Significant accounting policies (cont’d)
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 (or 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 is 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.
(p) Provisions
Provisions are recognised when the Consolidated Group has a present obligation (legal or
constructive) as a result of a past event, it is probable that the Consolidated Group will be
required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle
the present obligation at reporting date, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured using the cashflows estimated to
settle the present obligation, its carrying amount is the present value of those cashflows.
When some or all of the economic benefits required to settle a provision are expected to be
recovered from a third party, the receivable is recognised as an asset if it is virtually certain that
reimbursement will be received and the amount of the receivable can be measured reliably.
3: Critical accounting estimates and judgments
In preparing this Financial Report the Consolidated Group has been required to make certain
estimates and assumptions concerning future occurrences. There is an inherent risk that the resulting
accounting estimates will not equate exactly with actual events and results.
a)
b)
Significant accounting judgments
In the process of applying the Consolidated Group's accounting policies, management has
made the following judgments, apart from those involving estimations, which have the most
significant effect on the amounts recognised in the financial statements:
Capitalisation of exploration and evaluation expenditure
The Consolidated Group has capitalised significant exploration and evaluation expenditure on
the basis either that this is expected to be recouped through future successful development or
alternatively sale of the Areas of Interest. If ultimately the area of interest is abandoned or is
not successfully commercialised, the carrying value of the capitalised exploration and
evaluation expenditure would be written down to its recoverable amount.
Deferred tax assets
The Consolidated Group expects to have carried forward tax losses which have not been
recognised as deferred tax assets as it is not considered sufficiently probable at this point in
time, that these losses will be recouped by means of future profits taxable in the relevant
jurisdictions.
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates
and assumptions of future events. The key estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of certain assets and liabilities
within the next annual reporting period are:
64
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
3: Critical accounting estimates and judgments (cont’d)
Impairment of capitalised exploration and evaluation expenditure
The future recoverability of capitalised exploration and evaluation expenditure is dependent on
a number of factors, including whether the Consolidated Group decides to exploit the related
lease itself or, if not, whether it successfully recovers the related exploration and evaluation
asset through sale.
Factors that could impact the future recoverability include the level of reserves and resources,
future technological changes, costs of drilling and production, production rates, future legal and
political changes, (including obtaining the right to mine and changes to environmental
restoration obligations) and changes to commodity prices.
As at 31 December 2013, the carrying value of capitalised exploration expenditure is
$64,859,287 (2012: $53,642,412) refer to note 12.
4: Segment information
AASB8 Operating Segments requires operating segments to be identified on the basis of internal
reports about components of the entity that are regularly reviewed by the managing director (chief
operating decision maker) in order to allocate resources to the segment and assess performance.
The Consolidated Group undertakes mineral exploration and evaluation in Greenland.
Given the Consolidated Group has one reporting segment, operating results and financial information
are not separately disclosed in this note.
5: Revenue
Interest - Bank deposits
Other revenue
6: Expenditure
(a) Director and employee benefits
Directors’ fees
Directors’ and employee salary and wage expense
Directors’ and employee post-employment benefits
Directors’ and employee share based payments
31 Dec
2013
$' 000
31 Dec
2012
$' 000
256
41
297
274
77
351
31 Dec
2013
$' 000
31 Dec
2012
$' 000
(237)
(1,218)
(72)
(4,396)
(5,923)
(245)
(2,594)
(158)
(6,208)
(9,205)
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Notes to the accounts
6: Expenditure (cont’d)
(b) Professional fees:
Audit, accounting and taxation expense
Legal fess
Marketing and public relations
Consulting
(c) Occupancy expense:
Rent
Electricity
(d) Listing costs:
Stock exchange fees
Share registry fees
(e) Write-down of royalty acquisition
Write-down of royalty acquisition (i)
(f) Other expenses
Loss on disposal of investments
Changes in fair value of held for trading assets
Gain/(Loss) on foreign currency exchange
Impairment of capitalised exploration and evaluation
expenditure
Depreciation expense
Insurance
Operating lease rental expenses
Travel expenses
Payroll tax
Printing, stationery and office costs
Telephone
Other expenses
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
31 Dec
2013
$' 000
31 Dec
2012
$' 000
(203)
(91)
(166)
(63)
(523)
(382)
(23)
(405)
(65)
(37)
(102)
-
-
(15)
-
1
(871)
(188)
(129)
(5)
(171)
(69)
(27)
(73)
(566)
(215)
(388)
(276)
(345)
(1,224)
(375)
(34)
(409)
(150)
(67)
(217)
(5,075)
(5,075)
(75)
(27)
1
-
(232)
(145)
(10)
(370)
(195)
(58)
(111)
(343)
(i)
(1,565)
In October 2012 the Company finalised the acquisition of a royalty over future production from the
Kvanefjeld project, through the issue of 17,500,000 shares, refer to note 16. The rights to this
royalty were previously held by an external party. Any future payments under the royalty would have
been a liability to the Consolidated Group and recognised as an expense in the relevant future
period. The acquisition of the royalty has reduced the future potential costs to the Consolidated
Group and hence satisfied the recognition criteria for intangible assets as per AASB 138 “Intangible
assets”. The royalty was assessed for recoverability at the date of acquisition with a write-down
recognised based on the present stage of the development of the project. Therefore the value of the
royalty acquisition has been recognised as an expense in the year ended 31 December 2012.
(2,113)
66
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Notes to the accounts
7: Income tax
(a) Tax expense
Current tax
Deferred tax
b) The prima facie income tax benefit on pre-tax accounting
loss from operations reconciles to the income tax expenses
in the financial statements as follows:
Loss for period
Prima facie tax benefit on loss at 30%
add:
Tax effect of:
other non-allowable items
provisions and accruals
accrued income
revenue loss not recognised
Less:
Tax effect of:
exploration, evaluation and development expenditure
provisions and accruals
capital expenditure write off
other deductions
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
31 Dec
2013
$' 000
31 Dec
2012
$' 000
-
-
-
-
-
-
-
-
(8,769)
(2,631)
(17,344)
(5,203)
1,698
43
9
1,981
3,731
(818)
(157)
(120)
(5)
(1,100)
3,475
177
11
4,283
7,946
(2,309)
(112)
(319)
(3)
(2,743)
Income tax expense
-
-
The following deferred tax balances have not been
recognised:
Deferred tax assets:
at 30%
Carry forward revenue losses
Capital expenditure costs
Less: offset against deferred tax liability
26,056
706
26,762
(11,665)
15,097
24,075
1,064
25,139
(10,849)
14,290
The above deferred tax assets will only be recognised if;
(i)
(ii)
(iii)
The Consolidated Group derives future assessable income of a nature and amount sufficient
to enable the benefits to be utilised,
The Consolidated Group continues to comply with the conditions of deductibility imposed by
law, and
No change in income tax legislation adversely affects the Consolidated Group’s ability to
utilise the benefits.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Notes to the accounts
7: Income tax (cont’d)
Deferred tax liabilities (not recognised):
at 30%
Exploration, evaluation and development expenditure
Accrued income
less offset against deferred tax assets
8: Cash and equivalents
Cash at bank
Cash on deposit at call
Cash on deposit
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
31 Dec
2013
$' 000
31 Dec
2012
$' 000
11,656
9
11,665
(11,665)
-
10,838
11
10,849
(10,849)
-
Dec
2013
$' 000
Dec
2012
$' 000
253
4,665
425
5,343
123
10,259
419
10,801
The Consolidated Group’s financial risk management objectives and policies are discussed further at
note 25.
9: Trade and other receivables
(a) Current
Accrued interest
GST refundable
Payroll tax refund
Dec
2013
$' 000
Dec
2012
$' 000
18
31
-
49
29
280
17
326
(i) Trade debtors and sundry debtors are non-interest bearing, unsecured and generally on 30
day terms. As at 31 December 2013 and 31 December 2012 no amounts were past due but
not impaired. Additionally there was no allowance for doubtful debts at either 31 December
2013 or 31 December 2012.
68
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Notes to the accounts
10: Other assets
Deposit bonds
Prepayments
Investments carried at fair value:
Shares in listed companies – fair value (i)
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Dec
2013
$' 000
Dec
2012
$' 000
96
179
-
275
103
193
15
311
(i)
Movement in market value is based on the closing price on the Australian Securities
Exchange, of the shares held on the reporting date.
11: Property, plant and equipment
Plant and Equipment (cost)
Accumulated depreciation
Leasehold improvements (cost)
Accumulated depreciation
Buildings
Accumulated depreciation
Dec
2013
$' 000
Dec
2012
$' 000
1,616
(906)
99
(33)
844
(115)
1,567
(734)
99
(26)
694
(60)
1,505
1,540
(a) Movements in the carrying amounts
Movement in the carrying values for each class of property, plant and equipment between the
beginning and the end of the period.
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69
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Notes to the accounts
11: Property, plant and equipment (cont’d)
Plant and Equipment
Carrying value at beginning of year
Acquisitions
Disposals
Effects of currency translation
Depreciation expense
Carrying value at end of year
Leasehold improvements
Carrying value at beginning of year
Depreciation expense
Carrying value at end of year
Buildings
Acquisitions
Effects of currency translation
Depreciation
Carrying value at end of year
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Dec
2013
$' 000
Dec
2012
$' 000
833
9
(3)
15
(144)
710
73
(7)
66
634
132
(37)
729
985
38
-
-
(190)
833
80
(7)
73
669
-
(35)
634
Total property, plant and equipment carrying value at end of
period
1,505
1,540
12: Capitalised exploration and evaluation expenditure
Balance at beginning of year
Exploration and/or evaluation phase in
current period:
Capitalised expenses
Effects of currency translation (i)
Less:
Impairment of capitalised expenditure (iii)
Effects of currency translation (i)
Balance at end of year
Dec
2013
$' 000
Dec
2012
$' 000
53,642
46,808
2,728
9,360
65,730
(871)
-
64,859
5,368
-
52,176
1,466
53,642
(i) The Kvanefjeld Project EL 2010/02 is held by Greenland Minerals and Energy (Trading) A/S, the
100% held Greenlandic subsidiary. As a result all capitalised exploration and evaluation
expenditure has been recognised in the Greenlandic subsidiary and at reporting date has been
translated at the closing Australian dollar/Danish kroner exchange rate with the movement being
recognised in the foreign currency translation reserve.
70
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
12: Capitalised exploration and evaluation expenditure (cont’d)
(ii)
(iii)
(iv)
(v)
During the year the Company directly held 100% interest in Greenland exploration licenses
EL 2011/26 and EL 2011/27.
EL 2011/23 was relinquished during the year and the capitalised costs impaired. This
exploration license was on the east coast of Greenland and unrelated to the Kvanefjeld
project.
The recoverability of the Consolidated Group’s carrying value of the capitalised exploration
and evaluation expenditure relating to the Kvanefjeld Project and EL 2011/26 and EL 2011/27
is subject to the successful development and exploitation of the exploration property. The
Consolidated Group will carry out a feasibility study including among other areas,
environmental and social impact studies, with the intention of applying for the right to mine.
The Consolidated Group and the Greenland Government are currently in consultations with
stakeholders, regarding the social and environmental aspects of the project. Based on this
combined with the developments outlined above, the Consolidated Group has a positive
outlook regarding its ability to successfully develop the project, as a multi element project
including uranium. The Consolidated Group will continue to explore and evaluate the project,
with the view of moving to development, subject to approval to mine rare earth elements with
uranium. This will be done in a manner that is in accordance with both Greenland
Government and local community expectations.
Table of exploration licenses
Exploration Licence
EL 2010/02
Location
Southern Greenland
EL 2011/26
Southern Greenland
EL 2011/27
Southern Greenland
EL 2013/05 (i)
Western Greenland
Ownership
100% held by Greenland Minerals and
Energy (Trading) A/S
100% held by Greenland Minerals and
Energy Limited
100% held by Greenland Minerals and
Energy Limited
100% held by Greenland Minerals and
Energy Limited
(i)
Unrelated exploration license to the Kvanefjeld project that at the year ended 31 December
2013, the Consolidated Group had incurred no expenditure on.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Notes to the accounts
13: Trade and other payables
Accrued expenses (i)
Trade creditors (ii)
Sundry creditors (ii)
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Dec
2013
$' 000
Dec
2012
$' 000
163
282
98
543
329
703
208
1,240
(i)
(ii)
(iii)
Accrued expenses related to services and goods provided to the Consolidated Group prior to
the period end, but the Consolidated Group was not charged or invoiced for these goods and
services by the supplier at period end. The amounts are generally payable and paid within 30
days and are non-interest bearing.
Trade and sundry creditors are non-interest bearing with the exception of amounts owed on
corporate credit cards and after 30 days interest is charged at rates ranging between 15%
and 18%. All trade and sundry creditors are generally payable on terms of 30 days.
The financial risk related to trade and other payables is managed by ensuring sufficient at call
cash balances are maintained by the Consolidated Group to enable the settlement in full of all
amounts as and when they become due for payment.
14: Other liabilities
EURARE grant advanced payment (i)
Dec
2013
$' 000
125
125
Dec
2012
$' 000
-
-
(i) Greenland Minerals and Energy (Trading) A/S is a participant in the EURARE Project, a
European Union initiated project to assess the development and exploitation of Europe’s rare
earth deposits. As a participant in the EURARE Project Greenland Minerals and Energy
(Trading) A/S has received an advanced grant payment, which is to be applied against approved
EURARE Project expenses. The EURARE grant advance payment is the balance of the grant
received as at 31 December 2013 that had not been applied to approved project expenses, but is
expected to be applied against expenses incurred in the future period.
15: Provisions - Current
Provision for annual leave
Provisions – Non-Current
Provision for long service leave
72
Dec
2013
$' 000
Dec
2013
$' 000
Dec
2012
$' 000
144
144
331
331
Dec
2012
$' 000
30
30
89
89
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
16: Issued capital
Changes to the then Corporations Law abolished the authorised capital and par value concept in
relation to share capital from 1 July 1998. Therefore, the Consolidated Group does not have a limited
amount of authorised capital and issued shares do not have a par value.
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Dec 2013
Dec 2012
No
' 000
567,937
$' 000
334,399
No
' 000
416,390
$' 000
291,826
-
-
-
-
-
-
50,000
15,000
6,859
2,057
17,500
5,075
5,885
2,102
2,363
753
-
-
74,825
21,700
750
-
574,572
449
336,950
-
-
567,937
-
(2,012)
334,399
Balance brought forward
Issue of ordinary shares through capital
raisings
Issue of ordinary shares through share
purchase plan
Issue of ordinary shares as consideration
for acquisition of royalty (refer note 6f)
Issue of ordinary shares as consideration
for share based payments
Issue of ordinary shares in relation to the
acquisition of the non-controlling interest in
the Kvanefjeld project (refer to note 16)
Issue of ordinary shares as a result of
exercised options:
$0.25 exercise price options
Less costs associated with shares issued
Balance at end of financial year
17: Reserves
a) Option reserve
Balance brought forward
Issue of options to directors (i)
Issue of options to senior management (i)
Issue of performance rights to directors (i)
Issue of performance rights to senior management (i)
Issue of performance rights to staff (i)
Issue of employee rights to senior management (i)
Issue of employee rights to staff (i)
Issue of $0.75 exercise price options in relation to the acquisition
of the non-controlling interest in the Kvanefjeld project
Issue of $0.60 exercise price options on the basis of one option
for every two $0.30 shares issued
Recognition of shares issued in lieu of salary
Transfer to share capital – shares issued in lieu of salary
Options exercised – transferred to share capital:
$0.25 exercise price options
Balance at end of financial year
(i) Refer to note 24 for further information.
Dec
2013
$' 000
Dec
2012
$' 000
22,324
213
92
683
175
510
140
269
-
-
1,912
(1,169)
(261)
24,888
14,997
854
367
2,381
701
1,905
-
-
307
812
-
-
-
22,324
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
17: Reserves (cont’d)
The option reserve arises from the grant of share options and performance rights to executives,
employees and consultants. Amounts are transferred out of the reserve and into issued capital when
the options are exercised. Further information about share-based payments to directors and senior
management is made in note 24 to the financial statements.
b) Foreign currency translation reserve
Balance brought forward
Current period adjustment from currency translation of foreign
controlled entities
Balance at end of year
Dec
2013
$' 000
Dec
2012
$' 000
(5,355)
(6,783)
9,893
4,538
1,428
(5,355)
The foreign currency translation reserve records the foreign currency differences arising from the
translation of the foreign subsidiary’s accounts from Danish Kroner, the functional currency of
Greenland Minerals and Energy (Trading) A/S, to Australian dollars.
c) Non-controlling interest acquisition reserve
Balance brought forward
Settlement consideration – cash (i)
Settlement consideration – shares (i)
Settlement consideration – options (i)
Transfer non-controlling interest carrying value
Balance at end of year
Dec
2013
$' 000
(39,672)
-
-
-
-
(39,672)
Dec
2012
$' 000
(5,611)
(5,000)
(21,700)
(307)
(7,054)
(39,672)
The non-controlling interest acquisition reserve records the acquisition of the non-controlling interests
in Greenland Minerals and Energy (Trading) A/S.
(i)
In October 2012, the Company finalised the settlement acquisition of the outstanding 39% of
the issued capital of Greenland Minerals and Energy (Trading) A/S and moved to 100%
ownership of the subsidiary. As consideration for settlement and in addition to the deposit
amounts recognised in the previous year, the Company paid $5,000,000, issued 74,824,997
shares and 4,999,520 options with an exercise price of $0.75.
74
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Notes to the accounts
17: Reserves (cont’d)
d) Total reserves
Option reserve
Foreign currency translation reserve
Non-controlling interest acquisition reserve
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Dec
2013
$' 000
24,888
4,538
(39,672)
(10,246)
Dec
2012
$' 000
22,324
(5,355)
(39,672)
(22,703)
18: Dividends
No dividends have been proposed or paid during the period or comparative period.
19: Accumulated losses
Balance at beginning of financial year
Loss attributable to members of parent entity
Related income tax
Balance at end of financial year
20: Loss per share
Basic loss per share
From continuing operations
Diluted loss per share
From continuing operations
Dec
2013
$' 000
(246,705)
(8,769)
-
(255,474)
Dec
2012
$' 000
(230,030)
(16,675)
-
(246,705)
Dec
2013
Cents
Per share
Dec
2012
Cents
Per share
1.53
1.53
3.72
3.72
Basic and diluted loss per share
The loss and weighted average number of ordinary shares used in the calculation of the basic and
diluted loss per share are as follows;
Loss for year ($)
Weighted average number of shares used
in the calculation of basic and diluted loss
per share (Number)
Dec
2013
8,768,670
Dec
2012
16,675,104
572,142,187
488,501,056
(i)
There were 52,454,211 potential ordinary shares on issue at 31 December 2013 (31
December 2012: 55,378,711) that are not dilutive and are therefore excluded from the
weighted average number of ordinary shares and potential ordinary shares used in the
calculation of diluted earnings per share.
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75
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
21: Commitments for expenditure
Exploration commitments: EL 2010/02 is located in Greenland. The tenement expenditure incurred
during the year ended 31 December 2013 and prior years was in excess of the minimum expenditure
required to maintain the tenement in good standing. The excess expenditure can be carried forward
for 5 years. The amount carried forward will be sufficient to meet the minimum expenditure
requirements over this period.
The Consolidated Group has recognised sufficient estimated expenditure to keep exploration licenses
EL 2011/23, El 2011/26 and El2011/27 in good standing.
Tenement commitments
Not longer than 1 year
Longer than 1 year but not longer than 5 years
Longer than 5 years
Operating leases (i)
Not longer than 1 year
Longer than 1 year but not longer than 5 years
Longer than 5 years
Other contractual obligations (ii)
Not longer than 1 year
Longer than 1 year but not longer than 5 years
Longer than 5 years
Dec
2013
$’000
Dec
2012
$’000
-
1,000
-
1,000
198
17
-
215
140
-
-
140
250
1,000
-
1,250
210
17
-
227
-
160
-
160
(i)
(ii)
The only commitments for operating leases are lease rentals on the Consolidated
Group’s Perth head office premises. The current lease expires on the 14 February 2015,
and is non-cancelable, with a 2 year renewal option. No liabilities have been recognised
in relation to operating leases at 31 December 2013 or 31 December 2012.
Relates to ongoing contractual obligations with Gravner Limited for corporate advisory
services.
22: Subsidiaries
Name of subsidiary
Chahood Capital Limited
Greenland Minerals and Energy (Trading) A/S (i)
Country
of incorporation
Isle of Man
Greenland
Ownership interest
Dec
Dec
2012
2013
%
%
100
100
100
100
76
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
23: Notes to the statement of cash flows
Reconciliation of loss for the period to net cash flows from operating activities.
Loss for the year
(Gain) loss on sale or disposal of non-current
assets
(Gain) loss on revaluation of fair value through
profit and loss of financial assets
Depreciation
Equity-settled share-based payments
Royalty acquisition
Impairment of capitalised exploration and evaluation expenditure
Interest income received and receivable
(Increase)/decrease in assets
Trade and other receivables
Increase (decrease) in liabilities
trade and other payables
in provisions
Net cash used in operating activities
Year ended
31 Dec
2013
$' 000
Year ended
31 Dec
2012
$' 000
(8,769)
(17,344)
15
-
188
4,806
-
871
(256)
287
75
27
231
6,207
5,075
-
(274)
51
(1,028)
(246)
(4,132)
236
(60)
(5,776)
The Consolidated Group has not entered into any other non-cash financing or investing activities.
24: Share based payments
In addition to the share based payments discussed elsewhere within this this note, the following
share-based payment arrangements were entered into in the year ended 31 December 2013:
Date
Issue Price
Number
1,128,571
1,261,949
897,334
744,833
897,344
955,471
25/02/2013 (i)
25/02/2013 (ii)
25/02/2013 (iii)
15/05/2013 (iv)
01/10/2013 (iii)
01/11/2013 (iv)
Shares issued to debtors.
Shares issued to employee in lieu of salary and other employment entitlements.
Shares issued to employees as termination payment.
Shares issued in lieu of salary.
No share based payments other than as discussed elsewhere within this note were entered
into during the prior year.
$0.39
$0.39
$0.39
$0.29
$0.37
$0.28
Value
$440,143
$492,160
$349,960
$216,001
$335,575
$267,642
(i)
(ii)
(iii)
(iv)
(v)
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77
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
24: Share based payments (cont’d)
Shares in lieu of salaries
In February 2013 as part of a strategy to preserve cash reserves, directors, senior management and a
number of other staff agreed to a reduction in salary and other employment entitlements that would
have been payable by the Company in cash. As compensation for agreeing to these reductions, the
Company agreed to issue shares to the individuals concerned. The number of shares to be issued
was established by calculating the dollar value of foregone employment entitlements and issuing the
equivalent value in shares based on a share price of $0.30. The shares are to be issued in four
tranches over a two year period except for Michael Hutchinson who will be issued shares over three
tranches.
The shares that have been and are to be issued to directors were approved by shareholders at the
Company’s Annual General Meeting on 15 May 2013.
In accordance with AASB2, the value of the shares in lieu of salaries has been recognised as the fair
value of the shares issued in the first two tranches during the year ended 31 December 2013 and a
proportion of the fair value of the remaining two trances to be issued in the year ended 31 December
2014. All four tranches require continuous service through to the respective vesting date. As a result
of this vesting profile, 79% of the total fair value of the four tranches has been recognised at 31
December 2013, with the balance to be recognised during the year ended 31 December 2015.
Shares issued to staff in lieu of salary and other employment entitlements during the year ended 31
December 2013
Tranche
Number
Grant date fair
value
$
Pro-rata vesting
period value
recognised during
the year ended
31 Dec 2013
1
2
3
4
897,334
906,344
915,445
923,733
3,642,856
345,474
340,060
343,567
346,733
1,375,834
345,473
340,060
266,839
185,200
1,137,572
Shares issued to directors in lieu of salary during the year ended 31 December 2013
Tranche
Number
Grant date fair
value
$
Pro-rata vesting
period value
recognised during
the year ended
31 Dec 2013
1
2
3
4
744,833
955,471
955,470
955,467
3,611,241
216,001
267,642
267,758
267,874
1,019,275
216,001
267,642
175,955
115,376
774,974
Employee Rights
In September 2013 the Remuneration Committee and the Board approved the Employee Rights Plan
(“ERP”) and approved the issue of Employee Rights under the plan. All employees of the
Consolidated Group were invited to participate in the ERP. The number of rights being offered to
employees was determined by the seniority of the employee, with three levels of seniority being
established and a factor based on the seniority being applied to the employee’s base salary.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
24: Share based payments (cont’d)
The Employee Rights will convert to Ordinary fully paid shares subject to a twelve month continuous
service period vesting condition and in three tranches subject to share price vesting conditions. The
Employee Rights were offered to assist in retaining and to further incentivise employees.
In accepting the offer of the Employee Rights, employees agreed that the Employee Performance
Rights issued in 2011 would be cancelled. At the time the Employee Performance Rights were
cancelled, the fair value of the cancelled rights had been fully expensed.
The Employee Rights were not offer to directors and no directors participated in the Employee Rights
Issue.
The Employee Rights will vest in three tranches based on the Company’s Volume Weighted Average
Share Price (“VWAP”) exceeding price hurdles for 5 consecutive trading days.
Tranche 1 - Will vest upon both the volume weighted average price of Shares being $0.50 or more
for 5 consecutive Trading Days and the employee remaining an employee of the
Company until 30 September 2014.
Tranche 2 - Will vest upon both the volume weighted average price of Shares being $0.75 or more
for 5 consecutive Trading Days and the employee remaining an employee of the
Company until 30 September 2014.
Tranche 3 - Will vest upon both the volume weighted average price of Shares being $1.00 or more
for 5 consecutive Trading Days and the employee remaining an employee of the
Company until 30 September 2014.
No amounts are paid or payable by the recipient on receipt of the performance right. The
performance rights carry neither rights to dividends nor voting rights and are non-transferrable.
The value of the performance rights issued will be recognised as an expense over the expected
service vesting period. The fair value has been established using a binomial model based on the
following variables:
Grant date
Underlying share price at grant date
Maximum life
Expected future volatility
Risk free rate
Tranche1 share price hurdle
Tranche2 share price hurdle
Tranche3 share price hurdle
04/10/2013
$0.27
3 Years
100%
2.84%
$0.50
$0.75
$1.00
Performance rights
On the 23 January 2012, shareholders approved the issue of 1,000,000 un-vested performance rights
to Anthony Ho. These rights were issued to Mr Ho in recognition of the work and his valuable input in
securing the agreement to acquire the remaining 39% interest in the Kvanefjeld project.
The performance rights will vest in three tranches based on the Company’s Volume Weighted
Average Share Price (“VWAP”) exceeding price hurdles for 10 consecutive trading days.
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79
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
24: Share based payments (cont’d)
Tranche 1 - Will vest upon both the volume weighted average price of Shares being $0.75 or more
for 10 consecutive Trading Days and remain an employee of the Company until 30
June 2013.
Tranche 2 - Will vest upon both the volume weighted average price of Shares being $1.00 or more
for 10 consecutive Trading Days and remain an employee of the Company until 30
June 2013.
Tranche 3 - Will vest upon both the volume weighted average price of Shares being $1.50 or more
for 10 consecutive Trading Days and remain an employee of the Company until 30
June 2013.
No amounts are paid or payable by the recipient on receipt of the performance right. The
performance rights carry neither rights to dividends nor voting rights and are non-transferrable.
The Company did not issue any performance rights during the year ended 31 December 2013.
The value of the performance rights issued will be recognised as an expense over the expected
service vesting period. The fair value has been established using a binomial model based on the
following variables:
Grant date
Underlying share price at grant date
Maximum life
Expected future volatility
Risk free rate
Tranche1 share price hurdle
Tranche2 share price hurdle
Tranche3 share price hurdle
23/01/2012
$0.51
3 Years
100%
3.03%
$0.75
$1.00
$1.75
Employee performance rights plan
At the Company’s Annual General Meeting, on 12th May 2011, members approved the implementation
of an Employee Performance Rights Plan (“EPRP”). The plan is a result of a comprehensive
remuneration review the Company conducted, in consultation with independent consultants. The aim
of the plan is to assist in the retention of existing staff and the recruitment of future employees.
Under the EPRP, the Company will issue incentive shares to employees as part of their total
remuneration package. The plan will result in a direct cost saving to the Company through a
reduction in the salary component payable in remuneration packages.
Upon satisfying clearly pre-determined vesting conditions, each right issued under the EPRP will be
convertible into one fully paid ordinary share of the Company. To meet the vesting criteria, the
employee must remain an employee of the Company for a minimum of two years and will convert in
three tranches based on the Company’s Volume Weighted Average Share Price (“VWAP”) exceeding
price hurdles for 10 consecutive trading days.
Tranche 1 - Will vest upon both the volume weighted average price of Shares being $1.50 or more
for 10 consecutive Trading Days and 2 years continuous service for the Company
from 1 April 2011 save that this continuous service vesting hurdle will be deemed to
be satisfied in the event of a change of control of the Company of greater than 50% of
the shares in the Company.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
24: Share based payments (cont’d)
Tranche 2 - Will vest upon both the volume weighted average price of Shares being $1.85 or more
for 10 consecutive Trading Days and 2 years continuous service for the Company
from 1 April 2011 save that this continuous service vesting hurdle will be deemed to
be satisfied in the event of a change of control of the Company of greater than 50% of
the shares in the Company.
Tranche 3 - Will vest upon both the volume weighted average price of Shares being $2.50 or more
for 10 consecutive Trading Days and 2 years continuous service for the Company
from 1 April 2011 save that this continuous service vesting hurdle will be deemed to
be satisfied in the event of a change of control of the Company of greater than 50% of
the shares in the Company.
No amounts are paid or payable by the recipient on receipt of the performance right. The
performance rights carry neither rights to dividends nor voting rights and are non-transferrable.
The Company did not issue any performance rights under the EPRP during the years ended 31
December 2013 or 31 December 2012.
During the current year 4,860,000 performance rights were cancelled, the rights were cancelled on
employees accepting an offer to participate in the issue of employee rights. 590,000 performance
rights were cancelled in the prior year as a result of employees being terminated prior to the service
period vesting condition being satisfied.
The value of the performance rights issued will be recognised as an expense over the expected 2
year service vesting period. The fair value has been established using a binomial model based on the
following variables:
Grant date
Underlying share price at grant date
Maximum life
Expected future volatility
Risk free rate
Tranche1 share price hurdle
Tranche2 share price hurdle
Tranche3 share price hurdle
12/05/2011
$0.97
3 Years
100%
5.03%
$1.50
$1.85
$2.50
Performance rights granted under the EPRP for the year ended 31 December 2013
Tranche
1
2
3
Opening
balance
1 Jan 2013
4,855,000
5,170,000
5,835,000
15,860,000
Number
cancelled or
lapsed during
year ended
31 Dec 2013
1,455,000
1,520,000
1,885,000
4,860,000
Pro-rata vesting
period value
recognised during
the year ended
31 Dec 2013
487,770
436,589
443,345
1,367,704
Balance at
31 Dec 2013
3,900,000
3,900,000
4,200,000
12,000,000
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81
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
24: Share based payments (cont’d)
Performance rights granted under the EPRP for the year ended 31 December 2012
Tranche
1
2
3
Opening
balance
1 Jan 2012
5,000,000
5,325,000
6,125,000
16,450,000
Number
cancelled or
lapsed during
year ended
31 Dec 2012
145,000
155,000
290,000
590,000
Pro-rata vesting
period value
recognised during
the year ended
31 Dec 2012
2,816,507
2,859,010
2,966,368
8,641,885
Balance at
31 Dec 2012
4,855,000
5,170,000
5,835,000
15,860,000
Performance options
At the Company’s Annual General Meeting, in addition to approving the EPRP, members approved
the issue of unvested performance options to certain directors and senior management. The options
have an exercise price of $1.75 and are subject to pre-determined vesting conditions. To meet the
vesting criteria, a two year service period from the grant date must be satisfied and will vest in three
tranches based on the Company’s Volume Weighted Average Share Price (“VWAP”) exceeding price
hurdles for 10 consecutive trading days.
Tranche 1 – Will vest upon both the volume weighted average price of shares being $3.75 or more
for 10 consecutive Trading Days and 2 years continuous service for the Company
from 1 April 2011 save that this continuous service vesting hurdle will be deemed to
be satisfied in the event of a change of control of the Company of greater than 50% of
the shares in the Company.
Tranche 2 – will vest upon both the volume weighted average price of shares being $5.00 or more
for 10 consecutive Trading Days and 2 years continuous service for the Company
from 1 April 2011 save that this continuous service vesting hurdle will be deemed to
be satisfied in the event of a change of control of the Company of greater than 50% of
the shares in the Company.
Tranche 3 – will vest upon both the volume weighted average price of shares being $6.25 or more
for 10 consecutive Trading Days and 2 years continuous service for the Company
from 1 April 2011 save that this continuous service vesting hurdle will be deemed to
be satisfied in the event of a change of control of the Company of greater than 50% of
the shares in the Company.
No amounts are paid or payable by the recipient on receipt of the options. The options are unvested
and unlisted, carry neither rights to dividends nor voting rights and are non-transferrable.
On satisfying the vesting conditions, the options can be exercised by the payment of $1.75 per option
exercise price and on exercising each option will be converted to one fully paid ordinary share in
Greenland Minerals and Energy Limited.
The Company did not issue any performance options during the years ended 31 December 2013 or
31 December 2012.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
24: Share based payments (cont’d)
Performance options granted for the year ended 31 December 2013
Tranche
1
2
3
Opening
balance
1 Jan 2013
2,300,000
2,350,000
2,350,000
7,000,000
Number
cancelled or
lapsed during
year ended
31 Dec 2013
2,300,000
2,350,000
2,350,000
7,000,000
Balance at
31 Dec 2013
Pro-rata vesting
period value
recognised during
the year ended
31 Dec 2013
117,852
104,111
83,237
305,200
-
-
-
-
Performance options granted for the year ended 31 December 2012
Number
cancelled or
lapsed during
year ended
31 Dec 2012
Pro-rata vesting
period value
recognised during
the year ended
31 Dec 2012
471,408
416,444
332,948
305,200
Balance at
31 Dec 2012
2,300,000
2,350,000
2,350,000
-
-
-
-
-
Tranche
1
2
3
Opening
balance
1 Jan 2012
2,300,000
2,350,000
2,350,000
7,000,000
Employee options
The Company did not issue any employee options during the year ended 31 December 2012.
The weighted average fair value of performance rights granted during the financial year is $0.46
(2011: $0.61).
The following options issued to directors and senior management, were exercised during the financial
year ended 31 December 2013:
Date
Number
exercised (i)
Exercise
price
Share price
@ exercise
date
Amount
Paid
$
Amount
unpaid
$
S Bunn
(i)
02/02/2011
-
The number of options exercised relates only to options exercised that were granted as
compensation and recognised in remuneration in prior years.
187,500
750,000
$0.25
$0.30
There were no options exercised by directors or senior management during the previous financial
year ended 31 December 2012.
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83
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
24: Share based payments (cont’d)
Lapsed options
During the current financial year ended 31 December 2013, the following options issued to directors
and senior management lapsed as a result of market-based vesting conditions not being satisfied.
Director/senior
management
R McIllree (i)
J Mair (i)
S Bunn (i)
Number
2,800,000
2,100,000
2,100,000
Value @ grant
date
974,819
733,390
733,390
Lapse date
31/08/2013
31/08/2013
31/08/2013
Value @ lapse
date
-
-
-
(ii) Options lapsed as a result of not meeting vesting conditions prior to the option expiry date.
During the previous financial year ended 31 December 2012, no options issued to directors or senior
management lapsed.
Rights cancelled
During the current financial year ended 31 December 2013, the following un-vested Employee
Performance Rights were cancelled upon acceptance of participation in the Employee Rights Plan
offered during the year. The fair value of the cancelled rights had been fully expensed prior to the
cancellation.
Senior
management
S Bunn (i)
M Guy (i)
Number
2,100,000
350,000
Value @ grant
date
1,283,660
118,938
Cancellation
date
04/10/2013
04/10/2013
Value @
Cancellation
date
-
-
During the previous financial year ended 31 December 2012, no employee rights issued to directors
or senior management were cancelled.
The following are the terms of the Employee Rights:
1.
2.
3.
The Employee Rights are non-transferable.
The rights under Employee Rights are personal and an Employee Right does not confer any
entitlement to attend or vote at meetings of the Company, to dividends, participation in new
issues of securities or entitlement to participate in any return of capital.
The Employee Rights vest upon the satisfaction of any Employee hurdles specified at the
time of issue.
4. The Employee Rights lapse upon the Eligible Employee ceasing to be employed or on
the failure to satisfy any Employee hurdles within a required time of the issue of the
Employee Rights.
5. Upon vesting, one (1) Share will be issued for every one (1) Employee Right. The Shares
will rank equally in all respects with the existing Shares.
6.
If the Company makes a bonus issue of Shares, then the holder of the Employee Right upon
vesting will be entitled to have issued to it the increased number of Shares that it would
have received if the Employee Right had vested and the holder acquired Shares in
respect of the Employee Right before the record date for the bonus issue.
84
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
24: Share based payments (cont’d)
7. In the event of any reconstruction (including consolidation, sub-division, reduction or
return) of the issued capital of the Company prior to the vesting date, the number of
Employee Rights will be reconstructed in a manner consistent with the ASX Listing Rules.
The following are the terms of the Performance Rights:
1.
2.
The Performance Rights are non-transferable.
The rights under Performance Rights are personal and a Performance Right does not confer
any entitlement to attend or vote at meetings of the Company, to dividends, participation in
new issues of securities or entitlement to participate in any return of capital.
The Performance Rights vest upon the satisfaction of any performance hurdles specified at
the time of issue.
The Performance Rights lapse upon the Eligible Employee ceasing to be employed or on the
death, incapacity or disability of the Eligible Employee or on the failure to satisfy any
performance hurdles within a required time of the issue of the Performance Rights.
Upon vesting, one (1) Share will be issued for every one (1) Performance Right. The Shares
will rank equally in all respects with the existing Shares.
If the Company makes a bonus issue of Shares, then the holder of the Performance Right
upon vesting will be entitled to have issued to it the increased number of Shares that it would
have received if the Performance Right had vested and the holder acquired Shares in respect
of the Performance Right before the record date for the bonus issue.
In the event of any reconstruction (including consolidation, sub-division, reduction or return) of
the issued capital of the Company prior to the vesting date, the number of Performance
Rights will be reconstructed in a manner consistent with the ASX Listing Rules.
3.
4.
5.
6.
7.
6.
3.
4.
5.
The following are the terms of the Performance Options:
Each Option entitles the holder to one Share.
1.
The Options are exercisable at any time prior to 5.00 pm Western Standard Time on 31
2.
August 2013 ("Expiry Date").
The exercise price of the Options is $1.75 per Option.
Upon vesting, the Options are freely transferable.
The Company will provide to each Option holder a notice that is to be completed when
exercising the Options ("Notice of Exercise"). Subject to vesting, the Options may be
exercised wholly or in part by completing the Notice of Exercise and delivering it together with
payment to the secretary of the Company to be received any time prior to the Expiry Date.
The Company will process all relevant documents received at the end of every calendar
month.
Upon the exercise of an Option and receipt of all relevant documents and payment, the holder
in accordance with paragraph 5 will be allotted and issued a Share ranking pari passu with the
then issued Shares.
There will be no participating rights or entitlements inherent in the Options and the holders will
not be entitled to participate in new issues of capital which may be offered to Shareholders
during the currency of the Options. However, the Company will ensure that for the purposes
of determining entitlements to any such issue, the record date will be at least 7 business days
after the issue is announced. This will give Optionholders the opportunity (where Options
have vested) to exercise their Options prior to the date for determining entitlements to
participate in any such issue.
If there is a bonus issue ("Bonus Issue") to Shareholders, the number of Shares over which
an Option is exercisable will be increased by the number of Shares which the holder would
have received if the Option had been exercised before the record date for the Bonus Issue
("Bonus Shares"). The Bonus Shares must be paid up by the Company out of profits or
reserves (as the case may be) in the same manner as was applied in the Bonus Issue, and
upon issue will rank equally in all respects with the other Shares on issue as at the date of
issue of the Bonus Shares.
8.
7.
P a g e
| 68
85
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
24: Share based payments (cont’d)
9.
10.
10.
In the event of any reconstruction (including consolidation, sub-division, reduction or return) of
the issued capital of the Company prior to the Expiry Date, all rights of an Optionholder are to
be changed in a manner consistent with the Listing Rules.
In the event that the Company makes a pro rata issue of securities, the exercise price of the
Options will be adjusted in accordance with the formula set out in Listing Rule 6.22.2.
In the event that the Company makes a pro rata issue of securities, the exercise price of the
Options will be adjusted in accordance with the formula set out in Listing Rule 6.22.2.
The following reconciles the outstanding share options granted at the beginning and end of the
financial period.
Dec 2013
Dec 2012
Balance at beginning of the financial
period
Granted during financial period
Forfeited during the financial period
Exercised during the financial period
Expired during the financial period
Exercisable at the end of the financial
period
Number of
options
7,750,000
-
-
(750,000)
(7,000,000)
Weighted
average
exercise
price
Number of
options
Weighted
average
exercise
price
1.60
-
-
0.25
1.75
7,750,000
-
-
-
-
-
-
7,750,000
1.60
-
-
-
-
1.60
The average share price during the current period was $0.69 (2012: $0.40).
25: Financial instruments
(a) Capital risk management
The Consolidated Group manages its capital in order to maintain sufficient funds are available for the
Consolidated Group to meet its obligations and that the Group can fund its exploration and evaluation
activities as a going concern.
The Consolidated Group’s overall strategy remains unchanged from December 2012.
The capital structure of the Consolidated Group consists of fully paid shares and options as disclosed
in notes 17 and 17 respectively.
None of the Consolidated Group’s entities are subject to externally imposed capital requirements.
(b) Categories of financial instruments
Financial assets
Cash and equivalents
Loans and receivables - current
Fair value through profit and loss – held for trading
Financial liabilities
Amortised cost
86
Dec
2013
$' 000
Dec
2012
$' 000
5,343
49
-
668
10,801
326
15
1,240
P a g e
| 69
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
25: Financial instruments (cont’d)
(c) Financial risk management objectives
The Group’s principal financial instruments comprise cash and short term deposits. The main
purpose of the financial instruments is to earn the maximum amount of interest at low risk to the
Consolidated Group. For the period under review, it is the Consolidated Group’s policy not to trade in
financial instruments
The main risks arising from the Consolidated Group’s financial instruments are interest rate risk, credit
risk and liquidity risk. The board reviews and agrees policies for managing each of these risks and
they are summarised below:
(i)
(ii)
(iii)
(iv)
Interest Rate Risk
The Consolidated Group is exposed to movements in market interest rates on short
term deposits. 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 Consolidated Group does not have short or long term debt, and
therefore this risk is minimal.
There was no change in managing interest rate risk or the method of measuring risk
from the prior year.
Credit Risk
Credit risk refers to the risk that a counter party will default on its contractual
obligations resulting in financial loss to the Group. The Group has adopted the policy
of only dealing with credit worthy counterparties and obtaining sufficient collateral or
other security where appropriate, as a means of mitigating the risk of financial loss
from defaults.
The Consolidated Group has no significant credit risk exposure to any single
counterparty or any Consolidated Group of counterparties having similar
characteristics. The credit risk on liquid funds is limited because the counterparties
are banks with high credit – ratings assigned by international rating agencies.
The carrying amount of financial assets recorded in the financial statements, net of
any provisions for losses, represents the Consolidated Group’s maximum exposure to
credit risk.
There was no change in managing credit risk or the method of measuring risk from
the prior year.
Liquidity Risk
Liquidity risk refers to maintaining sufficient cash and equivalents to meet on going
commitments, as and when they occur. The primary source of liquid funds for the
Consolidated Group, are funds the Consolidated Group holds on deposit with varying
maturity dates.
The Consolidated Group monitors its cash flow forecast and actual cash flow to
ensure that present and future commitments are provided for. As well as matching
the maturity date of funds invested with the timing of future commitments.
There was no change in managing credit risk or the method of measuring risk from
the prior year.
Foreign Currency Risk
The Consolidated Group’s risk from movements in foreign currency exchange rates,
relates to funds transferred by the Company to the Greenland subsidiary and the
funds are held in Danish Krone (DKK). This risk exposure is minimised by only
holding sufficient funds in DKK, to meet the immediate cash requirements of the
subsidiary. Once funds are converted to DKK they are only used to pay expenses in
DKK.
P a g e
| 70
87
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
25: Financial instruments (cont’d)
(d) Liquidity risk
The following table details the Consolidated Group’s expected maturity for its non-derivative financial
assets. The tables below have been drawn up based on the undiscounted contractual maturities of
the financial assets including interest that will be earned on those assets except where the
Company/Consolidated Group anticipates that the cash flow will occur in a different period.
Weighted
Average
Effective
interest
rate
< 6
Months
6 – 12
Months
%
$' 000
$' 000
2.72
-
4.28
-
4,922
49
4,971
10,381
326
10,707
421
-
421
420
-
420
1 - 5
Years
$' 000
> 5
Years
$' 000
Total
$' 000
-
-
-
-
5,343
49
5,392
-
10,801
326
11,438
Dec 2013
Cash and equivalents
Trade and receivables - current
Dec 2012
Cash and equivalents
Trade and receivables - current
The following table details the Consolidated Group’s remaining contractual maturity for its non-
derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows
of financial liabilities based on the earliest date on which the Group can be required to pay. The table
includes both interest and principal cash flows.
Weighted
Average
Effective
interest
rate
%
< 6
Months
$' 000
6 – 12
Months
$' 000
1 – 5
Years
$' 000
> 5
Years
$' 000
Total
$' 000
-
-
-
543
-
543
1,240
1,240
-
125
125
-
-
-
-
-
-
-
-
-
-
-
-
543
125
668
1,240
1,240
Dec 2013
Trade and other payables
Other liabilities
Dec 2012
Trade and other payables
(e) Interest rate risk
The Consolidated Group is exposed to interest rate risk because it places funds on deposit at variable
rates. The risk is managed by the Consolidated Group by monitoring interest rates.
The Consolidated Group’s exposures to interest rates on financial assets and financial liabilities are
detailed in the liquidity risk management section of this note.
88
P a g e
| 71
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
25: Financial instruments (cont’d)
The Group has performed sensitivity analysis relating to its exposure to interest rate risk at balance
date. This sensitivity analysis demonstrates the effect on the current year results and equity post tax
which could result from a change in these risks. In the analysis a 1% or 100 basis points movement
has been applied on the assumption that interest rates are unlikely to move up more than that and
less likely to fall. This is taking into account the current interest rate levels and general state of the
economy.
There has been no change in managing credit risk or the method of measuring risk from the prior
year.
Interest Rate Sensitivity Analysis
At 31 December 2013, the effect on profit and equity as a result of changes in the interest rate, with
all other variables remaining constant would be as follows:
Change in profit
Increase in interest rate by 1% (100 basis points)
Decrease in interest rate by 1% (100 basis points)
Dec
2013
$' 000
Dec
2012
$' 000
81
(81)
80
(83)
A 1% or 100 basis points variable has been applied to the interest rate sensitivity analysis, after giving
consideration to the current interest rate levels and general state economy.
Fair value of financial instruments
The carrying value of all financial instruments is the approximate fair value of the instruments. This is
based on the fact that all financial instruments have either a short term date of maturity or are loans to
subsidiaries.
The only financial assets or liabilities carried at fair value are the investments held in listed entities as
disclosed in note 10. The fair value of these assets is based on quoted market prices at the reporting
date (being level 1 of the fair value hierarchy).
26: Key management personnel compensation
The aggregate compensation made to key management personnel of the Consolidated Group is set
out below:
Short-term employee benefits
Post-employment benefits
Other long-term benefits – provision for
long service leave
Termination benefits
Share-based payment
Year ended
31 Dec
2013
$
1,331,429
75,816
Year ended
31 Dec
2012
$
2,052,348
167,400
(29,752)
2,905,048
4,282,541
89,254
-
4,298,729
6,607,731
Refer to the remuneration report included in pages 31 to 45 of the Directors report for more detailed
Refer to the remuneration report included in pages 22 to 36 of the Directors report for more detailed
remuneration disclosures.
remuneration disclosures.
P a g e
| 72
89
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Notes to the accounts
Notes to the accounts
27: Key management personnel equity holdings
27: Key management personnel equity holdings
Fully paid ordinary shares of Greenland Minerals and Energy Limited
Fully paid ordinary shares of Greenland Minerals and Energy Limited
Dec 2013
M Hutchinson
Dec 2013
R McIllree
M Hutchinson
S Cato
R McIllree
J Mair
S Cato
A Ho
J Mair
J Whybrow
A Ho
S Bunn
J Whybrow
M Guy
S Bunn
M Guy
Dec 2012
M Hutchinson
Dec 2012
R McIllree
M Hutchinson
S Cato
R McIllree
J Mair
S Cato
A Ho
J Mair
J Whybrow
A Ho
S Bunn
J Whybrow
M Guy
S Bunn
M Guy
M
G
u
y
i
J
W
h
y
b
r
o
w
M
H
u
t
c
h
n
s
o
n
Balance
at beginning of year
Balance
S
A
J
S
D
R
at beginning of year
e
M
B
H
C
M
c
No.
a
u
o
a
c
2
i
n
t
I
r
o
No.
l
0
n
l
r
1
e
-
2
e
12,111,456
-
4,762,200
12,111,456
5,110,000
4,762,200
350,000
5,110,000
6,010,200
350,000
-
6,010,200
325,000
-
325,000
6
,
0
1
0
2
0
0
,
2
5
0
,
0
0
0
3
0
0
,
6
0
0
,
0
0
0
0
0
0
,
,
-
11,411,456
-
1
4,712,200
11,411,456
5
4
1
,
,
,
1
7
4
5,110,000
4,712,200
1
1
1
1
0
2
250,000
5,110,000
4
0
2
0
0
5
6,010,200
250,000
6
0
0
600,000
6,010,200
300,000
600,000
300,000
,
Short-term employee benefits
Post-employment benefits
Other long-term benefits – provision for
long service leave
Termination benefits
Share-based payment
Change in profit
Increase in interest rate by 1% (100 basis points)
Decrease in interest rate by 1% (100 basis points)
25: Financial instruments (cont’d)
Notes to the accounts
M
G
u
y
S
B
u
n
n
3
2
5
,
0
0
0
J
W
h
y
b
r
o
w
i
J
M
a
i
r
Granted as
compensation
Granted as
A
S
R
M
D
compensation
e
H
C
M
H
c
No.
o
a
u
c
2
t
I
t
o
No.
l
c
0
l
r
h
1
e
210,638
3
n
e
s
1,035,500
210,638
o
n
-
1,035,500
454,166
-
-
454,166
-
-
961,516
-
342,984
961,516
342,984
6
,
0
1
0
2
0
0
,
3
5
0
,
0
0
0
5
,
1
1
0
0
0
0
,
4
,
7
6
2
2
0
0
,
1
2
,
1
1
1
4
5
6
,
i
a
t
b
e
g
n
n
n
g
o
f
i
y
e
a
r
B
a
l
a
n
c
e
.
-
-
-
N
-
-
o
-
-
-
-
-
-
-
-
-
-
-
i
i
l
l
y
p
a
d
s
h
a
r
e
s
o
r
d
n
a
r
y
N
o
t
e
s
t
o
t
h
e
Received on
exercise of options
Received on
F
2
7
u
exercise of options
:
No. (i)
K
e
No. (i)
y
-
m
a
-
-
n
a
-
-
a
g
c
e
c
-
-
m
o
u
-
-
e
n
n
t
-
t
-
s
p
750,000
e
-
r
s
-
750,000
o
n
-
n
e
l
e
q
u
i
t
y
h
o
d
n
g
s
G
r
e
e
n
a
n
d
M
n
e
r
a
s
o
f
l
i
l
i
l
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
700,000
-
50,000
700,000
-
50,000
100,000
-
-
100,000
(600,000)
-
25,000
(600,000)
25,000
i
f
-
-
-
l
i
t
i
o
s
t
o
r
o
p
e
d
o
n
s
.
e
x
e
r
c
s
e
a
n
d
E
n
e
r
g
y
L
m
The number of shares received on exercise of options relates to options exercised that were granted as compensation and recognised in
e
The number of shares received on exercise of options relates to options exercised that were granted as compensation and recognised in
remuneration in prior years as well as listed options acquired by way of placement or options purchased either on market through the ASX, or
d
remuneration in prior years as well as listed options acquired by way of placement or options purchased either on market through the ASX, or
through third party off market transactions.
through third party off market transactions.
Net other change relates to shares purchased or sold either on market through the ASX, or through third party off market transactions.
Net other change relates to shares purchased or sold either on market through the ASX, or through third party off market transactions.
1
0
3
5
5
0
0
c
o
m
p
e
n
s
a
t
i
o
n
a
c
q
u
i
r
e
d
G
r
a
n
t
e
d
a
s
s
o
d
r
e
a
9
6
1
5
1
6
9
8
4
3
4
2
2
1
0
6
3
8
4
5
4
1
6
6
o
n
s
o
n
s
o
p
b
y
e
s
N
o
e
t
i
i
t
i
t
-
-
-
-
-
-
-
-
-
-
-
,
,
t
,
,
,
,
l
i
l
.
The Group has performed sensitivity analysis relating to its exposure to interest rate risk at balance
date. This sensitivity analysis demonstrates the effect on the current year results and equity post tax
which could result from a change in these risks. In the analysis a 1% or 100 basis points movement
has been applied on the assumption that interest rates are unlikely to move up more than that and
less likely to fall. This is taking into account the current interest rate levels and general state of the
economy.
Fair value of financial instruments
The carrying value of all financial instruments is the approximate fair value of the instruments. This is
based on the fact that all financial instruments have either a short term date of maturity or are loans to
subsidiaries.
Interest Rate Sensitivity Analysis
At 31 December 2013, the effect on profit and equity as a result of changes in the interest rate, with
all other variables remaining constant would be as follows:
The only financial assets or liabilities carried at fair value are the investments held in listed entities as
disclosed in note 10. The fair value of these assets is based on quoted market prices at the reporting
date (being level 1 of the fair value hierarchy).
There has been no change in managing credit risk or the method of measuring risk from the prior
year.
Refer to the remuneration report included in pages 22 to 36 of the Directors report for more detailed
remuneration disclosures.
A 1% or 100 basis points variable has been applied to the interest rate sensitivity analysis, after giving
consideration to the current interest rate levels and general state economy.
The aggregate compensation made to key management personnel of the Consolidated Group is set
out below:
Greenland Minerals and Energy Limited
And Controlled Entities
Year ended
31 Dec
2013
$
Year ended
31 Dec
2012
$
26: Key management personnel compensation
89,254
-
4,298,729
6,607,731
31 December 2013 Financial Report
Dec
2013
$' 000
Dec
2012
$' 000
2,905,048
4,282,541
1,331,429
75,816
2,052,348
167,400
(29,752)
P a g e
(81)
(83)
| 72
81
80
Greenland Minerals and Energy Limited
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
And Controlled Entities
31 December 2013 Financial Report
Net other change
(ii)
Net other change
(ii)
No.
No.
Balance
at end of year
Balance
at end of year
No.
No.
Balance held nominally
Balance held nominally
No.
No.
-
200,000
-
-
200,000
-
-
200,000
-
-
200,000
-
-
(200,000)
-
(200,000)
210,638
13,346,956
210,638
13,346,956
4,762,200
5,564,166
4,762,200
5,564,166
550,000
6,010,200
550,000
1,711,516
6,010,200
1,711,516
467,894
467,894
-
12,111,456
-
12,111,456
4,762,200
5,110,000
4,762,200
5,110,000
350,000
6,010,200
350,000
6,010,200
-
325,000
-
325,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
P a g e
| 73
P a g e
| 73
-
-
-
-
-
-
-
-
-
7
5
0
,
0
0
0
-
-
-
-
-
-
(
6
0
0
,
0
0
0
)
2
5
,
0
0
0
1
0
0
,
0
0
0
-
7
0
0
,
0
0
0
5
0
,
0
0
0
-
-
(
2
0
0
,
0
0
0
)
2
0
0
,
0
0
0
2
0
0
,
0
0
0
-
-
-
-
-
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o
.
(
i
)
e
x
e
r
c
i
s
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o
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s
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i
i
)
R
e
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o
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,
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6
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4
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8
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.
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.
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-
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)
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i
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(ii)
P
a
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e
|
7
3
90
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
And Controlled Entities
31 December 2013 Financial Report
Balance at
end of year
Balance at
No.
end of year
No.
Balance vested
at end of year
Balance vested
at end of year
No.
Vested and
exercisable
Vested and
exercisable
No.
No.
No.
Options
vested
Options
during year
vested
during year
No.
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50,000
50,000
-
-
2,800,000
2,800,000
-
-
2,100,000
2,100,000
-
-
-
-
2,850,000
2,850,000
50,000
50,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2
7
:
S
Net other
h
a
change (ii)
r
Net other
e
No.
change (ii)
o
p
No.
t
i
o
n
s
N
o
t
e
s
t
o
t
h
-
e
a
-
-
c
c
-
-
o
u
-
-
n
t
-
-
s
-
-
-
-
-
-
-
K
e
y
m
a
n
a
g
e
m
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n
t
p
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r
s
o
n
n
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l
e
q
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i
t
y
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o
d
n
g
s
i
l
-
-
-
-
-
-
-
-
-
(
-
-
c
o
-
-
n
t
’
-
50,000
d
)
50,000
o
f
l
G
r
e
e
n
a
n
d
M
n
e
r
a
s
i
l
a
n
d
E
n
e
r
g
y
L
m
i
i
t
e
d
B
a
l
a
n
c
e
Notes to the accounts
Notes to the accounts
27: Key management personnel equity holdings (cont’d)
27: Key management personnel equity holdings (cont’d)
Share options of Greenland Minerals and Energy Limited
Share options of Greenland Minerals and Energy Limited
Dec 2013
M Hutchinson
Dec 2013
M Hutchinson
R McIllree
R McIllree
S Cato
S Cato
J Mair
J Mair
A Ho
A Ho
J Whybrow
J Whybrow
S Bunn
S Bunn
M Guy
M Guy
Dec 2012
M Hutchinson
Dec 2012
M Hutchinson
R McIllree
R McIllree
S Cato
S Cato
J Mair
J Mair
A Ho
A Ho
J Whybrow
J Whybrow
S Bunn
S Bunn
M Guy
M Guy
Balance
M
S
J
at beginning
W
Balance
B
G
u
h
of year
u
at beginning
n
y
y
n
b
No.
of year
r
o
w
No.
-
-
2,800,000
2,800,000
-
-
2,100,000
2,100,000
-
-
-
-
2,850,000
2,850,000
50,000
2
50,000
,
8
5
0
,
0
0
0
-
-
2,800,000
2,800,000
2,100,000
2,100,000
-
-
-
-
2,850,000
2,850,000
-
-
(
i
i
)
N
e
t
o
t
h
e
r
c
h
a
n
g
e
l
r
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a
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F
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c
c
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d
a
n
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e
w
S
C
a
t
o
A
J
R
D
Granted as
e
M
H
M
c
a
o
c
compensation
Granted as
2
i
I
r
l
0
l
No.
r
compensation
1
e
2
e
No.
M
H
u
t
c
h
n
s
o
n
i
S
C
a
t
o
A
H
o
M
S
J
J
W
M
B
G
a
u
h
Exercised
u
i
n
y
r
y
n
b
No. (i)
Exercised
r
o
w
No. (i)
R
M
c
I
l
l
r
e
e
M
D
e
H
c
u
Expired
2
t
c
0
No
Expired
h
1
3
n
No
s
o
n
i
2
,
1
0
0
,
0
0
0
2
,
8
0
0
,
0
0
0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(750,000)
(750,000)
-
2
2
-
,
,
8
1
5
0
0
0
,
,
-
0
0
0
0
0
0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5
0
,
0
0
0
-
(2,800,000)
(2,800,000)
-
-
(2,100,000)
(2,100,000)
-
-
-
-
(2,100,000)
(2,100,000)
-
-
2
,
8
0
0
,
0
0
0
a
t
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e
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n
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r
N
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.
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.
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-
-
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-
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P
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|
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-
-
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-
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-
-
N
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.
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f
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a
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d
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a
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d
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r
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s
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E
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A
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2
0
1
3
F
n
a
n
c
i
a
l
R
e
p
o
r
t
91
(i)
(i)
(ii)
(ii)
i
t
i
t
n
e
o
r
The number of options exercised relates to options exercised that were granted as compensation and recognised in remuneration in prior years as
The number of options exercised relates to options exercised that were granted as compensation and recognised in remuneration in prior years as
well as listed options acquired by way of placement or options purchased either on market through the ASX, or through third party off market
h
well as listed options acquired by way of placement or options purchased either on market through the ASX, or through third party off market
e
transactions
c
transactions
u
Net other change relates to options purchased or sold either on market through the ASX, or through third party off market transactions.
r
r
N
Net other change relates to options purchased or sold either on market through the ASX, or through third party off market transactions.
e
o
n
o
n
s
h
a
o
p
t
i
t
t
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
All share options issued to key management personnel were made in accordance with the provisions of the employee share option plan.
All share options issued to key management personnel were made in accordance with the provisions of the employee share option plan.
Further details of the share option plan and of options granted during the current and prior period are contained in note 24.
Further details of the share option plan and of options granted during the current and prior period are contained in note 24.
g
r
a
n
a
n
d
h
i
t
t
t
t
-
-
-
-
-
-
-
-
-
-
-
5
0
,
0
0
0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(
i
i
)
c
h
a
n
g
e
N
o
.
N
e
t
o
t
h
e
r
P a g e
| 74
P a g e
| 74
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Notes to the accounts
Notes to the accounts
Notes to the accounts
27: Key management personnel equity holdings (cont’d)
27: Key management personnel equity holdings (cont’d)
27: Key management personnel equity holdings (cont’d)
Performance rights of Greenland Minerals and Energy Limited
Performance rights of Greenland Minerals and Energy Limited
Performance rights of Greenland Minerals and Energy Limited
A
H
o
A
l
l
Dec 2013
M Hutchinson
Dec 2013
R McIllree
M Hutchinson
Dec 2013
S Cato
R McIllree
M Hutchinson
J Mair
S Cato
R McIllree
A Ho
J Mair
S Cato
J Whybrow
A Ho
J Mair
S Bunn
J Whybrow
A Ho
M Guy
S Bunn
J Whybrow
M Guy
S Bunn
Dec 2012
M Guy
M Hutchinson
Dec 2012
R McIllree
M Hutchinson
Dec 2012
S Cato
R McIllree
M Hutchinson
J Mair
S Cato
R McIllree
A Ho
J Mair
S Cato
J Whybrow
A Ho
J Mair
S Bunn
J Whybrow
A Ho
M Guy
S Bunn
J Whybrow
M Guy
S Bunn
M Guy
J
M
a
i
r
Balance
at beginning
Balance
M
S
A
J
of year
W
at beginning
B
H
G
Balance
u
o
h
No.
u
of year
n
at beginning
y
y
n
b
No.
r
of year
o
w
1,400,000
No.
2,700,000
1,400,000
600,000
2,700,000
1,400,000
2,100,000
600,000
2,700,000
1,600,000
2,100,000
600,000
1,000,000
1,600,000
2,100,000
2,100,000
1,000,000
1,600,000
350,000
2,100,000
1,000,000
350,000
2,100,000
2
1
2
350,000
,
,
,
3
1
0
1
5
0
0
0
1,400,000
0
0
0
0
,
,
,
,
0
0
0
0
2,700,000
1,400,000
0
0
0
0
0
0
0
0
600,000
2,700,000
1,400,000
2,100,000
600,000
2,700,000
600,000
2,100,000
600,000
1,000,000
600,000
2,100,000
2,100,000
1,000,000
600,000
350,000
2,100,000
1,000,000
350,000
2,100,000
350,000
1
,
0
0
0
,
0
0
0
6
0
0
,
0
0
0
-
-
-
-
i
Granted as
S
R
M
D
M
compensation
e
Granted as
C
M
H
G
c
a
No.
c
u
u
compensation
2
t
Granted as
I
t
y
o
l
c
0
l
r
No.
h
1
e
compensation
2
e
n
-
s
No.
o
-
n
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3
5
-
0
,
0
-
-
0
0
-
-
-
-
-
-
1,000,000
-
-
-
1,000,000
-
-
-
1,000,000
-
-
-
-
-
-
1
,
4
0
0
,
0
0
0
2
,
7
0
0
,
0
0
0
6
0
0
,
0
0
0
-
-
-
-
S
B
u
n
n
2
,
1
0
0
,
0
0
0
-
S
C
a
t
o
J
J
R
Converted
W
M
M
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h
No.
c
Converted
i
y
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r
l
b
l
r
No.
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e
Converted
o
e
w
-
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2
-
,
7
0
-
0
,
0
-
-
0
0
-
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-
-
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-
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-
-
-
-
-
-
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1
,
6
0
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-
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H
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i
1
,
4
0
0
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0
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1
3
Expired
No
Expired
No
Expired
No
N
o
.
o
f
y
e
a
r
a
t
b
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g
n
n
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i
i
B
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.
c
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m
p
e
n
s
a
t
i
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G
r
a
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t
e
d
a
s
Greenland Minerals and Energy Limited
Greenland Minerals and Energy Limited
And Controlled Entities
Greenland Minerals and Energy Limited
31 December 2013 Financial Report
And Controlled Entities
31 December 2013 Financial Report
And Controlled Entities
31 December 2013 Financial Report
Balance at
end of year
Balance at
No.
end of year
Balance at
No.
end of year
No.
1,400,000
2,700,000
1,400,000
600,000
2,700,000
1,400,000
2,100,000
600,000
2,700,000
1,600,000
2,100,000
600,000
1,000,000
1,600,000
2,100,000
-
1,000,000
1,600,000
-
-
1,000,000
-
-
-
1,400,000
2,700,000
1,400,000
600,000
2,700,000
1,400,000
2,100,000
600,000
2,700,000
1,600,000
2,100,000
600,000
1,000,000
1,600,000
2,100,000
2,100,000
1,000,000
1,600,000
350,000
2,100,000
1,000,000
350,000
2,100,000
350,000
Balance vested
at end of year
Balance vested
at end of year
Balance vested
at end of year
No.
No.
No.
Vested and
convertible
Vested and
No.
convertible
Vested and
convertible
No.
No.
Rights
vested
Rights
during year
vested
Rights
during year
vested
No.
during year
No.
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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-
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-
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-
-
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-
-
-
-
-
-
-
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-
-
-
-
-
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-
-
-
-
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P
e
r
f
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Net other
2
N
7
change (i)
o
Net other
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No.
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change (i)
Net other
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e
No.
y
t
change (i)
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m
-
No.
t
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a
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a
a
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m
o
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(2,100,000)
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s
(350,000)
o
(2,100,000)
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n
(350,000)
(2,100,000)
e
l
(350,000)
e
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c
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E
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s
(i) Performance rights cancelled when employees accepted an offer to participate in the October 2013 Employee Rights issue
(i) Performance rights cancelled when employees accepted an offer to participate in the October 2013 Employee Rights issue
(i) Performance rights cancelled when employees accepted an offer to participate in the October 2013 Employee Rights issue
All performance rights issued to key management personnel were made in accordance with the provisions of the employee performance rights plan.
All performance rights issued to key management personnel were made in accordance with the provisions of the employee performance rights plan.
Further details of the employee performance rights plan and of options granted during the current and prior period are contained in note 24.
All performance rights issued to key management personnel were made in accordance with the provisions of the employee performance rights plan.
Further details of the employee performance rights plan and of options granted during the current and prior period are contained in note 24.
Further details of the employee performance rights plan and of options granted during the current and prior period are contained in note 24.
g
r
a
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a
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P
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92
P a g e
| 75
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.
Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
All performance rights issued to key management personnel were made in accordance with the provisions of the employee performance rights plan.
c
o
Further details of the employee performance rights plan and of options granted during the current and prior period are contained in note 24.
G
m
r
All performance rights issued to key management personnel were made in accordance with the provisions of the employee performance rights plan.
a
p
n
e
t
Further details of the employee performance rights plan and of options granted during the current and prior period are contained in note 24.
n
e
s
d
a
a
t
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s
o
n
2
,
1
0
0
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0
0
0
1
,
2
0
0
,
0
0
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r
i
g
h
N
o
l
t
-
-
-
-
-
-
.
Notes to the accounts
Notes to the accounts
27: Key management personnel equity holdings (cont’d)
27: Key management personnel equity holdings (cont’d)
Employee Rights of Greenland Minerals and Energy Limited
Employee Rights of Greenland Minerals and Energy Limited
Dec 2013
M Hutchinson
Dec 2013
R McIllree
M Hutchinson
S Cato
R McIllree
J Mair
S Cato
A Ho
J Mair
J Whybrow
A Ho
S Bunn
J Whybrow
M Guy
S Bunn
M Guy
A
l
l
Balance
at beginning
F
u
Balance
of year
r
p
t
h
at beginning
No.
e
e
r
f
of year
r
o
r
No.
m
a
n
c
e
r
i
g
h
t
s
d
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t
a
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o
f
s
i
l
S
C
a
t
o
Granted as
M
S
A
J
J
W
M
B
H
compensation
G
a
u
o
h
u
Granted as
No.
i
n
y
r
y
n
b
compensation
r
o
w
No.
-
-
-
-
-
-
-
-
-
-
-
2,100,000
-
1,200,000
2,100,000
1,200,000
i
R
M
D
e
Converted
M
H
c
c
u
2
No.
I
t
l
c
0
l
r
h
Converted
1
e
3
e
n
No.
s
-
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.
-
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n
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N
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a
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l
E
m
Expired
p
No
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y
Expired
e
No
e
R
g
h
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f
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a
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-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2
7
:
K
e
y
m
a
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a
g
-
e
-
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(
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2
4
.
P
a
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e
|
7
6
l
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.
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.
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E
x
p
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N
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.
c
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(
i
)
N
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.
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.
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.
d
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d
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R
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s
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
,
2
0
0
,
0
0
0
2
,
1
0
0
,
0
0
0
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Greenland Minerals and Energy Limited
And Controlled Entities
Greenland Minerals and Energy Limited
31 December 2013 Financial Report
And Controlled Entities
31 December 2013 Financial Report
Net other
N
o
change (i)
t
e
Net other
No.
s
change (i)
t
o
No.
t
h
e
a
c
c
o
u
n
t
s
Balance at
end of year
Balance at
No.
end of year
No.
-
-
-
-
-
-
-
-
-
-
-
2,100,000
-
1,200,000
2,100,000
1,200,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance vested
at end of year
Balance vested
at end of year
No.
No.
Vested and
convertible
Vested and
No.
convertible
No.
Rights
vested
during year
Rights
vested
No.
during year
No.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
P a g e
| 76
P a g e
| 76
G
r
e
e
n
l
a
n
d
M
n
e
r
a
l
s
i
a
n
d
E
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m
i
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Notes to the accounts
28: Transactions with related parties
Simon Cato is a Non-executive Director and Chairman of Advanced Share Registry Limited.
Advanced Share Registry Limited provides share registry services to Greenland Minerals and Energy
Limited. These services are supplied on normal commercial terms and Mr Cato does not receive any
remuneration from Advanced Share Registry Limited based on the supply of share registry services to
the Consolidated Group. For the year ended 31 December 2013 $36,867 was paid to Advance Share
Registry Limited for services provided (Dec 2012: $67,085).
29: Parent Company information
Financial position
Total Current Assets
Total Non-Current Assets
Total Assets
Total Current Liabilities
Total non-current liabilities
Total Liabilities
Net Assets
Equity
Issued Capital
Reserves
Accumulated Losses
Total Equity
Financial Performance
Profit (Loss) for the year
Total comprehensive income
Parent
Dec
2013
$' 000
Dec
2012
$' 000
5,592
74,231
79,823
586
30
616
79,207
11,469
63,761
75,230
1,429
89
1,518
73,712
336,950
24,888
(282,631)
79,207
334,339
22,324
(282,951)
73,712
320
320
(56,360)
(56,360)
Contingent liabilities
The parent company has no contingent liabilities as at 31 December 2013 or 2012.
Guarantees
Greenland Minerals and Energy Limited has guaranteed the provision of funding and support to the
Company’s 100% held subsidiary, Greenland Minerals and Energy Limited (Trading) A/S). This
funding forms part of the Consolidated Group’s approved budgeted expenditure.
Greenland Minerals and Energy Limited has placed $220,000 and $169,905 into two separate deposit
accounts with the Company’s bank. These deposits are held by the bank as security over corporate
credit cards issued to the Company.
During the financial year ended 31 December 2011, Greenland Minerals and Energy limited provided
a guarantee to the Greenland Government on the behalf of Arctic Energy Pty limited (“Arctic”). The
guarantee relates to the rectification of any potential environmental damage by Arctic in relation to an
on-shore oil exploration license held by Arctic. Under the guarantee Arctic is prevent from carrying
out any activity on the license without the expressed approval of Greenland Minerals and Energy
limited. No such approval has been granted to date.
Greenland Minerals and Energy limited currently holds a 24% interest in Arctic Energy Pty Limited.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Notes to the accounts
30: Remuneration of auditors
Auditor of the parent entity
Audit or review of the financial report
Other assurance services
Non-audit services - taxation
Related practice of the parent entity auditor
Audit or review of the financial report
Non-audit services – taxation
Non-audit services – other
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Dec
2013
$
87,536
8,500
14,700
110,736
Dec
2013
$
26,661
1,838
2,942
31,441
Dec
2012
$
88,830
-
3,465
92,295
Dec
2012
$
44,698
9,693
6,691
61,074
The auditor of Greenland Minerals and Energy Limited is Deloitte Touche Tohmatsu.
31: Subsequent Events
In March 2014 the Consolidated Group entered a non-binding Memorandum of Understanding
(“MoU”) with China Non-Ferrous Metal Industry’s Foreign Engineering and Construction Co Limited
(“NFC”). The MoU sets out a framework for both parties to cooperate in aligning the rare earth
concentrates from the Consolidated Group’s Kvanefjeld project, with NFC’s substantial rare earth
separation experience and capacity.
Please refer to the Company announcement released to the ASX on 24 March 2014.
Other than the matter above, there have been no matters or circumstances occurring subsequent to
the financial period that has significantly affected, or may significantly affect, the operations of the
Consolidated Group, the results of those operations, or the state of affairs of the Consolidated Group
in future years.
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Additional stock exchange information as at 21st February 2014
Consolidated Group secretary
Miles Guy
Registered office
Unit 6, 100 Railway Road, Subiaco
Western Australia, 6008
Principal administration office
Unit 6, 100 Railway Road, Subiaco
Western Australia, 6008
Share registry
Advanced Share Registry Services
150 Stirling Highway
Nedlands, Western Australia, 6009
Number of holders of equity securities
Ordinary share capital
574,572,911 fully paid ordinary shares are held by 3,690 individual shareholders.
Substantial Shareholders
Shareholder
1. Citicorp Nominees Pty Limited
1. JP Morgan Nominees Australia Limited
2. HSBC Custody Nominees (Australia) Limited
3. Rimbal Pty Ltd
4. GCM Nominees Pty Limited
Number
100,690,410
83,056,904
76,972,260
55,304,175
35,000,000
Percentage
17.5%
14.5%
13.4%
9.6%
6.1%
96
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Additional stock exchange information as at 21st February 2014
Distribution of holders of quoted shares
Share Spread
Holders
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
364
1,077
692
1,285
272
3,690
Units
190,676
3,285,248
5,789,537
45,017,032
520,290,418
574,572,911
Percentage
0.033%
0.572%
1.008%
7.835%
90.553%
100%
Twenty largest holders of quoted shares
Ordinary shareholders
1. Citicorp Nominees Pty Limited
2. JP Morgan Nominees Australia Limited
3. HSBC Custody Nominees (Australia) Limited
4. Rimbal Pty Limited
5. GCM Nominees Pty Limited
6. Roderick McIllree
Benoit Company Limited
7.
8.
Pure Steel Limited
9. Cameron John French
10. Jeremy Sean Whybrow
11. Giacobbe, Dimitri and David Iesini
12. Merrill Lynch (Australia) Nominees Pty Limited
13. John Mair
14. Simon Cato
15. Christopher and Rita Read
16. National Nominees Limited
17. Peter Harry Hatch
18. Falfaro Investments Limited
19. ABN Amro Clearing Sydney Nominees Pty Limited
20. BNP Paribas Pty Limited
Fully paid ordinary shares
Number
100,690,410
83,056,904
76,972,260
55,304,175
35,000,000
13,346,956
12,200,000
11,087,008
10,152,112
6,010,200
5,431,505
5,348,669
5,564,166
4,762,200
4,572,048
4,490,461
3,100,000
3,000,000
2,639,283
2,430,092
445,158,449
Percentage
17.5%
14.5%
13.4%
9.6%
6.1%
2.3%
2.1%
1.9%
1.7%
1.5%
0.9%
0.9%
0.9%
0.8%
0.8%
0.8%
0.5%
0.5%
0.4%
0.4%
77.5%
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
Greenland Minerals and Energy Limited
And Controlled Entities
31 December 2013 Financial Report
Additional stock exchange information as at 21st February 2014
Distribution of holders of quoted options
Share Spread
Holders
Units
Percentage
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
1
4
6
57
19
87
421
15,213
48,166
2,281,731
23,423,660
25,769,191
0.002%
0.059%
0.187%
8.854%
90.898%
100%
Twenty largest holders of quoted options
Ordinary shareholders
Pre-Emptive Trading Pty Limited
1.
Tracor Limited
2.
Zero nominees Pty Limited
3.
JP Morgan Nominees Australia Limited
4.
5.
Twofivetwo Pty Limited
6. USB Nominees Pty Limited
7. Citicorp Nominees Pty Ltd
8. National Nominees Pty Limited
9. Nicole Yougman
10. HSBC Custody nominees (Australia) Limited
11. ABN Amro Clearing Sydney Nominees Pty Limited
12. Greatside Holdings Pty limited
13. William Jay Goodair
14. Cameron John French
15. John Tilney
16. Michael Bushell
17. Floyd Bruce Garrett
18. Nicholas Timothy Allan
19. Jason Dalziell
20. James Alexander Hanson
Fully paid ordinary shares
Number
6,020,000
5,500,000
4,774,235
2,448,333
712,814
650,000
494,000
450,000
437,080
350,661
333,334
250,000
244,922
178,475
167,500
166,600
139,706
125,000
100,000
100,000
23,642,660
Percentage
23.4%
21.3%
18.5%
9.5%
2.7%
2.5%
1.9%
1.7%
1.7%
1.4%
1.3%
1.0%
1.0%
0.7%
0.6%
0.6%
0.5%
0.5%
0.4%
0.4%
91.6%
98
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Greenland Minerals and enerGy liMited – AnnuAl RepoRt 2013
The Kvanefjeld project
area is ideally located near
an international airport
and existing towns that are
expected to provide general
labour and services.
Greenland Minerals and enerGy liMiTed – AnnUAl RePORT 2013
99
100
Greenland Minerals and enerGy liMiTed – AnnUAl RePORT 2013
The fjord system in south
Greenland provides direct
shipping access to the
project area, year round.
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Greenland Minerals and enerGy liMiTed
Registered Office & Principal Place of Business
Unit 6, 100 Railway Road, Subiaco, Western Australia, 6008
Postal Address
PO Box 2006, Subiaco, Western Australia, 6904
Tel: +61 8 9382 2322
Fax: +61 8 9382 2788
www.ggg.gl