GREAT WESTERN EXPLORATION LIMITED
AND CONTROLLED ENTITIES
ABN 53 123 631 470
ANNUAL REPORT
30 JUNE 2015
GREAT WESTERN EXPLORATION LIMITED
ABN 53 123 631 470
CORPORATE DIRECTORY
Directors
Kevin Clarence Somes (Chairman)
Jordan Ashton Luckett (Managing Director)
Craig Donald Mathieson (Non-executive
Director)
Terrence Ronald Grammer (Non-executive
Director)
Auditor
Bentleys
Level 1, 12 Kings Park Road
West Perth
Western Australia 6005
Company Secretary
Justin Barton
Registered and Principal Office
Level 2
35 Outram Street
West Perth
Western Australia 6005
Telephone (08) 6489 0101
Facsimile: (08) 63`13 3997
Solicitors
Kings Park Corporate Lawyers
Level l2
45 Richardson Street
West Perth
Western Australia 6005
Share Registry
Computershare Investor Services Pty Limited
Level 11
72 St Georges Terrace
Perth
Western Australia 6000
Stock Exchange
The Company’s shares are listed by the
Australian Securities Exchange Limited
The home exchange is Perth
ASX Code - Fully paid shares GTE
Telephone: 1300 787 272
Facsimile: (08) 9323 2033
Website:
www.greatwesternexploration.com.au
GREAT WESTERN EXPLORATION LIMITED
CONTENTS
Review of Exploration Activities
Directors’ Report
Corporate Governance Statement
Consolidated Statement of Financial Position
Consolidated Statement of Profit or Loss and other
Comprehensive Income
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements for the Year
Ended 30 June 2015
Directors’ Declaration
Auditors Independence Declaration
Independent Auditors Report
Additional Information
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Great Western Exploration Limited
Review of Exploration Activities
Executive Summary
During the year the Great Western Exploration Limited (“the Company”; “GTE”) continued to
explore its Yerrida Basin projects in the Doolgunna region of Western Australia focusing on
copper massive sulphide, magmatic nickel sulphide and lode gold styles of mineralisation.
The Doolgunna region is once again become an area of interest as one of Australia’s most
exciting emerging copper-gold districts following the Sandfire Resource’s discovery of massive
copper sulphide mineralisation at Monty which is located 10km from Degrussa and only 17km
from the Company’s project area.
The work carried out during the year identified three new exciting prospects as follows:
New Springs: Targeting magmatic nickel sulphides within a layered mafic intrusion in a
setting that the company believes is similar to the Nova nickel deposit.
Finlayson:
Targeting lode gold along strike of the 5 million ounce Wiluna deposit
Goodin:
Targeting copper massive sulphide 25km southeast of Degrussa and 17km
southeast of Monty.
The Monty discovery further demonstrates the prospectivity of the Doolgunna region and the
company is looking forward to an exciting 12 months ahead as it continues to exploration and
progressing these prospects.
Also during the year Western Areas NL continued exploration at the Company’s Forrestania
projects and have now completed their Earn-In. Great Western now retains a 10% free carried
interest until the completion of a Bankable Feasibility Study.
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Great Western Exploration Limited
Yerrida Basin Projects
The Company has three contiguous projects in the Doolgunna region which is one of
Australia’s most exciting emerging copper-gold districts. The Doolgunna, Paroo and Cunyu JV
cover a total area of 2,365 km2 which makes the Company one of the largest landholders in the
district. The company owns 100% of the Doolgunna and Paroo projects and is earning 70% of
Glencore owned Cunyu project.
Figure 1. Location of Yerrida Basin projects and Prospects
The company believes there are several major structural corridors that extend north-northwest
(“NNW”) from Wiluna that are the first order controls for the mineralisation on the eastern
side of the Capricorn orogeny that includes the Degrussa, Plutonic, Thaduna, Magellan and
Monty deposits.
The company interprets this as the Wiluna greenstone belt being rifted (pulled apart) during
the formation of the Bryah and Yerrida basins which were subsequently formed over the top.
The NNW structural corridors represent growth faults that facilitated the rifting and are re-
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Great Western Exploration Limited
activated Archaean basement fault zones that include the Warronga-Ida, Bardoc and
Perseverance faults. These are major regional faults that can be traced 100kms and represent
major pathways for ore fluids, heat and intrusions and are known to host some of Western
Australia largest nickel and gold deposits to the south.
The Company is targeting Proterozoic base metal mineralisation (copper, gold, silver, zinc and
lead) within these corridors, particularly at the intersection of north east (“NE”) trending faults
which are likely to be the conjugate faults formed at the same time of rifting. It is a well-
established fact that the intersection of basin forming faults are highly prospective for many
types of deposits.
The recent Monty discovery further
In addition to base metals the project is also highly prospective for magmatic nickel sulphides
within the Cunyu layered mafic intrusion which has been intruded up along the regional
Perseverance fault.
During the year the Company identified three new exciting prospects; New Springs, Finlayson
and Goodin.
New Springs Prospect (Doolgunna Project GTE 100%)
The New Springs nickel prospect is located within the Proterozoic Yerrida basin approximately
85km northwest of Wiluna and approximately 10 km northwest of the Company’s Finlayson
Gold Prospect (fig 1).
The company believes that the New Springs prospect has similar characteristics to known
mafic-ultramafic sequences that host significant magmatic nickel sulphide deposits elsewhere
in the world. Furthermore the company also believes there are some significant similarities
between the geological setting, geochemistry and timing of New Springs when compared to the
Nova nickel deposit. The key indicators are as follows:
• Proterozoic layered mafic-ultramafic (dolerite- gabbro-pyroxenite) intruded along the
margin of the Yilgarn Craton during the Proterozoic.
• Geological Survey of Western Australia (“GSWA”) analysis of whole rock geochemistry
of samples taken from the Killara volcanics is consistent with sulphur saturation, which
is a key geological process that can lead to the formation and segregation of a nickel –
copper bearing sulphide mineralisation essential for the formation of nickel sulphide
deposits.
• Regional geochemistry indicates there is a significant localised enrichment of nickel,
copper, cobalt, gold and PGEs which indicative of magmatic nickel sulphide
mineralisation.
• Three high priority Airborne EM anomalies near the known pyroxenite outcrop.
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Great Western Exploration Limited
• Regional geological setting meets the criteria set out by the USGS for magmatic nickel
sulphide mineralisation.
The prospect is located within a mafic – ultramafic (gabbro-pyroxenite) sequence that forms a
part of the Killara volcanic unit within the Yerrida basin that has been emplaced along the
margin of the Yilgarn Craton during the Proterozoic (fig 2).
Pyroxenite
Figure 2.
Simplified GSWA regional geology map showing the layered dolerite-gabbro-pyroxenite
(mafic - ultramafic) target stratigraphy
Magmatic nickel sulphide deposits hosted in similar mafic – ultramafic sequences account for
approximately 60 percent of the world’s Ni production and are also a major source of
chromium, cobalt, copper and PGEs. These terrains are active exploration targets globally and
host some of the world’s largest nickel deposits including Voisey’s Bay (Canada), Norilsk
(Russia) and Jinchuan (China). In addition there are similarities with the Nova deposit which is
also hosted in a gabbro-pyroxenite sequence emplaced along the margin of the Yilgarn Craton
also during the Proterozoic.
Whole rock geochemical analysis completed by the GSWA on the Killara volcanics is consistent
with sulphur saturation that is a key geological process that can lead to the formation and
segregation of a nickel – copper bearing sulphide mineralisation from the parent magma which
is essential for the formation of nickel sulphide deposits.
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Great Western Exploration Limited
Furthermore the whole rock geochemical signature of the Killara volcanics is similar to the
mafic – ultramafic sequences that host the Norilsk nickel deposits and also exhibits lower than
average copper concentrations similar to the host rocks at Nova.
Because of the global importance of magmatic nickel sulphides deposits the United States
Geological Survey (“USGS”) completed a worldwide review in 2010 on this style of
mineralisation to determine a preliminary deposit model to facilitate the assessment for
undiscovered, potentially economic magmatic Ni-Cu±PGE sulfide deposits. They conclude the
regional geological guide for magmatic nickel mineralisation are as follows:
• Large volume of mafic volcanic sequences with evidence of primitive Mg-rich melts and
large volumes of tholeiitic magmatic rocks occurring on or near the edges of ancient
cratons.
• Province boundaries, rifts, and deeply penetrating faults that can allow for efficient
transport of magma through the crust.
• Small- to medium-sized differentiated mafic and (or) ultramafic dykes and sills,
• Deposits are generally not hosted in thick, large-layered intrusions.
• Sulfur-bearing crustal rocks into which the layered mafic rocks are intruded.
All of these criteria are either directly observed or can be reasonably interpreted to occur at
New Springs where the GSWA has interpreted sulphur bearing crustal rocks, province
boundaries, rifts within the Yerrida basin.
The company can see a number of important similarities between New Springs and Nova (table
1) and believes the geological setting is equivalent prior to the metamorphic overprinting at
Nova that is a characteristic of the Fraser Range Complex.
Table 1. Comparisons with of New Springs with Nova nickel deposit
Description
Nova
New Springs
Similar rocks (layered gabbro-pyroxenite
intrusion)
Proterozoic age
Located on margin of Yilgarn craton
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
Regional geochemical Ni anomaly
(cid:1) (271 ppm Ni) (cid:1) (221 ppm Ni)
Similar sized “eye” setting (~2.5km)
Similar size EM plate model (~800m)
Metamorphic grade
(cid:1)
(cid:1)
High
(cid:1)
(cid:1)
Low
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Great Western Exploration Limited
As magmatic nickel sulphides mineralisation forms prior to any regional metamorphism the
USGS study concluded no obvious correlation between the metamorphic grade of the host
rocks and the formation of magmatic nickel sulphides deposits.
Regional Geochemistry
The New Springs prospect is strongly anomalous (> 20 times background) in nickel, copper,
cobalt, gold and PGEs with the peak nickel values of 574 ppm and 221 ppm and maps out a
broad area that is enriched in nickel, copper, cobalt, Gold and PGEs co-incident with the
layered mafic – ultramafic sequence (Fig 3).
Pyroxenite
Nickel
Response ratio
( x background)
Gabbro
Figure 3.
GSWA regional geology overlain by the regional gridded nickel response ratios. Also
shown is the location of the two maximum nickel and the maximum gold assay at the
New Springs prospect from the regional geochemistry database in relation to the gabbro
and pyroxenite outcrops
This compares well with the Nova nickel deposit which is also hosted in gabbro-pyroxenite
sequence where a similar regional geochemical survey was completed over the Fraser Range
that identified a nickel anomaly with a peak value of 271ppm that ultimately led to the
discovery of Nova.
The company also has broad spaced 800m x 800m regional soil samples over most of the region
that mapped elevated nickel, copper and gold in the vicinity of the pyroxenite outcrop. This
survey was initially optimised for VMS style mineralisation so some of the pathfinder elements
used for magmatic nickel sulphide mineralisation were not assayed. However analysis of the
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Great Western Exploration Limited
trace elements that were assayed is consistent with nickel and copper enrichment from a
magmatic source.
Finlayson Prospect (Cunyu Project GTE earning 70%))
During the year the company completed maiden drilling at the Finlayson prospect comprising
of nine reverse circulation holes (“RC”) for 1,529m. The results from this drilling have greatly
enhanced the gold prospectively and is an exciting development in an area where there has
been no previous gold exploration or drilling along strike of a major gold district.
The drilling intersected a shear zone with altered mafic volcanics, anomalous gold
mineralisation and associated pathfinder elements including bismuth, silver and tellurium. The
shear zone has a downhole width of 15 metres with peak gold anomalism that includes 1 metre
intervals of 157ppb (0.16g/t Au) and 155ppb (0.16g/t Au) from 144 and 150 metres depth
respectively (fig 4).
The gold anomalism along with the important pathfinder elements is strong evidence of a gold
bearing hydrothermal system. The discovery of a mineralised shear zone within a mafic
volcanic sequence is a significant and important development at this early stage of drilling as it
provides a step change in the advancement of the Project.
Figure 4. CNRC005 mineralised shear zone
The primary objective of the drilling was to test the Company’s initial conceptual model that
there is unexplored mafic sequences and structures under shallow cover along the eastern
margin of the Yerrida basin that could be traced back in the geophysical datasets to the Wiluna
gold centre (“Wiluna”). To test this model the company designed a very broad spaced regional
drill programme to determine the depth and nature of the basement rocks to open up a sizeable
area for further exploration.
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Great Western Exploration Limited
The drilling was successful in demonstrating that the critical elements required for gold
mineralisation and furthermore the Company’s structural interpretation based on the drilling
and regional aeromagnetic data indicates that the gold is occurring within what could be an
extensive hydrothermal system.
Mineralized
Shear
intersected
in drilling
a)
b)
c)
Figure 5.
Finlayson gold prospect a) airborne magnetics image b) areas of magnetite
destruction c) the Wiluna gold pits (red) superimposed for size and geometry
comparison
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Great Western Exploration Limited
A simplified illustration of the structural interpretation at the Finlayson prospect is shown in
figure 5. The interpretation shows a strong magnetic unit, which drilling confirmed to be a
mafic volcanic sequence, within a 2 kilometres wide structural corridor comprising of primary
north trending structures and secondary northwest and northeast trending structures. There
are significant areas of demagnetisation coincident with these structures which could be
explained as hydrothermal alteration occurring within dilation zones related to these structures
and are therefore potential sites for the formation of gold deposits.
It is well known that gold mineralisation can occur in areas of magnetite destruction as the
chemical interaction of magnetite with gold bearing fluids is the mechanism in which gold is
precipitated.
Wiluna is a major gold centre with historical production of approximately 5 million ounces and
is located 55 kilometres to the southeast of the Finlayson prospect. The gold mineralisation at
Wiluna is hosted in a sequence of mafic volcanic rocks within a corridor 2 kilometres wide and
5 kilometres long that is bounded by two major north trending structures. Between these major
structures are secondary brittle-ductile linking structures orientated to the north and northeast
that host the gold in the form of quartz reef deposits with associated sulphides. There is also
demagnetisation of the host rocks associated with the gold mineralisation within this corridor.
At this early stage the geological associations and dimension of the Finlayson prospect
compares well to Wiluna.
Basement depths determined by the drilling combined with the geophysical data and field
mapping of the basal Finlayson Member has identified extensive areas of interest that are likely
to be prospective for gold under shallow cover. Whilst the newly discovered shear zone will be
the immediate focus of future exploration these other areas of interest will be included into the
overall exploration strategy.
The Finlayson prospect is a high priority with the potential for a major gold discovery. The
Company is planning further work including geochemical & geophysical surveys and further
drilling to be completed as soon as possible.
Goodin Prospect
The Goodin prospect is located 25km southeast of the Degrussa mine and only 17km from the
new Monty discovery. The company believes both Monty and Degrussa are located within a
NNW trending Waroonga – Ida fault zone (“WFZ”) which extends into the Goodin prospect.
These trends are clear in both regional geophysical and geochemical datasets (fig 6).
The WFZ is a very large crustal fault that is believed to be the first order control for many
world class nickel and gold deposits to the south. The company believes this fault zone was re-
activated during the formation of the Yerrida Basin and because it penetrates deep into the
crust is major conduit for heat transfer, ore forming fluids, intrusions and volcanic activity.
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Great Western Exploration Limited
Aeromagnetic combined with gravity
800m x800m Cu in soils
Figure 6.
Regional “Monty” and “Degrussa” trends in the regional geophysics and geochemistry
associated with the Waroonga – Ida Fault Zone (“WFZ”)
The company believes metal bearing hot fluids are focussed into areas where the WFZ
intersects north east (“NE”) trending structures forming replacement style massive sulphide
deposits and/or venting onto the sea floor to form VMS deposits during the formation of the
Yerrida Basin.
Furthermore the regional geological maps published by Sandfire Resources indicate a possible
stratigraphic relationship between the Degrussa deposit and the Johnson Cairn sequence where
Degrussa is located within or along the contact of this unit. The significance of this is that the
Johnson Cairn can be used as a marker horizon as it has been mapped extensively throughout
the region and indicates relative timing of the formation of rocks located above (younger) and
below (older).
At Goodin the company has previously identified 12 late time conductors that fulfil the above
criteria of which 6 are a high priority and during the year the company drilled two of these
targets. The drilling did intersect interbedded shale-siltstone sequence hosting up to 10%
disseminated pyrite and a sandstone sequence the company believes to be the target horizon.
The current airborne EM survey does not cover the “Monty” trend where there are several soil
geochemical and geophysical anomalies (fig 7). The company is planning to extend the survey
to cover this area along with follow-up ground surveys (both along the Degrussa and Monty
trends) and further drill testing.
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Great Western Exploration Limited
The Goodin prospect is an exciting opportunity for the discovery of massive copper sulphide
mineralisation similar to Degrussa or Monty.
“Monty”
Trend
“Degrussa”
Trend
Further follow-up areas require EM surveys:
Area 1: Enrichment of copper along NW fault along strike of Monty coincident with a density anomaly.
Area 2: Unexplained enrichment of copper along possible NE trending fault
Area 3: Unexplained moderate copper enrichment co-incident with strong gold enrichment along a
possible NE trending fault.
Figure 7. Shows areas of copper enrichment or depletion within a particular rock type compared to the
average background of that rock type. Useful for identifying fluid pathways at the surface that
may feed mineralisation at depth or along strike. Note the strong correlation of enrichment
along the “Monty:” trend.
Millrose (GTE 100%)
Millrose project is located 100km northeast of Wiluna and initially comprises of 3 Exploration
Licenses for a total area of 350km2 (fig 1).
The project was initially acquired because of an area of regional magnetic anomalism which
GTE had identified as one of the few remaining, unexplored Archaean greenstone belts within
Australia. The Company now controls 100% of the greenstone belt which extends for 35km of
strike.
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Great Western Exploration Limited
Work completed on the project to date includes detailed magnetic and radiometric surveying,
geological mapping and soil sampling which has confirmed the presence of Archaean BIF and
volcanics with associated gold and arsenic anomalism.
Initial soil sampling have delineated gold anomalism over a 10 km strike distance and
subsequent infill has identified a 1.5km gold-copper-nickel geochemical anomaly similar to
what was reported at the recently discovered Camelwood and Mt Fisher prospects located in
the same district.
During the year the company relinquished two of the three exploration tenements and is in the
process of reviewing the results to determine whether to continue with the final tenement,
however it is likely that the company will relinquish this tenement as well to concentrate on the
Company’s main Yerrida Projects.
Mt Gibb (GTE 10% free carried)
The Mt Gibb Nickel Project comprises of a 7 Exploration Licenses for total area of 170km2
surrounding Western Areas NL (ASX:WSA) nickel operations at Flying Fox - Spotted Quoll -
Diggers Rocks (fig 8).
Figure 8. Location of Mt Gibb JV
In October 2009, the company entered the Mt Gibb Joint Venture Agreement with Western
Areas NL to explore GTE’s tenements. Western Areas holds an impressive discovery record
since they commenced nickel exploration in the Forrestania region including the Spotted Quoll
and Diggers South nickel deposits. By January 2012, WSA had completed the first stage of its
earn-in (51%) and can earn up to 70% interest in the Project by spending a total of $2.5 million.
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Great Western Exploration Limited
During this year WSA completed the JV Earn In and as per the JV Agreement the Company
elected to dilute to a 10% free carried interest through to Bankable Feasibility Study. WSA have
indicated they are continuing to explore the area.
Competent Person Statement
The information in this report that relates to Exploration Results, Mineral Resources or Ore
Reserves is based on information compiled by Mr Jordan Luckett who is a member of the
Australian Institute of Mining and Metallurgy. Mr Luckett is an employee of Great Western
Exploration Limited and has sufficient experience which is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore
Reserves’. Mr Luckett consents to the inclusion in the report of the matters based on his
information in the form and context in which it appears.
Exploration Targets
It is common practice for a company to comment on and discuss its exploration in terms of
target size and type. The information in this announcement relating to exploration targets
should not be misunderstood or misconstrued as an estimate of Mineral Resources or Ore
Reserves. Hence the terms Resource(s) or Reserve(s) have not been used in this context in this
announcement. The potential quantity and grade of resource targets are conceptual in nature
since there has been insufficient work completed to define them beyond exploration targets and
that it is uncertain if further exploration will result in the determination of a Mineral Resource
or Ore Reserve.
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Great Western Exploration Limited
Tenement Schedule
District
Project Name
Tenement No.
Status
Ownership
Mt Gibb JV Project
Mt Gibb South
Hatters Hill
Hatters Hill
North Iron Cap
North Iron Cap
North Iron Cap
Neds Creek
Neds Creek
Neds Creek
Neds Creek
Neds Creek
Doolgunna
Doolgunna
Doolgunna
Paroo
Paroo
Paroo
Paroo
Paroo
Paroo
Paroo
Paroo
Paroo
Paroo
Paroo
Cunyu JV
Cunyu JV
Cunyu JV
Millrose
Millrose
Millrose
Doolgunna Project
Millrose Project
E74/305
E74/368
E74/428
E74/446
E77/1545
E77/1546
E51/1333
E51/1320
E51/1321
E51/1330
E51/1355
E51/1322
E51/1323
E51/1324
E53/1712
E53/1728
E51/1540
E51/1560
E53/1722
E53/1713
E53/1730
E53/1740
E53/1774
E53/1775
E53/1776
E51/1234
E51/1238
E53/1341
E53/1619
E53/1620
E53/1666
Live
Live
Live
Live
Live
Live
Surrendered
Live
Live
Live
Live
Live
Live
Live
Live
Surrendered
Live
Live
Surrendered
Pending
Live
Live
Live
Live
Live
Live
Live
Live
10% free carried
10% free carried
10% free carried
10% free carried
10% free carried
10% free carried
100%
100%
100%
90%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
GTE earning 70%
GTE earning 70%
GTE earning 70%
Surrendered
Surrendered
Live
100%
100%
100%
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Great Western Exploration Limited
Directors’ Report
The Directors of Great Western Exploration Limited submit herewith the annual report
of Great Western Exploration Limited and subsidiaries (“the Group”) for the financial
year ended 30 June 2015.
Information on Directors:
The names and details of the Company’s directors in office during the financial year
and up to the date of this report are as follows. Directors were in office for the entire
year unless otherwise stated.
K C Somes
J A Luckett
C D Mathieson
T R Grammer (Appointed 25 July 2014)
Mr Kevin Clarence Somes FCA
Non-executive Chairman
Experience and expertise
Mr Somes is a fellow of the Institute of Chartered Accountants and has been a partner
of Somes & Cooke Chartered Accountants for over 25 years. The firm specialises in tax
and accounting services and auditing.
Mr Somes has extensive experience in the management of exploration companies, with
Somes & Cooke being the auditors of a number of ASX listed mining companies.
Other current directorships
None.
Former directorships in last three years
None.
Mr Jordan Ashton Luckett
Managing Director
Experience and expertise
During his career, Mr Luckett has been a member of a number of successful exploration
teams that have made discoveries in Western Australia, Queensland, Canada and
Africa. For the previous twelve years he has held senior management positions in both
mining and exploration companies.
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Great Western Exploration Limited
Directors’ Report (continued)
Mr Luckett has a Bachelor of Science degree and is a member of the Australasian
Institute of Mining and Metallurgy.
Mr Luckett has 24 years’ of experience in both exploration and mining geology, having
worked throughout Australia, North America and Africa. He has a broad experience
that includes grass roots exploration, project generation, resource definition,
underground mining and geological management.
Other current directorships
None.
Former directorships in last three years
None.
Mr Craig Douglas Mathieson
Non-executive
Experience and expertise
After completing a Bachelor of Business (Banking & Finance), Mr Mathieson spent 10
years in commercial banking, principally in commercial property finance. In 2001, he
returned to the family business, DMS Glass, as Managing Director until its sale to CSR
Ltd in 2007. Mr Mathieson is currently CEO of the Mathieson Group, a large family
group with diverse investments, including property, business and rural interests.
Mr Mathieson has extensive commercial experience and he is currently a Non-
executive Director of Funtastic Ltd.
Other current directorships
Funtastic Ltd (August 2009 – current)
World Oil Resources Limited (June 2013 – current)
Former directorships in last three years
IPB Petroleum Ltd (August 2012 – March 2014)
Mr Terrence Ronald Grammer – Appointed 25 July 2014
Non-executive
Experience and expertise
Mr Grammer is one of Australia’s most successful exploration geologist’s with a
career spanning more than 40 years in Australia, Africa, Asia and New Zealand.
Mr Grammer has been based in Western Australia since 1988 and has extensive
professional experience in the exploration of gold, base metals & industrial minerals
and has an enviable record over a long period of time that includes being directly
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Great Western Exploration Limited
Directors’ Report (continued)
involved in three highly successful exploration companies that made the transition
from junior explorer to an ASX200 Company.
He was a founder and promoter in 1999 of Western Areas NL, and was exploration
manager of the company from 2000 until retiring in 2004.
In 2000 he was joint winner of the AMEC Prospector of the Year Award for his role
in the discovery of the highly profitable Cosmos nickel deposit in 1997 that
subsequently resulted Jubilee Mines NL becoming a leading mid-tier Australian
mining company prior to its takeover by Xstrata.
In June 2010 Mr Grammer joined the Board of Sirius Limited that subsequently went
on to make the Nova discovery that has transformed that company and will likely
become a significant nickel producer in the near future.
Mr Grammer was also Chairman of South Boulder Mines Limited from May 08
through to August 2013 where he helped guide the company through the discovery,
development and funding of the Colluli potash deposit in Eritrea.
Mr Grammer is currently Non-Executive Director of Sirius Resources Limited and
Non-Executive Chairman of Kin Mining NL.
Other current directorships
Kin Mining NL ( August 2011 - current )
Former directorships in last three years
Sirius Limited (June 2010 – September 2015 )
South Boulder Mines Limited (October 2007 – July 2013)
Fortis Mining Limited (December 2010 – November 2011)
COMPANY SECRETARY
The interim Company Secretary is Mr Justin Barton. Mr Barton was appointed interim
company secretary on 24 August 2015, following the resignation of Mr Kel Edwards,
whom had served as Company Secretary for Great Western Exploration Limited for the
previous 8 years.
Mr Barton is a Chartered Accountant, with over 18 years’ experience in accounting,
international finance and mining and has held a board and Chief Financial Officer
position with another ASX listed mining company.
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Great Western Exploration Limited
Directors’ Report (continued)
PRINCIPAL ACTIVITIES
The principal activity during the year to 30 June 2015 was mineral exploration for
copper, gold and nickel.
During the year the group continued its strategy of reviewing and exploring its mineral
exploration projects.
OPERATING AND FINANCIAL REVIEW
Review
The principal activity of the Company is mineral exploration. The objective of the
Group, in the event of the discovery of a mineral resource, would be the successful
exploration and development of the resource.
Details of the Company’s exploration projects are included in the Review of
Exploration Activities on page 1.
Financial position
At the end of the financial year the Group had cash reserves of $131,139 (2014:
$311,457). The Company incurred expenditure on exploration and evaluation of
$559,753 (2014: $3,468,418) before write offs.
Results of Operations
The operating loss for the year, after providing for income tax was $1,624,590
(2014: $4,427,594).
RISKS AND RISK MANAGEMENT
The Company attempts to mitigate risks that may affect its future performance through
a systematic process of identifying, assessing, reporting and managing risks of
corporate significance. Key operational risks and their management are recurring items
for discussion at Board meetings.
The following discusses the Company’s most significant business risks.
18
Great Western Exploration Limited
Directors’ Report (continued)
a) Exploration
Whilst considered highly prospective, the Company’s tenements are early stage
exploration tenements with limited exploration undertaken on them to date.
Exploration is a high risk undertaking. The Company’s joint venture projects for
copper, nickel and gold prospects in Australia are in the preliminary stages of
exploration and no assurance is given that exploration of its current projects or
any future projects will result in the delineation or discovery
of a significant mineral resource. Even if a significant mineral resource is
identified, there can be no guarantee that it can be economically exploited.
b) Overseas Investments
Investing in an emerging market carries inherent risks, including but not limited
to economic, social or political instability, uncertainty, or change, extreme
fluctuations in currency exchange rates, high rates of inflation, labour unrest,
expropriation and nationalisation, renegotiation or nullification of existing
concessions, licences, permits and contracts, illegal mining, changes in taxation
policies, restrictions on foreign exchange and repatriation hyperinflation,
currency non-convertibility or instability and changes of law affecting foreign
ownership.
c) Commodity prices
As an explorer for copper, gold, nickel and potentially other minerals, any
successes of the Company are expected to be closely related to the price of those
and other commodities. Fluctuating prices in those commodities make market
prices for securities in the Company more volatile than for other investments.
Commodities prices are affected by numerous factors beyond the control of the
Company. These factors include worldwide and regional supply and demand
for commodities, general world economic conditions and the outlook for interest
rates, inflation and other economic factors on both a regional and global basis.
These factors may have a positive or negative effect on the Company’s
exploration, project development and production plans and activities, together
with the ability to fund those plans and activities.
19
Great Western Exploration Limited
Directors’ Report (continued)
d) Environmental
The Company’s projects are subject to rules and regulations regarding
environmental matters and the discharge of hazardous wastes and materials. As
with all mineral projects, the Company’s projects are expected to have a variety
of environmental impacts should development proceed. Development of any of
the Company’s projects will be dependent on the Company satisfying
environmental guidelines and, where required, being approved by government
authorities.
The Company intends to conduct its activities in an environmentally responsible
manner and in accordance with all applicable laws, but may still be subject to
accidents or other unforeseen events which may compromise its environmental
performance and which may have adverse financial implications.
e) Future capital needs.
The Company’s ability to raise further capital (equity or debt) within an
acceptable time of a sufficient amount and on terms acceptable to the Company
will vary according to a number of factors, including prospectivity of projects
(existing and future), the results of exploration, subsequent feasibility studies,
development and mining, stock market and industry conditions and the price of
relevant commodities and exchange rates.
No assurance can be given that future funding will be available to the Company
on favourable terms (or at all). If adequate funds are not available on acceptable
terms, the Company may not
be able to further develop its projects and it may impact on the Company’s
ability to continue as a going concern.
20
Great Western Exploration Limited
Directors’ Report (continued)
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There has been no significant change in the state of affairs of the Company during the
financial year other than:
•
•
•
In October 2014, the placement of 8,601,000 ordinary fully paid shares at an issue
price of $0.04 each to raise $322,770 after issue costs.
In January 2015, the completion of a 1:3 non-renounceable rights issue to
shareholders for the issue of 12,447,760 ordinary fully paid shares at an issue
price of $0.03 each, to raise $343,060 after issue costs.
In June 2015, the placement of 10,600,000 ordinary fully paid shares, each with a
free attaching option exercisable at $0.03 and expiring 30 June 2016 at an issue
price of $0.01 each to raise $103,314 after issue costs.
DIVIDENDS
No dividends have been recommended by the Directors.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
The Directors are not aware of any matter or circumstance that has arisen since 30 2015
which has significantly affected or may significantly affect the operations of the Group,
the results of those operations, or the state of affairs of the Group, in future financial
years other than:
On 29 September 2015, Great Western Exploration Limited held a General Meeting
where the shareholders approved the following 7 resolutions:
Resolution 1
- Approval to Issue Shares Pursuant to Share Placement
Approval for the Directors to issue up to 70,000,000 Shares at an issue price
of $0.01 per share.
Resolution 2
- Approval for Mr Kevin Somes to participate in Share Placement
Approval for Mr Kevin Somes to participate in the Share Placement up to
10,000,000 Shares.
21
Great Western Exploration Limited
Directors’ Report (continued)
Resolution 3
- Approval for Mr Craig Mathieson to participate in Share Placement
Approval for Mr Craig Mathieson to participate in the Share Placement up
to 10,000,000 Shares.
Resolution 4
- Ratification of prior placement of Shares and Options
Ratified the prior issue of 10,600,000 Shares together with 10,600,000 free
attaching Options expiring 30 June 2016 exercisable at $0.05.
Resolution 5
- Proposed issue of Shares to Mr Kevin Somes in lieu of Director Fees
Approval for the issue of 6,022,600 Shares at an issue price of $0.01 per Share
to Mr Kevin Somes in full satisfaction of the accrued and outstanding
Director’s fees as at 30 June 2015 being $60,226.
Resolution 6
Director Fees
- Proposed issue of Shares to Mr Jordan Luckett in lieu of Salary and
Approval for the issue of 15,589,200 Shares at an issue price of $0.01 per
Share to Mr Jordan Luckett in full satisfaction of accrued and outstanding
Salary and Director’s fees as at 30 June 2015 being $155,982.
Resolution 7
- Proposed issue of Shares to Mr Craig Mathieson in lieu of Director Fees
Approval for the issue of 3,285,000 Shares at an issue price of $0.01 per Share
to Mr Craig Mathieson in full satisfaction of the accrued and outstanding
Director’s fees as at 30 June 2015 being $32,850.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
The Directors are not aware of any developments that might have a significant effect on
the operations of the Company in subsequent financial years not already disclosed in
this report.
ENVIRONMENTAL REGULATIONS
in an
Great Western Exploration Limited conducts
environmentally sensitive manner, and believes it has adequate systems in place for the
management of environmental requirements. The Company is not aware of any breach
of statutory conditions or obligations.
its exploration activities
The Directors have considered the enacted National Greenhouse and Energy Reporting
Act 2007 (the NGER Act) which introduces a single national reporting framework for
the reporting and dissemination of information about the greenhouse gas emissions,
22
Great Western Exploration Limited
Directors’ Report (continued)
greenhouse gas projects, and energy use and production of corporations. At the
current stage of development, the Directors have determined that the NGER Act will
have no effect on the Company for the current, nor subsequent, financial year. The
Directors will reassess this position as and when the need arises.
SHARE OPTIONS
The details of unissued ordinary shares under option at the date of this report are as
follows:
Grant Date Number
Under
Option
4,000,000
4,000,000
2,000,000
Option holders do not have any right, by virtue of the option, to participate in any
share issue of the Company or any related body corporate.
9 August 2011
12 December 2012
25 July 2014
30 May 2016
30 June 2016
30 June 2016
Unlisted
Unlisted
Unlisted
60 cents
60 cents
10 cents
Exercise
Price
Expiry Date
DIRECTORS’ INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY
The particulars of Directors’ interest in shares and options are as at the date of this report.
Ordinary
Shares
Options
Expiring
30 June 2016
-
3,000,000
1,000,000
2,000,000
K C Somes
J A Luckett
C D Mathieson
T R Grammer
8,366,972
8,582,546
14,958,045
-
DIRECTORS AND OFFICERS INSURANCE
The Company has made an agreement to indemnify all the Directors and Officers
against all indemnifiable losses or liabilities incurred by each Director and Officer in
their capacities as Directors and Officers of the Company to the extent permitted by the
Corporations Act 2001.
The Company has taken out an insurance policy at a premium of $18,260 in relation to
Directors and Officers indemnity.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the
company or intervene in any proceedings to which the company is a party for the
23
Great Western Exploration Limited
Directors’ Report (continued)
purpose of taking responsibility on behalf of the company for all or any part of those
proceedings.
The company was not a party to any such proceedings during the year.
NON-AUDIT SERVICES
Bentleys did not receive fees for non-audit services during the financial year. The
Directors are satisfied that the provision of non-audit services is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001.
Details of the amounts paid or payable to the auditor for audit and other services paid
during the year are set out in Note 26.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Auditor’s Independence Declaration, as required under section 307C of
the Corporations Act 2001, is set out on page 98.
24
Great Western Exploration Limited
REMUNERATION REPORT (AUDITED)
Remuneration Policy
This Remuneration Report outlines the director and executive remuneration
arrangements of the Company in accordance with the requirements of the Corporations
Act 2001 and its Regulations. For the purposes of this report Key Management
Personnel (KMP) of the Company are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities of the
Company and the Company, directly or indirectly, including any director (whether
executive or otherwise) of the Company.
For the purposes of this report, the term “executive” encompasses the Chief Executive
and senior executives.
i)
Directors
K C Somes
J A Luckett
C D Mathieson Director (Non-executive)
T R Grammer
Director (Non-executive)
Director (Executive)
Director (non-executive)(Appointed 25 July 2014)
There were no other changes of key management personnel after reporting date
and before the financial report was authorised for issue.
The Company has not established a Remuneration Committee, the role of the
Committee is assumed by the Board, as a whole, which is responsible for determining
and reviewing the remuneration arrangements of the directors and executives.
The Board assesses the appropriateness of the nature and amount of emoluments of
such Directors and executives on an annual basis by reference to market and industry
conditions.
In order for the Company to prosper, thereby creating shareholder value, the Company
must be able to attract and retain the highest calibre executives.
Executive and non-executive directors, other key management personnel and other
senior employees have been granted options over ordinary shares under the
Company’s Employee Share Option Plan. The recipients of options are responsible for
growing the Company and increasing shareholder value. If they achieve this goal the
value of the options granted to them will also increase. Therefore the options provide
an incentive to the recipients to remain with the Company and to continue to work to
enhance the Company’s value.
Due to the nature of the Company’s operations the current remuneration policy is not
linked to the performance of the Company.
25
Great Western Exploration Limited
REMUNERATION REPORT (AUDITED)
Remuneration Policy (continued)
Non-executive Directors remuneration
The Board seeks to set remuneration levels that provide the Company with the ability
to attract and retain the highest calibre professionals.
Fees and payments to non-executive Directors reflect the demands that are made on
and the responsibilities of the Directors from time to time.
Directors’ fees are determined by the Board within the aggregate Directors fee limit
approved by shareholders. The maximum currently approved by the Constitution
stands at $250,000.
Remuneration in the form of share options issued under the Company’s Employee
Share Option Plan is designed to reward Directors and executives in a manner aligned
to the creation of shareholder wealth. Subject to shareholders’ approval non-executive
directors may participate in the Company’s Employee Share Option Plan. The Board
considers the grant of options to be reasonable given the necessity to attract and retain
the highest calibre professionals to the Company.
Non-executive Directors receive superannuation benefits in accordance with the
Superannuation Guarantee Legislation. Non-executive directors are permitted to
salary sacrifice all or part of their fees.
Due to the nature of the Company’s operation i.e. mineral exploration and
development, the remuneration of directors and executives, at present, does not
include performance-based incentives.
Executive Remuneration (including executive directors)
The Board aims to reward executives with a level and mix of remuneration
commensurate with their position and responsibilities to align the interests of
executives with those of shareholders and to ensure that remuneration is market
competitive.
Remuneration consists of:
• Fixed Remuneration.
Being base salary, non-monetary benefits and superannuation. Fixed
remuneration is reviewed annually.
26
Great Western Exploration Limited
REMUNERATION REPORT (AUDITED)
Remuneration Policy (continued)
• Variable remuneration – Long term incentives.
Being share options issued under the Company’s Employee Share Option Plan.
The options do not have any vesting conditions other than service conditions.
Remuneration issued in the form of share options issued under the Company’s
Employee Share Option Plan is designed to reward directors and executives in a
manner aligned to the creation of shareholder wealth.
Due to the nature of the Company’s operation i.e. mineral exploration and
development, the remuneration of directors and executives, at present, does not
include performance-based incentives.
The Company has entered into contracts of employment with the Managing Director,
and standard contracts with other executives, the details of which are set out below.
Name
J A Luckett
Position
Managing
Director
Contract Details
Daily rate of $650 a day (Base on a
nominalised annual salary $120,000),
reviewed
plus
annually. In addition, will receive
$30,000 for Director Fees annually.
superannuation,
The Company may terminate, other
than for gross misconduct, with 1
month’s notice or payment in lieu of
an amount of $12,500 on the grounds
of
or
inadequate performance
illness, or 3 month’s
prolonged
notice or payment in lieu of an
amount of $37,500 for redundancy or
the Company being taken over.
Termination payments
are not
payable on resignation or under
circumstances
unsatisfactory
of
performance.
27
Great Western Exploration Limited
REMUNERATION REPORT (AUDITED) (continued)
Remuneration of Key Management Personnel
Short Term Post Employment Long Term Share based Payment
Salary
& Fees
$
Cash
Bonus
$
Non-monetary
Benefits
$
Other
$
Superannuation
$
Retirement
Benefits
$
Incentive
Plans
$
Long
service
leave
$
Options
$
Total
$
%
Performance
related
$
30 June 2015
Non-executive
directors
K C Somes
C D Mathieson
T R Grammer
Executive directors
J A Luckett
Total
30 June 2014
Non-executive
directors
K C Somes
C D Mathieson
F Cannavo
Executive directors
J A Luckett
Total
55,000
30,000
32,603
117,603
150,0001
267,603
41,250
30,000
7,500
78,750
311,2521
390,002
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,225
2,850
3,097
11,172
11,400
22,572
3,884
2,813
694
7,391
28,984
36,375
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31,018
31,018
60,225
32,850
66,718
159,793
-
161,400
-
31,018
321,193
-
-
-
-
-
-
-
-
-
-
-
-
45,134
32,813
8,194
86,141
340,236
426,377
1.Includes Directors fees of $30,000 in 2015 and $61,252 in 2014.
-
-
-
-
-
-
-
-
-
-
28
Great Western Exploration Limited
REMUNERATION REPORT (AUDITED) (continued)
Compensation Options: Granted and Vested during the year
30 June 2015
Details of Share based payments granted as compensation to Key Management
Personnel during the current financial year.
Directors
T R Grammer
Grant Date
Fair Value per Option
Exercise Price per Option
Expiry Date
First Exercise Date
Last Exercise Date
Vested No.
Vested %
25 July 2014
$0.0155
$0.10
30 June 2016
25July 2014
30 June 2016
2,000,000
100
No. of
Options
2,000,000
2,000,000
30 June 2014
No Compensation options were granted or vested during the year ended 30 June 2014.
Options granted as part of remuneration
30 June 2015
Value of
Options
Granted
During the
Year
Value of
Options
Exercised
During the
Year
Value of
Options
Lapsed
During the
Year
Directors
T R Grammer
$
31,018
31,018
$
$
-
-
-
-
%
Remuneration
consisting of
Options for the
Year
45.13
29
Great Western Exploration Limited
REMUNERATION REPORT (AUDITED) (continued)
For details on the valuation of options, including models and assumptions used, refer
to Note 21.
There were no alterations to the terms and conditions of options granted as
remuneration since their grant date.
30 June 2014
No options were granted as part of remuneration for the year ended 30 June 2014.
Shares issued on Exercise of Compensation Options
Share Issue
No.
Paid
Per Share
Unpaid
Per Share
30 June 2015
Directors
Executives
30 June 2014
Directors
Executives
-
-
-
-
-
-
-
-
-
-
-
-
30
Great Western Exploration Limited
REMUNERATION REPORT (AUDITED) (continued)
Option Holding of Key Management Personnel
30 June 2015
Directors
J A Luckett
T R Grammer
C D Mathieson
K C Somes
30 June 2014
Directors
K C Somes
J A Luckett
C D Mathieson
F Cannavo
Balance
1 July 2014
Granted as
Remunerati
on
Options
Exercised/
Cancelled
Net Change
Other
Balance
30 June 2015
Exercisable
Not
Exercisable
3,000,000
-
1,000,000
-
4,000,000
-
2,000,000
-
-
2,000,000
-
-
-
-
-
-
-
-
-
-
3,000,000
2,000,000
1,000,000
-
6,000,000
3,000,000
2,000,000
1,000,000
-
6,000,000
-
-
-
-
-
Balance
1 July 2013
Granted as
Remunerati
on
Options
Exercised/
Cancelled
Net Change
Other
Balance
30 June 2014
Exercisable
Not
Exercisable
-
3,000,000
1,000,000
1,000,000
5,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,000,000
1,000,000
1,000,000
5,000,000
-
3,000,000
1,000,000
1,000,000
5,000,000
-
-
-
-
-
31
Great Western Exploration Limited
REMUNERATION REPORT (AUDITED) (continued)
Shareholdings of Key Management Personnel
30 June 2015
Directors
K C Somes
J A Luckett
C D Mathieson
T R Grammer
30 June 2014
Directors
K C Somes*
J A Luckett
C D Mathieson
F Cannavo*
Balance
1 July 2014
Granted as
Remuneration
On exercise of
Options
Net Change
Other
Balance
30 June 2015
4,671,273
7,838,333
8,266,830
-
20,776,436
Balance
1 July 2013
Granted as
Remuneration
-
3,675,000
3,700,123
3,900,000
11,275,123
-
-
-
-
-
-
-
-
-
-
On exercise of
Options
-
-
-
-
-
-
-
-
-
-
3,695,699
700,000
6,666,666
-
11,062,365
8,366,972
8,538,333
14,933,496
-
31,838,801
Net Change
Other
Balance
30 June 2014
4,671,273
4,163,333
4,566,707
375,000
13,776,313
4,671,273
7,838,333
8,266,830
4,275,000
25,051,436
*Mr Somes was appointed a Director on 11 October 2013 and Mr Cannavo resigned as a Director on 11 October 2013
END OF REMUNERATION REPORT (AUDITED)
32
Great Western Exploration Limited
Directors’ Report (continued)
This Report of Directors, incorporating the Remuneration Report, is signed in
accordance with a resolution of the Directors.
Dated this 30 day of September 2015
K C Somes
Chairman
33
Great Western Exploration Limited
Corporate Governance Statement
For the year ended 30 June 2015
The Board of Directors of Great Western Exploration Limited is responsible for
Corporate Governance of the company. The Board guides and monitors the business
and affairs of the Company on behalf of the shareholders by whom they are elected
and to whom they are accountable.
Due to the size and nature of the Company’s activities, the Board as a whole is
involved in matters where larger Boards would ordinarily operate through sub-
committees. Some of the best practices recommended are not cost effective for adoption
in a small company environment.
The Board is committed to the standards of Corporate Governance as set out in the
ASX Corporate Governance Council’s Principles and Recommendations.
STRUCTURE OF THE BOARD
The skills, experience and expertise relevant to the position of Director held by each
director in office at the date of the Annual Report is set out in the Directors’ Report.
Directors of Great Western Exploration Limited are considered to be independent
when they are independent of management and free from any business or other
relationship that could materially interfere with or could reasonably be perceived to
materially interfere with the exercise of their unfettered and independent judgement.
The following directors were considered to be independent during the year:
Mr K C Somes
Mr C D Mathieson
MR T R Grammer
There are procedures in place to enable Directors to seek independent professional
advice, at the expense of the Company, on issues arising in the course of their duties as
Directors.
Set out below is the term in office held by each Director at the date of this report:
Mr K C Somes
Mr J A Luckett
Mr C D Mathieson
Mr T R Grammer
Non-executive Director
Managing Director
Non-executive Director
Non-executive Director
Appointed 11 October 2013
Appointed 22 January 2008
Appointed 9 December 2011
Appointed 25 July 2014
Nomination Committee
The function of establishing the criteria for Board membership, nomination of Directors
and review of Board membership, is performed by the Board as a whole, until such
time as the Company is of a sufficient size to warrant the establishment of a separate
Nomination Committee.
The composition of the Board is determined ensuring that there is an appropriate
combination of corporate and operational expertise and qualifications.
34
Great Western Exploration Limited
Corporate Governance Statement (continued)
For the year ended 30 June 2015
Performance
An evaluation of Directors is conducted by the Board on an annual basis. The
Managing Director is responsible for the review of key executives.
Remuneration
The Board as a whole is responsible for determining and reviewing the arrangements
for Directors and Executive management. The Board assesses the appropriateness of
the nature and amount of emoluments of such Officers on an annual basis by reference
to market and industry conditions and taking into account the Company’s operational
and financial performance.
Details of remuneration received by Directors and executives are included in the
Remuneration Report contained within the Directors’ Report.
CODE OF CONDUCT
The Company has established its Code of Conduct to ensure that directors and senior
executives are provided with clear principles setting out the expectations of their
conduct.
It is expected that directors and senior executives will actively promote the highest
standards of ethics, honesty and integrity in carrying out their roles and responsibilities
for the Company.
In dealings with the Company’s suppliers, competitors, customers and other
organisations with which they have contact, they will exercise fairness and integrity,
and will observe the form and substance of the regulatory environment in which the
Company operates.
Directors and senior executives must, at all times, act in the interests of the Company
and will ensure compliance with the laws and regulations in relation to the
jurisdictions in which the Company operates.
Directors and senior executives have a role in ensuring compliance with this code of
conduct, and therefore should be vigilant and report any breach of this code of
conduct.
For further information on the Company’s Code of Conduct refer to our website.
DIVERSITY POLICY
Diversity includes, but is not limited to, gender, age, ethnicity and cultural
background. The Company is committed to workplace diversity and recognises the
benefits arising from employee and board diversity including a broader pool of high
quality employees, improving employee retention, accessing different perspectives and
ideas and benefiting from all available talent.
The Board is responsible for developing measurable objectives and strategies to meet
the objectives and the monitoring of the progress of the objectives.
35
Great Western Exploration Limited
Due to the present scale of operations and number of staff the Company has not yet
set measurable objectives for achieving gender diversity. The Board will review
progress against any objectives identified on an annual basis.
Details of women employed within the Company are as follows:
Women on the Board
Women in senior management roles
Women employees in the Company
TRADING POLICY
No.
%
-
-
-
-
-
-
Under the Company’s Securities Trading Policy Directors and Key Management
Personnel must not trade in any securities of the Company at any time when they are
in possession of information which is not generally available to the market and, if it
were generally available to the market, would be likely to have a material effect on the
price or value of the Company’s securities.
Directors and Key Management Personnel are permitted to deal in the securities of the
Company throughout the year except during the following periods:
In the two weeks prior to, and 24 hours after the release of the Company’s Annual
Financial Report;
In the two weeks prior to, and 24 hours after the release of the Interim Financial Report
of the Company;
In the two weeks prior to, and 24 hours after the release of the Company’s Quarterly
Reports (together the Block out Period)
Any Director wishing to deal in the Company’s securities must obtain the prior written
approval of the Chairman or the Board before doing so.
If the Chairman wishes to deal in the Company’s securities the Chairman must obtain
the prior approval of the Board before doing so.
Any Key Management Personnel wishing to deal in the Company’s securities must
obtain the prior written approval of the Managing Director before doing so.
ASX Listing Rules require the Company to notify ASX within 5 business days after any
dealing in the securities of the Company
The Securities Trading Policy can be found on the company’s website.
AUDIT COMMITTEE
The Board has not established an Audit Committee.
The role of the Audit Committee in the establishment of effective internal control
framework to safeguard the Company’s assets, maintain proper accounting records
and ensure the reliability of financial information was performed by the Board as a
whole during the financial year.
36
Great Western Exploration Limited
Corporate Governance Statement (continued)
For the year ended 30 June 2015
The Board as a whole deals directly with and receives reports from the Company’s
external auditors in relation to the Annual financial reports and other statutory
requirements.
RISK MANAGEMENT
The Board as a whole carries out the role of Risk Management. The Board evaluates
and monitors areas of operational and financial risk.
The Board determines the Company’s risk profile and is responsible for overseeing and
approving risk management strategy and policies, internal compliance and internal
control. The effectiveness of controls is monitored and reviewed regularly.
The Chief Executive Officer and Chief Financial Officer, or equivalent, have provided a
written statement to the Board that in their view the Company’s financial report is
founded on a sound system of risk management and internal compliance and control
which implements the financial policies adopted by the Board and that the company’s
risk management and internal compliance and control system is operating effectively in
all material respects.
COMPLIANCE WITH DISCLOSURE REQUIREMENTS
The Company is committed to meeting its disclosure obligations and to the promotion
of investor confidence in its securities. It has in place written policies and procedures
to ensure compliance with ASX Listing Rule 3.1.
The Company will immediately notify the market by announcement to the ASX of any
information concerning the business of Great Western Exploration Limited that a
reasonable person would expect to have a material effect on the price or value of the
Company’s securities.
SHAREHOLDERS
The Board endeavours to ensure that shareholders are fully informed of all activities
affecting the Company. Information is conveyed to shareholders via the Annual
Report, Quarterly Reports and other announcements.
This
www.greatwesternexploration.com.au, and in hard copy upon request.
information
available
Company’s
the
on
is
website,
The Board encourages attendance and participation of shareholders at the Annual
General and other General Meetings of the Company.
The Company’s external auditor is requested to attend the Annual General Meeting
and be available to take questions about the conduct of the audit and the content of the
Auditors’ Report.
37
Great Western Exploration Limited
Corporate Governance Statement (continued)
For the year ended 30 June 2015
COMPLIANCE WITH BEST PRACTICE RECOMMENDATIONS
The Board sets out below its “if not why not” report in relation to those matters of
corporate governance where
the Company’s practices depart
from
the
Recommendations.
Recommendation
Great Western Exploration Limited
Current Practice
1.1
Companies should establish the
Satisfied.
functions reserved for the board and
those delegated to senior executives and
Board Charter is available at
disclose those functions.
www.greatwesternexploration.com.au
in the Corporate Governance Statement.
1.2
Companies should disclose the process
Satisfied.
for evaluating the performance of senior
executives.
Performance Evaluation Policy is
available at
www.greatwesternexploration.com.au
in the Corporate Governance Statement.
2.1
A majority of the board should be
Not satisfied.
independent directors.
At present, due to the size and nature of
the Company’s operations, the Directors
believe the current structure and
makeup of the Board which provides an
appropriate combination of corporate
and operational expertise to be in the
best interests of shareholders. This
position is to be reviewed annually.
2.2
The chair should be an independent
Not satisfied.
director.
During the year the Role of Chairman
38
Great Western Exploration Limited
Recommendation
Great Western Exploration Limited
Current Practice
and Managing Director was held by the
same person until 11 October 2013
when Mr K C Somes an independent
director was appointed chair.
2.3
The roles of chair and Chief Executive
Not Satisfied.
Officer should not be exercised by the
same individual.
Refer 2.2 above the role of Chair and
CEO were exercised by the same person
for the period 1 July 2013 to 11 October
2013.
2.4
The board should establish a
Not satisfied.
nomination committee.
The Board has not established a
Nomination Committee.
The Board considers that given the
current size, this function is efficiently
achieved with full Board participation,
until such time as the Company is of
sufficient size to warrant the
establishment of the Committee.
2.5
Companies should disclose the process
Satisfied.
for evaluating the performance of the
board, its committees and individual
Performance Evaluation Policy is
directors.
available at
www.greatwesternexploration.com.au
in the Corporate Governance Statement.
3.1
Companies should disclose a code of
Satisfied.
39
Great Western Exploration Limited
Recommendation
conduct and disclose the code or a
Great Western Exploration Limited
Current Practice
summary of the code as to:
The Code of conduct is available at
The practices necessary to maintain
www.greatwesternexploration.com.au
confidence in the company’s integrity
in the Corporate Governance Statement.
The practices necessary to take into
account their legal obligations and the
reasonable expectations of their
stakeholders
The responsibility and accountability of
individuals for reporting and
investigating reports of unethical
practices.
3.2
Companies should establish a policy
Satisfied.
concerning diversity and disclose the
policy or a summary of that policy. The
The Diversity Policy is available at
policy should include requirements for
www.greatwesternexploration.com.au
the board to establish measurable
in the Corporate Governance Statement
objectives for achieving gender diversity
for the board to assess annually both the
objectives and progress in achieving
them.
3.3
Companies should disclose in each
Not satisfied.
annual report the measurable objectives
for achieving gender diversity set by the
At present due to the Company’s
board in accordance with the diversity
present scale of operations and number
policy and progress towards them.
of staff it has not yet set measurable
objectives for achieving gender
diversity. The Board will review on an
annual basis progress against any
objectives identified.
3.4 Companies should disclose in each
Satisfied
40
Great Western Exploration Limited
Recommendation
annual report the proportion of women
employees in the whole organisation,
women in senior management and
women on the board.
Great Western Exploration Limited
Current Practice
4.1
The board should establish an audit
Not satisfied.
committee.
The Board has not established an Audit
Committee. The Board as a whole
carries out the role of the Audit
Committee due to the current size and
nature of the Company’s operations and
size of the Board.
4.2
The audit committee should be
Not satisfied.
structured so that it:
Consists only of non-executive directors
Refer to comment 4.1.
Consists of a majority of independent
directors
Is chaired by an independent chair, who
is not chair of the board. Has at least
three members.
4.3
The audit committee should have a
Not satisfied.
formal charter.
Refer to comment 4.1.
5.1
Companies should establish written
Satisfied.
policies designed to ensure compliance
with ASX Listing Rule disclosure
Continuous disclosure policy is
requirements and to ensure
available at
accountability at senior executive level
www.greatwesternexploration.com.au
for that compliance and disclose those
in the Corporate Governance statement.
policies or a summary of those policies.
41
Great Western Exploration Limited
Recommendation
Great Western Exploration Limited
Current Practice
6.1
Companies should design a
Satisfied.
communications policy for promoting
effective communication with
Shareholders communication policy is
shareholders and encouraging their
available at
participation at general meetings and
www.greatwesternexploration.com.au
disclose their policy or a summary of
in the Corporate Governance statement.
their policy.
7.1
Companies should establish policies for
Satisfied.
the oversight and management of
material business risks and disclose a
Risk management program is available
summary of those policies.
at
www.greatwesternexploration.com.au
in the Corporate Governance statement.
7.2
The board should require management
Satisfied.
to design and implement the risk
management and internal control
The management and implementation
system to manage the company’s
of risk management and internal control
material business risks and report to it
systems to manage the Company’s
on whether those risks are being
material business risks is routinely
managed effectively. The board should
considered by the Board.
disclose that management has reported
to it as to the effectiveness of the
company’s management of its material
business risks.
7.3
The board should disclose whether it
Satisfied.
has received assurance from the chief
executive officer (or equivalent) and the
The Board has received a section 295A
chief financial officer (or equivalent) that
declaration pursuant to the 2014
the declaration provided in accordance
financial year.
with section 295A of the corporations
42
Great Western Exploration Limited
Recommendation
Act is founded on a sound system of
risk management and internal control
and that the system is operating
effectively in all material respects in
relation to financial reporting risks.
Great Western Exploration Limited
Current Practice
8.1
The board should establish a
Not Satisfied.
remuneration committee.
The Board has not established a
remuneration committee.
The Board considers that given the
current size this function is efficiently
achieved with full Board participation,
until such time as the Company is of
sufficient size to warrant the
establishment of the committee.
8.2
Companies should clearly distinguish
The structure of Directors’
the structure of non-executive directors’
remuneration is disclosed in the
remuneration from that of executive
remuneration report of the annual
directors and senior executives.
report.
For further information on the corporate governance policies adopted by Great
Western Exploration Limited refer to our website:
www.greatwesternexploration.com.au
43
Great Western Exploration Limited
Consolidated Statement of Financial Position
As at 30 June 2015
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other financial assets
Other assets
TOTAL CURRENT ASSETS
NON CURRENT ASSETS
Property, plant and equipment
Mineral exploration expenditure
Other financial assets
TOTAL NON CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Provisions
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
8
9
10
11
12
13
10
14
15
2015
$
131,139
12,611
400
-
144,150
2014
$
311,457
24,133
1,000
5,483
342,073
17,880
5,522,609
-
5,540,489
85,358
5,541,853
59,616
5,686,827
5,684,639
6,028,900
503,244
-
503,244
240,883
24,039
264,922
503,244
264,922
5,181,395
5,763,978
16
17
19,496,573
1,682,618
(15,997,796)
18,441,819
1,828,623
(14,506,464)
5,181,395
5,763,978
The above statement of financial position should be read in conjunction with the
accompanying notes.
44
Great Western Exploration Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For The Year Ended 30 June 2015
Interest received
Net ( loss) / gain on revaluation of financial assets
Other income
Gain on foreign exchange
Employee benefit expense
Administration expenses
Directors’ fees
Depreciation
Compliance and regulatory expenses
Mineral exploration written off
Impairment on property, plant and equipment
Note
5
13
2015
$
4,178
(600)
-
39,148
(476,965)
(350,690)
(119,435)
(19,906)
(75,033)
(578,997)
(46,290)
2014
$
35,586
(2,400)
14,321
-
(598,873)
(607,569)
(140,000)
(29,320)
(81,277)
(3,018,062)
-
Loss before income tax
(1,624,590)
(4,427,594)
Income tax expense
6
-
-
Loss for the year
(1,624,590)
(4,427,594)
Other comprehensive income
Items that may be reclassified subsequently to
profit or loss:
Exchange differences on translating foreign
controlled entities
Total comprehensive income for the year
(43,765)
18,061
(1,668,355)
(4,409,533)
Basic loss per share (cents per share)
7
(0.965)
(3.42)
The above statement of profit or loss and other comprehensive income should be read
in conjunction with the accompanying notes.
45
Great Western Exploration Limited
Consolidated Statement of Changes in Equity
For The Year Ended 30 June 2015
Issued Capital
Share
Option Reserve
30 June 2015
$
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
Total
Equity
$
$
18,441,819
-
1,784,858
-
43,765
-
(14,506,464)
(1,624,590)
5,763,978
(1,624,590)
Balance At 1 July 2014
Loss for the year
Foreign exchange
differences
Total comprehensive
income for the year
Transfer of expired options
Share based payments
Shares issued during the
year
Transaction costs
Balance at 30 June 2015
-
-
1,109,262
(54,508)
19,496,573
-
-
(133,258)
31,018
-
-
1,682,618
(43,765)
-
(43,765)
(43,765)
(1,624,590)
(1,668,355)
-
-
-
-
-
133,258
-
-
-
31,018
1,109,262
-
(15,997,796)
(54,508)
5,181,395
Issued Capital
Share
Option Reserve
30 June 2014
$
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
Total
Equity
$
$
Balance At 1 July 2013
Loss for the year
Other comprehensive income
Total comprehensive income
for the year
Transfer of expired options
Share based payments
Shares issued during the year
net of transaction costs
14,190,666
-
-
1,823,325
-
-
25,704
18,061
(10,126,870)
(4,427,594)
-
5,912,825
(4,427,594)
18,061
-
18,061
(4,427,594)
(4,409,533)
(48,000)
9,533
4,251,153
-
-
-
-
48,000
-
-
9,533
-
4,251,153
Balance at 30 June 2014
18,441,819
1,784,858
43,765
(14,506,464)
5,763,978
The above statement of changes in equity should be read in conjunction with the
accompanying notes.
46
-
-
-
-
-
Great Western Exploration Limited
Consolidated Statement of Cash Flows
For The Year Ended 30 June 2015
Cash flows from operating activities
Cash payments to suppliers and employees
Payments for exploration and evaluation
expenditure
Interest received
Net cash used in operating activities
Cash flows from investing activities
Payments for acquisition of mineral tenements
Payments for property, plant and equipment
Refund of security deposits
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares and options
Share issue costs
Net cash provided by financing activities
Note
2015
$
2014
$
(500,136)
(735,778)
(1,296,460)
(3,313,746)
4,178
(1,231,736)
35,586
(4,574,620)
18
-
(3,336)
-
(3,336)
(230,745)
(17,585)
11,258
(237,072)
1,109,262
(54,508)
1,054,754
4,431,798
(176,280)
4,255,518
Net increase in cash held
(180,318)
(556,174)
Cash at the beginning of the financial year
311,457
867,631
Cash at the end of the financial year
8
131,139
311,457
The above statement of cash flows should be read in conjunction with the
accompanying notes.
47
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015
These financial statements and notes represent those of Great Western Exploration
Limited (‘the Company’) and its controlled entities (‘the Group’).
The financial statements were authorised for issue on 30 September 2015 by the
Directors of the Company.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
The financial statements are general purpose financial statements that have been
prepared
in accordance with Australian Accounting Standards, Australian
Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board (AASB) and the Corporations Act 2001. The Group is
a for-profit entity for financial reporting purposes under Australian Accounting
Standards.
Australian Accounting Standards set out accounting policies that the AASB has
concluded would result in financial statements containing relevant and reliable
information about transactions, events and conditions. Compliance with Australian
Accounting Standards ensures that the financial statements and notes also comply
with International Financial Reporting Standards as issued by the IASB. Material
accounting policies adopted in the preparation of these financial statements are
presented below and have been consistently applied unless stated otherwise.
Except for cash flow information, the financial statements have been prepared on an
accruals basis and are based on historical costs, modified, where applicable, by the
measurement at fair value of selected non-current assets, financial assets and
financial liabilities.
a) Going Concern
The financial report has been prepared on the going concern basis, which
contemplates the continuity of normal business activity, and the realisation of
assets and the settlement of liabilities in the ordinary course of business.
The Group incurred a loss for the year of $1,624,590 (2014: $4,427,594). During
the year the company raised $1,054,754 after issue costs, by the way of rights
issues to shareholders in July 2014 and January 2015 and placements in October
2014 and June 2016.The Group has a working capital deficit of $359,094 at 30
June 2015 (30 June 2014: Surplus $77,151). The Group has ongoing expenditures
in respect of administration costs and exploration and evaluation expenditure on
its Australian exploration projects.
48
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The directors have prepared a cash flow forecast, which indicates that the Group
will have sufficient cash flows to meet all commitments (including those at Note
24) and working capital requirements for the 12 month period from the date of
signing this financial report.
The Directors believe that at the date of signing of the financial statements there
are reasonable grounds to believe that, having regard to the matters set out
above, the Group will be able to raise sufficient additional funds to meet its
obligations as and when they fall due and continue to proceed with the Group’s
objectives beyond the currently committed expenditure for the 12-month period
from the date of signing this financial report. In arriving at this conclusion, the
Directors are comfortable that, as and when required, they will be able to raise
equity to provide sufficient working capital.
On the 29th of September 2015 at the general meeting, shareholders approved to
raise up to $700k through a share placement.
Should the Directors not achieve the matters as set out above, there is material
uncertainty whether the Group will continue as a going concern and therefore
whether they will realise their assets and extinguish their liabilities in the normal
course of business and at the amounts stated in the financial report.
The financials do not include any adjustments relating to the recoverability and
classification of recorded asset amounts and classification of liabilities that might
be necessary, should the Group not continue as a going concern and meet its
debts as and when they fall due.
b) Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and
results of entities controlled by Great Western Exploration Limited at the end of
the reporting period. A controlled entity is any entity over which Great Western
Exploration Limited has the ability and right to govern the financial and
operating policies so as to obtain benefits from the entity’s activities.
Where controlled entities have entered or left the Group during the year, the
financial performance of those entities is included only for the period of the year
that they were controlled. A list of controlled entities is contained in Note 23 to
the financial statements.
49
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
In preparing the consolidated financial statements, all intragroup balances and
transactions between entities in the consolidated group have been eliminated in
full on consolidation.
Non-controlling interests, being the equity in a subsidiary not attributable,
directly or indirectly, to a parent, are reported separately within the equity
section of the consolidated statement of financial position and statement of
comprehensive income. The non-controlling interests in the net assets comprise
their interests at the date of the original business combination and their share of
changes in equity since that date.
Business combinations
Business combinations occur where an acquirer obtains control over one or more
businesses.
A business combination is accounted for by applying the acquisition method,
unless it is a combination involving entities or businesses under common
control. The business combination will be accounted for from the date that
control is attained, whereby the fair value of the identifiable assets acquired and
liabilities (including contingent liabilities) assumed is recognised (subject to
certain limited exemptions).
When measuring the consideration transferred in the business combination, any
asset or liability resulting from a contingent consideration arrangement is also
included. Subsequent to initial recognition, contingent consideration classified
as equity is not remeasured and its subsequent settlement is accounted for
within equity. Contingent consideration classified as an asset or liability is
remeasured in each reporting period to fair value, recognising any change to fair
value in profit or loss, unless the change in value can be identified as existing at
acquisition date.
All transaction costs incurred in relation to business combinations are expensed
to the Statement of Profit or Loss and Other Comprehensive income.
The acquisition of a business may result in the recognition of goodwill or a gain
from a bargain purchase.
50
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Goodwill
The consideration transferred;
(i)
(ii) Any non-controlling interest, and
(iii) The acquisition date fair value of any previously held equity interest over
the acquisition date fair value of net identifiable assets acquired.
The acquisition date fair value of the consideration transferred for a business
combination plus the acquisition date fair value of any previously held equity
interest shall form the cost of the investment in the separate financial statements.
Fair value uplifts in the value of pre-existing equity holdings are taken to the
statement of comprehensive income. Where changes in the value of such equity
holdings had previously been recognised in other comprehensive income, such
amounts are recycled to profit or loss.
The amount of goodwill recognised on acquisition of each subsidiary in which
the Company holds less than a 100% interest will depend on the method
adopted in measuring the non-controlling interest. The Company can elect in
most circumstances to measure the non-controlling interest in the acquire either
at fair value (full goodwill method) or at the non-controlling interest’s
proportionate share of the subsidiary’s identifiable net assets (proportionate
interest method). In such circumstances, the Company determines which
method to adopt for each acquisition and this is stated in the respective notes to
these financial statements disclosing the business combination.
Under the full goodwill method, the vair value of the non-controlling interests is
determined using valuation techniques which make the maximum use of market
information where available. Under this method, goodwill attributable to the
non-controlling interests is recognised in the consolidated financial statements.
Goodwill on acquisition of subsidiaries is included in intangible assets.
Goodwill on acquisition of associates is included in investments in associates.
Goodwill is tested for impairment annually and is allocated to the Company’s
cash-generating units or groups of cash-generating units, representing the
lowest level at which goodwill is monitored not larger than an operating
segment. Gains and losses on the disposal of an entity include the carrying
amount of goodwill related to the entity disposed of.
51
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
c) Application of New and Revised Accounting Standards
Amendments to AASBs and the new Interpretation that are mandatorily
effective for the current year
In the current year, the Group has applied a number of amendments to AASBs
and a new interpretation issued by the Australian Accounting Standards Board
(AASB) that is mandatorily effective from an accounting period on or after 1 July
2014.
The application of these amendments and interpretation does not have any
material impact on the Group’s consolidated financial statements.
Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Standards and
Interpretations that were issued but not yet effective are listed below.
Standard/Interpretation
AASB 9 ‘Financial Instruments’, and the relevant
amending standards
AASB 15 ‘Revenue from Contracts with Customers’
and AASB 2014-5 ‘Amendments to Australian
Accounting Standards arising from AASB 15’
AASB 2014-3 ‘Amendments to Australian
Accounting Standards – Accounting for
Acquisitions of Interests in Joint Operations’
AASB 2014-4 ‘Amendments to Australian
Accounting Standards – Clarification of Acceptable
Methods of Depreciation and Amortisation’
Effective for
annual reporting
periods beginning
on or after
Expected to be
initially applied
in the financial
year ending
1 January 2018
30 June 2019
1 January 2017
30 June 2018
1 January 2016
30 June 2017
1 January 2016
30 June 2017
AASB 2014-6 ‘Amendments to Australian
Accounting Standards – Agriculture: Bearer Plants’
1 January 2016
30 June 2017
AASB 2014-9 ‘Amendments to Australian
Accounting Standards – Equity Method in Separate
Financial Statements’
AASB 2014-10 ‘Amendments to Australian
Accounting Standards – Sale or Contribution of
1 January 2016
30 June 2017
1 January 2016
30 June 2017
52
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
Assets between an Investor and its Associate or Joint
Venture’
AASB 2015-1 ‘Amendments to Australian Accounting
Standards – Annual Improvements to Australian
Accounting Standards 2012-2014 Cycle’
AASB 2015-2 ‘Amendments to Australian Accounting
Standards – Disclosure Initiative: Amendments to
AASB 101’
AASB 2015-3 ‘Amendments to Australian Accounting
Standards arising from the Withdrawal of AASB 1031
Materiality’
AASB 2015-4 ‘Amendments to Australian Accounting
Standards – Financial Reporting Requirements for
Australian Groups with a Foreign Parent’
AASB 2015-5 ‘Amendments to Australian Accounting
Standards – Investment Entities: Applying the
Consolidation Exception’
d) Cash and Cash Equivalents
1 January 2016
30 June 2017
1 January 2016
30 June 2017
1 July 2015
30 June 2016
1 July 2015
30 June 2016
1 January 2016
30 June 2017
Cash and cash equivalents in the statement of financial position comprise cash at
bank and in hand and short-term deposits with an original maturity of six
months or less that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.
e) Trade and Other Receivables
Trade receivables, which generally have 30 day terms, are recognised initially at
fair value and subsequently measured at amortised cost using the effective
interest method, less an allowance for impairment. Collectability of trade
receivables is reviewed on an ongoing basis. Debts that are known to be
uncollectible are written off when identified. An impairment provision is
recognised when there is objective evidence that the Company will not be able to
collect the receivable.
53
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
f) Investments and Other Financial Assets
Investments and financial assets in the scope of AASB 139 Financial Instruments:
Recognition and Measurement are categorised as either financial assets at fair value
through profit or loss, loans and receivables, held-to-maturity investments, or
available-for-sale financial assets.
When financial assets are recognised initially, they are measured at fair value,
plus, in the case of assets not at fair value through profit or loss, directly
attributable transaction costs.
All regular way purchases and sales of financial assets are recognised on the
trade date i.e. the date that the Company commits to purchase the asset. Regular
way purchases or sales are purchases or sales of financial assets under contracts
that require delivery of the assets within the year established generally by
regulation or convention in the market place. Financial assets are derecognised
when the right to receive cash flows from the financial assets have expired or
been transferred.
(i)
Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category
‘financial assets at fair value through profit or loss’. Financial assets are classified
as held for trading if they are acquired for the purpose of selling in the near term
with the intention of making a profit. Derivatives are also classified as held for
trading unless they are designated as effective hedging instruments. Gains or
losses on investments held for trading are recognised in the profit or loss and the
related assets are classified as current assets in the Statement of Financial
Position.
(ii)
Loans and receivables
Loans and receivables including loan notes and loans to key management
personnel are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Such assets are carried at
amortised cost using the effective interest method. Gains and losses are
recognised in profit or loss when the loans and receivables are derecognised or
impaired. These are included in current assets except for those maturities
greater than 12 months after balance date, which are classified as non-current.
54
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(iii) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets that have fixed
maturities and fixed or determinable payments, and it is the Group’s intention to
hold these investments to maturity. They are subsequently measured at
amortised cost.
Held-to-maturity investments are included in non-current assets, except for
those which are expected to mature within 12 months after the end of the
reporting period. All other investments are classified as current assets.
(iv) Available-for-Sale Investments
Available-for-sale investments are those non-derivative financial assets that are
designated as available-for-sale or are not classified as any of the three
preceding categories. After initial recognition available-for sale investments are
measured at fair value with gains or losses being recognised as a separate
component of equity until the investment is derecognised or until the
investment is determined to be impaired, at which time the cumulative gain or
loss previously reported in equity is recognised in profit or loss.
The fair values of investments that are actively traded in organised financial
markets are determined by reference to quoted market bid prices at the close of
business on the balance sheet date. Investments with no active market, and
whose fair values cannot be reliably measured, shall be measured at cost.
At each reporting date, the Company assesses whether there is objective
evidence that a financial instrument has been impaired. In the case of available-
for-sale financial instruments, a prolonged decline in the value of the instrument
is considered to determine whether an impairment has arisen. Impairment losses
are recognised in the Statement of Comprehensive Income.
55
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
g) Property, Plant and Equipment
Plant and equipment is stated at historical cost less accumulated depreciation
and any accumulated impairment losses.
Depreciation is calculated on a straight-line basis over the estimated useful life of
the assets as follows:
Plant and Equipment – over 6 to 15 years
Motor Vehicles – over 4 years
Computer Equipment – over 3 years
The assets’ residual values, useful lives and amortisation methods are reviewed,
and adjusted if appropriate, at each financial year end.
An item of property, plant and equipment is derecognised upon disposal or
when no further future economic benefits are expected from its use or disposal.
Any gain or loss arising on de-recognition of the asset (calculated as the
difference between the net disposal proceeds and the carrying amount of the
asset) is included in profit or loss in the year the asset is derecognised.
h) Exploration and Evaluation Expenditure
Exploration and evaluation costs are capitalised as exploration and evaluation
assets on a project by project basis pending determination of the technical
feasibility and commercial viability of the project. The capitalised costs are
presented as either tangible or intangible exploration and evaluation assets
according to the nature of the assets acquired.
When a licence is relinquished or a project abandoned, the related costs are
recognised in the Statement of Comprehensive Income immediately.
Exploration and evaluation assets shall be assessed for impairment when facts
and circumstances suggest that the carrying amount of an exploration and
When facts and
evaluation asset may exceed its recoverable amount.
circumstances suggest that the carrying amount exceeds the recoverable amount
an impairment loss is recognised in the Statement of Comprehensive Income.
56
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
i) Interests in Joint Ventures
The Company’s shares of the assets, liabilities, revenue and expenses of jointly
controlled operations have been included in the appropriate line items of the
consolidated financial statements.
j) Impairment of Assets
Assets are tested for impairment whenever events or changes in circumstances
indicate that the carrying amount exceeds its recoverable amount. An
impairment loss is recognised for the amount by which the asset’s carrying
amount exceeds it recoverable amount. Recoverable amount is the higher of an
asset’s fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are Group at the lowest levels for which there are separately
identifiable cash inflows that are largely independent of the cash inflows from
other assets or Group of assets (cash –generating units). Non-financial assets
other than goodwill that suffered an impairment are tested for possible reversal
of the impairment whenever events or changes in circumstances indicate that the
impairment may have reversed.
k) Trade and other Payables
Trade and other payables are carried at amortised cost; due to their short term
nature they are not discounted. They represent liabilities for goods and services
provided to the Company prior to the end of the financial year that are unpaid
and arise when the Company becomes obliged to make future payments in
respect of the purchase of these goods and services. The amounts are unsecured
and are usually paid within 30 days of recognition.
l) Provisions and Employee Leave Benefits
Provisions are recognised when the Company has a present obligation (legal or
constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
When the Company expects some or all of the provision to be reimbursed, for
example under an insurance contract, the reimbursement is recognised as a
separate asset but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the Statement of Comprehensive
Income net of any reimbursement.
57
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Provisions are measured at the present value of management’s best estimate of
the expenditure required to settle the present obligation at the balance sheet
date. If the effect of the time value of money is material, provisions are
discounted using a current pre-tax rate that reflects the time value of money and
the risks specific to the liability. The increase in the provision resulting from the
passage of time is recognised in finance costs.
Employee Leave Benefits
(i) Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave
and accumulating sick leave expected to be settled within 12 months of the
reporting date are recognised in respect of employees’ services up to the
reporting date. They are measured at the amounts expected to be paid when the
liabilities are settled. Expenses for non-accumulating sick leave are recognised
when the leave is taken and are measured at the rates paid or payable.
(ii) Long service leave
The liability for long service leave is recognised and measured as the present
level of expected future payments to be made in respect of services provided by
employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of
employee departures, and periods of service. Expected future payments are
discounted using market yields at the reporting date on national government
bonds with terms to maturity and currencies that match, as closely as possible,
the estimated future cash outflows.
m) Share Based Payment Transactions
(i) Equity settled transaction:
The Company provides benefits to its employees (including key management
personnel) in the form of share-based payments, whereby employees render
services in exchange for shares or rights over shares (equity-settled transactions).
The Company has in place the Great Western Exploration Limited Employee
Share Option Plan to provide benefits to directors and senior executives.
58
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The cost of these equity-settled transactions with employees is measured by
reference to the fair value of the equity instruments at the date at which they are
granted. The fair value is determined by an external valuer using a binomial
model.
In valuing equity-settled transactions, no account is taken of any vesting
conditions other than conditions linked to price of the shares of the Company
(market conditions) if applicable.
The cost of equity-settled transactions
is recognised, together with a
corresponding increase in equity, over the period in which the performance
and/or service conditions are fulfilled (the vesting period), ending on the date on
which the relevant employees become fully entitled to the award (the vesting
date).
At each subsequent reporting date until vesting the cumulative charge to the
Statement of Comprehensive Income is the produce of:
(i) the grant date fair value of the award;
(ii) the current best estimate of the number of awards that will vest, taking into
account such factors as the likelihood of employee turnover during the
vesting period and the likelihood of non-market performance conditions
being met; and
(iii)
the expired portion of the vesting period.
The charge to the Statement of Comprehensive Income for the year is the
cumulative amount as calculated above less the amounts already charged in
previous years. There is a corresponding credit to equity.
Until an award has vested, any amounts recorded are contingent and will be
adjusted if more or fewer awards vest than were originally anticipated to do
so. Any award subject to a market condition is considered to vest irrespective
of whether or not that market condition is fulfilled, provided that all other
conditions are satisfied.
If the terms of an equity-settled award are modified, as a minimum an
expense is recognised as if the terms had not been modified. An additional
expense is recognised for any modification that increases the total fair value
of the share based payment arrangement, or is otherwise beneficial to the
employee, as measured at the date of modification.
59
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
If an equity-settled award is cancelled, it is treated as if it had vested on the
date of cancellation, and any expense not yet recognised for the award is
recognised immediately. However, if a new award is substituted for the
cancelled award and designated as a replacement award on the date that it is
granted, the cancelled and new award are treated as if they were a
modification of the original award, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional
share dilution in the computation of diluted earnings per share.
n) Issued Capital
Ordinary shares are classified as equity. Incremental costs directly attributable
to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
o) Revenue Recognition
Revenue is recognised and measured at the fair value of the consideration
received or receivable to the extent it is probable that the economic benefits will
flow to the Company and the revenue can be reliably measured. The following
specific recognition criteria must also be met before revenue is recognised.
(i)
Interest Income
Revenue is recognised as interest accrues using the effective interest method.
This is a method of calculating the amortised cost of a financial asset and
allocating the interest income over the relevant year using the effective interest
rate, which is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to the net carrying amount of the
financial asset.
p) Income Tax and other Taxes
Current tax assets and liabilities for the current and prior years are measured at
the amount expected to be recovered from or paid to the taxation authorities
based on the current year’s taxable income. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted by the
balance sheet date.
60
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Deferred income tax is provided on all temporary differences at the balance
sheet date between the tax bases of assets and liabilities and their carrying
amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary
differences except:
o When the deferred income tax liability arises from the initial recognition
of goodwill or of an asset or liability in the transaction that is not a
business combination and that, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; or
o when the taxable temporary difference is associated with investments in
subsidiaries, associates or interests in joint ventures, and the timing of the
reversal of the temporary difference can be controlled and it is probable
that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary
differences, carry-forward of unused tax credits and unused tax losses, to the
extent that it is probable that taxable profit will be available against which the
deductible temporary differences and the carry-forward of unused tax credits
and unused tax losses can be utilised, except:
o when the deferred income tax asset relating to the deductible temporary
difference arises from the initial recognition of an asset or liability in a
transaction that is not
o a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; or
o when the deductible temporary difference is associated with investments
in subsidiaries, associates or interests in joint ventures, in which case a
deferred tax asset is only recognised to the extent that it is probable that
the temporary difference will reverse in the foreseeable future and taxable
profit will be available against which the temporary difference can be
utilised.
The carrying amount of deferred income tax assets is reviewed at each balance
sheet date and reduced to the extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of the deferred income tax
asset to be utilised.
61
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Unrecognised deferred income tax assets are reassessed at each balance sheet
date and are recognised to the extent that it has become probable that future
taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are
expected to apply to the year when the asset is realised or the liability is settled,
based on tax rates (and tax laws) that have been enacted or substantively
enacted at the balance sheet date.
Deferred tax assets and deferred tax liabilities are offset only if a legally
enforceable right exists to set off current tax assets against current tax liabilities
and the deferred tax assets and liabilities relate to the same taxable entity and
the same taxation authority.
Other Taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• when the GST incurred on a purchase of goods and services is not
recoverable from the taxation authority, in which case the GST is recognised
as part of the cost of acquisition of the asset or as part of the expense item as
applicable; and
• receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is
included as part of receivables or payables in the Statement of Financial Position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the
GST component of cash flows arising from investing and financing activities,
which is recoverable from, or payable to, the taxation authority is classified as
part of operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST
recoverable from, or payable to, the taxation authority.
q) Earnings per share
Basic earnings per share is calculated as net profit attributable to members of the
parent, adjusted to exclude any costs of servicing equity (other than dividends),
divided by the weighted average number of ordinary shares, adjusted for any
bonus element.
62
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Diluted earnings per share is calculated as net profit attributable to members of
the parent, adjusted for:
(cid:2) costs of servicing equity (other than dividends);
(cid:2)
the after tax effect of dividends and interest associated with dilutive potential
ordinary shares; and
(cid:2) other non-discretionary changes in revenues or expenses during the year that
would result from the dilution of potential ordinary shares;
Divided by the weighted average number of ordinary shares and dilutive
potential ordinary shares, adjusted for any bonus element.
r) Fair Value of Assets and Liabilities
The Company measures some of its assets and liabilities at fair value on either a
recurring or non-recurring basis, depending on the requirements of the
applicable Accounting Standard.
Fair value is the price the Company would receive to sell an asset or would have
to pay to transfer a liability in an orderly (i.e. unforced) transaction between
independent, knowledgeable and willing market participants at
the
measurement date.
As fair value is a market-based measure, the closest equivalent observable
market pricing information is used to determine fair value. Adjustments to
market values may be made having regard to the characteristics of the specific
asset or liability. The fair values of assets and liabilities that are not traded in an
active market are determined using one or more valuation techniques. These
valuation techniques maximise, to the extent possible, the use of observable
market data.
To the extent possible, market information is extracted from either the principal
market for the asset or liability (i.e. the market with the greatest volume and
level of activity for the asset or liability) or, in the absence of such a market, the
most advantageous market available to the entity at the end of the reporting
period (i.e. the market that maximises the receipts from the sale of the asset or
minimises the payments made to transfer the liability, after taking into account
transaction costs and transport costs).
63
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
For non-financial assets, the fair value measurement also takes into account a
market participant's ability to use the asset in its highest and best use or to sell it
to another market participant that would use the asset in its highest and best
use.
The fair value of liabilities and the entity's own equity instruments (excluding
those related to share-based payment arrangements) may be valued, where there
is no observable market price in relation to the transfer of such financial
instruments, by reference to observable market information where such
instruments are held as assets. Where this information is not available, other
valuation techniques are adopted and, where significant, are detailed in the
respective note to the financial statements.
Valuation techniques
In the absence of an active market for an identical asset or liability, the Company
selects and uses one or more valuation techniques to measure the fair value of
the asset or liability, The Company selects a valuation technique that is
appropriate in the circumstances and for which sufficient data is available to
measure fair value. The availability of sufficient and relevant data primarily
depends on the specific characteristics of the asset or liability being measured.
The valuation techniques selected by the Company are consistent with one or
more of the following valuation approaches:
Market approach: valuation techniques that use prices and other relevant
information generated by market transactions for identical or similar assets or
liabilities.
Income approach: valuation techniques that convert estimated future cash flows
or income and expenses into a single discounted present value.
Cost approach: valuation techniques that reflect the current replacement cost of
an asset at its current service capacity.
Each valuation technique requires inputs that reflect the assumptions that
buyers and sellers would use when pricing the asset or liability, including
assumptions about risks. When selecting a valuation technique, the Company
gives priority to those techniques that maximise the use of observable inputs
and minimise the use of unobservable inputs. Inputs that are developed using
market data (such as publicly available information on actual transactions) and
reflect the assumptions that buyers and sellers would generally use when
64
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
pricing the asset or liability are considered observable, whereas inputs for which
market data is not available and therefore are developed using the best
information available about such assumptions are considered unobservable.
Fair value hierarchy
AASB 13 requires the disclosure of fair value information by level of the fair
value hierarchy, which categorises fair value measurements into one of three
possible levels based on the lowest level that an input that is significant to the
measurement can be categorised into as follows:
Level 1
Measurements based on quoted prices (unadjusted) in active markets for
identical assets or liabilities that the entity can access at the measurement date.
Measurements based on inputs other than quoted prices included in Level 1 that
are observable for the asset or liability, either directly or indirectly.
Level 2
Measurements based on inputs other than quoted prices included in Level 1 that
are observable for the asset or liability, either directly or indirectly
Level 3
Measurements based on unobservable inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are
determined using one or more valuation techniques. These valuation techniques
maximise, to the extent possible, the use of observable market data. If all
significant inputs required to measure fair value are observable, the asset or
liability is included in Level 2. If one or more significant inputs are not based on
observable market data, the asset or liability is included in Level 3.
The Company would change the categorisation within the fair value hierarchy
only in the following circumstances:
(i) if a market that was previously considered active (Level 1) became inactive
(Level 2 or Level 3) or vice versa; or
(ii) if significant inputs that were previously unobservable (Level 3) became
observable (Level 2) or vice versa.
65
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
When a change in the categorisation occurs, the Company recognises transfers
between levels of the fair value hierarchy (i.e. transfers into and out of each level
of the fair value hierarchy) on the date the event or change in circumstances
occurred.
2. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and assumptions are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. Equally, the Company
continually employs judgement in the application of its accounting policies.
Management has identified the following critical accounting policies for which
significant judgements, estimates and assumptions are made. Actual results may
differ from these estimates under different assumptions and conditions. Those
which may materially affect the carrying amounts of assets and liabilities reported
in future years are discussed below.
(a) Significant accounting estimates and judgements
(i) Impairment of non-financial assets
The Company assesses impairment on all assets at each reporting date by
evaluating conditions specific to the Company and to the particular asset that may
lead to impairment. These include technology and economic environments. If an
impairment trigger exists, the recoverable amount of the asset is determined. This
involves value-in-use calculations, which incorporate a number of key estimates
and assumptions.
(ii) Share-based payment transactions
The Company measures the cost of equity settled transactions with directors and
employees by reference to the fair value of the equity instruments at the date at
which they are granted. Equity settled transactions comprise only options. Their
fair value is determined using the Binomial Options Pricing model. The accounting
estimates and assumptions relating to equity settled share-based payments would
have no impact on the carrying amounts of assets and liabilities within the next
annual reporting year but may impact expenses and equity.
66
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
2. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (continued)
(iii)Estimation of useful lives of assets
The estimation of useful lives of assets has been based on historical experience.
Adjustments to useful lives are made when considered necessary. Depreciation and
amortisation charges as well as estimated useful lives are included in Note 1(g).
(iv) Exploration and evaluation costs
Acquisition, exploration and evaluation expenditure incurred is accumulated in
respect of each identifiable area of interest. These costs are carried forward in
respect of an area that has not at balance sheet 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 relating to, the area of interest
are continuing.
(v) Environmental issues
Balances disclosed in the financial statements and notes thereto are not adjusted for
any pending or enacted environmental legislation, and the Directors understanding
thereof. At the current stage of the Company’s development and its current
environmental impact, the Directors believe such treatment is reasonable and
appropriate.
(vi) Taxation
Balances disclosed in the financial statements and the notes thereto, related to
taxation, and are based on the best estimates of Directors. These estimates take into
account both the financial performance and position of the Company as they
pertain to current income taxation legislation, and the Directors understanding
thereof. No adjustment has been made for pending or future taxation legislation.
The current income tax position represents that Directors best estimate, pending an
assessment by the Australian Taxation Office.
3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company’s financial instruments consist mainly of deposits with banks, accounts
receivable and payable.
The totals for each category of financial instruments, measured in accordance with
AASB 139 as detailed in the accounting policies to these financial statements, are as
follows:
67
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Financial Assets
Cash and cash equivalents
Receivables
Other financial assets- Cash on deposit
Financial assets at fair value through profit or loss
- Held for trading
Financial Liabilities
Trade and payables
Financial Risk Management Policies
Note
8
9
10
10
14
2015
$
131,139
12,611
-
400
144,150
2014
$
311,457
24,133
59,616
1,000
396,206
503,244
503,244
240,883
240,883
The Company attempts to mitigate risks that may affect its future performance through
a systematic process of identifying, assessing, reporting and managing risks of
corporate significance.
The management and the Board discuss the principal risks of our businesses,
particularly during the strategic planning and budgeting processes. The board sets
policies for the implementation of systems to manage and monitor identifiable risks.
The Board Risk Committee is responsible for the oversight of risk management.
The Company’s principal financial instruments comprise cash and short term deposits.
The Company has various other financial assets and liabilities such as trade receivables
and trade payables, which arise directly from its operations.
The main purpose of these financial assets and liabilities is to raise finance for the
Company’s operations. It is, and has been throughout the entire year under review, the
Company’s policy that no trading in financial instruments shall be undertaken.
The main risks arising from the Group’s financial instruments are cash flow interest
rate risk. Other minor risks are either summarised below or disclosed in Note 9 in the
case of credit risk and Note 16 in the case of capital risk management. The Board
reviews and agrees policies for managing each of these risks.
68
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(a)
Credit Risk
The Company minimises credit risk by undertaking a review of its potential
customers’ financial position and the viability of the underlying project prior to
entering into material contracts.
Financial instruments other than receivables that potentially subject the
Company to concentrations of credit risk consist principally of cash deposits.
The Company places its cash deposits with high credit-quality financial
institutions, being in Australia only the major Australian (big four) banks. Cash
holdings in other countries are generally not significant. The Company’s cash
deposits all mature within twelve months and attract a rate of interest at normal
short-term money market rates.
The maximum amount of credit risk the Company considers it would be
exposed to would be $144,150 (2014: $396,206) being the total of its cash and cash
equivalents and financial assets.
(b)
Cash Flow Interest Rate Risk
The Company’s exposure to the risks of changes in market interest rates relates
primarily to the Company’s short term deposits with a floating interest rate. All
other financial assets and liabilities in the form of receivables and payables are
non-interest bearing. The Company does not engage in any hedging or
derivative transactions to manage interest rate risk.
69
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
The following table sets out the Company’s exposure to interest rate risk and the
effective weighted average interest rate for each class of these financial
instruments.
Floating Interest
Rate
Non-Interest
Bearing
Total Carrying
Amount
Note
2015
$
2014
$
2015
$
2014
$
2015
2014
$
8
9
Financial
Assets
Cash and cash
equivalents
Trade and
other
Receivables
Other
Financial
assets
Weighted
average
interest rate
131,139
311,457
-
-
131,139
311,457
-
-
-
-
12,611
24,133
12,611
24,133
400
1,000
400
1,000
2.45
2.40
The effect on profit and equity, after tax, if interest rates at that date had been
10% higher or 10% lower with all other variables held constant as a sensitivity
analysis. Would be a +/- change to profit and equity of $13,114 (2014: $31,145).
A sensitivity of 10% has been selected as this is considered by management to be
reasonable in the current environment.
The Company constantly analyses its interest rate exposure to ensure the
appropriate mix of fixed and variable rates.
The Company has not entered into any hedging activities to cover interest rate
risk. In regard to its interest rate risk, the Company continuously analyses its
exposure. Within this analysis consideration is given to potential renewals of
existing positions, alternative investments and the mix of fixed and variable
interest rates.
70
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(c)
Price Risk
The Company is not exposed to equity securities price risk. There is no active
market for available for sale investments.
(d) Liquidity Risk
The Company’s objective is to match the terms of its funding sources to the
terms of the assets or operations being financed. The Company uses a
combination of trade payables and operating leases to provide its necessary debt
funding.
The Company aims to hold sufficient reserves of cash or cash equivalents to help
manage the fluctuations in working capital requirements and provide the
flexibility for investment into long-term assets without the need to raise debt.
Contracted maturities of payables at balance date
Payable
- Less than 6 months
- 6 to 12 months
- 1 to 5 years
(e)
Commodity Price Risk
2015
$
503,244
-
-
503,244
2014
$
240,883
-
-
240,883
Due to the early stage of the Company’s operations its exposure is considered
minimal. Risk arises as its operations are involved in exploration and
development of mineral commodities, changes in the price of commodities for
which the Group is exploring and developing may result in changes to the
Company’s market price. The Company entity does not hedge any of its
exposures.
(f)
Foreign currency exchange rate
A risk arises when future commercial transactions and recognised assets and
liabilities are denominated in a currency other than the Company’s functional
currency. At present, the Company is not considered to be exposed to any
significant foreign currency risk.
71
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
3. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(g) Net fair values
The Company has no financial assets or liabilities where the carrying value
amount exceeds fair value at balance date. The directors consider that the
carrying amounts of financial assets and financial liabilities recognised in the
consolidated financial statements approximate their fair value.
The Company’s financial assets at fair value through profit or loss are listed
investments (Note 10) and are categorised as Level 1, meaning fair value is
determined from quoted prices in active markets for identical assets.
4. OPERATING SEGMENTS
Segment Information
Identification of reportable segments
The Company has identified its operating segments based on the internal reports that
are reviewed and used by the Board of Directors (chief operating decision makers) in
assessing performance and determining the allocation of resources.
The Company’s principal activities are mineral exploration and are managed primarily
on a project by project basis. Operating segments are therefore determined on the same
basis.
Reportable segments disclosed are based on aggregating operating segments where the
segments are considered to have similar economic characteristics.
Types of products and services by segment
The Company’s exploration projects consist of:
• Nickel and Gold
• Base metals
Basis of accounting for purposes of reporting by operating segments
Unless stated otherwise, all amounts reported to the Board of Directors as the chief
decision maker with respect to operating segments are determined in accordance with
accounting policies that are consistent to those adopted in the annual financial
statements of the Company.
72
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
4. OPERATING SEGMENTS (Continued)
Segment assets
Segment assets are clearly identifiable on the basis of their nature and physical location.
Unless indicated otherwise in the segment assets note, investments in financial assets,
deferred tax assets and intangible assets have not been allocated to operating segments.
Segment liabilities
Liabilities are allocated to segments where there is direct nexus between the incurrence
of the liability and the operations of the segment. Segment liabilities include trade and
other payables and certain direct borrowings.
Unallocated items
Items of revenue, expense, assets and liabilities are not allocated to operating segments
if they are not considered part of the core operations of any segment.
73
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
4. OPERATING SEGMENTS (Continued)
(i)
Segment performance
30 June 2015
External sales
Total segment
revenue
Segment net
profit/(loss) before
tax
Reconciliation of
segment result to net
profit/(loss) before
tax:
(i) Amount not
included in segment
result but reviewed
by the Board:
•
Interest received
• Gain on foreign
exchange
• Net loss on
revaluation of
financial asset
• Directors fees
• Compliance
• Depreciation
• Other expenses
Net profit/(loss)
before tax from
continuing
operations
Doolgunna
Base Metals
Kazakhstan
Copper
Forrestania
Nickel &
Gold
Millrose
Nickel &
Gold
Other
Total
$
-
-
$
$
$
$
$
-
-
-
-
-
-
-
-
-
-
(218,568)
(101,765)
(9,130)
(294,036)
(57,263)
(680,762)
4,178
39,148
(600)
(119,435)
(75,033)
(14,817)
(777,269)
(1,624,590)
74
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
4. OPERATING SEGMENTS (Continued)
30 June 2014
External sales
Total segment
revenue
Segment net
profit/(loss) before
tax
Reconciliation of
segment result to net
profit/(loss) before
tax:
(i) Amount not
included in segment
result but reviewed
by the Board:
•
• Other income
• Net loss on
Interest received
revaluation of
financial asset
• Directors fees
• Compliance
• Depreciation
• Other expenses
Net profit/(loss)
before tax from
continuing
operations
Doolgunna
Base Metals
$
Kazakhstan
Copper
$
Forrestania
Nickel &
Gold
$
Millrose
Nickel &
Gold
Other
Total
$
$
$
-
-
-
-
-
-
-
-
-
-
-
-
(11,624)
(2,712,309)
(102,171)
-
(191,958)
(3,018,062)
35,586
14,321
(2,400)
(140,000)
(81,277)
(29,320)
(1,206,442)
(4,427,594)
75
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
4. OPERATING SEGMENTS (Continued)
(ii) Segment assets
Doolgunna
Base
Metals
$
Kazakhstan
Copper
$
Forrestania
Nickel &
Gold
$
Xstrata Base
Metals
$
Millrose
Gold
$
Other
Total
$
$
30 June 2015
Segment assets
2,598,440
-
2,314,201
609,968
-
-
5,522,609
Segment asset
increases for the year:
• Capital
expenditure
Reconciliation of
segment assets to total
assets:
Unallocated assets:
• Cash and cash
equivalents
• Receivables
• Other assets
• Property plant
and equipment
• Other financial
assets
Total assets from
continuing operations
192,914
192,914
-
-
-
-
287,083
25,914
53,842
559,753
287,083
25,914
53,842
559,753
131,139
12,611
-
17,880
400
5,684,639
76
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
4. OPERATING SEGMENTS (Continued)
Doolgunna
Base
Metals
$
30 June2014
Segment assets
2,931,801
Kazakhstan
Copper
$
-
Forrestania
Nickel &
Gold
$
Xstrata
Base
Metals
Millrose
Nickel &
Gold
Other
Total
$
-
2,338,488
$
$
$
271,564
5,541,853
Segment asset
increases for the year:
• Capital
expenditure
• Acquisitions
Reconciliation of
segment assets to total
assets:
Unallocated assets:
• Cash and cash
equivalents
• Receivables
• Other assets
• Property plant
and equipment
• Other financial
assets
Total assets from
continuing operations
621,629
23,662
2,317,024
216,024
38,824
-
645,291
2,533,048
38,824
59,297
-
191,958
-
3,228,732
239,686
59,297
191,958
3,468,418
-
-
311,457
24,133
6,483
85,358
59,616
6,028,900
77
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
4. OPERATING SEGMENTS (Continued)
(ii)
(iii)
Segment liabilities
30 June 2015
Segment liabilities
Reconciliation of
segment liabilities to
total liabilities:
Unallocated liabilities:
• Other liabilities
Total liabilities from
continuing operations
30 June 2014
Segment liabilities
Reconciliation of
segment liabilities to
total liabilities:
Unallocated liabilities:
• Other liabilities
Total liabilities from
continuing operations
Doolgunna
Base Metals
$
Kazakhstan
Copper
$
Forrestania
Nickel &
Gold
$
Xstrata Base
Metals
$
Millrose
Gold
Other
Total
$
$
-
-
-
-
-
-
-
503,244
503,244
Doolgunna
Base Metals
Kazakhstan
Copper
Forrestania
Nickel &
Gold
Xstrata Base
Metals
Bullseye
Millrose
Gold
Other
-
-
-
-
-
-
-
264,922
264,922
78
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
5. OPERATING SEGMENTS (Continued)
Revenue by geographical region
The Company’s revenue is received from sources within Australia.
(vi) Assets by geographical region
The location of segment assets is disclosed below by geographical location of the
assets:
Australia
(vii) Major customers
Balance as
at 30.6.2015
$
5,522,609
Balance as
at 30.6.2014
$
5,541,853
5,522,609
5,541,853
Due to the nature of its current operations, the Company does not provide
products and services.
5. EXPENSES
Employee benefits
Salaries
Superannuation
Share-based payments
2015
$
397,337
48,610
31,018
476,965
2014
$
538,857
50,483
9,533
598,873
79
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
6. INCOME TAX
2015
$
2014
$
a) The prima facie tax on profit/(loss) from ordinary
activities before income tax is reconciled to the income
tax expense as follows:
Accounting loss before income tax
(1,624,590)
(4,427,594)
Income tax benefit at the statutory income tax rate of
30% (2014: 30%)
(487,377)
(1,328,278)
Expenditure not allowable for income tax purposes
216,627
916,698
Capitalised mineral exploration expenditure
(167,326)
(1,040,525)
Capital raising costs
(16,352)
(43,355)
Benefit of tax losses not brought to account as an asset
454,428
1,495,460
Income Tax expense reported in the Statement of Profit
or Loss and Other Comprehensive Income
-
-
b) As at 30 June 2015, the Company has estimated tax losses of approximately
$17,800,000 (2014: $17,600,000), which may be available to be offset against deferred
tax liabilities and taxable income in future years. The availability of these losses is
subject to satisfying Australian taxation legislative requirements. The deferred tax
asset attributable to tax losses has not been brought to account in these financial
statements as the Directors believe it is not presently appropriate to regard
realisation of the future income tax benefits as probable.
c) Deferred Tax Liability
With regard to Mineral Exploration Expenditure of $5,522,609 (2014: $5,541,853) the
tax liability in respect of the book value has not been brought to account as it is
offset by the tax losses set out in 6(b) above.
80
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
7. EARNINGS PER SHARE
2015
$
2014
$
Loss used in the calculation of basic EPS
(1,624,590)
(4,427,594)
Weighted average number of ordinary shares used in
calculation
of basic earnings per share
168,344,559
129,413,312
8. CASH AND CASH EQUIVALENTS
Cash at bank
Cash on deposit
2015
$
99,523
31,616
131,139
2014
$
21,454
290,003
311,457
The effective interest rate on short term bank deposits on average was 2.45% (2014
2.4%), with an average maturity of 6 months.
81
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
9. TRADE AND OTHER RECEIVABLES
Current
GST receivable
Other
2015
$
12,611
-
12,611
2014
$
23,970
163
24,133
Sundry debtors are non-interest bearing and receivable within 30 days.
Allowance for impairment loss
Trade and other receivables do not contain impaired assets and are not past due. It is
expected that these other balances will be received when due.
Fair value and credit risk
Due to the short term nature of the receivables, their carrying value is assumed to
approximate their fair value.
Given the nature of the receivables the Company’s exposure to risk is not considered
material.
10. OTHER FINANCIAL ASSETS
Current
Financial assets at fair value through profit or loss
Held for trading Australian listed shares (Level 1 fair
value hierarchy)
2015
$
2014
$
400
1,000
Changes in fair value are included in the statement of comprehensive income.
Non-current
Cash on deposit
Cash on deposit as security for bank guarantees in respect of rental premises and
mineral exploration tenements.
-
59,616
82
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
11. OTHER ASSETS
Current
Prepayments
12. PROPERTY, PLANT AND EQUIPMENT
Plant and Equipment – at cost
Less: accumulated depreciation
Reconciliation of the carrying amount of property, plant
and equipment
Carrying amount at beginning of year
Additions
Disposals
Depreciation for the year
Written Off
Carrying amount at end of financial year
13. MINERAL EXPLORATION EXPENDITURE
Balance at beginning of the year
Deferred exploration expenditure
Exploration expenditure refund
Mineral expenditure written off (i)
Balance at end of financial year
2015
$
2014
$
-
5,483
2015
$
92,863
(74,983)
17,880
2015
$
85,358
2,674
(3,956)
(19,906)
(46,290)
17,880
2014
$
145,526
(60,168)
85,358
2014
$
102,973
11,705
-
(29,320)
-
85,358
2015
$
2014
$
5,541,853
559,753
-
(578,997)
5,522,609
5,091,496
3,468,419
-
(3,018,062)
5,541,853
(i) Mineral expenditure written off for the year was $578,997. The main area
written off in 2015 was the Millrose project and previously capitalised
expenditure on various tenements relinquished during the financial year.
83
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
13. MINERAL EXPLORATION EXPENDITURE (continued)
The value of the Company’s interest in exploration expenditure is dependent upon:
the continuance of the Company’s rights to tenure of the areas of interest;
the results of future exploration; and
•
•
• The recoupment of costs through successful development and exploitation of the
areas of interest or, alternatively, by their sale.
14. TRADE AND OTHER PAYABLES
Current
Trade payables
Sundry payables and accruals
2015
$
54,381
448,863
503,244
2014
$
55,821
185,062
240,883
Due to the short-term nature of these payables, their carrying value is assumed to
approximate fair value.
Trade payables are non-interest bearing and are generally settled within 30 days.
15. PROVISIONS
Current
Employee benefits
2015
$
2014
$
-
24,039
84
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
16. ISSUED CAPITAL
Ordinary Shares
Movements
Ordinary Shares
Balance 1 July
Transfer from Option Premium
Reserve
Rights Issue
- July 2014
- Jan 2015
- July 2013
- May 2014
Placement
- Oct 2014
-
June 2015
Issue costs
At 30 June
2015
$
19,496,573
2014
$
18,441,819
2015
Number
2014
Number
2015
$
2014
$
147,873,163
98,375,087
18,441,819
14,190,666
-
9,526,303
12,447,760
-
-
-
-
285,789
373,433
-
-
-
-
-
32,791,330
16,706,746
-
3,934,961
501,202
8,601,000
10,600,000
-
-
344,040
106,000
-
-
189,048,226
-
189,048,226
147,873,163
-
147,873,163
19,551,081
(54,508)
19,496,573
18,626,829
(185,010)
18,441,819
The Company at 30 June 2015 has issued share capital amounting to 189,048,226 (2014:
147,873,163) ordinary shares with no par value.
Ordinary shares participate in dividends and the proceeds on winding up of the parent
entity in proportion to the number of shares held.
At the shareholders’ meetings each ordinary share is entitled to one vote when a poll is
called, otherwise each shareholder has one vote on a show of hands.
Capital Risk Management
The Company’s objectives when managing capital are to safeguard their ability to
continue as a going concern, so that they may continue to provide returns for
shareholders and benefits for other stakeholders.
85
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
16. ISSUED CAPITAL (continued)
Due to the nature of the Company’s activities, being mineral exploration, the Company
does not have ready access to credit facilities, with the primary source of funding being
equity raisings. Therefore, the focus of the Company’s capital risk management is the
current working capital position against the requirements of the Company to meet
exploration programmes and corporate overheads.
The Company’s strategy is to ensure appropriate liquidity is maintained to meet
anticipated operating requirements, with a view to initiating appropriate capital
raisings as required. The working capital position of the Company is as follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Working capital position
2015
$
2014
$
131,139
12,611
(503,244)
(359,494)
311,457
24,133
(264,922)
70,668
86
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
17. RESERVES
Share Option Reserve
Foreign Currency Translation Reserve
2015
$
2014
$
1,682,618
-
1,682,618
1,784,858
43,765
1,828,623
(a) Share Option Reserve
Movements
Options
Unlisted
- Expiring 30 May 2016
Exercisable at $0.60
At 1 July
Issues during the year
Exercised during the year
At 30 June
Unlisted
- Expiring 30 June 2015
Exercisable at $0.40
At 1 July
Expired during the year
Transferred to Accumulated
Losses
At 30 June
2015
No.
2014
No.
2015
$
2014
$
4,000,000
-
-
4,000,000
4,000,000
-
-
4,000,000
1,371600
-
-
1,371,600
1,371,600
-
-
1,371,600
350,000
(350,000)
-
350,000
-
-
-
350,000
123,725
-
(123,725)
-
123,725
-
-
123,725
87
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
17. RESERVES (Continued)
2015
No.
2014
No.
2015
$
2014
$
Unlisted
- Expiring 30 June 2014
Exercisable at $0.40
At 1 July
Issued during the year
Exercised during the year
Expired during the year
Transfer to Accumulated
losses
At 30 June
Unlisted
- Expiring 30 June 2015
Exercisable at $0.40
At 1 July
Issued during the year
Expired during the year
Transferred to Accumulated
Losses
At 30 June
Unlisted
- Expiring 30 June 2016
Exercisable at $0.60
At 1 July
Issues during the year
Exercised during the year
At 30 June
Unlisted
-Expiring 30 June 2016
At 1 July
Issued during the year
Exercised during the year
At 30 June
-
-
-
-
-
-
1,000,000
-
-
(1,000,000)
-
-
-
-
-
-
-
-
1,000,000
-
(1,000,000)
-
-
1,000,000
-
-
9,553
-
-
(9,553)
-
1,000,000
-
48,000
-
-
-
(48,000)
-
-
9,553
-
-
9,553
4,000,000
-
-
4,000,000
4,000,000
-
-
4,000,000
280,000
-
-
280,000
280,000
-
-
280,000
-
2,000,000
-
2,000,000
-
-
-
-
-
31,018
-
31,018
-
-
-
-
88
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
17. RESERVES (Continued)
Unlisted
-Expiring 30 June 2016
At 1 July
Issued during the year
Exercised during the year
At 30 June
-
10,600,000
-
10,600,000
-
-
-
-
-
-
-
-
-
-
-
-
Total
20,6000,000
9,350,000
1,682,618
1,784,878
The share based payments reserve is used to record the value of share based payments
provided to employees, including key management personnel, as part of their
remuneration. Refer to Note 21 for further details of these plans.
The Group operates an Employee Share Option Plan under which Options to subscribe
for the Company’s shares have been granted to directors, senior executives and
employees.
18. CASH FLOW STATEMENT RECONCILIATION
a) Reconciliation of net loss after tax to net cash
flows from operations
Loss for the year
Depreciation
Share based payments
Mineral exploration expenditure written off
Impairment on property, plant and equipment
Revaluation of financial assets
Gain on foreign exchange
Changes in assets and liabilities
(Increase)/Decrease in trade and other receivables
(Increase)/Decrease in other assets
Increase/(Decrease) in trade and other payables
(Increase)/Decrease in exploration expenditure
Increase /(Decrease) in provisions
2015
$
2014
$
(1,624,590)
19,906
31,018
578,997
46,290
600
(39,148)
11,521
65,100
262,362
(559,753)
(24,039)
(1,231,736)
(4,427,594)
29,320
9,533
3,018,062
-
-
-
14,735
21,178
50,952
(3,313,716)
22,910
(4,574,620)
89
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
19. RELATED PARTY DISCLOSURE
a) Transactions with Directors and Directors Related Entities
During the year the group paid $3,975 (2014: $4,000) to Somes Cooke, an
accounting practice of which Mr K C Somes a director, is a partner, for taxation
and accounting services. The above transactions were entered into on normal
terms and conditions.
20. KEY MANAGEMENT PERSONNEL
(a)
Compensation for Key Management Personnel
Short term employee benefits
Post employment benefits
Other long term benefits
Termination benefits
Share based payments
21. SHARE BASED PAYMENTS
(a) Recognised share based payment expenses.
2015
$
267,603
22,572
-
-
31,018
321,193
2014
$
390,002
36,375
-
-
-
426,377
The share based payment expense recognised for employee services received
during the year is shown in the table below:
2015
$
2014
$
Expense arising from equity settled share-based
payment transactions
31,018
9,533
Expense arising from cash settled
share-based payment transactions
Total expense arising from
share-based payment transactions
-
-
31,018
9,533
The share-based payment plans are described below. There have been no
cancellations or modifications to any of the plans during 2015 and 2014.
90
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
21. SHARE BASED PAYMENTS (Continued)
b)
Types of Share based payment plans
Great Western Exploration Limited, Employee Share Option Plan
Share options are granted to senior executives and designed to provide
executives an incentive and participate along with shareholders by increasing
the value of the Company’s shares. The options are issued by the Board having
regard, in each case to:
(i)
the contribution to the Company which has been made by the Participant;
(ii)
(iii)
(iv)
the period of employment of the Participant with the Company, including
(but not limited to) the years of service by that Participant;
the potential contribution of the Participant to the Company; and
any other matters which the Board considers in its absolute discretion, to
be relevant.
The options are issued to participants at a price the Board considers appropriate,
but in any event, no more than nominal consideration.
Details of options expiry date and exercise price are set out in Note 21(c) below.
c)
Summary of Options granted under Employee Share Option Plan
Outstanding at
beginning of financial year
Granted during the year
- expiring 30 June 2015
- expiring 30 June 2016
Forfeited during the year
Expired during the year
Exercised during the year
2015
No.
Exercise
Price
2014
No.
Exercise
Price
9,350,000
9,350,000
-
2,000,000
-
10 cents
1,000,000
-
40 cents
-
(1,350,000)
-
-
-
(1,000,000)
-
40 cents
-
Outstanding at end of financial year
10,000,000
9,350,000
91
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
21. SHARE BASED PAYMENTS (Continued)
The following share-based payment arrangements were in existence during the
current and prior reporting periods:
Grant
Grant
Date
Date
Fair Value
Exercise
Price
No of
Options
Vesting
Date
Expiry
Date
9 August 2011
2 September 2011
12 December 2012
31 January 2014
25 July 2014
4,000,000
350,000
4,000,000
1,000,000
2,000,000
$0.342
$0.353
$0.07
$0.0095
$0.0155
$0.60
$0.40
$0.60
$0.40
$0.10
30 May 2016
30 June 2015
30 June 2016
30 June 2015
30June 2016
9 August 2011
2 September 2011
12 December 2012
31 January 2014
25 July 2014
The total number of options exercisable at year end was 10,000,000.
No options were exercised during the year.
d)
Option pricing model
Equity-settled transactions
The fair value of the equity-settled share options granted under the Employee
Share Option Plan is estimated as at the date of the grant using a Binomial
Model Pricing Model taking into account the terms and conditions upon which
the options were granted.
Dividend yield (%)
Expected volatility (%)
Risk free interest rate (%)
Expected life of options (yrs)
Option exercise price ($)
Weighted average share price at measurement date ($)
25 July
2014
0
88.33
2.55
0.91
10
0.052
92
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
22. PARENT INFORMATION
2015
$
2014
$
The following information has been extracted from the
books and records of the parent and has been prepared in
accordance with Australian Accounting Standards.
STATEMENT OF FINANCIAL POSITION
ASSETS
Current Assets
Non-current assets
TOTAL ASSETS
LIABILITIES
Current liabilities
Non-current liabilities
TOTAL LIABILITIES
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
144,151
5,540,489
335,469
5,675,147
5,684,640
6,010,616
503,244
-
257,329
-
503,244
257,329
19,496,573
1,682,618
(15,997,794)
18,441,819
1,784,858
(14,473,390)
5,181,396
5,753,287
STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
Total loss
(1,657,663)
(4,420,225)
Total comprehensive income
(1,657,663)
(4,420,225)
93
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
22. PARENT INFORMATION (Continued)
Guarantees
Great Western Exploration Limited has not entered into any guarantees, in the current
or previous financial year, in relation to the debts of its subsidiaries.
Contingent Liabilities
At 30 June 2015, there were no contingent liabilities in relation to the subsidiaries.
Contractual commitments
At 30 June 2015, Great Western Exploration Limited had not entered into any
contractual commitments for the acquisition of property, plant and equipment (2014:
Nil).
23. CONTROLLED ENTITIES
Interests are held in the following:
Name
Principal
Activities
Country of
Incorporation
Ownership
Interest
2015
%
2014
%
Carrying Amount
of Investment
2015
$
2014
$
Shares
GTE Holdings Pte
Ltd
Investment
Singapore Ordinary
100
100
GTE KZ LLP
Mineral
Exploration
Kazakhstan Ordinary
100
100
1
1
1
1
24. COMMITMENTS AND CONTINGENCIES
COMMITMENTS
a) Exploration Tenement Leases
In order to maintain current rights of tenure to
exploration tenements, the Group is required to outlay
lease rentals and to meet the minimum expenditure
requirements of the Western Australian Department
of Mines & Petroleum.
Within one year
2015
$
2014
$
1,285,000
1,542,325
94
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
24. COMMITMENTS AND CONTINGENCIES (Continued)
b) Operating Lease Commitments
Non-cancellable operating leases contracted for but
not capitalised in the financial statements
Payable – minimum lease payments
• not later than 12 months
• between 12 months and 5 years
• greater than 5 years
The property lease is a non-cancellable lease with a
one-year term, with rent payable monthly in advance.
-
-
-
32,605
-
-
CONTINGENCIES
There were no contingencies at the end of the financial year.
25. EVENTS AFTER BALANCE DATE
The Directors are not aware of any matter or circumstance that has arisen since 30
September2015 which has significantly affected or may significantly affect the
operations of the Group, the results of those operations, or the state of affairs of the
Group, in future financial years other than:
On 29 September 2015, Great Western Exploration Limited held a General Meeting
where the shareholders approved the following 7 resolutions:
Resolution 1
- Approval to Issue Shares Pursuant to Share Placement
Approval for the Directors to issue up to 70,000,000 Shares at an issue
price of $0.01 per share.
Resolution 2
- Approval for Mr Kevin Somes to participate in Share Placement
Approval for Mr Kevin Somes to participate in the Share Placement up to
10,000,000 Shares.
Resolution 3
- Approval for Mr Craig Mathieson to participate in Share Placement
Approval for Mr Craig Mathieson to participate in the Share Placement
up to 10,000,000 Shares.
95
Great Western Exploration Limited
Notes To The Consolidated Financial Statements For The Year Ended 30 June 2015 (Continued)
25. EVENTS AFTER BALANCE DATE (Continued)
Resolution 4
- Ratification of prior placement of Shares and Options
Ratified the prior issue of 10,600,000 Shares together with 10,600,000 free
attaching Options expiring 30 June 2016 exercisable at $0.05.
Resolution 5
- Proposed issue of Shares to Mr Kevin Somes in lieu of Director Fees
Approval for the issue of 6,022,600 Shares at an issue price of $0.01 per
Share to Mr Kevin Somes in full satisfaction of the accrued and
outstanding Director’s fees as at 30 June 2015 being $60,226.
Resolution 6
- Proposed issue of Shares to Mr Jordan Luckett in lieu of Salary and
Director Fees
Approval for the issue of 15,589,200 Shares at an issue price of $0.01 per
Share to Mr Jordan Luckett in full satisfaction of accrued and outstanding
Salary and Director’s fees as at 30 June 2015 being $155,982.
Resolution 7
- Proposed issue of Shares to Mr Craig Mathieson in lieu of Director Fees
Approval for the issue of 3,285,000 Shares at an issue price of $0.01 per
Share to Mr Craig Mathieson in full satisfaction of the accrued and
outstanding Director’s fees as at 30 June 2015 being $32,850.
26. AUDITORS REMUNERATION
The Auditor of Great Western Exploration Limited is
Bentleys
Amounts received or due and receivable for
2015
$
2014
$
• an audit or review of the financial report of the Group
• other services in relation to the Group – other services
31,000
28,500
-
31,000
28,500
96
Great Western Exploration Limited
Directors’ Declaration
In accordance with a resolution of the directors of Great Western Exploration Limited,
the Directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 44 to 96, are in accordance
with the Corporations Act 2001 and:
a.
b.
comply with Australian Accounting Standards, which, as stated in
accounting policy Note 1 to the financial statements, constitutes
compliance with International Financial Reporting Standards (IFRS); and
give a true and fair view of the financial position as at 30 June 2015 and of
the performance for the year ended on that date of the Company;
in the Directors’ opinion, subject to the matters mentioned in Note 1(a) to the
financial statements, there are reasonable grounds to believe that the Company
will be able to pay its debts as and when they become due and payable; and
the Directors have been given the declarations required by s 295A of the
Corporations Act 2001 for the financial year ended 30 June 2015.
2.
3.
Dated this 30 day of September 2015
K C Somes
Chairman
97
To The Board of Directors
As lead audit director for the audit of the financial statements of Great Western
Exploration Limited for the financial year ended 30 June 2015, I declare that to the best
of my knowledge and belief, there have been no contraventions of:
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
any applicable code of professional conduct in relation to the audit.
Yours faithfully
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Director
Dated at Perth this 30th day of September 2015
We have audited the accompanying financial report of Great Western Exploration
Limited (“the Company”) and Controlled Entities (“the Consolidated Entity”), which
comprises the statement of financial position as at 30 June 2015, and the statement of
profit or loss and other comprehensive income, statement of changes in equity and
statement of cash flows for the year then ended, 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.
The directors of the Company are responsible for the preparation of the financial report
that gives a true and fair view in accordance with Australian Accounting Standards and
the Corporations Act 2001 and for such internal control as the directors determine is
necessary to enable the preparation of the financial report that gives a true and fair view
and is free from material misstatement, whether due to fraud or error. In Note 1, the
directors also state, in accordance with Accounting Standards AASB 101: Presentation
of Financial Statements, that the financial statements comply with International Financial
Reporting Standards.
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. These Auditing
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
judgment, 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.
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
In our opinion:
a. The financial report of Great Western Exploration 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 30 June 2015 and of its
performance for the year ended on that date; and
ii.
complying with Australian Accounting Standards and the Corporations Regulations 2001;
b. The financial statements also comply with International Financial Reporting Standards as disclosed in
Note 1.
Without qualifying our opinion, we draw attention to Note 1(a) in the financial report which indicates that the
Consolidated Entity incurred a net loss of $1,624,590 during the year ended 30 June 2015. This condition,
along with other matters as set forth in Note 1(a), indicate the existence of a material uncertainty which may
cast significant doubt about the ability of the Consolidated Entity to continue as a going concern and whether it
will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in
the financial report.
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2015.
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.
In our opinion, the Remuneration Report of Great Western Exploration Limited for the year ended 30 June
2015, complies with section 300A of the Corporations Act 2001.
BENTLEYS
Chartered Accountants
MARK DELAURENTIS CA
Director
Dated at Perth this 30th day of September 2015
Great Western Exploration Limited
ADDITIONAL INFORMATION
1.
SHAREHOLDER INFORMATION
1.1
VOTING RIGHTS
In accordance with the Company’s constitution, on a show of hands every member
present in person or by proxy or attorney or duly authorised representative has one
vote. On a poll every member present in person or by proxy or attorney or duly
authorised representative has one vote for every fully paid ordinary share held.
1.2
SUBSTANTIAL SHAREHOLDERS AS AT 29 September 2015
Shareholder
No of Shares
Holdrey Pty Ltd ATF The Don Mathieson Family Trust 14,933,496
1.3
DISTRIBUTION OF HOLDERS AS AT 29 September 2015
Number of Holders
Distribution is:
1 – 1000
1001 – 5,000
5001 – 10,000
10,001 – 100,000
100,001 – and over
`
Fully Paid
Ordinary Shares
1,323
222
179
153
551
218
1,323
101
Great Western Exploration Limited
ADDITIONAL INFORMATION
1.4
TOP TWENTY HOLDERS:
(a)
Ordinary Shares
The names of the twenty largest ordinary fully paid shareholders as at
29 September 2015 are as follows:
Name
%
No. of Shares
1 Holdrey Pty Ltd
2 The Luckett Family Trust
3 UOB Kay Hian Private Limited (Clients
A/C)
4 BAM NR 1 Pty Ltd
5 Mrs J E Somes & Ms A J Somes (Jane
Somes Pension Fund)
6 Rogue Investments Pty Ltd
7 Frank Cannavo Investments Pty Ltd
8 Sunden Pty Ltd
9 Soria Nominees Pty Ltd
10 Citicorp Nominees Pty Ltd
11 Hallco No42 Pty Ltd
12 Ancan Investments Pty Ltd
13 Minsk Pty Ltd
14 Canna Investments Pty Ltd
15 Mr N L Blakesley
16
John Moran
17 Blade Skate Pty Ltd
18 Sayers Investments (ACT) Pty Limited
19 Eric James Godfrey
20 Magaurite Pty Ltd (Peter Nelson Super
Fund)
7.91
4.43
4.41
3.89
3.88
3.70
3.65
3.26
3.17
2.35
2.35
1.84
1.47
1.34
1.25
0.99
0.98
0.80
0.79
0.79
14,958,045
8,382,546
8,355,000
7,362,724
7,339,032
7,000,000
6,900,000
6,166,667
6,000,000
4,442,206
4,440,000
3,473,121
2,774,278
2,535,660
2,363,740
1,874,539
1,860,000
1,511,334
1,500,000
1,500,000
53.25
100,738,892
1.5
UNQUOTED SECURITIES
On issue
No of holders
Employee Share
Option Plan
Options
Other
10,000,000
-
7
-_____
102
Great Western Exploration Limited
2.
SCHEDULE OF MINERAL TENEMENTS
Details of Mineral Tenements are disclosed in the Review of Exploration Activities.
103