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FOR THE YEAR ENDED 31 DECEMBER 2017
CONTENTS
CHAIRMAN’S LETTER
REVIEW OF OPERATIONS
MINERAL RESOURCES
DIRECTORS’ REPORT
REMUNERATION REPORT
AUDITOR’S INDEPENDENCE DECLARATION
INDEPENDENT AUDITORS’ REPORT
DIRECTORS’ DECLARATION
CORPORATE DIRECTORY
Geopacific Resources Limited
Public listed Company (ASX Code: GPR)
incorporated in New South Wales in 1986
Australian Business Number (ABN)
57 003 208 393
Directors & Secretaries in Office
Milan Jerkovic - Non-Executive Chairman
Ron Heeks - Managing Director
Philippa Leggat - Executive Director – Corporate
Mark Bojanjac - Non-Executive Director
Ian Clyne - Non-Executive Director
Matthew Smith - Company Secretary
Registered Office
Level 1
278 Stirling Highway
Claremont WA 6010
Postal Address
PO Box 439
Claremont WA 6910
Fiji Operations Office
1 Cawa Street
Martintar Nadi Fiji
Tel: 679 6 727150
Fax: 679 6 727152
PO Box 9975
Nadi Airport Fiji
1
2
4
5
10
17
18
23
CONSOLIDATED STATEMENT OF PROFIT AND
LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT
OF FINANCIAL POSITION
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
CONSOLIDATED STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL STATEMENTS
SHAREHOLDER INFORMATION
24
26
27
28
29
70
Auditor
Greenwich & Co Audit Pty Ltd
Level 2, 35 Outram Street
West Perth WA 6005
Banker
ANZ Banking Group Ltd
Corner of Hay Street
& Outram
Street
West Perth WA 6005
Stock Exchange
ASX Limited
Level 4, Central Park
152-158 St Georges Terrace
Perth WA 6000
ASX Code: GPR
Share Registry
Boardroom Pty Ltd
Grosvenor Place
Level 12, 225 George Street
Sydney NSW 2000
CHAIRMAN’S LETTER
Dear Shareholder,
Geopacifi c has had a productive and successful 2017 year, primarily focused on
developing the Woodlark gold project (Woodlark).
After the reporting period, Geopacifi c released the Pre-
Feasibility Study (PFS) results, which demonstrate that
Woodlark is a robust, low-cost, low-stripping ratio, open
pit operation that can deliver an average of 100Koz Au per
annum over 10 years. Defi nitive Feasibility Study (DFS)
preparation has commenced with completion targeted in
Q3 of 2018.
Exploration work also continued on the Kou Sa Copper
Gold project in Cambodia with drilling and fi eldwork
outlining new prospects and opportunities to improve the
project. Limited work was undertaken in Fiji and the board
has decided to investigate options to divest the Fiji assets
to focus on Woodlark and Kou Sa.
During the year Geopacifi c made an off-market offer to
acquire all of the ordinary shares in Kula Gold Ltd (Kula).
Kula became an 85% controlled subsidiary of Geopacifi c
and is now consolidated into Geopacifi c‘s accounts. A
successful oversubscribed capital raise of $10.5 million
also took place during the year with funds raised to advance
Woodlark, exploration and working capital.
Looking forward to the New Year will see the company taking
a step closer to a development decision with the completion
of the DFS and investigation of fi nancing options. Work
will continue to enhance Woodlark and unlock the sizable
geological potential. Exploration and further studies will
continue on the Kou Sa project in Cambodia.
We thank all shareholders for their ongoing support and
we expect that the foundation created in 2017 has well-
positioned the Company to deliver signifi cant benefi ts and
value in the coming year.
The Geopacifi c team has made signifi cant progress over
the past year and we will continue to keep shareholders
informed of developments.
We appreciate the ongoing effort from our management
team led by Ron Heeks, service providers and stakeholders.
Milan Jerkovic
Chairman
2017 ANNUAL REPORT
1
REVIEW OF OPERATIONS
REVIEW OF OPERATIONS
EXPLORATION & DEVELOPMENT
ACTIVITIES
Woodlark Island, Papua New Guinea
Kou Sa project, Cambodia
The 2017 Financial Year was a period of significant
development for Geopacific, with development activities on
Woodlark Island taking centre stage as Geopacific moves
towards producer status.
Geopacific has focused on delivering the Woodlark gold
project (Woodlark) by delivering a Pre-Feasibility Study
(PFS) on the Kulumadau, Busai and Woodlark King gold
deposits. The PFS was released after the reporting period
and supports the development of a profitable, long-life
mining operation. The Project benefits from favourable
logistics and topography, being located on the coast and
well supported by regional shipping and airlines. Flat
topography and supportive social environment present
strong positives to operating on Woodlark.
Significant development activities undertaken at Woodlark
over the reporting period include:
•
Exploration at the Kou Sa Project, located in northern
Cambodia’s Chepp district continued over the reporting
period, focusing on delineating and testing additional
resource targets. Geopacific’s activities resulted in a
limited drilling program to test targets at the 181 and 118
Prospects.
Highlights of exploration activities this financial year
include:
•
Completion of extensive soil geochemical sampling
and geological mapping over the Kou Sa tenement;
• Trenching of anomalous geochemical signatures;
•
Drill testing anomalous geochemistry in trenching at
Prospects 181 and 118;
Assessment of Kampot and Kou Sa West extension
areas.
• Over 30,000 meters of diamond and RC drilling;
• Full geological review and interpretation;
•
Pre-Geopacific drillholes re-logged and integrated into
geological model and database;
• QA/QC updated to JORC 2012 standard;
• Updated geotechnical drilling and review;
•
•
Independent metallurgical and process design review;
Independent processing and mining cost preparation on
a ‘first principles’ basis;
• Independent engineering review;
• Variability and optimisation metallurgical test work;
• Review of environmental studies;
• Review and optimisation of key site infrastructure;
•
Resource and reserve calculations utilising independent
consultants;
• Independent consultant engaged to conduct DFS;
•
Established working relationships with key project
stakeholders.
Fijian gold and copper project, Fiji
Geopacific is the largest licence holder in Fiji, with five
projects located on the two main islands of Viti Levu and
Vanua Levu.
Exploration to date has provided evidence for porphyry
and/or epithermal systems at all projects.
There
remains potential to expand the already identified gold
mineralisation at Faddy’s prospect at the Nabila project,
which is the most advanced of the Fijian projects.
Highlights for the year include:
•
•
•
•
•
Completion of deep IP survey lines across the Vuda and
Sabeto licence areas;
Definition of strong IP conductors consistent with the
presence of a buried porphyry intrusion;
Good correlation
to strong gold and copper
mineralisation identified in surface sampling and earlier
shallow drilling;
Mineralisation and IP anomalies only 6km from Lion
One Metals’ Tuvatu underground gold development;
Renewal of the Vuda, Sabeto, Nabila and Kavukavu
licences.
CORPORATE
All resolutions voted on at the AGM passed
Geopacific held its annual general meeting on 24 May 2017.
All resolutions passed. The ordinary resolutions included
adoption of the remuneration report, re-election of Non-
Executive Director Ian Clyne and re- election of Executive
Director Philippa Leggat. Special resolutions included
appointment of auditor to fill a vacancy and approval of a
10% placement facility.
Woodlark gold project joint venture transaction and
Kula Gold Limited takeover
In January 2017, Geopacific and Kula Gold Limited (Kula)
announced the completion of the earn-in agreements
for Geopacific to acquire up to 80% of the Woodlark gold
project (Woodlark).
2
2017 ANNUAL REPORT REVIEW OF OPERATIONS
REVIEW OF OPERATIONS
On 1 May 2017, Geopacific made an off-market takeover
bid to acquire all of the ordinary shares of Kula and
released the Replacement Bidder’s Statement detailing
the Offer on 19 May 2017. The takeover offer for Kula
closed on 13 October 2017, at which time Kula became
an 85% controlled subsidiary of Geopacific and is now
consolidated into Geopacific’s accounts. Three Geopacific
representatives were appointed as Non- Executive
directors to a five-member Kula board. Appointments
included Geopacific Non-Executive Director, Mark Bojanjac
as Chairman; executive director corporate, Philippa Leggat
and Geopacific’s CFO and Company Secretary, Matthew
Smith.
At the end of the period Geopacific’s effective entitlement
to Woodlark was 86%, including a direct interest of 5% and
85% holding in Kula. This interest can increase up to 96%
through the joint venture.
In December 2017, Geopacific provided a Loan Facility to
Kula Gold Limited. The $500,000 facility will provide Kula
with working capital via a monthly drawdown for the next
12 months and can be converted to equity at Geopacific’s
election.
Oversubscribed capital raising – $10.5m
On 1 September 2017, Geopacific announced the successful
completion of a placement to sophisticated shareholders
to raise $10.5 million. The placement, made under the
Company’s 15% placement capacity, was well supported by
existing and new specialist resource sector and generalist
Australian institutional investors.
The placement was followed by a Share Placement Plan,
offered to all eligible shareholders.
Pre-Feasibility Study, resource and reserve
estimates
Geopacific inherited over $150 million in historic spend on
Woodlark, which included a wealth of drilling data from
over 275,000 meters of drilling. Geopacific’s team followed
a rigorous process to undertake an extensive work program
to advance the project. The program included reassessment
of historical data, infill drilling, pit optimisation/scheduling,
additional metallurgy, geotechnical & hydrology studies to
review, validate, re-interpret and add to existing data. This
work substantially increased the confidence surrounding in
geological data and existing resources and included over
30,000 metres of new resource drilling at both the Busai
and Kulumadau deposits.
The compilation of this body of work was targeted for
completion in Q1 2018 with the delivery of a Pre- Feasibility
Study (PFS), including resource and reserve estimates. The
PFS was successfully released post- reporting-period in
March 2018 and shows that Woodlark is a robust open-pit
operation able to deliver an average of 100,000 ounces of
gold per year for a 10-year mine life.
FINANCIAL REVIEW
2013
$
2014
$
2015
$
2016
$
2017
$
Net Profit/(Loss) After Tax
(1,364,336)
(1,636,029)
(2,000,637)
(4,144,977)
(3,211,185)
Earnings / (Loss) Per Share (Cents)
(1.26)
(0.67)
(0.25)
(0.45)
(0.23)
Cash and Cash Equivalents
3,258,776
4,165,516
12,589,002
11,469,015
6,765,343
Exploration Expenditure
1,486,557
5,529,505
15,787,417
12,140,869
23,540,334
Total Assets
Net Assets
17,223,875
23,617,573
48,233,948
60,714,745
77,112,639
16,670,970
22,778,317
47,143,679
57,912,542
74,349,987
The Group recorded a net loss after tax for the year ended
31 December 2017 of $3,211,185 (2016: $4,144,977). The
decrease over the 2016 financial year mainly relates to a
decrease in the tax expense on the recognition of deferred
tax liabilities associated with exploration and evaluation
expenditure.
At 31 December 2017, the Group’s total assets were
$77,112,639 (2016: $60,714,745) and net assets were
$74,349,987 (2016: $57,912,542). Continued investment in
exploration across the Group’s tenement holdings and the
acquisition of the Woodlark Gold Project were the primary
drivers of the increase in Total Assets for the period, with
additions of $23,540,334 (2016: $12,140,869 including
prepayments) in exploration and evaluation activities.
At reporting date, the Group’s Total Liabilities were
$2,762,652 (2016: $2,802,203) which represents a $39,551
decrease during the reporting period.
3
2017 ANNUAL REPORT REVIEW OF OPERATIONS
MINERAL RESOURCES
Kou Sa Project Mineral Resource –
Prospects 150 & 160
As at 31 December 2017 the total Mineral Resource for the Kou Sa Project was 3.84 million tonnes at 0.77% Cu, 0.66g/t Au
and 5.27g/t Ag for 51.2k tonnes of Cu equivalent. The Mineral Resource for Prospects 150 and 160 at the Kou Sa Project
estimated at 0.4% CuEq lower cut-off are detailed in the table below:
Category
Mt
Indicated
Inferred
3.49
0.35
Cu
%
0.78
0.70
Au
g/t
0.71
0.20
Ag
g/t
5.37
4.30
CuEq
%
Cu
kt
Au
koz
1.38
0.90
27.1
79.2
2.3
2.7
Ag
koz
602
48
CuEq
kt
48.1
3.1
Total
3.84
0.77
0.66
5.27
1.33
29.5
81.8
651
51.2
There was no change to the Mineral Resources reported at 31 December 2016 for comparison.
Competent Persons Statement
The information in this report that relates to the Mineral Resource estimates is based on information compiled by Jonathon
Abbott, a Competent Person who is a Member of the Australian Institute of Geoscientists. Jonathon Abbott is a full-time
employee of MPR Geological Consultants Pty Ltd and is an independent consultant to Geopacific Resources Limited. Mr
Abbott has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and
to the activity being undertaking to qualify as a Competent Person as defined in the 2012 Edition of the “Australasian Code
for Reporting of Mineral Resources and Ore Reserves”. Mr Abbott consents to the inclusion in this report of the matters
based on his information in the form and context in which it appears.
The information in this report that relates to exploration results is based on information compiled by or under the supervision
of Ron Heeks, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy and Managing
Director of Geopacific. Mr Heeks has sufficient experience which is relevant to the style of mineralisation and type of
deposit under consideration and the activity 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 Heeks
consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
Forward Looking Statements
All statements other than statements of historical fact included in this report including, without limitation, statements
regarding future plans and objectives of Geopacific Resources Ltd are forward-looking statements. When used in this
report, forward-looking statements can be identified by words such as ‘may’, ‘could’, ‘believes’, ‘estimates’, ‘targets’,
‘expects’ or ‘intends’ and other similar words that involve risks and uncertainties.
These statements are based on an assessment of present economic and operating conditions, and on a number of
assumptions regarding future events and actions that, as at the date of this report, are expected to take place. Such
forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties,
assumptions and other important factors, many of which are beyond the control of the company, its directors and
management of Geopacific that could cause the Company’s actual results to differ materially from the results expressed
or anticipated in these statements.
Geopacific cannot and does not give any assurance that the results, performance or achievements expressed or implied by
the forward-looking statements contained in this report will actually occur and investors are cautioned not to place undue
reliance on these forward-looking statements. The Company does not undertake to update or revise forward-looking
statements, or to publish prospective financial information in the future, regardless of whether new information, future
events or any other factors affect the information contained in this report, except where required by applicable law and
stock exchange listing requirements.
4
2017 ANNUAL REPORT DIRECTORS’ REPORT
DIRECTORS REPORT
The Directors present their report together with the financial report of the Geopacific Group, being Geopacific Resources
Limited (“Geopacific”) (“the Company”) and its controlled entities (“the Group”) for the financial year ended 31 December
2017, and the auditors’ report thereon.
1
DIRECTORS
The names of the Company’s Directors in office during the financial year and until the date of this report are as
follows. Directors were in office for the entire period unless otherwise stated.
Name, Position Held & Qualification Experience, Special Responsibilities & Other Directorships
Milan Jerkovic
Non-Executive Chairman
Appointed: 23 April 2013
B. App. Sc (Geology)
Fellow of AusIMM
Member of AICD
Post Graduate Diploma in Mineral
Economics
Post Graduate Diploma in Mining
Mr Milan Jerkovic is a qualified geologist with postgraduate qualifications
in Mining & Mineral Economics with over 30 years of experience in the
mining industry involving resource evaluation, operations, financing,
acquisition, project development and general management.
Mr Jerkovic was most recently the Chief Executive Officer of Straits
Resources Limited and has held positions with WMC, BHP, Nord Pacific,
Hargraves, Tritton and Straits Asia. Mr Jerkovic was the founding
Chairman of Straits Asia Resources and is currently Executive Chairman
of Blackham Resources Limited and a non-Executive Director of Metals
X Limited.
Ron Heeks
Managing Director
Appointed: 28 March 2013
B. App. Sc (Geology)
Member of AusIMM
Mark Bojanjac
Non-Executive Director
Appointed: 28 March 2013
B. Com
Member of ICAA
Mr Jerkovic was appointed Chairman of the Company on 1 August 2013
and is also a member of the Audit and Risk Committee.
Mr Jerkovic has the following interest in Shares in the Company as at the
date of this report – 10,418,899 ordinary shares.
With 30 years’ mining industry experience, Mr Heeks was a founder of
Exploration and Mining Consultants and has had previous experience
with WMC, Newcrest, Newmont (US) and RSG Consulting.
Mr Heeks has held senior roles in both mine management and exploration
and is a Former General Manager – Technical for Straits Asia Indonesian
Operations and Chief Technical Officer for Adamus Resources Southern
Ashanti Gold Operation. He has lived and worked in various countries
around the world gaining extensive experience in South-East Asia and
Indonesia in particular.
Mr Heeks was appointed Managing Director of the Company on 28 March
2013 after the Takeover of Worldwide Mining Projects Ltd.
Mr Heeks has the following interest in Shares in the Company as at the
date of this report – 8,269,616 ordinary shares.
Mr Bojanjac is a Chartered Accountant with over 20 years’ experience in
developing resource companies. Mr Bojanjac was a founding director of
Gilt-Edged Mining Limited which discovered one of Australia’s highest
grade gold mines and was managing director of a public company which
successfully developed and financed a 2.4m oz gold resource in Mongolia.
He also co-founded a 3 million oz gold project in China.
Mr Bojanjac was most recently Chief Executive Officer of Adamus
Resources Limited and oversaw its advancement from an early stage
exploration project through its definitive feasibility studies, and managed
the debt and equity financing of its successful Ghanaian gold mine.
Mr Bojanjac was appointed a Director of the Company on 28 March 2013
after the Takeover of Worldwide Mining Projects Ltd.
He serves as Executive Chairman of Canadian explorer, PolarX Limited
and is the Non-Executive Chairman of Kula Gold Limited.
Mr Bojanjac is also the Chairman of the Audit and Risk Committee.
Mr Bojanjac has the following interest in Shares in the Company as at the
date of this report – 3,416,666 ordinary shares.
5
2017 ANNUAL REPORT DIRECTORS’ REPORT
Name, Position Held & Qualification Experience, Special Responsibilities & Other Directorships
Ian Clyne
Non-Executive Director
Appointed: 6 October 2016
Mr Clyne has over 35 years’ experience in international banking having
worked in senior executive positions in ten countries in Asia, Oceania,
Australia and Europe. He has specialised in emerging markets and has
held roles of President, Director, Managing Director and Chief Executive
Officer with universal banking operations that have extensive branch
networks and large employee bases. Mr Clyne has successfully re-
engineered banks in Indonesia, Italy, Poland and PNG.
Philippa Leggat
Executive Director – Corporate
Appointed: 13 January 2017
B. Com (Finance, Risk & Strategic
Management)
Member of AICD
Matthew Smith
Company Secretary
Appointed: 1 December 2016
B. Com (Accounting)
Member of ICAA
Mr Clyne held the role of Managing Director and Group CEO of Bank South
Pacific (BSP), based in Port Moresby (2008 – 2013). He undertook a major
transformation program changing BSP from a typical emerging economy
banking institution into an innovative, technology driven, modern bank.
Under his leadership, the bank grew from having 400,000 accounts in
PNG to over 1 million in PNG and 1.5 million across the Pacific, including
Fiji and the Solomon Islands, with a market capitalisation of $1.7 billion
at the end of his term.
Mr Clyne is also a member of the Audit and Risk Committee.
Mr Clyne is currently a Non-Executive Director of Union Bank of Nigeria.
Mr Clyne has the following interest in Shares in the Company as at the
date of this report – 2,400,000 ordinary shares.
Ms Leggat has extensive experience in corporate mining roles and also
brings a new perspective to the Board having worked in several other
industries where she has achieved successful corporate outcomes.
Clients in the resource sector include MMG, Anglo-Gold Ashanti, Anglo
Platinum and Xstrata.
Ms Leggat is a corporate advisor and company director with over 15 years’
experience in assisting international organisations that operate in Africa,
Asia, Australia and Europe. She has a strong background in corporate
governance and finance and a practical understanding of the issues
faced by developed-world businesses operating in emerging economies.
Ms Leggat’s experience covers; negotiations, mergers and acquisitions,
fund raising, defining and executing business improvement strategies.
Ms Leggat currently serves as a Non-Executive Director of Kula Gold
Limited and was previously a Non-Executive Director of Parker Resources
NL.
Ms Leggat held no interest in Shares in the Company as at the date of
this report.
Mr Smith has over 15 years’ experience in the resource industry across
a broad range of commodities including precious metals, industrials
and bulk commodities. Mr Smith has worked for a range of companies
operating in the Asia Pacific region and most recently held the role of
Chief Financial Officer at ASX listed Kingsrose Mining Limited, with gold
operations in Indonesia.
Mr Smith is a Chartered Accountant with relevant industry experience
on an array of financing transactions across debt and equity markets.
Mr Smith also brings specialist knowledge in the areas of international
taxation, corporate structuring, accounting and corporate governance.
Mr Smith has previously held the role of Company Secretary at Straits
Resources Limited and is currently a Non-Executive Director of Kula
Gold Limited.
Mr Smith held no interest in Shares in the Company as at the date of this
report.
6
2017 ANNUAL REPORT DIRECTORS’ REPORT
2
PRINCIPAL ACTIVITY
The principal activity of the Group is mineral development and exploration focussed on gold and copper deposits
in Papua New Guinea and Cambodia.
During the year, the Group discontinued its operations in Fiji and classified its activity as held for sale. With the
exception of this, there were no significant changes in the nature of this activity of the Group during the financial
year.
3
OPERATING AND FINANCIAL REVIEW
A review of the operations and financial position of the Company during the year ended 31 December 2017,
including details of the results of operations, changes to the state of affairs, and likely developments in the
operation of the Company in subsequent financial years are set out in the Operations Review.
4
5
DIVIDENDS
No dividends were paid or declared during the financial year.
STATE OF AFFAIRS
There have not been any significant changes in the state of affairs of the Company during the financial year, other
than those noted in the financial report.
6
EVENTS SUBSEQUENT TO REPORTING DATE
On 13 March 2018, the Company announced the results of the PFS for Woodlark. The results of the PFS demonstrate
that Woodlark is a robust, low-cost, low stripping ratio operation that can deliver an average of 100koz Au per
annum over 10 years.
The key highlights of the PFS were:
• Annual production of 100Koz over 10-year mine life for 1.01Moz Au (incl. 51Koz Au Inferred);
• Free milling ore, with recovery of 92% for first five years and 90% over mine life;
• Up to 60% of gold recoverable by gravity;
• Conventional 2.4Mt.pa CIL circuit optimised with upgraded ore from year three;
• Head grade up to 1.63g/t Au in first years;
• Low stripping ratio of 2.5:1 for first five years, 3.1:1 over mine life;
• All in sustaining cost A$990/oz for first five years, A$1,110/oz over mine life;
• Capital cost A$180m;
• 2.2-year, post-tax project payback;
• Free cashflow over life of mine A$388m (pre-tax) and A$314m (post-tax) at A$1,650 gold price; and
• Post-tax IRR 33%.
Along with the PFS, the Company also announced an Initial JORC 2012 Compliant Mineral Ore Reserve for
Woodlark of 34.7 million tonnes at 0.99g/t Au for 1,101,600 ounces of gold; and a Mineral Resource Estimate for
Woodlark of 47.04 million tonnes at 1.04g/t Au for 1,573,000 ounces of gold.
7
2017 ANNUAL REPORT DIRECTORS’ REPORT
7
DIRECTORS’ INTERESTS AND BENEFITS
The relevant interest of each Director in the share capital as notified by the Directors to the Australian Stock
Exchange in accordance with section 205G(1) of the Corporations Act 2001, at the date if this report is as follows:
Name
M Jerkovic
M Bojanjac
I Clyne
R Heeks
P Leggat
Direct
Indirect
Shares
Options
Shares
Options
1,000,000
916,666
2,400,000
4,000,000
-
-
-
-
-
-
9,418,899
2,500,000
-
3,523,757
-
-
-
-
-
-
There were no unvested Performance Rights on issue to the Directors of the Company at the date of this report.
8
DIRECTORS’ MEETINGS
The number of Directors’ meetings (including meetings of committees) and the number of meetings attended by
each of the Directors of the Company during the financial year are set out below:
Name
M Jerkovic
M Bojanjac
I Clyne
R Heeks
P Leggat
Directors Meetings
Audit Committee Meetings
Attended*
Eligible to Attend
Attended*
Eligible to Attend
7
7
7
7
7
7
7
7
7
7
2
2
2
2
2
2
2
2
2
2
*Either in person, or by electronic means.
The Board of Directors takes ultimate responsibility for corporate governance. This includes the establishment
of compensation arrangements for the Company’s Executive Directors and senior executives. It also includes
the appointment and retirement of Non-Executive Directors, appointment of Auditors, monitoring key areas of
business risk, maintenance of ethical standards and Audit Committees. The Board seeks independent professional
advice as necessary in carrying out its duties and responsibilities.
9
LIKELY DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
The Group will continue to advance its development and exploration portfolio and seek to increase its tenement
holdings by acquiring further projects.
10
ENVIRONMENT REGULATIONS
Entities in the Group are subject to normal environmental regulations in areas of operations in Papua New Guinea,
Cambodia and in Fiji. There has been no breach of these regulations during the financial year, or in the period
subsequent to the end of the financial year and up to the date of this report.
8
2017 ANNUAL REPORT DIRECTORS’ REPORT
11
SHARE OPTIONS
There were 1,000,000 Options over unissued shares unexercised at 31 December 2017 (2016 – 2,688,768).
During the financial year, the Company cancelled 1,688,768 unlisted Options over unissued shares and did not
issue any shares on the exercise of unlisted Options. Since the end of the financial year, no unlisted Options have
been cancelled or exercised.
Details of unlisted Options over unissued shares in the Company as at the date of this report are presented in the
following table:
Options on Issue
Exercise Price
Expiry Date
800,000
200,000
$2.50
$5.00
Not later than 5-years after defining a JORC compliant ore reserve of over
200,000oz Au on the Faddy’s Gold Deposit
Not later than 10-years after defining a JORC compliant ore reserve of
over 1,000,000oz Au on the Faddy’s Gold Deposit
Option holders do not have any rights to participate in any issues of shares or other interest in the Company or
any other entity.
12
INSURANCE OF OFFICERS
The Company has paid a premium to insure the Directors and Company Secretary of the Group in respect of
certain legal liabilities, including costs and expenses in successfully defending legal proceedings, whilst they
remain as Directors and for seven years thereafter. The insurance contract prohibits the disclosure of the total
amount of the premiums and a summary of the nature of the liabilities.
13
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings
on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of
taking responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under
section 237 of the Corporations Act 2001.
14
AUDITOR’S INDEPENDENCE DECLARATION
The auditor’s independence declaration for the year ended 31 December 2017 is set out on page 17.
15
AUDITOR
During the year, the following fees were paid or payable to the auditors of the Company for services provided by
the auditor of the Company and its subsidiaries, its related practices and non-related audit firms:
Audit Services
Greenwich & Co
Audit and review of the financial report and other audit work under the
Corporations Act 2001
Other non-audit services
Ernst & Young
Audit and review of the financial report for Kula Gold and other audit
work under the Corporations Act 2001
Total
Consolidated
2017
$
2016
$
30,000
10,450
26,500
66,950
37,131
4,000
-
41,131
9
2017 ANNUAL REPORT DIRECTORS’ REPORT
16
NON-AUDIT SERVICES
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. The nature and scope of each type of non-audit
service provided means that auditor independence was not compromised.
17
REMUNERATION REPORT - AUDITED
This report outlines the remuneration arrangements of the Group in accordance pursuant to the requirements of
the Corporations Act 2001 and its regulations. This information has been audited as required under section 308(3)
(c) of the Corporations Act 2001.
This report details the remuneration arrangements of the Group’s key management personnel (KMP), who are
defined as those persons who have the authority and responsibility for planning, directing and controlling the
major activities of the Group, directly or indirectly, including any Director of Geopacific Resources Limited.
Details of the KMP of the Group during the reporting period are set out in the table below:
Name
Non-Executive Directors
Position
Milan Jerkovic
Mark Bojanjac
Ian Clyne
Executives
Ron Heeks
Philippa Leggat
Matthew Smith
Glenn Zamudio
James Kerr
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Managing Director
Executive Director - Corporate
Chief Financial Officer & Company Secretary
General Manager - Projects
General Manager - Geology
There were no changes to KMP other than those noted above after the reporting date and before the date the
financial report was authorised for issue.
Remuneration Governance
Due to the size and structure of the Board the Company does not have a separate Remuneration Committee.
Remuneration matters are dealt with by the full Board, with Directors excluded from individual discussions
as required. The Board will continue to assess the Company’s circumstances in determining whether the
establishment of a separate Remuneration Committee is required.
The Board is responsible for reviewing and recommending the remuneration arrangements of the Group KMP
each year and ensuring that the Group’s remuneration structures are aligned with the interests of the Company
and its shareholders. This includes an annual remuneration review of base salary (including superannuation),
short term incentives (STI) and long term incentives (LTI), including the appropriateness of performance hurdles.
Remuneration Consultants
During the reporting period, the Board engaged BDO Chartered Accountants to develop a comprehensive
remuneration framework for the Company and to provide recommendations as defined in section 9B of the
Corporations Act 2001.
Remuneration Overview and Strategy
The objective of the Group’s remuneration framework is to support the delivery of sustained shareholder value
and to ensure rewards accurately reflect achievements in line with general market conditions. The strategy is
designed to attract, motivate and retain high calibre individuals through the provision of remuneration packages
that incorporate a balance of fixed and variable remuneration. In accordance with sound corporate governance
practices, the structure of Non-Executive and Executive remuneration is separate and distinct.
10
2017 ANNUAL REPORT
DIRECTORS’ REPORT
17
REMUNERATION REPORT – AUDITED (CONTINUED)
Executive Remuneration Framework
The Board’s objective is to reward Executives with a quantum and mix of remuneration commensurate with their
position and responsibilities and that is competitive within the marketplace. With this in mind, the Company intends
to remunerate Executives with a mix of both fixed and at risk, or variable, remuneration. Variable remuneration
incorporates a balance of short, medium and long term incentives.
Fixed remuneration for Executives consists of base salary, superannuation and other non-cash benefits. It is
designed to provide a base level of remuneration which is appropriate for the Executives position, reflecting the
individuals’ skills, level of experience and responsibilities.
Variable remuneration, or performance linked remuneration, includes a combination of short, medium and long
term incentives designed to provide an “at risk” reward in a manner which aligns with the creation of sustained
shareholder value. All Executives are eligible to receive short, medium and long term incentives.
The following table provides a high level summary of the proposed remuneration framework:
Remuneration linked to market
rate of the role.
Total fixed
remuneration
Remuneration for meeting role
requirements.
Fixed
remuneration
Variable
remuneration
Incentive
Remuneration for delivering
on key milestones which are
designed to create value for
shareholders.
Variable
remuneration
Reward
Remuneration for the creation of
value for shareholders - directly
linked to shareholder returns.
Short term
incentive
Incentive for the achievement of
annual objectives.
Medium term
incentive
Incentive for the achievement of
sustained business value.
Long term
incentive
Reward for performance over
the long term.
The proposed plan considers the use of a range of equity based instruments to deliver incentives to focus on
the delivery of sustained shareholder value and to minimise the cash component of total remuneration. The
framework will incorporate a 5% cap on total shares issued to Executives under plan.
Non-Executive Directors
Fees and payments to Non-Executive Directors reflect the demands, which are made on, and the responsibilities
of the Directors. A review of Non-Executive Directors’ fees and payments is conducted annually. The Board may
from time to time seek the advice of independent remuneration consultants to ensure Non-Executive Directors’
fees and payments are appropriate in the market setting.
The Chairman’s fees are determined independently to the fees of Non-Executive Directors based on comparative
roles in market. The Chairman is not present at any discussions relating to determination of his own remuneration.
Directors’ fees
Non-Executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically
recommended for approval by shareholders. The pool limit currently stands at $400,000 per year in aggregate as
agreed at the 2012 Annual General Meeting.
A Director may also be paid fees or other amounts as the Directors determine, if a Director performs special
duties or otherwise performs duties outside the scope of normal duties of a Director. A Director may also be
reimbursed for out of pocket expenses incurred as a result of their directorship or any special duties.
11
2017 ANNUAL REPORT
DIRECTORS’ REPORT
17
REMUNERATION REPORT – AUDITED (CONTINUED)
Details of Remuneration
The tables below set of the details of the remuneration of the Groups’ KMP, pursuant to AASB 124 Related Party
Disclosures.
31 December
2017
Short Term
Benefits
Post Employment Benefits
Share
Based
Payments
Salaries
& Fees
$
Bonus Superannuation
$
$
Termination
Payments
$
Rights
$
Total
$
Share Based
Payments as a
Percentage of
Remuneration
%
Non-Executive Directors
M Jerkovic
M Bojanjac
I Clyne
NED Sub-total
95,000
60,000
60,000
215,000
-
-
-
-
9,025
5,700
5,700
20,425
Executive Directors
R Heeks
P Leggat
Directors Sub-total
Other KMP
M Smith
G Zamudio
J Kerr
Other KMP Sub-total
TOTAL
330,000
-
190,346 50,000
520,346 50,000
-
18,083
18,083
190,346
180,000
180,000
550,346
-
-
-
-
1,285,692 50,000
18,083
17,100
17,100
52,283
90,791
-
-
-
-
-
-
-
-
-
-
-
-
31 December
2016
Short Term
Benefits
Salaries
& Fees
$
Post Employment Benefits
Superannuation
Termination
Payments
$
$
7,442
4,117
1,213
12,772
-
12,772
-
10,517
1,425
1,425
1,425
2,083
16,875
29,647
Non-Executive Directors
M Jerkovic
M Bojanjac
I Clyne (i)
NED Sub-total
Executive Directors
R Heeks
Directors Sub-total
Other KMP
J Lewis (ii)
S Whitehead (iii)
M Smith (iv)
P Leggat (v)
G Zamudio (vi)
J Kerr (vii)
Other KMP Sub-total
TOTAL
78,333
43,333
12,769
134,435
262,500
396,935
220,000
125,382
15,000
15,000
15,000
21,923
412,305
809,240
Mr I Clyne commenced 6 October 2016
Mr J Lewis resigned 30 November 2016
(i)
(ii)
(iii) Mr S Whitehead resigned 30 November 2016
(iv) Mr M Smith commenced 1 December 2016
12
-
-
-
-
-
-
-
-
-
-
-
-
104,025
65,700
65,700
235,425
330,000
258,429
588,429
208,429
197,100
197,100
602,629
1,426,483
Share
Based
Payments
Rights
$
Total
$
11,900
8,925
-
20,825
97,675
56,375
13,982
168,032
47,600
68,425
310,100
478,132
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Share Based
Payments as a
Percentage of
Remuneration
%
12
16
-
15
11
6
-
-
-
-
60,000
-
-
-
-
-
60,000
60,000
35,700
8,925
-
-
-
-
44,625
113,050
315,700
144,824
16,425
16,425
16,425
24,006
533,805
1,011,937
Ms P Leggat commenced 1 December 2016
(v)
(vi) Mr G Zamudio commenced 1 December 2016
(vii) Mr J Kerr commenced 15 November 2016
2017 ANNUAL REPORT
DIRECTORS’ REPORT
17
REMUNERATION REPORT – AUDITED (CONTINUED)
Service Agreements
A summary of the key terms of the Director contracts with the Company are set out below:
Milan Jerkovic - Non-Executive Chairman
• Directors Fees of $95,000 per annum, (increased from $75,000 per annum on 1 November 2016);
• Statutory superannuation contributions;
• Eligible to participate in the long-term incentive schemes offered by the Company; and
• No Notice Period.
Mark Bojanjac - Non-Executive Director
• Directors Fees of $60,000 per annum (increased from $40,000 per annum on 1 November 2016);
• Statutory superannuation contributions;
• Eligible to participate in the long-term incentive schemes offered by the Company; and
• No Notice Period.
Ian Clyne - Non-Executive Director
• Directors Fees of $60,000 per annum (increased from $40,000 per annum on 1 November 2016);
• Statutory superannuation contributions;
• Eligible to participate in the long-term incentive schemes offered by the Company; and
• No Notice Period.
Ron Heeks – Managing Director
• Consulting Fees of $330,000 per annum (increased from $240,000 per annum on 1 October 2016);
• Eligible to participate in the long-term incentive schemes offered by the Company; and
• Six months plus an additional one month for each year of service.
Philippa Leggat – Executive Director - Corporate
• Salary of $180,000 per annum
• Eligible to participate in the long-term incentive schemes offered by the Company; and
• Four months plus an additional one month for each year of service.
Short-term Incentives
A completion bonus of $50,000 was paid to Ms Philippa Leggat during the period in relation to the completion of
the Woodlark Joint Venture Agreement with Kula Gold.
No other bonus payments were made to Directors of the Company or other KMP of the Group during the period.
Long-term Incentives - Share-based Compensation
No long term incentives were granted to Directors of the Company or other KMP of the Group during the period.
Options
No Options over ordinary shares in the Company were provided as remuneration to Directors of the Company or
KMP of the Group during the period.
13
2017 ANNUAL REPORT
DIRECTORS’ REPORT
17
REMUNERATION REPORT – AUDITED (CONTINUED)
Performance Rights
No Performance Rights over ordinary shares in the Company were granted as remuneration to Directors of the
Company or KMP of the Group during the year. The following table outlines the Performance Rights granted or
vested to the Directors of the Company and other KMP of the Group.
Name
Directors
M Jerkovic
M Bojanjac
I Clyne
R Heeks
P Leggat
Subtotal
Other KMP
J Lewis
S Whitehead
M Smith
G Zamudio
J Kerr
Subtotal
TOTAL
Performance Rights Granted
During the Year
Performance Rights Vested
During the Year
2017
2016
2017
2016
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
375,000
-
2,000,000
-
2,875,000
1,500,000
375,000
-
-
-
1,875,000
5,125,000
The fair value of the Performance Rights is measured at grant date and allocated equally over the period from
grant date to vesting date. This allocation is reflected in the Share Based Payments column of the remuneration
tables.
The fair value at grant date is independently determined using a Black-Scholes option pricing model that takes
into account:
•
•
•
•
•
•
•
the exercise price of the Performance Right;
the term of the Performance Right;
the impact of dilution;
the share price at grant date;
the expected price volatility of the underlying share;
the expected dividend yield; and
the risk-free interest rate for the term of the Performance Right.
14
2017 ANNUAL REPORT
DIRECTORS’ REPORT
17
REMUNERATION REPORT – AUDITED (CONTINUED)
Equity Instrument Disclosures Relating to KMP
Options
There were no Options over Ordinary Shares in the Company held during the financial year by Directors of the
Company or other KMP of the Group.
Performance Rights
There were no Performance Rights over Ordinary Shares in the Company held during the financial year by
Directors of the Company or other KMP of the Group.
31 December
Opening Balance
Granted During
Vested During
Closing Balance
2016
Directors
M Jerkovic
M Bojanjac
I Clyne
R Heeks
Subtotal
Other KMP
J Lewis
S Whitehead
M Smith
P Leggat
G Zamudio
J Kerr
Subtotal
TOTAL
1 January 2016
the Year
the Year
31 December 2016
500,000
375,000
2,000,000
2,875,000
1,500,000
375,000
-
-
-
-
-
1,875,000
4,750,000
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
375,000
2,000,000
2,875,000
1,500,000
375,000
-
-
-
-
-
1,875,000
4,750,000
-
-
-
-
-
-
-
-
-
-
-
-
-
15
2017 ANNUAL REPORT
DIRECTORS’ REPORT
17
REMUNERATION REPORT – AUDITED (CONTINUED)
Ordinary Shares
The number of Ordinary Shares in the Company held during the financial year by each Director of the Company
and other KMP of the Group, including their personally related parties, are as follows:
31 December
2017
Directors
M Jerkovic
M Bojanjac
I Clyne
R Heeks
P Leggat
Subtotal
Other KMP
M Smith
G Zamudio
J Kerr
Subtotal
TOTAL
31 December
2016
Directors
M Jerkovic
M Bojanjac
I Clyne
R Heeks
Subtotal
Other KMP
J Lewis
S Whitehead
M Smith
P Leggat
G Zamudio (i)
J Kerr
Subtotal
TOTAL
Opening Balance
1 January 2017
Issued on Vesting of
Performance Rights
Shares Acquired
on Market
Held at
Resignation
Closing Balance
31 December 2017
10,418,899
3,416,666
-
7,523,757
-
21,359,322
-
1,000,000
-
1,000,000
22,359,322
-
-
-
-
-
-
-
-
-
-
-
-
-
2,400,000
-
-
2,400,000
-
-
-
-
2,400,000
-
-
-
-
-
-
-
-
-
-
-
10,418,899
3,416,666
2,400,000
7,523,757
23,759,322
-
-
1,000,000
-
1,000,000
24,759,322
Opening Balance
1 January 2016
Issued on Vesting of
Performance Rights
Shares Acquired
on Market
Held at
Resignation
Closing Balance
31 December 2016
8,756,108
3,041,666
-
5,523,757
17,321,531
4,548,814
375,000
-
-
-
-
4,923,814
22,245,345
500,000
375,000
-
2,000,000
2,875,000
1,500,000
375,000
-
-
-
-
1,875,000
4,750,000
1,162,791
-
-
-
1,162,791
-
-
-
-
1,000,000
-
1,000,000
2,162,791
-
-
-
-
-
6,048,814
750,000
-
-
-
-
6,798,814
6,798,814
10,418,899
3,416,666
-
7,523,757
21,359,322
-
-
-
-
1,000,000
-
1,000,000
22,359,322
(i) G Zamudio – represents shares held at commencement of employment on 1 December 2016.
END OF REMUNERATION REPORT
The Directors Report, including the Remuneration Report, is signed in accordance with a resolution of the Directors:
Ron Heeks
Managing Director
Perth, Australia
29 March 2018
16
2017 ANNUAL REPORT
AUDITOR’S INDEPENDENCE DECLARATION
17
2017 ANNUAL REPORT INDEPENDENT AUDITORS’ REPORT
18
2017 ANNUAL REPORT INDEPENDENT AUDITORS’ REPORT
19
2017 ANNUAL REPORT INDEPENDENT AUDITORS’ REPORT
20
2017 ANNUAL REPORT INDEPENDENT AUDITORS’ REPORT
21
2017 ANNUAL REPORT INDEPENDENT AUDITORS’ REPORT
22
2017 ANNUAL REPORT GEOPACIFIC RESOURCES LIMITED
and Controlled En(cid:20)(cid:20)es
DIRECTORS’ DECLARATION
DIRECTORS’ DECLARATION
In accordance with a resolu(cid:10)on of the Directors of Geopacific Resources Limited, I declare that:
1.
In the opinion of the Directors:
(a) the financial statements and notes, of the consolidated en(cid:10)ty are in accordance with the
Corporations Act 2001, including:
(i) giving a true and fair view of the consolidated en(cid:10)ty’s financial posi(cid:10)on as at 31 December 2017
and of its performance for the year ended on that date; and
(ii) complying with the Australian Accoun(cid:10)ng Standards (including the Australian Accoun(cid:10)ng
Interpreta(cid:10)ons) and Corpora(cid:16)ons Regula(cid:16)ons 2001.
(b) the financial statements and notes also comply with Interna(cid:10)onal Financial Repor(cid:10)ng Standards as
disclosed in Note 1.
(c) subject to the ma‹ers set out in Note 1 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.
2. This declara(cid:10)on has been made a‘er receiving the declarations required to be made to the Directors in
accordance with sec(cid:10)on 295 of the Corporations Act 2001 for the financial year ended 31 December
2017.
On behalf of the Board
Ron Heeks
Managing Director
Perth, Australia
29 March 2018
29 | P a g e
23
2017 ANNUAL REPORT
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
GEOPACIFIC RESOURCES LIMITED
AND OTHER COMPREHENSIVE INCOME
and Controlled Entities
FOR THE YEAR ENDED 31 DECEMBER 2017
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2017
Consolidated
Note
2017
$
2016
$
Revenue from continuing operations
5
104,313
50,648
Administration expenses
Consultancy expense
Depreciation expense
Employee benefits expense
Occupancy expenses
14
(394,158)
(1,133,527)
(26,952)
(1,234,397)
(152,448)
(2,941,482)
(162,580)
(936,589)
(61,142)
(654,522)
(161,895)
(1,976,728)
Loss before income tax
(2,837,169)
(1,926,080)
Income tax expense
8
(28,395)
(2,218,897)
Loss after tax from continuing operations
(2,865,564)
(4,144,977)
Loss after tax from discontinued operation (attributable to
equity holders of the company)
Loss for the period
31
(345,621)
(3,211,185)
-
(4,144,977)
Loss for the year attributable to:
Non-controlling interest
Owners of the parent
Other comprehensive income
Exchange differences on translating foreign controlled
entities
Other comprehensive income for the year, net of tax
(32,399)
(3,178,786)
-
(4,144,977)
(3,211,185)
(4,144,977)
(1,821,975)
(1,821,975)
195,410
195,410
Total comprehensive income for the year attributable to
members of the parent entity
(5,033,160)
(3,949,567)
Total comprehensive income attributable to:
Non-controlling interest
Owners of the parent
21(b)
52,894
(5,086,054)
(5,033,160)
-
(3,949,567)
(3,949,567)
24
30 | P a g e
2017 ANNUAL REPORT
GEOPACIFIC RESOURCES LIMITED
and Controlled En(cid:20)(cid:20)es
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2017
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2017
Total comprehensive income for the period a†ributable to
owners of the parent arises from
Con(cid:20)nuing operations
Discon(cid:20)nued operations
Earnings per share (cents) for profit from con(cid:20)nuing
operations a(cid:144)ributable to the ordinary equity holders of the
company:
Basic earnings per share
Diluted earnings per share
Earnings per share (cents) for profit a(cid:144)ributable to the
ordinary equity holders of the company:
Basic earnings per share
Diluted earnings per share
Consolidated
Note
2017
$
2016
$
(4,740,433)
(345,621)
(5,086,054)
(3,949,567)
-
(3,949,567)
25
25
25
25
(0.21)
(0.21)
(0.45)
(0.45)
(0.23)
(0.23)
(0.45)
(0.45)
The above statement of profit or loss and other comprehensive income
should be read in conjunc–on with the accompanying notes.
31 | P a g e
25
2017 ANNUAL REPORT
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2017
Current Assets
Cash and cash equivalents
Trade and other receivables
Assets classified as held for sale
Inventory
Total Current Assets
Non-Current Assets
Trade and other receivables
Exploration and evaluation expenditure
Prepayment
Property, plant and equipment
Total Non-Current Assets
TOTAL ASSETS
Current Liabilities
Trade and other payables
Provisions
Total Current Liabilities
Non-Current Liabilities
Deferred tax liabilities
Provisions
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
Consolidated
Note
2017
$
2016
$
9
10
11
10
12(a)
12(b)
14
15
16
8
16
6,765,343
155,540
4,831,070
280,802
12,032,755
11,469,015
2,265,486
-
-
13,734,501
602,503
63,781,365
-
696,016
65,079,884
-
33,200,336
13,679,845
100,063
46,980,244
77,112,639
60,714,745
1,797,045
317,144
2,114,189
573,122
10,184
583,306
474,749
173,714
648,463
2,218,897
-
2,218,897
2,762,652
2,802,203
74,349,987
57,912,542
Equity
Issued capital
Reserves
Accumulated losses
Total equity attributable to equity holders
Non-controlling interest
Total Equity
17
18
21(b)
94,432,822
(394,903)
(21,364,443)
72,673,476
1,676,511
74,349,987
74,671,129
1,427,070
(18,185,657)
57,912,542
-
57,912,542
The above statement of financial position should be read
in conjunction with the accompanying notes.
32 | P a g e
26
2017 ANNUAL REPORT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2017
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27
2017 ANNUAL REPORT
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDING 31 DECEMBER 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees
Interest received
Net Cash Used In Operating Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
Exploration expenditure
Loans to related parties
Cash acquired on acquisition of a subsidiary
Net Cash Used In Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issues (net of costs)
Transactions with non-controlling interests
Net Cash From Financing Activities
NET DECREASE IN CASH AND CASH EQUIVALENTS
Cash and cash equivalents at beginning of the financial year
CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL
YEAR
Consolidated
Note
2017
$
2016
$
(3,955,909)
104,313
(3,851,596)
(3,591,465)
50,651
(3,540,814)
29(c)
(30,029)
(3,915,971)
(7,146,466)
254,605
(10,837,861)
(10,359)
(12,140,870)
-
-
(12,151,229)
10,066,962
(81,178)
9,985,784
14,572,057
-
14,572,057
(4,703,673)
11,469,016
(1,119,986)
12,589,002
6,765,343
11,469,016
The above statement of cash flows should be read
in conjunction with the accompanying notes.
28
34 | P a g e
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Geopacific Resources Limited (‘the Company’) is a listed public company domiciled in Australia. The
consolidated financial report of the Company for the financial year ended 31 December 2017 comprises the
Company and its controlled entities (together referred to as the ‘Group’).
The separate financial statements of the parent entity, Geopacific Resources Limited, have not been
presented within this financial report as permitted by the Corporation Act 2001.
The financial report was authorised for issue by the directors on 29 March 2018.
Basis of preparation
The financial report is a general purpose financial report that has been prepared in accordance with
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.
Standards, Australian Accounting
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions to
which they apply. Compliance with Australian Accounting Standards ensures that the financial statements
and the notes thereto also comply with International Financial Reporting Standards.
Material accounting policies adopted in the preparation of these financial statements are presented below
and have been consistently applied unless otherwise stated.
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.
Going Concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of
business.
During the year ended 31 December 2017, the Group incurred a net loss after tax of $3,211,185. At 31
December 2017, the Group had net assets of $74,349,987 and a working capital surplus of $9,918,566.
Whilst the Group has cash on hand of $6,765,343 at 31 December 2017, the Group’s future cash flow forecast
for the year ended 31 December 2018 reflects that the Group will require additional funding over that period
in order to meet the Group’s stated strategic objectives.
These conditions indicate the existence of a material uncertainty that may cast a significant doubt about the
Group’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and
discharge its liabilities in the normal course of business.
35 | P a g e
29
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Going Concern (continued)
The Directors have considered the funding and operational status of the business in arriving at their
assessment of going concern and believe that the going concern basis of preparation is appropriate based
on:
(cid:120)
(cid:120)
The Group’s ability to raise funds from external sources to meet ongoing development, exploration and
working capital requirements, as demonstrated by the capital raising of $10.5 million during the 2017
financial year ended; and
The Group’s ability to manage the timing of cash flows to meet the obligations of the business as and
when they fall due.
Should the Group not be able to continue as a going concern, it may be required to realise its assets and
discharge its liabilities at amounts that differ to those stated in the financial report.
The financial statements do not include any adjustments relating to the recoverability and classification of
recorded asset amounts, nor to the amounts or classification of liabilities that might be necessary should the
Group not be able to continue as a going concern.
The financial statements do not include any adjustments relating to the recoverability and classification of
recorded asset amounts nor to the amounts and classification of liabilities that might be necessary should
the Company not continue as a going concern.
Standards and Interpretations affecting amounts reported in the current period (and/or prior periods)
The Group has adopted all applicable new and revised Standards and Interpretations in the current year and
these standards have not significantly impacted the recognition, measurement and disclosure of the Group
and its consolidated financial statements for the financial year ended 31 December 2017.
New Accounting Standards for application in future periods
The AASB has issued new and amended accounting standards and interpretations that have mandatory
application dates for future reporting periods and which the Group has decided not to early adopt. These
standards and interpretations will not materially impact on the Group’s financial statements.
Significant accounting policies
The following is a summary of the material accounting policies adopted by the Group in the preparation of
the financial report. The accounting policies have been consistently applied, unless otherwise stated.
(a) Cash and cash equivalents
Cash and short-term deposits in the consolidated statement of financial position comprise cash at bank
and on hand. Cash equivalents are short-term, highly liquid investments that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the consolidated statement of cash flows, cash and cash equivalents consist of cash
and cash equivalents as defined above.
36 | P a g e
30
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction from the proceeds.
(c) Employee benefits
Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be
wholly settled within 12-months of the reporting date are recognised in other payables in respect of
employees’ services up to the reporting date. The liabilities are measured at the amounts expected to be
paid when they are settled. All other amounts are considered other long term benefits for measurement
purposes and are measured at the present value of expected future payments to be made in respect to
services provided by employees.
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as
the present value of expected future payments to be made, in respect of services provided by employees
up to the reporting date. Consideration is given to expected future 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 currency that match, as closely
as possible, the estimated future cash outflows.
Share-based payments
The fair value of performance rights and options granted to Directors and employees is recognised as an
employee benefit expense with a corresponding increase in equity. The fair value is measured at grant
date and recognised over the period during which the employees become unconditionally entitled to the
options.
The fair value at grant date is independently determined using a Black-Scholes option pricing model that
takes into account the exercise price, the term of the right or option, the impact of dilution, the share
price at grant date and expected price volatility of the underlying share, the expected dividend yield and
the risk-free interest rate for the term of the right or option.
The fair value of the options granted is adjusted to reflect market vesting conditions, but excludes the
impact of any non-market vesting conditions (for example, profitability and sales growth targets).
Non-market vesting conditions are included in assumptions about the number of options that are
expected to become exercisable. At each year end, the Company revises its estimate of the number of
options that are expected to become exercisable. The employee benefit expense recognised each period
takes into account the most recent estimate.
Upon the exercise of options, the balance of the share-based payments reserve relating to those options
is transferred to share capital and the proceeds received, net of any directly attributable transaction
costs, are credited to share capital.
37 | P a g e
31
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Financial Instruments
Initial recognition and measurement
Financial assets and liabilities are recognised when the entity becomes a party to the contractual
provisions of the instrument. For financial assets, this is equivalent to the date that the company commits
itself to either the purchase or sale of the asset.
Financial instruments are initially measured at fair value plus transaction costs, except where the
instrument is classified ‘at fair value through profit or loss’, in which case transaction costs are expensed
to profit or loss immediately.
Derecognition
Financial assets are derecognised when the right to receive cash flows from the financial assets have
expired or been transferred. Financial liabilities are derecognised when the related obligations are either
transferred, discharged or expired. The difference between the carrying value of the financial liability
extinguished or transferred to another party and the fair value of consideration paid, including the
transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest
method, or cost.
Financial assets 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. The classification
depends on the purpose for which the investments were acquired. Designation is re-evaluated at each
financial year end, but there are restrictions on reclassifying to other categories.
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. Such assets are carried at amortised cost using the effective interest
method. Gain or losses are recognized in profit or loss through the amortisation process and when the
financial asset is derecognised.
(ii) Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at
amortised cost using the effective interest method.
32
38 | P a g e
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(d) Financial Instruments (continued)
The conversion option classified as equity is determined by deducting the amount of the liability
component from the fair value of the compound instrument as a whole. This is recognised and included
in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion
option classified as equity will remain in equity until the conversion option is exercised, in which case,
the balance recognised in equity will be transferred to issued capital. Where the conversion option
remains unexercised at the maturity date of the convertible note, the balance recognised in equity will
be transferred to accumulated losses within equity.
No gain or loss is recognised in profit or loss upon conversion or expiration of the conversion option.
Transaction costs that relate to the issue of the convertible notes are allocated to the liability and equity
components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity
component are recognised directly in equity. Transaction costs relating to the liability component are
included in the carrying amount of the liability component and are amortised over the lives of the
convertible notes using the effective interest method.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence that a
financial asset has been impaired. A financial asset (or a group of financial assets) is deemed to be
impaired if, and only if, there is objective evidence of impairment as a result of one or more events (a
“loss event”) having occurred, which has an impact on the estimated future cash flows of the financial
asset(s).
In the case of financial assets carried at amortised cost, loss events may include: indications that the
debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency in
interest or principal payments; indications that they will enter bankruptcy or other financial
reorganisation; and changes in arrears or economic conditions that correlate with defaults.
For financial assets carried at amortised cost (including loans and receivables), a separate allowance
account is used to reduce the carrying amount of financial assets impaired by credit losses. After having
taken all possible measures of recovery, if management establishes that the carrying amount cannot be
recovered by any means, at that point the written-off amounts are charged to the allowance account or
the carrying amount of impaired financial assets is reduced directly if no impairment amount was
previously recognised in the allowance account.
When the terms of financial assets that would otherwise have been past due or impaired have been
renegotiated, the Group recognises the impairment for such financial assets by taking into account the
original terms as if the terms have not been renegotiated so that the loss events that have occurred are
duly considered.
39 | P a g e
33
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(e) Foreign currency transactions and balances
Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (‘the functional currency’).
The consolidated financial statements are presented in Australian dollars, which is Geopacific Resources
Limited’s functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in the statement of comprehensive
income.
Group companies
The financial results and position of foreign operations, whose functional currency is different from the
Group’s presentation currency, are translated as follows:
(cid:120)
(cid:120)
(cid:120)
assets and liabilities are translated at year-end exchange rates prevailing at reporting date;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the Group’s
foreign currency translation reserve in the statement of changes in equity. These differences are
recognised in the statement of comprehensive income in the period in which the operation is disposed.
(f) Goods and Services Tax (GST) & Value Added Tax (VAT)
Revenues, expenses and assets are recognised net of the amount of associated GST or VAT, unless the
GST or VAT incurred is not recoverable from the taxation authority. In this case, the GST or VAT is
recognised as part of the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST or VAT receivable or payable. The
net amount of GST or VAT recoverable from, or payable to, the taxation authority is included with other
receivables or payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST or VAT components of cash flows arising from
investing or financing activities which are recoverable from, or payable to the taxation authority, are
presented as operating cash flows.
34
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2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g) Impairment of assets
Assets are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the
asset’s carrying amount exceeds its recoverable amount. The 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
grouped at the lowest levels for which there are separately identifiable cash inflows which are largely
independent of the cash inflows from other assets or groups of assets (cash-generating units).
Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal
of the impairment at each reporting date.
(h) Interests in Joint Arrangements
Joint arrangements represent the contractual sharing of control between parties in a business venture
where unanimous decisions about relevant activities are required. Separate joint venture entities
providing joint venturers with an interest to net assets are classified as a joint venture and accounted for
using the equity method.
Joint venture operations represent arrangements whereby joint operators maintain direct interests in
each asset and exposure to each liability of the arrangement. The consolidated group’s interests in the
assets, liabilities, revenue and expenses of joint operations are included in the respective line items of
the consolidated financial statements.
Gains and losses resulting from sales to a joint operation are recognised to the extent of the other parties’
interests. When the consolidated group makes purchases from a joint operation, it does not recognise
its share of the gains and losses from the joint arrangement until it resells those goods/assets to a third
party.
(i)
Income tax
The income tax expense or revenue for the year is the tax payable on the current year’s taxable income
based on the notional income tax rate adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences between the tax bases of assets and liabilities and their carrying
amounts in the financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to
apply when the assets are recovered or liabilities are settled. The relevant tax rates are applied to the
cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset
or liability. An exception is made for certain temporary differences arising from the initial recognition of
an asset or a liability.
No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in
a transaction, other than a business combination, that at the time of the transaction did not affect either
accounting profit or taxable profit or loss.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying
amount and tax bases of investments in controlled entities where the Company is able to control the
timing of the reversal of the temporary differences and it is probable that the differences will not reverse
in the foreseeable future.
Current and deferred tax balances attributable to amounts recognised directly in equity are also
recognised directly in equity.
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35
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(j) Loss per share
Basic loss per share
Basic loss per share is calculated by dividing the result attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of
ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares
issued during the year.
Diluted loss per share
Diluted loss per share adjusts the figures used in the determination of basic loss per share to take into
account the after tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary shares.
(k) Mineral Tenements and Deferred Mineral Exploration Expenditure
Exploration and evaluation expenditure is carried forward as an asset when rights to tenure are current;
and:
(cid:120)
such costs are expected to be recouped through the successful development and exploitation of the
area of interest, or by its sale; or
exploration activities in the area of interest have not reached a stage which permits a reasonable
assessment of the existence or otherwise of economically recoverable reserves and active or
significant operations in, or in relation to, the area of interest are continuing.
(cid:120)
In the event that an area of interest is abandoned or if the Directors consider the expenditure to be of
reduced value, accumulated costs carried forward are written off or impaired in the year in which that
assessment is made. A regular review is undertaken of each area of interest to determine the
appropriateness of continuing to carry forward costs in relation to that area of interest.
Immediate restoration, rehabilitation and environmental costs necessitated by exploration and
evaluation activities are treated as exploration and evaluation expenditure. Exploration activities
resulting in future obligations in respect of restoration costs result in a provision to be made by
capitalising the estimated costs, on a discounted cash basis, of restoration and depreciating over the
useful life of the asset. The unwinding of the effect of the discounting on the provision is recorded as a
finance cost in the statement of comprehensive income.
(l) Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and any accumulated
impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of
the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Group and the cost of the item can be measured reliably. All other repairs and maintenance are
charged to the statement of comprehensive income during the financial year in which they are incurred.
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36
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l) Plant and equipment (continued)
Depreciation on assets is calculated using the straight-line or diminishing value method to allocate their
cost or revalued amounts, net of their residual values, over their estimated useful lives, as follows:
Plant and equipment
Computer software
(cid:120)
(cid:120)
(cid:120) Motor vehicles
(cid:120)
Furniture and fittings
5% - 37.5%
25%
25%
7% - 20%
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted
prospectively if appropriate, at each reporting date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
An item of plant and equipment is derecognised upon disposal or when no further future economic
benefits are expected to arise from the continued use of the asset.
Any gains or loss on the derecognition of an asset (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) are included in the statement of comprehensive income
in the period the item is derecognised. When revalued assets are derecognised, amounts recorded in
other reserves in respect of those assets are transferred to retained earnings.
(m) Inventory
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in,
first-out method as all inventory at year-end are parts and supplies, which are consumed in the normal
course of operations. Net realisable value is the estimated selling price in the ordinary course of business,
less the costs of completion and selling expenses.
Company policy is to recognise major stock items consisting of diesel, cements, chemicals, piping,
lubricants and other fuel-based products as assets at period-end based on inventory counts conducted.
Minor stock items consisting of small equipment parts, minor lubricants and other related materials are
immediately expensed out and capitalized as part of deferred exploration expenditures which is included
under intangible assets.
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37
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(n) Principles of consolidation
The consolidated financial statements comprise the financial statements of Geopacific Resources Limited
and its controlled entities, referred to collectively throughout these financial statements as the “Group”.
Controlled entities are consolidated from the date on which control commences until the date that
control ceases.
The financial statements of the controlled entities are prepared for the same reporting period as the
parent company using consistent accounting policies. Adjustments are made to bring into line and
dissimilar accounting policies that may exist.
The balances and effects of transactions between controlled entities included in the consolidated
financial statements have been fully eliminated.
Non-controlling interest
Non-controlling interests are allocated their share of net profit or loss after tax in the income statement
and are presented within equity in the consolidated statement of financial position, separately from the
equity of the owners of the parent. Losses are attributed to the non-controlling interests even if that
results in a deficit balance.
Discontinued operations
A discontinued operation is a component of an entity that either has been disposed of, or is classified as
held for sale and:
(cid:120)
(cid:120)
represents a separate major line of business or geographical area of operations;
is part of a single co-ordinated plan to dispose of a separate major line of business or geographical
area of operations.
Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets
the criteria to be classified as held for sale.
(o) Available for sale assets
Assets and disposal groups are classified as ‘held for sale’ if their carrying amount is to be recovered
principally through a sales transaction rather than through continuing use. The reclassification takes
place when the assets are available for immediate sale and the sale is highly probably. Non-current assets
held for sale are measured at the lower of carrying amount and fair value less costs to sell. Assets held
for sale are not depreciated or amortised.
38
44 | P a g e
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(p) 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 Group and the revenue can be reliably
measured. The following specific recognition criteria must also be met before revenue is recognised:
Sale of Goods and Disposal of Assets
Revenue from the sale of goods and disposal of other assets is recognised when the significant risks and
rewards of ownership have passed to the buyer and can be reliably measured.
Interest Revenue
Revenue is recognised as the interest accrues using the effective interest method.
Rental Income
Rental Income is recognised on a straight-line basis over the lease term.
(q) Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes
in presentation for the current financial year.
(r) Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessor) are charged to the statement of comprehensive income on a straight-line basis over the
period of the lease.
(s) Provisions
Provisions are recognised when the Group has legal or constructive obligation, as a result of past events,
for which it is probable that an outflow of economic benefits will result and that outflow can be reliably
measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the
end of the reporting period.
45 | P a g e
39
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(t) Business combinations
The acquisition method of accounting is used to account for all business combinations regardless of
whether equity instruments or other assets are acquired. The consideration transferred for the
acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and
the equity interests issued by the group. The consideration transferred also includes the fair value of any
asset or liability resulting from a contingent consideration arrangement and the fair value of any pre-
existing equity interest in the subsidiary. Acquisition related costs are expensed as incurred. Identifiable
assets acquired and liabilities and contingent liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition by
acquisition basis, the group recognises any non-controlling interest in the acquiree either at fair value or
at the non-controlling interest's proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are
less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of
all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain
purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are
discounted to their present value as at the date of exchange. The discount rate used is the entity's
incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a
financial liability are subsequently remeasured to fair value with changes in fair value recognised in profit
or loss.
40
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2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
2
FINANCIAL RISK MANAGEMENT
The Group has exposure to a variety of risks arising from its use of financial instruments. This note presents
information about the Group’s exposure to the specific risks, and the policies and processes for measuring
and managing those risks. Further quantitative disclosures are included throughout this financial report. The
Board of Directors have the overall responsibility for the risk management framework.
(a) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from transactions with customers and
investments.
Trade and other receivables
The Group has no listed investments and the current nature of the business activity does not result in
trading receivables. The receivables that the Group recognises through the normal course of business
are short term in nature and the most significant (in quantity) is the receivable from security deposits for
tenements. The risk of non-recovery of receivables from this source is considered to be negligible.
Cash deposits
The Group’s primary banker is the ANZ Banking Group. The Group currently has no significant
concentrations of credit risk.
(b) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it has sufficient liquidity
to meet its liabilities when due, under both normal and stressed conditions, without incurring
unacceptable losses or risking damage to the Group’s reputation.
The Group manages its liquidity risk by monitoring its cash reserves and forecast spending. Management
is cognisant of the future demands for liquid finance resources to finance the Group’s current and future
operations, and consideration is given to the liquid assets available to the Group before commitment is
made to future expenditure or investment.
(c) Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and
equity prices will affect the Group’s income or the value of its holdings of financial instruments. The
objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising any return.
47 | P a g e
41
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
2
FINANCIAL RISK MANAGEMENT (CONTINUED)
(c) Market risk (continued)
Foreign exchange risk
The Group operates in Australia, Papua New Guinea, Cambodia and Fiji and is exposed to foreign
exchange risks arising from the fluctuation of the exchange rates of the Australian dollar, United States
dollar, the Fijian dollar and the PNG Kina. The Group has no further material foreign currency dealings
other than the above.
Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities
are denominated in a currency that is not the Group’s functional currency. The Group does not have a
formal foreign currency risk management policy however, it monitors its foreign currency expenditure in
light of exchange rate movements.
Interest rate risk
The Group has significant interest bearing assets and the Group’s income and operating cash flows are
materially exposed to changes in market interest rates. The assets are short term interest bearing
deposits. No financial instruments have been used to mitigate risk (Note 28 – Financial Instruments).
(d) Capital management
The Board’s policy is to maintain a sound capital base so as to maintain investor, creditor and market
confidence and to sustain future development of the business. The Board of Directors monitors capital
expenditure and cash flows as mentioned in (b).
The Group’s objectives when managing capital is to safeguard the Group’s ability to continue as a going
concern, so as to maintain a strong capital base sufficient to maintain future exploration and
development of its projects. In order to maintain or adjust the capital structure, the Group may return
capital to shareholders, issue new shares or sell assets to reduce debt. The Group’s focus has been to
raise sufficient funds through equity to fund exploration and evaluation activities.
There were no changes in the Group’s approach to capital management during the year. Risk
management policies and procedures are established with regular monitoring and reporting. Neither the
Company nor any of its controlled entities are subject to externally imposed capital requirements.
42
48 | P a g e
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
3
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Estimates and judgments are continually evaluated and are based on historical experience and other factors
including expectations of future events that may have a financial impact on the Group and that are believed
to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition, seldom equal the related actual results.
Key judgments
Exploration and evaluation expenditure
The Company’s policy in relation to the accounting for exploration and evaluation expenditure is stated in Note
1(k). There is judgment involved in determining the treatment of exploration and evaluation expenditure, more
specifically, in determining whether it should be carried forward as capitalised exploration, or written off to the
income statement.
The Board and management give due consideration to the areas of interest relating to the exploration and
evaluation expenditure on a regular basis and are confident that decisions to either write off or carry forward
such expenditure reflect fairly the prevailing situation. In the year ended 31 December 2017, no exploration
and evaluation expenditure was written off (2016: nil).
Assets held for sale
Assets Held for Sale are measured at fair value, factoring in any estimated costs of sale. If the fair value at
reporting date is lower than the carrying value, an impairment for the difference is recognised in the
Company’s accounts. The board and management consider the carrying amount to be less than the fair value
of the asset held for sale less costs of disposal. At 31 December 2017 the net assets of the Companies being
sold was $4.83M as stated in Note 11. No impairment was reported for the year ended 31 December 2017.
Acquisition of Kula
The directors of Geopacific consider the acquisition of Kula Gold Limited (“Kula”) a business combination as
it involved the acquisition of 85% of the issued capital of Kula. The business combination has been disclosed
in Note 30.
Key Estimates
Share based payments
The Group measures the cost of equity-settled transactions 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 internal valuation using
a Black-Scholes option pricing model. Refer Note 24 for details of estimates and assumptions used.
49 | P a g e
43
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
4
PARENT COMPANY INFORMATION
The following information has been extracted from the books and records of the parent and has been
prepared in accordance with 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
Share based payments reserve
Accumulated losses
Total Equity
STATEMENT OF COMPREHENSIVE INCOME
Total profit/(loss)
TOTAL COMPREHENSIVE LOSS
Guarantees
Parent
2017
$
2016
$
6,438,480
72,814,479
79,252,959
11,307,015
52,066,718
63,373,733
906,388
789,122
1,695,510
472,751
446,353
919,104
94,432,821
789,838
(17,665,210)
77,557,449
74,671,128
789,838
(13,006,337)
62,454,629
(4,658,873)
(4,658,873)
313,604
313,604
Geopacific Resources Limited has not entered into any guarantees, in relation to the debts of its subsidiaries.
The Company has a guarantee of $82,000 over the lease of its office premises. This has been classified as
restricted cash.
Contingent liabilities
At 31 December 2017, Geopacific Resources Limited had no contingent liabilities (2016: nil).
Contractual commitments
At 31 December 2017, Geopacific Resources Limited had not entered into any contractual commitments for
the acquisition of property, plant and equipment (2016: nil).
44
50 | P a g e
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
5
REVENUE
Interest income – financial institutions
Total revenue
6
LOSS BEFORE INCOME TAX
Consolidated
2017
$
2016
$
104,313
104,313
50,648
50,648
Consolidated
2017
$
2016
$
Loss before income tax includes the following specific expenses:
Contributions to defined superannuation funds
156,071
58,135
7
REMUNERATION OF AUDITORS
The Auditor of Geopacific Resources Limited is Greenwich and Co Audit Pty Ltd.
Amounts received or receivable - Greenwich & Co Audit Pty Ltd for:
- An audit or review of the financial report
- Tax Services
Total
The Auditor of Kula Gold Limited, a controlled entity, is Ernst & Young.
Amounts received or receivable – Ernst & Young for:
- An audit or review of the financial report
Total
Consolidated
2017
$
2016
$
30,000
10,450
40,450
37,131
4,000
41,131
Consolidated
2017
$
2016
$
26,500
26,500
-
-
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45
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
8
INCOME TAX
(a)
The components of the income tax expense/(benefit) comprise:
Current tax
Deferred tax
Total tax expense / (benefit)
Total tax expense is attributable to:
Profit from continuing operations
Profit from discontinued operation
Total tax expense
(b)
Reconciliation of income tax to prima facie tax payable:
Net loss before tax
Loss from discontinued operation
Prima facie tax at 30%
Adjusted for the tax effect of:
Non-deductible share based payments
Exploration costs
Other non-deductible expenses
Effect of current year tax losses not recognised
Deferred tax assets not brought to account
Effect of prior period deferred tax recognised
Foreign exchange on opening deferred tax balances
Total tax expense
46
Consolidated
2017
$
-
292,838
292,838
28,395
264,443
292,838
2016
$
-
2,218,897
2,218,897
2,218,897
-
2,218,897
Consolidated
2017
$
2016
$
(2,837,168)
(81,178)
(2,918,346)
(1,926,080)
-
(1,926,080)
(875,504)
(577,824)
-
-
1,349
2,264,553
-
(1,109,861)
48,338
328,875
43,911
-
958
787,069
-
1,964,783
-
2,218,897
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2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
8
INCOME TAX (CONTINUED)
(c)
Deferred tax:
Deferred tax assets:
Business related costs
Employee entitlements
Tax losses
Total before offset
Offset by deferred tax liabilities
Total deferred tax assets after offset
Deferred tax liabilities:
Exploration and evaluation expenditure
Total before offset
Offset by deferred tax assets
Total deferred tax liabilities after offset
(d)
Deferred tax assets not recognised:
Deferred tax assets not recognised
Tax losses - current year
Tax losses - prior years
Tax losses - on acquisition of Kula
Total tax expense / (benefit)
Consolidated
2017
$
2016
$
227,266
139,223
7,020,993
7,387,481
(7,387,481)
-
7,862,230
7,862,230
(7,387,481)
474,749
339,714
3,055
-
342,769
(342,769)
-
2,561,666
2,561,666
(342,769)
2,218,897
Consolidated
2017
$
2016
$
2,264,553
4,615,883
36,427,611
43,308,047
789,069
3,826,814
-
4,615,883
Deferred tax assets relating to tax losses have only been recognised in Papua New Guinea to the extent of
the deferred tax liability balance.
The deferred tax asset relating to the remainder of the Group have not been recognised in the current
reporting period as the Director’s do not believe the realisation is probable at this point in time.
9
CASH AND CASH EQUIVALENTS
Current
Restricted cash
Cash at bank
Total Cash and Cash Equivalents
Consolidated
2017
$
2016
$
82,000
6,683,343
6,765,343
-
11,469,015
11,469,015
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2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
10
TRADE AND OTHER RECEIVABLES
Consolidated
2017
$
2016
$
Current
Security deposits
Sundry debtors
Other receivables
GST receivable
Loan receivable
Total Current Trade and Other Receivables
Non-Current
VAT receivable
Total Non-Current Trade and Other Receivables
11
ASSETS CLASSIFIED AS HELD FOR SALE
Current
Assets held for sale
Movement during the year
Carrying value - beginning of the year
Transfer from exploration expenditure
Other net liabilities
Carrying value - end of the year
125,391
24,823
1,402,668
712,604
-
2,265,486
9,577
84,009
-
-
61,954
155,540
602,503
602,503
-
-
-
-
-
-
-
Consolidated
2017
$
2016
$
4,831,070
-
6,639,151
(1,808,081)
4,831,070
The board and management after due consideration have determined that the fair value of the asset held
for sale is the value of the net assets of the Companies being sold, which at 31 December 2017 was $4.83M.
The other net liabilities consists mainly of the deferred tax liability offset by some cash and other receivables.
Impairment
Any impairment loss on a disposal group is allocated to remaining assets and liabilities on a pro rata basis,
except that no loss is allocated to financial assets, deferred tax assets and employee benefit assets which will
be measured in accordance with Geopacific accounting policies.
Management has deemed that no impairment was necessary as at 31 December 2017 regarding the asset
held for sale.
48
54 | P a g e
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled En(cid:20)(cid:20)es
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
12
EXPLORATION EXPENDITURE
(a) Capitalised explora„on expenditure carried forward
Non-current
Movement during the year
Carrying value - beginning of the year
Acquired on acquisi(cid:141)on
Addi(cid:141)ons
Transfer from prepayments
Transfer to assets held for sale
Carrying value - end of the year
Consolidated
2017
$
2016
$
63,781,365
33,200,336
33,200,336
19,583,649
3,956,686
13,679,845
(6,639,151)
63,781,365
26,157,372
-
7,042,964
-
-
33,200,336
During the year, the Company did not expense any previously capitalised explora(cid:141)on expenditure (2016: nil).
As outlined in Note 19, the Company renego(cid:141)ated the payment schedule with Vendors for the acquisi(cid:141)on of
Golden Resource Development Co.
Under the revised terms, one final payment of US$1.575 million is due at comple(cid:141)on of a bankable feasibility
study for the Kou Sa Project, along with a 2% royalty on produc(cid:141)on capped at $8.425 million. Therefore no
prepayment exists at 31 December 2017 and all expenses rela(cid:141)ng to the Kou Sa Project are shown as
capitalised exploration.
The Company confirmed its inten(cid:141)on to look at selling its Fiji assets and an ac(cid:141)ve program to locate a buyer
for these assets commenced. The associated assets and liabili(cid:141)es were consequently transferred to assets
held for sale as disclosed in Note 11.
(b) Prepayment
Non-current
Movement during the year
Carrying value - beginning of the year
Addi(cid:141)ons
Transfer to explora(cid:141)on expenditure
Carrying value - end of the year
Consolidated
2017
$
2016
$
-
13,679,845
13,679,845
-
(13,679,845)
-
8,581,940
5,097,905
-
13,679,845
55 | P a g e
49
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
13
JOINT ARRANGEMENTS
Interest in Joint Operations:
Raki Raki (Fiji) Joint Venture
Geopacific Resources Limited has a 50% interest
in Joint Venture with Peninsula Energy Limited.
Current Assets
Assets classified as held for sale
Total
Consolidated
2017
$
2016
$
962,004
962,004
985,661
985,661
The Raki Raki Joint Venture is a Fijian based project that Geopacific holds that makes up part of the valuation
of the assets held for sale as disclosed in Note 11.
14
PLANT AND EQUIPMENT
Non-Current
Plant and equipment at cost
Less: accumulated depreciation
Total plant and equipment
Consolidated
2017
$
2016
$
5,614,196
(4,918,180)
696,016
476,589
(376,526)
100,063
Plant & Equipment
Movement 2017
Plant &
Equipment
$
Computer
Software
$
Furniture &
Fittings
$
Total
$
Balance at 1 January 2017
Assets acquire on acquisition
Additions
Disposals
Transfers to assets held for sale
Transfers to exploration
Depreciation
Foreign exchange fluctuation
Balance at 31 December 2017
71,269
187,782
21,066
(1,520)
(11,311)
(72,082)
(19,416)
5,561
181,349
13,223
-
1,983
(112)
-
-
(5,537)
-
9,557
15,571
494,665
2,139
-
(3,755)
(17,489)
(1,999)
15,978
505,110
100,063
682,447
25,188
(1,632)
(15,066)
(89,571)
(26,952)
21,539
696,016
50
56 | P a g e
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
14
PLANT AND EQUIPMENT (CONTINUED)
Plant & Equipment
Movement 2016
Plant &
Equipment
$
Computer
Software
$
Motor
Vehicle
$
Furniture &
Fittings
$
Total
$
Balance at 1 January 2016
Additions
Disposals
Transfers
Depreciation
Foreign exchange fluctuation
Balance at 31 December 2016
95,075
18,186
(7,366)
-
(37,042)
2,416
71,269
19,363
1,769
-
-
(7,914)
5
13,223
18,606
-
-
(8,998)
(3,519)
(6,089)
-
17,802
1,369
-
8,998
(12,667)
69
15,571
150,846
21,324
(7,366)
-
(61,142)
(3,598)
100,063
15
TRADE AND OTHER PAYABLES
Current
Trade creditors and accrued expenses
Total
16
PROVISIONS
Current
Provisions
Total
Non-current
Provisions
Total
Consolidated
2017
$
2016
$
1,797,045
1,797,045
573,122
573,122
Consolidated
2017
$
2016
$
317,144
317,144
10,184
10,184
173,714
173,714
-
-
57 | P a g e
51
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
17
ISSUED CAPITAL
Consolidated
2017
$
2016
$
Issued Capital
94,432,822
74,671,129
Reconciliation of movements in Issued Capital during the period:
2017
2016
Date
Shares
$
Shares
$
Balance at 1 January
Shares issued pursuant to a Placement
Shares issued pursuant to a Placement
Shares issued on conversion of
Performance Rights
Shares issued pursuant to a Placement
Shares issued per off-market takeover
Shares issued per off-market takeover
Shares issued pursuant to a Placement
Shares issued per off-market takeover
Shares issued pursuant Share Purchase
Plan
Shares issued per off market takeover
Less: share issue costs
23-Aug-16
26-Aug-16
14-Oct-16
19-Oct-16
9-Aug-17
17-Aug-17
7-Sept-17
15-Sept-17
6-Oct-17
18-Oct-17
1,155,743,584 74,671,129
-
-
-
-
799,593,584 60,099,072
8,136,077
189,211,091
3,097,054
72,024,514
-
-
6,150,000
-
-
236,782,061
13,685,836
-
8,050,590
479,004
350,000,000 10,500,000
430,250
15,366,076
5,833,334
175,017
24,496,239
-
734,887
(608,056)
88,764,395
3,816,869
-
-
-
-
-
-
-
-
-
-
-
(477,943)
Balance at 31 December
1,801,907,130 94,432,822
1,155,743,584 74,671,129
52
58 | P a g e
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
18
RESERVES
(a) Reserves
Share-based payments reserve
Foreign currency translation reserve
Total
(b) Movements
Share-based payments reserve
Opening Balance 1 January
Share based payment expense
Closing Balance 31 December
Foreign currency translation reserve
Balance 1 January
Exchange gains/(losses) during year
Balance 31 December
Consolidated
2017
$
2016
$
789,838
(1,184,741)
(394,903)
789,838
637,232
1,427,070
789,838
-
789,838
637,232
(1,821,973)
(1,184,741)
643,465
146,373
789,838
441,822
195,410
637,232
Total reserves
(394,903)
1,427,070
(c) Nature and purpose of reserves
Share-based payments reserve
The share-based payments reserve records:
(cid:120)
(cid:120)
(cid:120)
(cid:120)
the value of unexercised options issued to employees and Directors which have been taken to
expenses;
the value of options issued on acquisition of Millennium Mining (Fiji) Ltd;
the value of unexercised options granted pursuant to the Employee Share Option; and
the value of Performance Rights which have vested.
Foreign currency translation reserve
The foreign currency translation reserve records unrealised exchange gains and losses on translation of
controlled entities accounts during the year.
59 | P a g e
53
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
19
CONTINGENT LIABILITIES
Kou Sa – Revised Repayment Schedule
In January 2015, the Company’s subsidiary, Royal Australia Resources Ltd, entered into an agreement to
acquire 100% of the Issued Capital of Golden Resource Development Co Ltd for $US14.0 million plus interest
payments of US$1,275,750.
The Company renegotiated the payment schedule in relation to its agreement to acquire 100% of the
Company with the Vendors in January 2016. Under the revised terms, one final payment of US$1.575 million
is due at completion of a bankable feasibility study for the Kou Sa Project, along with a 2% royalty on
production capped at $8.425 million.
The Group did not have any other contingent liabilities at the end of the reporting period (2016: nil).
20
COMMITMENTS
(a)
Tenement Commitments
Entities in the Group are required to spend certain amounts to retain their interest in areas over which
Special Prospecting Licenses are held. All requirements have been complied with and all reports and
lodgements have been made. In the ordinary course of business, the Group is currently waiting on the
reissue of certain licences by the Mineral and Resource Departments of Papua New Guinea.
The following table provides an outline of the annual expenditure required by tenement:
Tenement
Tenement
Renewed
to
Annual
Commitment
2018
Comments
SPL 1216
2-Aug-19
125,700 Renewed 3 August 2017. Annual expenditure as budgeted.
SPL 1231
29-Nov-18
62,850 50% JV partner Imperial Mining (Fiji) Ltd has notified intent
to dilute. Expenditure as budgeted.
SPL 1373
29-Nov-18
62,850 50% JV partner Imperial Mining (Fiji) Ltd has notified intent
to dilute. Expenditure as budgeted.
SPL 1436
29-Nov-18
47,138 50% JV partner Imperial Mining (Fiji) Ltd has notified intent
SPL 1361
SPL 1368
SPL 1415
14-Apr-19
14-Apr-19
12-Feb-19
to dilute. Expenditure as budgeted.
125,700 Renewed 24 April 2017.
125,700 Renewed 24 April 2017.
47,138 Licence renewed for 3 years, final year expenditure of
FJD$150,000.
SPL 1493
29-Nov-18
47,138 Annual expenditure as budgeted.
54
60 | P a g e
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
20
COMMITMENTS (CONTINUED)
(a)
Tenement Commitments (continued)
Tenement
Tenement
Renewed
to
Annual
Commitment
2018
Comments
SPL 1216
2-Aug-19
101,945 Licence renewal lodged with authorities. Annual expenditure
as budgeted.
SPL 1231
29-Nov-18
122,334 Licence renewal lodged with authorities. Annual expenditure
as budgeted.
SPL 1373
29-Nov-18
81,556 Licence renewal lodged with authorities. Annual expenditure
as budgeted.
The Group is also committed to spend US$474,000 in aggregate in the 2017 and 2018 calendar years on the
Kou Sa project in Cambodia subject to pending licence renewals. During the 2017 calendar year $1.98m was
spent on exploration expenditure in Cambodia.
(b) Operating Lease Commitments
Payable – minimum lease payments:
Payable not later than one year
Payable later than one year, but not later than five years
Total
Consolidated
2017
$
2016
$
149,469
275,673
425,142
108,627
6,738
115,365
61 | P a g e
55
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
21
PARTICULARS RELATING TO CONTROLLED ENTITIES
(a) Material Subsidiaries
Class of Share
Direct Ownership Percentage
2017
%
2016
%
Worldwide Mining Projects Pty Ltd
Eastkal Pte Ltd
PT IAR Indonesia Ltd
Beta Limited
Royal Australia Resources Ltd
Golden Resource Development
Geopacific Limited
Millennium Mining (Fiji) Limited
Kula Gold Limited
Woodlark Mining Limited
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100
100
100
100
85
85
100
100
85
5
100
100
100
100
85
-
100
100
-
-
Worldwide Mining Projects Limited is a company incorporated and carrying on business in Australia.
Eastkal Pte Ltd is a company incorporated and carrying on business in Singapore.
PT IAR Indonesia is a company incorporated and carrying on business in Indonesia.
Royal Australia Resources Ltd is a company incorporated and carrying on business in Cambodia.
Petrochemicals (Cambodia) Refinery Ltd holds a 15% minority interest in Royal Australia Resources Ltd.
Golden Resource Development is a company incorporated and carrying on business in Cambodia.
Worldwide Mining Projects Pty Ltd and Petrochemicals (Cambodia) Refinery Ltd entered into a Shareholders
Agreement in December 2012 to explore, develop and hold the Kou Sa project. Petrochemicals (Cambodia)
Refinery Ltd will be a free carried joint venture partner until a decision to mine on the Kou Sa project area is
made.
Following a decision to mine, Petrochemicals (Cambodia) Refinery Ltd will be granted an option to purchase
further shares in Royal Australia Resources Ltd at fair market value to increase its percentage shareholding
to 20%; and contribute to all costs, expenses and liabilities incurred or sustained in proportion to its
shareholding interest in Royal Australia Resources Ltd.
Geopacific Limited, Beta Limited and Millennium Mining (Fiji) Limited are companies incorporated and
carrying on business in Fiji.
Kula Gold Limited is a company incorporated and carrying on business in Australia.
Woodlark Mining Group is a company incorporated and carrying on business in Papua New Guinea.
At 31 December 2017 Kula Gold Limited held a 95% interest in Woodlark Mining Limited resulting in
Geopacific Resources Limited holding an indirect interest of 81% in Woodlark Mining Limited as well as a 5%
direct interest.
56
62 | P a g e
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
21
PARTICULARS RELATING TO CONTROLLED ENTITIES (CONTINUED)
(b) Non-Controlling Interests
Set out below is summarised financial information for each subsidiary that has non-controlling interests that
are material to the group. The amounts disclosed for each subsidiary are before inter-company eliminations.
Summarised balance sheet
Current assets
Non-current assets
Total Assets
Current liabilities
Non-current liabilities
Total Liabilities
Net Assets
Accumulated NCI
Summarised statement of comprehensive income
Revenue
Loss for the period
Other comprehensive income
Total comprehensive income
Profit allocated to NCI
Kula Group
2017
$
2016
$
594,441
24,199,348
24,793,789
1,056,168
12,199,115
13,255,283
11,538,506
1,676,511
Kula Group
2017
$
2016
$
103
(216,202)
569,163
352,961
52,894
-
-
-
-
-
-
-
-
-
-
-
-
-
63 | P a g e
57
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
21
PARTICULARS RELATING TO CONTROLLED ENTITIES (CONTINUED)
(b) Non-Controlling Interests (continued)
Summarised cash flows
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net increase/(decrease) in cash and cash equivalents
Kula Group
2017
$
2016
$
(408,155)
(3,324,704)
3,707,698
(25,161)
-
-
-
-
The above information represents the information of the Kula Group which consists of Kula Gold Limited and
Woodlark Mining Limited from the date of acquisition on 9 August 2017 through to 31 December 2017.
22
KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Directors
All Directors of the Company are identified as Key Management Personnel under AASB 124 “Related Party
Disclosures”. Details of each person holding the position of Director of the Company during the reporting
period are outlined in the table below:
Name
Non-Executive Directors
Milan Jerkovic
Mark Bojanjac
Ian Clyne
Executive Directors
Ron Heeks
Philippa Leggat
Position
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Managing Director
General Manager - Corporate
Executive Director - Corporate
(b) Other Key Management Personnel (KMP)
Details of the Other KMP of the Group during the reporting period are set out in the table below:
Name
Executives
Matthew Smith
Glenn Zamudio
James Kerr
58
Position
Chief Financial Officer & Company Secretary
General Manager - Projects
General Manager - Geology
64 | P a g e
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
22
KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
(c)
KMP Compensation
Key Management Personnel Compensation:
Short term benefits
Post-employment benefits
Share based payments
Termination payments
Total
Consolidated
2017
$
2016
$
1,335,692
90,791
-
-
1,426,483
809,240
29,647
113,050
60,000
1,011,937
Please refer to the Remuneration Report in the Directors’ Report for further details on the remuneration paid
or payable to each member of KMP for the reporting period.
23
RELATED PARTY TRANSACTIONS
Transactions with Key Management Personnel:
Xavier Group Pty Ltd – Consulting Services
Total
Consolidated
2017
$
2016
$
98,673
98,673
28,218
28,218
Xavier Group Pty Ltd is an entity in which the Company’s Non-Executive Chairman, Mr M Jerkovic, is a Director
and shareholder.
Xavier Group Pty Ltd has been utilised to provide corporate consulting services to the Company. All
transactions with related parties are on normal commercial terms.
65 | P a g e
59
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
24
SHARE-BASED PAYMENTS
(a)
Employee Option Plan
The Company’s Employee Option Plan was approved by shareholders at the annual general meeting held on
31 May 2012. All employees are eligible to participate in the plan.
Options granted under the plan are issued for no consideration, carry no dividend or voting rights and when
exercised convert into ordinary shares. During the reporting period, no options were granted under the plan.
(b)
Services
During the reporting period, the Company did not issue any shares as payment for services (2016: nil).
(c) Unlisted Options Issued
During the reporting period, no options over unissued shares were granted or exercised (2016: nil) and
1,688,768 options lapsed (2016: nil). There were 1,000,000 Options over unissued shares unexercised at
reporting date (2016 – 2,688,768). Since the end of the financial year, no unlisted Options have been
cancelled or exercised.
Details of unlisted Options over unissued shares in the Company as at the date of this report are outlined in
the table below:
Issue Date
Expiry Date
Exercise
Price
Number on
Issue
Movement During the Year Number on
Issue
6-Jun-09
6-Jun-09
5-Aug-14
Note (a)
Note (b)
5-Aug-17
$
1-Jan-17
Granted
Lapsed
31-Dec-17
2.50
5.00
0.07
800,000
200,000
1,688,768
2,688,768
-
-
-
-
-
-
(1,688,768)
-
800,000
200,000
-
1,000,000
(a) Not later than 5-years after defining a JORC compliant ore reserve of over 200,000oz Au on the Faddy’s Gold Deposit.
(b) Not later than 10-years after defining a JORC compliant ore reserve of over 1,000,000oz Au on the Faddy’s Gold Deposit.
(d)
Performance Rights Issued
During the reporting period, no performance rights over ordinary shares in the Company were granted
(2016: nil).
During the period, no performance rights vested and converted into ordinary shares (2016: 6,150,000).
60
66 | P a g e
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
25
LOSS PER SHARE
(a)
Basic and Diluted Loss Per Share
Basic earnings per share:
From continuing operations attributable to the ordinary equity
holders of the company
From discontinued operation
Diluted earnings per share:
From continuing operations attributable to the ordinary equity
holders of the company
From discontinued operation
(b)
Reconciliation of Loss Used in Calculating Loss Per Share
Basic and Diluted Loss Per Share:
Loss attributable to the ordinary equity holders of the Company
used in calculating basic and diluted loss per share:
From continuing operations
From discontinued operation
(c) Weighted Average Number of Shares Used as the Denominator
Weighted average number of ordinary share used as the
denominator in calculating basic and diluted loss per share
Consolidated
2017
Cents
2016
Cents
(0.21)
(0.02)
(0.23)
(0.21)
(0.02)
(0.23)
(0.45)
-
(0.45)
(0.45)
-
(0.45)
Consolidated
2017
$
2016
$
(2,865,564)
(345,621)
(3,211,185)
(4,144,977)
-
(4,144,977)
Consolidated
2017
No. of Shares
2016
No. of Shares
1,375,377,691
911,111,545
67 | P a g e
61
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
26
EVENTS OCCURRING AFTER BALANCE DATE
On 13 March 2018, the Company announced the results of the Pre-Feasibility Study (PFS) for the Woodlark
Gold Project (Woodlark). The results of the PFS demonstrate that Woodlark is a robust, low-cost, low
stripping ratio operation that can deliver an average of 100koz Au per annum over 10 years.
The key highlights of the PFS were:
• Annual production of 100Koz over 10-year mine life for 1.01Moz Au (incl. 51Koz Au Inferred);
• Free milling ore, with recovery of 92% for first five years and 90% over mine life;
• Up to 60% of gold recoverable by gravity;
• Conventional 2.4Mt.pa CIL circuit optimised with upgraded ore from year three;
• Head grade up to 1.63g/t Au in first years;
•
• All in sustaining cost A$990/oz for first five years, A$1,110/oz over mine life;
• Capital cost A$180m;
• 2.2-year, post-tax project payback;
• Free cashflow over life of mine A$388m (pre-tax) and A$314m (post-tax) at A$1,650 gold price; and
• Post-tax IRR 33%.
Low stripping ratio of 2.5:1 for first five years, 3.1:1 over mine life;
Along with the PFS, the Company also announced an Initial JORC 2012 Compliant Mineral Ore Reserve for
Woodlark of 34.7 million tonnes at 0.99g/t Au for 1,101,600 ounces of gold; and a Mineral Resource Estimate
for Woodlark of 47.04 million tonnes at 1.04g/t Au for 1,573,000 ounces of gold.
27
OPERATING SEGMENTS
The Group has identified its operating segments based on the internal reports that are reviewed by the Board
in assessing performance and determining the appropriate allocation of the Group’s resources. The Group
also has had regard to the qualitative thresholds for the determination of operating segments.
For management purposes the Group is organised into four operating segments based on geographical
locations, which involves mineral exploration and development in Cambodia, Fiji and Papua New Guinea. All
other corporate expenses are disclosed as “Others” within this segment report. The Group’s principal
activities are interrelated and the Group has no revenue from operations. For the 31 December 2017 segment
note, Fiji has been reclassified into “Others” with the change in accounting treatment to assets held for sale.
All significant operating decisions are based on analysis of the Group as four segments. The financial results
of these segments are equivalent to the financial statements of the Company as a whole. The accounting
policies applied for internal reporting purposes are consistent with those applied in preparation of the
financial statements.
62
68 | P a g e
2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
27
OPERATING SEGMENTS (CONTINUED)
Revenue by Geographical Location:
Cambodia
Papua New Guinea
Fiji
Other
Total
Net Loss Before Income Tax by Geographical Location:
Cambodia
Papua New Guinea
Fiji
Other
Total
Assets by Geographical Location:
Cambodia
Papua New Guinea
Fiji
Other
Total
Liabilities by Geographical Location:
Cambodia
Papua New Guinea
Fiji
Other
Total
Consolidated
2017
$
2016
$
-
-
-
104,313
104,313
59
-
-
50,592
50,651
Consolidated
2017
$
2016
$
(120,107)
(38,656)
-
(2,678,406)
(2,837,169)
(101,234)
-
(87,262)
(1,737,584)
(1,926,080)
Consolidated
2017
$
2016
$
38,311,958
24,719,079
-
14,081,602
77,112,639
31,471,352
-
6,098,360
23,145,033
60,714,745
Consolidated
2017
$
2016
$
327,660
995,974
-
1,439,018
2,762,652
103,400
-
453,509
2,245,294
2,802,203
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2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
28
FINANCIAL INSTRUMENTS DISCLOSURES
Credit Risk
The Directors do not consider that the Group’s financial assets are subject to a material level of credit risk.
Therefore, no disclosures are made. Refer to Note 2(a).
Impairment Losses
The Directors do not consider that any of the Group’s financial assets are subject to impairment at the
reporting date. No impairment expense or reversal or impairment charge has been recorded during the
reporting period in relation to the Group’s financial assets.
Liquidity Risk
Liquidity risk arises from the financial liabilities of the Group and the Group’s ability to meet their obligations
to repay their financial liabilities as and when they fall due. The Group monitors rolling forecasts of liquidity
on a regular basis.
The following table reflects the liquidity risk arising from the financial liabilities held by the Group at balance
date. The contractual maturity reflects undiscounted gross amounts:
Consolidated
2017
Carrying
amount
$
Contractual
cash flows
$
6 months
or less
$
6-12
months
$
1-2
years
$
Financial Assets - Cash Flows Realisable
Cash and cash equivalents
Trade and other receivables
Total anticipated inflows
Financial Liabilities - Due for Payment
Trade and other payables
Other financial liabilities
Total expected outflows
6,765,343
155,540
6,920,883
6,765,343
155,540
6,765,343
155,540
6,920,883 6,920,883
1,797,045
-
1,797,045
1,797,045
-
1,797,045
1,797,045
-
1,797,045
Net inflow/(outflow) on financial
instruments
5,123,838
5,123,838 5,123,838
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
28
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
Consolidated
2016
Carrying
amount
$
Contractual
cash flows
$
6 months
or less
$
6-12
months
$
1-2
years
$
Financial Assets - Cash Flows Realisable
Cash and cash equivalents
Trade and other receivables
Total anticipated inflows
Financial Liabilities - Due for Payment
Trade and other payables
Other financial liabilities
Total expected outflows
11,469,015
2,265,486
11,469,015 11,469,015
2,265,486
2,265,486
13,734,501 13,734,501 13,734,501
573,122
-
573,122
573,122
-
573,122
573,122
-
573,122
Net inflow/(outflow) on financial
instruments
13,161,379 13,161,379 13,161,379
At 31 December 2017, the Group had no interest-bearing liabilities (2016: nil).
Currency risk
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The Group is exposed to foreign currency on expenditures that are denominated in a currency other than
Australian Dollars. The United States Dollar, Papua New Guinea Kina and Fiji Dollars are the currencies that
primarily give rise to the Group’s currency risk.
Interest rate risk
The interest profile of the Group’s interest-bearing financial instruments at the reporting date are outlined
in the table below:
Fixed rate instruments:
Financial liabilities
Total
Variable rate instruments:
Financial assets
Total
Consolidated
2017
$
2016
$
-
-
-
-
6,765,343
6,765,343
11,469,015
11,469,015
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2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
28
FINANCIAL INSTRUMENTS DISCLOSURES (CONTINUED)
Cash flow sensitivity analysis for variable rate instruments
A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity
and comprehensive income by the amounts shown below. The analysis assumes that all other variables
remain constant.
Profit and Loss
Equity
100bp
increase
$
100bp
decrease
$
100bp
increase
$
100bp
decrease
$
2017 - Variable rate instruments
2016 - Variable rate instruments
67,653
114,690
(67,653)
(114,690)
67,653
114,690
(67,653)
(114,690)
Fair values versus carrying amounts
The carrying amounts of financial assets and liabilities as described in the consolidated statement of financial
position represent their estimated net fair value.
29
NOTES TO THE STATEMENT OF CASH FLOWS
(a)
Cash and Cash Equivalents
Cash and cash equivalents at the end of the financial year as shown in the Statement of Cash flows is
reconciled to the related items in the Statement of Financial Position as follows:
Restricted cash
Cash at bank
Total
(b) Non-Cash Financing
Consolidated
2017
$
2016
$
82,000
6,683,343
6,765,343
-
11,469,015
11,469,015
Consolidated
2017
$
2016
$
Share Based Payments - Note 24(d)
-
146,370
66
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2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
29
(c)
NOTES TO THE STATEMENT OF CASH FLOWS (CONTINUED)
Reconciliation of Cash Flows from Operating Activities
Consolidated
2017
$
2016
$
Net loss after income tax
(3,211,185)
(4,144,977)
Adjustments for Non-cash Items:
Depreciation
Share based payments
Unrealised net foreign exchange (gain) / loss
Acquisition of Kula Gold net assets
Transactions with non-controlling interests
Changes in Assets & Liabilities
(Increase) / Decrease in trade and other receivables
(Increase) / Decrease in inventory
Increase / (Decrease) in trade and other payables
Increase / (Decrease) in provisions
Increase / (Decrease) in other liabilities
Increase / (Decrease) in deferred tax liabilities
26,952
-
(1,821,974)
(203,229)
81,178
1,597,015
(280,802)
1,223,923
480,674
-
(1,744,148)
61,142
146,370
195,410
-
-
(1,510,698)
-
(499,813)
(4,697)
(2,448)
2,218,897
Net Cash Used in Operating Activities
(3,851,596)
(3,540,814)
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2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017 GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
Note 30 – BUSINESS ACQUISITION
Between 9 August 2017 and 8 October 2017 Geopacific acquired 85% of the issued capital of Kula Gold
Limited (Kula), in an off market takeover offer. The takeover offer involved the issue of Geopacific shares to
Kula shareholders who accepted into the offer. Accepting Kula shareholders received 1 Geopacific share for
every 1.1 Kula shares.
The takeover offer resulted in Geopacific gaining control of Kula on 9 August 2017 when the conditions of
the takeover offer were removed and Geopacific issued the first tranche of shares gaining over 50% of the
issued capital of Kula. Ultimately Geopacific acquired 85% of Kula by the time the takeover offer closed in
October 2017.
At 31 December 2017 Kula owned a 95% interest in Woodlark Mining Limited (Woodlark), the 100% owner
of the Woodlark Gold Project. Geopacific owns the remaining 5% of Woodlark. Geopacific therefore owns an
81% indirect interest in the Woodlark Gold Project along with a 5% direct interest. The acquisition was made
as Geopacific believes that combining Woodlark Mining Limited under a single ownership structure is in the
interest of the shareholders of both companies.
Fair value of consideration transferred
Amount settled for the issue of shares in Geopacific
Total
Recognised amounts of identifiable net assets:
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total current assets
Non-current assets
Exploration and evaluation expenditure
Property, plant and equipment
Total non-current assets
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Loan from GPR
Total non-current liabilities
Identifiable net assets
Amount settled for the issue of shares in Geopacific
Non-controlling interest
68
$
9,694,732
9,694,732
254,605
85,703
272,666
612,974
18,974,706
682,447
19,657,153
187,001
188,068
375,069
8,491,416
8,491,416
11,403,642
9,694,732
1,708,910
11,403,642
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2017 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2017
Note 31 – DISCONTINUED OPERATION
The group confirmed its intention to sell its Fiji controlled companies and an active program to locate a buyer
for these companies commenced. The associated assets and liabilities were consequently presented as held
for sale (Note 11).
The financial performance information presented below is for the full year to 31 December 2017.
Revenue
Administration expenses
Depreciation expense
Employee benefits expense
Occupancy Expenses
Loss before income tax
Income tax expense
Loss from discontinued operation
$
2,598
(16,233)
(3,135)
(44,600)
(19,808)
(83,776)
(81,178)
(264,443)
(345,621)
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2017 ANNUAL REPORT
SHAREHOLDER INFORMATION
GEOPACIFIC RESOURCES LIMITED
and Controlled En(cid:20)(cid:20)es
SHAREHOLDER INFORMATION
The shareholder information set out below was applicable as at 22 March 2018.
(a)
Analysis of numbers of equity security holders by size of holding:
Analysis of numbers of equity security holders by size holding:
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Total
(b)
Equity security holders – ordinary shares
Class of Equity Security
Ordinary Shares
Number
Shares
36
24
30
565
460
1,115
6,792
70,239
269,854
25,238,232
1,776,322,013
1,801,907,130
The names of the twenty largest holders of quoted equity securi…es, ordinary shares, are listed below:
Ordinary Shares
Number Held
% of Issued
Shares
NDOVU CAPITAL IV B V
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
PACIFIC ROAD CAPITAL MANAGEMENT G.P. LIMITED
WASHINGTON H SOUL PATTINSON AND COMPANY
PACIFIC ROAD HOLDINGS S.A.R.L.
J P MORGAN NOMINEES AUSTRALIA LIMITED
MR CRAIG GRAEME CHAPMAN
HOME IDEAS SHOW PTY LTD
ORION MINE FINANCE FUND II LP
HOME IDEAS SHOW PTY LTD
ZERO NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MR DANIEL MCDONAGH
PACIFIC ROAD CAPITAL A PTY LTD
PACIFIC ROAD CAPITAL B PTY LTD
GWYNVILL TRADING PTY LTD
CITICORP NOMINEES PTY LIMITED
MR ANTHONY WILLIAM OLDING & MRS CAROLINE ANNE OLDING
BNP PARIBAS NOMINEES PTY LTD
TOP 20 SHAREHOLDERS
OTHER SHAREHOLDERS
TOTAL ORDINARY SHAREHOLDERS
514,039,174
368,794,053
159,233,551
62,108,319
61,278,432
39,613,071
34,508,777
30,000,000
29,581,427
29,069,768
28,294,574
17,500,000
15,815,999
14,019,004
12,603,256
12,603,256
12,500,000
11,058,705
10,029,218
10,000,000
1,472,650,584
329,256,546
1,801,907,130
28.53
20.47
8.84
3.45
3.40
2.20
1.92
1.66
1.64
1.61
1.57
0.97
0.88
0.78
0.70
0.70
0.69
0.61
0.56
0.55
81.73
18.27
100.00
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2017 ANNUAL REPORT
SHAREHOLDER INFORMATION
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
SHAREHOLDER INFORMATION
(c)
Substantial holders
Extracts from substantial shareholder register:
NDOVU CAPITAL IV B V
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
(d)
Voting rights
Shareholding
Number Held
% of Issued
Shares
514,039,174
368,794,053
28.53
20.47
The voting rights attached to each class of equity securities are set out below:
Fully paid Ordinary Shares
On a show of hands, every member present at a meeting in person or by proxy shall have one vote and
upon a poll each share shall have one vote.
Options – listed and unlisted
There are no voting rights attached to options.
(e)
Summary of unlisted options issued
Options expiring not later than five years after
the defining on Faddy's Gold Deposit of a JORC
complaint Ore Reserve of over 200,000 oz of
contained Au with an exercise price of $2.50
Option holder with more than 20% of class
Exploration Drilling Services (Fiji) Ltd
L Andreson Investments Pty Ltd
Sheila Anderson Investments
Options expiring not later than ten years after
the defining on Faddy's Gold Deposit of a JORC
compliant Ore Reserve of over 1,000,000 oz of
contained Au with an exercise price of $5.00
Option holder with more than 20% of class
Exploration Drilling Services (Fiji) Ltd
L Andreson Investments Pty Ltd
Sheila Anderson Investments
Number of
Options
Number of
Holders
Options
Held
% of
Options
Issued
800,000
5
200,000
5
320,000
220,000
180,000
80,000
55,000
45,000
40.0
27.5
22.5
40.0
27.5
22.5
77 | P a g e
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2017 ANNUAL REPORT
SHAREHOLDER INFORMATION
GEOPACIFIC RESOURCES LIMITED
and Controlled Entities
TENEMENT DETAILS
Current interest in tenements held by Geopacific Resources Limited and its subsidiaries, as at 31 March 2018
are listed below:
Country
Location
Tenement
Interest
Fiji
Fiji
Fiji
Fiji
Fiji
Fiji
Fiji
Fiji
Cambodia
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
SPL 1231
SPL 1373
SPL 1436
SPL 1368
SPL 1493
SPL 1361
SPL 1216
SPL 1415
NE Viti Levu
NE Viti Levu
NE Viti Levu
Nadi, Viti Levu
Vanua Levu
Nadi, Viti Levu
Nadi, Viti Levu
Nadi, Viti Levu
Preah Vihear Provence Kou Sa Project
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
Woodlark Island
EL 1172
EL 1279
EL 1465
LMP 89
LMP 90
LMP 91
LMP 92
LMP 93
ME 85
ME 86
ML 508
50%
50%
50%
100%
100%
100%
100%
100%
85%
86%
86%
86%
86%
86%
86%
86%
86%
86%
86%
86%
72
78 | P a g e
2017 ANNUAL REPORT
G
E
O
P
A
C
I
F
I
C
R
E
S
O
U
R
C
E
S
2
0
1
7
A
N
N
U
A
L
R
E
P
O
R
T